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Start while you’re young

Richard T Lishman, Managing Director of the 4dentists group highlights why when it comes to financial planning, it’s better to start as early as possible.

Pablo Picasso once said, “Our goals can only be reached through a vehicle of a plan in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.” While many would agree that this statement is relevant to a number of applications, it seems particularly pertinent for financial planning, and is advice that professionals of all backgrounds and ages would do well to heed.

Young dentists new to the world of financial planning especially can benefit from Picasso’s wise words, as effective monetary management requires a great deal of preparation and foresight. Naturally, the earlier you start the better, because if left too late it might not be possible to achieve everything that you had set out to do. It can also be more stressful leaving financial arrangements to the last minute, particularly as you never know what’s around the corner. That’s why it’s always best to start financial planning as soon as is feasibly possible.

Where do you start?

The first thing you’ll need to do is establish what your short- and long-term financial goals are. The clearer you are about what you want to achieve, the more likely you are to succeed in meeting your objectives. It may be that your primary aspiration is to buy a house, start a family and put aside funds for the future, in which case your financial planning will likely be geared around utilising appropriate savings vehicles with lower risk. Or perhaps you plan on starting your own business and building the value of your estate through investments. Whatever your aim, it’s important to remember that it doesn't necessarily matter how much money you have, but how you organise it so that you can do more with it.

Get help from the off

Once you’ve established what you intend to achieve, you can begin formulating a financial strategy. The plan should be relatively flexible to accommodate for any potential changes (your priorities are likely to develop over time, after all), and unforeseen events such as illness and so on. An experienced Independent Financial Adviser (IFA) is the best person to help you with this, as they will be able to create an adaptable financial plan that’s both tailored to your needs and relevant to evolving market conditions. They can also help you to understand the financial implications of certain events such as becoming a self-employed associate, buying a house, buying or selling a practice and making a will, as well as provide advice on relevant taxations.

Your options

There is a variety of investment and savings vehicles open to you; with the help of an IFA, you can assess which ones would benefit you the most, meet your goals and provide the most return with the lowest amount of risk. Each type has its advantages and disadvantages, so it’s worth weighing up your options before making a commitment, and where possible, it is advisable to diversify your assets as it helps to ensure that your portfolio is more protected should one asset suddenly start to underperform. Possible options include cash investments such as savings accounts, bonds, shares, equity funds and property. Over time, your portfolio will evolve and certain assets will perform better than others, but as long as it’s properly nurtured and rebalanced as and when it’s appropriate, there’s no reason why you shouldn’t be able to achieve your goals.

Retirement planning

The other thing you need to think about is retirement planning. It may seem like a long way off, but you can do yourself a lot of favours by starting early. For one thing your pension pot will be considerably bigger by the time you come to retire, but you’ll also avoid having to save larger sums of money over a shorter period of time, which can put a strain on your overall finances. Indeed, it’s a lot less stressful saving 12% of your salary, than it is 20%.

Get cover early

To compliment your financial planning and ensure your finances are covered, be sure to take out the relevant insurance as well. You might have age on your side, but sickness, illness, family issues and the like can strike at any time. Besides, the longer you leave it the higher your premiums will be, so it makes sense to arrange cover sooner rather than later.

What are you waiting for?

There can be no denying that starting financial planning at an earlier stage in life can be hugely beneficial. The question is; have you started yet?

For more information please call 0845 345 5060 or 0754DENTIST.

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