Aug 28, 2023 | EWAN ROSIE

Avoiding costly mistakes

We often meet people who’ve made mistakes with their finances, especially when they have come in to a sum of cash, for example, after a business sale. Sometimes these mistakes can turn out to be costly and in most instances they could’ve easily been prevented.

Here are the top five things we see that could hold you back when it comes to managing cash…

Not knowing yourself

It’s easy to become very caught up in everyday life, people are busy, and they don’t often have time think about their ‘bigger picture’. We know people work hard and spend years building their wealth. When you’re doing this on top of running a business or raising a family – it can be hard to find time to properly assess what you want to do in life, or as we would say, how you’re going to make life count!

We strongly encourage our clients to think about what’s important to them, both now and in the future. Addressing this is part of our process and we build your goals in to a financial plan that is tailored entirely around you and your family. Doing all of this will mean you make informed decisions and that your adviser can work with you to make sure you enjoy the journey.

Investing with no set strategy

So, as we’ve said, many people spend years building their businesses and wealth. Once they’ve sold, it’s common to be bombarded with the latest investment ideas – many are badged as ‘unique opportunities’ or ‘too good to miss’. As tempting as this may seem, it can often lead to people jumping in to an investment approach without having thought about who they are, how they want to live on a daily basis or their long-term game plan. If you’re going through a sale, or have just completed, don’t feel that you have to rush investment decisions. Returns are typically only earned over the long-term so don’t let media headlines fool you. Take the time to make educated decisions that are right for you.

Overspending/over allocating capital

Whether its a new home, holiday property, cars, or other luxury items, most people typically spend a significant amount of money within the first three years of coming in to a big sum of cash. If you decide to sell these assets later in life you usually won’t recoup the original purchase price, so if you’re sitting on cash funds, the best thing you can invest in is time. Time to think about your values and goals – don’t act impulsively!

Not addressing tax structuring and estate planning

In business it becomes second nature to be moving quickly, negotiating several things at once and making dozens of decisions daily. But when it comes to tax planning, people often shy away from acting on structuring their financial affairs efficiently and addressing estate planning projects.

Initial hurdles include making the time to understand the high-level issues, couple this with a lack of clear goals and the process can become long and onerous. The time spent getting this right from the start will pay off in the long run and could save significant sums of money, improve investment returns and avoid the costly process of undoing misinformed decisions.

Advisor selection and integration

When you come in to cash it’s common to feel as though action needs to be taken immediately and clients we meet have often approached a number of professional advisers, each with differing or sometimes, overlapping specialisms. The result is usually information overload and a lasting feeling of mistrust! Which advisor should you trust and which understands you and your family? As we advocate, time should be spent on understanding your bigger picture. It all comes back to making some decisions about what life looks like for you and then working with an adviser to drive this forward. Select an adviser you can trust and that can service your specific needs.

If you want to talk to a member of our team about your bigger picture and how you can make life count, get in touch.


This communication is for general information only and is not intended to be individual advice. It represents our understanding of law and HM Revenue & Customs practice as at 14 August 19. You are recommended to seek competent professional advice before taking any action. The value of investments and the income from them can go down as well as up, and you may get back less than you originally invested. Past performance is not a guide to the future. The investments described are not suitable for everyone. This content is not personalised investment advice, and Cooper Parry Wealth can take no responsibility for investment decisions you may make as a result of this information. Tax and estate planning advice are not regulated by the FCA.


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