Adviser as training wheels
When returning from an OE you have choices: A fresh start or a pick up from where you left off. Our economy moves on, our world we left feels just that little bit different - maybe even a bit claustrophobic to begin. But reality soon sets in. Long term issues that you may have briefly pondered before the big adventure are now more pressing.
To consider are career, housing and family. While not all financial they are life planning.
One career for life seems to be old fashioned these days. In the corporate world, moving from location to location, as opportunities grow with your skill set is not the way now. Companies do not assist as they did to assist folk move up the ladder. How have we adjusted? Not very well.
What challenge to attack first?: Get career sorted? Buy the house and mortgage oneself up to the neck? Have a family now or later? They are all good questions and all have significant life style impacts. Buying the house first wins in many instances however this also limits career choice due in part to the illiquid nature of property.
With mortgages much higher (as expressed as a multiple of house hold income) lifestyle impacts are also important to understand. A high spending lifestyle seems to be a priority for many however, that lifestyle is not always fundable with high debt servicing or unexpected family additions.
There’s a drift of folk from the high stress city life, corporate world to the wide open spaces of the country and a down shifting of life speed but I’m yet to see any real research that declares this widely successful.
It seems fantastic but prices are a reflection of general desirability and employers pitch remuneration packages at local levels. To be really successful at this early transition windfall success is required to give the base of wealth to fund the desired continued lifestyle or alternatively a much more modest existence.
Dreams are the one thing left free, free of tax (so far) and limitation. Dreams can be made reality by turning them into goals. But to convert dreams to goals they need to be well considered, written down and regularly reviewed.
The financial impact of plans and goals need to be considered to ensure a stress free financial future is a reality for all concerned.
Unfortunately, many in New Zealand are still do-it-yourself (DIY) investors and prefer to have more of a ‘dating’ liaison with a financial professional. And generally want one of three kinds of relationships:
First, the ‘adviser as training wheels’, where the investor devises their own investment strategy and then runs it past an adviser. In this scenario the adviser isn’t always given enough information. It may work okay, but to take a more holistic approach, looking at more than investments is needed.
Second, the ‘adviser as sounding board’, where the client calls for a periodic check-up. It’s valuable to have an independent check of progress, the adviser may not be in the picture until later than optimal, they could add more value if involved from the outset.
Thirdly is the ‘adviser as problem solver’. While seeking independent advice is the best way to tackle a problem, chances are the relationship ends once the problem is solved or the crisis has passed. While some problems are caused by factors outside our control by focusing on the whole picture, a good adviser can help steer clear of pitfalls, or at least lessen their impact.
Give yourselves the best possible chance of reaching your career goals, provide a secure future for the family and still enjoy the journey along the way, work with a professional financial adviser and utilise all of their resources and expertise. Look for someone experienced, impartial and authorised.
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