Imagine this: you’re in your 30s, have a stable job, some savings, maybe even a few investments, and you’re living life the way you want. But is that enough?
Most of us want a few backup plans — a plan B, C, D… whatever you want to call them.
What about five years from now? What happens if you get promoted — or laid off? What if you want to buy a car? How easily could you afford it, and when?
Let’s talk about even bigger decisions: starting a family, having kids, buying a home, and planning retirement.
The list goes on, but one thing all these have in common is this: we plan our futures based on facts — and a whole lot of assumptions.
That’s totally normal — don’t get me wrong. But the problem is that some of those assumptions can cause us to overlook important factors. And that’s when the gap between expectation and reality starts to hurt.
How do I know?
Simple. I’ve made those mistakes myself (and probably still will).
That’s actually one of the reasons I started working on Simulator — to test ideas, avoid blind spots, and make better-informed decisions.
This isn’t financial advice. It’s just my experience — and hopefully a way to help you save some time and stress.
Let’s See How This Plays Out in Real Life
Linda and Henry, a couple in their mid-to-late 40s, had a simple plan — and one big question: Are we making the right move for our future?
Here’s what their situation looked like:
- They owned a home worth £1M, with an outstanding £450K mortgage
- Pension savings were minimal — one had £50K in an old workplace pension, the other had none
- They expected a £300K payout from a business sale in six months
Their idea? Sell the current home, downsize to a more modest property, invest the £300K, and contribute £1,500/month into long-term investments.
Based on their projections, they believed they would end up with:
- A fully owned home worth ~£800K
- An investment pot of ~£700K in 10 years, ready to support early retirement
The strategy sounded solid at first glance — debt-free living, long-term investing, and capitalizing on a windfall.
But when I simulated this, a few issues came up.
Reaching £700K in 10 years would require an annual return of around 5%, which is possible — but they’d need to account for gradually shifting from equities to bonds as they near withdrawal. This shift could reduce potential returns (while also reducing volatility). A more conservative estimate of 3–4% would result in a portfolio closer to ~£600K by 2035. A diversified portfolio of stocks might work better for many people — but context matters.
Selling the business might trigger tax liabilities, and downsizing could involve capital gains tax on the sale and stamp duty on the new property. Investing the full £300K at once may also bring tax consequences. A smarter approach might include using a SIPP or phasing the investment over time.
Even without full data on income, expenses, and tax specifics, this simulation helped highlight a few common mistakes people make in long-term planning.
Let’s Break Them Down:
Mistake 1: Assuming Everything Will Go According to Plan
People tend to model their future as if everything will run smoothly (which, let’s be honest, is a little too optimistic).
In our example, Linda and Henry expected stable 5% returns. Sounds great, right? But what if something goes wrong — a market crash, unexpected expenses, a drop in income? Optimism is great, but running a few “what-if” scenarios can provide peace of mind and build resilience into your plan.
Mistake 2: Overlooking Taxes and Hidden Costs
When modelling future scenarios, many overlook capital gains tax, local tax laws, or underestimate rising living costs.
If that’s not you — congrats, you’re ahead of the curve. But if it is — you’re not alone. These details can feel overwhelming, but they make a huge difference in the long term. In our example, the couple assumed they could invest £300K tax-free. In reality, exploring tax-efficient options like SIPPs or phasing could reduce liabilities.
Mistake 3: Planning in Isolation
Focusing on one big goal — like accumulating £700K — without considering life’s other twists and turns can leave gaps in your plan.
Medical emergencies, family needs, income fluctuations — they all matter.
When you look at multiple potential life events together, your financial plan becomes more flexible and realistic.
I’ve highlighted three mistakes I noticed while planning Linda and Henry’s case. But I’d love to hear from you — what mistakes have you made or encountered while planning your future?
And just to be clear, this post isn’t meant to scare you or tell you you’re doing it wrong. It’s simply a reminder: financial planning isn’t about perfection — it’s about preparation. Considering the details most people skip is already half the work.
When I started working on Simulator, my goal was to help people explore these exact kinds of nuances — and to show how wealth is actually built: slowly, thoughtfully, and with realistic expectations.
