If you’ve ever wondered about the effects of financial advice, delivering value for money is just one of its positive outcomes. With the recent noise on inflation and interest rates, we understand that cash flow management is a topic of high interest.
Having an adviser on your side allows you to have that opportunity to optimise how you use cash at different stages in your wealth journey. From managing an income and spending behaviour and personal cashflow coaching and management through to managing cash balances, leading up to and through retirement.
Cash provides a level of certainty for planning purposes. For example, investors who require cashflow in retirement can develop strategies to allocate and maintain levels of cash to meet expected spending. A popular strategy is to calculate expected spend over a number of years and keep that in cash. An additional benefit of holding cash is the ability to access it on demand.
Consider cash as a tool, not an attractive investment
While cash may appear to be an attractive asset class for the sense of security it brings, it is important to also evaluate it in the context of interest rates and inflation. We have experienced low interest rates over a number of years, and the prospect of material interest rate increases don’t appear to be likely in the short term. An investor needs to consider if any return achieved through a cash holding, is at risk of being eroded by inflation. An adviser can play an important role in educating clients on an appropriate level of cash to hold in their portfolio. They can also help clients keep their portfolio invested where appropriate to grow assets for future spending needs and find the best source and process for accessing capital when required.
Contact the team at LA Wealth today so we can discuss your future goals.
Disclaimer: Any information provided herein is of a general nature only. No consideration has been taken into your objectives, needs or financial situation. Before acting on this information you should consider if it is appropriate for your situation.