Have no fear: making the future less daunting
Even if you’ve never watched a second of Strictly Come Dancing, it’s likely you recognise the name Craig Revel Horwood.
His signature brand of withering criticism (“I thought you were wriggling like a slug in salt!”) strikes terror into the hearts of the show’s celebrity contestants. That’s why I was fascinated to hear him talk about his views on how we can all cope with fear.
He’s been a successful dancer, choreographer, theatre director, and now TV star, but can still remember a time when he’d turn up for an audition and never hear from the producers again. It’s enough to make a budding star fear their career has ended.
But instead of letting the fear take over, he learned to accept these knockbacks. His take was that people are hard-wired to deal with fear. No matter what happens we can always bounce back and get on with life.
I think there’s something in this: we’re all far more resilient than we give ourselves credit for.
But of course, that doesn’t stop us trying to protect ourselves at the outset by avoiding taking too many risks. It’s a very natural thing to do.
The only thing is, when you apply that rule to your finances, it can end up being unhelpful - you could miss out on potential returns through being overly cautious.
Trying to live your life without fear
One of our founding principles at Smarter Financial Planning is to help you live without the fears that money can bring, including the fear of running out of it.
Take my retired clients Diane and Paul. Paul was self-employed and like many in the same situation had the same niggling worries throughout his career – where is the next project coming from? What work is on the way next year? Will there be enough to cover the mortgage? It was my job to reassure him that his retirement needn’t feel like this, and that he’d be able to relax knowing these questions were all answered.
It's not always rosy in the garden though. Being a successful investor has its challenges. Although I can’t control the markets, I do what I can to protect clients from the inevitable dips. I tell people at the outset that it’s likely that in year 1 and 4 I won’t be their favourite person at review, because it's roughly that often their investments show a dip in value. But that we'd be all friends the other three years because that’s when things usually correct themselves.
The idea that the investment journey won’t always be plain sailing can of course feel quite scary, but once you remove fear from the equation – shine a light on the central issues – things can look a lot less daunting.
For example, a temporary dip in the market that impacts the current value of your pension needn’t mean you need to change the whole strategy, In fact, as I’m fond of saying, these dips are all part-and-parcel of the life of a long-term investor. The plan I create is designed to withstand these falls.
Out of context, seeing a drop in the portfolio might well have inspired a knee-jerk response, which could have negative long-term consequences. But I was able to reassure Diane and Paul that in the long term, they’ll still be ok – their future won’t be impacted.
Don’t fear ‘what next?’ Embrace it
Not only can fear force you into panicked decisions over your investments, fear of the unknown – asking ‘what next?’ of retirement, sometimes makes us overly cautious on taking the next step.
We’ve touched on this before, how it’s important to find that balance between working hard enough to achieve what you want in life, and then easing up before you become too old to enjoy it.
You see it a lot in sport. Careers are short and it can sometimes be difficult to let go and imagine yourself as being anything other than your previous job.
Former boxer Ricky Hitman Hatton, British former two-weight world champion, recently spoke about his own struggles with depression following retirement 10 years ago, saying “I might be retired, but I’m not dead”. He’s even organised a return for the ring, a charity match to give himself “a reason to get out of bed.”
Taking the step into the unknown, proactively becoming more than your old job is a challenge. But it can also be liberating.
Take my friend Steve. He’s recently retired and it’s given him a new lease of life. He took a year doing absolutely nothing 'productive', just playing golf, maybe the odd driving range session. But I remember seeing him and thinking he was now a fully engaged Cornish surfer-dude, with his tan and sun-bleached hair. It was a real transformation. But that was just the beginning.
He was really getting into his retirement stride, travelling the country, ticking off famous courses, so his wife bought home details of a voluntary role at Waddesdon Manor, which might be familiar to you as our local National Trust property, and they’ve put him on beer and wine tasting, which couldn’t be more perfect!
I met Steve for a walk last week and he described how he has taken on another local role as part-time greenkeeper at his golf club. Opportunities have arisen and fallen into place in a way he could never have planned for.
And it’s helped him successfully make the transition from his working life to a new post-retirement ‘career.’ He’s got that sense of feeling valued and being part of something. It’s only May, but he’s already talking about how (for the first time ever), he’s looking forward to the work Christmas party!
Planning ahead
Of course, letting go of these fears doesn’t mean letting your whims run riot and abandoning any caution in our investment strategies. That’s what we’re here for.
As financial planners we can give you a glimpse of what you want your end goal to be and help you work towards it - we’ll also take the emotional sting out of any tricky decisions that you need to take to get there.
We can guide and support you and help you to check in on your feelings to find out what it is that’s worrying you or holding you back. We can explore them and investigate the idea of eliminating the emotional aspect.
Once you take the fear away, you can start to see a number of new possibilities open up in front of you.
Without fear, the result (as Craig might say), can be fab-u-lous.