1. The Money Plan
Your 5-Steps to
Financial Mastery

2. Warren Shute CFP Chartered FCSI Chartered Wealth Manager
About Warren
Warren Shute CFP Chartered FCSI Chartered Wealth Manager
Author, The Money Plan
@warrenshute
warrenshuteCFP
Warren Shute CFP

3. Step 1: Create a Compelling Vision
Ask yourself a powerful question:
How do you want to live
the rest of your life?

4. Set Goals… Breaking it down into goals is how you will get there:
10 years
5 years
3 years
1 year
Think SMAC!
Specific – are they clear?
Measurable – when will you attain them
Achievable – are they realistic 50/50 chance
Compatible – do they fit your vision

5. …Then Break Them Down Further
A year is a long time – how many New Year’s resolutions are forgotten by February?!
Split your first year into four quarters, or 90-day check-ins
Review them regularly, write them down
“Most people overestimate what they can do in one year and underestimate what they can do in 10 years.” Bill Gates

6. It’s Our Habits That Make Us !
Take daily steps towards your goals;
Actions – write 3-5 actions to complete each day
Review – look back and celebrate your wins
Gratitude – live with an attitude of gratitude
Journal – 5 minutes to record your feelings
“If life is worth living, it’s worth recording.”
Tony Robbins

7. Step 2: Get Financially Well Organised
Automate as much of your finances as possible – take emotion out of the way
On UK average wage, you’ll have over £1.3m go through your accounts in your life!
Whether you earn £10,000 or £1m p.a. the principles are the same

8. The Bank Accounts System
Put some WAM into your life!
Automate ALL your regular payments – from mortgage to gym to kids’ pocket money
Weekly payments work – it’s not difficult to wait
Ask yourself 3 questions on all expenditure:
Do I need this?
Do I want this?
Can I get it cheaper?
Savings cover any emergencies

9. Building Your House of Wealth
Step 3:
Foundations
Building Your House of Wealth

10. Foundations Strong buildings are built on sturdy foundations
The right mix of foundations is personal to you and your circumstances
Emergency cash:
months of living expenses (or £1,000 if you have unsecured debts)
Life cover:
Sufficient to cover mortgage, other liabilities (e.g. lost income) and funeral
expenses
Critical illness:
Pays out against a variety of scenarios; a ‘Serious illness’ alternative has been launched
Income protection: Covers against being unable to work through an accident, sickness or disability

11. Foundations Strong buildings are built on sturdy foundations
The right mix of foundations is personal to you and your circumstances
Private medical insurance:
Not essential, desirable depending on local NHS waiting lists & treatments
General insurance:
Check your cover carefully, shop around for savings on car, travel, home & contents
Wills & Trusts:
If you take just one thing out of today, then please make a will!
It is absolutely essential for everyone, and especially if you have dependents
LPAs:
Lasting Power of Attorney’s are essential for everyone over 18

12. Know You Numbers
Your investments provide enough income at 4% to cover ‘desired’ living needs without ever working again
Your investments provide enough income at 4% to cover ‘basic’ living needs without ever working again
No unsecured debts; emergency reserve fund of 3-12 months in place

13. Step 4: Repaying Unsecured Debt
The
Snowball
System
Your snowball is your monthly surplus – what’s left after paying all bills, including WAM
It should be at least 12.5% of your gross income – the first hour of your working day

14. Accelerate Unsecured Debt Repayments
List all your unsecured debts and arrange them in order of smallest first – NOT highest interest first
Ensure automated minimum payments on all debts
Take your snowball and pay this onto debt number 1 on your list (the smallest).
Dopamine boost!

15. Accelerate Unsecured Debt Repayments
Continue until debt 1 is paid, then close this account
Next, take the minimum payment from debt 1 and your snowball payment and pay this along with debt number 2’s minimum payment - all onto debt 2
Continue this, through your debts until you’re unsecured debt-free!

16. Overpaying Your Mortgage: 40/40/20
Pay off your mortgage quicker or invest?
I say do both – and enjoy yourself while you do

17. Life is for Living - it’s not a destination
Chapters of our life
Childhood 0-21 years – 25%
Working life years – 50%
Retirement 66-88* year – 25%

18. 40/40/20 in Action By splitting your snowball…
40% mortgage overpayments
40% investment
20% fun
…you get the best of all worlds
Financial freedom faster
Psychological boost of building wealth
Enjoy yourself – life is for living
The Power of Overpaying
On a 25-year, £225,000 mortgage, if your snowball pays the capital portion you could own your home in 14.5 years– saving £35,000

19. Step 5: Investment Success Three main considerations:
1. Term
2. Risk
3. Wrapper

20. Defining Your Investment Strategy
Term
Risk
Wrapper
How long until you need to access the capital?
The longer the better – stay invested, don’t try and second-guess the markets
If less than 5 years, probably better to avoid the stock market
How much could your investment fall before you felt uncomfortable?
More equities in your portfolio means more ups and downs
Rule of thumb – hold 100 minus your age in equities, i.e. at 40 you’d hold 60% equities
Which type of account should you hold?
Three main options:
Pensions
General Investment Account
Stocks & Shares ISA
Maximising your annual pension allowance is your first priority

21. How much do you need for your retirement?
The million pound question?! It’s likely to be less then you think
General rule of thumb:
Save £100,000 for every £3,500 p.a. of income you think you need in retirement
So if you wanted £14,000 p.a. then you’d need £400,000 savings

22. …and finally: BELIEVE IN YOURSELF
“Whether you think you can, or you think you can’t – you’re right.”
Henry Ford
Psychology matters: YOU will determine your success
Write down your compelling vision and your goals, and read them regularly
Take pride in your achievements along the way
Live your life – don’t just save up for the future, enjoy the present as well

23. Thank You
For some useful resources and a copy of the presentation go to;
@warrenshute
warrenshuteCFP
Warren Shute CFP