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PYRMONT WEALTH SPRING CLEANING REVIEW

The 10 Step Financial Spring Cleaning Review

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Give Your Finances a Spring Clean in the Current Environment

Most of us couldn’t have envisaged what would happen over the last few years but the time we have had, has given us the opportunity to do the things we had been putting off. With the current restrictions in Hong Kong and the start of a new season, now might be the perfect time to consider giving your finances a spring clean.

Follow our 10 step financial spring cleaning review aimed to help you understand your current financial situation, make better investment decisions, and create a simple strategy for estate planning.

Our 10 Step Financial Spring Cleaning Review

Step 1: LIQUID ASSETS & CASH FLOW

Understanding your cost of living is the foundation to any cash flow or financial plan. It allows you to evaluate your personal finances and ensure that you know what is required to support your lifestyle and any future changes. When reviewing your outgoings, you would usually consider unforeseen expenditures and any expenses that might fluctuate or change overtime.

Consider the liquid assets that you have and which ones will be enough to sustain your lifestyle and any potential emergencies over the next one to three years. So, have a think about what would happen if your liquid assets run out and which ones you would need to realise, and what level of cash flow you would consider as sustainable.

Step 2: INCOME & PROTECTION

At this point, you should consider your income and determine whether it is sufficient enough to sustain your lifestyle. Do you also you have the right protection in place for you and your family should the worst happen and you become unable to work?

Insurance solutions such as Income Protection, Critical Illness Cover, amongst other types, are meant to help you with exactly that and more.

Step 3: LOANS & DEBT

Look at any outstanding loans or debts that you might have to see how you can improve your situation. Could you refinance or remortgage to get better lending options? Could you pay off more of your debt than you are currently paying? Ask yourself these questions to evaluate whether you could improve your debt situation.

Step 4: LIFE INSURANCE

If you were to die, what level of income do you have and what protection do you have in place in order to ensure that your family can remain supported?

Making sure your loved ones are taken care of in case the unexpected occurs. Whether it is providing in your absence, a legacy planning strategy or perhaps to reduce an estate tax, life insurance can be simple and very useful.

Step 5: CURRENT INVESTMENT STRUCTURE

Are your investments structured in the best, most tax-efficient way? When your investment structures were first put in place they might have fitted around your circumstances but if these have changed or you would like to start planning on the best way to pass on your wealth to your loved ones in the future, then you might need to reconsider their structure.

Step 6: PENSIONS & SAVINGS

Are you saving enough for retirement or for the things that matter most to you? Have you topped up your own savings or investment accounts as well as those that might belong to your children and your spouse? Additionally, are you able to contribute additional funds to your pension or the pension of your spouse? Think about your current saving patterns and whether you should be doing anything differently.

Step 7: GIFTS

After you have carefully gone through steps one to four, do you have the scope to gift capital sums to loved ones without it having an impact on your lifestyle? Also, if you have excess income, can you use this to give your children regular gifts? Gifting is an important aspect of inheritance planning and can help reduce your tax rate (specially for those with financial ties to the UK).

Step 8: WILLS, TRUSTS & ESTATE PLANNING

Have you updated your Will so it reflects your current circumstances and your wishes and will it offer protection to your spouse and children from divorce or unwelcome attention?

Your Will should clearly state how you want your estate to be distributed to beneficiaries and if you want your children to have access to large sums of money while they are at a young age.

In addition, you should also think about your executors, trustees and advisors to determine whether they understand your values and how they can offer the right support. Your designated family members and executors should also understand where all of your information is stored in relation to your assets and liabilities.

Interested in donating some of your money? Considering setting up a a charitable trust or simply making a donation to a charity of your choice.

Step 9: LASTING POWER OF ATTORNEY

A Lasting Power of Attorney (LPA) is a legal document that lets you (the ‘donor’) appoint one or more people (known as ‘attorneys’) to help you make decisions or to make decisions on your behalf.

This gives you more control over what happens to you if you have an accident or an illness and cannot make your own decisions (you ‘lack mental capacity’).

If you have set up a Lasting Power of Attorney, are they still capable of carrying out this role?

Step 10: FAMILY & ESTATE PLANNING

Will your family be able to manage your wealth when you die? Make sure to plan ahead in the event any challenges may arise so you can prepare for them. You might want to put safeguards or seek advice from a financial planner.

LIFE-CENTRED FINANCIAL PLANNING

Wealth can prove a challenge to manage but a review will enable you to determine your current position and make the necessary changes to ensure that everything is in place for the future.

Our financial planners can create a unique LifePlan that will help you with exactly that. It will allow you to understand your financial future and to see how you can spend your time doing what you want to do, helping the people you would like to help, experiencing new and exciting things and living the life you want to live.

Book your free initial consultation to learn more about how we can help you.

 

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