Financial planning is a lifelong process

Posted by TEBI on January 8, 2020

Financial planning is a lifelong process


Here at TEBI we are strong believers in the value of proper financial planning. However confident you feel about your knowledge of investing and other financial issues, having someone you can turn to, who knows you, your personality of your goals, is hugely beneficial.

As the financial writer Jason Butler explains in this video, financial planning isn’t a one-off, once-and-for-all solution. It’s an on-going, lifelong process.



This video was produced for Index Fund Advisors, an evidence-based financial advice firm based in California and serving clients across the United States.
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Video transcript:

Something that many investors often fail to appreciate is that financial planning isn’t something you can do once in your life and then forget all about it, it’s a lifelong process.

Sure, there’s a great deal of work to be done at the outset — deciding on your financial goals, working out how much you need to invest to achieve those goals, and of course devising a strategy. But that still leaves plenty of things your adviser will need to do on an on-going basis. Jason Butler was for many years a very successful financial adviser. He now works mainly as an author and a consultant.

Jason says: “That planning process of what’s important to you, do the numbers, project managing, isn’t just like, you know, turning up to a gym with a two month session with a gym trainer, it’s about evolving new habits, regular, positive habits, proper decision making, accountability and a proper discipline to continually check in with your plan and your finances. Sometimes you’ll have to do lots of changes, sometimes you won’t.

“Sometimes there will be difficult decisions, sometimes they’ll be simple. Sometimes the way ahead won’t be really clear, it won’t be obvious, but you’re going to have to plump for something. And so, I remember when I was working with clients sometimes they’d say well, it hasn’t been a busy year, but when we said what did you value, I value the discipline, the structure, and the sense of peace of mind that I have.”

One of the most important tasks for your adviser is to rebalance your portfolio, perhaps once or twice a year. It’s something you need to do, but investors who try to manage on their own, without the support of an adviser, often fail to.

Butler: “Rebalancing is just really simple. If I start out with fifty per cent of my portfolio in bonds, and fifty per cent in equities, and regardless of the value of the portfolio if the equities now represent sixty per cent of the portfolio, and the bonds represent forty, I have to sell some of the equities to bring them back to fifty and buy more of the bonds, now what that means is you are selling off something that has gone up which is counterintuitive and behavioural science sats we’re unable to do, and you’re buying more of something which has fallen which makes us compound our fear and our pain so it’s counterintuitive but what it does is it means, it doesn’t mean that you maximise your return, but what it does mean is it means that you keep the risk-return profile of the portfolio in check.”

So, when choosing a financial adviser, make sure it’s someone you’re happy to work with for a very long time. Thank you to Jason Butler, and to you for watching.


Jason Butler has also contributed a number of articles to TEBI. Here are some of the most recent:

Beware investing in serviced accommodation

Time to face up to your money mistakes

Five steps to achieving financial freedom

If you don’t ask, you don’t get

Match your spending with your values

How to rid yourself of debt


Picture: Suzanne D. Williams via Unsplash


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