Financial planning lessons from our holiday

Holidays are a time for relaxation and reflection.

Sam and I usually come back from a trip away with hundreds of fresh ideas and a renewed vigour for what we do.

This year’s family holiday was no different. We took a trip, with the kids in tow, taking in the Scottish Highlands by boat, train and car.

Because, in truth, we never completely switch off (Sam was solving a client query as we took an outing on a steam train) our time away gave us a chance to think about some of the problems people come up against when they’re making financial plans.

Sometimes it’s an easy fix, other times there could be a gaping hole. Either way, these problems are things we as advisers can’t help but spot a mile off! Here are a few of the episodes over the trip that gave us food for thought:

Set your goals and buy a castle!

I often talk to clients about the importance of setting goals. How’s about this for a set of aspirations?

1) Get married and have several children
2) Buy a Rolls Royce
3) Buy a Scottish castle.

Those were the three goals made by Lt Col Stewart Allward in a secret diary he kept while a prisoner of war after Dunkirk. He went on to achieve all three.

And you can visit the castle he bought. Castle Stalker, on a tiny island off Argyll on Scotland’s west coast is still owned and used as a holiday home by the Allward family.

The castle is steeped in history, although what we were most excited about was that it’s the setting for Monty Python’s Holy Grail. It’s from those ramparts that John Cleese’s French soldier taunts King Arthur (with choice lines including “your mother was a hamster and your father smelled of elderberries.”).

Buying the castle was no mean feat. It took 10 years to refurbish, and at times the work must have seemed painfully slow. All the elements had to be transported by boat, and they were only able to take across six roof tiles at a time!

It’s a great example of someone with clear goals and having the determination to achieve them.

Find someone to help put things in perspective

But you can’t get by on determination alone. You need to have a proper plan in place.

In the boat over to Castle Stalker I had a good chat with the guy who runs the business taking passengers to and from the island.

He also has clear goals, he wants to sell his business, buy a new boat to travel some more, then retire to Oban 30 miles away. He’s already part of the way there, he has the dream and aspirations. But it’s not a complete plan – yet.

What’s missing is the financial side. He needs answers to questions such as, “How much of a pension do I need to retire?” “What kind of an income will I need?” “When is the right time to aim to sell the business?" These are all important pieces of the jigsaw that add up to creating a whole plan.

I happened to mention I was a financial adviser and could complete the picture for him. So we might even have gained a new client from our trip!

Make sure your plans are watertight

A goal as big as buying a castle needs a huge amount of money, but even the very rich need to plan.

A few hours’ drive from Castle Stalker is the Glenlivet Estate. It’s 58,000 acres of farmland and forests, home to salmon fishing, grouse moors and Gordon Castle – one of the largest country houses in Scotland.

It was owned by the Gordon family for around 400 years. But in the 1930s, on the death of the serving third Duke of Gordon, and faced with crippling death duties (now known as inheritance tax) his son was forced to sell up.

Clearly not everybody is a member of the landed gentry, but everybody benefits from a watertight plan that protects your assets.

At the opposite end of the spectrum, I later got chatting to someone in a pub near Aberdeen who has everything mapped out. He hopes never to touch his private pension, as he’s organised everything out to the last detail, including all the financials.

But this isn’t something that comes naturally to all of us, and even if you think it does, there’s always a benefit to having a fresh perspective.

Financial planning is hard to do alone. Getting an adviser helps you take a wider view and get a more complete and concrete picture. You can have the greatest plan in the world, but it still needs someone to put it together.

Give us a call if you’d like to find out more.