Rising Tide Blog

Once they’ve been given financial advice and created a financial plan, many people consider these are ‘set in stone’. It’s important, however, to understand that these things are fluid; as your life evolves, they should too.

Financial advice is rooted in the understanding of goals and the assessment of resources (both current and future). As advisers, we work to bring these two areas together, make reasonable assumptions and devise a plan of attack based on what we know now.

So, when what we know changes, often, the plan changes. This iterative and evolving process is part and parcel of giving and receiving advice. I find it helps to think of it like the weather; when the forecast says 17 and rainy but the day ends up warm, we adjust our clothing to be more comfortable and then move on with our plans.

Changing inputs

At Rising Tide, our advice team frequently has conversations with clients about changing inputs.

Some examples of changing inputs include:

• a property purchase price is different than expected
• changing remuneration from a new job or promotion
• increasing the days of childcare you pay for each week
• deviations from the original plan
• a sense of uncertainty

Changing a financial plan willy-nilly can be costly. Not just in monetary terms, but also in terms of your time and energy. However, changing a plan based on updated information is smart.

Updated information: Rising interest rates

The current situation in terms of rising interest rates can be viewed as “updated information” and may require your plan to be updated so you can reach your goals.

This may look like:

a) reducing your lifestyle spending to maintain your savings and investments
b) reducing your savings and investments to maintain your lifestyle
c) switching from principal & interest repayments to interest only on your mortgage; or
d) some combination of the above

You may feel like you’re falling behind if you’re doing any of the above – but you are not. To do anything else is unwise and will result in some kind of financial reckoning.

It pays to remember that changing a plan is inevitable. Why? Because it’s unrealistic to think the assumptions you base your plan off will play out perfectly. That rarely happens.

Success requires flexibility

In a nutshell, it’s like a footy game.

If a team wants to win, the coaches will have to make changes to their game plan based on the evolving situation on the field – how each player is performing, the team’s real time strengths and weaknesses, and how the opposition is doing.

If the coaches simply stick to their original plan, they may lose. Winning may require making strategic substitutions or positional changes.

Stay agile

Your financial plan is no different; consider it a fluid concept, designed to be nimble and adjust to your ever-evolving life, to set you up for success.

Change isn’t a setback or failure; it’s a reflection of your humanity and the dynamic nature of life.

Just like a football team that adjusts its strategy during a match, updating your financial plan as circumstances shift shows your willingness to adapt and make the most of the opportunities that come your way.

So, embrace the need for change, stay agile, and keep playing the game to win!