A funny thing happened to me the other day – I bumped into a couple who I’d had a pre-Covid‘ Discovery’ meeting with some two years before. They seemed particularly pleased to see me, quickly crossing the street to say hello and to thank me.
“Thank me for what?” I asked.
“Your advice from way back.” they replied.
I then went into my faux humble mode, saying that’s very kind of you and glad I could help…but here’s the thing my advice to them had literally been to do NOTHING!
But the doing nothing (or almost nothing) had, they said, made a profound difference to their life!
Like most people who visit a financial planner, they had an underlying reason for meeting with me. Not unreasonably they had some money to invest having recently retired (I think they had maybe inherited some money too). Like any half-decent financial planner, I established their circumstances – no children with each having a good and secure index-linked pension for life – and how they wanted to live the rest of their life.
What jumped out was their love of travel, particularly the overseas kind.
They then, and again not unreasonably, returned to the ‘real reason’ why they had come speak to me. The husband in particular was very keen to discuss how we invested money and so on.
“Why do you want to invest?” was my next question, which was answered with “To make it grow”…dummy! (that last bit is my interpretation of it all!).
We then returned to their passion for travel and the realistic timeframe for this (which was the next 5 – 10 years). “OK,” I ventured “Do you currently have enough money to do all the travel you’d ever want to do?”
“Yes,” was their answer.
If we had more money do you think you’d travel more? “No.”
“If you lost a chunk of this money would it impact on your ability/desire to travel?”
“Yes, it probably would.”
“So why would we want to invest your savings in a vehicle that might make you more money over the next 5 to 10 years but also could lose you a bunch of it and then impact on your ability/desire to travel?” – was how I left it.
The really funny thing about all this is was that when they had left, I had thought they were completely underwhelmed and deflated by our conversation.
Not only had it changed the way they now see their savings (they also sold their investments with a very well-known, high-charging wealth management business) it also changed the way they viewed the next 10 years or so of their life.
Over the next few months, they booked (remember this was pre-COVID) four foreign holidays (not all in the end fulfilled sadly) plus they had also ‘invested’ in a new electric car to bring them in line with their own environmental beliefs.
In short, they now viewed their capital as an enabler that would help them really live a full and active life together and not something that needed to be ‘preserved’ for a day they would never need it!!
So, for those who believe proper financial planning is ‘all about the money’ to some extent you are right – it is. But money viewed just as money, without a real-life plan is just that… and no more.