80% of people only plan for now - survey

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Cape Town - More than 80% of people who do not work with a financial adviser plan their finances for the short term only.

This trend cuts across income brackets, ages and nationalities, a new global survey reveals.

When asked whether they typically plan their finances one year ahead, one to three years ahead or three years or more ahead, 82% of the respondents – who at the time did not have an adviser – responded with the first option.

Brett Taylor, senior area manager for the deVere Group, said their survey joins a growing bank of international data that highlights this trend of a short-term outlook in financial planning.
 
“For example, in Japan 40% of all share trades are now day trades, whilst in Britain a growing number of divorcing parents are reportedly raiding their pension pots,” he said.

“It’s extremely concerning that the vast majority of people without a financial adviser are exclusively thinking about their finances in the short term.

“It is alarming as longer-term planning gives people more opportunities and more time to reach their ultimate financial objectives – which for most of us is financial freedom."

The earlier you start your financial strategy, the easier the journey to your financial goals will typically be.

“In addition, as we have seen across the world, governments are being forced to continually cut age-related benefits," he said.

"This means that older people will not be able to count on external support to the extent they have done in the past, so we have to be more financially self-reliant in retirement."

On top of that, people are living longer and as such the money accumulated throughout their working lives has to go further than ever before.

“If personal circumstances allow, it’s time to stop thinking only in the short term as longer-term financial planning could bring those lifestyle-enhancing benefits most of us desire, sooner rather than later,” Taylor said.

- Fin24

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