Author: Catherine Weinress

Of the big five lessons that need to be unlearned about money, I think time perhaps is the biggest missed opportunity.

Why? Simply because the biggest trap of time is that you always think you have plenty of it – and because of this, tend to miss out on one of the biggest opportunities to grow wealth almost effortlessly – as it’s time that allows your money to make money for you in the world of investing.

In Australia our government had the incredible foresight to introduce superannuation – meaning those who start work are putting away 9.5% of their income into investments to support themselves in retirement.

It has been proven however, that 9.5% will not be enough to fund an adequate and dignified retirement – and for many will only cover about 30% of living expenses.

So why is time, which seems at face value, a pretty hard thing to master and to unlearn? I believe because it goes to the very heart of us being human – and our unwillingness to acknowledge our own fragility and ultimately mortality.

Sounds deep? It is. Too often we want to live in the moment (which is not always easy), enjoy ourselves now, and let tomorrow figure itself out.

I know I certainly did. I spent my 20’s acquiring the things I wanted, and chasing the experiences that defined my view of what a good time was. Quite frankly, I don’t regret it. What I do regret however, is that I did not have the foresight to tuck a little away and invest it along the way.

When I think of the all the clothes, shoes, cars and stuff I spent my money on, I wish I had that little birdy on my shoulder telling me to tuck 10% of it away. Not in a bank account, but in an investment account. To be honest, I don’t think I even knew what a managed fund or a stock was then, or how to access them.

It was the early days of the internet, and the wealth of information and easy access was not there. I did not have family who knew anything about it, and it certainly was not taught at school or university.

And so I missed one of the biggest easy wins in my life when it comes to money. And time passed, as it always does. Children arrived, and nature kicks in, wanting to give your kids everything you can. This becomes the focus financially, and again, time passes, and the opportunity to make my money work for me slipped further behind.

I guess my awakening to the unlearning of time came during my 40s. And perhaps that is when most of us finally start to understand that time moves quickly, and that we don’t have all the time in the world. It’s certainly been that way for me, and many of my friends.

This is why I have dedicated myself and my company to awakening and helping gen X Unlearn Money in time – to be able to prepare for the last third of their lives – and be able to live it exactly the way they want it.

But there is still time to change habits around money and start investing. It all begins with an awakening that we should be doing more – but what exactly?

While I explore that in much more detail in our fifth unlearning pillar – action – a quick guide to get you started should include:

1. Saving enough income to cover at least three months of living. The experts all say six months, but the reality is, that’s a hard task when many of us have massive monthly expenses. Three months gives you enough peace of mind that if the worst happens you can hustle and make other arrangements.
2. Checking your insurance, wills and estate planning. If time does run out early, will everyone you care about be okay? I believe the best way to do this is through a quality financial adviser. I pay my adviser a retainer of $200 a month. For that I get the best deal on insurance, wills and estate planning and the knowledge that if anything happens to me or my husband, he will be the first phone call to make.
3. Starting an investment account. There are so many ways you can do this now. I prefer managed funds to individual stock buying. You can buy them through mfunds on the ASX, go to the managers direct or access them through a financial adviser in a variety of ways. Having worked in the finance industry for more than 23 years, we have deep connections in the sector and suggest you spend a few months of 3-5 minutes a day getting across professional investing – not so you can do it yourself (unless you want to), but so you can understand it enough to have confidence that you are putting your money in the right place for you.

Of course, when money is tight this plan is not going to be done overnight. And that’s another thing about time we all need to unlearn – start now anyway, even if it’s seems impossible. Because whether it takes two years or 10 to get to the part where you start investing outside of super, the time will pass anyway.

For time stops for no man or woman.

I have a feeling I could be seen as the killjoy of the century by stating that one of things we need to unlearn about money is desire.

What do I mean by this? Well, it’s nothing to do with physical passion, but everything to do with want, rather than need.

It’s something that took me a long time to grasp the concept of – and to be honest, at times I still struggle with it.

A classic example for me has always been cars. Since a teenager in Gunnedah admiring V8 Commodores, I have always loved sports cars. I promised myself by the time I turned 25, I would be driving a BMW. This was due to the fact that as a kid, my family watched Sale of the Century. I always equated smart people, and ultimately winners, as having this car as it was the ultimate prize.

This has resulted in me spending a large portion of my time obsessing over how I was going to have this car. Funnily enough, this is closely related to another unlearn lesson around belief, but more on this next week.

I believed I would get there, and I did – a week before my 25th birthday I took delivery of a bright blue Series 3 Sports.

If only that was the end of the story. Alas, no. I can say that since then I have owned seven sports cars.

Now when I say owned, what I should say, is financed. The funny thing about cars is that the new car smell and feeling wears off. It usually took me only a couple of years before I was eyeing off the next car, and desiring that feeling of new again.

The flipside of this desire however, is the fact that you never actually own anything. And it finally dawned on me that owning a car was not an asset – it was a liability.

Too often it is easy to want the newer things – the bigger TV, the latest outfit, new golf clubs, or a bigger house.

What this desire does, however is trap us. I found I was working to pay these cars off – trading them in and starting at ground zero again. Too often the things we want end up being the things that stop us attaining financial freedom, because I have learned in my forties that the person with the cash wins. Not the person with the best cars, outfit or home. Because a lot of the time, these things are paid for on credit – and ultimately end up costing us way more than the asking price.

So now, we drive our people mover with pride (fully owned after five years of paying it off) and my Mercedes convertible (okay, something things never change!!) for the long term. I don’t look at other cars or spend time thinking about what next.

I also put more focus on buying investment pieces (whether it be clothes, bags or anything else) that I love and that will last. A funny thing I have noticed over the past twenty years of working with some incredibly wealthy people in finance is that most of them are obsessed with getting value. They drive cars for 10 years, live in the same houses and only buy when things are a bargain. While I used to question why I now know the answer – it is the obsession with finding value, eliminating desire for things that really trap us, and slowly accumulating wealth that creates long term financial freedom.

And freedom after all, is what we all desire.

I heard a frightening statistic this week: that our national debt level is 130 per cent of our GDP (gross domestic product). Quite simply, as a nation, we are racking up debt faster than we are producing.

Or, in old fashioned terms, we are spending more than we earn.
Anyone knows in managing their own budgets, that spending more than you earn ends badly. Usually with a diminished lifestyle as you need to sacrifice in order to pay back what you are have already spent. If you can…

Another equally disturbing statistic is that 30 per cent of households are responsible for 85 per cent of household debt. Wow – this is a big spending 30 per cent of our population.

No doubt it’s what’s been driving property prices up in major cities like Sydney and Melbourne. Combined with the fact that 40% of bank loans have been interest only (although the government is now decreasing that to 30 per cent,) this means that only a few factors in the combination need to change for a series of cascading events to occur.

Reading big picture statistics like this can sometimes paralyse you with fear and a feeling of “what can I do?” It’s obvious we can’t change the habits of a whole nation, but what we can do is think about our own situation and make a checklist for the what if happening.

 

What if interest rates rise? What if house prices drop? What if another GFC came into play? What if you lost your health? What if you lost your ability to work? What if your business failed?

Bear with me; I am not trying to put you on a downer, what I am trying to do is give you a sleep-at-night feeling. Because if you have answers, plans and assurances around all these questions, then you won’t be caught out if circumstances change.

Chances are you do have a plan already. But the household debt tells me that many Australians are used to a good economy and prosperous times; which at times can mean that the worse is not planned for or taken into serious consideration as it has not been needed previously.

If you don’t have a plan, perhaps it’s time to see a financial adviser. If you don’t know one, start with a search on the FPA website and ask them these questions:

• Are you a Certified Financial Planner (CFP)?
• How do you charge?
• What do you specialise in?
• How will we work together?

If you find the answers are to your liking, it just may help you answer those what ifs, and sleep better at night. For if the whole nation is not covered, at least you and your family are.

It’s an exciting day as I finally get to show the world my debut novel, The Breakfast Club for 40-Somethings.

Of course, holding a real live book in my hand, that I wrote, is a personal thrill. And it’s also a great big tick on my bucket list.

But more than that, what excites me is what I know this book can do for others – for people I care about, and those I don’t even know personally but share so much in common with.

You see, if you are anything like me, you’ve hit your 40s and you suddenly realise life is really hard work. Whether you have kids, a full-on job, are dealing with ageing parents, or health challenges, your 40s and 50s can be a tough place to be.

While we can all look at social media, and think other people’s lives are much better than our own, the reality is everyone faces challenges and frustrations – and it’s how we deal with those that determines our future.

One thing I have learned from working in the financial services industry for more than 24 years is that if you know the secrets of making money, growing wealth can be more than achievable. You do not have to earn a fortune to build longer-term wealth.

After all, the money industry tends to be good at, well, making money. What it has traditionally not been good at is sharing those secrets with the rest of us – by making it easy to understand and, dare I say, interesting and entertaining.

In a world where we are all busy and stretched, to be entertained while learning is a goal for most of us. Lengthy text books, lectures and boring how-to guides tend to get left on the bedside table, if picked up at all.

So I have taken a new approach and written something different. It is a story. Sure, the characters are fictional, but they have traits and circumstances familiar to each and every one of us. They also have the ability to share their own personal money situations – which is something not many of us do. After all, talking about money is pretty much taboo in our society.

So, if you want to unlearn limiting money behaviours and start to make better long-term choices, this book is for you. It will help you start the important process of thinking about yourself – and what you want for your life.

So many of us put ourselves last when it comes to living the life we dream of. I believe this doesn’t have to be the case. By unlearning some things you know about money and having a purposeful plan, you can move toward the life you want.

So really, I wrote this book for you – to help you crack the code of the secrets of money while having a laugh with some flawed, at times unhappy characters, who manage to reinvent their lives.

It’s the first step you can take toward putting yourself front and centre and planning a life that you want for yourself and your family in the future.

If you want to figure out which limiting money beliefs you need to unlearn after reading the book, take my free quiz on the five pillars to find out. https://vanessastoykov.com.au/5pillars/

To order your book now at a discounted rate through Booktopia, click HERE.

More to come – I promise. I’m here for you.

Until next time,

My final unlearn pillar is a big one: action.

My final unlearn pillar is a big one: action.

It’s the pillar that can make or break your financial success. It’s also the thing that most people don’t know quite enough about to really make it work for them.

The thing about action that most of us need to unlearn is that there is no single thing you need to get or do in order to make your financial goals a reality.

Rather, a cascading set of actions is needed – it’s not difficult once you understand what you need, but is it impossible to truly succeed if you don’t know what you need to get you there.

There are many aspects of action that most of us need to unlearn. The most basic one, but often the toughest, is actually doing something. I know I want to lose five kilos, but am I really prepared to give up that morning muffin? My lack of action toward losing that five kilos means it’s a pipe dream: not something I am prepared to action to get what I want.

Funnily enough, money works pretty much the same way. Know you need savings, but there is never anything left at the end of the month? Well pay the savings first, before you spend a cent of your income, and adjust to living off the rest.

Know your family would be in trouble if you got sick, or worse? Do something about it and look into the right kind of insurance.

Most of us delay action, because we are delaying, on a grander scale, pain. It’s been said by many psychologists that as human beings we are either moving toward pleasure, or moving away from pain. So the muffin is short-term pleasure, and the tight pants are long-term pain.

Getting life insurance is hard to understand, expensive and just plain boring to organise, but having the worst happening would create deep long-term pain.
So at this point in the journey of unlearn, I am going to share with you the biggest single thing I did to change my financial future and take action.

My husband and I picked the right financial adviser.

That’s it.

“What?” I hear you say. “It’s got to be harder than that?”

No, not really. Of course, there were many lessons along the way that I had to learn. You can read about the other of four pillars and my challenges with them here.

But, to take action, the best thing we did was to find the right adviser.

It was through this relationship that we were able to come up with a solid plan of action. One that gave both my husband and I total peace of mind about our future – across all scenarios.

The process they went through was fascinating – and it included a lot more couples counselling in there than you might suspect.

This was because the really big, hard questions needed to be asked of us by our adviser, in order to get to an actionable plan.

Questions that we had to consider included:[/vc_column_text][vc_column_text]

• Who would get the kids if we were both to croak?
• What money would leave individual family members?
• How much insurance did each of us need if the other one died? What would the living one do with it?
• If sometime did get the kids, how much money would we leave them to look after them?
• What would we do about power of attorney if a terrible accident happened?

[/vc_column_text][vc_column_text]You may ask what has this got to do with wealth, but the reality is, all these questions really need to be answered in order for you to have a failsafe future plan that is to weather any storms.

Once we hashed these out (and boy, that was an interesting process) which actually took a few weeks, (lots to think about!) we could then set up tick boxes for some more solid actions that took us step-by-step towards our financial goals.

How much per month did we want to spend in retirement? I realised my fantasy life as an oldie was going to cost 50 per cent more than what we would have in super by the time we retired. This helped us to understand how much extra we needed to put in super now, in order to hit our goals then.
We also put a solid timeline around the following:[/vc_column_text][vc_column_text]

• Credit cards – how long it would take us to pay them off and never rack them up again
• Emergency savings – could we get three months in a high interest account and never touch it unless we were burning?
• Our kids’ future – could we put away money every month that earned compounding interest for our kids’ university fees, cars, lives?
• Living money – how much did we really need in order to have a good life every month? The rest we moved at the start of the month so we did not get tempted.
• Investing outside of super – what funds, what timeframe, and what should we pay?

[/vc_column_text][vc_column_text]While I am have been in the financial services industry for well over 20 years, and probably knew the investing part pretty well, the other steps, which are in fact far simpler, were the ones I needed to take to get my wealth plan on track.
These things don’t all happen in a matter of months. This cascading plan takes years to achieve – but with a plan you can tick the list off – knowing that you are moving ever closer the future you want.

It’s a great feeling. Remember that show The A-Team? I always loved it when Hannibal would say “I love it when a plan comes together.”

That’s how I felt when we found the right adviser. And you can too.

Which is why the next part of my unlearn series is going to be directed towards how to find the right adviser. I know you may have read the press: “don’t trust advisers, they are dishonest.” Or thought there was no way you could afford one; or that it would be embarrassing to share just how bad with money you were.

Let me tell you, while there are some advisers who are not the ones you want to pick (just like in any other profession), there are thousands who are incredible at what they do.

You just need to know how to find them, what questions you should ask of them, and what to pay them.

I am going to help you do just that in, in my new book, out later this year.
Because I wholeheartedly believe in the power of great advice. There’s no financial gain in this for me. In fact, my education business spends it time training financial advisers, and making them even better at what they do, to help you.

So think carefully about the action you need to take to get peace of mind and what you want.

Because you deserve it.