1 00:00:07,133 --> 00:00:10,453 Speaker 1: You're listening to the Saturday Morning with Jack team podcast 2 00:00:10,573 --> 00:00:11,453 Speaker 1: from News Talks. 3 00:00:11,453 --> 00:00:16,693 Speaker 2: That'd be our personal finance expert Ebinggnight from Opie's Partners 4 00:00:17,013 --> 00:00:20,093 Speaker 2: is here this morning. Hey, ed, great to be here, Jack, 5 00:00:20,373 --> 00:00:22,173 Speaker 2: Great to be speaking with you. So it turns out 6 00:00:22,213 --> 00:00:25,453 Speaker 2: there is a big difference between the wealthy and people 7 00:00:25,533 --> 00:00:30,173 Speaker 2: like me, probably more than one difference. But the difference 8 00:00:30,213 --> 00:00:33,013 Speaker 2: you want to focus on this morning is that wealthy 9 00:00:33,093 --> 00:00:37,453 Speaker 2: people think about money in terms of decades, whereas a 10 00:00:37,453 --> 00:00:41,773 Speaker 2: lot of people think of money in much shorter terms. 11 00:00:42,453 --> 00:00:45,413 Speaker 3: Well, that's exactly right. If you're financially stressed, you tend 12 00:00:45,413 --> 00:00:48,853 Speaker 3: to have to think about your money in days. You know, 13 00:00:48,853 --> 00:00:51,173 Speaker 3: you're thinking about how do I pay the bills this week? 14 00:00:51,253 --> 00:00:53,013 Speaker 3: How do I get through to the next payday? And 15 00:00:53,013 --> 00:00:55,293 Speaker 3: that's when you're in survival mode. Now, if you're a 16 00:00:55,333 --> 00:00:57,493 Speaker 3: little bit better off, you might think about your money 17 00:00:57,533 --> 00:00:59,253 Speaker 3: in terms of months. You know, how do I say 18 00:00:59,293 --> 00:01:01,533 Speaker 3: for the next holiday, or you know, maybe I can 19 00:01:01,573 --> 00:01:03,613 Speaker 3: save up enough money to buy a different car at 20 00:01:03,653 --> 00:01:06,013 Speaker 3: the start of next year. Well, if that's you, you 21 00:01:06,093 --> 00:01:08,333 Speaker 3: might be thinking about your money in terms of months. 22 00:01:08,333 --> 00:01:10,053 Speaker 3: And in that case, you're in what I call the 23 00:01:10,053 --> 00:01:13,093 Speaker 3: comfort zone. But it does turn out that really wealthy 24 00:01:13,173 --> 00:01:16,653 Speaker 3: people do tend to think about their money in decades, 25 00:01:17,093 --> 00:01:19,093 Speaker 3: and you're thinking about, well, how can I build some 26 00:01:19,133 --> 00:01:21,173 Speaker 3: wealth for the next two to four decades. And if 27 00:01:21,213 --> 00:01:24,133 Speaker 3: you're in that mindset, you're really in what I call 28 00:01:24,413 --> 00:01:26,973 Speaker 3: the wealth mode. But just before I talk about how 29 00:01:27,013 --> 00:01:29,573 Speaker 3: do you go about changing your mindset? Because it's easy 30 00:01:29,613 --> 00:01:32,613 Speaker 3: to talk about that in theory, but what do you 31 00:01:32,693 --> 00:01:35,693 Speaker 3: actually do to change your mindset? Why is it that 32 00:01:35,773 --> 00:01:38,653 Speaker 3: we all know we really should invest more, but we 33 00:01:38,693 --> 00:01:41,893 Speaker 3: don't do it. Well, there's a nerdy term that I'll 34 00:01:41,933 --> 00:01:45,573 Speaker 3: teach you to today deck It's called temporal discounting. Now 35 00:01:46,053 --> 00:01:49,573 Speaker 3: forget the technical term. What that really means is our 36 00:01:49,853 --> 00:01:54,693 Speaker 3: brains love stuff now, and we don't really value stuff 37 00:01:54,693 --> 00:01:56,933 Speaker 3: that we might get in the future. So if you've 38 00:01:56,973 --> 00:01:59,773 Speaker 3: got one hundred bucks, you love to spend it now, 39 00:02:00,093 --> 00:02:03,493 Speaker 3: you don't really value as much what that money could 40 00:02:03,493 --> 00:02:07,653 Speaker 3: turn into in the future. Similarly, if you go out 41 00:02:07,693 --> 00:02:09,853 Speaker 3: and spend money on your credit card because it doesn't 42 00:02:09,893 --> 00:02:12,373 Speaker 3: feel like money is leaving your account now, you don't 43 00:02:12,373 --> 00:02:14,373 Speaker 3: really value the fact that you might have to pay 44 00:02:14,413 --> 00:02:17,093 Speaker 3: interest on that in the future. So our brains are 45 00:02:17,093 --> 00:02:21,053 Speaker 3: really wired to now now, now, getting stuff now, rather 46 00:02:21,133 --> 00:02:24,133 Speaker 3: than putting money aside and getting even more stuff in 47 00:02:24,173 --> 00:02:24,693 Speaker 3: the future. 48 00:02:24,893 --> 00:02:28,173 Speaker 2: Yeah, so I did the there's a calculator on your website, 49 00:02:28,173 --> 00:02:30,453 Speaker 2: which is really good. So I worked out my kind 50 00:02:30,453 --> 00:02:33,213 Speaker 2: of life expectancy given my age and gender and that 51 00:02:33,293 --> 00:02:34,973 Speaker 2: kind of thing at the moment. So there's a fifty 52 00:02:35,013 --> 00:02:37,293 Speaker 2: percent chance, according to your calculator, that I'll live to 53 00:02:37,333 --> 00:02:40,213 Speaker 2: eighty nine, which means that I really do need to 54 00:02:40,213 --> 00:02:43,613 Speaker 2: try and get past what is the temporal disconnect and 55 00:02:43,653 --> 00:02:44,573 Speaker 2: think about the future. 56 00:02:45,613 --> 00:02:48,693 Speaker 3: This is the interesting thing. Now, to a person with 57 00:02:48,733 --> 00:02:51,613 Speaker 3: a hammer, every problem looks like a nail. I'm an economist, 58 00:02:51,653 --> 00:02:54,093 Speaker 3: so I think every problem can be fixed with a calculator. 59 00:02:54,413 --> 00:02:58,253 Speaker 3: So if people google the how long will I live calculator, 60 00:02:58,253 --> 00:02:59,973 Speaker 3: and you might need to put in put in open 61 00:02:59,973 --> 00:03:02,293 Speaker 3: as my account, the opes and this will come up. 62 00:03:02,493 --> 00:03:05,133 Speaker 3: You put in your age, your gender, when you started working, 63 00:03:05,173 --> 00:03:07,053 Speaker 3: when you get to retire, and it gives you a 64 00:03:07,173 --> 00:03:09,653 Speaker 3: kind of this is your life. So if you're a 65 00:03:09,693 --> 00:03:13,013 Speaker 3: forty five year old woman, you started working at the 66 00:03:13,053 --> 00:03:16,013 Speaker 3: age of twenty and you want to retire at sixty five, Well, 67 00:03:16,213 --> 00:03:19,413 Speaker 3: you've been working so far for twenty five years. You've 68 00:03:19,413 --> 00:03:21,933 Speaker 3: got twenty years left in your work life, and you've 69 00:03:21,933 --> 00:03:25,173 Speaker 3: got to use the next twenty years to set yourself 70 00:03:25,293 --> 00:03:29,253 Speaker 3: up and pay for the twenty six year retirement that 71 00:03:30,053 --> 00:03:32,333 Speaker 3: you're going to eventually have, because you've got a pretty 72 00:03:32,373 --> 00:03:34,733 Speaker 3: decent chance of living till ninety one. And so just 73 00:03:34,813 --> 00:03:36,853 Speaker 3: running your numbers like this gives you a bit of 74 00:03:36,893 --> 00:03:38,693 Speaker 3: this is your life and shows you there is simply 75 00:03:38,733 --> 00:03:40,693 Speaker 3: what your life looks like in decades and that can 76 00:03:40,733 --> 00:03:41,813 Speaker 3: help change your mindset. 77 00:03:41,973 --> 00:03:44,373 Speaker 2: Yeah, so good. Hey, thank you very much, Ed, And 78 00:03:44,453 --> 00:03:46,893 Speaker 2: like you say, you can access that how long will 79 00:03:46,933 --> 00:03:50,493 Speaker 2: you live calculator on the Opie's website We'll Wake So 80 00:03:50,533 --> 00:03:51,773 Speaker 2: there's a link on the news that was your b 81 00:03:51,853 --> 00:03:54,613 Speaker 2: website as well. Guess your own need Jack. 82 00:03:55,333 --> 00:03:58,453 Speaker 1: For more from Saturday Morning with Jack Tame, listen live 83 00:03:58,533 --> 00:04:01,333 Speaker 1: to news talks that'd be from nine am Saturday, or 84 00:04:01,413 --> 00:04:03,333 Speaker 1: follow the podcast on iHeartRadio.