The journey, not the destination

Have you ever read Into Thin Air by Jon Krakauer or seen the movie Everest? It’s based on the true story of an expedition that goes badly wrong.

In 1996, a mountaineer called Rob Hall led a small team of experienced explorers to tackle the mountain. Having already conquered Everest four times, you could say that mountaineering was his bread and butter, so his fifth ascent to the summit shouldn’t have posed any problems.

Before the climb, the team spent a huge amount of time carefully planning how to get to the top, as is natural. Afterall, the ascent is what the climb is all about, the focus, excitement and sense of achievement is all on reaching the top.

From day one, they hit the ground running, overcoming unexpected challenges because they had fully prepared for them. The team’s ascendency was a success.

But getting to the top, they found, was only half the battle.

Unfortunately, their journey back down is where it went horribly wrong. A lack of planning combined with emotionally-driven decision making, left them exposed to the full horrors of an Everest blizzard, eventually taking the lives of the eight climbers.

So why did things go awry? By focusing all their attention on getting up the mountain safely, the team overlooked the importance of the second half of the journey: the descent. This may not have been as exciting, or what the climb was all about, but of course, it was equally as important.

There’s a lesson to be learned here…

I have many aspirational clients, with big life goals and ambitions to fulfil, which is fantastic. A summer house in the south of France, an exciting adventure across south-east Asia. Amazing. Or how about this: a client in their 20s who wishes to retire by the time she's 45.

What a goal!

I also have clients who simply want to make sure they have enough in retirement. This is great too.

But what happens after you’ve accomplished your life goals? What happens once you’ve bought that dream house, retired early or retired with enough to enjoy a happy and comfortable retirement? What’s the next chapter?

Yes, climbing up the mountain is important, but you need to know what happens when you get to the top. We spend so much time saving for our retirement, but very little time on how we plan to manage afterwards.

This is extremely important, especially if we’re all going to live a lot longer because our retirement could last a long time. Imagining retiring at 45!

But there’s another reason

One of the biggest pitfalls of retirement is what happens financially in the first few years after you retire. This is the period when your retirement plan is most vulnerable to market forces. This is called ‘sequencing of returns risk’. Bad returns will hurt the most in the first decade, when you are most vulnerable to the effects of a decline in your portfolio.

So it’s the most challenging time in terms of holding fast, resisting emotionally-driven decision making and sticking to the plan.

This is where the role of the financial planner becomes invaluable

My job is both to get everyone up Everest and safely back down in one piece. To help you to remain focused and resist the urge to react (or panic) and respond emotionally to market volatility. To adapt to challenges, but to stay the course.

Therefore my role goes beyond just helping people being financially secure. It falls somewhere between being a financial advisor and a mentor. I bridge peoples’ financial aspirations with reality, contextualising each goal with the potential variables that may affect you once you get there.

But each person’s ascent and descent is very different. So the key to all this is knowing as much about you, your goals and aspirations as possible. But not just at the initial planning stage, nor as you reach your goals, but afterwards too.

I have clients who are reassessing their retirement plans in light of the Covid-19 crisis. Some who are exploring new business ventures for example, or are thinking about passing on more wealth to their children. Some people wonder about whether to share some of these ideas with me because they’re not sure if they’re part of my remit, but they are. Everything that’s important to you is important to your future and therefore to me too.

The more I know about these plans, about you, your family and your careers, the better I’m able to guide you along the right route. Both in terms of getting you there and helping you to maintain your potential thereafter.

In the advice profession we talk a lot about the fact that ‘our financial life cycle is a journey, not a destination’. The bit after you’ve reached the top may or may not be the most exciting part, but in many ways it’s the most important.