Are You Financially Resilient?

Are You Financially Resilient?

Are You Financially Resilient?
Are You Financially Resilient? 1

Written by Sebastian Elwell

January 31, 2021

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Are you financially resilient?

We hear a lot about resilience. It’s one of the key things we’ve credited with getting us – and continuing to get us – through the Covid pandemic, and it’s becoming one of the characteristics that we use to judge our own actions and those of others.

What is resilience?

Usually used during times of difficulty, ‘resilience’ is about being able to adapt to circumstances, and having the flexibility to be able to see things differently or work differently in order to manage when things get tough.

So financial resilience is applying that same adaptability to your business and personal finances when times are hard.

So, when things have an impact on your busines or your assets, how able are you to change tack, diversify and cover your costs?

Building financial resilience

As we’ve seen over the past 12 months, it’s incredibly important to plan ahead when you can so that you have a financial cushion both in your business and in your personal finances. There are several ways to manage this, and it’s best to have a long-term plan that takes a range of possible scenarios into account.

Whilst it’s true that even the most forward-looking financial planner would have been unlikely to predict the circumstances that we’re in now, those people who have a plan in place should have savings or investments that they can use to plug any gaps now. They should also be getting advice on how they can plan to replace those assets over time. For business owners, this is a two-pronged approach: looking at what your personal financial plans and needs are, and seeing how your business can adapt to provide for those needs.

Tips for financial resilience

Here are a few tips to help you become more financially resilient. There’s no one-click wonder here; building financial resilience takes time and effort.

  1. Have a plan. This is the most important thing you can do. You can’t make any decisions until you know what the ‘end points’ are. By sitting down and thinking about what you need now – to cover mortgage payments, bills, school fees and other expenses – and also what you want for the future, you can set some realistic goals and then see how you can meet them.
  2. Reduce debt. Where you can, reduce your debts. No matter what happens in the world around you, your debts will still exist. So it’s a good idea to see which debts are costing you the most and getting rid of them if you can.
  3. Take a good look at your business. Is it helping you as much as it could? Could you increase your income by diversifying or your profits by reducing costs? Is your tax planning as efficient as possible? Do you have an exit strategy? If your business is your main source of income, you need to make sure it’s working really hard for you.
  4. Save and invest where you can. We know that building up savings and investments relies on your having excess income. How you manage that excess income can make a real difference to your long-term financial resilience. Professional advice will help you to see how you can make the most of your money, and how you can use it to give you additional security now and in the future.

The value of independent financial advice

To ensure that your financial resilience is properly planned, it’s a good idea to talk to an independent financial adviser. With the experience and market knowledge to ask the right questions, help you see where gaps in your financial planning might exist and work with you to plan a way forward that gives you the financial support and protection you need.

Switchfoot Wealth Limited Independent Financial Adviser

I started Switchfoot Wealth to offer financial planning that matches the way we live and work today. Using the best technology and offering expertise gained through both formal qualifications and years of working closely with clients, we are bringing financial planning into the 21st century, helping people, businesses and professional advisers make the most of their time and their money.

– Sebastian Ewell

Switchfoot Wealth Founder

Read more about Switchfoot Wealth

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SwitchFoot Wealth Limited is an appointed representative of Sense Network Limited which is authorised and regulated by the Financial Conduct Authority. SwitchFoot Wealth Limited is entered on the Financial Services register (www.fca.org.uk/register) under reference number 808196.
Registered Address: 28 Upper Hale Road, Farnham, Surrey, GU9 0NS. Registered in England & Wales No.: 11220173.
The information contained within this website is subject to the UK regulatory regime and therefore restricted to consumers based in the UK.

The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services business aren’t able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk.

Guest Blog – The role of an Eldercare Consltant

Guest Blog – The role of an Eldercare Consltant

Guest Blog – The role of an Eldercare Consltant
Guest Blog - The role of an Eldercare Consltant 2

Written by Sebastian Elwell

January 17, 2021

Beyond purely financial planning matters, the practicalities of arranging care for a loved one can be overwhelming.  Are there services out there that can help with navigating the complex maze of care needs?  I caught up with SOLLA affiliate Claire Edwards, founder of  Claire Edwards Eldercare Consultant to discuss her service.  Claire kindly agreed to provide the following guest blog.

The Value of Independent Care Advice

Switchfoot Wealth Limited Independent Financial Adviser

I started Switchfoot Wealth to offer financial planning that matches the way we live and work today. Using the best technology and offering expertise gained through both formal qualifications and years of working closely with clients, we are bringing financial planning into the 21st century, helping people, businesses and professional advisers make the most of their time and their money.

– Sebastian Ewell

Switchfoot Wealth Founder

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​The Personal Finance Society Awards The PFS asked me to create a short blog and video about the PFS awards.  Here are my top tips for awards entries.  Original blog can be found on the PFS site here.   If you are interested in joining us on our mission please...

SwitchFoot Wealth Limited is an appointed representative of Sense Network Limited which is authorised and regulated by the Financial Conduct Authority. SwitchFoot Wealth Limited is entered on the Financial Services register (www.fca.org.uk/register) under reference number 808196.
Registered Address: 28 Upper Hale Road, Farnham, Surrey, GU9 0NS. Registered in England & Wales No.: 11220173.
The information contained within this website is subject to the UK regulatory regime and therefore restricted to consumers based in the UK.

The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services business aren’t able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk.

Salary Planning

Salary Planning

Salary Planning
Salary Planning 3

Written by Sebastian Elwell

January 10, 2021

Business owners – what’s the best way to pay yourself?

At Switchfoot Wealth we receive regular referrals from accountants to produce a ‘personal financial plan’.  We help business owners like you to document your personal financial needs, both now and over your lifetime.

The Personal Financial Plan is often the starting point for many complex areas of accountancy and business advice delivered by your accountant, but why do they need to understand your personal financial plan?  And how can Switchfoot Wealth liaise with both you and your accountant to ensure that your personal financial planning is mapping to your business planning and working in harmony?

One key area often mentioned is salary planning.

If you’re a business owner, you need to balance your finances carefully. On one hand, you want your business to be healthy, so re-investing profits into the business rather than taking them out seems like a good idea. On the other hand, you own a business in order to make a living, so you also want to take a salary – in a tax-efficient way.

Are these two options mutually exclusive? Not necessarily. It all depends on the profits your business is making and what sort of lifestyle you want to lead. Generally speaking, the most tax-efficient way to pay yourself is to take a minimum salary of £12,500 and minimum dividends of £2000. However, most business owners want – and need – to see a larger income than that.

There are, in fact, a variety of ways to pay yourself from your business. These include:

  • Salary
  • Dividends
  • Pension contributions
  • Repayment of director loan accounts
  • Electric cars
  • Other benefits such as tax-efficient life cover and flexible benefits packages

 

Working out what is best for you will depend on your business and your specific requirements, which is why it makes sense to work with an independent financial adviser, to develop a personal financial plan.  If you can clearly and concisely articulate how much money you need, when and in what tax wrapper – then your accountant will be in a much better place to advise you and the business about the most efficient way to pay yourself.

How can your business meet your needs?

What business owners really need to know is: “How do I pay myself as tax-efficiently as possible, whilst still meeting my lifestyle needs now and in the future?”

That’s a more complex question, and it’s one of the reasons that savvy business owners turn to independent financial advice. It’s more than thinking about pensions and investments; it’s about looking at your current financial needs – paying the bills, going on holiday, covering school fees – and at what you would like in the future – moving to a bigger house, taking the family on the holiday of a lifetime, affording hobbies and interests and of course funding retirement.

From this, you and your accountant can start to plan how hard your business needs to work for you in order to provide you with the income you need. This is where you start to really link the performance of your business with the benefits you get from it. Your personal income and your business success are inextricably linked, and good financial advice can help you define what you need, and suggest ways in which your business can support those needs.

This is particularly important for people in areas where housing and lifestyle is expensive, such as the areas of Surrey that we work in – the areas surrounding Guildford and Farnham. Independent financial advisors need to be aware of market conditions in the areas they work in; a certain level of income is needed to afford housing, for example.

Working closely with your accountant

This is where your various professional advisers can work together to help you achieve your goals. Your accountant is far more important to your business than just the person who sorts out your end of year accounts and your tax bills. She is the person who can help you make and implement strong business strategies that will give you the business that supports your personal needs.

Bringing together your personal and business financial plans is the obvious way to ensure that you are making the best possible plans for your long-term future.

Tax-efficient financial planning

Of course, all business owners and individuals want to make sure they are tax-efficient. This requires specific planning based on a clear understanding of income, outgoings and needs. This gives you a platform from which you can make plans for your business, ensuring that you are making business decisions that help to support your own financial goals.

Ready to make a start?

If you want to find out how to pay yourself tax-efficiently and meet your financial needs, we start with a detailed analysis of what you need and when – the personal financial plan. We’ll then work together with your accountant to explain your plan so that she can help devise a strategy to meet your needs. Input from all three parties (accountant, financial adviser and business owner) is needed to make your financial plan become a reality.

 

Switchfoot Wealth Limited Independent Financial Adviser

I started Switchfoot Wealth to offer financial planning that matches the way we live and work today. Using the best technology and offering expertise gained through both formal qualifications and years of working closely with clients, we are bringing financial planning into the 21st century, helping people, businesses and professional advisers make the most of their time and their money.

– Sebastian Ewell

Switchfoot Wealth Founder

Read more about Switchfoot Wealth

Related Articles

Why did Switchfoot Wealth choose to work with Sense Network?

"I started Switchfoot Wealth to offer financial planning that matches the way we live and work today. Using the best technology and offering expertise gained through both formal qualifications and years of working closely with clients, we are bringing financial...

PFS Awards

​The Personal Finance Society Awards The PFS asked me to create a short blog and video about the PFS awards.  Here are my top tips for awards entries.  Original blog can be found on the PFS site here.   If you are interested in joining us on our mission please...

SwitchFoot Wealth Limited is an appointed representative of Sense Network Limited which is authorised and regulated by the Financial Conduct Authority. SwitchFoot Wealth Limited is entered on the Financial Services register (www.fca.org.uk/register) under reference number 808196.
Registered Address: 28 Upper Hale Road, Farnham, Surrey, GU9 0NS. Registered in England & Wales No.: 11220173.
The information contained within this website is subject to the UK regulatory regime and therefore restricted to consumers based in the UK.

The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services business aren’t able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk.