Everyone has a plan until they get punched in the mouth

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Mike Tyson, one of boxing’s most infamous and ferocious competitors once uttered this rather chilling sentence – “Everyone has a plan until they get punched in the mouth”, one can only imagine what a punch from one of the most successful heavyweight boxers of all time would feel like…..

People get “punched in the mouth” on a daily basis, in one way or another, it might not be an actual punch but a metaphor for some unplanned, painful and hurtful episode that no one saw coming.

With regards to finances there are often “punches in the mouth”, be it

People dying unexpectedly leaving behind no Will and insufficient life cover for their loved ones

Someone getting sick and being unable to work and have no income continuance plan or Serious Illness Cover in place.

Someone who invested money in the next “big thing” only to lose some of their savings.

So how do you prepare for that unexpected punch in the mouth? Well from a financial point of view I believe a well-crafted, impartial and robust financial plan will alleviate a lot of problems life may throw at you.

Remember another famous saying – if you fail to prepare, prepare to fail! 

Disclaimer
Pinnacle Financial Advisers Ltd t/a Blueprint Financial Planning is regulated by the Central Bank of Ireland. All content provided in these blog posts is intended for information purposes only and should not be interpreted as financial advice. You should always engage the services of a fully qualified impartial financial adviser before entering any financial contract. Pinnacle Financial Advisers Ltd t/a Blueprint Financial Planning will not be held responsible for any actions taken as a result of reading these blog posts

Who Doesn’t Love a Bargain?

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Christmas, Summer, Closing Down, Renovation, Black Friday, Cyber Monday, Anniversary, whatever the occasion – who doesn’t love a Sale? The opportunity to grab a bargain and smile smugly as you were one of the “cute ones” who didn’t pay over the odds. People queue all night in some instances or spend hours online trawling for the bargains.

Television half price ……sounds good to me.

That laptop you were eyeing up before Christmas is €300 cheaper in the January sales…… happy days you think to yourself.

That nice new suit you saw, bit pricey I thought but now you can buy for €200 off…..yes indeed I will take it.

There is one Sale that happens, fairly regularly and on a large scale that people simply don’t like……the sale in the Stock Market. I mean who would want to buy shares in a company for $20 when they were $40 a few months ago – that couldn’t be a good deal. The risk averse nature of many investors perceive that company to be in trouble, better to stay away. Often people say  “I’m leaving my money on deposit for another while, the markets are very volatile” or “I will wait until the sentiment in the Economy is more positive before I invest”. What these people are doing is missing out on the “sale” – turning down the opportunity to purchase a company or fund at a reduced price. Would these people not buy that dress or that suit if it were marked down 50% - of course not, why not grab a bargain!!!!!

For the long term savvy investor they know that dips in the stock market can be their best friend ultimately as they benefit from what’s called Euro/Dollar cost averaging – in layman’s terms getting more “bang for your buck” – these people are the real “cute ones” grabbing bargains that will ultimately lead to a more prosperous financial future. As Warren Buffett once said “When people are being nervous, be greedy and when people are being greedy be nervous”.

So if you are in a position to invest for the medium to long term whether that’s via a Pension, Unit Linked Fund, Savings Plan or buying stocks directly remember that when there is a “sale” in global markets like there was in 2008, you can avail of some real bargains. Remember the old saying – “if you act in haste you repent in leisure” – stay the course, seek professional advice and only invest what you can afford. After all – who doesn’t love a bargain!

Disclaimer
Pinnacle Financial Advisers Ltd t/a Blueprint Financial Planning is regulated by the Central Bank of Ireland. All content provided in these blog posts is intended for information purposes only and should not be interpreted as financial advice. You should always engage the services of a fully qualified impartial financial adviser before entering any financial contract. Pinnacle Financial Advisers Ltd t/a Blueprint Financial Planning will not be held responsible for any actions taken as a result of reading these blog posts

The Future You

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Have you ever had a conversation with your “future you”? That little voice or person on your shoulder that tells you – the future you will achieve that.

You know the way….. right? The little voice that that tells you tomorrow will be different.

Tomorrow I will definitely get up earlier.

Tomorrow I will definitely go to the gym.

Next week after my friends birthday party I’m going to start my diet.

I have a lot on this year but definitely next year I’m changing jobs.

There is another way of classifying this reassuring self-talk – it’s not an actual word or a medical condition but it sums up how a lot of us approach our lives, it’s called LongFingeritis and we all suffer from it, especially when it comes to our finances. As a financial adviser, I’ve heard them all, including

“I’ve been meaning to get some life cover since our little one arrived”

“I’ll wait now until I hit my thirties and then I will definitely start a pension”

“I know you earn feck all on deposit, I really must look into savings options”

“It’s scary how many people I know you have got ill, I must definitely buy some serious illness cover”

You get the message by now – all examples of people putting things on the long finger and not taking responsibility for their own and their families financial futures.

So the next time you find yourself saying “I really must sort out”, here’s an idea, actually do something about it. Remember a pound of action is better than a tonne of intention.

Take ownership of your financial future and as the Nike slogan says “Just Do It”!

 

If you want to sort your financial future and no longer want to suffer from LongFingeritis please contact me at john@blueprintfp.ie

 

Disclaimer
Pinnacle Financial Advisers Ltd t/a Blueprint Financial Planning is regulated by the Central Bank of Ireland. All content provided in these blog posts is intended for information purposes only and should not be interpreted as financial advice. You should always engage the services of a fully qualified impartial financial adviser before entering any financial contract. Pinnacle Financial Advisers Ltd t/a Blueprint Financial Planning will not be held responsible for any actions taken as a result of reading these blog posts

Long term investing makes sense, deposits make cents!  

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Don’t have all your eggs in the one basket
— Warren Buffett

Recently I attended a seminar hosted by a major life assurance company in the beautiful surrounds of Páirc Uí Chaoimh, there was an expert panel discussion, an investment update and an Economic outlook, overall I found it a very interesting and thought provoking event. One thing really stuck with me however, a statistic from one of the speakers, that there is presently over €100 billion on deposit in Ireland… (yes you read that correctly) a truly remarkable figure when you consider that deposit rates are at an all-time low and any paltry level of interest you get is liable to a punitive rate of DIRT tax. I chatted to a few of my industry peers afterwards and we all found this figure hard to comprehend.

After the event I asked myself, why is this the case? How can so many people be willing to accept such a low level of return on their savings;

Are some people still reeling from the downturn of 2008/2009?

Are people nervous that another stock market crash is around the corner, after all we are 9 year’s into a Bull run!

Do people not understand how investments work and rather than engage with a qualified professional people choose the inertia option and decide to bury their head in the sand and do nothing.

People are scared of losing money and view keeping money on deposit as the “safe” option. After all two American psychologists Daniel Kahneman and Amos Tversky carried out a study and found that financial losses cause people twice as much pain as the pleasure they receive from financial gain - this phenomenon is known as "loss aversion".

So why invest I hear you ask? Well some of the following facts should pique your interest;

  1. Since bottoming out in March 2009 the S&P 500 (the American stock market index based on the market capitalisations of 500 large companies) has returned more than 266%.
  2. Historically the stock market has returned an average of 9% a year for more than a century.
  3. From 1996 through 2015, the S&P 500 returned an average of 8.2% a year. But, if you missed out on the top 10 trading days during those 20 years, your returns dwindled to just 4.5% a year – this proves the adage of “it’s time in the market not timing the market” that’s important.
  4. When you invest in a diversified portfolio you are investing in a number of asset classes (Stocks, Property, Bonds, Alternatives, Hedge Funds and Commodities) across a range of sectors in a number of different countries, whereas on deposit you are investing in one asset class i.e. Cash in one country i.e. Ireland.

I can already hear some of the dissenting voices…… Investments are risky, people lost everything, cash is king, etc etc. I will counter with the following;

a)   Investments do have a level of risk, so engage with a qualified professional to ensure you have the attitude AND aptitude to take risk.

b)   You should always have a rainy day fund in place in a deposit account for emergencies.

c)   If your money is on deposit and is earning little or no level of return your money will “lose” to inflation.

d)   As the picture at the start of the article states, don’t have all your eggs in one basket…….diversify to reduce risk and increase potential returns.

I’m a huge fan of Warren Buffett, the world’s most successful investor so I will finish on one of his most famous quotes “never depend on a single source of income, makes investments for a second source”.

I hope you found this article of interest, if you would like to discuss investment opportunities please phone 085/1126454 or email john@blueprintfp.ie.

Disclaimer
Pinnacle Financial Advisers Ltd t/a Blueprint Financial Planning is regulated by the Central Bank of Ireland. All content provided in these blog posts is intended for information purposes only and should not be interpreted as financial advice. You should always engage the services of a fully qualified impartial financial adviser before entering any financial contract. Pinnacle Financial Advisers Ltd t/a Blueprint Financial Planning will not be held responsible for any actions taken as a result of reading these blog posts

Saving for a Sunny Day!

 Image by Christopher Michel [ via Wikimedia Commons ]

Image by Christopher Michel [ via Wikimedia Commons ]

We as Financial Advisers often talk to our clients about "Rainy Day" funds, the need to have a sum of money put aside for the "God forbid" or "What if" scenarios that may arise. Whilst I fully endorse the need for these Rainy Day / Emergency funds I recently had a different and somewhat enlightening discussion with a client of mine.

My client was in an enviable position in many ways, she had a good level of protection in place (Health Insurance, Serious Illness Cover and Income Continuance through her employer), furthermore she had a significant amount of money on deposit. She had some disposable income on a monthly basis and was enquiring about savings options available to her. As we were discussing these options we began chatting about her favourite hobbies and past times, she listed Travelling, Painting and Golf. I suggested why not save for a "Sunny Day" and build up a fund she can use to enjoy and pursue her hobbies more, she immediately smiled and agreed that was a great idea.

Tony Robbins, the well known motivational speaker, life coach and personal strategist has written two books on finance and investment in recent years, namely "Money : Master the Game" and "Unshakeable". He regularly refers to the need to build up a "freedom fund" and to save regularly to pay for both the necessities and luxuries in life. I always stress the importance of savings to my clients, but in my opinion with the savings you have built up they need to be ear marked for a specific purpose, either as a means of protection (rainy day) or enjoyment (sunny day).

I was fortunate enough to be invited by a friend to play golf in the Old Head of Kinsale recently (pictured above), truly a jewel in Ireland's crown from both a golf and tourism point of view. Some of my client's goals with her new "Sunny Day" savings fund is to play golf in some of Ireland's top golf courses, like the Old Head, Ballybunion etc and travel more, safe in the knowledge that she has significant provisions in place for the "Rainy Day" and is putting her new "Sunny Day" fund to good use!

So if you have some disposable income, have sufficient protection provisions in place why not consider saving for your "Sunny Day" , we all have personal interests and goals make sure you get to enjoy and achieve them!

Disclaimer
Pinnacle Financial Advisers Ltd t/a Blueprint Financial Planning is regulated by the Central Bank of Ireland. All content provided in these blog posts is intended for information purposes only and should not be interpreted as financial advice. You should always engage the services of a fully qualified impartial financial adviser before entering any financial contract. Pinnacle Financial Advisers Ltd t/a Blueprint Financial Planning will not be held responsible for any actions taken as a result of reading these blog posts

Inspiration

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An investment in knowledge pays the best interest

If you fail to prepare, prepare to fail
— Benjamin Franklin, renowned Politician on knowledge and planning
 
Risk comes from not knowing what you’re doing

The stock market is a device to transfer money from the impatient to the patient

Never depend on a single income, make investments to create a second source

People should spend what they have left after saving not save what they have left after spending

When people are being greedy be fearful, when people are being fearful be greedy
— Warren Buffett, the worlds most successful investor on income, investing and saving
 
Compound interest is the 8th wonder of the world, he who understands it, earns it… he who doesn’t pays it.
— Albert Einstein, Nobel Prize winner on compound interest
 
Your life does not get better by chance, it gets better by change
— Jim Rohn, American Author, Entrepreneur and Motivational Speaker

The Wheel of Finance

At Blueprint Financial Planning we believe there are 8 core components to a person’s financial wheel, namely  Income, Savings, Banking, Tax, Retirement Planning, Budgeting, Protection Planning and Estate Planning.

Your level of knowledge, proficiency and planning in each area can impact hugely on how your financial future will evolve. We provide our clients with a copy of this wheel and simply ask them to rate on a scale of 1-10 (1 being bad and 10 being the best etc) their approach and level of satisfaction with each area. This is the start of their “Financial Blueprint” from which we build a robust financial plan around. The results obviously vary from client to client but as the saying goes “a picture paints a thousand words”.  From their results and “drawing” their wheel people can see very easily how solid their wheel looks and going forward how smooth their journey will be.  Our aim is to get everyone to a “10” to ensure as smooth a journey as possible towards their financial freedom. So ask yourself if you rated your approach to each section on a scale of 1-10, joined the dots on the corresponding numbers, what would your wheel look like?

Disclaimer
Pinnacle Financial Advisers Ltd t/a Blueprint Financial Planning is regulated by the Central Bank of Ireland. All content provided in these blog posts is intended for information purposes only and should not be interpreted as financial advice. You should always engage the services of a fully qualified impartial financial adviser before entering any financial contract. Pinnacle Financial Advisers Ltd t/a Blueprint Financial Planning will not be held responsible for any actions taken as a result of reading these blog posts