I have been away in France for two weeks. When we go away we switch off from the outside world so for us the Olympics have passed us by. However, over the last couple of days we have really immersed ourselves in the Olympics and it has been amazing to see all the medals.
We watched one race and post-race interview and it made me think that financial planning is like training for an Olympic medal. After the race a young 22 year old runner said that he was delighted to have come fourth but actually his focus was Rio in 2016 when he should hit his peak.
This struck me as a very mature attitude. To achieve his goal he cannot just sit at home and put his feet up he needs to formulate a plan and stick to that plan. The plan may have to be adjusted to reflect unexpected events but ultimately the goal will always remain in sight.
Financial planning is no different, there is no point paying money into a pension, ISA etc without an idea of what the goal is and then once you have that goal you can then formulate a plan to deliver that goal. The problem is that many people have no real goal and therefore no plan. They pay into a pension or ISA and are disappointed with the outcome because they have unrealistic expectations. The simple reason why they have unrealistic expectations is because they had no expectations in the first place and therefore any result will be disappointing (i.e. no goals and no plan will ultimately lead to disappointment).
So watching the Olympics makes me think why financial planning should be considered in the same way. To achieve greatness you need a goal, and you need a plan, and you need to stick to that plan.
NOTE: This is written in a personal capacity and reflects the view of the author. It does not necessarily reflect the view of LWM Consultants. The post has been checked and approved to ensure that it is both accurate and not misleading. However, this is a blog and the reader should accept that by its very nature many of the points are subjective and opinions of the author. This is not a recommendation to buy any product or service including any share or fund mentioned. Individuals wishing to buy any product or service as a result of this blog must seek advice or carry out their own research before making any decision, the author will not be held liable for decisions made as a result of this blog (particularly where no advice has been sought). Investors should also note that past performance is not a guide to future performance and investments can fall as well as rise.