Human beings, in general, are notoriously bad at calculating risk and weighing up reward, it’s almost hard wired into us.
Our survival, millennia ago, was based around our inability to think too much about the future and focus on ‘eating today’.
This, while useful hunting Mastodons, is less helpful when planning our financial futures and we may take key decisions in our lives without much thought to our finances.
This article will help explore some of the times when financial advice might make all the difference to our wealth and future happiness.
Before the 2008 crash, at the height of Britain’s property prices, the speed at which house purchase decisions were made reached epic proportions.
The availability of mortgages and other cheap credit in an economy based on an unsustainable housing boom resulted in countless first time buyers finding themselves, post crash, in negative equity.
Others found that when the ‘sweetheart deal’ mortgage rates they signed up to ended, their home became exceedingly expensive.
In both instances some financial advice might have prevented a lot of long term heartache.
The long term effect of negative equity or an expensive mortgage deal can be immense, being ‘trapped’ in your property that you can only sell at a loss or saddled with a huge mortgage obligation should be avoided at all costs.
You can often get mortgage advice from independent financial advisor as part of the overall cost of the loan you take out.
People cringe at the thought of discussing money and finances along with the romantic side of tying the knot, but it is essential that you are realistic about the economics of marriage too.
Getting married, sharing a home, and potentially having children together means that life insurance, wills and inheritance and the ownership of shared assets all have to be considered.
Accessing financial advice is important at this point, as there are countless life insurance policies, critical illness covers, and other provisions to cover your individual needs to choose from.
Having an expert who can guide you towards the best deals might well save you money in the long run.
Sadly, for many married couples, divorce too will be a significant milestone.
It goes without saying that during the complex and emotionally painful process of ending a marriage expert legal advice is necessary, but it is also important for both parties to have financial advice too.
You might experience a considerable decrease in your income as a result of divorce from your partner, or you might be the recipient of money in the divorce settlement.
You might be the partner who is obliged to pay out a large settlement, or the one who has most responsibility for ongoing child maintenance payments.
If you become the sole provider for any children from the marriage, you may need to consider your life insurance and critical illness cover.
You might already have these policies but they may need to be reviewed in order to reflect the value of any maintenance payments you receive.
A financial advisor can also offer guidance on the most effective way of investing any lump sum from the divorce so it continues to grow in value, and can be used to pay for education and university costs for your children, or add to your own retirement fund.
Some divorcing couples also need to disentangle their pensions and here a financial adviser can be invaluable.
In savings terms, your retirement starts now.
Making sure we have an income that will sustain us after our working life is over is something that many people put off until their 30s or 40s, but the longer you leave it, the more costly it becomes.
If you are just starting out on the road to planning your retirement and you have no idea about what choices there are or what pension products to buy, getting some advice is a good place to start.
However, you might already have a portfolio of investments and a variety of pension pots that you have built up yourself.
In this case it might be important to find out whether you current pension providers or other investments are performing effectively, compared to the rest of the market.
A financial adviser will be able to give your portfolio an audit and suggest whether or not your money could be put to better use elsewhere.
Knowledge is wealth
The more expertise that is available to us, the better informed we are and the less likely we will be to make costly decisions that are not easily undone.
Financially, we only have so many options, money, and time, to spend investing it, so it is important not to rely on pot luck.
So if you have a significant milestone in your life fast approaching, you might find it useful to talk over your options with an advisor.