Author: Vanessa Stoykov

Have you stopped to think about how fast we all are running now? Our work is flat out, we are constantly connected via smart phones, and our personal lives are running just as hard. Life is a juggle and a lot of the time we can feel like we are paddling like crazy under the water – just like the proverbial duck.

In this environment, money – and even more importantly; debt, play a huge role in the stress of keeping your head above water.

Australians have one of the biggest household debt ratios in the world.

Our mortgages are huge and our credit cards are racked up. To the outside world this may look like you have a great house, nice car; go on good holidays and have it all.

But internally, as I know from personal experience, this means living inside the money trap – paying off one card, to rack up another. Stretching to pay the mortgage every month and always having that back of mind worry feeling about money.

It wasn’t too many years ago that I was on that treadmill. Big mortgage for the dream house, big leases on very nice cars and credit cards that never went down to zero. And for a long time there, I thought that was OK. That I could handle it, and that I had everything I wanted. But after a while, the shine wore off all the things I thought I couldn’t live without. And the stress of maintaining them only got bigger.

While I was not able to change everything all at once about my life, the first and important thing my husband and I did was come to the realisation that the house and all the stuff were not what made us happy. Being with our kids, and enjoying friends and family was where the joy was.
We also wanted to change the way we worked and have freedom to not do work we no longer enjoyed. This meant we had to undo all the things we had set up about our lives. We sold our house, paid down our credit cards to zero, and worked toward eventually owning our cars outright.

We also built a safety net account that will see us live for six months if no money came in the door at all, and got our insurance and wills/estate planning in order with a great financial planner. Now I am not saying it was fun, and there was a lot of stress along the way. There was also a fair amount of swallowing pride. It took five years to really turn it all around, and there were many nights spent wondering was it all worth it.

But I am here to say – it was. Until you no longer have a big fat financial burden on your back, you really don’t know just how heavy it was. When I sit in the traffic and see so many angry faces, frustrated people and short tempers, I know without a doubt, much of it is caused by the crazy pace, and the stress of making ends meet.

If deep down you know you are in a money trap, maybe its time to think differently about your life. About what really makes you happy. To start the process, I have created a Reinvention Journal to help you on your way. It’s free here and you can start filling it out to see what really matters to you, and the true financial position you are in. Only when you are clear on these two things can you really start to change your life and leave the money trap behind.

It’s not easy, it is not quick and there’s a whole lot of dumping pride in the process. But I can promise you, that long term change to move toward a life you really want, could be the most important thing you do in your adult life. Use your years wisely, as you cannot get them back.

You can change your life. Take the first step. I am here to help.

Until next time

There is a phenomenon on social media at the moment in China called ‘flaunt your wealth’. The idea is people lying next to their luxury car as if they have fallen out, with their personal belongings from their bag spread around them. These items are luxury products that prove how much they have to spend. Their hashtag on Instagram is #fallingstars

It occurred to me when reading about this in the press that this is a prime example of people who want to show that they are rich. But the bigger question is – are they wealthy?

In today’s world of brands and relatively easy access to credit, it has not been too hard for people to look like they are rich. European cars, clothes with high end labels all over them, and jewellery and handbags to give the display of money.

What has not always gone with this display is real wealth. While rich may be all the luxury items that are displayed to the world, a lot of the time those people have no real assets that they own, and no liquidity or cash if they needed it. Many are living from one pay cycle to the next while paying off all the beautiful things they own – which instantly lose value and keep them in a cycle of debt.

While the #fallingstars might be the extreme of these examples, the different between rich and wealthy is obvious at home too. It’s why as a nation we are in a massive amount of personal debt, and mortgages are so high. While many of us aspire to the finer things in life, much of the time we can’t really afford them. So what starts as ‘treat yourself to the best’ becomes a life trapped in an endless cycle of paying for what you never could really afford.

Wealthy people have multiple income streams, lots of assets they own and they keep their overheads as low as possible to maintain a standard of living that is comfortable but not wasteful.

Those who are rich have lots of leased or financed items they never own, lots of debt, and are constantly juggling to pay one thing or another. While rich might look more glamorous on the outside, it is a whole lot better to be wealthy.

A simple trip to the mall will demonstrate how easy it is to fall into the trap of wanting things you don’t need. Of justifying a high price with an “I deserve it” attitude. In fact, malls are some of the most dangerous places to be until you truly understand the difference between rich and wealthy.

Because wealthy people can walk through a mall, have a purpose for being there, and bypass everything else unless it represents true value. Whereas someone with a rich mindset will be sucked into whatever is the latest beautiful thing they see.

I have decided in my 40’s that being wealthy is my true goal. Of course getting there isn’t easy. It requires budgeting, saying no, sacrificing and making sensible decisions. It’s definitely the harder road in the short term. But long term, this mindset is the real ticket to a much easier life. So, if you have been acting more like someone who is rich than wealthy, maybe it’s time to assess what you really want out of life. It is still serving you and bringing you happiness?

Because wealthy equals freedom – something we all want.

Here’s to a wealthy mindset

Until next time,

I’m writing this blog from the backseat of a van with my family – racing across the Irish countryside to take us to stay in an 800-year-old castle. What an adventure.

I am moving into week 3 of our family trip across the UK. We have been to London, Scotland and now Ireland with our 3 boys. There’s been ups and downs, rain and sunshine, and a whole bunch of togetherness. It’s the trip of a lifetime, and something my husband and I have dreamed of doing for a very long time.

There are a few things I have learned about myself and money along the way. The first being – money is well spent on experiences, rather than things. There was a time (ok, plenty of time, I have to admit) where my thoughts and desires revolved around clothes, cars, jewelry and STUFF.

I spent much of my money and time buying things that I believed I wanted, and that would make me happy.

However, over time, I have realised that the stuff never really did make me happy. Sure, there was the pleasure of wearing something fab for the first time or walking out of the store with the bags in my hands, but that buzz never lasted long. It always led me looking to the next thing, and the next.

This trip for me, has represented more than anything a deep change in my view of money, and how it is spent. While we have spent a small fortune getting five of us here, it has been done in a way that represents our values, and what having money goals is all about. It has been about enjoying each other as a family and sharing experiences and adventures that will last in our memories for a lifetime.

Here are five money truths I learned for overseas travel:

1. We paid for this trip in advance. Accommodation, airfares, transfers and food where we could. This meant none of it was put on credit, and I wasn’t mentally planning for how we were going to pay it back. We only booked the trip when we had the funds. This is a good feeling.
2. We haven’t gone retail crazy. I bought a hat and a scarf in Scotland (it was freezing!) but other than that, I haven’t bought a thing. I bought a large suitcase full of clothes, and don’t need more. Sure, I saw plenty of things I would have liked, but it was easy to walk away. Because spending our money on experiences has given us a lot more meaningful pleasure.
3. Our kids have learned valuable money lessons. Currency exchange being one of them. Our 15-year old is now regularly checking our currency against the pound and euro – a lesson he would have found boring in economics class, but fascinating when cashing in his hard-earned savings.
4. We haven’t gone without, but we have been sensible. We may eat in the hotel restaurant or out one night but have taken back fruit and food to the room on other nights. While we have definitely spent every day, our costs have been variable and sometimes way cheaper than expected.
5. We worked to a budget. We planned what we wanted to spend and put it on our visa in advance. We can then spend and keep track of our costs daily online, to make sure we are within our planned spend.

Travel really does open your mind and allows you to leave the routine and sameness of every day. To me it is a crucial part of life experience. Doing it in a way that is mindful of money and as a reward for a long-held family goal has been incredibly rewarding.

A trip, whether big or small, creates valuable memories that last – longer than any material item ever could.

Until next time,

Vanessa

Action is the Unlearn Pillar that most people don’t know quite enough about to really make it work for them.

Part One of exploring the Unlearn Pillar of Action I revealed what questions my husband and I had to hash out in order to take some more solid actions.

In this Part Two of exploring the Unlearn Pillar of Action, I’m going to reveal more step-by-step plans I uncovered and how I got there.

How much per month did we want to spend in retirement? I realised my fantasy life as an oldie was going to cost 50 percent 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:

• 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 salary 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?

While I 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 I delve so deeply into 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. Read The Breakfast Club for 40-Somethings and see what effect a financial planner can have on your life. Download the free guide on How to Find the Right Financial Planner.

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 its 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.

Everyone makes jokes about the kind of old age they want. Or dream of travelling, sleeping in, and general good times. The reality is mostly different, as people experience different life challenges, including health, and the fact that having no purpose tends to kill humans, so the everlasting holiday wears off after 6 months.

But we have all had dreams we have had to shelve in our life. Doing things we dreamed of when we were young – before jobs, kids and mortgages. What if the next phase of your life was your reinvention, where you got to live that dream?

Having a life plan and a clear vision of what you want your future to be like is the first step toward that. By asking yourself these five simple questions, you can begin the process of your reinvention – and have the years ahead to look forward to it.

1. What do you want to be different than today? (House, job, hobbies, time…)
2. What did you used to want to be?
3. What excites you that are currently not doing?
4. How much per month do you think it would take to do that?
5. What’s your timeframe – when could you start your reinvention?

Armed with these questions, you can then go about seeking financial advice around how this could be paid for. It’s also a brilliant idea to get a full health check – one of my dearest friends just paid for an MRI which showed she had cancer – which would not have been picked up if she did not do this test. Your health and likely challenges ahead is important to know about as much as you can.

Then you can do your rough timeline – do you target 2028 as your reinvent year? 2030? Whatever the goal, putting a date to it will make it real and give you long term goals to work toward.

Reinvention is the new retirement, and controlling your own future is a way of avoiding the negative new cycle and sometimes frightening world we live in today.

I am happy to be your guide on this reinvention – I am in the process of doing it myself, and have already begun to see the benefits.

Until next time,
Vanessa

Today the unlearn lesson I want to explore is focus. Or rather, clarity about your future and your goals. While it may seem odd that the abilities to create wealth and to focus are strongly related, it’s actually not too big a stretch to say, as if you don’t have a goal, you won’t hit it.

Today, the unlearn lesson I want to explore is focus. Or rather, clarity about your future and your goals. While it may seem odd that the abilities to create wealth and to focus are strongly related, it’s actually not too big a stretch to say, as if you don’t have a goal, you won’t hit it.

I have found over my life, my goals have changed. In my 20’s, I wanted to start a business, and travel to Europe. In my 30s, it was about having kids and figuring out how life works when you have little people.
I’m now in my 40’s and life is different again, but it is still driven by bigger goals, and a defined end game.

I have always believed that to really achieve what you want, you have to imagine it, think about it, almost to the point of obsession, and with a certainty based on the knowledge that one day you will get there.

This makes the setbacks, and tough times in your life a little easier to bear – because you know you are on track to getting what you want.

So many times in life, we have vague ideas about things we would like, or dreams we have, but they remain just that. Our tendency to ‘deal with things later’ means we don’t actually get what we want. This leads to a lifetime of ‘settling’ rather than using what years we have been given to the best of our advantage. In order to get what we want, we need to unlearn this lack of focus, and create some real, tangible goals.

Often times, the world of financial planning is simplified to just time horizons to retirement. I have found however, there is a new movement in the industry, where advisers and professional investors are now talking about goals. This means there’s a need to designing an investment strategy that matches the goals a person has in life.

Everybody is different, and what works for one, would not for another. So designing a financial strategy based on individual goals makes sense right? The industry is starting to see the light.

But in order for that process to be successful, you actually have to have clearly defined goals, and be able to articulate, and stick to them.

Loose goals, like travel, just won’t get you there. There is an easy process I can share with you to start defining your goals – which you can then action with a good financial strategy.

1. Imagine your life in five years, 10 years and 20 years. What do you see yourself doing at each of these stages? What is your family like? What experiences do you want to have achieved in each of these periods? Take one page for each of those time periods and write a list. Put in as much detail as you can. Describe the experiences, and holidays in enough detail, that they start to feel real. You won’t believe the power of actually putting on paper the dreams you have for your life and your families.
2. On another page, write down all the areas where you spend in your life. Not the boring details, but the general overviews – mortgage, school fees, medical expenses, kids. Then start to look at these expenses against your time periods. In 10 years will your kids have left home? Will the school fees be over? Start to get an understanding of how your major expenses could shift over time. This will help you to focus on the bigger plan –and the fact that you can in fact build a financial plan that shifts as your life does.
3. Talk to your family, friends and colleagues about your goals. This helps to make them real to holds us accountable by saying them out loud. It also puts meat on the bones for you around how amazing it could actually be and how important it is to get there. By finding inspiring people at any stage of their life that you can point to and say, ‘I would like to be like that’, helps make it real. I met a lady in her 70s last week who was on the board of our children’s school. She spoke so passionately about her work on the board and how much she enjoyed it, that it inspired me to think that I would like to be doing that in my 70s. Bang. Another goal to add to my rather large list. Brilliant.

Once you have your goals, and they are real in your mind (and that of your family and friends), it’s time to put them into action. This will be explored in my fifth pillar of unlearning, suitably described as action. Some of you may well be able to create your own financial plans around your goals. I have never been that disciplined, or, to be honest, had that sort of skill set. This is why I have a financial adviser.

I can say without reservation, that a great adviser can be a brilliant asset to your life. I have no vested interest or financial gain in recommending this – I just know it’s has been the transforming piece of the puzzle for me. My husband and I now know what kind of life we want to lead – right into retirement; how much we want to spend along the way; and what we will end up with to leave to our kids when the party is done – all because we went through the process of advice.

To get you started thinking about your goals here’s a few snippets of inspiration. They have certainly helped me more clearly define what really matters to me.

[Steve Jobs Stanford Commencement Speech: “How to live before you die”] – this is such a great reminder that we have limited time, so use it exactly as you wish.

[Patti Dobrowolski’s TED Talk: “Draw your future, take control of your life”] – this was voted one of the best TED Talks2015 – and for a good reason! It’s a great talk on why visualising and writing down goals really works.

[Goal Setting Workshop with Tony Robbins] – this is an audio feed, but it gives a good explanation of the power of setting tangible goals

I started this journey to help Australians prepare for their financial future. I’m motivated because I know so many amazing people who can help. And I learned the hard way, what it’s like to be under financial pressure, pay for a life that keeps you on a treadmill, and feels like it’s going nowhere.

I want to help you unlearn money, question your limiting beliefs and reinvent your life. More about how your beliefs impact your financial future, here.

According to ABS data release in 2017, Australians household debt to income ratio now stands at a record 188.6%.

Around 3 in 10 households were classified as ‘over-indebted’ with mortgage holders and high income earners particularly susceptible.

Debt and the pressures it brings to life can be debilitating. Anyone in Sydney who has kids at private school and a mortgage most likely knows what this feels like. Debt however, is not just the problem of capital cities. If you are leveraged with a business, have run up credit cards, or have taken out a personal loan, you might be feeling the pressure of making ends meet.

Which is why unlearning your limiting money habits, and reinventing your future is so important. Those of you who are in debt still have time to make the pension irrelevant for your retirement.

Turning it around starts with two simple questions:

1. What do I really want from my life moving forward?
2. What could I change to get what I want?

You can start answering questions like this in your free Reinvention Journal, here.

While the questions are easy, the actions may not be as simple. For example, the actions may be selling the house of your dreams to get out of a massive mortgage, or changing your kids school to lower the fees (and yes, my husband and I have done both).

These may feel like impossible choices, but over time, if you really think about what truly gives you joy, and what is causing you stress, you might find it’s not as hard as you think.

Whatever your actions are, the first step toward changing your financial future, is recognising what you need to unlearn, or change. You can take my free, five pillars test to understand what’s holding you back.

This is the first step in many, toward getting on the right track to a future that has less debt and stress, and more joy.

I look forward to taking this journey with you.