Shiva Sachaphimukh from Farnam Tree gives his insight.

Different stages of life necessitate different needs and wants, which need to be reflected in your financial planning. Trade-offs are involved in how you manage your investments. Younger individuals that have a longer investment horizon are more suited for volatility compared to people in retirement. Seldom does coming up with a plan today work 10 or 20 years in the future.

Understanding this is crucial for a sound financial plan as you will need to periodically update and review it.  Your plan needs to be specific to your stage of life, and also flexible enough to be changed once you cross milestones in your life. Outlined below are priorities that should be most important for different stages of your financial life.

Young Adults: Build a Foundation for the Future

Setting yourself up for the long-term is paramount in the early stages of adulthood (your 20s and 30s). Your number one priority is to establish and maintain an emergency fund to cover unexpected expenses and financial storms.  This is made possible once you save from your income – saving up to 3-6 months of your expenses is a decent start, and can be adjusted for your circumstances. The worst thing that can happen is if you need to liquidate some or all of your budding investment portfolio. Even if you are not a high–income earner, take the time to put a plan together.

Another important thing to bear in mind is establishing good credit history.  Minimise debt balances and don’t fall behind on credit card payments. THis will help you in the future if you need to apply for a mortgage.

Middle Age: Maximise Retirement Contributions

As you transition into middle age (your 40s and 50s), applying momentum towards your goals will pay off in the future. Being disciplined financially will allow you to increase contributions to your retirement portfolio.

Thailand allows you to contribute towards retirement through tax saving funds.  While the performance is below par on most investments, the tax write-off is advantageous.  The money gained back can be used to contribute to your nest egg.

For those with growing families, your children’s education and living costs are high in this stage, as you’re aiming to set them up for their future. Do not forget to prioritise yours. Reviewing and updating your investment portfolio or insurance coverage to ensure proper protection for yourself and your family is also vital during this stage.

Pre-Retirement: Balancing Your Goals

For pre-retirees (your 50s and 60s), the focus intensifies on transitioning from accumulation to protection and income. This means you may switch out from growth/aggressive investment products into more investments that pay a more stable income. This involves rebalancing your portfolio to ensure it aligns with your risk tolerance and remaining time horizon.

Estimating your retirement expenses and planning for benefits allows you to forecast your future financial needs and make informed decisions about your retirement income streams.

Retirement: When Your Hard Work Pays Off

Finally, as you enter retirement (your 60s and beyond), managing your retirement savings to cover living expenses becomes the central focus. Downsizing your home and reevaluating your healthcare needs can help optimise your budget. Remaining active and socially engaged will contribute significantly to your overall well-being during this phase. After all, wealth is pointless without health.

However, the journey of financial planning is not linear.  Life throws curveballs, and unexpected events like marriage, divorce, illness, or job loss can significantly impact your financial landscape. Therefore, flexibility and adaptability are key. Regularly reviewing and updating your plan to reflect changes in your circumstances and goals ensures your financial roadmap remains relevant and effective.

Remember, it’s never too early or too late to take control of your finances and chart a course towards financial security and prosperity. Most importantly, do not compare yourself with others. Having enough money to retire comfortably is the most important goal. This is where, “it’s not about winning, it’s about finishing.”

Shiva Sachaphimukh is a Director and part of the investment team at Farnam Tree.  He is a licensed Investment Consultant with the Thai Securities and Exchange Commission (SEC).

Farnam Tree is a boutique investment and wealth management firm based in Bangkok.  The company is a licensed Investment Advisor under the Thai SEC and Ministry of Finance.