In summary

Our Senior Wealth Director, Simon Brookes, tells us how cash flow planning works and says that, even though there’s no crystal ball to consult, measured predictions can be the next best thing.

What is cash flow planning?

Cash flow planning is an incredibly helpful tool for visualising your financial future. You can plot money coming in and money going out, as well as many other factors that affect your finances. We have modelling software that can show you how different versions of your future could look, helping you to assess your options. 

Cash flow planning enables you to make more informed decisions, even life-changing ones like when you want to retire or whether you can help your grandchildren onto the property ladder.

Why is cash flow planning important? How can it help?

It’s an important process for all our clients and a great way to explore your options. I have had some wonderful conversations where clients perhaps don’t realise how strong their financial position is. Some people don’t come from a background of money, and they can be surprised about the value of their house or pension and the fact they’re in a position to pass on money.

On the other hand, sometimes our role is to challenge. Someone may think they can retire at 55, when, under the current circumstances, that’s not achievable. We work in an environment of increasing uncertainty, and yet people are expected to be ever more vigilant about their finances. Our role is to help relieve that pressure.

What sort of things do you need to think about?

You’ll have to consider many different things, including your health, savings and assets, and what sort of lifestyle you want. Would you like to retire early? On what income? Are you planning to work part-time? Travel? Invest in property? Or your family’s education? We can shelter you from the noise and complications, so that you are able to focus on your options and make the right choices. 

We also look at how to protect you and your family against unexpected situations, such as family emergencies, unforeseen costs and long-term care. Relationships are at the core of what we do. To truly understand someone’s objectives, you have to understand their hopes, dreams and aspirations. It’s about drilling down to understand and support them.

How will I know what my options are?

We have an incredible cash flow planning software platform. It’s a very powerful system that does a brilliant job of distilling the complex into simple, straightforward data. It’s pre-loaded with intelligent data and estimates for external factors like interest rates, inflation, investment performance and care costs. We then layer in information about you, your assets and your possible plans. You can play around with the numbers, experimenting with timings and values, allowing you to consider options for work, saving, spending and giving money away. We can see if you could be taking more risk with your portfolio and see how you feel about the possible outcomes. The reporting is short, sharp and relatable – exactly what you need to help you make informed decisions.

How often should I sit down and plan cash flow?

Meeting at least annually and more frequently during periods of change, like marriage or divorce, could be helpful. The world changes, legislation changes, and investment markets change, so it’s important that your plan keeps pace.

If you’d like to feel confident about your cash flow over the course of your lifetime – get in touch for a free, impartial conversation.

Contact us

0203 418 0257

info@onekc.co.uk

References

Source: https://www.brooksmacdonald.com/individuals/resources/insights/go-cash-flow