Make a Plan, Don’t Panic - Planning Each Day Keeps the Panic Away

Well, much like my audio habits of listening to podcasts at 1.5 speed, January has sped by!

For those of you who have escaped having an image or visual assault of President Trump on a minute-by-minute basis, you are blessed. However, the press frenzy around Trump made me think back to my days as a financial adviser. Of course, I still have the skills, the only difference now is I talk to individuals impartially, I'm not focused on products.

Anyhow, back to my pondering, when Brexit, COVID, or any BIG news feature is splashed all over the media, we all grab hold of a headline or two and it permeates. Some people panic, some do nothing, some mean to take action and then another priority trumps it (haha, like what I did there!). Whatever our response to what the world's media pumps at us, it's important to...

HAVE A PLAN

Why? Because I said so! Seriously, everyone should have a plan. I love a plan. It's important because it keeps us focused on what matters to us, builds resilience when life throws curveballs, and stops panic.

Take these examples

●      A self-employed person (myself included) swinging from feast or famine with cashflow, having a pot of say 3 months' expenditure takes the pressure off. Bills are covered for 3 months. This works for everyone, not just sole traders.

●      Mortgage rates go up and go down. Factor this into your budget when reviewing mortgages. Build a pot to pay off your interest-only mortgage.

●      Have a document with your life admin information, wishes, passwords. Keep it safe!

Let’s do economics

I wish I had taken Economics at school, I still might! Let's explore the learnings of Vilfredo Pareto. You've likely heard of the 80/20 rule... He observed that 80% of land in Italy was owned by 20% of the population, essentially highlighting an unequal distribution between inputs and outputs, emphasising focusing on the "vital few" over the "trivial many."

Real-life examples, in business applications, 80% of profits come from 20% of customers or products. Daily life, 80% of the time, you wear 20% of your clothes.

So, the moral of the story is to diversify. If you are close to retirement, it's probably not a good idea to have 100% of your ISA investment or pension in shares.

In summary: Have a plan for today and a plan if bad things happen and talk about it with friends and family. We must encourage the world to talk about our finances, not Trump.

STOP procrastinating!

Want help creating your financial plan? Get in touch 07900 190 285 or hello@kirsticoxadvocacy.com