Understanding the basics of the financial plan recipe

Here’s a recipe for a basic financial plan:

Take one or more income sources and pour into a big pot. Add appropriate amounts of life, income protection and permanent disability insurance. Simmer for a few decades while slowly adding superannuation contributions and a dollop of non-super savings. Stir in some constructive debt, but take care to keep a lid on it. Dip into the pot occasionally to taste. Simmer steadily, and consume regularly after retirement.

What’s missing, of course, is the most important ingredient of all – a generous sprinkling of dreams.

Finding the dream

In a world of almost limitless possibilities and with new things constantly clamouring for attention, it can be surprisingly hard to decide on which dreams you want to pursue. The basic goals of securing your income, protecting your family and building financial independence through retirement are all very sensible and worthy, but what’s going to put the zing into life? What do you really want?

One way to pin down what matters most to you is to make a note every time something sparks a strong visceral response or a genuine interest. It might be a good cause to support, a skill to learn or a new career to pursue. Or it could be an exotic place to visit or a situation you want to change. In fact, it can just about be anything, but whatever ‘it’ is, it will spark a consistent and enduring emotional desire. And you aren’t restricted to just one dream, of course. You’re allowed as many as you like.

Share it

So you’ve found your dream, something that you are prepared to commit time, money and energy to. What next? Well, to become a reality your dreams need to be turned into goals, and that means building plans around them. It also means running your dreams through a reality check, and maybe modifying them if necessary. A trip to Mars next year? It ain’t gonna happen. Next birthday in Paris? That’s much more doable.

While your financial planner may not be the first person you think of sharing your dreams with, it really is worth doing early in the relationship. Whether it’s a specific goal or your lifetime wish list, your adviser can help with the reality checks, work out the financial requirements and craft a strategy that gets you as close to your goals as possible. And yes, that strategy probably will include boring things like superannuation, insurance and savings.

However your adviser will be equally interested in whatever it is that leads to your personal fulfilment. He or she may even help you dream bigger, discover more possibilities and opportunities, and help you stay on track.

The best laid schemes

For all the value of having clear goals life has a knack for tossing up both random obstacles and opportunities. So be flexible in your outlook. Enjoy the journey, whatever life serves up. After all, it might turn out to be a tastier dish than any you originally dreamed of.

Disclaimer: This information has been prepared by Primestock Securities Limited ABN 67 089 676 068, AFSL 239180 (“Prime”). Prime accepts no obligation to correct or update the information or opinions in it. This information does not take into account your objectives, financial situation or needs. Before acting on this information, you should consider whether it is appropriate to your situation. It is recommended that you obtain financial, legal and taxation advice before making any financial investment decision. Prime is bound by the Australian Privacy Principles for the handling of personal information.


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