1 00:00:05,960 --> 00:00:09,479 Speaker 1: Cura and welcome to this episode of Shared Lunch where 2 00:00:09,480 --> 00:00:12,280 Speaker 1: we focus on Money Month, which is run by Sorted 3 00:00:12,320 --> 00:00:15,280 Speaker 1: New Zealand. The theme this year is to pause and 4 00:00:15,400 --> 00:00:18,880 Speaker 1: quite literally get your money sorted. So we thought we'd 5 00:00:18,880 --> 00:00:22,400 Speaker 1: discussed something familiar to many, and that's you've managed to 6 00:00:22,400 --> 00:00:25,680 Speaker 1: get on the property ladder. But now what How do 7 00:00:25,720 --> 00:00:29,280 Speaker 1: you stop yourself from going backwards or standing still and 8 00:00:29,320 --> 00:00:32,600 Speaker 1: grow your wealth for the future. I'm Helen Madison and 9 00:00:32,680 --> 00:00:35,479 Speaker 1: to help us with this conundrum, I'm joined by financial 10 00:00:35,479 --> 00:00:39,519 Speaker 1: strategist and coach, the founder of enable Me, Hannah McQueen. 11 00:00:41,600 --> 00:00:44,080 Speaker 1: Hi Hannah, lovely to have you in the studio. Thanks 12 00:00:44,080 --> 00:00:44,840 Speaker 1: for joining us. 13 00:00:45,040 --> 00:00:45,800 Speaker 2: Thank you, Hannah. 14 00:00:45,880 --> 00:00:49,000 Speaker 1: That's harder than ever to buy a house, it seems 15 00:00:49,080 --> 00:00:52,800 Speaker 1: at the moment. And I think you recognize this that 16 00:00:52,880 --> 00:00:55,760 Speaker 1: times have actually changed when you decided to, I think, 17 00:00:55,840 --> 00:00:59,240 Speaker 1: republish or update your book, kill your mortgage, and sort 18 00:00:59,240 --> 00:01:03,760 Speaker 1: your retirement. So let's start with what's different today than 19 00:01:03,760 --> 00:01:05,679 Speaker 1: perhaps a couple of decades ago. 20 00:01:06,120 --> 00:01:10,199 Speaker 2: Ultimately a couple of decades ago, provided you weren't bad 21 00:01:10,360 --> 00:01:13,479 Speaker 2: with money, you were going to be okay in the end. 22 00:01:14,080 --> 00:01:18,240 Speaker 2: So the conditions were favorable enough that you could almost 23 00:01:18,360 --> 00:01:23,640 Speaker 2: drift towards financial success and being able to retire comfortably. 24 00:01:24,120 --> 00:01:26,760 Speaker 2: As long as you lived within your means, as long 25 00:01:26,840 --> 00:01:29,400 Speaker 2: as you delayed your gratification, you were going to be okay. 26 00:01:30,000 --> 00:01:33,840 Speaker 2: And that was largely because the house prices to income 27 00:01:33,920 --> 00:01:37,000 Speaker 2: prices were a lot closer than what they are today. 28 00:01:37,800 --> 00:01:41,119 Speaker 2: So in my granddad's day, let's say he bought a house, 29 00:01:41,200 --> 00:01:44,600 Speaker 2: and let's say he earned fifty thousand dollars. The house 30 00:01:44,640 --> 00:01:49,080 Speaker 2: cost one hundred thousand dollars hypothetically, So what that meant 31 00:01:49,320 --> 00:01:51,120 Speaker 2: is that it was a lot easier to save a 32 00:01:51,200 --> 00:01:53,480 Speaker 2: deposit because he didn't have to save as much of 33 00:01:53,520 --> 00:01:56,920 Speaker 2: his income to come up with a deposit, which meant 34 00:01:56,920 --> 00:02:01,480 Speaker 2: he could get onto the housing ladder very early. He 35 00:02:01,600 --> 00:02:04,160 Speaker 2: was able to have a very moderate mortgage. He could 36 00:02:04,160 --> 00:02:07,440 Speaker 2: become mortgage free within ten years, provided he wasn't bad 37 00:02:07,760 --> 00:02:11,200 Speaker 2: just being average. And then because he was mortgage free 38 00:02:11,240 --> 00:02:13,840 Speaker 2: in ten years, he then had thirty five years to 39 00:02:13,880 --> 00:02:17,440 Speaker 2: save for his retirement. So that was his condition. So 40 00:02:17,440 --> 00:02:19,359 Speaker 2: then you go to my parents' day, where instead of 41 00:02:19,360 --> 00:02:21,280 Speaker 2: it being a one to two ratio, it's a one 42 00:02:21,320 --> 00:02:23,799 Speaker 2: to four, or to my day where it's a one 43 00:02:23,840 --> 00:02:27,040 Speaker 2: to six ratio. So house prices are now six times 44 00:02:27,400 --> 00:02:30,680 Speaker 2: the average income of someone, and practically that means that 45 00:02:30,720 --> 00:02:33,799 Speaker 2: you need to save a lot, which means you need 46 00:02:33,800 --> 00:02:36,639 Speaker 2: to get the deposit, which means it takes you longer 47 00:02:36,680 --> 00:02:41,160 Speaker 2: to save. Your mortgage is fatter, which takes longer to 48 00:02:41,200 --> 00:02:44,880 Speaker 2: pay off. And if you're lucky and you're good with money, 49 00:02:45,400 --> 00:02:48,360 Speaker 2: you may be mortgage free by retirement. But that assumes 50 00:02:48,440 --> 00:02:51,240 Speaker 2: that you will not upgrade your home, or help your 51 00:02:51,320 --> 00:02:54,600 Speaker 2: kids onto the property ladder, or do anything kind of 52 00:02:54,680 --> 00:02:59,280 Speaker 2: moderately exciting that under those conditions you might be okay. 53 00:02:59,360 --> 00:03:01,800 Speaker 2: But less than forty percent of kiwis are on track 54 00:03:01,919 --> 00:03:06,960 Speaker 2: to do that, And so I guess ultimately that big 55 00:03:07,360 --> 00:03:10,120 Speaker 2: ratio has changed, which sort of has made it very 56 00:03:10,120 --> 00:03:13,800 Speaker 2: difficult in other areas. But in addition to that, compared 57 00:03:13,800 --> 00:03:18,400 Speaker 2: to my granddad's day, we've now got consumer debt, so 58 00:03:18,480 --> 00:03:20,920 Speaker 2: short term death Like credit cards weren't even a thing 59 00:03:21,200 --> 00:03:23,800 Speaker 2: back then. You couldn't even use a credit card, so 60 00:03:24,280 --> 00:03:27,160 Speaker 2: now we can. Now we can buy things, pay for 61 00:03:27,240 --> 00:03:30,400 Speaker 2: them later, we can buy things. We've just got so 62 00:03:30,480 --> 00:03:32,680 Speaker 2: much choice. Not only were there no credit cards back then, 63 00:03:32,720 --> 00:03:36,480 Speaker 2: but there are no cafes, so all these things that 64 00:03:36,520 --> 00:03:38,840 Speaker 2: we enjoy and want to be able to enjoy, and 65 00:03:38,880 --> 00:03:42,360 Speaker 2: maybe should rightly be able to enjoy. It's making it 66 00:03:42,400 --> 00:03:44,920 Speaker 2: easier to spend when the conditions are worse, so at 67 00:03:44,920 --> 00:03:48,040 Speaker 2: the very time, because normally, when things are harder, you 68 00:03:48,160 --> 00:03:50,000 Speaker 2: come at that by saying, Okay, well, I'm going to 69 00:03:50,040 --> 00:03:53,120 Speaker 2: be better. But if we look at these generations that 70 00:03:53,200 --> 00:03:56,080 Speaker 2: I'm surrounded with, conditions are harder, but at the same 71 00:03:56,120 --> 00:04:00,720 Speaker 2: time we are worse, and that's something that needs to 72 00:04:00,800 --> 00:04:04,440 Speaker 2: quite seriously be addressed. Otherwise we're going to have people 73 00:04:04,440 --> 00:04:06,760 Speaker 2: who either don't believe they'll get onto the property ladder, 74 00:04:07,040 --> 00:04:11,040 Speaker 2: which is really concerning for young people, or aren't going 75 00:04:11,080 --> 00:04:14,120 Speaker 2: to be able to retire safely, which has a lot 76 00:04:14,120 --> 00:04:15,560 Speaker 2: of impact in other areas as well. 77 00:04:16,720 --> 00:04:19,839 Speaker 1: So, while Leboon's situation is different, is it fair to 78 00:04:19,920 --> 00:04:24,160 Speaker 1: say that given that environment what you've just explained, people 79 00:04:24,200 --> 00:04:27,320 Speaker 1: are probably feeling a bit stark. There's a bit of 80 00:04:27,400 --> 00:04:30,000 Speaker 1: fog around what they should be doing financially to be 81 00:04:30,120 --> 00:04:32,200 Speaker 1: smarter and to get ahead. Yeah. 82 00:04:32,240 --> 00:04:38,719 Speaker 2: Well, I think people think that I'm not bad with money, 83 00:04:38,839 --> 00:04:43,280 Speaker 2: therefore there can't be any obvious areas I can improve. 84 00:04:43,600 --> 00:04:46,440 Speaker 2: Therefore there's no point sort of going through that process 85 00:04:46,480 --> 00:04:51,360 Speaker 2: of refinement. That seems to be the gist, And I 86 00:04:51,400 --> 00:04:55,240 Speaker 2: think it's because they don't immediately see where their inefficiencies are, 87 00:04:55,279 --> 00:04:59,880 Speaker 2: because a lot of them are more technical inefficiencies structure 88 00:05:00,080 --> 00:05:01,880 Speaker 2: all to do with how they structure their mortgage and 89 00:05:01,880 --> 00:05:06,840 Speaker 2: their key we savers, their insurances, their tax how their 90 00:05:06,839 --> 00:05:11,120 Speaker 2: money flows like that. Actually those are specialist areas, so 91 00:05:11,160 --> 00:05:12,840 Speaker 2: most people don't even know what they need to know 92 00:05:12,920 --> 00:05:14,719 Speaker 2: to do it better. So they just think, well, it 93 00:05:14,760 --> 00:05:17,240 Speaker 2: feels about right, therefore it will be. And then the 94 00:05:17,279 --> 00:05:20,919 Speaker 2: other half is most people don't know how to save successfully. 95 00:05:20,960 --> 00:05:23,480 Speaker 2: They don't know what their target should be for savings, 96 00:05:24,120 --> 00:05:27,240 Speaker 2: and so then all that we do is we think, okay, well, 97 00:05:27,520 --> 00:05:30,280 Speaker 2: for success, I just need to earn more money. If 98 00:05:30,320 --> 00:05:32,679 Speaker 2: I just earn more money, I'm going to be okay. 99 00:05:33,240 --> 00:05:36,480 Speaker 2: But what happens is as you earn more money that 100 00:05:36,800 --> 00:05:40,120 Speaker 2: all that happens is that you get this lifestyle creep. 101 00:05:40,440 --> 00:05:43,200 Speaker 2: You just spend a little bit more, and you feel 102 00:05:43,200 --> 00:05:46,320 Speaker 2: okay about that because you're earning more money, but it 103 00:05:46,400 --> 00:05:51,880 Speaker 2: translates to this really dangerous outcome of you're working hard 104 00:05:52,080 --> 00:05:55,440 Speaker 2: and you're going nowhere, or you're not going getting ahead 105 00:05:55,520 --> 00:05:59,240 Speaker 2: at the rate that you should indicative of your income, 106 00:05:59,320 --> 00:06:01,240 Speaker 2: because I think we do you accept that the poor 107 00:06:01,640 --> 00:06:04,960 Speaker 2: will always be poor and the rich will always be rich. 108 00:06:05,279 --> 00:06:08,039 Speaker 2: But it is the strength of that middle class who 109 00:06:08,120 --> 00:06:10,880 Speaker 2: kind of don't identify as being super rich but earn 110 00:06:10,920 --> 00:06:14,359 Speaker 2: pretty good income when they are not getting ahead. That 111 00:06:14,520 --> 00:06:16,880 Speaker 2: is a problem that really needs to be addressed. 112 00:06:18,320 --> 00:06:20,719 Speaker 1: So if you're in that situation and you are feeling 113 00:06:20,800 --> 00:06:23,200 Speaker 1: quite struck and you're not really sure what to do, 114 00:06:23,839 --> 00:06:26,080 Speaker 1: what can what's the starting point? 115 00:06:27,480 --> 00:06:29,080 Speaker 2: Yeah, well, it's almost like you've got to hop on 116 00:06:29,080 --> 00:06:33,240 Speaker 2: the scales, right, which is horrific. I heard a locker 117 00:06:35,000 --> 00:06:37,640 Speaker 2: from a weight loss perspective that the worst part of 118 00:06:37,680 --> 00:06:39,680 Speaker 2: any journey when you're going to get on those scales. 119 00:06:40,120 --> 00:06:42,080 Speaker 2: But we've got to take stock of where you're at. 120 00:06:42,600 --> 00:06:45,520 Speaker 2: We need to understand what you're aiming for. And most 121 00:06:45,560 --> 00:06:47,599 Speaker 2: people don't even know how to set financial goals. They 122 00:06:47,640 --> 00:06:49,920 Speaker 2: don't even know what they should be aiming for. So 123 00:06:49,960 --> 00:06:52,280 Speaker 2: again they default to, well, I just won't be bad, 124 00:06:53,880 --> 00:06:56,960 Speaker 2: but we need to understand we you are, what you're 125 00:06:57,000 --> 00:07:00,240 Speaker 2: trying to aim for, what you're actually progressing at. It's 126 00:07:00,240 --> 00:07:02,560 Speaker 2: like there's no point having a goal unless you're tracking 127 00:07:02,640 --> 00:07:05,600 Speaker 2: to it or understand your trajectory, and then we need 128 00:07:05,640 --> 00:07:07,719 Speaker 2: to work out and can we do it better? And 129 00:07:07,800 --> 00:07:10,560 Speaker 2: for most of my clients we can normally improve their 130 00:07:10,640 --> 00:07:15,440 Speaker 2: savings rate by three hundred percent, like it's insane, And 131 00:07:15,480 --> 00:07:19,560 Speaker 2: these people are financially literate people. They earn good income, 132 00:07:19,960 --> 00:07:24,480 Speaker 2: they're managing budgets in their day job. But on a 133 00:07:24,520 --> 00:07:27,840 Speaker 2: personal basis, we often need a plan and structure and 134 00:07:27,960 --> 00:07:30,640 Speaker 2: some accountability if we're going to stick to it. 135 00:07:31,640 --> 00:07:34,040 Speaker 1: Are there also things that you can do that more 136 00:07:34,080 --> 00:07:36,760 Speaker 1: short terms, say like having an emergency fund, and then 137 00:07:36,800 --> 00:07:40,480 Speaker 1: there's the longer term things thinking perhaps about your contributions 138 00:07:40,520 --> 00:07:42,160 Speaker 1: to QBSABER for example. 139 00:07:42,720 --> 00:07:44,320 Speaker 2: Yes you can, but those are the sort of more 140 00:07:44,360 --> 00:07:47,320 Speaker 2: tactical things, right like that that's not going to move 141 00:07:47,400 --> 00:07:51,480 Speaker 2: the boat out any faster, And yes, I want you 142 00:07:51,560 --> 00:07:53,119 Speaker 2: to be in the right key. We save a fund, 143 00:07:53,200 --> 00:07:55,840 Speaker 2: contributing the right amount with the right provider, of course 144 00:07:55,880 --> 00:07:58,120 Speaker 2: I want that. That's sort of an inefficiency for most 145 00:07:58,160 --> 00:08:02,120 Speaker 2: of us, But that a nice is still not going 146 00:08:02,160 --> 00:08:06,080 Speaker 2: to get your mortgage paid off faster, and nor is 147 00:08:06,120 --> 00:08:07,960 Speaker 2: it going to position you so you can help your 148 00:08:08,040 --> 00:08:10,680 Speaker 2: kids onto the property ladder or whatever your goal is 149 00:08:10,760 --> 00:08:15,760 Speaker 2: for you, And I think that's where people get sometimes 150 00:08:15,800 --> 00:08:19,559 Speaker 2: fixated on the things that won't actually change the dial, 151 00:08:20,320 --> 00:08:22,920 Speaker 2: and because the things that change the dial right, those 152 00:08:23,000 --> 00:08:28,360 Speaker 2: are harder to unlock because it's often linked to behavioral change, 153 00:08:28,920 --> 00:08:31,320 Speaker 2: and that can be tricky for some people, especially when 154 00:08:31,320 --> 00:08:35,360 Speaker 2: you overlay relationships. But I think the first back to 155 00:08:35,440 --> 00:08:36,960 Speaker 2: kind of what are the things that you can do 156 00:08:37,120 --> 00:08:39,360 Speaker 2: as part of taking stock of where you're at, you 157 00:08:39,480 --> 00:08:43,640 Speaker 2: have to understand who you are and how you work 158 00:08:43,679 --> 00:08:47,640 Speaker 2: with money, because that will determine what strategy is going 159 00:08:47,679 --> 00:08:51,040 Speaker 2: to be effective for you. Because if you are a saver, 160 00:08:51,720 --> 00:08:56,800 Speaker 2: someone who naturally enjoys saving, which I can't even I 161 00:08:56,840 --> 00:08:58,559 Speaker 2: can't relate to that at all because I'm a shopper, 162 00:08:59,120 --> 00:09:02,120 Speaker 2: but they naturally enjoy doing that, how we would set 163 00:09:02,160 --> 00:09:04,559 Speaker 2: a strategy for that person is very different to how 164 00:09:04,600 --> 00:09:07,880 Speaker 2: we engage a natural spender. And neither of them are 165 00:09:07,880 --> 00:09:11,160 Speaker 2: good nor bad. Like please don't attribute emotion to money, 166 00:09:11,720 --> 00:09:14,040 Speaker 2: but depending on what you are, there is a different 167 00:09:14,040 --> 00:09:16,400 Speaker 2: way that we need to combat or play to that 168 00:09:16,520 --> 00:09:19,200 Speaker 2: strength if it is a strength. And I think that's 169 00:09:19,240 --> 00:09:24,800 Speaker 2: where some people come unstuck. They're not self aware with 170 00:09:24,880 --> 00:09:28,120 Speaker 2: their own money tendencies, that their money beliefs that they 171 00:09:28,160 --> 00:09:31,600 Speaker 2: tell themselves. All these things have more of an impact 172 00:09:31,760 --> 00:09:35,439 Speaker 2: around what you're likely to achieve rather than your income level. 173 00:09:35,760 --> 00:09:38,679 Speaker 1: But also, I suppose often you buy a house, it's 174 00:09:38,679 --> 00:09:42,440 Speaker 1: a pretty large asset. With someone else, you might have 175 00:09:42,640 --> 00:09:46,360 Speaker 1: quite different money behaviors, and that probably is something you'd 176 00:09:46,360 --> 00:09:50,360 Speaker 1: probably have to navigate. I mean, you must see couples 177 00:09:50,360 --> 00:09:51,720 Speaker 1: in the situation all the time. 178 00:09:52,320 --> 00:09:57,520 Speaker 2: Yes, sometimes I think I'm more of a relationship counselor 179 00:09:57,640 --> 00:10:03,600 Speaker 2: and a financial advisor. Yes, I think you've got the 180 00:10:03,679 --> 00:10:08,280 Speaker 2: coupling right, Like, if you're a spender married to a spender, 181 00:10:08,640 --> 00:10:11,800 Speaker 2: you're looking good, you're having a good time, you're probably 182 00:10:11,800 --> 00:10:14,880 Speaker 2: going nowhere, but boy, you fun. And then you've got 183 00:10:14,880 --> 00:10:17,120 Speaker 2: the saver married to the saver, which are just sort 184 00:10:17,120 --> 00:10:20,079 Speaker 2: of tight, which is helpful, I guess. And then you've 185 00:10:20,120 --> 00:10:22,160 Speaker 2: got that combo where you could be a spender and 186 00:10:22,160 --> 00:10:28,160 Speaker 2: a savor and that can be quite fraught. And I 187 00:10:28,200 --> 00:10:31,040 Speaker 2: think when you first get together, it's probably cute and 188 00:10:31,080 --> 00:10:33,280 Speaker 2: interesting and you're curious as to how they work with 189 00:10:33,360 --> 00:10:35,080 Speaker 2: money and all of those things. But after a few 190 00:10:35,160 --> 00:10:38,760 Speaker 2: years it's quite tiresome for everyone. Because the spender feels 191 00:10:38,760 --> 00:10:40,680 Speaker 2: bad about spending and the saver is not making any 192 00:10:40,679 --> 00:10:43,680 Speaker 2: progress and you don't understand why the other person is 193 00:10:43,880 --> 00:10:48,439 Speaker 2: how they are, and it creates friction. Not necessarily arguments 194 00:10:48,440 --> 00:10:51,079 Speaker 2: the friction could be dealt with by not talking about it, 195 00:10:51,720 --> 00:10:55,000 Speaker 2: Like friction doesn't have to be explosive. But that friction, 196 00:10:55,160 --> 00:10:59,680 Speaker 2: if we go back to the science of propulsion, that friction, 197 00:10:59,840 --> 00:11:03,320 Speaker 2: that disconnect slows down your ability to get ahead. And 198 00:11:03,360 --> 00:11:06,240 Speaker 2: I do think it's well many my clients, half my 199 00:11:06,280 --> 00:11:11,839 Speaker 2: clients are that opposite attracts financially, and so we've got 200 00:11:11,880 --> 00:11:14,120 Speaker 2: to learn, well, how can we navigate that when you 201 00:11:14,240 --> 00:11:17,679 Speaker 2: both have you've had different upbringings around money. You see 202 00:11:17,760 --> 00:11:21,880 Speaker 2: money differently, you spend differently, you're motivated by different things. 203 00:11:22,160 --> 00:11:25,880 Speaker 2: How do we navigate that successfully so that you still 204 00:11:25,960 --> 00:11:28,320 Speaker 2: like each other and obviously you still like me. So 205 00:11:28,400 --> 00:11:32,120 Speaker 2: those are things that we take care to do. And 206 00:11:32,160 --> 00:11:37,200 Speaker 2: I think it helps that I'm independent and qualified to 207 00:11:37,240 --> 00:11:40,240 Speaker 2: comment on these things because there's a lot of emotion 208 00:11:40,440 --> 00:11:45,079 Speaker 2: that comes to these meetings. There's frustration, there's hurt, sometimes 209 00:11:45,080 --> 00:11:48,520 Speaker 2: there's guilt, and you have to be able to work 210 00:11:48,760 --> 00:11:52,400 Speaker 2: through that in a really constructive way, which is interesting 211 00:11:52,400 --> 00:11:54,880 Speaker 2: because one of the most common pieces of feedback I 212 00:11:54,920 --> 00:11:58,760 Speaker 2: get from clients is I wish i'd found you ten 213 00:11:58,840 --> 00:12:02,640 Speaker 2: years ago. I'm sleeping better, and I can't believe you 214 00:12:02,720 --> 00:12:05,360 Speaker 2: got away with saying that to my spouse, right, Like, 215 00:12:05,480 --> 00:12:07,480 Speaker 2: sometimes you've got to just hear it from the right 216 00:12:07,559 --> 00:12:10,440 Speaker 2: person for it to be taken on board. So if 217 00:12:10,480 --> 00:12:13,400 Speaker 2: I'm wanting to get fit, my husband's fit and I 218 00:12:13,400 --> 00:12:17,200 Speaker 2: could take advice from him, perhaps I'm just I'm not 219 00:12:17,520 --> 00:12:23,440 Speaker 2: interested in receiving helpful suggestions. And so even if he 220 00:12:23,480 --> 00:12:26,280 Speaker 2: would say something that my personal trainer would say to 221 00:12:26,320 --> 00:12:29,040 Speaker 2: me the exact same thing and without emotion, like, it 222 00:12:29,040 --> 00:12:31,880 Speaker 2: wouldn't be like a jab, it would be really constructive 223 00:12:31,880 --> 00:12:36,199 Speaker 2: and kind. I'm just not inclined to engage with his feedback, 224 00:12:36,240 --> 00:12:38,719 Speaker 2: but I will my personal trainer, And I think back 225 00:12:38,760 --> 00:12:41,120 Speaker 2: to that self awareness kind of taking the pulse of 226 00:12:41,160 --> 00:12:45,080 Speaker 2: where you're at financially, understanding yourself who you need to 227 00:12:45,120 --> 00:12:47,360 Speaker 2: hear the information from so you actually take it on 228 00:12:47,440 --> 00:12:49,079 Speaker 2: board is very helpful. 229 00:12:49,559 --> 00:12:53,080 Speaker 1: I'm in that spender saver relationship marriage if you like, 230 00:12:53,160 --> 00:12:55,319 Speaker 1: and I totally concur with what you're saying. I could 231 00:12:55,360 --> 00:12:57,719 Speaker 1: talk about it all day, but we won't. One thing 232 00:12:57,760 --> 00:13:00,600 Speaker 1: I did wanted to talk about, though, was how much 233 00:13:00,600 --> 00:13:04,079 Speaker 1: of a difference does it make with restructuring or structuring 234 00:13:04,120 --> 00:13:06,520 Speaker 1: your mortgage. I mean, quite often New Zealand is I 235 00:13:06,520 --> 00:13:10,000 Speaker 1: think most commonly fixed for two years and pretty much 236 00:13:10,080 --> 00:13:13,040 Speaker 1: leave it and everything's being paid off at the same time. 237 00:13:13,520 --> 00:13:15,320 Speaker 1: What do you say to that, Well. 238 00:13:15,160 --> 00:13:19,760 Speaker 2: Structuring your mortgage is important, and you're trying to balance 239 00:13:19,800 --> 00:13:23,080 Speaker 2: a few things. So you want certainty I guess for 240 00:13:23,120 --> 00:13:25,280 Speaker 2: a period of time, and the fixed interest rate gives 241 00:13:25,320 --> 00:13:28,120 Speaker 2: you that certainty. But you also want the ability to 242 00:13:28,200 --> 00:13:31,360 Speaker 2: pay off the debt without being penalized because you do 243 00:13:31,400 --> 00:13:33,360 Speaker 2: need to pay it off faster, and you want the 244 00:13:33,400 --> 00:13:36,680 Speaker 2: flexibility of being able to reaccess that money as well. 245 00:13:36,960 --> 00:13:39,679 Speaker 2: So you're trying to balance those things. Before you can 246 00:13:39,760 --> 00:13:42,120 Speaker 2: work out how to structure it. We have to first 247 00:13:42,400 --> 00:13:46,120 Speaker 2: maximize your cash surplus. So if you don't, if you're 248 00:13:46,200 --> 00:13:48,680 Speaker 2: not saving at the moment, that suggests you don't have 249 00:13:48,720 --> 00:13:51,719 Speaker 2: a cash surplus, and most people will, you'll sort of 250 00:13:51,760 --> 00:13:55,119 Speaker 2: be able to identify whether you think you're sinking, floating, 251 00:13:55,240 --> 00:14:00,240 Speaker 2: or flying somewhere along there around that spectrum. So we 252 00:14:00,280 --> 00:14:02,679 Speaker 2: need to first determine is there money left over that 253 00:14:02,720 --> 00:14:06,199 Speaker 2: we could put towards paying the mortgage off faster. If 254 00:14:06,240 --> 00:14:09,680 Speaker 2: the answer is yes, great, that makes you better than most. 255 00:14:10,000 --> 00:14:12,760 Speaker 2: The next question is how do I maximize that? And 256 00:14:12,800 --> 00:14:15,800 Speaker 2: once I've maximized it, then I'll work out how I 257 00:14:15,840 --> 00:14:19,440 Speaker 2: need to structure the mortgage. If your situation, though, is 258 00:14:19,480 --> 00:14:21,840 Speaker 2: that you don't have much money left over, you're kind 259 00:14:21,840 --> 00:14:26,880 Speaker 2: of living paycheck to paycheck most likely, well paycheck to paycheck, 260 00:14:27,400 --> 00:14:30,360 Speaker 2: but there isn't much growing out the side, perhaps beyond 261 00:14:30,400 --> 00:14:32,720 Speaker 2: your Kiwi saver, Well, then we've got to take a 262 00:14:32,720 --> 00:14:36,200 Speaker 2: different approach because we have to try and stabilize your position. 263 00:14:36,840 --> 00:14:40,320 Speaker 2: If you're already flying saving a lot, again, we still 264 00:14:40,320 --> 00:14:42,440 Speaker 2: want to maximize it, but we're trying to fly you 265 00:14:42,480 --> 00:14:45,760 Speaker 2: to your destination faster. So depending on where you're at, 266 00:14:45,760 --> 00:14:48,120 Speaker 2: we want to first kind of squeeze out all the 267 00:14:48,160 --> 00:14:51,560 Speaker 2: inefficiencies and try and get you. So we've got a 268 00:14:51,600 --> 00:14:54,720 Speaker 2: plan to lift your savings rate to twenty percent of 269 00:14:54,760 --> 00:14:57,640 Speaker 2: your income, and not everyone can get there. For some 270 00:14:57,680 --> 00:14:59,440 Speaker 2: of my clients, it has taken us more than a 271 00:14:59,600 --> 00:15:01,960 Speaker 2: year to get to that level, and it's a combination 272 00:15:02,080 --> 00:15:05,000 Speaker 2: of costs coming down and also working on strategies to 273 00:15:05,040 --> 00:15:07,520 Speaker 2: lift income so that we do have that money left over. 274 00:15:07,960 --> 00:15:10,680 Speaker 2: But that's the first thing that we're trying to do, 275 00:15:10,800 --> 00:15:14,160 Speaker 2: and then we work out how to structure the mortgage. Now, typically, 276 00:15:14,360 --> 00:15:17,120 Speaker 2: if I was to put numbers around this, if you're surplus, 277 00:15:17,160 --> 00:15:22,160 Speaker 2: the money leftover could be increased to fifty thousand dollars 278 00:15:22,200 --> 00:15:24,280 Speaker 2: a year. I'm just plucking a number. Then I would 279 00:15:24,320 --> 00:15:27,360 Speaker 2: link that into how I structure your mortgage. I would 280 00:15:27,360 --> 00:15:30,600 Speaker 2: have a revolving credit facility that you don't have f 281 00:15:30,680 --> 00:15:33,760 Speaker 2: poss access to, so it's not a transactional account, but 282 00:15:33,840 --> 00:15:37,080 Speaker 2: it would be fifty thousand dollars overdrawn, and the objective 283 00:15:37,160 --> 00:15:38,720 Speaker 2: is going to be to pay that off over the 284 00:15:38,720 --> 00:15:41,120 Speaker 2: course of the year. Again, you don't have f poss 285 00:15:41,120 --> 00:15:44,760 Speaker 2: access to that, but that becomes I guess, the propulsion 286 00:15:44,840 --> 00:15:47,240 Speaker 2: to try and grow wealth when we move to the 287 00:15:47,240 --> 00:15:49,000 Speaker 2: next stage. But I've got to get you mortgage free 288 00:15:49,040 --> 00:15:52,040 Speaker 2: first well, as part of the know how quickly I 289 00:15:52,080 --> 00:15:54,920 Speaker 2: can get you mortgage free before I overlay the wealth strategy. 290 00:15:56,000 --> 00:15:57,920 Speaker 1: But there's a balancing act, though, isn't it. Because we 291 00:15:58,000 --> 00:16:00,200 Speaker 1: often get the question should I be paying off my 292 00:16:00,320 --> 00:16:03,480 Speaker 1: mortgage or should I be contributing to key wesaver, And 293 00:16:03,520 --> 00:16:05,920 Speaker 1: obviously you should be contributing to key we Saver, But 294 00:16:06,000 --> 00:16:08,560 Speaker 1: then it's how much and what's my emphasis? 295 00:16:08,920 --> 00:16:12,200 Speaker 2: Yeah, So, as a general rule, you contribute to key 296 00:16:12,200 --> 00:16:15,080 Speaker 2: we saver if you're not in financial hardship, and you 297 00:16:15,120 --> 00:16:18,680 Speaker 2: contribute up to the level that your employer matches. If 298 00:16:18,720 --> 00:16:21,120 Speaker 2: you're self employed, there isn't that much of an incentive 299 00:16:21,200 --> 00:16:25,480 Speaker 2: to contribute beyond what the government will unlock the attacks 300 00:16:25,560 --> 00:16:28,360 Speaker 2: credit for you. But let's say it's three percent. So 301 00:16:28,360 --> 00:16:31,040 Speaker 2: if you had money outside of that, then the question is, well, 302 00:16:31,040 --> 00:16:35,040 Speaker 2: what do I do with it? Well, yes, you could 303 00:16:35,040 --> 00:16:37,360 Speaker 2: put it into key we Saver, and I guess that's 304 00:16:37,360 --> 00:16:40,480 Speaker 2: a form of compulsory saving. But that is assuming that 305 00:16:42,040 --> 00:16:45,920 Speaker 2: you haven't purchased your first home, I guess, And you 306 00:16:45,920 --> 00:16:49,720 Speaker 2: don't need that money for retirement. I guess it protects it, 307 00:16:49,720 --> 00:16:52,560 Speaker 2: it locks it in a vault for you. But for 308 00:16:52,680 --> 00:16:54,840 Speaker 2: most of us, cerdainly the clients that I'm working with, 309 00:16:54,920 --> 00:16:57,840 Speaker 2: I can put that money to work a lot faster 310 00:16:58,400 --> 00:17:00,080 Speaker 2: and a lot harder than if it was left and 311 00:17:00,120 --> 00:17:03,080 Speaker 2: a kiwisaver fund. So contributing up to the level your 312 00:17:03,080 --> 00:17:07,199 Speaker 2: employer matches absolutely could put that into kiwisaver. It's the 313 00:17:07,359 --> 00:17:12,600 Speaker 2: extra contribution that I'm I'm wary of because if I 314 00:17:12,640 --> 00:17:16,320 Speaker 2: can put that money towards paying your mortgage off faster, 315 00:17:17,560 --> 00:17:21,520 Speaker 2: not only are we creating flexibility and financial resilience now 316 00:17:21,800 --> 00:17:24,199 Speaker 2: that you can benefit, but we're creating equity and your 317 00:17:24,200 --> 00:17:27,680 Speaker 2: property as well that we could recycle as a deposit 318 00:17:27,720 --> 00:17:30,320 Speaker 2: for an investment property. And so then you've got kind 319 00:17:30,359 --> 00:17:33,320 Speaker 2: of three layers working hard for you. You've got your 320 00:17:34,280 --> 00:17:38,159 Speaker 2: greater cash surplus, which increases your resilience, which means you 321 00:17:38,200 --> 00:17:43,720 Speaker 2: can weather storms more comfortably. We've got your mortgage coming down, 322 00:17:43,760 --> 00:17:46,880 Speaker 2: which is saving you interest costs, getting you mortgage free faster, 323 00:17:47,359 --> 00:17:49,640 Speaker 2: and also creating equity in your home. And then we're 324 00:17:49,680 --> 00:17:52,920 Speaker 2: tapping into that equity as a deposit for an investment property. 325 00:17:53,119 --> 00:17:57,000 Speaker 2: Those three things will outperform any qv saver investment kind 326 00:17:57,000 --> 00:17:58,920 Speaker 2: of any day of the week, any extra key WE 327 00:17:59,000 --> 00:18:01,399 Speaker 2: Saver investment on what your employer matches. 328 00:18:02,560 --> 00:18:05,080 Speaker 1: But the beauty of compound interest, obviously you need to 329 00:18:05,119 --> 00:18:07,680 Speaker 1: be contributing something though, so that you can take advantage 330 00:18:07,680 --> 00:18:08,080 Speaker 1: of time. 331 00:18:09,160 --> 00:18:12,960 Speaker 2: Yes, but yes, but I do think that the benefit 332 00:18:12,960 --> 00:18:16,359 Speaker 2: of kiwisaver isn't really the compound interest, and it isn't 333 00:18:16,480 --> 00:18:19,960 Speaker 2: really time. It's the fact that your employer is contributing, 334 00:18:20,320 --> 00:18:22,960 Speaker 2: so you're getting one hundred percent return. That is the 335 00:18:23,000 --> 00:18:26,879 Speaker 2: beautiful thing. The actual fund that you're investing in after 336 00:18:26,960 --> 00:18:29,440 Speaker 2: inflation in some of those things might actually give quite 337 00:18:29,480 --> 00:18:33,800 Speaker 2: a poor return, but getting access to that employer money 338 00:18:33,920 --> 00:18:38,600 Speaker 2: is the golden ticket for kiwisaver. So yes, having it 339 00:18:38,640 --> 00:18:41,720 Speaker 2: locked up so you can't touch it is also helpful 340 00:18:41,760 --> 00:18:46,800 Speaker 2: because you don't inadvertently fritter it away. But it's more 341 00:18:46,880 --> 00:18:49,000 Speaker 2: that it's just locked up for a long period of 342 00:18:49,040 --> 00:18:51,760 Speaker 2: time rather than the based performance of the fund, which 343 00:18:51,800 --> 00:18:54,600 Speaker 2: is where I guess that compounding concept comes in. 344 00:18:55,960 --> 00:18:58,720 Speaker 1: What about trying to be smart with your money? And 345 00:18:59,080 --> 00:19:02,440 Speaker 1: I mean there's the options, the shares, the savings accounts, 346 00:19:02,880 --> 00:19:05,400 Speaker 1: better deals on your insurance, things like that. I mean, 347 00:19:05,880 --> 00:19:09,399 Speaker 1: all of them probably have a part to play. But 348 00:19:09,480 --> 00:19:11,679 Speaker 1: if you weren't just focused on your mortgage and you 349 00:19:11,720 --> 00:19:15,280 Speaker 1: had other investments and you're quite diversified, what do you 350 00:19:15,320 --> 00:19:17,880 Speaker 1: think then what could people be doing well? 351 00:19:17,880 --> 00:19:20,200 Speaker 2: I think it comes back to kind of the principles 352 00:19:20,480 --> 00:19:23,280 Speaker 2: of wealth creation, where you want your money to work 353 00:19:23,320 --> 00:19:26,880 Speaker 2: as hard as it can for the kind of balance 354 00:19:27,000 --> 00:19:30,880 Speaker 2: of risk or volatility. So if we look at a mortgage, 355 00:19:30,960 --> 00:19:33,800 Speaker 2: let's say the average mortgage rate, the three year mortgage 356 00:19:33,840 --> 00:19:35,959 Speaker 2: rate at the moment is six point three five percent. 357 00:19:36,680 --> 00:19:38,760 Speaker 2: So if you've got an extra dollar, you've got the 358 00:19:38,840 --> 00:19:41,680 Speaker 2: question do I pay off my mortgage to save myself 359 00:19:41,720 --> 00:19:44,000 Speaker 2: six point three five percent on what I've paid off? 360 00:19:44,080 --> 00:19:46,200 Speaker 2: Or do I put that dollar into something else, whether 361 00:19:46,240 --> 00:19:49,639 Speaker 2: it's managed fund, shares, property, crypto, whatever we want to 362 00:19:49,680 --> 00:19:52,600 Speaker 2: call it. So I guess the question then is, well, 363 00:19:52,640 --> 00:19:55,159 Speaker 2: what is the return on these other investments, what is 364 00:19:55,200 --> 00:19:58,119 Speaker 2: the certainty of that return, and what is the impact 365 00:19:58,200 --> 00:20:00,679 Speaker 2: of inflation as well? Because we've got a balance these things, 366 00:20:01,240 --> 00:20:04,520 Speaker 2: and can I reaccess that money easily? When you're looking 367 00:20:04,560 --> 00:20:07,880 Speaker 2: at a guaranteed return of six point three five percent 368 00:20:08,480 --> 00:20:13,240 Speaker 2: guaranteed after tax saving, then that would be the equivalent 369 00:20:13,280 --> 00:20:15,920 Speaker 2: of a guaranteed maybe ten per I can't do the 370 00:20:15,960 --> 00:20:17,719 Speaker 2: math in my head, but let's say a ten percent 371 00:20:17,760 --> 00:20:22,160 Speaker 2: return before tax, before fees and all of those things, 372 00:20:22,680 --> 00:20:26,120 Speaker 2: which most investments, whilst they might perform at that rate 373 00:20:26,720 --> 00:20:30,160 Speaker 2: over a long term, some might very few of them 374 00:20:30,320 --> 00:20:33,520 Speaker 2: perform at that rate on a guaranteed level. And so 375 00:20:33,560 --> 00:20:35,240 Speaker 2: then you say, well, I need if I'm trying to 376 00:20:35,240 --> 00:20:37,840 Speaker 2: get my money to work as hard as it can 377 00:20:38,280 --> 00:20:41,080 Speaker 2: for as much certainty, which while you've got a mortgage, 378 00:20:41,119 --> 00:20:43,439 Speaker 2: you need to be thinking more about the certainty of 379 00:20:43,520 --> 00:20:47,199 Speaker 2: outcomes rather than the hopeful outcomes. We're not ready to 380 00:20:47,320 --> 00:20:50,439 Speaker 2: diversify yet, because you've got this mountain of debt that 381 00:20:50,480 --> 00:20:53,080 Speaker 2: we need to get under control, and we do want 382 00:20:53,080 --> 00:20:55,359 Speaker 2: to get that under control before we even kind of 383 00:20:55,400 --> 00:20:59,240 Speaker 2: think about diversifying. And I think that's why some people 384 00:20:59,359 --> 00:21:05,040 Speaker 2: lean to more property based assets whilst they have a mortgage, 385 00:21:05,119 --> 00:21:07,920 Speaker 2: because they can reuse the equity they've got in their 386 00:21:07,960 --> 00:21:11,040 Speaker 2: home or on the property that they're paying off and 387 00:21:11,200 --> 00:21:15,720 Speaker 2: still grow wealth. Now, once we mortgage free, it's game 388 00:21:15,800 --> 00:21:19,119 Speaker 2: on for diversifying to your other assets. But we really 389 00:21:19,160 --> 00:21:22,840 Speaker 2: want to ensure we get certainty of return kind of 390 00:21:22,880 --> 00:21:25,960 Speaker 2: no matter what. And while interest rates remain high, it 391 00:21:26,080 --> 00:21:28,760 Speaker 2: makes more sense in most instances to pay off that 392 00:21:28,840 --> 00:21:32,320 Speaker 2: mortgage over investing in other types of assets because it 393 00:21:32,359 --> 00:21:35,280 Speaker 2: just won't work as hard. But when interest rates drop, 394 00:21:35,359 --> 00:21:37,560 Speaker 2: and we're kind of on the precipice of rates starting 395 00:21:37,560 --> 00:21:40,840 Speaker 2: to drop, we're going to move. I guess the equilibrium 396 00:21:40,880 --> 00:21:44,359 Speaker 2: of that point is going to change. So you'll recall 397 00:21:44,440 --> 00:21:46,679 Speaker 2: in COVID when interest rates went down to two percent, 398 00:21:47,359 --> 00:21:50,000 Speaker 2: why would you pay off a mortgage under those conditions 399 00:21:50,000 --> 00:21:52,280 Speaker 2: when you could get a lot more investing in other 400 00:21:52,320 --> 00:21:55,159 Speaker 2: types of assets. So the first question we ask is 401 00:21:55,800 --> 00:21:58,080 Speaker 2: what is the interest rate that you're paying and can 402 00:21:58,119 --> 00:22:01,240 Speaker 2: I get a guaranteed return somewhere else? And if the 403 00:22:01,280 --> 00:22:03,119 Speaker 2: answer is no, well then you should be paying off 404 00:22:03,160 --> 00:22:04,280 Speaker 2: your mortgage. 405 00:22:06,040 --> 00:22:08,400 Speaker 1: What are some of the biggest mistakes? Then you see 406 00:22:08,400 --> 00:22:10,919 Speaker 1: that people make. Is it what we spoke about at 407 00:22:10,920 --> 00:22:13,159 Speaker 1: the beginning, that they kind of think they're doing the 408 00:22:13,200 --> 00:22:15,960 Speaker 1: right thing and they're flaying along, saving a bit, spending 409 00:22:16,000 --> 00:22:19,600 Speaker 1: this structuring their mortgage in a way that they think 410 00:22:19,720 --> 00:22:22,080 Speaker 1: might work. Is it all a bit up to chance 411 00:22:22,280 --> 00:22:23,440 Speaker 1: or what do you see? 412 00:22:23,800 --> 00:22:29,359 Speaker 2: I think a lot of Kiwis are sleep walking towards 413 00:22:30,440 --> 00:22:37,560 Speaker 2: their retirement and there's sort of this hope that it'll 414 00:22:37,600 --> 00:22:42,960 Speaker 2: be okay. And they were brought up by parents or 415 00:22:43,000 --> 00:22:47,160 Speaker 2: grandparents where it was okay, so you could see why 416 00:22:47,200 --> 00:22:52,160 Speaker 2: they would make that conclusion. But for most of us 417 00:22:52,200 --> 00:22:54,320 Speaker 2: that isn't going to be the case. And so then 418 00:22:54,359 --> 00:22:57,360 Speaker 2: you say, well, what is it not being okay? Actually mean, 419 00:22:57,400 --> 00:22:59,960 Speaker 2: because no one's dying as a result of not having 420 00:23:00,200 --> 00:23:03,359 Speaker 2: their retirement, but the impact of not having enough saved 421 00:23:03,359 --> 00:23:06,480 Speaker 2: for your retirement and key we save normally accounts for 422 00:23:06,560 --> 00:23:09,960 Speaker 2: around forty percent of what you are likely to need 423 00:23:10,000 --> 00:23:13,520 Speaker 2: for retirement. So it's helpful, but it's not the silver bullet. 424 00:23:13,720 --> 00:23:16,639 Speaker 2: It's better than no bullet, but it's not the silver bullet. 425 00:23:16,680 --> 00:23:18,240 Speaker 2: I've got to work out what to do with the rest. 426 00:23:18,600 --> 00:23:20,960 Speaker 2: So if you haven't been able to amass the rest 427 00:23:20,960 --> 00:23:23,960 Speaker 2: of the money that you needed, then it just is 428 00:23:24,000 --> 00:23:25,720 Speaker 2: going to mean, Well, you're going to need to downsize 429 00:23:25,760 --> 00:23:28,920 Speaker 2: your home earlier, you might need to work longer, You're 430 00:23:29,000 --> 00:23:31,400 Speaker 2: unlikely to have the retirement you want, or be able 431 00:23:31,400 --> 00:23:33,880 Speaker 2: to help the kids as you expected. I don't think 432 00:23:33,880 --> 00:23:36,320 Speaker 2: any of those things are literally the end of the world, 433 00:23:37,160 --> 00:23:40,640 Speaker 2: but it is disappointing, I think for many of us 434 00:23:40,680 --> 00:23:43,720 Speaker 2: when we know that we have earned good income, so 435 00:23:43,840 --> 00:23:48,719 Speaker 2: why is that our financial reality? But being prepared to 436 00:23:48,840 --> 00:23:52,040 Speaker 2: confront that, especially when you have a partner who often 437 00:23:52,119 --> 00:23:55,720 Speaker 2: is disengaged from finances. There's always one who's disengaged in 438 00:23:55,720 --> 00:24:00,680 Speaker 2: the relationship. What I find is that when you hit 439 00:24:00,800 --> 00:24:04,879 Speaker 2: around fifty age fifty for at least one of you, 440 00:24:04,880 --> 00:24:07,480 Speaker 2: you are very conscious of the fact, well, I've got 441 00:24:07,520 --> 00:24:11,520 Speaker 2: fifteen summers of income here that I need to maximize. 442 00:24:12,080 --> 00:24:14,439 Speaker 2: And for many of us, knowing that we are going 443 00:24:14,520 --> 00:24:16,520 Speaker 2: to maximize, it still isn't going to be enough. So 444 00:24:16,560 --> 00:24:19,000 Speaker 2: that's the brutal reality. The next question is what do 445 00:24:19,040 --> 00:24:21,400 Speaker 2: we do about it? And there is always something that 446 00:24:21,440 --> 00:24:23,000 Speaker 2: can be done, hands down. 447 00:24:24,200 --> 00:24:26,440 Speaker 1: The other thing, too, I suppose, is if you get 448 00:24:26,480 --> 00:24:29,360 Speaker 1: a plan in place, if you do what you've just described, 449 00:24:29,960 --> 00:24:33,480 Speaker 1: you probably have to review it reasonably often too, though. 450 00:24:34,160 --> 00:24:36,639 Speaker 2: Yes, I think well with my clients, I review it 451 00:24:36,680 --> 00:24:41,480 Speaker 2: every three months because in my experience, you need milestones 452 00:24:41,520 --> 00:24:45,000 Speaker 2: that need to be celebrated. Absolutely, But you get this 453 00:24:45,119 --> 00:24:47,800 Speaker 2: little bit of creep that comes in, and even if 454 00:24:47,800 --> 00:24:51,360 Speaker 2: you only have a one degree kind of shift in 455 00:24:51,480 --> 00:24:54,600 Speaker 2: how you spend over the next fifteen years, that is 456 00:24:54,640 --> 00:24:57,880 Speaker 2: the difference between did we save enough or not? And 457 00:24:58,480 --> 00:25:02,840 Speaker 2: that's I'm conscious of that. People come to me for 458 00:25:02,880 --> 00:25:06,959 Speaker 2: that accountability, and I'm tracking savings targets, spending targets. I 459 00:25:07,000 --> 00:25:09,439 Speaker 2: want you to have a good life, so I'm not 460 00:25:09,440 --> 00:25:11,879 Speaker 2: trying to prevent you spending. But once we've got the 461 00:25:11,960 --> 00:25:14,520 Speaker 2: number that you have allocated to whatever you need to spend, 462 00:25:15,040 --> 00:25:17,680 Speaker 2: then let's commit to it. And most importantly, I'm then 463 00:25:17,760 --> 00:25:21,040 Speaker 2: tracking your mortgage coming down faster, the pace that we're 464 00:25:21,080 --> 00:25:24,800 Speaker 2: getting building equity, and how quickly we're growing wealth in 465 00:25:25,040 --> 00:25:29,520 Speaker 2: addition to paying off your mortgage. Well I did, I 466 00:25:29,600 --> 00:25:34,360 Speaker 2: ran a half marathon on the weekend. Oh haggulation. Well 467 00:25:34,680 --> 00:25:37,480 Speaker 2: that wasn't the reveal. But what was weird about this 468 00:25:37,560 --> 00:25:39,840 Speaker 2: reveal is I wanted to do a particular time and 469 00:25:39,880 --> 00:25:44,159 Speaker 2: I accidentally deleted my app on my watch in the 470 00:25:44,240 --> 00:25:47,439 Speaker 2: shoot before you start. Oh is this crazy? So I 471 00:25:47,480 --> 00:25:51,840 Speaker 2: was trying to work out how I was pacing. And 472 00:25:51,880 --> 00:25:54,000 Speaker 2: the weird thing about this course is they didn't give 473 00:25:54,040 --> 00:25:57,640 Speaker 2: you any milestones along the way, So they didn't give 474 00:25:57,680 --> 00:26:00,560 Speaker 2: you you've run two k's or five, five k's or 475 00:26:00,560 --> 00:26:02,560 Speaker 2: whatever the case is. You only were told where you're 476 00:26:02,600 --> 00:26:05,800 Speaker 2: at at the halfway mark. And so I was trying 477 00:26:05,840 --> 00:26:08,119 Speaker 2: to I was just trying to get my bearings. I'm like, oh, 478 00:26:08,160 --> 00:26:10,280 Speaker 2: this doesn't feel particularly good. And I could see a 479 00:26:10,359 --> 00:26:13,320 Speaker 2: pacer up in front and they had their number how 480 00:26:13,359 --> 00:26:16,120 Speaker 2: long they were going to take to run, and I thought, oh, 481 00:26:16,160 --> 00:26:19,040 Speaker 2: they're running slower than what I was aiming for, but 482 00:26:19,119 --> 00:26:22,240 Speaker 2: I can't even pass them because I'm like, this is terrible. 483 00:26:23,240 --> 00:26:26,680 Speaker 2: And so what turned out is I ended up passing 484 00:26:26,680 --> 00:26:28,760 Speaker 2: the pacer on this hill and I said, well, can 485 00:26:28,800 --> 00:26:31,320 Speaker 2: you tell me how far we've gone? And because my 486 00:26:31,400 --> 00:26:33,359 Speaker 2: watch was saying six k's and they're like, we've actually 487 00:26:33,359 --> 00:26:37,040 Speaker 2: gone nine k's. So then that completely changed things. And 488 00:26:37,040 --> 00:26:38,560 Speaker 2: then I'm like, at what pace are you doing? And 489 00:26:38,560 --> 00:26:40,440 Speaker 2: they're like, oh, we're not actually running at the pace 490 00:26:40,480 --> 00:26:43,040 Speaker 2: that we said. We're running faster than our pace. And 491 00:26:43,080 --> 00:26:46,280 Speaker 2: I'm thinking, you've got one job literally to stick to 492 00:26:46,320 --> 00:26:49,960 Speaker 2: your pace. Why are you off? But how that relates 493 00:26:49,960 --> 00:26:52,840 Speaker 2: to finances, as for many of us, we feel like 494 00:26:52,880 --> 00:26:55,399 Speaker 2: we're sort of we're caught in something and we're trying 495 00:26:55,400 --> 00:26:57,800 Speaker 2: to get to the other end, and it is so 496 00:26:58,240 --> 00:27:00,760 Speaker 2: hard to get to the other end where you don't 497 00:27:00,760 --> 00:27:02,919 Speaker 2: know where you are relative to where you need to be, 498 00:27:03,680 --> 00:27:05,879 Speaker 2: where you don't know the pace at which you're moving 499 00:27:05,920 --> 00:27:07,760 Speaker 2: forward to work out if you need to improve or 500 00:27:07,760 --> 00:27:09,960 Speaker 2: slow down, because it all comes home to roost at 501 00:27:09,960 --> 00:27:14,879 Speaker 2: some point. And I just thought that's how many people 502 00:27:15,000 --> 00:27:19,480 Speaker 2: must feel financially or with any big goal that they 503 00:27:19,520 --> 00:27:21,639 Speaker 2: just don't even know. So when you don't know, you 504 00:27:21,680 --> 00:27:25,000 Speaker 2: don't get to celebrate. When you don't know, you don't 505 00:27:25,040 --> 00:27:26,920 Speaker 2: know how to adjust, And for most of us it's 506 00:27:26,960 --> 00:27:30,520 Speaker 2: just small refinements made quickly that will be the difference 507 00:27:30,520 --> 00:27:32,959 Speaker 2: between whether we keep that cadence going or whether we 508 00:27:33,000 --> 00:27:37,160 Speaker 2: actually kind of burn out prematurely. And so it's hard, 509 00:27:37,480 --> 00:27:43,800 Speaker 2: but I really believe structure, milestones, celebrations, support and quick 510 00:27:43,840 --> 00:27:47,280 Speaker 2: adjustments are the key often to keeping your mindset strong, 511 00:27:47,320 --> 00:27:49,440 Speaker 2: because I need your mindset in order to get through the. 512 00:27:49,400 --> 00:27:55,000 Speaker 1: Curveballs well said, looking at it being sordid month and 513 00:27:55,119 --> 00:27:58,440 Speaker 1: people actually perhaps taking the time now to do that, 514 00:27:58,800 --> 00:28:01,080 Speaker 1: I suppose the idea is that they not just look 515 00:28:01,119 --> 00:28:04,200 Speaker 1: at it, but actually take some action and then make 516 00:28:04,240 --> 00:28:05,199 Speaker 1: that action stick. 517 00:28:05,800 --> 00:28:08,200 Speaker 2: Yes, And that's the hard part. And I think if 518 00:28:08,240 --> 00:28:12,359 Speaker 2: we can create that structure of accountability first telling you 519 00:28:12,400 --> 00:28:15,520 Speaker 2: what's possible and then showing you how to hit it, 520 00:28:16,080 --> 00:28:18,359 Speaker 2: I think that shifts a lot of people. But being 521 00:28:18,440 --> 00:28:22,199 Speaker 2: there when it gets hard, because anyone is good on 522 00:28:22,240 --> 00:28:24,679 Speaker 2: a good day, but very few people are good on 523 00:28:24,720 --> 00:28:27,399 Speaker 2: a bad day, And when it comes to finances, we 524 00:28:27,480 --> 00:28:30,680 Speaker 2: tend to have more bad than good. At least that's 525 00:28:30,800 --> 00:28:32,800 Speaker 2: how we rationalize our lack of progress. 526 00:28:33,040 --> 00:28:35,480 Speaker 1: Thanks for joining us today, Hannah. We could have talked 527 00:28:35,520 --> 00:28:38,360 Speaker 1: for hours. It's great to have you. Thank you very 528 00:28:38,440 --> 00:28:40,680 Speaker 1: much for having me, and thanks everyone for tuning in. 529 00:28:41,160 --> 00:28:44,000 Speaker 1: We're giving away two copies of Hannah's book, Kill Your 530 00:28:44,040 --> 00:28:47,480 Speaker 1: Mortgage and Sort Your Retirement. You can find these details 531 00:28:47,520 --> 00:28:50,560 Speaker 1: in the episode description. Great to have you watching and 532 00:28:50,600 --> 00:28:53,880 Speaker 1: listening today to Sheared Lunch Until next time, Kakitiano. 533 00:28:54,560 --> 00:28:58,320 Speaker 2: Investing involves risk you might lose the money you start with. 534 00:28:58,800 --> 00:29:02,560 Speaker 1: We recommend talking to a licensed financial advisor. We also 535 00:29:02,600 --> 00:29:06,480 Speaker 1: recommend reading product disclosure documents before deciding to invest.