Sound financial planning fits on the back of a napkin. When something matters as much as our financial future, we tend to assume it must be complicated. A video on the Bloomsbury Wealth YouTube Channel.
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Transcript: Robin Powell & David Jones/ Financial planning expert
Robin Powell: When something matters as much as our financial future, we tend to assume it must be complicated — that anything this important demands expertise and sophistication we couldn’t possibly manage on our own. David Jones isn’t so sure. He spent more than three decades in financial services, first running his own planning firm and later in a senior role at the fund manager Dimensional. What he learned is that the most valuable financial advice is often the simplest.
David Jones: I think there’s, there’s a misnomer or a trap that some people fall into, which is that, uh, you have to make it complicated, uh, in order that people will think that you’re a smart person and, and then you’re, you’re worth whatever we’re going to pay you ’cause you’ve made it look so complicated. But in my experience, people pay for simplicity. I don’t think any client in the history of clients has ever walked into an office and gone, “Will you please make my life more complicated?” They want, they want simplicity and, and clarity. And I think the best advisers, and certainly the ones I’ve encountered, they’re always looking f- for ways to help their clients actually make sense of the world, and then put things in place that remove the complexity from them. They, they allow them to make simple decisions based on the relevant information. And I think that’s, that’s what people pay for, clarity and simplicity.
RP: So what does that simplicity look like in practice? Often, it begins with a deceptively simple question, and it’s one most of us would struggle to answer.
DJ: “I would start with these questions like, well, do you know how much money you have on you at the moment? Or what, you know, last time you took £100 from a cash point? Of course, I’ve had to update that ’cause people don’t use cash points anymore. So last time you tapped your watch on a card reader, what did you spend? What did you spend last month? And I f- and I found even in really huge audiences, uh, that people just didn’t know with any degree of clarity or certainty.”
RP: That admission is where the napkin comes in. On it, David Jones would sketch four simple boxes — what you earn, what you spend, what you own and what you owe — and then show you how they connect.
DJ: “This money that’s coming in, it’s got to do these jobs, it’s got to pay for your current spending and your lifestyle, et cetera. Uh, it’s also likely servicing debt, so I draw an arrow into the, into what you owe. And then I said the thing that’s really important is that you, you’re putting money into what you own. You’re, you’re accumulating assets. Because the, the punchline to all of this was when you stop earning, what you own has to pay for what you spend.’”
RP: It’s a simple idea, and almost obvious once you hear it. Yet drawn out on a single sheet of paper, it’s often the moment the penny drops — the point at which an abstract worry becomes something a person can see clearly and act on. That’s the real value a good planner brings: not making your finances more complicated than they need to be, but cutting through the complexity until what matters is clear.
Disclaimer — The information in this video does not constitute advice or a recommendation, and you should not make any investment decisions on the basis of it. If you do however require advice please do not hesitate to contact Bloomsbury Wealth.
