Finance
A HOLE IN YOUR BUCKET?
Andrew Fort Andrew Fort B.A. (Econ.) CFPcm Chartered MCSI APFS, Certified and Chartered Financial Planner, Fort Financial Planning
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n my most recent articles for the Sherborne Times, I have been attempting to explain that real financial planning is all about ‘knowing your bucket.’ Your bucket, essentially, is the amount of money that you currently have, taking into account all future inflows and outflows, for the rest of your life. At FFP, we understand that the number one priority for nearly every client is the reassurance that they will never, in any circumstances, run out of money. Using powerful financial planning software, it is usually a straightforward process to identify whether you will run out of money. The main driver is identifying the cost of your current and future lifestyles. If you have a big lifestyle, you will need a lot in your bucket; if you have a modest lifestyle, you will need less in your bucket. The driver behind your bucket is your lifestyle. Understanding your bucket enables you to live your financial life more purposefully. Knowing where you spend your money, and what gives you the most enjoyment, can be empowering. However, managing your bucket is not simply a one-off action. Our lives change; our preferences and desires change as well. Most people know that you can’t go to the gym once and then be fit for the rest of your life – you have to keep going. Real financial planning is an ongoing process, year after year after year. In many respects, real financial planning is like sailing. When a boat leaves Weymouth for Lyme Regis, the captain has a plan prepared beforehand. On the journey, the boat will encounter unexpected winds and unexpected currents. In other words, they are constantly being blown off course and minor adjustments are needed along the way to reach the destination. Real financial planning is similar. Sometimes, the journey is straightforward but occasionally, as the current pandemic reminds us, unexpected events occur. While we can’t control the wind, or a pandemic, we can control other factors. We can spend less, we can invest more, we can even take more (or less) risk. Regular review meetings help to remove financial worry from day-to-day living. Without having to worry about money on a daily basis, the opportunity to begin enjoying life opens up; after all, life is not a rehearsal. Enjoy life while you can – let your financial planner do the worrying for you! ffp.org.uk
120 | Sherborne Times | July 2021
