What do Civil Defence and Financial Planning have in common?

7 April 2021 by Bruce Cameron

What do Civil Defence and Financial Planning have in common?

News alert March the 5th 2021: Three large earthquakes occurred off the coast of NZ. Civil Defence alerts buzzed cellphones around New Zealand warning of a possible tsunami on the East Coast. Updates in media and Civil Defence website were made known and Kiwis around the land in at risk areas responded to the threat.

Along the East Coast of the North Island officials evacuated homes, business, and communities to ensure safety of civilian life, following an 8.1 earthquake of the coast. Later in the afternoon the Civil Defence alert level was downgraded and people could return home and to their work. The New Zealand North Eastern Coastline and communities thankfully spared of a natural disaster on this occasion.

Some points to note on Civil Defence were:

  1. Understanding the risks of the event.
  2. Have a plan in place to prevent damage and loss of life.
  3. Implementing the plan when weather, earthquake or floods determine a prudent course of action, through the various agencies.
  4. Visit the Civil Defence website to understand more about what to do in a disaster. https://www.civildefence.govt.nz/

So, what does Financial Planning have in common with Civil Defence?

Given the sudden and unexpected nature of natural disasters, at first not many similarities may come to mind, but on examination here are some of the common themes I observed.

As above, I would suggest a financial plan has the following attributes:

  1. Understand the financial risks of an insurable life event, whether for property or health.
  2. Have a personalised plan in place to prevent damage, protect wealth and minimises financial loss due to uncontrollable life events such as accident or illness.
  3. Implement the plan and review regularly. When did you last review your financial plan - or your Wills and Enduring Powers of Attorney (estate planning) for personal injury or untimely death due to changes in your life circumstances?
  4. In other words: Plan and be prepared.

Some further questions for readers to consider are noted below:

  1. When did you last consciously make time to review the financial risks to your life, family, business, and work interests to protect your own health (families) and life plans for the next 12 months and beyond?
  2. Do you have the correct fire and general insurance to replace loss to physical assets? Are things the same value or greater value?
  3. Do you have the correct health cover to access medical treatment for an unexpected diagnosis requiring an operation?
  4. What protection do you have for your income earning ability for the next decade? Even a modest income of $25,000 p.a. multiplied 10 years is $250,000 of unearned pre-tax income. If you do not have a suitable policy in place for illness, how would you manage?
  5. Legislation and bank lending policy often changes, this may impact your plans if you want to sell your home and buy another one. Is there a funding gap?
  6. Should you maintain a balanced investment / KiwiSaver portfolio in retirement?
  7. What is the difference between a balanced investment portfolio, compared to a growth or conservative investment portfolios? Why is this important to review?

Here at Lifetime as advisers we like to assist you, our clients, to manage and arrange your financial affairs to meet your life goals and aspirations. Helping you identify gaps in your thinking and/or planning using our collective experience to assist you in your goals and life choices is part of our Advice for Life philosophy and approach to financial planning.

Research in New Zealand from two leading professional bodies, the Financial Services Council and Financial Advice NZ, has shown people with financial advice experience less stress and have the potential of more productive and happier lives. Who would not want a slice of that outcome? Investment returns are 4% better on average from advised New Zealanders than non-advised New Zealanders*.

“To put this 4% into real terms; if a 25-year-old were to take financial advice and saved $2,500 per year, they would be $1.5 million better off at 55 than if they didn’t take advice. That’s a remarkable difference, and a benefit that many more New Zealanders should be receiving,” said FSC chief executive Richard Klipin.

(August 2020).

"...if a 25-year-old were to take financial advice and saved $2,500 per year, they would be $1.5 million better off at 55 than if they didn’t take advice."

We welcome the opportunity for our existing and prospective clients to contact us and arrange a time to talk. A great outcome is for us to provide an assurance (where possible) that your current plan is well suited for your life stages, and plans.

If your current plan has some gaps, a conversation with your adviser would look at sensible changes to make to address life’s unexpected and unpredictable moments, and add value to your planning.

I encourage you to read the reviews on our website from some of our satisfied clients that mirrors the research findings. We invite you to make a time to update your financial plan; just as you may need to review your personal (and business) Civil Defence plans should the need arise in the future.

 

References:

https://www.fsc.org.nz/site/fsc1/Money%20and%20You%20-%20Research%20-%20Financial%20Services%20Council%20-%20August%202020.pdf Page 9.

https://financialadvice.nz/wp-content/uploads/2020/10/Financial-Advice-NZ-Trust-in-Advice-Double-page.pdf Page 5.

 

Article By Bruce Cameron - Learn More

About the Author

Bruce Cameron is an experienced adviser who has 20 years’ experience in the New Zealand financial services industry. Based in Tauranga, Bruce has a passion for working with clients to ensure they get practical financial and investment advice that is relevant to their goals.

Disclaimer: This article has been prepared for the purpose of providing general information, without taking into consideration any particular investor’s objectives, financial situation or needs. Any opinions contained in it are held by the author as at the report date and are subject to change without notice.

preview image - Unlocking Financial Harmony: Navigating the Symphony of Life with Mindfulness

Unlocking Financial Harmony: Navigating the Symphony of Life with Mindfulness

In the hustle and bustle of daily life, the concept of mindfulness often finds its place in discussions about mental health and stress reduction. However, its impact on financial wellbeing is a hidden gem worth exploring.

A 2021 survey by the New Zealand Retirement Commission ranked New Zealand’s overall financial wellbeing as 61 out of 100. In this case, financial wellbeing is defined as “a combination of meeting commitments, being financially comfortable, and resilient for the future.” The area in which New Zealand scored the lowest was preparedness for retirement, with a 43 out of 100 which highlights that around one in three New Zealanders are concerned that they will not have adequate savings to last through their retirement.

24 November 2023 by Lifetime
preview image - Finding Your Financial Ikigai: The Japanese Art of a Balanced & Purposeful Life

Finding Your Financial Ikigai: The Japanese Art of a Balanced & Purposeful Life

In a world that often measures success in financial terms, the Japanese concept of Ikigai offers a refreshing perspective. Transcending the boundaries of culture and geography, this philosophy loosely translates as "a reason for being". Ikigai is a convergence of what you love, what you're good at, what the world needs, and what you can be paid for. It's an approach that represents a broader view of prosperity, encompassing joy, purpose, and contentment. As financial advisers, we find this particularly compelling. This article delves deeper into how Ikigai can not only enrich your life but also inform your financial decisions for a more fulfilling journey.

21 November 2023 by Lifetime