If in its simplest form, the aim of providing financial planning advice is to make you better off, then money is merely a means to achieving that end.
To benefit you, we believe your money should ultimately be converted into a non-financial measure of wellbeing. This could be measured in positive emotions, such as happiness, satisfaction or contentment or an absence of negative emotions, such as worry and anxiety.
This process is not straightforward. Every decision made requires making a prediction about the emotional consequences that will flow from it.
What if this prediction is wrong? What if you were to make a mistake about what makes you happy, what if you had spent money on the wrong things and failed to achieve the level of ‘wellbeing’ from your income or investments you were hoping for.
Part of our role as a Financial Adviser is to assist our clients to articulate their goals, purpose and legacy needs and to make the most of their money across their own and their family’s lifetimes.
In this blog, we wanted to cover the first part in this topic of converting money into wellbeing.
The Trade Off – Happiness today vs in the future
This is one of the difficult questions we face. Should we save more today (usually resulting in the sacrifice of some wellbeing in the short term) with the benefit of being able to perhaps spend more in the future.
From a psychological perspective, spending today can be more directly and immediately seen and experienced in contrast to spending in the future, which is a more abstract concept.
From experience, in many cases we see that the thought of spending in the future does not trigger the same emotional response as the more tangible current day experiences. With this in mind, spending today can often be the preferred choice. This bias can often result in achieving lower overall wellbeing, particularly when you consider things such as interest costs and opportunity costs etc.
Our role at Boutique Advisers is to assist in making our client’s future spending more concrete, more tangible and less hypothetical. We achieve this through our LifePlan modelling which is one stage of our 5 Pillars Journey. Although we remain humble and cannot presume to know exactly what will maximise your personal wellbeing, we believe we can add significant value in assisting to articulate goals, purpose and legacy needs. This in turn will ensure that our advice maximises yours (and perhaps your family’s) individual wellbeing.
Andrew Bolingbroke enjoys building long-term relationships with clients and working alongside them as their life plans develop and change over time. This gives his clients confidence that, through Boutique Advisers, they have clarity and structure around their finances. Andrew enjoys working collaboratively with clients’ other trusted advisers to ensure that they have a truly holistic financial journey.