As a client of Charlton House, the early stage of our relationship will involve putting together your financial plan.
Part of that will require us to spend time assessing what’s most important to you in life, so we can ensure your financial plan is aligned to fulfil them.
However, we will often find this a struggle because articulating and defining your goals can be more difficult than you may think.
This is the first of two articles about that issue. Next month you can read about why sometimes thinking about things you don’t want to happen can be the best way to motivate you to plan for your future, so you avoid them.
But first, read about seven key areas we often highlight to clients that can act as a prompt to trigger inspiration.
1. Your work and professional plans
At a very simple level, an important issue that will be integral to planning your financial future will be when you want to retire or at least reach a point where you are financially independent.
This will give you a good idea of your time horizon for wealth accumulation and building a retirement fund.
You can then drill down into more granular detail. For example, you may be intending to continue working in some capacity after you stop your current job, perhaps sharing your experience and insight on a consultancy basis or as a non-executive director, or like a couple of our clients that I can think of, just being more selective over the work you take on. In this way, it becomes less about the money and more about the personal fulfilment.
Beyond that, you may have other professional plans.
Maybe you always wanted to gain professional designation in your particular business, or be keen to study for an MBA. If so, you might want to factor in a couple of years not working in order to study.
Alternatively, you might have always wanted to follow a totally different career path once you reach a certain age (we currently have a client who is a partner in a law firm planning to go to Art College!), so could include that in your forward planning.
2. Where you want to live
Where you want to live will be a key factor to your long-term plan.
You may be currently living the life of an expat in Hong Kong, but is your intention to return home to the UK to retire?
If this is the case, such a big upheaval in your life will need to be planned for, and it will make sound sense to factor this into your thinking.
The opposite could also apply. You may be living in the UK now but are considering spending your retirement years in a warmer climate.
At a more personal level, we would also ask you to think about what you envisage your home looking like.
Do you see a busy household, with a large family gathering every Christmas? Are you hoping to have a lot of living space, including several living rooms and a library, with a swimming pool and barbeque in the back garden?
Or are you thinking about downsizing when the time comes, to reduce your overheads and release some capital?
3. Your family commitments
While you’re thinking about your own plans, it’s also advisable to be aware of the plans and aspirations of others, especially as you could find that they may not align with yours.
For example, your spouse or partner may have a completely different set of priorities to you when it comes to how they imagine spending their retirement years.
The potential for this underlines the importance of planning as a couple and coming to a mutually acceptable agreement.
You should also think about other family members.
What kind of financial support do you envisage providing to your children and grandchildren? You may have it in mind to help them with living costs at university, to get on the housing ladder and also cover the cost of a dream wedding. Alternatively, you may want them to stand on their own two feet and appreciate the value of hard work and providing for themselves.
Find out more: 5 simple ideas that can help you grow your wealth as a couple
4. Your hobbies and passions
This is a subject that often comes up when I’m talking to clients about their long-term plans, especially if they are approaching retirement.
You may well have existing hobbies that you enjoy and are seeing retirement as a great opportunity to spend even more time following them.
Alternatively, you may plan to take up something entirely new once you retire. For example, in consecutive meetings earlier this year, two unconnected clients both revealed that surfing was at the top of their post-retirement bucket list.
Whatever it is you think you’ll want to spend your time doing, the sooner you start planning for it, the better your chances of doing it justice when the time comes.
This also raises the importance of being mentally prepared for a life without work and having plans in place to fill the time.
It’s all well and good being financially prepared for retirement, but all too often there is a gaping hole in people’s psychological preparation for when they are no longer working.
Find out more: How to prepare emotionally for financial independence in retirement
5. Where you want to travel
The goal that almost always features on bucket lists is overseas travel. You will probably have a good idea of the places you want to visit when time is no object.
Some of the travel you have in mind could refer back to your hobbies and passions. For me it would be a trip to watch the Masters Golf in Augusta – I’ve priced it up and it won’t be cheap!
But the issue of travel may well relate to more than simply taking long holidays abroad.
For example, if you plan to spend much of your working life as an internationally mobile businessperson, you may simply hanker for a quieter life at home with limited trips abroad once you stop working.
6. Friendships and the community you live in
If you are currently living and working in Hong Kong, you may appreciate the transient nature of the cast of characters you meet, either through work or socially.
Given that, you may be looking forward to a quieter retirement where you have the opportunity to build a new, and more permanent, friendship group.
Alternatively, you may already have a collection of close friends who you plan to spend your retirement years with.
You could also be looking to get some altruistic pleasure through helping out in your local community and improving the environment where you live.
This could involve utilising your professional expertise giving back to your community through local groups and societies.
7. Your health and wellbeing
Almost everything you have read in this article so far is dependent, to a great extent, on you enjoying good health.
But the other side of the coin is giving some thought to what will happen if and when you start slowing down and may need some level of care provision.
This may not automatically mean having to go into a care home. There are many levels of care below that, including those that will enable you to live an active and independent lifestyle.
However you also might want to think about their perfect live from a health and wellness perspective, in terms of what that might look like and the related financial commitment, in terms of regular check-ups, and visits to health and fitness resorts.
Also bear in mind that the longer you live, the longer your money needs to last!
Regardless, it is important to articulate what your plans will be, and to be able to factor this in as part of your long-term financial goal setting.
Get in touch
If you would like to talk to us about your retirement plans please contact us by email or, if you prefer to speak to us, you can reach us in the UK on +44 (0) 208 0044900 or in Hong Kong on +852 39039004.
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