The concept of financial security is very personal. Your idea of the amount of money you would need and want in order to consider yourself financially ‘secure’ and your family properly provided for in the future, will be determined by your lifestyle, the size of your family, current financial commitments and future plans.
A lot of people talk about achieving ‘financial freedom’, but does that mean the same to you as financial security? Although it would undoubtedly be ideal to know that your investments would continue to deliver an excellent income while growing in capital value, without needing any day-to-day time commitment from you, would something less still give you security?
You might say that’s all semantics, but my point is that you need to really think about what income and capital you’re going to need for the rest of your life:
as a minimum, to ensure your financial commitments are covered and you can continue to have a good lifestyle, and
ideally – the amount that would allow you to live the life you dream of.
Once you’ve got those two figures – and it’s going to take some time to work them out properly – then you can start to plot the steps you’ll need to take to get there and set some measured, achievable goals that will enable you to build an investment portfolio that delivers on those goals.