Short Medium and Long Term Financial Needs
Published / Last Updated on 19/04/2023
By breaking down your short-term, medium-term and long-term financial needs, you can get a better understanding of money that you will need during those periods or indeed how much you need to save to plan for your long term needs as well as understanding the levels of investment risk you can afford to take within each area.
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SHORT – MEDIUM – LONG TERM INVESTING |
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If we segregate all your monthly, wealth and investments into: |
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Short Term |
Money that you need access to in the next 0-5 Years |
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Medium Term |
Money that you need access to in the next 5-10 Years |
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Long Term |
Money that you need access to in the next 10 Years + |
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How would you like it to be split? |
Short Term |
Medium Term |
Long Term |
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e.g., 30% Short, 30% Medium, 40% Long term |
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% |
% |
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OR amounts e.g., £50,000 Short, £100,00 Medium, £100,000 Long term |
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£ |
£ |
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TOLERANCE TO RISK/LOSSES & MARKET VOLATILITY |
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You have given your general attitude towards risk. We now wish to test your tolerance to losses of that stated risk level. |
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If in 12 months’ time, investments markets have fallen. How much of a fall in value are you prepared to accept? |
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Short Term Money 0-5yrs: |
0% Deviation |
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Up to +/- 5% Deviation |
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Up to +/- 10% Deviation |
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Up to +/- 15% Deviation |
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Up to +/- 20% Deviation |
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Up to +/- 25% Deviation |
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Up to +/- 30% Deviation |
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Up to +/- 40% Deviation |
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Up to +/- 50% Deviation |
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Medium Term Money 5-10yrs: |
0% Deviation |
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Up to +/- 5% Deviation |
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Up to +/- 10% Deviation |
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Up to +/- 15% Deviation |
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Up to +/- 20% Deviation |
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Up to +/- 25% Deviation |
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Up to +/- 30% Deviation |
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Up to +/- 40% Deviation |
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Up to +/- 50% Deviation |
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Long Term Money 10yrs + |
0% Deviation |
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Up to +/- 5% Deviation |
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Up to +/- 10% Deviation |
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Up to +/- 15% Deviation |
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Up to +/- 20% Deviation |
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Up to +/- 25% Deviation |
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Up to +/- 30% Deviation |
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Up to +/- 40% Deviation |
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Up to +/- 50% Deviation |
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OVERALL TOLERANCE TO LOSSES FOR ALL OF MONEY? |
0% Deviation |
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Up to +/- 5% Deviation |
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Up to +/- 10% Deviation |
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Up to +/- 15% Deviation |
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Up to +/- 20% Deviation |
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Up to +/- 25% Deviation |
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Up to +/- 30% Deviation |
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Up to +/- 40% Deviation |
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Up to +/- 50% Deviation |
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For each, short, medium and long term you can then plan what risk profile you want for each taking no risk or low risk for short term needs and medium risk to high risk for longer terms funds that you may not need for 10 or 20 years plus.
By having an understanding of your general risk profile, your attitude to risk and importantly, your tolerance to losses, we can then better understand how to build your pension and investment portfolio to meet your short-term, medium-term and long-term objectives and needs.
See Risk Profiles and Tolerance to Losses: Risk and Losses
By completing the above, both you and us will then be in a position to work out what investment risk to take with all parts of your finances and different stages in your life.
