Inflation means that the cost of financial decision drift just took a nasty leap

Inflation means that the cost of financial decision drift just took a nasty leap

We know that simply through the passage of time, our present financial situation becomes our future financial situation. So far, so simple…

From working with our clients over the years, it is clear to us that there are essentially four possible outcomes for that future financial situation:

1.????Ideal

2.????Okay

3.????Surviving

4.????Crisis

Now for the kicker – the path from now to any of those outcomes is NOT a straight line. It is a curve.

How do we know this? Compounding. The cumulative impact of one’s decisions, or lack of them, ie drift, is the driver of your outcome.

What’s this got to do with inflation?

Compounding. Your starting point is the same, your current financial situation. The time it will take to get to your future financial situation is the same. For example, 20 years until retirement. But the rate of change has just jumped. A lot. That means the curves have become a lot more pronounced.

“Yeah, but it is only going to be for a few years…”

That higher rate for those “few years” is compounded, so the overall cost of drift is an order of magnitude higher.

Have you have been thinking that you will get around to sorting out your finances in a “few years’ time”?

Have you been swamped with work, family, study, life and just not had the time to get to thinking about this?

A financial plan is the best place to start. Mathematically, now is always the best time to start a financial plan.

But how do we do that?

The best way of establishing a financial plan is to reach out to a financial adviser to talk about how you can get ahead of the curve and on your way to ‘Ideal’ by making regular good decisions that compound over time.

You can book a 15-minute no-obligation consultation free of charge with one of our professional financial advisers. Here we can discuss creating a proper financial plan tailored to your specific situation and outline how you can onto the ‘Ideal’ dark green line to achieve your long-term financial goals.


Adrian Johnson

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#financialplanning?#financialadvice?#permanentwealthpartners?#forprofessionalsbyprofessionals?#PWPNewsletter?#inflation #compounding

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