While financial planning and creating a secure future sounds tough, it is simpler than it sounds.
Getting finances in order is something many Australians struggle with, but My Millennial Money podcast host and retired financial adviser Glen James revealed it is easier than most people realise.
He joined KnowHow founder Bushy Martin on the Get Invested podcast to talk about his three point financial plan.
“First one is to live on less than you earn, the second is to be a generous giver, and the third is to invest the rest,” Glen said.
He said the key to living on less than you earn is to budget and form the right habits and behaviours.
“Life is just based on our habits and our behaviours. I just think you win and lose everything in your life based on your habits, and having it sorted out and automated,” Glen said.
“As an example, the other day I opened my super account and I was like ‘oh wow, I’ve put a lot of money in there’. But it doesn’t feel like it because I just pay monthly. So just putting in monthly amounts really does build up, and it’s just automated in the background.
“So you’ve just got to get systems and structures in place. It’s the same way that I built my business – with really good systems and processes and good workflow, nothing gets missed. I basically run my personal cash flow like a lean and agile business, because you want to really be able to adapt and change. You want to really be able to allocate resources if there’s something that comes up. You don’t want to have things that are tying you down.”
Bushy also said that sustaining these habits and behaviours is dependent on your own mindset, self-belief and expectations.
“Sustainable success in anything lies at the intersection of what I call self, health, and wealth,” he explained.
“Self is your mindset – what’s between your ears and your outlook on your life and your self-belief and your belief in other things and and your expectations around how things are going to roll. Your health is around the happy habits, daily rituals and the day to day stuff that you do that builds the patience and persistence that then can ultimately contribute to wealth. And however you want to define wealth, whether it be business, what you invest in, where you spend your time, it’s all about that combination.
“And I see way too many people focussing on the wealth component, but putting no energy into the self or the health component, and then wonder why they self-sabotage or don’t achieve the goals they’re looking to aspire to.”
The second component is to frequently be a generous giver.
“I think there’s always people worse off. I give well over 10% of my income away each year. Although I think it does more for me. It makes me think that I’m no one special. I’m just a bloody bogan living in a house on the Central Coast. So I need that to keep me grounded. And particularly when I walked into a cafe in Perth and someone was like, ‘oh Glenn I listen to the podcast’. Like, that’s weird. That’s not normal, and I can’t let that affect who I am. So part of me being generous and a giver is to help deflate anything that elevates me to think I’m better than anyone,” Glen explained.
“So I’m really a vocal advocate of being generous with your money. So if you’re fortunate enough to hear this recording, you’re probably doing pretty good. So you know, everything’s relative, yes, but let’s just chill out for one second and slow down on creating wealth for you, and help other people first.”
Bushy added: “I hadn’t really realised until I started giving myself just how fulfilling that is to give to someone without ever expecting anything in return and without them even knowing it. There’s just a sense of satisfaction that comes out of that.”
Finally, Glen advised listeners to invest the rest, and secure help where possible.
“The first thing I do is cap out my super each year. Would I rather pay 15% or 30% tax than 40%? Hmmm, I wonder! And thankfully, yes, I’m in a position where I can do that. So that’s kind of number one,” he said.
“And I pay a financial advisor to look after that part of it because I’m pro advice. I am pro professional help and I’m not above this. It will stop me doing something dumb, logging in and doing something. So it’s just that accountability piece with that side of the coin, I can bounce anything off them.
“Then secondly, I’ve got what I call my second super, which is an investment bond. I put monthly amounts into that, because realistically you want to keep limits of that for over 10 years. And then I’ve got a share investing account.”
Listen to the full interview here.
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