Do you have questions about cash flow analysis? Here our chartered wealth planner Josh Gupta explains everything you need to know.

Josh Gupta, CFP™ Chartered MCSI
Chartered Wealth Manager/Planner
Posted in Fiducia News on 16.05.19
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What is cash flow analysis?

Cash flow is not an insurance strategy, it’s not an investment plan and it’s definitely not a product.

Cash flow analysis or modelling or forecast simply tracks the flow of cash. Very similar to a household budget but on a larger scale and on a longer time frame.

It is really a thought-provoking process to help us understand our future finances. It helps us find answers to some very important questions like:

• When can I retire?
• Will I have enough money in retirement?
• Will I leave behind an Inheritance Tax Bill?
• Can I afford to help my children with a house deposit?
• Will my pension be enough?

Cash flow planning begins with identifying all money coming in and money going out from all sources, such as earnings, investments, annual and lump sum expenditure. This data is then analysed along with your future goals and requirements taking into account life events such as retirement, one-off expenses like gifts to children, holidays, and even your death.

Comprehensive calculators are used incorporating assumptions of inflation, growth, investment returns, expenses etc. Long-term and short-term goals are taken into consideration and measured against any income and outgoings to help us make informed decisions. The system allows flexibility to make changes in real time and in fact client involvement is highly encouraged for overall benefit. The result is then expressed in a user-friendly graph suggesting a surplus or potential shortfall.

Why is it useful?

Once we are aware of our financial track, we can implement effective strategies today to either enhance the outcome or achieve our goals sooner. More importantly, it provides peace of mind and takes away the ambiguity.

Based on your personal goals, effective strategies can be put in place in a timely manner to achieve financial stability in future. Popular areas where we can work with you are:
Implementing Pension strategies covering contributions and withdrawals

• Efficient tax strategies with investments and savings
• Inheritance tax planning
• Trust planning
• Long term care strategies
• Separation settlements
• Understand risk/reward relationship for investments and we can benefit from it
• Understand how compounding works and benefits in the longer term

I believe cash flow analysis is a powerful tool to make us aware of our current financial state and helps us design a robust plan for a secure financial future.

Is it hard to understand?

There is a range of software available in the market. Some are more comprehensive in nature than others. It can be a bit tricky and often provides less than accurate result if done without the help of a professional.

It’s advised that you discuss your options with a qualified financial planner as the planner will not only help you identify GAPS in your financial space but also help design appropriate long-term and short-term strategies to achieve your personal goals.

As we are all different with different goals, there isn’t a ‘one size fits all’ strategy. I recommend that you book your first ‘non-obligatory’ meeting with a financial adviser at Fiducia Wealth.

In conclusion, I would say cash flow analysis or comprehensive financial planning is not just about savings and investments. It’s about spending too.

Josh Gupta, CFP™ Chartered MCSI
Chartered Wealth Manager/Planner
Posted in Fiducia News on 16.05.19

If you would like to know more about how we as Financial Advisers can help you set, plan and achieve your financial goals then financial planning section of  our website: Financial Planning or send us email at: email@fiduciawealth.co.uk

The information contained in website is for guidance only and does not constitute advice which should be sought before taking any action or inaction. The information is based on our understanding of legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change. Accordingly no responsibility can be assumed by Fiducia Wealth Management Limited, or any associated companies or persons, its officers or its employees, for any loss occasioned in connection with the content hereof and any such action or inaction. Professional financial advice is necessary for every case.

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