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What is “life-centred planning”?

In our regular column, Money Matters, SIMON PARFITT of Pyrmont Wealth Management answers your burning questions on finance and provides financial planning and investment advice. Here, he explains about “life-centred planning” and why it’s important.

What is “life-centred financial planning?”

“Many people who have just begun working with us are surprised by how our planning process starts. We don’t begin by talking about pensions or investments, or how much you’re saving. Instead, we ask you about your family, work, home, goals and the things you value the most. This is because our job is to build a financial plan that will help you make your life plan a reality. Of course, building wealth that will provide for your family and keep you comfortable today and in retirement is an important part of that plan. So is monitoring investments and assets and doing what we can to maximise your return. But maximising your return on life is just as important, if not more so. We’ve often found that people who view money as an end in and of itself never feel like they have enough. People who learn to view money as a tool start to see a whole new world of possibilities.”

Bags of money

Feeling free

One of the most important things your money can do for you is provide a sense of freedom. If you don’t feel locked into chasing the next dollar, you’ll start exploring what more you can get out of life than just more money. Feeling free to use your money in ways that fulfil you is going to become extremely important once you retire. After all, you’re going to have to do something with the 40 hours every week you used to spend working! But you’re also going to have to allow yourself to stop focusing on saving and start enjoying the life that your assets can provide.

Again, having money and building wealth is a part of the plan. But it’s not the plan in and of itself. The earlier you start thinking about how you can use your money to balance your vocation with vacation, your sense of personal and professional progress with leisure and pleasure, and the demands of supporting your family with achieving your individual goals, the freer you’re going to feel.

And achieving that kind of freedom with your money isn’t just going to help you sleep soundly at night – it’s going to make you feel excited to get out of bed the next morning.

What’s next?

So, when does the planning process end? If you’re like most people we work with, the answer is never. The kinds of adjustments we make throughout the life of your plan will be in response to major life transitions. Some of these we’ll be able to anticipate: a child going to university or a property purchase you’ve been planning for; for other transitions, like a sudden illness or a relocation for work, we’ll help you adjust for as necessary.

In some cases, your life plan might change simply because you want something different out of life; you might start looking for a new place to live; you might lose yourself in a new hobby and want to invest some money in it; or you might even start a new company.

It’s planning for and reacting to these moments where your life and your money intersect that is important for us.

Simon is regulated by both the HK Confederation of Insurance Brokers (011833) and the Securities and Futures Commission (BGY807).
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This article first appeared in the August/September 2019 issue of Expat Living magazine. Subscribe now so you never miss an issue.