Financial Planning – helping to answer life’s big questions.

A lovely couple from the Midlands had sold the business that they had spent thirty years building and running. Not for tens of millions but for a good amount of money. They’d had a good life, but not an extravagant one, as they had been focussed on the business, their children and helping the local community. Still relatively young, they had plans to travel, plans to help their family, plans to develop new interests and become more involved in the community and a desire not to ‘work’ again. The question was whether what they had got from the business was a life changing amount of money.

If they left their money on deposit, would it be enough to last them? 

This question was relatively simple to answer. With a detailed look at their expenditure and how that might change over time, a discussion about life expectancy, data on pensions and other assets that would be there to support them and a longer discussion on how they felt about leaving money to their children and to charities, the conclusion that we came to was ‘Yes’. Despite low interest rates currently and without projecting high interest rates in the future, if they were happy to use their capital there was every likelihood that it would support them for life without having to invest and take investment risk.

What if they used half of it to buy a smallholding in Cumbria as essentially a second home and hobby? 

This question came as a surprise, they’d holidayed there for years, loved the area and had a dream of buying, renovating and managing a smallholding combining modern green technology and traditional land management. With no intention of making this a profitable enterprise, this took capital from what was accessible to support them and added significant initial and ongoing expense. The answer, ‘it depends’. It depends on how long you want to keep the smallholding; it depends on how accurate the estimates of the cost of renovation, development and running the smallholding are; it depends on if you still want a deposit approach with what is left; it depends on what approach to investment you might be comfortable with if you moved some capital from deposit.

The end result has been that we’re now part way through the renovation and development stage, with a plan that is working so far and to which we return regularly to update, adjust and review.