I always use the analogy of a freshly landscaped garden when it comes to your own financial plan. Once established and the new plants are watered in, you can’t let it go unattended and expect it to thrive. It requires weeding, fertilising, and monitoring to continue to thrive, and your own financial plan is no different.
Aset-and-forget strategy is dangerous and can be detrimental to your lifestyle in retirement.
Almost every year, we see significant changes announced for our superannuation system, interest rates, the stock market, and the property market, and all of this emphasises the need for regular reviews of your financial strategy and your investment portfolio.
A full review should take place at least one or two times per year and cover topics such as:
- What future expenditure is planned for the next 12 months, and how much liquidity or access to cash do you have so that you don’t need to sell investments to fund these?
- Have your financial goals, dreams, and desires changed as a result of a changed job or family circumstances?
- Are you on track to achieving your objectives in the planned time frame, or are adjustments needed?
- What new legislation or taxation changes have occurred, and are you eligible to take advantage of these and factor them into your financial plan?
- How have your investments performed, and are they appropriate for current market conditions, or would you benefit from rebalancing or being a bit more proactive with your portfolio?
Are you adequately protected against changing financial and personal risks? Start by also looking at the following to give you a head start for 2016.
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