Your opportunities. Your wealth. Your legacy.
Part of the process of putting in place a successful personal lifestyle financial plan is to understand your ‘number’ – in other words, the amount of money you’ll ultimately need to ensure complete peace of mind in knowing your future lifestyle is secure and making sure you don’t run out of money before you run out of life.
By getting to know you and what you want to achieve, we’ll be able to provide you with a detailed action plan that is focused on you. By creating a total wealth solution for you, we can get a clear understanding of your current lifestyle, your future and the life you want to live.
Initially, creating a financial life plan will help you to make the right financial choices and achieve the right balance between current responsibilities and future aspirations. All of this should enable you to achieve your desired lifestyle goals and objectives over time.
This is important to fund expenditures and meet liabilities for the next two to five years. Investments should be held in stable assets with low volatility, such as cash and/or a high-quality bond ladder. Failure to plan adequately for your liquidity needs could mean you have to sell assets at discount prices.
Assessing your cash flow needs over the next two to five years, and setting aside funds to meet them, creates a buffer between cash needs and market returns, thus reducing the risk of being forced to sell assets with high return potential at the wrong time. This strategy generally involves low-volatility assets such as short-term fixed income and cash, as well as borrowing facilities.
This will enable you to meet your financial goals for the balance of your lifetime, and is characteristically well-diversified across asset classes with a growth orientation. The exact composition depends on your situation, goals, financial personality and values.
These assets are designed to satisfy lifetime needs. With short-term cash needs met by your liquidity strategy, these assets can be focused on long-term growth, with an asset allocation tailored to your risk appetite and the family’s aspirations.
These are assets in excess of what you need to meet your lifetime objectives. Your approach to your legacy strategy investment portfolio could be more aggressive and less liquid than those investments in your liquidity or longevity strategies, given the time horizon is much longer term.
This strategy is assigned to improve the lives of others, both within your family and in society. In many cases, this will include cash flows lasting beyond your lifetime, including philanthropic goals and assets earmarked for future generations.
Given the opportunity to focus over a very long investment time horizon, this strategy has the capacity to invest in asset classes that offer an illiquidity premium, such as private equity, or investment themes that seek to profit from long-term trends in society or technology.