Spend more money
IF, LIKE many people, you were taught the importance of saving from an early age, getting into the mindset of spending accumulated capital to enjoy the finer things in life can be a difficult mental leap to make.
But this way of thinking could ultimately mean that when you approach the end you’ll have a healthy bank balance but you will have perhaps sacrificed your enjoyment of life along the way.
At Faron Partnership we often find that people who’ve built up considerable investments over the years often live on modest incomes because they only ever want to spend the interest from their deposits or the dividends from their shares while keeping the capital intact.
Often clients forego life’s dayto-day pleasures solely to maintain capital which is probably going to end up being taxed when they leave it to someone else through inheritance tax.
It’s important to remember that when you spend their money the shopkeeper doesn’t really mind whether you’re buying his or her goods with income or capital – it’s all money to them.
However, if planned properly it should be all money to you as well.
Provided you plan effectively and forecast correctly a structured use of capital to provide for a higher standard of day-to-day living shouldn’t be overlooked.
This is where financial forecasting comes in. It helps our clients to understand how the structured disinvestment of their holdings can be used to support their lifestyle with a safety cushion built in.
I’m sure you all know of someone, it may even be you, who is frightened or scared of running out of money as they get older, but it doesn’t have to be this way.
When clients come to us we carefully analysis their financial circumstances together with their hopes and aspirations for the future and use this as the bedrock of our planning process.
By modelling possible outcomes using specialist software we can provide solutions which will give you the confidence to spend more now knowing that you will not run out of money in old age while still having some to leave to your love ones, which we appreciate is an important consideration for many.
Our forecasting methods can show what you’re likely to have in the future based on what you have now and how that outcome can be altered through a carefully thought out investment strategy tailored to your specific set of circumstances.
The bottom line is that it is possible to spend more money on yourself during your lifetime without feeling guilty.
Ultimately you need to ask yourself: Do I want to regret not doing more with my life when I enter old age and are no longer able to do the things I once could?
Remember, the value of your investments can go down as well as up. Past performance is not a reliable indicator of future outcomes.
Andy lives in Wokingham and has worked as a financial adviser for over 30 years. He is married with three grown-up children. Faron Partnership offers personal financial advice, including retirement, investment and estate planning. Any information or views expressed in this article should only be acted upon within the context of your own circumstances with the help and guidance of a professional financial adviser. Faron Partnership Ltd is an independent financial adviser which is an appointed representative of ValidPath Ltd which is authorised and regulated by the Financial Conduct Authority.