Amanda Thompson says a solid plan, the right money mindset and behaviours will help investors, especially women, stay financially fit.
Amanda is the founder of Endurance Financial and an award-winning financial planner whose mission is to help investors conquer their financial fears and challenges.
The author of Financially Fit Women joined KnowHow’s Bushy Martin on the Property Hub’s Get Invested podcast to discuss how female investors, and all other investors, can become financially fit and successfully build their wealth.
Financially fit tip 1: Establish a plan
One of the biggest mistakes any investor can make is not having a plan in place. In fact, Amanda believes that ‘failing to plan is planning to fail’.
“You’ve got to have a plan, and you have to form healthy habits. And the only way to do that is to take small steps and trial and error as well,” Amanda said.
“So for example, you might find that doing sprints works for you, or training three days a week and having two rest days works for you. It’s the same with investments. You might think you want to do shares or property or you might just want to put your money in a bank account. Either way, you’ve got to start somewhere, so start small and figure out what sits right for you. And you’ve always got to come back to yourself in whatever you do and you’ve got to be aligning your financial goals with who you are, what you truly want for your personal wealth, and what sits with your values.”
Bushy added: “Your lifestyle goals do change and evolve. But if you have a picture on how you want to live and how much that lifestyle costs, then you can determine what sort of income-producing nest egg you need to create that’s going to fund that. Then within that, and between now and then, if your goals change, at least you’ve got a GPS so you can revisit on a regular basis and say, well this has changed so we need to slightly alter that. But at least you’ve got a directional device that’s focusing on the end game and you are investing in a way that’s going to help you achieve that.”
Financially fit tip 2: Improve your money mindset
Both men and women need to understand their relationship with money and adjust behaviours which can negatively impact their wealth growth.
“It comes down to sacrificial spending. I have plenty of experience to tell you that who we deem as wealthy people do not necessarily have a very good cash flow. So some people will have the fancy cars and the fancy houses and they’re in debt to the eyeballs and all of the surplus cash is just going to be servicing a debt that’s not necessary. So be really mindful of keeping up with the Joneses, live within your means, and stick to who you are,” Amanda said.
“So you need to figure out what triggers you to go and buy, say, ten pairs of shoes in one sitting, or is it because you’re celebrating, or is it because you’re commiserating? So figure out who you are when it comes to money. Are you a spender or a saver when you want to celebrate these type of things? Because if you don’t know the mechanics of your brain, you won’t be able to use those mechanics to build your wealth later on.”
Financially fit tip 3: Trust your instincts
Amanda said one of the unique financial obstacles women face is, in fact, themselves.
“We’re our worst enemy. You’ve heard of women’s intuition, well it exists. We just forget to bring it into ourselves. And often we are so busy fighting the good fight of equality and trying to be perfect and awesome at everything, that admitting we’re not so great at our finances is something we don’t want to do because we feel one little chink in the armour means that we lose all the confidence in everything else. So our self-confidence is our biggest issue,” she said.
“And I say to anyone, male or female, if your intuition is telling you that something is wrong, chances are it is or you just haven’t had the education around it. So go with your gut feeling. If you think something’s wrong, then it probably is. And you can’t hide in the cupboard for all that time.”
Financially fit tip 4: Understand your superannuation situation
Amanda said younger generations in particular need to become more invested in their superannuation.
“It’s a challenge. Basically for the younger generation, superannuation seems to be this concept that people don’t care about, but 11% of your wage is going into it. Now it is your money whether you like it or not. So who are you not to take an interest in it?” she said.
“And if you’re getting that entitled that you are not interested in your superannuation, then have a good look in the mirror because this is going to be what we rely on. Not the aged pension, but your superannuation, and we are very lucky in Australia. I doubt that it’s going to be taxed for a very long time, so it is going to be everyone’s best friend once they retire.”
Listen to the full interview here.