Stage 1:

Your working years – Building Wealth

The majority of people retire without sufficient assets to ensure a comfortable retirement despite working hard throughout their life. Your working years are crucial for building wealth to provide for a comfortable future but it is important to enjoy the journey along the way. Critical to achieving your financial ambitions is understanding that creating wealth isn’t the same as earning a high income. It isn’t necessarily about what you earn but it is all about how much of what you earn that you keep and then making the most of this income. This phase of the financial lifecycle requires exposure to asset classes that can provide real investment growth over a medium to long term.

There are many barriers to achieving your financial objectives efficiently and our job is to help you overcome these barriers and work with you in reducing, as much as possible, the risks involved along the way.

Nothing worthwhile can be achieved without taking action so the first step on your journey to Financial Freedom is to create, and then maintain, an up to date financial plan tailored to your specific circumstances, objectives and requirements (see our ‘Unique Approach’).

This stage of your financial lifecycle should allow you to answer the following questions in a positive and confident fashion:

  • Do you have a clear, up to date and comprehensive financial plan in place to achieve your objectives?
  • Do you know what your net lifestyle income is i.e. what are your monthly/annual lifestyle requirements?
  • Do you know what level of income producing assets you require at retirement age (your financial target) to re-create your desired lifestyle income at that point in time?
  • Do you know where you are now relative to your financial target? If there is a financial gap what is it? What level of regular investing do you need to make and at what level of investment return is needed to bridge this gap within the desired timescale?
  • Tax is one of the biggest obstacles to creating wealth. Are you using the tax code as efficiently as possible to keep more of the income that you are earning? Are you investing before you pay tax (using tax efficient retirement structures) or after you pay tax?
  • What level of information do you have with regard to your existing personal and pension assets and their performance? Are the fees incurred reasonable and value for money? What is your tolerance to investment risk? Is your investment strategy consistent with your objectives, time frames and risk capacity?
  • Do you have an up to date Will to reflect your wishes for your estate and family?
  • Have you provision made for education costs for your children?
  • Is your mortgage/debts structured in the most tax efficient manner possible? Should you accelerate repayments?
  • Are you likely to inherit assets in the future? What effect will this have on your financial future and are there tax implications or risks associated with this that can be minimised?
  • Death, illness and disability are very real risks to you and your family’s future. Do you know what type and level of protection you require to adequately protect against these significant risks? How much protection do you have already and are these structured appropriately and as cost effectively as possible?

We, at Rockbridge Financial Planning, passionately believe that building sufficient wealth in an efficient manner for a comfortable future is about appropriate and long term proactive planning combined with wise decision making. Once you decide to invest in yourself and take action we can help you achieve your financial ambitions.