In a recent podcast on the Allan Gray Podcast with Dan Brocklemank, head of Orbis UK, he reflected on how humans are NOT designed to be good investors. Our natural instincts very often pull us in the exact opposite direction to what we need to be doing in order to be good at investing. Our natural habits and instincts protect us in the present; they’re not good at protecting us for the future and seeing the bigger picture.

We spend months or years preparing for many significant life events. The first for many of us was the build-up to going to ‘big school’. Our three-, four- and five-year-old selves grew increasingly excited, right up until the day school started and then there was an overwhelming flow of emotions that may have been more negative than positive. When you stand in the playground of first-graders on the first day of school, you’re bound to see plenty of tears.

So many things have changed in the last four decades, and yet so much has stayed the same. Financial planning has become an entire profession and is no longer just a bunch of salespeople selling insurance. It’s evolved into a profoundly nuanced practice, and those of us who are continually advancing our professional development are spending more time on understanding the integration of all aspects of life and well-being in our approach to financial planning.

We all have reasons for doing things. It might be because we’re sticklers for following rules, or perhaps we avoid difficult situations and emotions by constantly focusing on the positives. Maybe our motivations come from a restless spirit or a drive to keep control and order - but for some of us, we become people pleasers. It may not be in every area of our life, but in certain situations, we may find ourselves defaulting to keeping everyone around us happy, often at the cost of our own happiness. It’s nice to be accommodating, but auto-accommodating can be exhausting.

As 22seven recently published on medium.com, “Always think twice before you buy something on credit or take out a loan.” Here’s the thing to remember with credit - it’s just a nicer way of saying that you’re spending money you don’t have. In other words, you’re using someone else’s money to fund your current lifestyle. Credit is sold to us on the premise that it’s money we will have in the future, and often we do have the money in time and can pay it all back, but sometimes we don’t, and we just keep borrowing more. This is when we get stuck.

A balloon payment (also called a residual value) is quite simply an amount of money that is still due after you’ve finished paying your monthly instalments. The goal of structuring a loan with a balloon payment is to make it more affordable on your current cash flow, making it very attractive.