Pet rant: Putting the cart before the horse

As a financial planner, this is a conversation that I often have when I meet somebody new. They ask me:

“What return can you get me?”
“What return do you need?”
“A good one.”

On other occasions, people ask me:

“If I give you £10 a month, how much can you give me back?”
“How much money do you need back?”
“I don’t know.”

Result = frustration all round.

The problem is that people try to put the cart before the horse.

Ideally, the first step is to draw up a plan that defines how much money you need to fund your lifestyle, both now and in the future. Then you can answer the question about what return you need, and I can tell you where to put your investment.

For example, Brian knows he needs £5.97 million. It may sound a lot, but he has worked it out to the penny. He has a big mortgage to pay off, three daughters to put through university and probable weddings, and the intention of retiring young to travel the world with his wife.

Note that it’s not about the money, it’s about what the money can buy you.

To help calculate the amount you need, you may like to read these books:

Alternatively, call us on 01435 863787 and we can help you work it out.

Remember, return is related to risk. If you want more return, you have to take more risk.

Lance Baron

Certified Financial Planner (CFP) based in East Sussex, UK. We support people in Southeast England with more than £500K to invest by building a financial plan that will help them live the life they want… until age 100