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086: Building your financial IQ and EQ with Marion Mays
2.7k Plays11 months ago
Mia and Dinah interview certified money coach, Marion Mays, to discover how to improve your financial IQ and EQ, build wealth, finding the right financial professional advice and managing your finances systematically.
Resources
- Thalia Stanley Group
- Money Smart
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Transcript
Introduction to Podcast Purpose
00:00:00
Speaker
This is Life Admin Life Hacks, a podcast that gives you techniques, tips, and tools to tackle your life more efficiently, to save your time, your money, and improve your household harmony.
00:00:12
Speaker
I'm Dinara Roberts, an operations manager who used to think sorting finances was just about knowing how to do it. But now I think I understand why you do it is probably even more important. I'm Mia Northrop, a researcher and writer who thanks her past self for making some sound financial decisions and knows her future self will be even better placed.
Meet Marianne Mays, Money Coach
00:00:33
Speaker
In this episode, we interview certified money coach Marianne Mays. Hello and welcome to Life Admin Life Hacks.
00:00:41
Speaker
In this episode, we talk to Marianne Mays, who reveals how to develop your financial IQ, financial EQ, and financial capability. The ecosystem of financial experts that you can access and the strengths of each. And the first step to building your wealth is to honor and empathize with your future you.
00:01:01
Speaker
If you want to start the new year with a fresh approach to your money, then listen on. This episode is brought to you by our signature online course, The Art of Adulting.
The Art of Adulting Course
00:01:10
Speaker
This group program features step by step lessons that guide you through setting up foundational digital tools, plus sharing the mental load, money management, kids logistics, organizing a will, meal planning, social life and self-care.
00:01:24
Speaker
Each week, new content drops and there are live Q&A's with Mia and I, plus you have access to a private Facebook community to ask questions, share your progress and leverage some extra accountability. This course is value packed to help you get real results. Our next intake is February, so head to lifehadminlifehacks.com to jump on the wait list to be the first to know when doors open and to be eligible for early bird bonuses.
00:01:49
Speaker
Make 2024 the year you get totally organised. Join us and set yourself up for a calmer year with more time and headspace for the things that matter most.
Marianne's Financial Literacy Mission
00:02:00
Speaker
Marion Mays is the founder of Talia Stanley Group, a firm dedicated to helping women in their prime with both financial literacy and financial capability. Her experience spans 30 years in the financial services sector, and today, as a certified money coach, she is enabling women to do money better. She focuses on bringing women empowerment in three specific areas, making more money
00:02:22
Speaker
We like that. Managing money better. We love that. And multiplying money. Truly important. She's a deep passion for property and has been educating and mentoring women on how to buy and invest in property for almost 20 years. She's presently serving as an ambassador for both the Women's Network Association of Australia and the Ladies Finance Club. We're not championing women into economic empowerment or property ownership. You'll find her in the kitchen.
00:02:47
Speaker
Cooking up organic fare often referred to by her family as medicinal food. She lives in Melbourne with her son and two-year-old model, Border Collie. Oh, Marianne, thanks so much for coming on the show today. Thank you to you both. I'm really grateful for the opportunity to share some information that I hope helps some of your listeners. Well, we do recognise that people have very uneven education when they grow up about personal finances.
00:03:12
Speaker
And depending on what went on in their own household, when they were growing up, what they studied, what they did for work, where their interests sit, what their responsibilities are for finance, you know, it can be very uneven.
Hosts' Financial Journeys
00:03:23
Speaker
And actually, Mayor and I, we went to high school together, but we also went to University of Melbourne together, and we both studied commerce at Melbourne Uni. And I actually went on to become, you know, worked in an accounting firm,
00:03:36
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and to work in the finance sector. But actually me. I failed accounting one day. I did that twice. I remember distinctly. Here we are. And so even though we went to like the same school and I guess had reasonably similar economic background growing up and both studied
00:03:53
Speaker
some sort of business at uni, we actually have really different attitudes, behaviours and relationships with money. It's actually very fascinating. Thanks so much again for coming on the show. But like maybe we should kick off on like what led you to launch your business and dedicate your focus particularly on women, Marianne. I'm a little bit nervous now hearing all those ventures in the money space.
00:04:14
Speaker
spent my working career in financial services and it's all I really knew. And in my observation of that, what I saw was people consistently doing things that were very questionable. And I remember as early back in the early 90s, maybe late 80s, when we had the collapse of a major building society in Melbourne, interest rates on deposit funds were about 18% there.
00:04:40
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And I remember people walking in on the Friday and depositing $200,000 so they could get 18%. And on the Monday, dealing with the media announcements that that building society had essentially collapsed.
Motivation Behind Thalia Stanley Group
00:04:52
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That was one of the defining moments when it first occurred to me that people are often doing things with money that they're just doing and they don't understand and perhaps don't even have a level of knowledge that they need to have.
00:05:04
Speaker
And so after considerable time in the financial services industry about eight, nine years ago, I decided to launch Thalia Stanley Group, which is named in honor of my parents. My mother was Thalia. My father was Stanley. I thought that it was time that there was a service offering that bought financial literacy and financial capability in a dignified way to people beyond providing just financial advice to them. So that's kind of how it all started. Yeah.
00:05:33
Speaker
How do you distinguish between financial literacy and financial capability? What do you see as the differences there?
Financial Literacy vs. Capability
00:05:40
Speaker
Financial literacy is information-based. If you and I want to get a six-pack, then we will go on YouTube and we will watch information of how to get a six-pack.
00:05:49
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then doing the 1,000 sit-ups a day is going to be the implementation and give us the capability, if you will. And then hopefully after that, we've both got six packs. I've watched many of those videos and I have to confess, I don't have a six pack. There is information and then there is the implementation and the doing-ness of the information, which gives us
00:06:12
Speaker
in experiential sensation of it, and life is experiential, it's not theoretical. And from doing this, we get competency or capability if you will. So that's the distinct difference. Yeah, and I can imagine there's a lot of listeners right now thinking, hmm, you know, I've read lots of books related to finance, I might be getting blogs, but the actual application, and as you said, experiencing, watching what happens when you do X, Y, and Z, and building in those habits is a whole other thing.
00:06:40
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And one of the other things that you sort of talk about is improving people's financial IQ and also their financial EQ. Talk us through the distinctions there.
Financial IQ vs. EQ
00:06:50
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Well, our financial IQ is our aptitude. So again, coming back to financial literacy and understanding basic financial concepts. Our financial EQ is based in our emotional intelligence. And why do we do the things that we do with money or not?
00:07:09
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and you two ladies preferenced earlier that you've had similar journeys and I'm suspecting have different relationships and different outcomes with money. So to speak, I think the financial literacy is easy enough to understand our money IQ. We need to first develop a knowledge base, we need to have practice in that knowledge base of implementing, then we get to have financial capability. I think most people can understand that. In terms of our money EQ, that's a little different.
00:07:37
Speaker
Our set of beliefs or rules or thoughts, if you will, around money are usually formed in our formative years, somewhere between the ages of two and 10. And that's when our subconscious brain is being formed. And without going into a mini psychology lesson, for those of the listeners that are not aware, we have a conscious brain and we have a subconscious brain. And 95% of all of the decisions that we make automatically every day in our life are made from our subconscious brain.
00:08:07
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And the programming of that subconscious brain, if you will, happened in those formative years. So this is why it can often feel like there's a seven-year-old running the show when it comes to money. Yeah. I'm a little disturbed that it is so young, two to 10.
Should Kids Be Paid for Chores?
00:08:24
Speaker
I thought it would be, I thought it would drift into the teens. And what's alarming me is how much time my son has spent on YouTube watching people, you know, talk about outlandish who are you making scenes and watching Mr. Beast and
00:08:37
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soccer professional soccer players and what they earn and his skewed warped sense of money. Okay, that's so really good going Marianne. Well, I think if you if you think about it, we implement the concept of money with our children quite early. And I know for many households, one of the earliest implementations of the concept of money is you're going to do some chores
00:09:01
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and I'm going to pay you some money for doing those chores. And if anyone listening has read anything that I've published online recently, it advocates to never ever do that. I won't go into the reasoning why, but there's some really important reasons as to why as parents
00:09:18
Speaker
we would not set our children up to be financially remunerated for doing chores in their house. We can talk about that if you want, because I think it's important for people to know why they might think the way they do, if that's how they grew up with chores. And I'll reference my answer by saying that everyone is always doing the best they can with what they know. So if you're currently paying your children for chores, please don't go home and say I heard some
00:09:42
Speaker
that Mary may sit and you're all not paying money anymore. The first thing is in the real world that you and I live in, and I don't know how your house runs, but nobody in the real world is financially remunerated for doing chores.
00:09:55
Speaker
It's usually a family or a community based activity that we do as contribution because we care about each other and because also we want our environment to be a certain way. So participating in a family activity is not something in the real world that people are usually financially remunerated for. The second and more important reason is that
00:10:16
Speaker
If I was to interview a hundred kids and ask them if they loved doing chores, I think a hundred kids would say, we don't love doing chores, but we get money for it. Programming your children, remember their subconscious is taking in everything and recording it and storing it as a program to run. Programming your children to do an activity which they don't particularly like in order to get money, sets them up to have a belief system that in order to get money in life,
Impact of Childhood Beliefs
00:10:44
Speaker
We have to work hard and do all kinds of things, whether or not we enjoy doing those things. And that is the only way we can get money. In the old days, I'm talking about in the early seventies, a lot of us were indoctrinated or programmed that way by our very well-meaning parents who wanted to teach us.
00:11:02
Speaker
work ethic. But unfortunately, it's not a healthy life system to give your children. Yeah, it's a really interesting perspective. Dada and I, we've talked about pocket money and kids on the show before. And that is a pretty consistent recommendation that comes across that
00:11:19
Speaker
should divorce the two. And the contribution to the family is about supporting the family and being a team player and those kinds of things. Interestingly, my kids now trade off chores with one another for payment, which I actually think is okay, right? Because this is kind of like, you know, they've been given tasks to do and then
00:11:38
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one will get the other to do something and we'll pay them in exchange for doing it, which I think is like the beginnings of kind of the trade off and learning around those sorts of things. But, you know, maybe it's on the great side, but it's interesting to watch that kind of entrepreneurial spirit play out in our art style. Do you love the entrepreneurial spirit? I think to follow on from that, when I'm working with an adult who comes to me to do work
00:12:03
Speaker
on their money IQ or EQ. Probably the hardest part of the work that we do is really meeting reality where it's at. So the gap in between where they are and where they would like to be or where they had hoped to be until we can collapse that gap so that they can meet reality where it's at.
00:12:21
Speaker
That is probably the heaviest lifting that we do. And going back to what we were talking about with the children, setting children up in the reality and the notion that they're going to grow up and get married one day and somebody is going to pay them for chores is what, particularly, I'm helpful. It's certainly not happening in my household anyway. Certainly don't lie about it.
00:12:42
Speaker
When you talk about money EQ, I guess one of the things we've talked about previously, we've had an episode or actually two episodes on the show previously about money stories or money personalities. You know, what's is is that the same thing? And I guess, you know, do you sort of subscribe to this idea of people having money stories and a particular framework that you work within? Yeah, absolutely. Without question, there is no question. Do we all have money stories? Yes.
00:13:09
Speaker
All of our subconscious, whether we like it or not, were programmed in our formative years and we had experiences and we gave those experiences meaning in relation to money. Meers might be that you have to work hard to get money and money is not easy to come by, hypothetically.
00:13:26
Speaker
Yours might be money is in abundance and it's everywhere and all you've got to do is be in contribution and it just falls onto you and I might have a different money story. So absolutely and usually we can work out our money story fairly quickly by a specific process that involves writing down your very first money memory just exactly as it happened.
00:13:51
Speaker
and then putting any emotional thoughts or feelings that you had around it. And then going on to think about the time when you started getting money on a consistent, regular basis, which is usually around the ages to 10 to teenage years when you either got pocket money or you started working. And that regard is what was your pattern with money? What did you do on a consistent, regular basis when you got your pocket money? Did you spend it all? Because this will feed into your money story.
00:14:20
Speaker
Did you give it away to other people to try and do connection through money? Did you save it all and hold on to it because you had a money story that money's really hard to get and it's not easy to come by. So geez, I've got a little bit of money. I better hold on to it really tightly. So what we're looking for there is pattern recognition in terms of what were your behaviors when you started getting money on a regular basis. And then the third part is I honestly believe this is someone who's
00:14:48
Speaker
trained in psychology and behavioural sciences is that all of us innately know the answers within ourselves. Sometimes it just takes someone to guide us or help us remove some of the layers. And the third part of that process is writing with compassion as an adult based on your current day reality. This is the house I live in. This is the car I drive. This is how much money I earn.
00:15:14
Speaker
I think my money story might be, and then writing with compassion. And I think innately, we always know our
Personal Money Stories
00:15:21
Speaker
inner truth. It just gets covered up or clouded somewhere along the way. So that's a three-state process that anyone can do to get an understanding of their money story.
Money Archetypes
00:15:30
Speaker
To the second part of your question, you refer to money personalities or money types.
00:15:35
Speaker
You know, this is based on Carl Jung's introduction of archetypes, and we call these money archetypes, and there are eight money archetypes. I'm not sure if you're familiar, if you've already had somebody on speaking about them, but for example, there's the archetype of the innocent, and the innocent archetype usually takes a ostrich approach to money matters, and they often live in denial, bury their heads in the sand,
00:16:02
Speaker
They don't want to have to see what's going on around them. And they're usually easily overwhelmed by financial information. And they often rely heavily on advice or outsourcing their decision-making. And Mia, you're smiling. You might know somebody that... I'm not going to name any names. I'll just smile and we'll move on. But it's really interesting. Talking to people, they often remark on how different they might be with money to their siblings.
00:16:31
Speaker
And it's that idea that, you know, they've grown up in a household where they might've been getting some of the same sort of, you know, stories that they might interpret things differently and remember things differently. But there's also that factor of their money archetype coming into play. So that's, you know, there's many reasons why they might have such different habits from their siblings when they think, oh, we grew up in the same household that was just so, you know, different with money. That's really common, Mia. It's because I'm working with a client at the moment who's a very successful business entrepreneur.
00:17:01
Speaker
And her and her sibling grew up in the same house with the same messaging and the same experiences around money. And to give you context, they came from an affluent family. When they were about seven, their family was targeted because they were wealthy and their house was broken into.
00:17:15
Speaker
and the robbers robbed the house, but they also did something, which I won't describe because it's absolutely disgusting, but they actually did something through the house to protest about that family's wealth. So the money story for these two young girls became, they weren't aware of it until they started working with me. They're fully fledged adults now. One is incredibly wealthy and has a lot of money and one doesn't, and they came from the same household.
00:17:42
Speaker
It is the meaning that they gave to that event at the time and what they decided. One sibling decided that having money is unsafe and it's even dangerous because people actually target you, break into your house and do disgusting things in it. The other meaning, the other sibling gave to it is that I'm never going to be in this position again
00:18:03
Speaker
where somebody can come into my home and rob us and I'm going to have control over all my money and I'm going to be a warrior archetype and I'm going to be incredibly successful with money at whatever cost.
00:18:15
Speaker
So same experience, but they both gave two different meanings to it and they both made two different decisions around what that would look like for them as their life played out. That's really interesting.
Reality vs. Expectations in Finance
00:18:25
Speaker
I'm curious what you were saying before about having people look at the gap between, you know, the reality of where they are and where they want to be. Is that, are you talking about sort of just the financial gap or are you talking also about the emotional gap as well? I'm talking about the everything gap. I would say to you that there's a big thing to say, but I've been doing this work
00:18:45
Speaker
in the trenches for about eight, nine years. So I've helped a lot of people in terms of using this methodology of money coaching and behavioral science. I would say that the majority of people who have some difficulty with money, whether it be making money, whether it be managing money or whether it be multiplying money, have a disconnect between the reality that is and where they want things to be. And I like to use the analogy, whether it's a good one or not, I'm not really sure of AA.
00:19:13
Speaker
And the point is until you walk into a room in AA and are witnessed by 10 people and say, my name's Marion. I'm an alcoholic. Nothing is possible. The moment you do that, everything becomes possible on the other side of that statement. I have high income earners who make two, $300,000 a year that I work with that have no reserve savings.
00:19:38
Speaker
that have assets, but the assets are geared. So their mortgage is $1.7 million. Yeah. And they have this false sense of security because they are high income earners and they may have a profession as lawyer or doctor or what have you, that they're always going to have access to a high disposable income. I would say there's a massive gap there between reality and what is true. And this is a really common trait I see with high income earners.
00:20:05
Speaker
who have a consistent, stable, high salary, there's often a huge gap, because if they didn't have that salary next week, they wouldn't be able to live in the same house for very long, they wouldn't be able to drive the same car, and maybe their children wouldn't be able to go to the same private school that they're going to. As silly as this sound, these are all educated, intelligent people. They're not aware of the gap. So until they can get clarity and collapse that gap and say, yeah, this is a problem,
00:20:33
Speaker
Yes, I don't have an issue earning money, but I clearly have an issue managing money and I clearly have an issue multiplying money. Nothing is possible until they reach that epiphany, if you will. And in terms of addressing that gap, what are the questions that everyone should be able to answer about their finances?
Knowing Your Financial Status
00:20:52
Speaker
Well, I think it's really healthy, just at the most basic level, to know what you have and to know what you owe.
00:20:59
Speaker
And just because your neighbor or your friend or your colleague has a similar earning comparison to you and they may have a property that's worth two million and you may be struggling to get into the property market, it's a question about, well, really, what do they owe on that two million dollar property? So in answer to your question, definitely what you have
00:21:24
Speaker
versus what debts you owe. You should obviously know some basic numbers like how much do I earn and what are my living costs and when we talk about people's living costs we usually break them down into three separate categories. The first category being our fixed costs or our needs.
00:21:41
Speaker
They're the boring ones we have to pay every single month, like we're bookkeepers, our rent, electricity, gas, food, et cetera, insurances. And the second category is, of course, our fun cost or our wants. And the third category is our future cost.
00:21:55
Speaker
This is a concept that's quite foreign to many of us. It comes from this theme of the power of three that every dollar you earn should do three jobs for you. The first job it should do is it should take care of your needs today. You really do need a roof over your head and food to eat. More importantly, contrary to how many of us were raised where you should save all your money and live in self-deprivation and then you can grow up and have savings and be happy. Some accountants may still advocate that model.
00:22:23
Speaker
Planners may still advocate that model but in the money coaching world we tend to more so use a values aligned money planner that says what's deeply important to you at the core of your beingness. Now let's use money in a way to honor that rather than you being in self deprivation. The best way to address that is letting people have a defined amount of money each month that they just enjoy
00:22:47
Speaker
because they could be dead next month. And that's not a pep talk, obviously, but that is reality. And there's no good having all this money in our super fund or all this money in savings, and we are no longer here to enjoy it. And of course, the third category there is taking care of our future self.
Future Financial Self-care
00:23:04
Speaker
I'm going to be 53 next month and whatever experience you're having right now in life in relation to money and the quality of life, you can thank your younger self from a decade back because whatever she did or didn't do for you is the experience that you're living today. This is something that is a foreign concept to many people but I believe that self-care is not about self-care of just the here and now but self-care is about the care of our
00:23:32
Speaker
future and possibly more fragile selves as age may be earning capacity declines as we age if we're in physical labor intensive jobs or highly stressful jobs maybe our capacity to earn at that level diminishes so
00:23:47
Speaker
The you today, what are you doing to take care of that future, maybe fragile self? Some sobering eyebrow raising going up thinking, oh, thanks past me. Probably got to where you're at. Oh, you might be fist pumping and going, yeah, thanks. That was great. It is making me think about are there particular scenarios that trigger women to take action on their money? Like when people come to you, I'm sure you see the same sort of scenarios or patterns
00:24:14
Speaker
It's like this happened and now I've really got to get onto it. Yeah, absolutely. One of the most common triggers, if you will, or impetus, if you will, is
00:24:25
Speaker
people trying to get onto the property ladder. That's a really big acquisition, right? And you have to prepare all this stuff to try and get money. So people are like, I'm in my 20s, I'm in my 30s. I really want to have at least one property in this lifetime. Oh, now that requires me to do a whole lot of stuff. And maybe the stuff they're doing in an IQ level, like going to work, working hard, paying their tax, coming home, is not cutting it because they're not getting the results that they need to have.
00:24:51
Speaker
So I would say that would be a very common reason for why people seek out help and support. The other reason would be a change in personal circumstances. So that would look like either I started a new relationship and this person and I are worlds apart when it comes to money. He wants to hold on to every single cent and never spend anything. And when we go out for coffee, he tells me that my latte was $3.62. Need to transfer to him. And I'm just happy to shout the both of us. Which one is right in that scenario?
00:25:21
Speaker
They both have deeply embedded money stories from very different upbringings. They both have this range of resonance or this hard wiring in their nervous system that's very different. And they've got to find a way to live in a world that requires money as a constant topic of conversation and navigation inside an intimate partner relationship. Yeah. I mean, I'd love to hear more about
Managing Financial Differences in Relationships
00:25:43
Speaker
that. Like how do you.
00:25:44
Speaker
approach these conversations with partners or other family members who've got like these different money stories or you know different ideas about those concepts that we've been talking about. So in response to that I do a lot of couples work and sometimes pre when they're first getting together, sometimes during when they've been together for 10 or 15 years
00:26:05
Speaker
and money is starting to be a point of contention or a crux in the relationship, and a lot of work post-relationship breakdown. So to answer your question, I think you take them out for a nice meal, you order a really expensive bottle of wine, and then you start the money conversation. And no, I'm absolutely kidding. It doesn't require that. You can just have the conversations.
00:26:26
Speaker
It is very common that two people who live in an intimate setting will have a different relationship and a different narrative around money. And the first step of that is each party just naming it. So I have a friend who is a self-made millionaire.
00:26:42
Speaker
And he's literally that guy when we go for coffee, he's like, your coffee was $4.50. And I am like, oh my God. Buying your coffee and let me shout you another one for next week. Just on a point of like, that's how I feel about it. Who's right, who's wrong? I don't think that really matters. We're just really different. So naming what it is for you. And we see this all the time where one person wants to borrow a lot of money to live in the big house because that equals success and status.
00:27:10
Speaker
this person has a money story that's based in fear and loss and if we're taking all that debt we're going to end up in the worst possible place imaginable and there's a family in the middle of that and children that need to be housed. The first thing is naming it and being real and honest about what are your habits, behaviours, traits, story with money and the second part of that is and I see this beautiful thing happen when I work with couples when
00:27:34
Speaker
They do the values-based work and they do the money story inquiry work when they realize, because they often hear stories they haven't heard before also. You know, this happened to me when I grew up and the partner will be like, well, you never shared that with me, right? So they hear the other person's money story and they're able to meet it with deep compassion. Like I never knew you grew up in such deprivation. I never knew you grew up wearing secondhand clothes with holes in it and all the kids at school picked at you. And that is why today,
00:28:04
Speaker
You're so restrictive with your money and you want to hold on to every cent and you don't want to spend it. And then what happens from there, obviously, as intelligent, educated adults is that when we understand somebody's reasoning or lens for why they do something, we're able to meet that really differently as opposed to someone just saying,
00:28:24
Speaker
You need to pay for your own coffee and it's $3.62. It's a really different conversation that's then able to unfold. And then of course from there, what has to happen is each party is acknowledging the differences and then it's like game plan teamwork. What is the system? What is the solution?
00:28:43
Speaker
and what is the strategy that is gonna honor your fears, your money story, your emotional range of resonance that's hardwired in your body and the same for the other person. And then you come up with something that is a middle ground for both and allows them to both coexist inside that framework and do money in a way that doesn't breed resentment or doesn't breed anxiety because we know unfortunately based on statistics
00:29:10
Speaker
where that inevitably leads to if we don't find a solution. Yeah. And I think one of the key words you said then was a system so that things can be set up automated. That's why that's become boring because they're just sort of, you know, on autopilot to a degree, as opposed to making decisions every day and trying to work out a game plan all the time.
00:29:31
Speaker
What do you suggest for people who want to manage and monitor their finances in a systematic way? I suggest that both parties or anybody, single person couple, sit down and figure out their three highest values. And this is probably left of centre for anyone listening going, I just want to hear about money. Why are you telling me about values? When I do values based work with clients and I do it with every single client,
00:29:55
Speaker
It takes the most amount of time and they have to go back usually a couple of times to even get to what their values are. In fact, most people think a value is, I want to be kind, I want to be honest. That's a virtue. A value is an emotional state that we want to experience on a consistent basis. And often, so my highest value is to be a present mother to my son. Not an award-winning mother, not an exceptional mother. It's got something to say about this. But to be a present mother.
00:30:24
Speaker
So if my highest value is to be a present mother, then that requires certain things of me when it comes to earning money and when it comes to managing money and when it comes to multiplying money. There are a lot of things I have to say no to in my career because it's in conflict to my highest value.
00:30:40
Speaker
So an answer to your question, no matter who you are, figure out your three highest values, because honestly, you will go through this lifetime accumulating money, paying tax and using money only to end up in a place that feels like it hasn't been fulfilling for you or hasn't met your needs in terms of your human experience. So that's the first thing. And then the second thing I would say is come up with a money planner.
00:31:07
Speaker
that reverse engineers your three highest values. So not a budget, a money planner that is based in reality, that meets all of your needs and pays all your bills on time. So your credit rating is protected. That enables you to enjoy money now so that you can have positive reinforcement that money is a good thing. I get to enjoy money, money is healthy, and then take care of that future, maybe fragile self so that you're not waking up in 120 months, which is a decade.
00:31:36
Speaker
but I like using 120 months and she's not saying to, why didn't you just put a little bit away from it for me or invest it to get the benefit of compounding interest? Absolutely. I think that's a really key message that people get that it's not about frugality. You need to look at reality and meeting both your needs and your wants so that you can actually enjoy life and not put off this idea that I'll enjoy life when I saved lots of money and stopped working and retire.
00:32:03
Speaker
There's a lot of people do think that way. So none of us are looking good in a gold bikini at age 84 on the beach, you know? If that's one of your things on your back, at least go to it now. You know, there are things that we can experience and we can do now. Our money can be a vehicle to help us do them that we can't do realistically when we're 70 and when we're 80 and when we're 90. Yeah. And to finish, what I want to pick up on is the idea of multiplying money, this building wealth, moving out of sort of the budgeting
Values-Based Money Planning
00:32:32
Speaker
mode.
00:32:32
Speaker
budgets don't work, we've got lots of, there's so much evidence there that that kind of micro management doesn't really work. How do people get started with that building wealth? Well, the first thing they need to do is set up a values based money planner that even acknowledges there needs to be a portion of their money be sent off into the future to take care of them. They have to get to that space first and they have to get to a space where they value self and future self enough to do that.
00:32:58
Speaker
For many clients, it looks like what they can afford. So I can afford 10% of everything I earn just to get rid of it, invest it and not think about it. For some clients, it's 20%. And for some clients who want to retire early, it's 40% or 50%. This is a very personal thing and there's no kind of one thing fits all. But I trust that everyone listening, if they haven't, now they will hear about compounding interest.
00:33:24
Speaker
being considered one of the eighth wonders of the world. We don't have to do all the heavy lifting. If we are able to find investments that match our risk profile that we've had financial IQ in, that we've developed financial capability in and they feel comfortable to us and we choose whatever investments we choose, then putting money into that on a consistent regular basis over a long period of time, the way compounding interest works is
00:33:54
Speaker
It's the power of the time that you have the money invested and the continued fact that you're adding money to that amount that helps it multiply. So you may only have invested $100,000 over a 15-year period, but the compounding impact of that is much greater. We are really lucky in this day and age if you want to get started in investing
00:34:15
Speaker
that you no longer need a minimum amount of $20,000 and to know some guy called a stockbroker. We have these devices, our phones, and we can even use them to start investing. And commonplace for many people to start investing is by the use of micro-investing apps. And I think the description defines what they are. It's the ability to invest very small amounts of money into various things, depending on what you feel like investing.
00:34:45
Speaker
so that you can have the experience of investing and develop your financial capability. Something doesn't become scary once we're doing it. $50 a week, if that's what we can afford or we're investing $200 a month, which equals $50 a week and that's all we can afford. Seeing that money invested, seeing that it's really there next month, seeing that it's gone up in value,
00:35:06
Speaker
Seeing that you're earning money that you didn't even put into it because you've invested it helps develop our confidence in our financial capability. So I would say those two things are critical. The acceptance that we need to start doing something for our future self might be very happy.
00:35:21
Speaker
and then allocating an amount that works for us, regardless of what anyone else is doing, and then finding an investment vehicle. There are many different types of investments. We know there are properties, shares, bonds, ETFs. There are all kinds of investments, but finding something that fits for you and just starting taking the first little step. Yeah. I hope this serves as inspiration for anyone out there who's listening
00:35:44
Speaker
He thinks, oh, I thought I need to have a massive pile of spare cash sitting around to start investing. You really don't. One of the apps I played around with last year was one where it rounded up all your little transactions to the dollar. So if I bought something for a dollar fifty four, it would round it up to two dollars. And, you know, you take all these little increments and then at the end of, you know, if you hit a certain threshold, it got to like 50 bucks or something. I don't know. Actually was low. It was maybe like five dollars. It would invest it in
00:36:14
Speaker
an ETF, an exchange traded fund. So it was totally passive on my part. I didn't have to have anything saved. It was all automated and it just quietly was investing in the background. So there's all sorts of, as you said, vehicles, apps that we can be using to get started and make small steps to build wealth in that way. Yeah. And I think really thinking about getting your kids to be aware of that is also really important in terms of starting off
00:36:42
Speaker
them in terms of thinking about their money story around thinking about those three things. Historically, it was interesting. I think that people often used to have like the jar approach to for kids to manage their money in terms of like, you have to put this much into you're allowed to spend this much and save this much and sometimes give to charity or whatever. But I think it's, you know, when we move to electronic only, it creates some of those really simple concepts become more difficult in some ways to implement. So
00:37:11
Speaker
I think being a bit deliberate and thinking about teaching your kids some of that's really important too. I think a really cut through way to teach your children and it can kind of wipe out if we feel like we're listening here and we feel like, oh my God, I've done some damage. What kind of a really effective way to cut through all of that is go on to the Money Smart government website, put in compounding interest and sit down and show your children
00:37:37
Speaker
if you only put $20 away a month, but you did that for the next 20 years, based on, you know, the average of return of, you know, the Australian stock market or something, they would end up with, it blows their mind. They're like, so a second, I put this money in, but then someone gives me four times as much back at the end. Like, how is that working, right? I feel like that can override anything that we've done that will serve them. That's just like a miracle.
00:38:05
Speaker
To finish with Marion, I'm curious, you know, there's accountants, there's financial advisors and financial planners and there's money coaches.
Choosing Financial Help
00:38:12
Speaker
How do people decide who they need help from to improve their finances? Where would you? I feel like, man, this is such a high quality question and it's a really important question.
00:38:22
Speaker
Really, we can look at three different levels of expertise. So, and I'll start with we have financial counsellors and financial counsellors are really effective at assisting people who are in financial distress, who maybe have very high levels or unimaginable, unmanageable debt situations.
00:38:42
Speaker
They don't have enough income to meet basic needs. So first and foremost, financial counsellors are really effective at helping people who are in need. Then in the next in the financial ecosystem in Australia, what we have is certified money coaches and certified money coaches work in the capacity of financial IQ, literacy, financial capability.
00:39:05
Speaker
and financial EQ. So the behavioral science, the psychology, trying to figure out why does the gambler gamble? Yeah, that can't be fixed with a financial product, which is what financial planners do. So certified money coaches sit in that lens of working with IQ, EQ, and then the psychology around changing patterns and behaviors. And then of course we have licensed financial planners.
00:39:31
Speaker
Now we have about 16,000 licensed financial planners in Australia and we have a population of, I think about 26 or 27 million people. So we can all do division here. We can all do the work. The access to financial planners is not necessarily affordable to everyone. The average financial planning fee or access to financial planning fees between four and $5,000 a year ongoing. And financial planners are licensed under ASICs and they're experts in financial products.
00:39:59
Speaker
insurance products, superannuation, managed funds, investments. So I trust that overview gives you a sense of who does what skill set. So if I have a need to manage my cashflow better, then I'm likely to be going to, depending on what level I'm at, a certified money coach. If I have a need to get advice
00:40:23
Speaker
based on an insurance product or a managed fund product or a financial product, then I'm likely to be going to a financial planner. They are very distinctly very different services and roles that they play. So they're the three people in the financial ecosystem that we have access to. I just want to say also as an access point to financial literacy and capability and getting support with your finances,
00:40:47
Speaker
We must remember we all have different financial access points that are viable for us and an access point to financial literacy could be a really good quality podcast. It could be a book. It could be a low priced money course done by somebody who's got the necessary credentials.
00:41:06
Speaker
When you think about your access point, there are all of those options available to you. And I just caution and I just say, like to say this, if you do go down the path of working with a financial, a licensed financial planner, then a good thing to have is a level of financial literacy.
00:41:23
Speaker
so that you can participate in the conversation in a meaningful way and not just kind of put your hands up in the air and say, you tell me what to do. I don't really understand. Yeah. And you mentioned before Money Smart at that website, and it is actually one of the really good government websites as a good starting point for people about
00:41:42
Speaker
a brief topic, and I think we refer to it quite a lot in our book and in our show notes from previous episodes. So that's another really good, it's a really good place to start. I agree. We don't accountants fit in that ecosystem. Accountants, now there are accountants and there are accountants. So there are accountants that help us process our tax returns. And there are a lot of those type of accountants. And then there are accountants that work in not only taxation matters, but also in helping you structure a company in the right way.
00:42:12
Speaker
or giving you business or financial advice with respect to structuring entities and the tax implications. So if I'm in business, should I be a sell trader? Should I be a partner? Should I be a company? Do I need to set up a trust for asset protection? That kind of information would come from an accountant who's qualified and experienced in giving that kind of information. And I love this question again, because a lot of people who
00:42:36
Speaker
come to work with either certified money coaches or certified licensed financial planners are like, well, why didn't my accountant tell me this? Or, you know, why didn't my accountant tell me I've been paying 50 grand in tax every year and I could have just been doing this and saving it? Well, that's not necessarily his role. Yeah. Thank you so much for sharing all your experience and ideas with us today, Marianne. It's been fascinating and a total pleasure.
00:43:00
Speaker
Thank you for having me. And I trust that there was something in that gamut of all the different things that we discussed that is helpful to the both of you. And where can our listeners find you if they want to hear more or get in contact with you? So unfortunately, these days, if you put my name in Google, way too much information comes up. So that would be an easy starting point. Of course, we have a company website, ThaliaStanley.com.au. But simply popping Mary and May's into Google will give you lots of different access points.
00:43:27
Speaker
interviews I've done, media staff, podcasts, but I'm a regular usually for those listening on LinkedIn and I like to write a lot and publish a lot on LinkedIn as well. Great. And we'll conclude links to all those resources in the show notes. Thank you so much, Marianne. Thank you for having me. Thanks for listening. Show notes for this episode are available at lifeadminlifehacks.com. And if you're a fan,
00:43:52
Speaker
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