There is probably no greater a deception than believing something to be true when in reality it is not. If some basic assumptions are wrong then any plans based on those assumptions are not going to work out. Trust placed in something or someone that is untrustworthy is misplaced trust and will lead to heartache in the end.
The past 30 years of dealing with clients and managing their financial affairs has taught me that clients often put a lot of faith in beliefs which ultimately, will not stand the truth test. Many people are held captive in their financial lives by misinformation, propaganda, and lack of knowledge. At iPlanning one of our key objectives is to dispel myths, provide innovative thinking and wisely act on data.
The first myth that we are looking at is “My house is my pension”.
The bricks and mortar asset that provides the feeling of security for lots of people, is regularly referred to as “the best investment I have ever made.”
There are reasons for this perception that “it’s the best investment I ever made”
- They can touch and feel the asset.
- They don’t see the fluctuations in its value.
- They are in it for the long term.
- They don’t sell quickly if they’re panicked.
- They rarely factor in and always ignore the cost of the asset which includes the purchase cost, maintenance costs, repair costs and improvement costs.
So, is this a myth or not? How much faith should we place in our home as a pension and bricks and mortar as a great investment. The next Myth-Busters blog will shed some much needed light on this topic!
Have you ever realised that you were working on false assumptions? What were the implications? Leave us a comment below.
The views expressed in this post are those of the author only and are not necessarily those of I Planning Wealth Management Ltd. All material in this post should be considered as general information only and should in no way be construed as a recommendation of a specific product or course of action. Each circumstance is different and professional advice tailored to your circumstances should be sought from a qualified financial adviser.