Published on: 04 May 2021 in Events
Your future, your responsibility: takeaways from our finance session with Emily Man
Reading time: 3 minutes and 52 seconds
Recently, we were thrilled to host Emily Man for a member session on financial planning.
Emily touched on a wide range of important areas, but all of them stemmed from one important principle, valuable to all directors: now is the time to take responsibility for your future.
Emily set out two key areas that are particularly important to engage with: saving for the mid and long-term and preparing for the worst. Catch up with some of the key takeaways from these areas below.
Mid and long-term saving
- These days we are all living longer, and if you want to have a level of flexibility in later life – giving yourself a choice of whether you’d like to work or not, for example - then you need to provide this yourself.
- There are also added costs that come with living into old age. Living longer will also mean potentially paying for care – which can come to around £60,000 per year now, full time, so this needs to be considered.
- Emily’s advice is to think about a pot of half a million, as the potential growth on this pot could be around £25,000 a year (i.e. you can probably live off this for ever just by living off the interest).
- The first step towards building savings is keeping a track on your regular monthly outgoings, either through excel or by using a book-keeping app. It’s only through this that it becomes clear where there is wiggle room and what you need to do to save.
- Emily also stressed the importance of pension-planning. Directors, who are mostly freelancers, do not often have an employer to take care of their pension or protection, so this is a particularly urgent area to address – and one that’s widely overlooked. Emily asked attendees to consider themselves in twenty years time, and to be as thoughtful and generous to that person as they can.
Preparing for the worst
- Emily told attendees that, as hard as it is, it’s worth having a think about what would happen if you died unexpectedly. What would your dependents do if you were to die tomorrow – where and how would they live, what income would they rely on? Do they know what you would want to happen to your belongings or house? Would they know what hopes you have for their futures? All this can be covered off with the Will (and you can find out more about wills in relation to your royalties with Directors UK here). Insurance will give you peace of mind that they will be taken care of in the way that you want.
- It’s also worth seriously considering Lasting Power of Attorney. In the event of you being incapacitated for what ever reason, creating a Power of Attorney who will be legally allowed to make decisions for you will make your dependants lives infinitely easier, as they will have access to your bank accounts to pay for your care, or your bills. If you Google “Lasting power of Attorney” and HMRC you can find out all about it.
- If you were to be unable to work and your income stopped due to illness or accident you need to know what you can survive on every month. You can buy Income Protection which will give you an income (up to retirement if needed) if you are unable to do your job (through illness or accident). If unemployment were to happen then Emily’s advice would be to have at least three, ideally six, months saved in your “rainy day Account” – difficult of course, but if you want it to be a priority then you need to make changes.
We’d like to thank Emily for an informative and eye-opening session on financial planning for the future. Emily is an Associate Partner of St. James’s Place Wealth Management. For more information head to Emily’s web page or contact Emily via email at Emily.Man@sjpp.co.uk.