WEBVTT - What would a financial planner fix first? 0:00:01.590 --> 0:00:03.830 Welcome to How Do They Afford That, the podcast that 0:00:03.890 --> 0:00:07.370 peeks into the financial lives of everyday Australians. I'm Michael Thompson. 0:00:07.470 --> 0:00:09.680 I'm an author and a co-host of the business news podcast, 0:00:09.800 --> 0:00:12.860 Fear and Greed. As always, I am with financial planner, 0:00:12.940 --> 0:00:18.450 Canna Campbell, the founder of financial literacy platform, Sugar Mama TV, 0:00:18.500 --> 0:00:22.830 and my co-author on our book, 12 Months to Financial Freedom, 0:00:22.870 --> 0:00:25.690 available now in stores everywhere. Hello, Canna. 0:00:25.850 --> 0:00:28.470 Good morning. I'm so proud. Our book is out. 0:00:28.770 --> 0:00:31.570 It's been, and it's been swimming around now for a 0:00:31.630 --> 0:00:34.349 few weeks, and it's been great to see people reading 0:00:34.390 --> 0:00:37.050 it and enjoying it and learning something from it. 0:00:37.210 --> 0:00:39.710 Making a difference and starting to help people fix their 0:00:39.770 --> 0:00:41.940 finances and actually understand what to do. 0:00:42.130 --> 0:00:47.420 Yeah, indeed. Today, our episode is, it's going to be fun. 0:00:48.760 --> 0:00:50.060 We are going to put you to the test. 0:00:50.970 --> 0:00:51.930 Challenge accepted. 0:00:52.030 --> 0:00:53.230 You don't even know. You barely even know what the 0:00:53.270 --> 0:00:54.810 challenge is and you've already accepted it. 0:00:54.910 --> 0:00:55.890 That's how confident I am. 0:00:56.810 --> 0:00:57.670 I like this confidence. 0:00:57.730 --> 0:00:58.010 It's good. 0:00:58.050 --> 0:00:59.350 What I'm going to do is I've got a series 0:00:59.450 --> 0:01:05.500 of hypothetical people with some very different financial situations. And 0:01:05.600 --> 0:01:07.020 what I want to do is I'm going to give 0:01:07.040 --> 0:01:10.050 you the problem, right? The problem that they are experiencing. 0:01:10.950 --> 0:01:13.350 And I want you to tell me what you would 0:01:13.430 --> 0:01:17.410 fix first in that situation. Not everything that they should do. 0:01:17.470 --> 0:01:19.010 I'm not asking you to do a full kind of 0:01:19.030 --> 0:01:22.230 statement of advice and plan out everything for them. Just 0:01:22.860 --> 0:01:26.539 what the immediate priority is for these people. Are you 0:01:26.920 --> 0:01:29.060 up for that now that you know what the challenge is? 0:01:29.740 --> 0:01:31.179 Let's let us begin. Okay. 0:01:31.319 --> 0:01:34.840 All right. And of course, This is general information only. 0:01:34.900 --> 0:01:39.470 This is not your circumstances. These are hypothetical circumstances. If 0:01:39.770 --> 0:01:41.910 you hear something here that you go, oh, actually, that 0:01:41.970 --> 0:01:44.750 is kind of me, go and get some professional advice. 0:01:45.069 --> 0:01:47.910 See a financial planner who can tailor some advice to 0:01:47.970 --> 0:01:54.190 your particular circumstances. All right, scenario one. I am earning, 0:01:54.910 --> 0:01:58.970 should we give them a name? Let's say Steve. All right, Steve. 0:01:59.840 --> 0:02:00.760 Steve. Steve. 0:02:01.160 --> 0:02:03.900 Steve is earning good money. Let's say Steve's earning $ 150, 000 0:02:03.800 --> 0:02:08.260 a year. He's doing pretty well, all right? But somehow, 0:02:08.600 --> 0:02:12.540 Steve has got virtually nothing left at the end of 0:02:12.760 --> 0:02:18.079 every month, okay? What's the first thing that you do? 0:02:18.780 --> 0:02:20.780 What do you want to know? What's the priority? How 0:02:20.840 --> 0:02:23.690 does Steve fix his immediate challenge? 0:02:24.190 --> 0:02:26.369 Well, before we can fix anything, we need to press 0:02:26.430 --> 0:02:30.180 pause and go back a bit and understand... why Steve? 0:02:30.740 --> 0:02:32.560 Why haven't you been able to save? Why haven't you 0:02:32.580 --> 0:02:35.260 been able to invest or do something with your money? 0:02:35.300 --> 0:02:38.600 What's the block here? Because if we can understand what's 0:02:38.639 --> 0:02:42.239 going wrong or perhaps it was just situational, he went 0:02:42.280 --> 0:02:46.139 through some medical issues or a complicated family dynamic, that 0:02:46.180 --> 0:02:48.280 might be the reason why. Well, then that's okay. We 0:02:48.400 --> 0:02:50.880 now can clear the path to move on. But if 0:02:50.919 --> 0:02:54.600 there is, say, some sort of issues, there's maybe a 0:02:54.600 --> 0:02:58.360 bit of a block around self-worth or financial literacy or 0:02:58.400 --> 0:03:01.520 maybe something a bit more serious like maybe gambling. It's 0:03:01.639 --> 0:03:03.480 good to understand these things so that we can deal 0:03:03.520 --> 0:03:06.600 with them first and then get him on his path 0:03:06.700 --> 0:03:10.340 to saving, investing. And this is where, you know, having 0:03:10.380 --> 0:03:13.210 this conversation is really, really important because then we can 0:03:13.250 --> 0:03:16.150 set some goals in alignment to Steve's values. 0:03:16.470 --> 0:03:19.810 Okay. All right. And assuming that there isn't a major, 0:03:20.169 --> 0:03:23.669 major problem there and it is just cost of living 0:03:24.030 --> 0:03:26.290 and he's just getting a bit squeezed at the end 0:03:26.340 --> 0:03:28.850 of each month, What does he do? 0:03:28.870 --> 0:03:31.010 We're going to do a budget. We're going to sit down, 0:03:31.450 --> 0:03:33.859 go through all of his living expenses, all of his 0:03:33.919 --> 0:03:36.280 bank transactions, and get a really clear idea as to 0:03:36.380 --> 0:03:38.900 where his money's going so that we can work out 0:03:39.340 --> 0:03:42.480 where there's potential wastage, which represents opportunities that we could 0:03:42.620 --> 0:03:43.720 use to start investing. 0:03:44.080 --> 0:03:47.490 Okay. All right. So it's a simple, really, a simple 0:03:47.510 --> 0:03:50.790 question of visibility, of understanding where that money is going. 0:03:51.090 --> 0:03:51.530 Exactly. 0:03:51.730 --> 0:03:53.010 And I promise this is going to be the last 0:03:53.050 --> 0:03:55.900 time I mention it this episode. But there's a really 0:03:55.940 --> 0:03:58.580 good guide to budgeting in Chapter 1 of 12 Months 0:03:58.600 --> 0:03:59.460 to Financial Freedom. 0:03:59.700 --> 0:04:03.440 And we give you formulas. We tell you exactly which 0:04:03.490 --> 0:04:06.650 accounts you need. It could be more practical and easy 0:04:06.670 --> 0:04:07.010 to follow. 0:04:07.170 --> 0:04:08.350 All right. So good old Steve. 0:04:08.370 --> 0:04:09.490 So Steve needs to read our book. 0:04:09.530 --> 0:04:12.950 Yeah, Steve. Okay. That's Steve's problem solved. Just get the book. 0:04:13.210 --> 0:04:15.990 But no, really, it is a budgeting challenge initially just 0:04:16.010 --> 0:04:18.520 for him. Step one for him would just be sit down, 0:04:19.160 --> 0:04:22.160 do his budget, look forward, look back at where the 0:04:22.200 --> 0:04:24.760 money is going. And then once he does that, he 0:04:24.800 --> 0:04:28.380 can see if there are particular challenges within his cash flow, 0:04:28.420 --> 0:04:31.540 things that are draining his money unexpectedly and where he 0:04:31.580 --> 0:04:33.360 can prioritize and shift his focus. 0:04:34.160 --> 0:04:35.460 Correct. Okay. All right. 0:04:35.940 --> 0:04:44.180 Steve, thanks to you. Next, we have Rosemary. No, that's 0:04:44.220 --> 0:04:44.700 a terrible. 0:04:44.800 --> 0:04:46.960 That's such a, I love it. It's very old school. 0:04:47.080 --> 0:04:49.240 Yeah, I know, but it just, it doesn't roll off 0:04:49.260 --> 0:04:52.550 the tongue. It's a great name. Rosemary. Rosemary. You're happy 0:04:52.570 --> 0:04:53.670 with that? Okay, we'll roll with that. 0:04:53.790 --> 0:04:53.990 Okay. 0:04:54.250 --> 0:04:56.729 I should have planned the names here, but I wasn't 0:04:56.770 --> 0:04:58.950 going to give anybody names, but who knows what we'll 0:04:58.990 --> 0:05:00.810 come up with over the next few hypotheticals. 0:05:00.830 --> 0:05:01.789 Okay. 0:05:01.850 --> 0:05:06.500 Good old Rosemary here. She's doing pretty well. She's got 0:05:06.500 --> 0:05:10.520 $ 100, 000 sitting in cash. I'm assuming it's not actually cash. 0:05:10.580 --> 0:05:13.440 It's just sitting in a bank account, right? She's got 0:05:13.500 --> 0:05:17.790 no debt. Great. Good for you, Rosemary. But she's never invested. 0:05:18.510 --> 0:05:18.770 Either. 0:05:18.950 --> 0:05:23.710 She's been saving, saving, saving, 100K, sitting in the bank. 0:05:24.650 --> 0:05:25.770 What are you doing with Rosemary? 0:05:26.589 --> 0:05:30.700 Before we do anything, it's about education. Understanding, Rosemary, why 0:05:30.740 --> 0:05:33.839 haven't you invested yet? What stopped you? You don't understand 0:05:34.600 --> 0:05:38.120 how to invest or what to invest in. Let's go 0:05:38.260 --> 0:05:41.380 straight to the heart of the problem here and look 0:05:41.520 --> 0:05:45.029 at all the different investment options, do a risk profile, 0:05:45.630 --> 0:05:49.349 pie charts, graphs, looking at the historical return's a massive 0:05:49.390 --> 0:05:53.530 educational piece with her to understand what is actually right 0:05:53.550 --> 0:05:55.540 for her. And then from that, we can look at 0:05:55.570 --> 0:05:57.570 some concrete goals for her to work towards. Is she 0:05:57.620 --> 0:06:00.700 looking to build up income? Is she wanting to secure 0:06:00.720 --> 0:06:03.460 a retirement? Is she, you know, wanting to actually have 0:06:03.520 --> 0:06:05.320 some money set aside for some, you know, she likes 0:06:05.360 --> 0:06:07.140 that peace of mind of having cash. Maybe she's not 0:06:07.180 --> 0:06:08.839 necessarily ready to invest. 0:06:08.860 --> 0:06:11.330 Hmm. Because I suppose that is really the big question. 0:06:11.390 --> 0:06:15.190 Why has she got, it's a great position to be in, right? 0:06:15.310 --> 0:06:17.690 It's an enviable position because she has cash and the 0:06:17.730 --> 0:06:20.950 potential now to do something fantastic with that money. But 0:06:21.690 --> 0:06:22.960 how did you get there in the first place? 0:06:23.180 --> 0:06:26.360 And of course, like she's wasting time and money, but 0:06:26.940 --> 0:06:28.279 this is where I think a lot of people sort 0:06:28.300 --> 0:06:30.580 of go headfirst into a financial strategy. But if you 0:06:30.600 --> 0:06:33.560 can stop and understand like why am I where I 0:06:33.640 --> 0:06:36.089 am today? What's caused me? What stopped me? What's helped me? 0:06:36.120 --> 0:06:38.770 What's hindered me? That investment of time can be very, 0:06:38.810 --> 0:06:41.270 very powerful because you do really tend to then launch 0:06:41.670 --> 0:06:44.180 with so much more power and efficiency with your financial journey. 0:06:44.600 --> 0:06:48.100 And I know we're only doing very surface level with 0:06:48.120 --> 0:06:50.760 each of these people, but Rosemary, she would be a 0:06:50.800 --> 0:06:53.680 prime candidate now for seeing a financial planner because that's 0:06:53.700 --> 0:06:56.800 such a big, that's a massive sum sitting there. You 0:06:56.820 --> 0:06:58.780 would want to get some good advice about what to 0:06:58.820 --> 0:06:59.440 do with it, right? 0:06:59.580 --> 0:07:00.920 And the great thing is once you've got a bit 0:07:00.940 --> 0:07:03.620 of education behind you, it's such a great catalyst to 0:07:03.660 --> 0:07:07.130 just continue on building from there. But with a financial planner, 0:07:07.210 --> 0:07:09.780 they can run a whole pile of different scenarios and 0:07:09.820 --> 0:07:12.520 do projections, and then you can compare the projections and 0:07:12.580 --> 0:07:14.460 see what's right for you. Okay. 0:07:15.220 --> 0:07:16.900 You know what? I made a really good call naming 0:07:16.940 --> 0:07:20.860 these people. Rosemary feels real to me. I'm just sending 0:07:20.900 --> 0:07:25.930 her all my best with your $ 100, 000 journey. Next up, Boris. 0:07:27.230 --> 0:07:31.290 Boris is in his late 30s. Boris has a massive mortgage. 0:07:32.070 --> 0:07:33.570 He's investing every month as well. 0:07:34.190 --> 0:07:36.850 That's impressive. You've got a big mortgage and you're still investing. Yeah. 0:07:36.890 --> 0:07:38.590 I don't know how much money he's earning, but it 0:07:38.630 --> 0:07:40.250 must be a bit. I could just make up a 0:07:40.290 --> 0:07:42.350 sum considering I've made up the rest of the scenario, 0:07:42.390 --> 0:07:44.650 but I'm not going to. Money though is tight. 0:07:45.690 --> 0:07:46.560 As it is for everyone. 0:07:46.780 --> 0:07:49.720 Indeed. But he's got a big mortgage, big repayments, but 0:07:49.760 --> 0:07:51.520 he is still trying to invest at the same time. 0:07:51.840 --> 0:07:56.560 Money is becoming quite tight. Which one gets the priority 0:07:56.800 --> 0:07:58.880 for Boris? That's his question for you. 0:07:59.100 --> 0:08:03.790 Look, Without this being official advice, but my knee-jerk reaction 0:08:03.950 --> 0:08:06.570 would be to obviously focus on the mortgage because that 0:08:06.610 --> 0:08:08.850 is non-deductible debt. You know, the quicker you can pay 0:08:08.890 --> 0:08:10.070 that off, the better. 0:08:10.290 --> 0:08:11.430 It's also the roof over your head. 0:08:11.710 --> 0:08:14.610 Exactly. And if money is tight, you know, that obviously 0:08:15.270 --> 0:08:18.170 whilst we can often get through tight times between a 0:08:18.210 --> 0:08:20.510 certain period is obviously not sustainable in the long run. 0:08:21.130 --> 0:08:25.730 So I would not just be providing advice or saying that. 0:08:25.790 --> 0:08:29.420 You've got to do a deep dive with the numbers. okay, 0:08:29.460 --> 0:08:31.120 how much of the mortgage has he paid off? How 0:08:31.140 --> 0:08:34.690 much equity has he got? How much is the regular 0:08:34.730 --> 0:08:36.770 investment plan? If the regular investment plan is only a 0:08:36.809 --> 0:08:39.730 very small amount, say $ 100 a month, does it really 0:08:40.150 --> 0:08:42.770 add much value to stop it and put that $ 100 0:08:42.330 --> 0:08:44.360 towards the mortgage? Maybe there's something else that needs to go. 0:08:44.390 --> 0:08:46.420 Maybe they need to go through their budget. There's a 0:08:46.600 --> 0:08:49.439 lot of different options and paths to go through here. 0:08:49.920 --> 0:08:53.160 Whilst obviously initially my first point of call would be, okay, well, 0:08:53.179 --> 0:08:56.100 let's look at cutting or maybe cutting back the regular 0:08:56.120 --> 0:08:59.980 investment plan. So there's lots of different factors that come 0:09:00.020 --> 0:09:02.380 into play here. And another one is, well, perhaps what 0:09:02.700 --> 0:09:05.240 would happen if he was to maybe pause the regular 0:09:05.260 --> 0:09:08.080 investment plan, increase his mortgage repayments to see his debt 0:09:08.120 --> 0:09:10.990 come down quicker, would that help create more breathing space 0:09:11.020 --> 0:09:13.190 in his budget? How much time and money would that 0:09:13.230 --> 0:09:15.349 save him off his home loan? And then there's the 0:09:15.370 --> 0:09:18.610 question is, well, perhaps in a year's time or two years' time, 0:09:18.650 --> 0:09:20.410 he can look at a debt recycling strategy where he 0:09:20.450 --> 0:09:23.710 can catch up again if he's really passionate about investing 0:09:23.750 --> 0:09:25.840 and building that financial freedom for himself. 0:09:26.480 --> 0:09:29.480 So he's actually, Boris is in a pretty good position. 0:09:29.600 --> 0:09:32.059 He's in a strong position. And the one key thing 0:09:32.080 --> 0:09:33.520 you're trying to always do as a financial planner is 0:09:33.570 --> 0:09:37.250 create as many opportunities as possible. And so you've got 0:09:37.530 --> 0:09:39.610 options to choose from. You're never backed into a corner 0:09:39.630 --> 0:09:43.250 where there's only one strategy going forward. And the great 0:09:43.270 --> 0:09:45.989 thing about Boris is it's not set and forget. He 0:09:46.010 --> 0:09:47.830 doesn't have to stick to one strategy and that's it 0:09:47.850 --> 0:09:51.220 for the next 20 years. He might decide to pause investing, 0:09:51.280 --> 0:09:53.740 focus on the mortgage for a year or two, then 0:09:53.800 --> 0:09:56.380 look at a debt recycling, then look at some salary sacrificing. 0:09:56.920 --> 0:09:58.620 You know, it's a piece of music with lots of 0:09:58.679 --> 0:10:02.500 different rhythms and beats and melodies. So, you know, he 0:10:02.540 --> 0:10:05.280 doesn't have to have the pressure of making a decision 0:10:05.320 --> 0:10:07.260 and that's it for the rest of his life. 0:10:07.590 --> 0:10:15.209 All right. Our fourth person, her name is Hayley. Helen. No, Hayley. Hayley. 0:10:15.350 --> 0:10:17.229 It's Hayley. And Hayley's 45. Okay. 0:10:17.250 --> 0:10:17.429 Okay. 0:10:19.110 --> 0:10:23.130 But she's had a realization lately. She's realized that she's 0:10:23.190 --> 0:10:29.360 basically ignored her superannuation. All right, 45, basically ignored her super. 0:10:30.000 --> 0:10:32.920 And she has logged in, checked out her super balance, 0:10:33.760 --> 0:10:37.320 and has realized that it is nowhere near where she 0:10:37.360 --> 0:10:40.740 would like it to be for someone who is probably 0:10:40.800 --> 0:10:45.280 halfway through her career. What's the first move for Hayley? 0:10:45.440 --> 0:10:47.340 Well, the first move is to explore her story. 0:10:48.400 --> 0:10:48.780 Why? 0:10:49.640 --> 0:10:53.000 Does she have not much money in superannuation? Perhaps she 0:10:53.040 --> 0:10:54.000 had time out of the workforce. 0:10:54.260 --> 0:10:56.990 I'm sensing a real theme here, and this is something 0:10:57.030 --> 0:11:00.230 that you have tried to emphasize to me over a 0:11:00.230 --> 0:11:03.130 long period of time, that financial planners are not just 0:11:03.170 --> 0:11:06.790 about the numbers, that you are about the story. The story. 0:11:06.890 --> 0:11:10.079 And everything else about a person, and then you help 0:11:10.120 --> 0:11:11.170 figure out what the strategy is. 0:11:11.420 --> 0:11:15.699 The mindset, the values, even the connection to who they 0:11:15.820 --> 0:11:18.339 are and what's important to them. Yep. You know, their 0:11:18.360 --> 0:11:20.600 big why. Because when you do actually stop and spend 0:11:20.640 --> 0:11:24.140 time working with this, you have a very different mindset. 0:11:24.160 --> 0:11:27.750 You have a much more resilient sense of motivation and 0:11:27.780 --> 0:11:31.510 commitment and drive. It really does transform. And that's why 0:11:31.530 --> 0:11:35.110 I always say, like, your financial plan doesn't begin with 0:11:35.130 --> 0:11:37.730 your budget or the numbers or the projections. It actually 0:11:38.090 --> 0:11:40.490 starts as an inside job. Okay. 0:11:40.530 --> 0:11:44.410 So- Hayley, the super's not really where she needs it 0:11:44.450 --> 0:11:44.709 to be. 0:11:45.250 --> 0:11:46.550 Again, we need to step back and look at the 0:11:46.590 --> 0:11:49.569 big picture here. Like, why? Perhaps she was busy, you know, 0:11:49.830 --> 0:11:53.820 raising young children, and that's why. And in the meantime, 0:11:53.840 --> 0:11:56.270 you know, is she single? Is she not? Like, we 0:11:56.320 --> 0:11:59.000 need to look at the big picture here and obviously 0:11:59.020 --> 0:12:02.160 the finer details. Perhaps, you know, her husband's been busy 0:12:02.220 --> 0:12:08.020 paying off the homeowner. They're mortgage-free. Perhaps she has been unwell, 0:12:08.040 --> 0:12:10.450 and that's why she hasn't been able hasn't been working 0:12:10.470 --> 0:12:12.490 and hasn't been able to put money into super. Or 0:12:12.510 --> 0:12:14.470 perhaps she's actually not put much money into super or 0:12:14.510 --> 0:12:16.750 any money into super because she's been so busy investing. 0:12:17.740 --> 0:12:20.740 We don't really know, but let's just take an assumption 0:12:20.780 --> 0:12:24.040 that she's been raising children, hasn't been working or went 0:12:24.080 --> 0:12:26.880 back on a part-time capacity, not much going in, didn't 0:12:26.920 --> 0:12:29.680 pay attention to it, didn't invest it. Well, then we 0:12:29.700 --> 0:12:31.300 need to look at, well, how do we catch up? 0:12:31.900 --> 0:12:34.190 And what actually is the figure that she needs in 0:12:34.230 --> 0:12:36.330 her super that will make her feel comfortable and happy 0:12:36.370 --> 0:12:39.170 and give her The retirement on the terms and conditions 0:12:39.190 --> 0:12:41.030 that she wants, like what age does she want to 0:12:41.050 --> 0:12:43.050 retire on? How much money does she actually want to 0:12:43.110 --> 0:12:45.110 live off? How long does she want that money to last? 0:12:45.910 --> 0:12:48.520 We can then work out a fat figure for her 0:12:48.540 --> 0:12:50.360 to work towards, like a goal, whether it be like 0:12:50.360 --> 0:12:54.000 $ 1. 6 million. We can work backwards from that. But we 0:12:54.040 --> 0:12:56.179 need to get a really clear understanding as to what 0:12:56.220 --> 0:12:59.340 her situation looks like, what options are available. She might 0:12:59.380 --> 0:13:01.569 maybe own her own home and plans on downsizing. That's 0:13:01.610 --> 0:13:04.290 another way to help boost the superannuation through the downsizer 0:13:04.309 --> 0:13:07.359 contribution depending on her age. So there's lots of different things, 0:13:07.380 --> 0:13:10.220 but really it's about the catch up, but making sure 0:13:10.260 --> 0:13:12.120 we understand how much she needs to catch up by 0:13:12.160 --> 0:13:13.819 and the amount of work that we need to do 0:13:13.840 --> 0:13:15.920 between now and then. Because obviously the sooner you start, 0:13:15.940 --> 0:13:16.219 the better. 0:13:16.440 --> 0:13:18.580 Yeah. But 45 is not too late. 0:13:18.880 --> 0:13:21.120 Not at all. There's a lot you can do, a lot. 0:13:21.760 --> 0:13:25.590 And the key thing is obviously starting now. Don't waste 0:13:25.640 --> 0:13:26.140 any more time. 0:13:26.470 --> 0:13:29.709 Okay. I think Hayley would be happy to hear that, 0:13:30.530 --> 0:13:34.130 I suspect. I mean, I'm speaking on behalf of imaginary people. 0:13:34.450 --> 0:13:38.250 But look, Hayley, thanks you. Boris, thanks you. Rosemary, thanks you. 0:13:38.309 --> 0:13:42.130 And Steve also. I've got to keep track of these 0:13:42.190 --> 0:13:44.380 names now. All right, let's take a very quick break. 0:13:44.500 --> 0:13:48.860 We've got three cracking scenarios coming up, and I really 0:13:48.920 --> 0:13:51.260 want to test you out on these ones because they 0:13:51.300 --> 0:13:53.420 get a little bit trickier after the break. Back in 0:13:53.440 --> 0:14:01.970 a sec. Canna, today we are putting you to the 0:14:02.020 --> 0:14:05.330 test of Really, what would a financial planner fix first? 0:14:05.370 --> 0:14:08.950 These are hypothetical people. We've given them names. Not much 0:14:09.250 --> 0:14:13.960 kind of depth to their characters, unfortunately, but we're making 0:14:13.980 --> 0:14:18.220 assumptions as we go. Now, scenario five, we are dealing 0:14:18.260 --> 0:14:20.400 with a gentleman by the name of Roberto. 0:14:20.420 --> 0:14:21.360 Oh, Roberto. 0:14:22.740 --> 0:14:31.090 Sounds very exotic. He's got shares. He's got ETFs. He's 0:14:31.110 --> 0:14:34.380 a bit of an investor, Roberto. dabbled in crypto as well. 0:14:35.060 --> 0:14:37.980 He's got a couple of old super accounts. It's got 0:14:38.000 --> 0:14:41.660 a lot of stuff going on, Roberto does, but no 0:14:41.800 --> 0:14:45.780 actual strategy. A lot of stuff, no strategy. Where do 0:14:45.820 --> 0:14:47.420 you start with Roberto? 0:14:47.920 --> 0:14:52.560 Well, let's sit down and do some concrete goals. Give 0:14:52.600 --> 0:14:55.760 the goals that clarity and definition. What is Roberto really 0:14:55.800 --> 0:14:57.979 trying to achieve here? Is he trying to achieve passive 0:14:58.020 --> 0:15:01.240 income for financial freedom? Is he trying to build up 0:15:01.260 --> 0:15:05.170 a certain amount portfolio size and what's that portfolio going 0:15:05.190 --> 0:15:06.590 to do? Is that perhaps going to be sold down 0:15:06.610 --> 0:15:09.910 eventually and help pay for, say, a family home? You know, 0:15:10.130 --> 0:15:13.970 what is Roberto's life goals and dreams? This kind of 0:15:14.190 --> 0:15:17.910 scattergun approach is very common where people, you know, just 0:15:18.150 --> 0:15:21.910 they're dipping their toe in everything. It's a bit messy, 0:15:22.010 --> 0:15:25.740 but there's no structure and there's nothing's really working together. 0:15:25.750 --> 0:15:28.950 Because when you look at financial plans, When we're creating 0:15:28.990 --> 0:15:33.690 a financial strategy, they're all codependent upon each other. Okay. 0:15:33.710 --> 0:15:37.150 So there is a cause and effect that helps all 0:15:37.170 --> 0:15:40.260 of these work in harmony together. So we need to 0:15:40.280 --> 0:15:42.680 look at, okay, well, all right, let's come up with 0:15:42.940 --> 0:15:45.780 the goals. Where does superannuation come in here? Where does 0:15:45.820 --> 0:15:47.960 insurance come here to protect what he's built so far 0:15:48.000 --> 0:15:51.140 and what he's built going forward? What does he have 0:15:51.160 --> 0:15:55.360 as cash savings, emergency money? There's a lot of things 0:15:55.400 --> 0:15:58.000 that need to be kind of put back onto the 0:15:58.020 --> 0:16:01.920 kitchen table, analyze, and then consider it as to how 0:16:01.960 --> 0:16:03.590 we work together, more working together. 0:16:03.610 --> 0:16:06.180 A couple of questions off the back of that. I 0:16:06.830 --> 0:16:09.790 imagine you would see a bit of this kind of 0:16:09.810 --> 0:16:12.510 thing where when things become the flavor of the month 0:16:12.550 --> 0:16:14.910 or they get a lot of attention that people start 0:16:14.950 --> 0:16:18.210 to dabble. See, all of a sudden crypto has, over 0:16:18.230 --> 0:16:20.650 the last decade or so, everyone started talking about it. 0:16:20.650 --> 0:16:22.690 So you get people just dabbling a little bit in crypto. 0:16:22.950 --> 0:16:25.489 Micro-investing is another big one where people think, oh, I'm 0:16:25.510 --> 0:16:27.110 going to have a dabble of investing and I can 0:16:27.130 --> 0:16:29.790 just start with like $ 5. And then they've got like 0:16:29.930 --> 0:16:33.180 five micro-investing accounts that aren't actually doing anything at all, 0:16:33.220 --> 0:16:36.660 that are not actually working, but could be consolidated potentially 0:16:36.680 --> 0:16:39.420 and be working towards some exciting goals of yours. 0:16:39.680 --> 0:16:43.610 ETFs are another one because they have become so prominent 0:16:43.670 --> 0:16:45.710 and so many people are investing in it and a 0:16:45.710 --> 0:16:47.310 lot of people talking about it that you kind of 0:16:47.330 --> 0:16:50.070 think it's almost a FOMO thing. I should be in there. 0:16:50.370 --> 0:16:52.050 And this is the, you know, I guess power of 0:16:52.070 --> 0:16:55.119 social media, like good and bad. But, and this is 0:16:55.140 --> 0:16:56.640 what I was saying at the beginning of this episode, 0:16:56.680 --> 0:17:01.760 people kind of jump headfirst without a plan or a strategy. 0:17:01.780 --> 0:17:04.700 It's kind of like heading to the shops where there's 0:17:04.720 --> 0:17:08.410 like a stock market clearance sale with no shopping list. 0:17:09.480 --> 0:17:12.399 As a financial planner, do you get excited when somebody 0:17:12.440 --> 0:17:16.000 like Roberto walks in? Like, there is a lot to 0:17:16.040 --> 0:17:18.900 work with here and it's kind of, this is going 0:17:18.920 --> 0:17:20.389 to be fun sorting you out. 0:17:20.869 --> 0:17:25.010 I wouldn't say excited necessarily, but it's more like we've 0:17:25.030 --> 0:17:27.409 got to do a clean up here. Okay. It's, you know, 0:17:27.430 --> 0:17:30.590 it's a bit of a declutter. We're going to, it's 0:17:30.630 --> 0:17:32.510 a spring clean, if you like. And we're going to 0:17:32.750 --> 0:17:35.710 make everything neat and tidy and organized. And Roberto is 0:17:35.730 --> 0:17:41.800 going to feel so much more like, calm and sense 0:17:41.840 --> 0:17:43.100 of purpose and direction again. 0:17:43.300 --> 0:17:45.840 Can I say, Roberto already sounds like he's pretty calm. 0:17:46.040 --> 0:17:47.120 Like he sounds pretty cool. 0:17:47.140 --> 0:17:49.070 He's pretty chilled, yeah. 0:17:49.140 --> 0:17:53.490 He's got that vibe. Scenario six. This is, I'd like 0:17:53.510 --> 0:17:57.389 you to meet Claude. Claude is 30. Claude is, I 0:17:57.650 --> 0:17:59.689 don't know many 30-year-olds named Claude. 0:17:59.730 --> 0:18:00.550 I don't know any Claudes. 0:18:00.630 --> 0:18:02.409 No, nor do I actually, but we're sticking with it now. 0:18:03.690 --> 0:18:08.250 Claude's 30. He is earning good money. He's got no kids. 0:18:09.060 --> 0:18:11.840 no mortgage. But he knows that both of those could 0:18:11.880 --> 0:18:14.020 be coming pretty soon. I think there might be a 0:18:14.060 --> 0:18:16.820 plan for Claude to maybe look at getting into the 0:18:16.840 --> 0:18:21.800 property market. Maybe as a partner, looking at kids. Who knows? 0:18:22.140 --> 0:18:23.680 Making a lot of us- Are you serious? 0:18:23.700 --> 0:18:25.330 You spent the one? 0:18:25.369 --> 0:18:27.570 Yeah. Would you ask him about that as well? You'd 0:18:27.590 --> 0:18:28.570 try and suss all of that out. 0:18:28.590 --> 0:18:34.210 Absolutely. As a financial planner, you know the most intimate, deep, 0:18:34.230 --> 0:18:37.629 dark secrets of your clients. It is quite incredible. And 0:18:37.650 --> 0:18:40.929 you are You are like almost like the local priest, 0:18:40.970 --> 0:18:42.450 like they are your safe space. 0:18:42.510 --> 0:18:42.710 Yeah. 0:18:43.330 --> 0:18:45.750 And you take the phone calls and, you know, you 0:18:45.790 --> 0:18:50.710 know intimately so many like complicated dynamics from their health 0:18:50.790 --> 0:18:57.510 to their family to their work scenarios. Like, oh my goodness. 0:18:57.630 --> 0:18:59.260 It's an honour as well, I should say. 0:18:59.540 --> 0:19:03.520 Well, seeing as you know Claude now clearly so well, 30, 0:19:03.520 --> 0:19:06.399 good money, no kids, no mortgage, but those could be 0:19:06.440 --> 0:19:11.090 on the near horizon. Does he build wealth aggressively now, 0:19:11.350 --> 0:19:13.450 really just hammer the investing and just try and kind 0:19:13.510 --> 0:19:16.050 of set himself up and build his emergency money? Or 0:19:16.070 --> 0:19:20.050 does he start preparing for those big expenses that he 0:19:20.090 --> 0:19:23.290 knows is coming, like maybe getting into the property market 0:19:24.070 --> 0:19:26.990 or putting aside money to support the kids? 0:19:27.350 --> 0:19:30.320 Well, I want to know, what does Claude really want? 0:19:31.100 --> 0:19:33.879 And he can technically have both and work on both, 0:19:34.119 --> 0:19:37.629 but what's really important to him? Because As a financial planner, 0:19:37.750 --> 0:19:40.580 if you don't understand your client, and I was to 0:19:40.619 --> 0:19:43.040 tell Claude, go and do this, but it doesn't really 0:19:43.880 --> 0:19:47.600 resonate with him. It doesn't actually feel relatable. He's not, 0:19:48.320 --> 0:19:50.679 you know, he's not given that aha moment. He's not 0:19:50.740 --> 0:19:53.419