WEBVTT - The financial advice that doesn’t work anymore 0:00:01.560 --> 0:00:03.920 Welcome to How Do They Afford That? The podcast that 0:00:03.960 --> 0:00:07.560 peaks into the financial lives of everyday Australians. I'm Michael Thompson. 0:00:07.640 --> 0:00:09.520 I'm an author and the co host of the business 0:00:09.560 --> 0:00:12.480 news podcast Fear and Greed, And as always I'm with 0:00:12.560 --> 0:00:16.439 Canna Campbell, financial planner and the founder of Sugar Mummer TV, 0:00:16.960 --> 0:00:23.080 the financial literacy platform that covers YouTube, podcast, books, TikTok threads, everything, 0:00:23.160 --> 0:00:27.080 including our upcoming book that we wrote together called Twelve 0:00:27.080 --> 0:00:30.360 Months to Financial Freedom. You're excited about it coming out. 0:00:30.560 --> 0:00:32.920 I'm really excited. I'm really proud, and I think this 0:00:33.000 --> 0:00:36.159 is going to make life so much easier because you've 0:00:36.159 --> 0:00:38.960 got literally a roadmap to follow, step by step, month 0:00:38.960 --> 0:00:40.640 by month, and you can take it at your own pace. 0:00:41.320 --> 0:00:45.560 And this is what creates real results, something that you 0:00:45.560 --> 0:00:48.240 can actually see and feel and enjoy. It hopefully inspires 0:00:48.280 --> 0:00:49.479 you to just keep going with it. 0:00:49.600 --> 0:00:51.600 Yeah, and it deals with that issue that I always have, 0:00:51.680 --> 0:00:54.800 which is where do you start and if you hit 0:00:54.880 --> 0:00:58.000 kind of roadblocks, how do you get past them? We 0:00:58.120 --> 0:00:59.200 talk through all of that. 0:00:59.160 --> 0:01:01.960 And we share all of hacks and secrets and tricks, 0:01:02.000 --> 0:01:04.679 you know, and it's I think I must say it's 0:01:04.680 --> 0:01:06.399 life changing. Oh I like that. 0:01:06.520 --> 0:01:08.760 We shall put that on the cover twelve Months to 0:01:08.800 --> 0:01:12.000 Financial Freedom, which is coming out on the first of September, 0:01:12.000 --> 0:01:16.440 but pre orders are available now. A fun one for 0:01:16.520 --> 0:01:18.720 us today. Well, I think it could be fun. It 0:01:18.720 --> 0:01:22.200 should be fun for you as well. Because you have 0:01:22.319 --> 0:01:24.680 been a financial planner for quite some time. 0:01:24.920 --> 0:01:27.520 I think, like twenty four years. I'm feeling really old. 0:01:28.080 --> 0:01:30.319 That's that's it just means you're experienced. 0:01:31.080 --> 0:01:33.440 I got in the industry very very young. Yeah, and 0:01:33.480 --> 0:01:35.360 it was all males. I was the only female. 0:01:35.440 --> 0:01:39.360 Yeah, you're the only four year old working as a financial. 0:01:39.400 --> 0:01:42.520 Best friend just paid for itself, that's all it took. 0:01:43.000 --> 0:01:47.240 Okay. I want to know today, the financial advice that's 0:01:47.280 --> 0:01:51.040 been around forever, like those the old advice that you 0:01:51.160 --> 0:01:54.280 hear about kind of save ten percent of your income 0:01:54.640 --> 0:01:58.440 and stay loyal to providers and they'll look after you. 0:01:59.400 --> 0:02:02.360 I want you to give me ten. Just the look 0:02:02.400 --> 0:02:05.840 on your face, the y heart is boiling, the eye 0:02:05.920 --> 0:02:09.240 rolling that is going on right now. Ten pieces of 0:02:09.280 --> 0:02:16.080 financial advice that don't actually work anymore easy, I'll give 0:02:16.120 --> 0:02:16.519 you twenty. 0:02:16.600 --> 0:02:18.960 Yeah, I mean I have managed to keep this at 0:02:18.960 --> 0:02:21.680 ten because you've worked with my OCD issues. 0:02:22.040 --> 0:02:25.000 Yes, you do make it tough on occasion. Let's go 0:02:25.040 --> 0:02:25.760 with number one. 0:02:26.160 --> 0:02:27.360 All right, just work harder. 0:02:28.320 --> 0:02:31.240 That's that is Actually I have heard that. 0:02:31.280 --> 0:02:33.799 You know what, Tom says that to me. Really, I 0:02:33.840 --> 0:02:35.560 don't know if we can swear, but it really pisses 0:02:35.600 --> 0:02:37.360 me off. He's like, I just shut up and work harder, 0:02:37.680 --> 0:02:40.800 just work harder, just to get a rise out of me. Really, 0:02:40.960 --> 0:02:41.960 maybe a pot thrown. 0:02:42.320 --> 0:02:45.000 And it doesn't work, doesn't necessarily because yes, there are 0:02:45.040 --> 0:02:48.720 times when just maybe changing your attitude to work is 0:02:48.760 --> 0:02:49.920 going to help, but it's not. 0:02:50.200 --> 0:02:53.919 But also like a lot of people, including myself, are 0:02:53.960 --> 0:02:57.560 already working incredibly hard and you know, and a lot 0:02:57.600 --> 0:03:00.920 of people are you know, also working really hard, still struggling, 0:03:02.080 --> 0:03:04.880 So it doesn't Actually it's not actually good advice at all, 0:03:04.960 --> 0:03:08.760 doesn't help at all. The reality is that today, you know, 0:03:09.040 --> 0:03:13.000 getting ahead is a combination of different things and essentially 0:03:13.280 --> 0:03:16.480 working smarter, not harder. But you know, it's a combination 0:03:16.560 --> 0:03:22.400 of investing, negotiating better terms and conditions, upskilling, investing in yourself, 0:03:22.760 --> 0:03:25.080 you know, building up other income sources, whether it be 0:03:25.160 --> 0:03:27.079 you know, a side hustle or even learning how to 0:03:27.160 --> 0:03:31.640 use technology. To add more efficiency in your life. So no, 0:03:31.760 --> 0:03:34.320 it's not about working harder, it's about working smarter. 0:03:34.600 --> 0:03:37.040 Okay, shall we put that one in the bin? 0:03:37.760 --> 0:03:39.680 Yes with Tom? 0:03:39.960 --> 0:03:42.240 Did you just put your life partner in the bin? 0:03:43.040 --> 0:03:45.440 It? He says it just to get a rise out 0:03:45.480 --> 0:03:48.920 of me. The love of your lifey and churist. That's 0:03:48.920 --> 0:03:49.400 his hobby. 0:03:50.120 --> 0:03:52.400 Oh that's good. See, that's probably why he and I 0:03:52.400 --> 0:03:55.080 would get on so well so well, because we share 0:03:55.080 --> 0:03:59.440 a hobby which is antagonizing you. Okay. The second piece 0:03:59.480 --> 0:04:02.080 of bad advice or outdated advice that can get in 0:04:02.080 --> 0:04:02.560 the bin. 0:04:03.280 --> 0:04:06.560 And that is buy a home as soon as possible. 0:04:07.760 --> 0:04:08.160 Okay. 0:04:08.320 --> 0:04:11.600 Yeah, So look a lot of people renting. Besting is 0:04:11.640 --> 0:04:15.800 actually the smart thing to do and actually works better 0:04:15.840 --> 0:04:18.640 for their their needs and their tastes. And you know 0:04:18.640 --> 0:04:22.880 where they might work their finances. That's where you live, 0:04:23.720 --> 0:04:26.600 rents somewhere and then buy a house as an investment property, 0:04:26.680 --> 0:04:28.520 you know where it suits your goals. 0:04:28.440 --> 0:04:30.839 Perhaps more affordable like a royal. 0:04:31.000 --> 0:04:34.560 Regional bub yeah, or you know an apartment in the 0:04:34.600 --> 0:04:36.919 city and whilst you go and live and rent a house. 0:04:38.080 --> 0:04:41.640 The other thing is you know some people and I 0:04:41.680 --> 0:04:44.160 know personally these people they don't want to go and 0:04:44.160 --> 0:04:48.080 buy a home. They don't want the responsibility that the 0:04:48.240 --> 0:04:51.120 idea of a mortgage creates a huge amount of financial stress, 0:04:51.240 --> 0:04:53.880 but also emotional stress, feeling that they are trapped, they're stuck. 0:04:53.920 --> 0:04:55.760 You know, they're going to have to stay living in 0:04:55.760 --> 0:04:57.880 that area, you know, for a long period of time, 0:04:58.000 --> 0:05:00.480 so you know, and for some people not the right 0:05:00.520 --> 0:05:01.440 timing as well. 0:05:01.680 --> 0:05:04.120 It's kind of the Australian default though, isn't it that 0:05:04.520 --> 0:05:06.880 you are going to buy a place at some point 0:05:06.920 --> 0:05:10.840 and live in that, whereas other countries, particularly European countries, 0:05:11.160 --> 0:05:16.640 that the rental culture is fantastic and that's all you 0:05:17.520 --> 0:05:18.760 will do, yeah, for life. 0:05:18.839 --> 0:05:21.000 And the rental rules also very very different as well. 0:05:21.040 --> 0:05:22.440 You can do what you want to the property. You 0:05:22.480 --> 0:05:24.839 can have like a ten year rental agreement if you want. 0:05:24.960 --> 0:05:28.400 Yeah, so you've got that security, that stability over a 0:05:28.440 --> 0:05:29.440 long period of time. 0:05:30.200 --> 0:05:32.440 So I think it's about doing you know, if you 0:05:32.480 --> 0:05:34.200 want to buy a home, that's great, nothing wrong with it, 0:05:34.240 --> 0:05:36.279 but do it on your terms and conditions. You know, 0:05:36.400 --> 0:05:38.720 that works for your cash flow, your goals and of 0:05:38.720 --> 0:05:39.800 course your lifestyle. 0:05:39.880 --> 0:05:40.200 Okay. 0:05:40.480 --> 0:05:46.320 At number three, loyalty pays so This obviously applies to 0:05:46.360 --> 0:05:50.760 things like employers, banks, insurers, utilities, but we've all seen 0:05:50.800 --> 0:05:55.120 loyalty tax is really expensive. Actually, I was talking about 0:05:55.160 --> 0:05:57.760 this with Ali from the Today Show because I do 0:05:57.760 --> 0:06:01.159 this segment every Sunday morning on my personal Finance, and 0:06:01.560 --> 0:06:03.760 you know, she said, oh, you know, Lord, you tax 0:06:03.960 --> 0:06:07.000 sometimes gets called lazy tax, and I said, you know what, No, 0:06:07.040 --> 0:06:10.680 I think's actually now time poor tax because we're all 0:06:10.760 --> 0:06:13.040 working so hard. You know, we don't have the time 0:06:13.120 --> 0:06:16.440 to often pick up the phone. You know, it's too overwhelming, 0:06:16.440 --> 0:06:18.520 but a long list of things to do with responsibilities, 0:06:18.520 --> 0:06:20.560 and you know, we just don't we find the time. 0:06:20.600 --> 0:06:24.799 But loyalty tax is really expensive. We are sadly being 0:06:25.400 --> 0:06:28.239 ripped off, particularly when you look at what your banks 0:06:28.279 --> 0:06:31.600 are offering new customers versus what you're currently paying. 0:06:31.880 --> 0:06:34.960 And it's so counterintuitive, isn't it. You would think that 0:06:35.040 --> 0:06:37.280 you have been loyal, that you've been with something for 0:06:37.320 --> 0:06:39.400 ten years, and you always used to see kind of 0:06:39.440 --> 0:06:42.719 like the three year no claim bonus and stuff through 0:06:42.760 --> 0:06:45.400 your insurer, and you would assume that that's because you've 0:06:45.440 --> 0:06:47.880 been really loyal over a long period of time. 0:06:47.760 --> 0:06:50.400 And it's actually not, Well, you've been very trusting, but 0:06:50.600 --> 0:06:53.960 unfortunately that is ultimately a sense of being naive and 0:06:54.000 --> 0:06:55.119 we're wasting money. 0:06:55.240 --> 0:06:58.560 Yeah okay, I like that one, but the way that 0:06:58.640 --> 0:07:01.080 you have characterized it there as a time poor tax 0:07:01.760 --> 0:07:04.479 one hundred percent because I think everybody knows that you 0:07:04.560 --> 0:07:06.400 can get a better deal for most things if you 0:07:06.400 --> 0:07:10.600 shop around, but who has the time? I know it's 0:07:10.640 --> 0:07:14.360 because we just need to work harder. Okay, Tom, all right, 0:07:14.360 --> 0:07:15.800 settle down number. 0:07:15.480 --> 0:07:19.040 Four, Get a secure job and stay there. And this 0:07:19.160 --> 0:07:21.040 is you know, something like our grandparents or if our 0:07:21.080 --> 0:07:23.600 parents did you know they stayed with the one employer 0:07:23.640 --> 0:07:26.120 for like twenty years, wrapped up that long service leave. 0:07:27.160 --> 0:07:29.320 You know, yes, when our careers are you know, a 0:07:29.400 --> 0:07:32.400 linear back in the day, but today it's so different. 0:07:33.040 --> 0:07:35.000 You know, we all know that the biggest and best 0:07:35.000 --> 0:07:38.520 pay rises we get now when we move companies, yea, 0:07:38.680 --> 0:07:42.520 even move industries. That's when we've seen the big step 0:07:42.640 --> 0:07:45.040 up in our earning capacity. And a lot of us 0:07:45.080 --> 0:07:49.280 have multiple careers, multiple income sources. I mean, look, I podcast, 0:07:49.760 --> 0:07:54.320 do television, I do keynote, speaking books you know, books, yes, books, 0:07:54.320 --> 0:07:59.280 books very important and lead with that, you know, so 0:07:59.760 --> 0:08:02.840 that it doesn't actually work like that, and you know, 0:08:03.240 --> 0:08:05.360 careers really do evolve, and also because of AI, we 0:08:05.400 --> 0:08:08.120 do need to adapt and change, you know, and pivot. 0:08:08.560 --> 0:08:11.800 And there's obviously contracting work that side hustles, you know, 0:08:12.640 --> 0:08:15.280 it doesn't that is not the world. Really, It's about 0:08:15.320 --> 0:08:18.560 staying in a work or a job that's actually enjoyable 0:08:18.560 --> 0:08:21.679 and fulfilling and satisfying and never getting to that dangerous 0:08:21.760 --> 0:08:24.080 zone of actually staying comfortable and lazy. 0:08:25.960 --> 0:08:29.280 I find that one interesting because that has been an 0:08:29.320 --> 0:08:34.040 evolution away from that. Whereas security was valued, it seemed 0:08:34.080 --> 0:08:38.440 above security and loyalty to an employer, that the employer 0:08:38.520 --> 0:08:40.640 was loyal to you and you had security for a 0:08:40.640 --> 0:08:42.840 long period of time. But that has changed, and it 0:08:42.840 --> 0:08:44.559 has changed over the last few decades. And I think 0:08:44.600 --> 0:08:46.920 one of the recent stats that I saw when we're 0:08:47.120 --> 0:08:51.760 preparing for the book was a statistic around young people 0:08:51.800 --> 0:08:54.280 these days can expect to have I think it is 0:08:54.360 --> 0:08:59.480 seventeen different jobs across three to four different careers. Yeah, 0:08:59.559 --> 0:09:04.040 isn't that credible? And that is there is actually something 0:09:04.120 --> 0:09:08.280 quite fulfilling out of that as well, that not necessarily 0:09:08.320 --> 0:09:11.160 staying in a job that you may not enjoy, that 0:09:11.679 --> 0:09:15.400 you're actually chasing satisfaction and fulfillment as well as just 0:09:15.480 --> 0:09:19.040 financial security, which I think is really rewarding. 0:09:18.720 --> 0:09:20.880 Definitely and you know, your creative of your own destiny. 0:09:20.920 --> 0:09:22.880 It puts you back in the driving seat. 0:09:23.080 --> 0:09:27.760 Yeah, number five on this list of financial advice that 0:09:27.960 --> 0:09:29.280 doesn't really work anymore. 0:09:30.360 --> 0:09:33.840 So deep breath, this one gets me annoyed. Saved ten 0:09:33.880 --> 0:09:35.920 percent of your income. 0:09:37.360 --> 0:09:40.160 That is actually a real that used to be a 0:09:40.200 --> 0:09:41.080 piece of advice. 0:09:41.440 --> 0:09:44.080 Yeah, it's still unfortunately has a bit of a heartbeat. 0:09:44.080 --> 0:09:48.560 But Okay, it's not that the ten percent is bad. 0:09:49.520 --> 0:09:52.160 Is the problem that it's an arbitrary number and it's 0:09:52.440 --> 0:09:54.600 not reflective also of where we are in the world 0:09:54.640 --> 0:09:58.440 right now and the economic and financial challenges that most 0:09:58.480 --> 0:10:02.760 of us are facing. And it's very circumstantial. And this 0:10:02.800 --> 0:10:04.360 is why I have a big issue with this whole 0:10:04.400 --> 0:10:07.199 budgeting system of ten percent should go into this account, 0:10:07.200 --> 0:10:09.120 ten percent should be in this account. That percent, I 0:10:09.120 --> 0:10:12.840 don't believe. I'm really very much about that Pigeonholing prescription. 0:10:13.520 --> 0:10:16.320 It's very subjective as to how much you earn, but 0:10:16.360 --> 0:10:19.080 also what your budget is, what your living expenses and 0:10:19.120 --> 0:10:21.520 lifestyle is. You know, for someone who's earning say three 0:10:21.600 --> 0:10:24.040 hundred thousand dollars a year, saving ten percent, you know, 0:10:24.160 --> 0:10:26.280 is obviously going to be very different from someone who's 0:10:26.320 --> 0:10:29.320 earning seventy thousand dollars a year. And of course, whether 0:10:29.360 --> 0:10:31.920 they have children, whether they have a mortgage, you know, 0:10:32.240 --> 0:10:34.400 whether they have debts in their lives, what their their 0:10:34.400 --> 0:10:38.120 lifestyle taste is going to be. But that also holds 0:10:38.120 --> 0:10:40.680 people back because what if you're in a situation where 0:10:40.720 --> 0:10:44.720 perhaps you've paid your home off that guidance of ten percent, 0:10:44.720 --> 0:10:46.320 it was actually going to hold them back because they 0:10:46.360 --> 0:10:49.920 can actually get capable of saving more. And then people 0:10:49.960 --> 0:10:51.680 who feel that they can't actually reach that goal of 0:10:51.720 --> 0:10:54.760 saving them being ten percent are going to feel deflated, 0:10:55.080 --> 0:10:58.120 you know. And it's not about saving, it's about investing. 0:10:58.320 --> 0:10:59.480 Like but Anya will come to that. 0:11:00.080 --> 0:11:03.280 I mean to play devil's advocate on that one. For me, 0:11:03.400 --> 0:11:07.000 that's more just about the idea. It is almost just 0:11:07.080 --> 0:11:12.800 about being almost responsible. It's just old fashioned being making 0:11:12.840 --> 0:11:18.080 sure that you are not just spending everything prioritizing a 0:11:18.200 --> 0:11:20.840 little bit of financial security, even if that is for 0:11:20.880 --> 0:11:23.720 your emergency money or you're putting it then towards investing. 0:11:23.840 --> 0:11:27.400 Well, look, it's the rainy day idea but I think 0:11:27.400 --> 0:11:30.480 it's more about creating the habit. But it's really not 0:11:30.520 --> 0:11:32.360 going to take you very far, particularly over the long 0:11:32.440 --> 0:11:34.760 run when you think about inflation. That money is then 0:11:34.840 --> 0:11:37.360 essentially sitting in savings account for ten years and it's 0:11:37.360 --> 0:11:39.560 not actually being used with any sort of purpose. 0:11:39.679 --> 0:11:41.880 All right, Okay, so save ten percent of your income 0:11:42.000 --> 0:11:45.440 or pop that in the bin with the others. So 0:11:45.440 --> 0:11:47.600 so far we've got just work harder, buy a home 0:11:47.640 --> 0:11:52.000 as soon as possible, loyalty pays, get a job and 0:11:52.040 --> 0:11:55.840 stay there forever, and then save ten percent of your income. 0:11:55.960 --> 0:12:05.199 Quick break, and back with the rest of the list. Cana. 0:12:05.200 --> 0:12:08.600 We're putting together a cracking list today of the top 0:12:08.720 --> 0:12:12.040 ten pieces of financial advice that just don't work anymore. 0:12:12.880 --> 0:12:17.880 And I've enjoyed these. Verse five. Give us number six. 0:12:18.200 --> 0:12:22.840 Pay off your mortgage before investing. Now, this may have 0:12:22.960 --> 0:12:26.040 been sensible when you know you didn't have the opportunity 0:12:26.240 --> 0:12:29.640 to perhaps say, look at something like debt recycling, or 0:12:29.679 --> 0:12:33.280 you didn't really know about investing, wasn't something available to you, 0:12:33.360 --> 0:12:37.040 or they weren't sort of the options there. But most 0:12:37.120 --> 0:12:40.360 Australians are able to actually tackle both of these goals 0:12:40.440 --> 0:12:43.400 of paying down home loan and investing at the same time, 0:12:43.440 --> 0:12:46.960 And the fact is actually really efficient way of achieving 0:12:46.960 --> 0:12:49.800 two goals, diversifying outside of the family home, starting to 0:12:49.920 --> 0:12:53.160 build a long term growing passive income, obviously the compound 0:12:53.160 --> 0:12:56.880 and growth opportunities, and even obviously the benefits of debt recycling. 0:12:56.920 --> 0:13:00.040 But you know with the tax deductible interest, but you 0:13:00.360 --> 0:13:03.679 don't have to do that first. You're actually there is 0:13:03.720 --> 0:13:05.480 actually a danger of doing that because you're missing out 0:13:05.800 --> 0:13:06.640 losing time. 0:13:06.720 --> 0:13:09.600 Because just just through the timing of it. If you 0:13:09.640 --> 0:13:13.000 were to say, put all your money into paying off 0:13:13.000 --> 0:13:15.680 your mortgage and instead of thirty years, you're able to 0:13:15.679 --> 0:13:19.880 do it in twenty years, that is still potentially twenty 0:13:19.960 --> 0:13:24.679 years of investing and compound interest and growth in your 0:13:24.720 --> 0:13:26.880 investments that you will have missed out on during that 0:13:26.920 --> 0:13:28.880 time because you've decided to do them one then the 0:13:28.880 --> 0:13:31.840 other rather than at the same time. And it doesn't 0:13:31.840 --> 0:13:32.640 need to be big. 0:13:32.800 --> 0:13:34.760 Well about to say, it doesn't need to be aggressive. 0:13:34.800 --> 0:13:36.480 You don't need to go and borrow hundreds and thousands 0:13:36.520 --> 0:13:38.640 of dolls. You can start with a very small amount 0:13:38.840 --> 0:13:41.960 and slowly and steadily increase it over time as your 0:13:42.000 --> 0:13:42.880 mortgage comes down. 0:13:43.000 --> 0:13:47.360 Yeah, yeah, and when you mentioned debt recycling just reminds 0:13:47.400 --> 0:13:49.680 me that that's a fantastic thing to talk to a 0:13:49.720 --> 0:13:54.000 financial planner. It's a slightly more complex, it's been. 0:13:53.960 --> 0:13:58.480 More sophisticated, but it's very it's a very powerful strategy 0:13:58.920 --> 0:14:00.320 if you're in a position where you can do it. 0:14:00.320 --> 0:14:03.320 It's worth knowing and understanding about it so that when 0:14:03.320 --> 0:14:05.400 the time comes by you'll know orry actually think we 0:14:05.400 --> 0:14:06.120 should be looking at this. 0:14:06.200 --> 0:14:08.800 We're ready number seven on the list. 0:14:09.120 --> 0:14:11.400 You need to own a property to be calm, wealthy, 0:14:12.400 --> 0:14:15.040 oh dear. Yeah, So it's deeply embedded obviously in the 0:14:15.080 --> 0:14:18.640 Australian culture, but there are lots of people that have 0:14:18.720 --> 0:14:25.480 built enormous wealth through ches, through ETFs, through investing in 0:14:25.600 --> 0:14:29.280 businesses and of course supernuation. In fact, some of the 0:14:29.280 --> 0:14:32.240 wealthiest people I know don't own a home. They know 0:14:32.360 --> 0:14:35.120 worth millions of dollars sometimes even hundreds of millions of 0:14:35.160 --> 0:14:36.320 dollars and don't own a home. 0:14:36.560 --> 0:14:38.960 Really yeah, oh wow, really cool. 0:14:39.160 --> 0:14:41.880 And of course you know superannuation as well. But you know, 0:14:41.920 --> 0:14:46.000 property is just one path and you know it's not 0:14:46.160 --> 0:14:49.040 the only path. You know you want to be building on, 0:14:49.320 --> 0:14:52.840 you know, focus on building assets that not just about 0:14:52.840 --> 0:14:55.800 necessarily collecting properties and you want assets where your money 0:14:55.840 --> 0:14:56.680 is working for you. 0:14:57.680 --> 0:15:02.360 And I suppose yeah, the property investing scenario. 0:15:01.960 --> 0:15:04.600 Has changed changed, yes, hugely. 0:15:04.800 --> 0:15:07.240 Yeah, And it is worth going back and having a 0:15:07.280 --> 0:15:09.920 listen to the episode that we did recently on the 0:15:09.960 --> 0:15:14.440 property and property investing for passive income as opposed to 0:15:14.480 --> 0:15:18.080 this idea of the short term benefits of negative gearing 0:15:18.120 --> 0:15:22.680 and the tax incentives. Okay, number eight, Well, this is 0:15:23.880 --> 0:15:27.120 one of my top five lists I reckon that you 0:15:27.160 --> 0:15:27.760 have put together. 0:15:28.600 --> 0:15:31.520 All right, cut out the coffee and the avocado toast. 0:15:32.480 --> 0:15:34.520 Oh, that's one that always gets people a little bit 0:15:34.600 --> 0:15:35.160 riled up. 0:15:35.800 --> 0:15:39.000 So yeah, drives people wild. 0:15:39.480 --> 0:15:41.560 So it feels like it's the just work harder. 0:15:41.640 --> 0:15:45.040 Yeah, it does have a very underlying vibe about that. 0:15:45.360 --> 0:15:47.800 So it's not just the you know, the small expenses. 0:15:48.440 --> 0:15:52.080 You know, we obviously do need to remember was it 0:15:52.360 --> 0:15:55.000 tiny leak sink ships still, But at the end of 0:15:55.040 --> 0:15:57.520 the day, you need to be focusing on the biggest 0:15:57.560 --> 0:16:00.720 expenses first to look at saving money. So if you 0:16:00.800 --> 0:16:03.280 can save obviously we've got to say two thousand dollars expense, 0:16:03.320 --> 0:16:05.520 and you can save ten percent of that, which is 0:16:05.560 --> 0:16:09.160 say two hundred dollars a month versus saving ten dollars 0:16:09.200 --> 0:16:12.520 a month expense saving you know, ten percent off, that's 0:16:12.560 --> 0:16:14.560 a dollar. Like, you've got to look at the efficiency. 0:16:15.120 --> 0:16:19.920 Hit up your biggest most expensive expenses first for the 0:16:19.960 --> 0:16:22.240 biggest amount of savings and the impact, like. 0:16:22.320 --> 0:16:24.400 You call up your bank and talk to them about 0:16:24.400 --> 0:16:26.000 a better deal on your homeland. Exactly. 0:16:26.080 --> 0:16:28.000 That's what I mean. Sometimes the biggest savings are right 0:16:28.080 --> 0:16:29.240 under our nose, all. 0:16:29.240 --> 0:16:30.880 Right, So we don't have to cut out the coffee, 0:16:30.880 --> 0:16:32.560 we don't have to cut out the avocado toast, and 0:16:32.600 --> 0:16:35.080 we can pop that whole piece of advice just straight 0:16:35.120 --> 0:16:36.080 in the bin with the rest of them. 0:16:36.280 --> 0:16:39.560 Number nine, keep your money in the bank where it's safe. 0:16:40.600 --> 0:16:42.840 I just love how you just loaded that with so 0:16:43.000 --> 0:16:46.400 much just sarcasm and judgment. So this is what I 0:16:46.440 --> 0:16:47.360 think of this advice. 0:16:48.360 --> 0:16:52.040 Well money, Okay, First of all, inflation mean if your 0:16:52.040 --> 0:16:55.600 money is not all the time obviously it depends on 0:16:55.640 --> 0:16:59.160 the economic climate, but inflation, and they also you've got 0:16:59.160 --> 0:17:00.840 to pay tax on the interest do you earn, and 0:17:00.840 --> 0:17:03.640 then you add inflation, sometimes your money is actually going backwards. 0:17:03.680 --> 0:17:05.840 And you know, we saw was it during COVID We 0:17:05.880 --> 0:17:08.439 had those bank guarantees that came through. No was, it 0:17:08.480 --> 0:17:11.320 wasn't even it was before COVID actually where the banks 0:17:11.320 --> 0:17:15.359 had to start guarantee They had guarantees on savings deposits 0:17:15.560 --> 0:17:17.720 to help protect your money, and then the limits started 0:17:17.760 --> 0:17:21.320 reducing and reducing the GFC. GFC, yes, I knew there 0:17:21.359 --> 0:17:24.960 was a major economic event. So like, obviously it depends 0:17:25.000 --> 0:17:27.639 it's where you deposit your money, but it's not guaranteed. 0:17:27.680 --> 0:17:32.440 It's not obviously it's highly unlikely, but it's not one safe. 0:17:32.560 --> 0:17:35.920 But also it's not necessarily the best use of your money. 0:17:36.000 --> 0:17:39.080 Yeah, you want something that obviously gives you the financial security, absolutely, 0:17:39.160 --> 0:17:40.840 but you also want something that grows with you. 0:17:41.320 --> 0:17:41.840 Yeah. 0:17:42.080 --> 0:17:42.680 And the. 0:17:44.960 --> 0:17:48.240 We do have one of the best banking systems though 0:17:48.359 --> 0:17:50.840 we did compared to compared to elsewhere in the world. 0:17:51.320 --> 0:17:57.480 The stability and the strength of Australian banks is it extraordinary. 0:17:57.560 --> 0:17:59.280 Yes, absolutely, And that's why I said it's a very 0:17:59.359 --> 0:18:01.159 very small risk. But we can't bury our hits in 0:18:01.160 --> 0:18:04.680 the sand say there's no risk, because that's not technically correct. 0:18:05.400 --> 0:18:08.119 And oh yes, emergency money must be in cash. Absolutely, 0:18:08.160 --> 0:18:10.000 short term goals, yes, it must be in cash, but 0:18:10.720 --> 0:18:14.240 you know particularly, and I've seen this backfire with people 0:18:14.280 --> 0:18:17.680 in retirement because they've had that mentality and then they're 0:18:17.760 --> 0:18:21.320 wondering why they're savings account is now dropping at a 0:18:21.320 --> 0:18:24.120 faster rate. And you know, this is the heartbreaking side 0:18:24.440 --> 0:18:26.879 of inflation in the environment we're living in the moment, 0:18:27.119 --> 0:18:30.639 is those people that are left with their wealth diminishing 0:18:30.640 --> 0:18:31.760 away at a rapid speed. 0:18:31.920 --> 0:18:35.520 Yeah, I mean yeah. Emergency money is an interesting example 0:18:35.600 --> 0:18:37.840 or almost an exception to the rule, isn't it, because 0:18:37.880 --> 0:18:39.960 you need to keep it in cash, and it's probably 0:18:40.000 --> 0:18:45.160 it's definitely better tucked away in a safe Aussie bank. 0:18:45.320 --> 0:18:48.200 You're ten in cash under your mattress. 0:18:48.800 --> 0:18:50.800 Well obviously because it's not on any interest and it's not 0:18:50.840 --> 0:18:51.320 even short. 0:18:51.359 --> 0:18:54.240 If you get robbed, it could be accumulating dust though, 0:18:54.320 --> 0:18:55.960 so it is accumulating something. 0:18:57.480 --> 0:19:02.200 Number ten retire at sixty five. Say that I'm wannertire 0:19:02.240 --> 0:19:04.120 sixty retiring at sixty five? 0:19:04.359 --> 0:19:09.600 Okay, are you saying that that is out of date 0:19:10.000 --> 0:19:12.800 or it's just it doesn't it's not a one size 0:19:12.800 --> 0:19:13.640 fits all anymore. 0:19:13.720 --> 0:19:16.200 Well, now, it's more I think of a semi retirement, 0:19:16.240 --> 0:19:19.280 that transition to retirement for a lot of people and 0:19:19.840 --> 0:19:22.400 you know, that whole idea of stopping waking up one 0:19:22.480 --> 0:19:25.560 day and stopping work completely and going fishing is not there. 0:19:25.560 --> 0:19:25.840 People. 0:19:25.880 --> 0:19:29.359 Actually, I know a handful of people who've retired but 0:19:29.440 --> 0:19:33.040 actually are still in the game. You know. They love 0:19:33.200 --> 0:19:35.600 building things, they love being part of a community, they 0:19:35.640 --> 0:19:38.640 love the connection they you know, they've shifted on something 0:19:38.640 --> 0:19:40.480 more meaningful that they've been wanting to do for a 0:19:40.520 --> 0:19:43.040 really long time, something that connects to their heart, you know. 0:19:43.600 --> 0:19:46.320 And sometimes obviously just is that sort of part time work. 0:19:46.640 --> 0:19:49.080 Or I've seen people going to start new businesses and 0:19:49.119 --> 0:19:52.120 great businesses and and take on a whole nother. 0:19:52.400 --> 0:19:53.600 Career, partner, another career. 0:19:53.960 --> 0:19:56.440 I think there's something really important about this about you know, 0:19:56.480 --> 0:20:00.720 the keeping your cognitive skills, you know, keeping fit and strong, key, 0:20:00.760 --> 0:20:04.320 staying in the community, having those relationships, that connection. You know, 0:20:05.119 --> 0:20:07.359 that relevance is really important. 0:20:08.240 --> 0:20:12.080 It is, Yeah, and just for that mental fitness, that's 0:20:12.600 --> 0:20:15.280 just it is so so. 0:20:15.119 --> 0:20:21.959