Financial Fantasy Football
We know that few people find money and finances the most interesting of subjects but what if you thought about it like your fantasy football team?
For the uninitiated, fantasy football is game where players choose footballers to form a ‘fantasy’ team. Within a certain budget, they need to create a team to score them points based on the performance of the players in the real football league.
What has this got to do with your finances? Well, we think that well managed finances have a lot of similarities to fantasy football. Bear with me here. Just like in fantasy football, most people have a budget they must work within, and can’t necessarily afford everything they ideally want.
A successful fantasy football team also has good blend of complementary skills. Solid, defensive players as well as creative attack minded players. This is true of your finances too. It’s no good having a great set of (attacking) investments, if you’re not defensively solid and protected should the worst happen.
Clearly, everyone is different and has different financial needs, but we think we’ve come up with a pretty strong ‘financial fantasy football’ team.
We’re playing a classic 4-4-2 diamond formation.
Goalkeeper: Life insurance
Your last line of defence and a position every team needs. Life insurance means your family will be OK should the worst happen to you.
Right-back: Income protection
At right back is income protection. This kind of policy pays out if you can’t work and is a great defender. Adept at covering for a range of potential problems, income protection is often on hand if other players get into trouble and is great on the cover. A vital part of most successful teams.
Towering at the back is an up-to-date will. Without it, you could be left exposed with your estate not going those you choose on your death. A will is crucial if you have assets and will protect you and your loved ones. An integral part of your team and a player you want to check up on regularly to ensure they stay in tip-top shape.
Centre-back: Critical illness
Alongside your will at centre-back is another stalwart of the modern-era – critical illness. With many of us living longer, more and more people are getting serious long-term medical conditions. Protecting yourself against this with a lump sum payout is often a great idea. You may never need this defender, but if your health comes under attack, they are in place to make sure you’re family defended.
Left-back: Deposit account
Linking the play beautifully, the deposit account is an old, experienced head in our financial team. A diligent worker, the deposit account just gets on with it, day in, day out. Unlikely to give you much offensively, the deposit account is a safe left-back, sitting deep in our formation. A well run deposit account paying the best levels of interest and avoiding overdraft fees will help provide a reassuring stable influence in your team.
Your budget sits right at the heart of your team and is the glue that holds everything else together. Sitting deep, an effective budget allows the other members of your team to play without pressure and to express themselves creatively knowing that your team (or money) will never get into trouble with this solid player sitting in this vital position.
Savings can be a really versatile player and a great squad member. Helping in both attack and defence, savings can be used to help fund a variety of things. They are a calm head in the team and never get flustered being backed by a government guarantee. Every team needs this kind of versatile and reliable player.
Left-midfield: General investment account
Always wanting to be a striker, the GIA was never quite as good as a pension or ISA but still can play a part in a successful team. Without the tax advantages of our strikers, the GIA is nevertheless a useful player and can be used defensively or offensively depending on the investment funds chosen within the account. A good hard worker and ever-available with no limits, the GIA performs a useful role in our team.
Attacking-midfield: Financial plan
Probably your most important player is your financial plan. Your plan pulls the strings in midfield and create opportunities for your other players. Your financial plan should be the first name on the team sheet and the player that the others all look to for guidance and inspiration. Your financial plan is unquestionably your captain – your leader on the pitch.
You might see your pensions as slightly boring, long-term and far off, but you need to have an attacking mindset as most people will rely on their pensions to fund their older age. For most people, taking some risk can really pay off. An attack minded pension (especially when you’re younger) can help you score your retirement goals. Pensions get a bit of extra attacking flare with generous tax relief making them a really potent weapon up front.
Paired alongside the towering pension upfront is the quick and nimble ISA. With no tax to pay, and immense flexibility, they can be a great at attacking your long terms targets and form a great partnership with your pension. Whether you invest your ISA as an out-and-out attacker or employ it to sit in just behind your main attacker in the ‘No. 10’ playmaker role, they can provide great long-term returns and help grow your wealth.
Bench: Emergency fund
You might never need your emergency fund and if everything is going well in the game of life, this could be the case. But things change in life like they do in the game and without a good emergency fund on the bench you could be in trouble. Somewhere between 3-6 months expenditure as readily accessible cash is normally sufficient here.
Physio: Private medical insurance
For those seeking the very best medical treatment without the waits, a PMI policy can help your players get back out on the pitch in the quickest possible time by providing the specialist diagnosis and treatment.
Coach: Your financial planner
We think an independent Chartered Financial Planner is the Pep Guardiola of coaches. Any good financial planner can add real value and get your finances playing as a team. If you’re taking on the coaching role yourself, make sure you have some basic coaching badges (financial understanding) to ensure you get your tactics right.
So here’s a reminder of our financial fantasy football starting XI:
Income protection Will Critical illness Deposit account
Savings General investment account
Financial plan (c)
What do you think of our team? How does your team look and which areas do you need to strengthen in the transfer window
Whatever you think of our team, we hope this has helped get you thinking about your finances and been a bit of fun.