Brah...Finance - Personal Finance for Australians: Recent Episodes
Jed Guinto
If you're an Aussie (A.k.a Australian) and looking to get control of your debt, or maybe learn about investing in the stock market, possibly real estate investing, then you've come to the right place. My name is Jed Guinto and this is Brah.........Finance!! The origins of this podcast name will be explained in due course! Many years ago, I was broke and deep in 5-figure debt. I didn't know anything about finances, didn't know how credit cards, had no savings and the thought of one day buying my own property was just wishful thinking. Maybe you're going through some of this. Fast forward 5 years and everything has changed. No more debt, no more credit cards, 5 figures investments in the stock market, I have my own property and a passive income. All in 5 years. Is this something you'd like to achieve? Nowadays we (My two Bro's Kirby and Siege) have complete control of our finances. Each of us having different experiences but ultimately striving for the same thing. We'll share our stories, expertise, mistakes and secrets. It is our goal to teach you how to get control of your finances, teach you secrets and techniques we've personally used to take our lives back from Banks and institutions charging us exorbitant fees, real estate agents using fancy jargon to confuse you and finally, social media pressuring you to make financial decisions you don't understand. Welcome, to Brah........Finance!
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If you haven't researched Index Funds, I suggest you start there before investing in individual companies. Should you be brave enough and willing to do the work, you can invest in individual companies. Long term they can potentially provide significantly higher rewards. But remember. With higher reward, comes greater risk.
What do you look for in a potential partner and how do you go about assessing those things? Do you give a questionnaire on the first date? Maybe an online survey? Do we interview her family members?
Don't do any of those things. Those ideas are exactly why I do finance and not a course on finding love.
When selecting individual companies we have to understand a few key concepts. We invest in individual companies because we'd like to make more money. But more money than what? We need to couple risk and reward.
If you had two investments both with identical returns, yet one had much more risk than the other. Which would you choose? It's a no-brainer. We choose the one with less risk as it has a higher chance of paying off.
To apply this, we need to benchmark the investment against something. Index funds are the way to go. A wide market index fund such as Vanguard Total U.S. Stock Market which mirrors the S&P500 in the U.S. can typically grow somewhere between 7-11% each year with a 2% dividend. It is a relatively low risk by the very nature of it being an index fund.
Therefore, when selecting an individual company it needs to have equal or less risk (or volatility) than that of the Index fund whilst providing significantly more return. Otherwise, why take the risk?
Next, we need to think about specific aspects that make an investment attractive long term. The key word is 'long term'. That is because we want enough time for Compound Growth to occur.
If you're not sure about Compound growth there's an article on my Patreon that goes through it.
If a company has little chance of making it into the future, our money will not grow. This leaves us with fewer options to choose from. Primarily strong, robust companies that have a good track record. We're not interested in newcomers that have yet to prove themselves. This track record also shows us that they can consistently generate profits and manage their business well.
Next comes competitive advantage. Would you drink any other Coke than Coca Cola? Do you always buy an iPhone no matter how much it costs?
Companies with strong brands and a competitive advantage can increase the price of their products with inflation. Those that can't are typically industries where it's a race to the bottom. These include airlines where the cheapest flight wins. Petrol and Gas stations.
The next factor is consistency. We want to see consistent performance. This can be done several ways as the internet has made it very easy. We look at earnings, revenue, profit, debt, cash flow and more. We want to ensure no erratic behavior.
Finally, we want to ensure we understand the company and the industry it's in. If you're an accountant who knows nothing about fashion, don't invest in fashion brands no matter how good the previous factors look. Reason is that when things change in the market in that industry, or the company itself has dropped in the share price, you won't understand why.
Whereas investing in areas you understand, gives you such an edge that you can smell false news a mile away.
Conclusion
These are just some basic things I look for when starting to research potential companies to invest in.
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When you purchase a house you'll have to choose between Variable or Fixed. This refers to how interest rate structure of the life of your loan. Deciding which is best depends on your long-term goals.
The Allure and Risks of Fixed Interest Rates
Fixed-rate home loans are particularly appealing due to their initial stability and predictability. They allow homeowners to lock in an interest rate for a period, usually between one to five years, resulting in consistent monthly repayments. This fixed period offers a shield against immediate fluctuations in the market, a boon during uncertain economic times.
However, this apparent stability can be deceptive, especially when low fixed rates are used as lures to attract new customers. For instance, during the COVID-19 pandemic, interest rates plummeted to as low as 2% as part of the Reserve Bank of Australia's efforts to stimulate the economy. This dramatic drop led to an influx of customers locking in low rates, under the assumption that their repayments would remain constant.
The challenge arises in the lack of understanding about the impact of interest rate changes. For example, on a $600,000 loan at a 2% interest rate, monthly repayments would be around $1,800. However, when interest rates spiked to nearly 7%, repayments jumped to over $3,300. Such an increase can be financially crippling for many, as they may not be able to afford the higher repayments once the fixed term ends and rates revert to higher variable rates.
Variable Interest Rates: Flexibility and Uncertainty
Variable interest rates, while offering flexibility, are susceptible to changes influenced by the Central Bank's policy decisions. The primary advantage of variable-rate home loans is the ability to make unlimited additional repayments, which can significantly reduce the overall interest payable and shorten the loan term.
However, the risk of variable rates lies in their unpredictability. Rates can increase based on economic conditions, leading to higher monthly repayments. This can pose a challenge for budgeting and financial planning, especially in volatile economic climates.
With a Variable rate structure, you can make unlimited additional repayments whereas in Fixed rates, you are capped. Which, if you’re in a position to make large additional payments, you would not be able to under a fixed structure.
With Variable, you’re susceptible to increases in interest rates, but also can benefit from drops in interest rates in good times. If you sign on to a fixed rate at 5%, and market rates drop, you stay at 5%. Whereas in a variable structure, you’ll enjoy the rate drop.
Key Considerations for Homeowners
The essential factor for homeowners is to prepare for future rate changes, regardless of the initial appeal of a low fixed rate. It's vital to assess not just the current affordability but also the potential for increased repayments in the future. This involves considering a 'buffer' to accommodate potential rate hikes and ensuring that your finances can withstand realistic interest rate changes.
Final Thoughts
In deciding between variable and fixed interest rates, Australian homeowners must weigh the predictability and stability of fixed rates against the flexibility and potential savings of variable rates. Understanding the impact of interest rate changes on monthly repayments is crucial. Homeowners should not only look at the present benefits of a low fixed rate but also prepare for the eventual return to higher variable rates.
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The journey into first-time property ownership often presents a labyrinth of complexities, from dodging aggressive real estate agents to navigating through the myriad of mortgage options from various banks.
Undertaking this journey alone can be a daunting, stress-filled endeavor. This is where the expertise of a good broker shines, offering a beacon of guidance and efficiency. These professionals not only simplify the process but can also access a wealth of information rapidly, making the journey smoother.
And the best part? They’re free!
What is a Real Estate Broker?
A real estate broker is not just an intermediary in property transactions but a pivotal figure in your journey to homeownership. Choosing a good, reputable broker is essential - akin to selecting a life partner in marriage. The importance of this phase cannot be overstated.
A proficient broker knows how to negotiate favorable rates, complete paperwork efficiently, evaluate your finances to determine your purchasing power, manage risks, educate you on economic changes, and provide early access to government programs and grants.
The best way to gauge a broker's performance is by asking for feedback from individuals who have recently bought a house. This level of diligence in selecting the right broker can make a significant difference in your property-buying experience.
Key Responsibilities of a Broker in First-Time Purchases
* Market Knowledge and Property Identification: They offer insights into the real estate market and assist in finding the right property.
* Financial Guidance and Price Negotiation: Brokers provide financial advice, suggest financing options, and handle price negotiations.
* Property Viewing and Evaluation: They arrange viewings and evaluate the property’s condition and potential issues.
* Legal and Regulatory Guidance: Brokers navigate the legal procedures and ensure compliance with property laws.
* Managing Transactions and Closing Deals: They oversee the entire transaction process, ensuring a smooth closing.
The Benefits of Working with a Broker
* Expertise and Experience: Brokers bring valuable knowledge and experience to the table.
* Time and Stress Reduction: They streamline the property search and reduce the stress involved in negotiations.
* Professional Network: Access to a broker’s network can be crucial in finding the right property and deals.
* Representation and Advocacy: A broker advocates for your interests throughout the process.
Choosing the Right Broker
When selecting a broker, consider their reputation, experience, local market knowledge, and reviews from previous clients. It’s essential to choose someone who aligns with your needs and whom you trust.
Final Thoughts
For first-time buyers, a broker is an indispensable ally in the journey to homeownership. Their expertise and guidance can demystify the complex world of real estate, ensuring you make informed decisions. Remember, the right broker can turn the daunting dream of owning a home into a manageable and rewarding reality.
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I want to talk about the journey towards buying your first home. It starts by paying off debt and building your savings. It's really easy to fall off the bandwagon when it comes to getting your finances under control.
Here's the way I found to work TOWARDS a house:
- Set up your automation and accounts for everyday expenses.
- Build your 6-12 months of emergency savings.
- Begin investing in index funds.
- Meet with a broker to assess your financial position relative to how much you'd like to borrow.
- Readjust your borrowing power based on rising interest rates.
- Build an additional buffer for post-home purchase (ensures you have enough left over just in case).
- Buy a house.
As you can see, building the buffer is step 2. The buffer ensures that if unexpected expenses occur, we can cover them without becoming mentally derailed. It's hard when you have to move money back and forth between accounts because it feels like progress is being taken away from you.
The automation in step 1 will automatically push money towards your savings account. What some people do is create a whole new bank account with a different bank and have the money transferred there. This account has no associated card, which removes the temptation to spend it.
Let's add time to the equation. What tends to happen when you've automated your accounts is that it just happens in the background. Before you know it, you've built up enough savings. You might think that the next step is to buy a house. But I actually think people should invest first.
Now, before you start telling me it's risky, hear me out. Index funds, which are a basket of stocks that allow you to become automatically diversified, are relatively low risk and have good returns, even in bad economic times. You can even buy index funds specifically tied to property.
Because it now takes much longer to save for a house, while you wait for the best time to strike, the value of your stocks goes up. In fact, in my personal situation, after I had my 6-12 months saved up, I began buying stocks each month. But it took a few years before the timing was right to get a house. In those few years, I ended up accruing an additional $15k in stock value, which I could sell to buy my house.
Luckily for me, during the time I was buying stock, I was still diverting some of my funds towards saving for a house. After meeting with a broker, he told me I actually had enough in my savings to buy a house, which meant I could leave the stocks to keep growing and still buy a house.
This is a win-win situation and gives me a number of options. If I suddenly need cash, I can always liquidate some of my stocks (which I've never had to do). By leaving my stock, it can just grow. Another win for me.
Moving my savings towards property means the money in my home is now growing as well. Any renovations I do also build equity.
Now, I have mentioned a few times that having equity sounds good on paper, but it's not real money until you sell the asset. That is true. But the way I like to think about finances is to try and have a win scenario for every situation.
If the stock market crashes tomorrow, I have cash on standby to purchase stocks at a discount. If the market instead jumps, I already have stocks to ride the wave. If housing prices go down, it's fine because I already have a home to live in. If they go up, my equity increases. If I lose my job, I have several other income streams.
Every which way you look at it, I have some form of protection. That is true security. Just because it says 'full-time' on your job contract, doesn't mean you have security.
So take it
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The history of taxation is as old as civilization itself, originally designed as a means to generate capital, primarily to fund wars. In ancient times, rulers and governments imposed taxes to amass wealth, ensuring they had the resources necessary for military campaigns.
The Australian Tax System: A Progressive Approach
Today, the Australian tax system plays a pivotal role in the country’s development. It is structured to fund public services, infrastructure, healthcare, and education. But why do some individuals pay more tax than others?
The answer lies in the progressive nature of the tax system, which is designed to be equitable rather than equal. This means individuals and entities with higher incomes pay a proportionately larger amount in taxes, reflecting their greater capacity to contribute to society’s needs.
Tax Benefits: Rewarding Beneficial Endeavors
The Government learned long ago that if you want to move the country in a specific direction, they can tax activities that take away from that agenda, and incentivise the ones that align. It’s actually that simply.
When reading the tax code, you’ll actually find that a substantial amount of it, in fact most of it is laws are on how to reduce your tax by pursuing certain activities. These can include but are not limited to:
- Superannuation Contributions: Contributions to superannuation funds often receive favorable tax treatment. When the population ages, the costs for services especially retirement funding such as pensions becomes a heavy burden for the Government. When they see people investing and making extra contributions to take care of themselves in retirement, it’s one less person the Government has to support. They like this.
- Education and Research: Tax deductions for certain educational expenses and research activities encourage investment in knowledge and innovation, crucial for the country’s growth. This creates new industries and potential jobs.
- Charitable Donations: Donations to registered charities are tax-deductible, promoting philanthropy and support for non-profit sectors.
- Investment in Renewable Energy: Tax incentives for investing in renewable energy projects align with the government’s commitment to environmental sustainability.
Tax Penalties: Discouraging Unfavored Activities
Conversely, the tax system can impose higher taxes to discourage certain activities or to manage economic disparities:
- Luxury Car Tax: This tax is imposed on expensive vehicles, discouraging excessive spending on luxury goods while generating additional revenue.
- Capital Gains Tax (CGT): Higher taxes on short-term capital gains discourage speculative investment and encourage long-term, stable investment behavior.
- Sin Taxes: Higher taxes on products like tobacco and alcohol serve a dual purpose – reducing consumption of harmful products and generating revenue.
- Progressive Income Tax: High-income earners face higher tax rates, a measure to address income inequality and ensure a fair contribution from all economic segments.
A Dynamic and Responsive System
Earning more but not aligning with Government policy simply means you’re swimming upstream. We work so hard in our jobs that climbing that corporate ladder brings more wealth as well as more stress and time away from our family. The more you earn, the more you’re taxed.
The only way to combat this is to start investing, purchasing real estate, starting a business, starting a side gig, investing in renewable energy, investing in index funds and ta
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Let's talk fear. There are a lot of things to be scared about financially. Job loss, retirement, your children, etc. The amazing thing about finance is that there's usually something we can do about it. It's rarely terminal. We just need to take the right action as soon as we can and let time do the rest.
Let's face it. The world is scary out there. Especially if we have a family that depends on us financially. Losing a job for example spells disaster and if you have got the right systems in place, you're in for a world of hurt. The great thing about this is that these issues are solvable. You just need to know how.
I'm going to go through 7 of the biggest fears I know people have when it comes to money and then talk briefly about some of the things you can do to put these fears to rest.
- Running Out of Money: This is perhaps the most common fear. It encompasses worries about not having enough money to meet daily needs, cover emergencies, or maintain a desired lifestyle, especially during retirement.
- Debt: Many people fear being overwhelmed by debt, whether it's from credit cards, student loans, or mortgages. The stress of managing and repaying large debts can be a significant source of anxiety.
- Job Loss/Income Instability: The fear of losing a job and the resulting loss of income is a major concern. This fear is heightened in economic downturns or industries prone to layoffs.
- Inflation and Rising Costs: People often worry about the decreasing purchasing power of their money due to inflation, especially when it comes to long-term goals like retirement savings.
- Investment Losses: For those who invest, the fear of making poor investment choices or experiencing market downturns can be significant. This includes concerns about not knowing enough to invest wisely or losing capital due to market volatility.
- Healthcare Costs: The potential for significant healthcare expenses, especially in later life or due to chronic health conditions, is a major financial fear for many.
- Not Being Able to Afford Retirement: Many fear that they won't be able to save enough for retirement, or that their retirement savings won't last through their retirement years.
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In the previous example, we went through some basics of retirement planning. However, there is a considerable flaw in the previous model. That is, it assumes you have to sell all your stocks at age 70 and then with discipline, not spend it all too quickly. Let's solve that problem.
The way I described it previously isn't exactly how you want to do it. But I wrote it that way so you have a basic idea. What we've done is purchase a basic Toyota Corolla. No addition, no customizations, nothing. It's completely plain.
We can now consider modifying it in the ways we need.
Investing in the way I mentioned has something we call an infinite money glitch. One of the biggest fears people have is running out of money in old age. This method will solve that.
So assume our yearly return is 10%. If we have $1M in stocks, by the end of the year, it will grow by 10%. Our stocks are now worth $1.1M. Say we sold $100k worth of stocks to live off. That leaves us with $1M once again. What happens at the end of the next year?
Well assuming it again grows by 10%, then the $1M grows again to $1.1M and on and on it goes.
This has a few assumptions though. Firstly, it assumes that you're not spending more than $100k. Secondly, it assumes we'll get 10% growth. Thirdly, it assumes to no extreme situation such as needing experimental surgery costing $500k. Fourthly, we're not accounting for inflation.
What happens if it only grows by 5% and we also solve $80k worth over the next 10 years? The stock grow to $1.05M, we'd sell $80k leave us $970k.
Say this happens again the next year. Our stock price would grow to $11.02M, we'd sell $80k leaving us with about $939k. As you can see, if this continues we'll run out of money.
So the key here is ensuring the growth on your portfolio is greater than your expenses. But done right, it's infinite money baby!
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Retirement Planning is not as hard as you think. With so many online calculators to help you, it doesn't take long to get some basic figures.
To perform the calculation, we need some basic figures. You can put your values in if you'd like. If you'd also like to see this in writing, be sure to check out my Patreon where I'll have an article with the same title. Here we go.
We need to start with some basic figures. Do not get bogged down with trying to get this specific because no matter what you do, it'll never be specific. Not only is it a waste of time, but the accuracy is not actually needed. As you'll see, we'll very quickly be able to make adjustments as our life changes.
First start by determining your age, your target retirement age and when you think you'll die. This gives you how many years you have left to retire, then how many years of life where you'll need money to live off. A few assumptions though.
Assuming your house is paid off by this time greatly reduces monthly expenses. But also keep in mind that you'll be older with more medical bills and possibly some dependents. Hopefully you'll have no debt by then.
Lets plug in some values. Assume my age is 35, retirement target is 70 and I'll die at age 90. that gives me 35 years of good investment time and 20 years of survival. Now because we can never get these values perfect, we can add a margin of safety. That means simply beefing up the figures. Instead of dying at 90, we'll die at age 100. Instead of age 35 to invest, we increase to 40. By making these conservative changes, it adds room for the unexpected. For now, we'll keep the figures the same.
Assume our monthly expenses at age 70 is $5k. That means, for a given year, our total yearly expenses are $60k. If we plan to live for 20 years, then it's simply $60k times 20 giving us: $1.2M.
Wow. So far so good. Now you might be saying, why on earth do I need to worry about this if I have Superannuation or a retirement fund? Doesn't that take care of me?
My answer is…'hopefully'. What we learned from the COVID pandemic and many world changing events of the past, is that we never know what the future is going to look like. Placing all our bets on super is putting all our eggs in one basket. Superannuation is also just a company. Its made up of people. People who can make mistakes, charge incorrect fees, make bad investment decisions and more.
By taking our retirement in our own hands, we can treat Super as a back up retirement fund. How great is that? Two retirement plans!
I'll also add, that should your investment plan for retirement work really well, it can also lead to early retirement. An added bonus.
With our retirement fund calculated we can one of many investment calculators to determine how much to invest.
https://www.calculator.net/investment-calculator.html
(Be sure to check my patreon for links)
According to the website, its approximately $350 a month at 10% annual return will give around $1.2M.
Now should interest rates be better then you wont need to invest as much. For example, if interest rates are 12% then youll only need to invest $200. I leave it to you to play with the numbers. But this at least gives you as baseline of what needs to be done.
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Right after COVID-19 broke out, the stock markets crashed. Not unexpected. Superannuation funds are tied to the stock market. When you provide money to these organizations, they invest that money for you as conservatively or aggressively as you'd like. But even they are susceptible to market crashes. If you happen to retire at COVID's worst, you may have lost a third if not more of your retirement fund. That's hundreds of thousands of dollars. There's a better way.
Introduction
We've all heard about superannuation, that nest egg we're counting on for our golden years. But let's stir things up a bit - should we be relying entirely on superannuation for retirement? With the market's ups and downs, I've got some intriguing points to discuss. So, settle in, and let's get into the nitty-gritty.
Remembering the Global Financial Crisis
Before we jump in, let's take a quick trip down memory lane to the Global Financial Crisis (GFC) of 2007-2008. That was a real game-changer for many people's retirement plans. Superannuation funds took a massive hit, and it was a stark reminder that financial markets can be unpredictable and even unforgiving. If you were planning to retire around that time, your superannuation balance might have seen some dark days. This historical example is precisely why putting all your retirement eggs in the superannuation basket might not be the best strategy.
The COVID-19 Wake-Up Call - A Deeper Dive
Fast forward to the more recent COVID-19 pandemic, and we saw a similar story. The market took a nosedive, and superannuation balances suffered. It just goes to show how external factors, beyond our control, can significantly impact our retirement plans. Life is unpredictable, and so are the markets.
Exploring Index Funds - Your Financial Sidekick
With all this unpredictability, what can we do? Well, one smart move is getting friendly with index funds. Think of them as a cool, easy-going buddy for your investment portfolio. They're kind of like a cross-section of the market, giving you a slice of everything without the hassle of picking individual stocks. What's great about index funds is their simplicity and cost-effectiveness. They often come with lower fees than actively managed funds and are a great way to diversify your investments.
Superannuation: A Closer Look
Now, back to superannuation. Remember, these funds are managed by companies, and like all companies, they can have their ups and downs. They also charge fees for managing your money, which can add up over time. Plus, the performance of these funds can vary. It's kind of like a rollercoaster ride – exciting but not always fun.
Broadening the Horizon - More Investment Avenues
But it's not all about stocks and bonds. Consider real estate for potential rental income and value appreciation. Exchange-traded funds (ETFs) are another option, trading like stocks but diversified like index funds. And don't forget international investments, which can expose you to different economies and growth opportunities.
Crafting Your Unique Retirement Playlist
So, how do we mix all these elements for a great retirement plan? Start with superannuation as your base track. Then, layer in different investment styles - index funds for broad market exposure, bonds for stability, real estate for income, and maybe some international investments for a bit of adventure. The goal is to create a diversified portfolio that matches your financial goals and risk tolerance. And just like any good playlist, your investment mix needs regular reviews and updates.
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The traditional route to financial security has been through a stable 9-5 job. That's what our parents did and that's usually what they tell us. Climbing the corporate ladder has been ingrained in us since early childhood and schooling and was thought to be the pathway to wealth.
However, this path is no longer true in my opinion. While ascending in a career can lead to higher salaries, it also brings with higher taxes and greater responsibilities. This reality paints a sad picture: a regular job, while providing the illusion of stability, is unlikely to lead you to significant wealth.One of the reasons a 9-5 doesn't provide lasting wealth is rooted in how tax systems are structured. In many countries, the tax system is designed to incentivize certain behaviors and penalize others. Those who earn a salary are taxed on their income, often progressively, meaning the more you earn, the higher the percentage of tax you pay.
On the other hand, the tax system rewards those who invest, buy real estate, create jobs, create business and provide opportunities for others - i.e. producers. These individuals benefit from various tax breaks, deductions, and incentives. For example, owning a business can offer deductions for expenses, while investing in real estate might provide depreciation benefits and lower capital gains taxes.
At the heart of this disparity is the difference between being a consumer and a producer. The 9-5 job often falls into the consumer category. People in this bracket typically work, earn, and spend. Their financial growth is linear and limited by the amount they can earn and save after taxes and expenses. These are usually the people the Government has to support in old age.
Producers, however, approach wealth creation differently. They focus on creating value, be it through businesses, investments, or real estate. Their income is not just a function of time spent working but is tied to the value they create and the assets they build. This approach can lead to exponential wealth growth, especially when combined with the advantages of compound growth and smart investment strategies.
To move towards wealth, the key is to shift from a mindset of consumption to one of creation. This doesn't necessarily mean quitting your 9-5 job immediately. Instead, it's about gradually building assets that can generate income beyond your regular salary. This could be through side businesses, real estate investments, stock market investments, or any avenue that allows your money to work for you.
Not only will a 9-5 not make you rich, but it also creates a very serious bottle neck; a single point of failure if you will. If you only have your job as a source of income, then no doubt your entire lifestyle is linked to that job. Lose the job, lose the lifestyle. This can bring incredible amounts of stress for yourself and your family.
Ensuring you have investments and other sources of income, albeit small, is enough to provide you some buffer should the worst happen. My personal experience is that these extra streams of income, also make you a better performer at work because you're not scared to lose your job. You take more risk, you're bolder in your approach and you're willing to try things that could fail.
However, if you're scared to lose your job, you'll act conservatively, with caution and strive towards maintaining the status quo. Not exactly a recipe for a high performer.
So I advise you to stop blaming the Government. Stop blaming corporations. Start thinking about how you can create value because when you do, you'll be well on your way to enjoying the tax breaks and opportunities that the rich do.
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When I think of buying a house I don't just think of the actual purchase event. I think about what happens if interest rates increase, I think about how I can capitalize if housing demand drops, I think about what happens if I suddenly lose my job, I think about unexpected expenses or changes to my life like having a kid. I want to set up my life so I have protection and you can too.
Building your 6-12 months (or more) of savings is absolutely crucial. What I see a lot of people do is jump from paying off debt to planning to buy a house.
Here's the way I found to work TOWARDS a house:
- Set up your automation and accounts for everyday expenses.
- Build your 6-12 months of emergency savings.
- Begin investing in index funds.
- Meet with a broker to assess your financial position relative to how much you'd like to borrow.
- Readjust your borrowing power based on rising interest rates.
- Build an additional buffer for post-home purchase (ensures you have enough left over just in case).
- Buy a house.
As you can see, building the buffer is step 2. The buffer ensures that if unexpected expenses occur, we can cover them without becoming mentally derailed. It's hard when you have to move money back and forth between accounts because it feels like progress is being taken away from you.
The automation in step 1 will automatically push money towards your savings account. What some people do is create a whole new bank account with a different bank and have the money transferred there. This account has no associated card, which removes the temptation to spend it.
Let's add time to the equation. What tends to happen when you've automated your accounts is that it just happens in the background. Before you know it, you've built up enough savings. You might think that the next step is to buy a house. But I actually think people should invest in stocks first.
Now, before you start telling me it's risky, hear me out. Index funds, which are a basket of stocks that allow you to become automatically diversified, are relatively low risk and have good returns, even in bad economic times. You can even buy index funds specifically tied to property.
Because it now takes much longer to save for a house, while you wait for the best time to strike, the value of your stocks goes up. In fact, in my personal situation, after I had my 6-12 months saved up, I began buying stocks each month. But it took a few years before the timing was right to get a house. In those few years, I ended up accruing an additional $15k in stock value, which I could sell to buy my house.
Luckily for me, during the time I was buying stock, I was still diverting some of my funds towards saving for a house. After meeting with a broker, he told me I actually had enough in my savings to buy a house, which meant I could leave the stocks to keep growing and still buy a house.
This is a win-win situation and gives me a number of options. If I suddenly need cash, I can always liquidate some of my stocks (which I've never had to do). By leaving my stock, it can just grow. Another win for me.
Now, I have mentioned a few times that having equity sounds good on paper, but it's not real money until you sell the asset. That is true. But the way I like to think about finances is to try and have a win scenario for every situation.
If the stock market crashes tomorrow, I have cash on standby to purchase stocks at a discount. If the market instead jumps, I already have stocks to ride the wave. If housing prices go down, it's fine because I already have a home to live in. If they go up, my equity increases. If I lose my job, I have several other income streams.
https://www.patreon.com/Jellyman_Investing
Intro
"Welcome to the Jellyman Investing podcast, where I guide you through the intricate world of personal finance, paving your path to financial stability and success. I'm Jed Guinto, and today, I'm thrilled to share an exclusive look at my Patreon page, featuring comprehensive collections on various financial topics. Whether you're battling debt or planning for retirement, I've got tailored content just for you. Let's explore."
1. Getting Out of Debt:
"In the 'Getting Out of Debt' collection, I dive into effective strategies for overcoming debt. You'll discover personal anecdotes, actionable advice, and tools to help you pay off your debts more efficiently. From smart budgeting to negotiating with creditors, this collection is your ally in the fight against debt."
2. Everyday Finance:
"The 'Everyday Finance' collection focuses on mastering your day-to-day financial management. Here, I share methods for creating and sticking to budgets, insights on minimizing expenses, and tips to maximize your financial health with simple, everyday decisions."
3. Investing in Index Funds:"For those intrigued by the stock market, my 'Investing in Index Funds' collection is a treasure trove of information. I break down what index funds are, why they're a wise choice for long-term investment, and how you can start investing in them today."
4. Passive Income:"In the 'Passive Income' collection, I explore various avenues to earn income with minimal ongoing effort. From real estate investments to dividend-yielding stocks and digital entrepreneurship, I'll guide you through creating additional income streams for a more financially secure future."
5. Buying Your First House"Thinking about homeownership? 'Buying Your First House' is your comprehensive guide. This collection includes everything from saving for a down payment to navigating the home-buying process, complete with practical checklists and financing insights."
6. Buying Individual Stocks:"If you're interested in a hands-on approach to investing, the 'Buying Individual Stocks' collection is for you. I delve into how to select stocks, conduct a thorough analysis, and manage a robust stock portfolio, equipping you with knowledge for informed investing."
7. Investment Properties:"The 'Investment Properties' collection is for those looking to delve into real estate investing. I cover everything from selecting the right property to managing tenants, ensuring you get the most from your real estate investments."
8. Planning for Children:"Preparing for a family? In the 'Planning for Children' collection, I provide financial advice for future parents. This includes strategies for saving for education, budgeting for an additional family member, and securing their financial future."
9. Financial Freedom:"'Financial Freedom' is all about escaping the paycheck-to-paycheck lifestyle. In this collection, I share ways to build wealth, reduce reliance on regular employment, and achieve true financial independence."
10. Retirement Planning:"And finally, 'Retirement Planning' is designed to help you prepare for a worry-free retirement. From understanding pension plans to exploring retirement accounts, I guide you through various strategies to ensure a financially secure retirement."
Outro:
"That's a quick tour of the exclusive collections available on my Patreon page. For full access and more in-depth content, head over to Patreon and join the Jellyman Investing community. Thank you for listening to the Jellyman Investing podcast. Remember, your journey to financial literacy and empowerment starts right now!"
https://www.patreon.com/Jellyman_Investing
Is fire a good thing? It can devastate forests, destroy houses or it can cook food and provide heat. In short the answer is, depends who's controlling the fire.
Before I get on with this episode, a reminder that I have a Patreon page where you can read articles, download spreadsheets, get internet resources, watch tutorial videos and even chat with me. It's free to join so sign up today. The link is:
Patreon.com/Jellyman_Investing
Also, a disclaimer, that I am not a financial advisor, please consult with a professional before making any financial decisions. On with the episode.
Many Real Estate 'gurus' on platforms like YouTube and TikTok praise the concept of 'good debt.' This is reminiscent of a World War II story where engineers wrongly focused on reinforcing parts of returning fighter planes instead of considering the ones that didn't return. This analogy is vital for understanding the risks of good debt in real estate investing.
Good debt involves borrowing money, usually for real estate, with the aim of wealth accumulation. It seems straightforward: take a loan, buy property, wait for equity growth, and profit. However, this simplistic view often leads to underestimating the risks.
Consider those who aggressively invest in property, like a woman I knew who used credit and loans to increase her home's value. This strategy worked until the 2008 financial crisis, which eroded much of her home's value. This illustrates that equity, though valuable on paper, isn't accessible wealth until the asset is sold. Many, planning to retire in their homes, will never realize this equity.
The term 'equity rich, cash poor' describes those with valuable assets but little liquid wealth. Real estate and leverage aren't inherently bad, akin to fire that can cook food or burn forests. However, debt increases risk. The more you borrow, the higher the interest and the greater the financial burden if things go awry.
The key to using leverage is caution. Avoid over-borrowing, start small, build a buffer, and don't hastily compare your progress to others. Opting for modest living with financial security is preferable to a lavish lifestyle with constant financial worries.
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When you get your financial affairs in order, when you educate yourself to the point where regardless of what's happening in the economy you still make money or protect yourself and your family, you've won the game of life. It's not that hard, just takes time.
Before I get on with this episode, a reminder that I have a Patreon page where you can read articles, download spreadsheets, get internet resources, watch tutorial videos and even chat with me. It's free to join so sign up today. The link is:
Patreon.com/Jellyman_Investing
Also, a disclaimer, that I am not a financial advisor, please consult with a professional before making any financial decisions. On with the episode.
Right now you make be broke, in debt, no savings, no house, whatever. Things could be bad for you? I mean is it worth trying to get all my financial affairs in order? What's at the end of the rainbow here?
So to get you motivated and excited about the future let's talk about what your life could be like once you achieved many of your large financial goals. Here's some of the advantages.
You're not worried about not getting your paycheck that week.
You're not worried about unpaid leave.
You're not worried about slightly higher bills.
You're not worried about unexpected expenses.
You're not fearful that you can't provide for your children.
You don't care about change home interest rates.
You don't check the price of food on menus.
You can buy what you want, when you want and however much you want.
You can flight first class.
You spend and enjoy life, and yet your assets still grow in value.
You don't care which party is in Government.
You can capitalize on market downturns.
You can sleep at night knowing your investments are conservative
You've managed your investment risk such that downturns don't scare you.
You can pay your house off soon.
The list goes on. The point is, these are all extremely exciting things. You may not get all of them, but what's important to understand is how these things unfold.
You don't wake up one day and 10 of these are suddenly true. What tends to happen, is that you achieve one which frees up capacity to achieve the next.
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There was once a king who was to pay a farmer for his work. He asked how much he'd like to get paid. The farmer replied saying, place two coins on the first square of the chess board. Then double the number of coins when you go from one square to the next.
First there was 2, then 4, then 8 and so on. Can you guess how many coins there are by the time he reaches the end of the chess board?
Before I get on with this episode, a reminder that I have a Patreon page where you can read articles, download spreadsheets, get internet resources, watch tutorial videos and even chat with me. It's free to join so sign up today. The link is:
Patreon.com/Jellyman_Investing
Also, a disclaimer, that I am not a financial advisor, please consult with a professional before making any financial decisions. On with the episode.
The article explains compound growth, a key concept in investing where money earns more money, eventually outpacing expenses and leading to financial freedom. This can be achieved through various investment avenues like stocks, index funds, real estate, or business ownership.
The concept is similar to how credit card interest works. If only minimal payments are made, the interest accumulates, leading to an ever-increasing debt. This compounding effect can turn a small debt into a large one over time, illustrating how banks make money and the dangers of credit card debt.
The article then applies this concept to investing. For instance, investing in a company like Apple allows the investor to benefit from the company's growth, which in turn increases the investment's value. The goal for long-term investors is to have investments that grow more than their annual expenses.
An example is provided to illustrate this: investing $1M in stocks that grow by 10% annually. By withdrawing $100k each year, the investor maintains the principal amount while benefiting from the growth.
The article emphasizes the power of compound growth and how even a small change in the growth rate can significantly impact the investment's final value. It also highlights the importance of choosing the right investment vehicles, like superannuation funds with minimal fees, as small differences can lead to substantial gains or losses over time.
Finally, the article promises to explore further topics like investment choices, risk assessment, and the role of age in investment strategies in future discussions.
https://www.patreon.com/Jellyman_Investing
Once your accounts are set up and put into autopilot, its time to get efficient. You'll come to understand that when it comes to investing, it's not necessarily the amount you earn or the amount you invest, it's the time you stay invested.
Before I get on with this episode, a reminder that I have a Patreon page where you can read articles, download spreadsheets, get internet resources, watch tutorial videos and even chat with me. It's free to join so sign up today. The link is:
Patreon.com/Jellyman_Investing
Also, a disclaimer, that I am not a financial advisor, please consult with a professional before making any financial decisions. On with the episode.
To illustrate the impact of extra repayments on a home loan, consider a $500k house purchased with a 100% bank loan, a 30-year term, and a 5% interest rate. Monthly repayments are about $2,700, totaling $466k in interest over 30 years, nearly doubling the house's cost.
Adding an extra $200 per month reduces the loan term by nearly 5 years and saves about $80k in interest. Increasing the extra payment to $500 monthly saves $150k in interest and cuts almost 10 years off the loan.
Building wealth isn't about sudden windfalls or high salaries; it involves small, consistent habits over time. Making minor lifestyle adjustments can significantly affect loan repayments. For example:
- Reducing utility bills and switching to energy-saving bulbs.
- Being more efficient with food consumption.
- Using an electric scooter for short trips.
- Making coffee at home.
- Choosing a bank with no account fees.
- Reducing streaming services and Uber Eats usage.
These savings, potentially totaling $300 monthly, can accelerate mortgage repayment, increase savings, or build an emergency fund. Additional income sources, like tax returns, bonuses, or side jobs, further contribute to this strategy.
Managing small amounts effectively prepares for handling larger sums. The same principles apply whether dealing with $50 or $50,000. It's about developing a mindset from the ground up. Wealth often accumulates subtly, and how one manages small savings can influence their overall financial growth and ability to build wealth sustainably.
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Welcome to another episode here at Jellyman Investing where we'll be talking about building your foundation. That means, learning how to structure and automate your accounts so that you don't over spend, you have a better understanding of where the money is flowing and most importantly, slowly and steadily build your savings to the coveted 6-12 month target.
Before I get on with this episode, a reminder that I have a Patreon page where you can read articles, download spreadsheets, get internet resources, watch tutorial videos and even chat with me. It's free to join so sign up today. The link is:
Patreon.com/Jellyman_Investing
Also, a disclaimer, that I am not a financial advisor, please consult with a professional before making any financial decisions. On with the episode.
In the past, many people, including myself, managed finances through a single bank account, making it hard to track spending, bills, and savings. This approach often leads to overspending and unclear savings growth.
The game-changer for me was learning about account structuring and automation from "Barefoot Investor." Automating finances reduces reliance on willpower and provides clear visibility on each account's growth.
Most banks offer multiple accounts through their apps. A basic structure includes four accounts, but customization is encouraged for individual needs.
- Everyday Spending: For daily expenses like lunch and transport.
- Enjoyment: Allocating funds for leisure without overspending.
- Short to Mid-term Goals: Saving for things like weekend trips or special purchases.
- Emergencies: The most crucial account for unexpected, large expenses. It's important to prioritize this fund to avoid setbacks.
For instance, if unexpected expenses average around $1,000, aim to save $2,000-$3,000 in the emergency fund. Once this target is met, allocate more to other accounts.
Many people spend their paycheck without saving effectively. Scheduled payments in banking apps can help allocate specific amounts to each account based on income and expense understanding.
This system resembles the Japanese practice of using labeled envelopes for budgeting. Expanding beyond four accounts for specific expenses like bills, insurance, or pets ensures funds are always available for each category. Surplus funds in these accounts act like mini savings accounts, gradually growing.
This practice is crucial regardless of income level, from $2,000 to $50,000 a month. Efficiently moving money to where it's needed prepares you for more complex financial ventures like investing and real estate.
https://www.patreon.com/Jellyman_Investing
There is nothing I hate more than Credit Cards and Personal Loans. Many times designed and marketed to prey on the weak of our society to keep them down, low and poor. Generating billions of revenue for banks at interest rates that are utterly ridiculous and difficult to understand.
Before I get on with this episode and vent like crazy about credit cards, a reminder that I have a Patreon page….
Patreon.com/Jellyman_Investing
where you can read articles, download spreadsheets, get internet resources and even chat with me. It's free to join.
Also, a disclaimer, that I am not a financial advisor, please consult with a professional before making any financial decisions. On with the episode.
Before making any investments or significant purchases, it's crucial to eliminate debt, especially from credit cards or personal loans. These debts act like a hole in a ship, hindering progress regardless of other factors.
Debt, especially with high interest rates, impedes financial growth. Many only pay the minimum on credit cards, which barely reduces the principal, the original borrowed amount. This results in most payments going towards interest, with interest continually growing due to ongoing spending.
Many aren't aware of their interest rates and are shocked when they realize how much they've paid. As debt grows, banks frequently contact debtors, contrasting with their usual unavailability.
To address debt, consolidating loans through a balance transfer can be effective. For instance, if you owe $5,000 on each of three credit cards from different banks, a bank like ANZ can consolidate this debt. This means you now owe ANZ $15,000 instead of the three original banks.
The advantage is that ANZ may offer 0% interest on the consolidated debt, compared to the high rates of the original banks. This allows payments to fully reduce the principal. However, this 0% interest is usually temporary, often for 12-18 months, and may involve transfer fees. After the promotional period, a higher interest rate may apply.
The key to success with this strategy is having a plan to pay off the debt before the low-interest period ends. This approach requires discipline but is vital for financial success. The first step towards building a sound financial plan is to get out of debt.
https://www.patreon.com/Jellyman_Investing
Before we begin on this wonderful journey of personal finance, a few things. Firstly, I have a Patreon page set up specifically so people can read these podcasts in article form, but there'll also be downloadable files, video tutorials and more. Simply because trying to explain a certain things through a podcast can be challenging and I have been requested to provide the spreadsheets I use, websites I frequent to assess housing and more. It's free to join and it's the perfect way for you to reach out and chat to me as well.
The URL is patreon.com/Jellyman_Investing
Let's get on with the episode.
If you've lived a life similar to mine which is reaching your late 20's and having no savings and possibly even being in debt, it can be challenging to start thinking positively or even believing it's possible to live a debt-free life where you're not constantly worried about finances.
Trust me though, it is possible because I've done it and so can you. Not only will I provide you with knowledge but I'll be your personal cheerleader. I'll wear the skirt if I have to. That's how committed I am to you.
Becoming financially positive after these setbacks is a lot like getting back into the dating game after having your heart broken. You're a little deflated, your hairs a mess, socks don't match, and you've lost belief that you'll find your Ryan Gosling or as it was in my case, my Rachel McAdams.
But finances, just like in dating don't get better just sitting on the couch. It's time to hit the gym, giving up the coke (coca cola I'm referring to, not the other kind), getting a haircut and quite simply going outside and getting some fresh air.
I'm serious, take the next 20 seconds and take the deepest 3 breaths of your life. I'll do them with you.
Close your eyes, stop what you're doing (Unless you're driving or holding a baby), and I'm serious take 3 deepest breaths you've ever taken in your life!!!
Through the nose, out the mouth. Let those shoulders drop.
Through the nose, out the mouth.
Through the nose, out the mouth.
Today is the day that the old you is no more. Built into our brains is a small lizard part known as the amigdala. It is remnants of our cave dwelling days where our goal was to search for food, find shelter, procreate, oh and that's right….NOT GET EATEN BY TIGERS AND BEARS!
Built into our brain is the fear that things will never change or that whatever we do attempt will fail and we'll make a fool of ourselves. It's time to tell that part of your brain, to go to hell. That you're in charge now and that no matter, we will conquer the road ahead.
This all starts by forgiving yourself. To forgive your parents for not teaching you. To forgive the schools for not training you. To forgive past managers and boss that didn't take care of you. This is all holding you back. It's keeping you in this state and it's time to break free.
All the decisions and experiences of that past that have lead you here, is now in the past. These emotions are holding you back from the future. It's like a crazy ex-girlfriend that just keeps texting you. It's time to block her number, change your address, change your name, move to Hawaii and grow a beard.
From this moment forward, we will be focused on learning. On discovery. On getting stronger and more capable. On building our confidence and courage so that we can live a life of joy, opportunity and colour.
3 deep breaths. That's all it takes. Let's go.
https://www.patreon.com/Jellyman_Investing
Welcome to the first episode of Jellyman Investing. Thank you for joining me and lets get this show underway.
If you're listening to this podcast no doubt you're wanting to improve your financial situation in some way. Maybe you're hoping to get out of debt, or learn about investing, buying your first house, planning finances for children, working towards financial independence, planning retirement and more.
These are just some of the things I plan to talk about in this podcast. My goal is to make each episode short and sweet. Maybe 5-10 minutes long about as long as it takes to drink a cup of coffee.
Let me talk a little about my journey and maybe you can relate a little bit. It's also so you know I didn't just get this from reading books. I've lived a lot of this stuff.
I am 36 years old. My family came here from the Philippines in the late 80's. I was fortunate enough to go to school and eventually university. I studied Aerospace Engineering for a number of years even at one point pursuing a Ph.D. in Vibro-Acoustics in Composite Commercial Aircraft Material for the Early Detection of Microfractures. That's right. I had to say that every time someone ask me what my research was on. By my late 20's I switched careers into Data Analytics working for a number of institutions across Education, Automotive, Manufacturing and now in Banking.
Now why did I tell you all that? To gloat? No, definitely not. The reason I tell you that is that even though academically it may appear I did very well, you'd assume I was just as intelligent in regards to my finances.
Yet, by my 27th birthday, I was unemployed, 5 figures in debt, multiple credit cards, no savings, no job prospects, buying a house wasn't even on the radar, my girlfriend was about to leave me and I was on the verge of getting kicked out of my home.
The conclusion, school, university and our parents (through no fault of their own) do not prepare you financially. I've lost count of how many people I speak to who through their illustreous careers and education, who are some of the smartest people you'll meet, but yet even with $180k yearly salaries, struggle to make ends meet or worse, they're in debt.
Why is it doctors struggle financially?
Why do programmers on $200k salaries, struggle to pay rent?
Why are people who've been in jobs for 10+ years, still have no savings?
Why is it, we invest in highly risky things such as Crypto?
Why is buying a house so godamn hard these days?
Why is it, those with multiple degrees and higher levels of education than the rest of us, still can't gather enough for a home deposit?
These are the sort of scenarios and questions I want to talk about in this podcast because my goal is to get you debt free, financiall stress free, educated so you can capitalize on global investment opportunities, be able to buy your first house, support your wife or husband, provide for you children, care for your parents and more.
Let's do this.
Having a buffer is probably one of the most important things to have. The reason is because life is unpredictable. We’re also not good at judging, calculating or preparing for the unforeseen. Think back in your life how many bad and stressful situations you were in where if you had 2-3 months worth of income just sitting there, would have made the world of difference?
Having 6-12 months of income protects you from a sudden loss of job, a medical incident, family emergency, housing problem, changes to the economy, increase in home interest rates, moving house, relationship breakdowns, unexpected child, expected child moving house, your company going out of business, and so on, and so on. The list is endless.
The other reason its important is because of economic downturns. This is usually when big fortunes are made. The average person lives paycheck to paycheck, lives in financial fear and is ultra-conservative. They have no financial plan or strategy and don’t know enough about money to make a killing when the right opportunity arises. The smart investor learns to fight another day and when the market recovers, makes a fortune. Here’s how it happens. In the 2008 financial crisis. Many were unprepared. The stock market and housing markets collapsed. Those with years worth of saved income survived the onslaught and when the markets began recovering, had capital to invest and ride the growth. COVID in Australia was no different!
Compound interest is extremely fascinating to us. It can either work for you or against you. Let’s do an example. Did you know that your credit card has compound interest? Assume you have a credit card and you spend $1,000. Then the bank charges you interest of 5%. Which means now you owe $1,050. Then next month you still don’t pay it off and they charge you another 5%. Does that bring it to $1,100? Answer is no. Because it’s 5% plus the debt they added the previous month. Which brings the total to $1,102.5. So a little bit got added. Over months and years this can grow out of control. The mistake most people make is that they pay the interest component but not the underlying loan. Which means, by design, they never pay off their debt. The banks do this on purpose to keep you “on their payroll” forever!!
Understanding this explains why most people end up in serious credit card debt. Conversely, it also explains why people smart with their money are able to grow large fortunes with considerably low paying jobs. It works the same way. A little bit invested now growing at 5% over many years will grow to a large fortune given enough time.
We get this remark all the time “Which companies should I invest in on the stock market?” Woooahhh……hold your horses!! That’s the equivalent of saving which fighter jet should I fly before even joining the army and done basic firearms training. Investing in the stock market is no simple thing if you’re trying to accumulate long term wealth. It’s a winnable game but you need a long term, robust strategy. Sound boring!? It’s supposed to be.
This is the reason most people do it poorly. Instead of putting the effort in and mastering this craft, its much easier to listen to a friend of yours with stock tip based on nothing but speculation and put money on it straight away. When the stocks goes down, most will panic and sell. Not exactly a long term strategy.
Our goal is to understand WHY it goes down or why it goes UP for that matter. It’s not magic. There are mechanics involved that cause the market to behave the way it does. By understanding these mechanics we can plan our strategy.
This doesn’t have to be boring. In fact, once you start winning this game, it’s hella exciting!!!
In this episode the boys and I discuss how we personally dealt with debt in the past in particular credit card debt. You’ll see that even though we had learned skills to get jobs, we didn’t have the skills to manage and make our money work for us. As they say, making money and keeping money are two different sets of skills.
If it’s two things we all share, it’s money and health. Debt in particular is something I think almost everyone experiences in their life and there’s a reason for it. It has never been easier to get a credit card. It has never been easier to use one as it’s connected to Amazon, or eBay or Shopify. One-click and whatever you desire will be delivered to your door. However, with this ease of purchase comes a price.
Most people who get credit cards, or let me rephrase that, most of those provided a credit card by a banking institution are not trained to use one. It’s the equivalent of putting your 5-year old behind the steering wheel. I’m not saying your stupid. What I’m saying is that the system is designed in such a way that debt and in particular fees occur. That is how banks stay in business.
The time for blaming yourself is over. Debt is not something you did. You were preyed on by banks. You were prayed on by the internet and all those flashing lights. The temptation, so great that it takes over your emotions and makes you buy things you probably don’t need. For the price of buying a few things here and there, the fees starting adding up. The phone calls from banks start happening. You’re now getting letters. The stress is building and it feels like there’s no way out.
It is this stress, this burden that creates so many problems in our lives. It’s time to defeat it!
2 of my best friends and I have been on our financial journey for years. We get asked questions all the time from all sorts of places for finance advice ranging from how to buy a home, how to invest in the stock market, how to manage finances and so on.
One day I was driving in the car with the missus and she came up with the idea of starting a podcast. We were already talking about finance all the time, enough to annoy our spouses! So instead, we’ve decided to annoy you 😊
Introducing Kirk and CJ. I’ve known these guys for many years. About 5-8 years we were all terrible with finances. We didn’t invest, we spent all our money, we had debt and no assets. 5 years later we each have houses, invest in the stock market and have complete control of our finances. Wouldn’t you like to do the same?
Your mind is an extremely powerful tool. It can help you achieve great things but it can also create massive problems. Harnessing your mind is key to getting control of your finances. How is that possible you say? Well, think about this.
Each person has a certain story they’ve told themselves such as I’m not good with money, my parents didn’t teach me, I’m not good with numbers, I have no discipline, etc. It is these stories that we tell ourselves and in particular yourself that has lead you right here. It is the mindset you currently have that has resulted in your current life. To think that your life will change without changing your mindset first, makes no sense. We must start from the ground up.
This podcast is not just about teaching financial techniques. It’s also about teaching how your thinking impacts your financial situation. Someone who thinks they’re not good with numbers simply won’t try to be good with numbers. It’s time to put these stories to rest and look forward. The mistakes you’ve made in the past should be considered “lessons”. That credit card debt looming over you isn’t burden, it’s a challenge to be conquered and we’ll help you get there.
Welcome to Brah….Finance (Joke will be explained in due course). We designed this podcast for Australians looking to get control of their finances because WE are also Australians!
Maybe you were like us at one point; credit card debt keeping you up at night, buying your first house feels impossible, don’t know how to save, the stock market is a mystery or maybe you have extra money and simply don’t know what to do with it. We’ve been there. In fact, all three of us, Jed (Me), Kirk and CJ have had experience in every one of these areas.
At different points in our lives, it all felt hopeless. But through hard work, study and research we learned how to better manage our finances. In just several short years, we went from being out of control with our finances to being in complete control. We each own houses, one of us has two houses! We all invest in the stock market. We all have healthy savings. These things are accidents. They’re skills that you can learn and in this podcast, we’ll share the things we did and hopefully it can inspire you to get control of your finances.