4 financial planning myths debunked

Having worked in the industry for over 16 years, I see the benefits of financial planning every day. I witness first-hand how it changes people’s lives, protects and supports them in difficult times, and helps them reach their financial and life goals. It’s one of the things I love about my job.

Financial advice can be truly life-changing, but it can also be misunderstood. So today, I want to talk about some of the common misconceptions about financial planning and why they are just that.

#1 It’s only for those nearing retirement

This is a really common misconception and one that can limit your financial outcomes. In fact, recent research by Rice Warner highlights that after 4-6 years of receiving financial advice, advised individuals have an average of 60% more assets than non-advised individuals.  And after 15 years, this grows to a whopping 290% more assets than comparable households who don’t receive advice.

You spend your life making financial decisions that will affect you today and tomorrow, from property to cars, holidays and schooling for your kids. Many people make these decisions without understanding whether it is helping them move towards the lifestyle they want or jeopardising their future.

A financial adviser can help you make all of these decisions as part of a bigger picture, ensuring you stay on track for what you want out of life today and tomorrow.

#2 You need to have significant assets to benefit

Many people believe you need significant assets to benefit from financial planning, but the reality couldn’t be more different. Financial planning is about helping you reach your financial goals – whatever they may be.  We can help you with advice that will set you up for success and put you on a pathway to building the lifestyle and finances you want.

Some of the most valuable advice we give our clients is how to pay down debt, structure financial affairs to maximise outcomes, and build healthy financial habits. Those who start early are in the best position to use this advice to grow their assets and their wealth.

#3 It’s expensive

Over a forty-year career earning an average of $100,000 you will earn $4 million, potentially making your income your biggest asset.  Making the most of this money to accumulate, grow, and protect your wealth will cover financial planning costs many times over.

As mentioned above, research shows advised clients end up significantly ahead of non-advised clients.  There are many ways the right financial advice can help you save significant amounts of money that you can then deploy elsewhere to live the life you want.

For example, by creating a plan to help you pay down your mortgage sooner, your adviser could save you six-figure amounts.  Even at today’s low interest rates, paying off an $800k loan in half the time would save you $220k.  This could mean you can move up the property ladder, give your children a private school education or take that dream holiday – the impacts on your lifestyle can be priceless.

Another way financial advice can save you significant amounts of money is by helping you structure your super to weather financial storms.  From the 2008 GFC to the current COVID-19 pandemic, financial downturns can have a disastrous impact on your retirement savings if you are not prepared.  By helping you structure your super, your adviser can save you a lot of stress and ensure you have the funds to live the retirement you deserve.

#4 It’s all about restrictions and limitations  

Many people incorrectly think financial planning is all about restricting life today in order to save for tomorrow, but this is not the case.  The right financial advice should be about living for today while planning for tomorrow, enabling you to do more of what you love, not less!

One of the ways we help you make the right financial decisions is by making sure your spending is aligned to your values.  If you get this right, your money could actually buy you happiness.  To find out more about aligning values and spending, you can download our free roadmap here.

If you’re ready to explore how financial planning can help you reach your life goals, get in touch to book your free consultation.

General Advice warning

The information provided in this blog does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. Apt Wealth Partners (AFSL and ACL 436121 ABN 49 159 583 847) and Apt Wealth Home Loans (powered by Smartline ACL 385325) recommends that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.