Speaker 1: Welcome to How Today Afford That, the podcast that peaks
Speaker 1: into the financial lives of everyday Australians. I'm Michael Thompson.
Speaker 1: I'm an author and the co host of the business
Speaker 1: news podcast Fear and Greed and There's Always I'm with
Speaker 1: Canna Campbell, financial planner and founder of Sugar Mummer TV,
Speaker 1: the financial literacy platform covering YouTube, podcasts, books, Instagram threads,
Speaker 1: TikTok and more. Hello, Canna, good morning. Can a quick
Speaker 1: little shout out? Not long now until our book comes out,
Speaker 1: Twelve Months of Financial Freedom.
Speaker 2: If you haven't pre ordered your copy, now is the time.
Speaker 1: And it does what it says on the cover. It
Speaker 1: is twelve Months to Financial Freedom. It is month by
Speaker 1: month helping you take control of your money.
Speaker 2: Right. We couldn't make it any easier for you to
Speaker 2: fix your finances and get you back on track and
Speaker 2: actually enjoying and being proud of the progress, because this
Speaker 2: is really about creating a shift and a breakthrough. Yeah.
Speaker 1: Absolutely so, Twelve Months to Financial Freedom comes out in September,
Speaker 1: but pre orders are available now Today's episode and this
Speaker 1: really really interesting and this has the potential to almost
Speaker 1: be life changing. What we're talking about today. Most people
Speaker 1: I think they know well, they think they know what
Speaker 1: they earn, whether it's an annual salary or an hourly
Speaker 1: rate to take home pay, but it's not the full
Speaker 1: picture necessarily. And I was reading an article recently about
Speaker 1: the Fire movement. It was actually an article about Your
Speaker 1: Money or Your Life, which is the book that was
Speaker 1: the genesis of the Fire movement back in the nineties.
Speaker 1: And in the article, it was talking about the true
Speaker 1: hourly wage, right, this idea that we actually are all
Speaker 1: working for a whole lot less than we think. And
Speaker 1: once you understand that, and once you can calculate what
Speaker 1: you are actually working for, then it changes the way
Speaker 1: that you think about money. Money takes on a different
Speaker 1: value you and your time takes on a different value
Speaker 1: as well. So today the true hourly wage, best place
Speaker 1: to start is probably what is it? What is the
Speaker 1: true hourly wage?
Speaker 2: So this is where you sort of take your your
Speaker 2: gross salary, like one hundred thousand dollars a year, and
Speaker 2: then you go intoduct tax, and then you deduct all
Speaker 2: the work related expenses, like you know, getting to work,
Speaker 2: like bus fare or parking, fuel, public transport, if you
Speaker 2: have to wear like a special uniform, you know, the
Speaker 2: professional clothing involved, and that then you know, gives you
Speaker 2: obviously a net figure. And then you can look at
Speaker 2: the level of amount of hours that you're doing and
Speaker 2: that then gives you an hourly rate out of the interest.
Speaker 2: Have you ever done this before?
Speaker 1: No? No, I haven't. It is it is worthwhile. I've
Speaker 1: been a bit scared to do it. It's actually, yeah,
Speaker 1: because all of a sudden you think that you know
Speaker 1: the and a lot of these things, like when you're
Speaker 1: listing all of those expenses, they're not tax deductible a
Speaker 1: lot of those things like guion fees. But I mean
Speaker 1: like you're not going to be able to deduct the
Speaker 1: cost of the petrol that it takes to get to
Speaker 1: work and things like that for work.
Speaker 2: But no, there's a lot of things. It costs money
Speaker 2: to tone up to work, particularly when you think about things.
Speaker 1: Like childcare as well. Yeah, yeah, and your lunch and
Speaker 1: you're buying it at work. Stuff that's not.
Speaker 2: It works, you know if you have to wear a suit, yeah,
Speaker 2: to work? That expensive.
Speaker 1: All of these things. What about time though? Right, so
Speaker 1: that the focus obviously all of those things, they were
Speaker 1: all expenses. The actual financial expenses. But what about the
Speaker 1: time that you spend getting ready, the time that you
Speaker 1: spend commuting, all the time that you spend working when
Speaker 1: you're not supposed to be working.
Speaker 2: Yes, so that definitely factors in. So obviously, you know,
Speaker 2: the travel time, even like getting dressed and ready in
Speaker 2: the morning, you know, making yourself representable, it's the big one.
Speaker 2: Checking emails after work or you know, over the weekending
Speaker 2: up on project. All the extra hours that we have
Speaker 2: to do, you know, whether we've got to you know,
Speaker 2: we've got to travel, you know, say for a conference,
Speaker 2: so often people have to leave on a Sunday to
Speaker 2: make sure that they land at that destination and time.
Speaker 2: It really does it into our own personal time. All
Speaker 2: those hours really do add up, and we end up
Speaker 2: doing a lot more hours than say, like the forty
Speaker 2: hour week or the fifty whatever we've signed in our contract.
Speaker 1: Okay, so that's how you get the two sides of
Speaker 1: this equation, right. You are taking your salary yep, take
Speaker 1: off tax, and then take off all of those other
Speaker 1: financial expenses.
Speaker 2: So the work related expenses and the time related expenses.
Speaker 1: But then with the time, right, so say you work
Speaker 1: a forty hour week, you then add on, say, say
Speaker 1: it takes you an hour to get to and from
Speaker 1: work every day, so that's another ten hours. And then
Speaker 1: you add on any time preparing for work or doing
Speaker 1: extra work at home or on the weekend. You add that,
Speaker 1: and all of a sudden that you have a sixty
Speaker 1: hour week.
Speaker 2: Yes, exactly. So the I guess the comment not dat
Speaker 2: a figure is getting bigger. So your hourly rate in
Speaker 2: the mathematical formula gets a lot smaller and quite depressing.
Speaker 1: How much lower? Like this is significantly lower.
Speaker 2: Right, So it's going to vary from situation to situation.
Speaker 2: And I've actually done this twice in my life. I
Speaker 2: did this a long time ago, actually when I was
Speaker 2: writing Mindful Money in my book, because I talk about
Speaker 2: the importance of having this awareness. I never went to
Speaker 2: that detail. I was more about looking at the negross
Speaker 2: salary minus your tax, and then obviously looking at you know,
Speaker 2: the hours. I didn't go into the I didn't even
Speaker 2: want to go into the detail of all the additional
Speaker 2: things out and how they add up, because it can
Speaker 2: get quite depressing. And then I did it actually ironically
Speaker 2: about six weeks ago, and it was very sobering.
Speaker 1: Is that how people usually react like, is it an
Speaker 1: eye opener? It is.
Speaker 2: It can be quite depressing as well, But if you
Speaker 2: are willing to sit through the uncomfortableness, I think it's
Speaker 2: very important because it allows you to see what you
Speaker 2: know at stop and question your value system and where
Speaker 2: you're actually spending your time. And I mean, this is
Speaker 2: going to be I'm probably going to rub people the
Speaker 2: wrong way, but you know, I think with this, I
Speaker 2: think it's great. I think it's very it's great to
Speaker 2: have the awareness because very natural for our brains to
Speaker 2: be driven by our egos and go, well, I own
Speaker 2: like one hundred and fifty thousand dollars a year. You know,
Speaker 2: I'm making great money. But when you actually do this,
Speaker 2: it forces you to look at the real numbers of
Speaker 2: your situation and actually how you're spending your time and
Speaker 2: the cost of showing up to work. And you know,
Speaker 2: this is why I have a bit of an issue
Speaker 2: with this, because you could go down a bit of
Speaker 2: a rabbit warren and add so many things to you,
Speaker 2: you know, to your hours. At the end of the day,
Speaker 2: we do need to get dressed up and go to work,
Speaker 2: you know, yes, it is part of our you know,
Speaker 2: to have a competitive advantage to be able to add
Speaker 2: value and be a great team player and you know,
Speaker 2: be a part of a great business or even run
Speaker 2: a great business. You can't just do the bare minimum
Speaker 2: of hours. You know, We've all got to put in
Speaker 2: strocim initiative, put in some effort and energy and passion
Speaker 2: into this if we want to get ahead. And that's
Speaker 2: supposed to worry whether this is this is a bit
Speaker 2: I'm going to get trouble for this, a bit a bit.
Speaker 1: Wokish, bit woke.
Speaker 2: Yeah, okay, I'm like probably going to get attacked for that.
Speaker 2: But I just I just feel like there's a bit
Speaker 2: of a cop out. Like I think it's encouraging. If
Speaker 2: you go too deep with this, it can encourage you
Speaker 2: to be a bit like my time's worth more like
Speaker 2: I don't have I don't need to do this. I'm
Speaker 2: going to luwer myself in society to check my emails
Speaker 2: and look, don't get me wrong, we all need boundaries professionally.
Speaker 1: Yeah, but also like, but I'm also assuming though that
Speaker 1: it's someone else's problem to fix right this to me,
Speaker 1: this is not about Okay, they're not paying me enough
Speaker 1: to justify the time that I'm putting into it. Your
Speaker 1: job is your job. Your salary is your salary. Yeah right.
Speaker 1: The things that you can change is the way then
Speaker 1: it approaches, you approach your spending and the mentality that
Speaker 1: you take into everything around it.
Speaker 2: And that's that's where I get worried that people get
Speaker 2: stuck in that and they can't question their career path,
Speaker 2: their question what they're entitled to the salary. They can
Speaker 2: get this like a bit of entitlement.
Speaker 1: They worried.
Speaker 2: It comes from this. But this is the flip side
Speaker 2: of it. Sorry about about Was I cutting you on?
Speaker 1: No? No, But I want to do though before we
Speaker 1: get onto the flip side, because we need to dig
Speaker 1: into this a bit further. But I just want to
Speaker 1: finish the calculation that we did before, because we had
Speaker 1: on one side, Yes, we had added up the you've
Speaker 1: got your salary and then you take all of the
Speaker 1: other bits and pieces off that and so let's use
Speaker 1: it add one hundred thousand dollars. Let's say it's one
Speaker 1: hundred and twenty thousand dollars only because I've just done
Speaker 1: some calculations and it's going to work better if I
Speaker 1: do that one hundred and twenty thousand dollars, but then
Speaker 1: you take off all of the other bunch of different things.
Speaker 1: Let's say you come down to one hundred thousand dollars, right, Okay,
Speaker 1: that's how much you're taking home tax wise. That doesn't work,
Speaker 1: but just turn a blink. One hundred thousand dollars. Okay,
Speaker 1: you work a forty hour week, So you divide you
Speaker 1: one hundred thousand dollars by fifty two weeks and then
Speaker 1: divide that by forty to get your hourly wage on
Speaker 1: paper would be forty eight. But if you're adding the
Speaker 1: extra time that you spend, say you're doing an extra
Speaker 1: twenty hours a week for all the prep that you're
Speaker 1: doing to get ready for work, and the commuting to
Speaker 1: and from work, and the extra shift that you do
Speaker 1: that is unpaid because you're working on a project from home.
Speaker 1: All that things something that you're working a sixty hour week.
Speaker 1: Instead of the forty eight dollars per hour that you
Speaker 1: were getting when it was a forty hour week. At
Speaker 1: a sixty hour week, it's actually thirty two dollars. And
Speaker 1: that's how you then calculate what this true hour wage is.
Speaker 1: What we're going to do now is take a very
Speaker 1: quick break and I just wanted to you just just unleash, yeah,
Speaker 1: because I can feel like every time you're about to
Speaker 1: say something, I've cut you off, and.
Speaker 2: I feel like I've said everything I need to say
Speaker 2: about my concerns of this. But then we need to
Speaker 2: seek about the positive signe of this.
Speaker 1: Oh, I was hoping thatd be a little bit more rage.
Speaker 1: Do you go like full sith? Just let the anger
Speaker 1: flow through you? Right? Quick break back in a moment,
Speaker 1: Canna unleashes. Can we are talking about the true hourly wage,
Speaker 1: and we've gone through how to calculate what your true
Speaker 1: hourly wages. We got little taste of your anger towards
Speaker 1: the potential sense of entitlement that it can create. Would
Speaker 1: you like to just recap anything that makes you angry?
Speaker 2: Look, I think it's great to have the awareness of
Speaker 2: how much you are putting into your work, but I
Speaker 2: think it's a slippery slope that can actually send land
Speaker 2: somewhere quite toxic for your mental health and not necessarily
Speaker 2: there to help you if used incorrectly. So the flip
Speaker 2: side of that.
Speaker 1: Is using it correctly, using it.
Speaker 2: Correctly to maybe get a greater understanding as to how
Speaker 2: you're using your time, and how you can maybe run
Speaker 2: your life a little more efficiently so that you're not
Speaker 2: doing twenty extra hours on top of your forty hour week,
Speaker 2: you know, clearing emails and working from home home and
Speaker 2: checking in over the weekend, and you know, doing a
Speaker 2: whole pile of prep and travel like. You know, having
Speaker 2: that awareness can maybe help you put some healthy boundaries
Speaker 2: in place, or can help you maybe look at your
Speaker 2: career path and maybe make some changes, whether it be
Speaker 2: investing in additional education and training to you know, to
Speaker 2: change jobs, or to renegotiate your contract and so forth.
Speaker 1: At its most simple level, does it help to reframe
Speaker 1: the way that you think about just what you are
Speaker 1: spending on. Surely you're going to be less frivolous with
Speaker 1: your money if you actually that's three hours of my
Speaker 1: true hourly wage.
Speaker 2: So this is the funny thing. So I did this
Speaker 2: recently and I felt quite it was very grounding. It's
Speaker 2: very humbling because you sort of go, oh, my goodness,
Speaker 2: look how much this gets stripped back to It's like is.
Speaker 1: It even worth it?
Speaker 2: So even I got into that kind of woe mentality,
Speaker 2: which is very unlike me because I'm I like to
Speaker 2: think of my someone who's got a lot of get
Speaker 2: up and go and I'm really passionate about my work
Speaker 2: and trying to live life. But I did this with
Speaker 2: my kids so recently. My kids, not my kids, My
Speaker 2: two girls are pretty wild. They do not listen to
Speaker 2: anything I say. And after asking them about thirty thousand
Speaker 2: times please don't play in the curtains, of course they
Speaker 2: go and play in the curtains and they rip down
Speaker 2: the whole entire rod that's like bolted into the ceiling.
Speaker 2: And it's very high ceiling, so it's not something I
Speaker 2: can just get on off a step ladder and fix
Speaker 2: myself with the drill. I've got to get a handy
Speaker 2: man out and we've they've snapped the rod and like
Speaker 2: like it's a long They've done a lot of damage basically.
Speaker 2: But I try to explain to them, like, you know,
Speaker 2: do you know how many hours it's going to I
Speaker 2: have to work to pay for someone to now come
Speaker 2: in and fix this and that, To try and put
Speaker 2: a bit of perspective into you know, where the time
Speaker 2: is and what it actually adds up to and what
Speaker 2: it when you don't use money wisely and carefully the
Speaker 2: damage it does, and you know, talking to my kids
Speaker 2: about that, and I was able to give them like
Speaker 2: a number of hours, you know, and now I'm like,
Speaker 2: that's time that I could be spending with you, playing
Speaker 2: with you, but now I've got to go and find
Speaker 2: the money to get this fixed. That awareness was really helpful.
Speaker 2: And like before, you're on a six year old for context,
Speaker 2: so of course, like you could only penetrate so deeply
Speaker 2: in their brain. But also with my son, you know,
Speaker 2: he wants a new bike, and you know he's putting
Speaker 2: a lot of pressure on me. I'm like, and we
Speaker 2: only recently, he only recently bought a bike. So I
Speaker 2: try and explain to him again that context of had
Speaker 2: you know, like how long does it take you to
Speaker 2: save that up with your hours? You know, bring it
Speaker 2: back to the hour, so you understand the important taking
Speaker 2: care of your items, the amount of work that's involved,
Speaker 2: how long it takes to save up. It's not like
Speaker 2: you can just pull money out of a hat. Just
Speaker 2: to have that grounding and that awareness as to you know,
Speaker 2: what you really want as well, because quite often when
Speaker 2: we get a context of okay, gosh, that's you know,
Speaker 2: three days worth of work, do we really want that
Speaker 2: new flashy thing. Is it just for our ego or
Speaker 2: is it just a short term satisfaction. I think that's
Speaker 2: where it can be incredibly helpful, and of course, like
Speaker 2: you can also go too far as well.
Speaker 1: For a very brief moment there, I thought you were
Speaker 1: about to say, pull money out of a rabbit. It
Speaker 1: sounds as you started to take a rabbit.
Speaker 2: Pull money out of a like a rabbit, like a magician.
Speaker 1: No, I figured that's what it was, and I just
Speaker 1: thought it was quite an intriguing image of where from
Speaker 1: a rabbit you would pull the money. Anyway, we'll move on,
Speaker 1: We will move on from that. One part of your
Speaker 1: money or your life and the fire philosophy is this
Speaker 1: idea of kind of the life energy and the that
Speaker 1: you are trading your time and your energy for money, right,
Speaker 1: And this kind of all ties back into back into
Speaker 1: this this trade off that you were explaining to your kids,
Speaker 1: the fact that this is these are our that you
Speaker 1: would prefer to spend with them doing something else, but
Speaker 1: instead you.
Speaker 2: Need now I need to go and hustle exactly to
Speaker 2: fix the curtains.
Speaker 1: Is that does that go too far? Can do you think?
Speaker 1: Because it feels like there. Yes, there is a little
Speaker 1: bit of use in reframing it. But we're all we
Speaker 1: all have to work, we all have to do something,
Speaker 1: and if you do that, you'll end up resenting your job.
Speaker 2: This is why I said. It can become quite toxic
Speaker 2: and also you can become it can become very limiting.
Speaker 2: Like you know, you think, oh, well, I kind of
Speaker 2: fool that because that's x amount of hours, Like it
Speaker 2: doesn't take into consideration the intangible value, the priceless moments
Speaker 2: from doing that particular activity or spending that money, you know,
Speaker 2: you know, such as a holiday. You know, you think, oh,
Speaker 2: well that holiday is going to take your momth's save
Speaker 2: up save up for it. Well, then I won't do it.
Speaker 2: You know, that's too much. But you're forgetting about what
Speaker 2: comes from that holiday, the memories, the moments, the bonding,
Speaker 2: the connection that you venture, the excitement, the journey. Yeah,
Speaker 2: you know, having your eyes open to see another culture.
Speaker 2: You know, that's the intangible value that isn't factored back
Speaker 2: into here, you know, and that could take your hourly
Speaker 2: way from being twenty two dollars to fifty two dollars.
Speaker 2: You know, and you know you can miss out on
Speaker 2: a lot of things if you get too fixated on.
Speaker 1: This, Where does it fit into the broader fire philosophy
Speaker 1: in that case, because this is a fire is all
Speaker 1: about financial independence, retire early and about getting more of
Speaker 1: that time back for yourself and to live the way
Speaker 1: that you want. It feels like it's actually all about
Speaker 1: a trade off, about working really hard now to give
Speaker 1: yourself all of those hours later.
Speaker 2: I think the thing with this is it's very much
Speaker 2: about the awareness, and I think it stops at that
Speaker 2: and how you choose to use that awareness in a
Speaker 2: positive way. You know, being aware of the time, being
Speaker 2: aware of you know your expenses, how you use money,
Speaker 2: Also being aware of the energy. You know what you're
Speaker 2: using to increase your energy, where you spend your time
Speaker 2: that depletes your energy, and of course what your lifestyle is.
Speaker 2: And this is a big component to the fire movement. Obviously,
Speaker 2: if you've got a expensive, extravagant, lavish lifestyle, that's going
Speaker 2: to need greater financial freedom to be able to support it,
Speaker 2: whereas if it's less it's obviously easier and faster to build.
Speaker 2: So finding that sweet spot that works for you, and again,
Speaker 2: as I said, this awareness so that you can work
Speaker 2: understand you know, obviously what the true hourly wage is
Speaker 2: for yourself, but actually build something that's meaningful and relates
Speaker 2: to what you want, what your value system is, what
Speaker 2: you want to intentionally build.
Speaker 1: If somebody does go through this process of calculating their
Speaker 1: true hourly wage and they don't like the answer and
Speaker 1: they don't like what they discover, how do they have spirally,
Speaker 1: how do you avoid becoming resentful of your work? What
Speaker 1: do you do? Is there a positive way to reinforce that?
Speaker 2: Well, it's about solutions and about stepping up and taking
Speaker 2: action to make those changes so you don't stay stuck,
Speaker 2: you know, looking at negotiating your work, you know, can
Speaker 2: you negotiate saying two days a week from home that
Speaker 2: you're not traveling as much? Can you look at spending
Speaker 2: some money on some additional training and qualifications so that
Speaker 2: you can look at changing jobs or apply for a
Speaker 2: pay rise or a promotion, you know, is it time
Speaker 2: to look at maybe a side hustle, you know, so
Speaker 2: you can start sort of adding back the you know,
Speaker 2: the top line figure to help get your you know,
Speaker 2: how much you actually walk away with as an hourly
Speaker 2: rate up?
Speaker 1: Again?
Speaker 2: You know, can you look at reducing your working hours.
Speaker 2: I remember when I first launched Triggle Mama TV and
Speaker 2: I did a video about this, and a woman wrote
Speaker 2: to me and said she changed her hours so that
Speaker 2: she could do longer hours at work, but then immense
Speaker 2: she got a whole day back at home, which was
Speaker 2: great for her but also manage. You got a whole
Speaker 2: day back at home with her young children and didn't
Speaker 2: have to pay for daycare. So that awareness is really
Speaker 2: really powerful, you know, looking at okay, like how do
Speaker 2: I run my life necessar I'm trying that this awareness
Speaker 2: to build intentionally build something that reflects back to you.
Speaker 2: So there's lots of different things. You've got to look
Speaker 2: use the awareness to look to the solution and understand
Speaker 2: what it is that you want to build it. You
Speaker 2: don't want to stay stuck because you become bitter and
Speaker 2: resentful and old and angry.
Speaker 1: This ended up being different to what I was expecting
Speaker 1: because I thought it was one of those things that
Speaker 1: you do it and it changes your life. It changes
Speaker 1: the way that you see your money, and it changes
Speaker 1: your approach to spending and to your job and all
Speaker 1: of that, But really it doesn't as such, and I
Speaker 1: think your advice today has actually been a good reality
Speaker 1: check on that that in the end, there are certain
Speaker 1: things that you actually just we need to work part
Speaker 1: of life.
Speaker 2: It also the intellectual stimulation that we get from work,
Speaker 2: you know, the value and the service that we add
Speaker 2: to others around us, the connection of working with work colleagues,
Speaker 2: you know, the community, you know, being a part of
Speaker 2: something I think is really important.
Speaker 1: And while it is a good exercise probably to do,
Speaker 1: just an interesting exercise to do, just don't go too
Speaker 1: far down the rabbit hole.
Speaker 2: It's very grounding and humbling, as I said, and it's
Speaker 2: nice to check in, but it's not something I recommend
Speaker 2: you become fixated with.
Speaker 1: Okay, great, Where do we find you if we want
Speaker 1: more information?
Speaker 2: Sugar on my TV, on Instagram or Canna Campbell Official.
Speaker 1: And you can hear me every day with Sean Aylmer
Speaker 1: on Fear and Greed business news. You can use. Thank
Speaker 1: you for listening to how do they afford that? Remember
Speaker 1: to follow on the podcast. That's very important and the
Speaker 1: best thing that you can do is actually tell somebody
Speaker 1: else about the show. Word of mouth is very important,
Speaker 1: and keep an eye out for our book twelve months
Speaker 1: to Financial Freedom. Available for pre order now. It is
Speaker 1: coming out on the first of September. Thanks for company.
Speaker 1: Join us togin next week. M