‘When is enough?’
Accumulating wealth is a primary goal for most of us, but it is of particular significance for younger generations. People born subsequent to ‘the Baby Boomers’ years are likely to live longer in retirement than the years they generated wealth.
‘Enough’ accumulated wealth is the amount that satisfies a comfortable lifestyle. We assume that means you will achieve your lifestyle and financial needs, goals and objectives by your retirement date.
The state of being ‘satisfied’ is different for each of us. Each of us require different levels of wealth to be accumulated. In this article, we assume financial goals achievement means –
- you have confidence in achieving this objective,
- you sleep comfortably at night, and
- you believe in your financial independence.
Accumulating wealth; and wealth protection.
Setting goals:
Each of us has different goals – and over time our own goals will change as circumstances change. Consequential circumstances could include –
- some windfall gain, or
- some unforseen detrimental event,
- a significant change in health status might intervene in the progress, or
- an accident that renders you or someone in your family permanently disabled, (and requiring high levels of care).
All manner of changes in family structures can impact on our strategy for accumulating wealth
Collecting relevant data:
To determine how much accumulated wealth is enough, requires the collation of all relevant data regarding your current financial position. We process data regarding –
- assets, including superannuation;
- liabilities, and
- available cash flow,
for this exercise.
Your advisor level will listen to the aspirations of investors as to what they would like to achieve financially whilst maintaining an acceptable lifestyle. This lifestyle includes concurrent provision for dependants – children, and/ or vulnerable dependants.
We make an assessment of each individual’s aversion to investment risk. This builds the understanding of them as an investor. Understanding the investor risk profile will inform their financial expectations. Armed with all of this information puts our team in a position to strategise solutions to client needs, goals and aspirations to set them on the pathway to accumulating wealth.
Assessing available timeframe:
In many cases, the ultimate financial goal is ‘financially independent’ retirement. Whether sufficient wealth is accumulating for this objective –
- a projection is made as to the anticipated longevity of the investor,
- where they will live,
- what health they will ‘enjoy’,
- what retirement lifestyle is expected, and
- whether other financial responsibilities will prevail at the start of retirement.
Calculating the adequate wealth target:
As complicated as all of the unknowns in the above may sound, it is possible to make an acceptable determination as to ‘what is enough’. Experienced financial planners can assist you to make those calculations – or to review your own process with you by way of confirmation.
Plan to protect:
Having satisfied yourself that you have the above calculation ‘nailed’, it is wise to consider whether self-insurance is a wise move – and if the attainment of the financial goal set above is ‘fragile’, then it will be much safer to outsource the financial risk that you can reasonably anticipate, through life insurance risk protection issued by a reputable insurer. If you take this path, there is another ‘what is enough’ calculation to make –
- the amount of insurance protection required to ensure that any interruptions to the attainment of your goals will be minimal?
Whilst insurance available online (or as advertised on TV) may be convenient, it will be to your benefit to ensure that –
- you understand which insurance product provides the protection for the identified risk,
- the name in which to hold the policy,
- what ‘conditions’ should be confirmed, and to
regularly undertake a review of your insurance portfolio ensuring that you are neither under- nor over-insured.
To learn more – and get sound advice…
The experienced advisers at Continuum Financial Planners Pty Ltd are available to work through these processes and calculations with you. They provide professional wealth management advice having –
- listened to you,
- developed an understanding of your financial needs, and
- utilising effective processes,
formulate solutions to your individual needs, goals and objectives.
To make an appoitment to meet with one of our experienced advisers –
- phone our office, on 07-34213456, or
- at your convenience, use the linked Book A Meeting facility.
Links to other articles that we have posted on wealth accumulation strategies and on life insurance matters are –
- Strategic Wealth Management;
- Life Insurance protection from personal risk;
- Continuum Financial Planners: Risk Protection; and
- Continuum Financial Planners: Investment Strategies.
(This article was originally posted by us in October 2013. During one of our occasional updates/ refreshings, most recently in June 2025, we changed the title.)
