Planning for The Future

The idea of building assets is an interesting concept, and one I have only begun to think about recently.  Over the past couple of years I have noticed a big change in the way I think about money.  I was focused on doing everything I could to clear my debts for years, then it was an income to live on for now.  As my income plan is falling into place as well, it is perhaps time for me to look to the future.

It occurred to me that my health problems have had a massive impact on my ability to prepare for the future.  For example, I have worked rather sporadically over the past 30 years.  That has given me the opportunity to do a lot of different things, but one thing it has not provided is a pension plan.

Strangely, at the age of 18 I had more pension plans in place than I do at the age of 48.  It has begun to bother me somewhat that I have practically nothing to show for my life so far.  Perhaps it is the fact that 50 is just around the corner, or maybe it is just a by product of my changing financial situation.

Negative Equity

The fact I am in this position also makes me think about others.  It makes me think about older people who struggle to pay for heating and have no quality of life.  I wonder too about people in a similar situation as myself who have few financial assets.  How many people in the UK alone are in negative equity?

Negative equity is a term I heard a lot several years ago when the housing crash wiped out the value of property.  That was when people owed more for their mortgages than the property was worth.  I was one of the people affected by this when the value of my house almost halved.  Thankfully that situation has improved for many of us.

Negative equity however goes much further than the value of houses.  Looking at the bigger picture it is any imbalance between assets and debts!

If for example I have no assets at all and a debt of £200 that equals a negative equity of £200.  As it stands right now I am starting to move into a positive equity situation where my assets are worth more than I owe.  Finally I am building assets that will provide for me in later years.

Turning the Scale

I can see now that I began to turn the scale the day I lost my job.  The irony of that is not lost on me at all, and I recognise how strange it must sound.  Yet the day I lost my job is the day I took stock of my financial situation and put the wheels in motion to improve it.

Taking stock of where you stand financially is the single most important factor when it comes to turning the scale.  It is the moment of truth and for many a very painful moment.  It means writing a list of your debts and weighing those against your savings or assets.  The difference between these two figures is your net worth, or how much money you really have.   If you are very lucky you will be either at a zero balanced position, or in a positive equity situation.

Building Assets

The only way to have a secure financial future is through building assets.  For some that is through buying property and for others it is through savings or investments.  Now that I am thinking about assets rather than debts I realise I have both property and investments on my list of assets.  Even though I have had my house now for well over 10 years it has only really struck me that it is an asset.  I guess that is because it was always a major struggle to pay my mortgage before.

I am now on the other side of this equity equation and will be focusing on building up my assets from now on.  It is quite an exciting place to be after the drudgery of dealing with debts.  I realise too this is where my feelings of financial freedom are coming from.  I know for sure I am now looking at a better financial future….and it feels wonderful!

If you have found this post useful or inspiring please feel free to share it with others.  Thanks in advance to those who do share it, I always appreciate your help in reaching a larger audience!

Ellie xx

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