I have had a niggling feeling for a few months now that I may be targetting the wrong networth number to reach FI (financial independence and retire by 60). In my early 40’s my dream was to retire by 55. I even had the number 55 written on my wall at work. People use to come in and think it was “55 days to my next holiday” or something similar. I would proudly state that it was when I was retiring. I would get blank stares from people younger and from the older folk, “really?!?!?!”. I even had a TTR (transition to retirement) countdown on my phone. I wanted so badly to retire or have the choice, at 55. I was exhausted from trying to be ‘everything’ to everyone and it beat me down. I just didn’t really know what vehicle or strategy would get us there when our income was not high and we had daycare & primary school kids and the dreaded mortgage!.
One of the main things I admire about Scott Pape is his passion to teach young people about money management and giving these young minds that knowledge CAN help their parents, teachers AND themselves for the rest of their lives.
Canna Campbell mentions in her book ‘Mindful Money’ that her dad intervened when she started working to make her set up a bank account and invest her money in shares. He went on to explain dividends and how money makes money. How powerful is that? I sometimes think I may talk too much about money with the kids but then I read something like this and know that I am doing my kids a service for their future selves when money does become a main part of their lives.
I would like to deep dive into what I have played with to help my kids get started with their finances, especially when they started working and bringing in their own CASH.
Knowing how much you have available and what your debts are is the first step. You can work through my Finance 4 U Series which goes into the foundational steps to KNOW your numbers in detail.
The series goes through some key elements to help you feel more confident with your finances and consciously be aware of where your money comes from, where it goes, and how to manage that process.
Investing is different to saving. Invested money is not as easily available as money held in saving accounts, however, some investments are accessible within a few days if needed. My intention with this post is for investing for the long term, so there are some steps you need to consider BEFORE you start moving money to investments.
I think this is the BEST tax calculator around! It’s so easy to use AND is up to date with the latest percentages.
Have you ever wanted to know:
- how much a base wage/salary is as a take-home pay weekly, fortnightly or monthly?
- updated tax brackets for this year or previous years?
- what the difference in taxes will be if you were to salary sacrifice?
- how much superannuation your employer will pay?
- The real difference between a pay rise or a job offer?
I first heard Vince Scully speak on a My Millenial Money podcast and was nodding all the way through. I had to know more about him and so hopped onto Google and went down the rabbit hole for a few hours.
His current creation, LifeSherpa, is an online financial literacy & adviser site, which is excellent and for all ages. So much information to assist at every stage of life and learning. On the Life Sherpa website you can request a ‘discovery session’ and I was lucky to get Vince for the meeting.
I AM excited about this process because normally I’d look at a lot of this on my own.
Having someone else review our financials, who has an unbiased viewpoint AND has so much more knowledge than I do about government and super regulations, made me excited to do this session.
Hooray, we are at the pointy end now. Well done.
My wish for you is that you have discovered some things along this journey that will help give you the confidence to keep going. Now that you KNOW YOUR NUMBERS you can definitely CONTROL the majority of them and when (and there will be a ‘when’) things go haywire, you will be able to refocus on what you need to do, to get out of the situation. You will be able to move forward and rebound fast as you are BUILDING your numbers to Wealth for you and your family … for FUTURE U!
I am proud of you and me for getting this all down on paper 😀 … a pat on the back all-round!
This post has been the hardest to write as there are so many different ways to building wealth. I have been thinking that there are many similarities to working towards having a healthy lifestyle at this step. The foundations of both these goals are pretty generic. Know what you put into your mouth, or in our case what you spend (Step 2-4). Understand where we are at with our inner health and current weight, or with finances, knowing what we have to work with, ie, our Networth, debts, and our possible surplus each month.
Let’s get excited. Well, you can fake it for now and I assure you, you will be later! This is where we start putting the plans and information into action.
It’s kind of like what they say in the building industry – “measure twice, cut once”. A lot of our work so far has been in preparing, collating and reviewing. Now we will start putting some steps into action to lead to building wealth and financial confidence.
Now for the fun stuff! We will start calculating all the pages you’ve been working on, this will form a summary of your Networth and your Yearly/Monthly Income and Expense Summary.
A positive result is great and we can work on giving that positive amount a job. Perhaps saving, paying off debt or investing.
Let’s talk retirement fund.
Future You will thank you for this.
1. Have a copy of your superannuation statement or if you have a login, go to your account.
2. You need to source the Product Disclosure Statement (PDS) for the fund. The document is usually 15+ pages and in that wonderful document, you will find 2 main fees.
Thank you for coming along on this journey. The last 4 weeks have all been about Owning your Numbers and allowing your mind to think about your past and current journey. Having these details in black and white and down on paper is such a tangible thing. It allows this information you have written down to swim around in your mind and also attract what you are thinking about. Like if you are thinking of your car insurance and how to best get this expense down you may start seeing insurance ads or you overhear people at work talking about insurance. Take note and ask around or call to see if you can reduce your expenses.
Curious to know what this week’s task is?
Glad you are still following along. This is the last step for the foundational phase of Finance 4 U. This step will wrap up the start of the process. Once you know where your money goes and how much you can bring in, it will help you focus on THE NUMBER.
I call this your LIVING NUMBER. To live the life you have carved out for yourself at the moment, these fundamental numbers give you a guide or starting point to move to the next levels of your money management. You are the CEO of YOU … always remember that!
Let’s do this!
In this week’s tasks, we are going to look at all the debts we have. Because we are in the collation stage, I would like you to write down on a separate page each loan you have. This could be a home loan, car/boat loan, furniture, credit card, and family/friend loans. The intention of one debt per page is that we will be going back to these in the next phase to Review, Reduce or Remove. More on this later.
So for this week, only write out each debt and some pertinent details relating to these debts.
Okay, are you ready? 😊
Last week the task was for you to source an exercise book or notebook so that we can get started on your money journey of Owning your numbers, Controlling your numbers and Building your numbers.
We are going to use some good old fashion methods. If you have already been on your money journey, this series can help remind you of some expenses that may have crept up, or help you tweak your numbers. I will also be working alongside you.
As we move along the SERIES I will explain and cover lots more about building wealth, but for now, we are working on Owning your numbers, slow and steady whilst you are busy living. 😊
I AM …
I am excited to share this with YOU and I hope that you join me on this journey. Whether you have your budget/expenses/finances already handled, or you just cruise through each week and each month, OR even if you have your head in the sand …😊 I would love to help guide you through with some good old fashion foundations and then get into the FUN stuff… you may not think it can be fun, but trust me when I say this, when you have a plan and you are ticking off achievements and there are fewer surprises/expenses coming your way, you will feel at peace. And even occasionally have a little happy dance! 😊
We sold our SMSF Investment Property AND here are the numbers – the good, the BAD and the ugly.
As I write this post I am also working through all the numbers from when we purchased the property in 2015, to now selling it and changing strategy.
I have battled with myself as to WHY I am changing direction when only 5 years have passed. I will walk through it here to work through the potential demons/concerns I have and see if I can come to some key points that will make this choice solidify in my mind. I don’t want to be thinking about this in years to come and wondering if I did the right thing or not.
Writing the reasons now will cast them in stone for me to look back on later if I do start down the rabbit hole of WHY did I SELL … Blah blah blah
This post is partly to vent and partly to work out our moves going forward for the short term. Last week, my husband told me that he has been on JobKeeper (Government assistance program during COVID) since April! I had started getting concerned when work dried up about 6 weeks ago and he was at home, however, the company were still paying his weekly wage, or so I thought. No super was being contributed but I thought we could handle that for the short term. Now he tells me the government have been contributing each month about 60% of his wage and his company were struggling to top up the 40%.
This is such a hot topic and there is no right or wrong. At the end of the day, it is what you feel is right for you and your kids. I have learnt along the way our children are so much a part of us but more importantly, they are their own ‘being’ and we can only guide and nurture them into the wonderful human beings they will become. It’s so hard to not ‘just do’ for them OR give them ‘what I didn’t have when I was a kid’.
I believe there is a fine line between giving so that they have an advantage going into adulthood AND giving them too much so that they have no sense of the value of money, no sense of delayed gratification and poor financial literacy.
In today’s post I would like to explore and delve into different areas that I have tried to develop with my kids (sometimes they listen and ALOT of times they ‘don’t’ seem to be listening 😊 … teenagers. I persevere and hope even 10% sticks). Even if you don’t have kids, I encourage you to think of someone you know that could benefit from this post and share with them. Give the gift of knowledge.
I feel like I really need to lock down our goals and see them in print. So many options and things to think about that I am finding it hard to focus. It is also so hard to focus when you are thinking of so much ‘life’ stuff. Life goes on and the stuff, like your FUTURE YOU wealth and health can suffer as you feel that you don’t have enough capacity in the day to take on the challenge of caring for FUTURE YOU, whilst working through the challenges of the here and now.
My challenge in this week’s post is to formulate and work through the outline of the next 8 years worth of goals for financial independence and my own growth.
The year was 2010 and our net worth was $750,000 (this was after the sale of our house, and includes superannuation and shares).
We sold our home that was spacious and a great family home with a big backyard AND we were STRESSED (well I was) with the financial burden of ‘house debt’.
In hindsight, we didn’t have a HUGE debt compared to these days ($450,000 home loan). But with a young family, working part-time, minimal understanding of finances and no other income stream I found it very distressing that we couldn’t get ahead. I was brought up to believe wealth only came from buying 2-4 properties and I couldn’t see how we could do that.
- We were 40 years old
- Super ($170k)
- Shares ($50k)
- And a beautiful home (profit after the sale of our home $550k)