The REAL benefits of Lifestyle Financial Planning

Five years ago, I left my corporate job, where I had worked for over a decade, to pursue my journey as a Licensed Financial Planner. To date, I have never regretted this critical decision.

I participated in the Malaysia Financial Planner of the Year 2020 (MFPYA) competition, and I am privileged to be selected as one of the winners. Through the competition, my work was scrutinised and peer-reviewed. The quality of my work was validated, and I ascertained that I was providing my clients with the best possible financial advice and solutions. I also received constructive feedback from the judges on areas I could improve. This experience propels me to continue developing my skills and enhance my advisory capability.

Since then, many have asked me what a Financial Plan is and how it help individual and family. I want to take this opportunity to share some of my thoughts based on my experience over these years.

What is Lifestyle Financial Planning?

Have you ever wondered why some people seem to have the ability to live the life of dreams, whilst some live from paycheck to paycheck, even though both share the same starting point many years back? You may say that everyone’s circumstances are different. However, there is a significant difference between those with a guideline on reaching financial success and those without one.

Many people enjoy spending their hard-earned money on lifestyle. I am also a believer in ‘money does not spend on you or your loved ones do not belong to you’. This is exceptionally true for the older generations who have worked hard but feel guilty about spending a little bit extra on themselves. However, I will put a caveat on those who spend without limitation not knowing their current financial situation.

Generally, when it comes to financial planning, people think that financial planners only try to calculate how much money is ‘Enough’, ‘enough for what’ and ‘for how long. It is purely numerical. But is it so?

Lifestyle financial planning encompasses more than the numerical/logical perspective. It is a financial plan built around the lifestyle you want now and, in the future, rather than just buying financial products. For example, if you would like to bring the family for a 1-month holiday every year, your lifestyle financial plan would enable you to do this.

This is an unconventional way of planning for a client whereby it moves away from traditional modular planning, which only focuses on one area, e.g., insurance or investment. The planning process focuses on what you seriously intend to achieve in your life, understanding your motivations and values, your state of wellbeing, and what you plan to do in the next 5, 10, 20 or more years. Besides this, we must also delve deeper into your relationship with money before we can design a plan to help you achieve and maintain your desired lifestyle. It is a plan which takes into consideration of emotions and logical perspective. We must complete a delicate balance between what you want versus the resources you prepare to put in and the resources available to you.

Your lifestyle financial plan

We use a sophisticated financial planning tool to generate illustrations and scenarios which reflect how long your current financial position can last and devise a plan to fill any gaps to help you achieve your goals.

Based on my experience, along the journey, the client has more clarity in their financial situation, and they feel more empowered to make the right financial decisions. They are empowered to make sound financial decisions, for example having a more extended holiday without guilt, or some may need to save more or cut expenses to accumulate wealth effectively.

Once embarked on implementing the recommendations, the ability to stick to the plan is essential. This plays a vital role so that the program does not detour. Another critical key is regular review, ensuring the project keeps up with the uncontrollable changes over time.

Our involvement does not stop at a written plan; the goal is only part of the overall financial planning process. The journey is enriching to me, whereby I am honoured to be part of clients’ long-term plans, seeing them realise their lifelong ambitions.

The REAL Benefits

Lifestyle financial planning brings clarity to your current and future financial situation. It guides what you need to do now to allow you to maintain and achieve your desired lifestyle until you expire. It takes away the fear of ever running out of money. You have so much clarity and peace of mind once you finally know that you are using your finances to deliver things that matter to you and to the one you matter the most.

Talk to me if you would like to explore further.