Category: Blog

Regardless of what words we want to put to our journey with our money, there are a few realities that we need to face.

First – everything we do is linked to money, whether we pay for it ourselves or rely on a benefactor.

Second – some of our wealth-generation depends on luck and circumstance, but most of it depends on our ability to intentionally earn an income and manage the money we have.

Third – our intention to earn an income is only so good as our ability to act on that intention.

Fourth – external factors will always influence the first three.

In the financial planning profession, there are many titles held and roles played by experienced and qualified people to help us engage with our money in a way that covers all four of the above points. Sometimes they can be handled by one person, and in other cases, you might choose several people to play the different roles in the journey.

Two popular titles are those of financial coach and financial planner. These two roles enable us to have different conversations with our money, and often overlap. A good financial planner will have skills that help you articulate your journey and align your goals and needs with financial products that will add value. The goal is to create a plan that you not only implement, but that can grow and mature with you, your family and your changing needs. This is why a financial planner is not simply a broker – they have skills and knowledge that will help you engage with more than just financial products.

A financial coach is less concerned with the products and the plan and will focus more on identifying behaviours and habits that are holding you back from experiencing the best value from your financial plan. Even the best-laid plans can be left to ruin if they are not appropriately implemented or are derailed by other events and external factors.

It’s helpful to know how these different conversations shape our overall ability to create and keep our wealth in a way that enables us to provide for ourselves and others. It’s easy to look at one area (typically the second or third) and ignore the others because it is a lot to keep in mind, and when we sit with each area, we can be overwhelmed with how intricate and complex they can be.

Working with planning and coaching professionals who are qualified and experienced can help you strengthen your vulnerabilities and fortify your strengths.

It’s easy to think about a financial plan and consider the elements that typically go into it. For instance, we could picture a plan that consists of a retirement savings product, life and health insurance, investment portfolios, and maybe a few things like trusts, wills and estate plans. Or, we could think about what a financial plan can help us avoid, and help us achieve.

When we think of our financial plan in terms of the products that comprise the overall portfolio, we risk becoming detached from our financial plan. For most of us, products are not interesting, and some of us find them intangible and boring. But – when we think of how these products can help us, or why we might choose them in the first place, we can increase our level of enthusiasm and engagement. This is when our financial plan starts to become a life-financial plan.

When life gets complicated, busy and full of stuff, we can quickly find ourselves with no direction or exit strategy – even if we have managed to save up lots of money and build what we perceive to be a successful life.

Life’s complexities make things messy, and through the ensuing stress and lack of quality time, we can miss obvious areas where we aren’t transferring business or work success into personal wealth and health. Spending quality time with people we love, engaging in downtime, and practising self-care are all important to our overall wellbeing and should be part of a better financial planning process.

There are also risks to consider and provide protection for, from income protection to health care provision. It’s not so much about the products we choose, but about the people and lifestyle that we choose to protect and provide for.

A better financial plan can help us consider risks and avoid them, and it can also help us achieve more in life as we integrate it with our daily choices. We can work towards things like 4-day work weeks, annual or quarterly holidays, or paying down debt to become less reliant on credit.

Inside of a financial plan that considers the people, the lives and the relationships – we can have complete peace of mind and confidence. Financial planning is not just about ticking boxes or trying to keep up with the Joneses; it’s about changing lives. We can only do this with better conversations when we sit down to work on financial plans, conversations that help us achieve and live the life we want with the money we have.

In the next few years, we are likely to see a significant increase in small businesses, from home enterprises to startups. Many people have had to create sideline income or recover from losing their jobs in a shrinking job market. Jobs seeing the fastest decline are in production or administration support, primarily due to automation and digitisation of platforms and processes.

With the meteoric growth of social media, personal marketing has become an attractive option for those who don’t have a budget for marketing and advertising. Leveraging digital marketing is an incredible way to build a small business, but one needs to be strategic about it.

When a business is started inside of an urgent need to generate an income, the entrepreneur’s focus is often on earning money as fast as possible. Two common pitfalls of this situation are that they either try to grow too quickly and can’t sustain the growth, or the marketing messages focus more on the product or service and not on the people using it and how they will benefit.

The first pitfall requires better business modeling and less marketing; the second pitfall requires better marketing.

Startups who are struggling with marketing often think that they have a problem with discoverability, but the problem could be more complex and harder to see. It was in the mid-1990s that Bill Gates said, “Content is king!” and it has formed the baseline strategy for most self-marketers, often to their detriment. Too much time is spent trying to create new content (or feeling bad for not creating content), and not enough time is spent on positioning and distributing content.

If you’re not relevant and not “out there”, the right customers and clients won’t find you.

To build relevance, you need to position your message well. When there is pressure to generate income, we focus on the money. Wherever we can, we must focus on the difference we make. Keep reminding people why and how you help them.

To be “out there”, you need to distribute your content. Social media is great, but it’s not the only way to find and engage with your network. Email, direct messaging, and live events are still incredible options. Any way to deliver content to your ideal client is worth exploring and exploiting. Don’t limit yourself to Facebook. 

Begin with the people who know and like you already, starting with your existing customer or client base and creating opportunities for word-of-mouth marketing. This is savvy distribution as you don’t have to manage it all yourself; you simply create the momentum (distribution) and the direction (positioning) and let your network sustain the flow.

They say that getting old happens slowly, and then all at once. Most of the change around us occurs so gradually that we barely notice it; ageing, losing or gaining our fitness, losing or gaining weight, intimacy in relationships, and debt and investing. These are some of the areas of incrementally-unnoticeable change with which we’re most familiar.

Often, our experience begins with gaining or losing “Just one more”. Just one more day before we arrange that video call, one more day of rest before returning to our exercise, one more helping of food before we’re full, one more credit account.

It’s okay to have just one more, in the wrong direction… as long as we can recognise when it’s a habit before it becomes unhealthy for us. Obviously, we’d like to be in the practice of having just one more in the right direction. For example, just one more lap in the pool, one more yoga video, one more glass of water, one more payment on my credit card.

When change happens slowly, it’s easy to think that nothing is really changing yet. This is why it doesn’t seem to happen until it happens all at once. We can carry small changes for a long time, but the longer we carry them, the more noticeable they become.

Debt and unhealthy financial choices can seem small and manageable when they occur, but slowly, over time and with compounding interest (in the wrong direction), we can become overwhelmed. This is because it’s not the weight that matters; it’s how long we’re carrying it for that matters.

Imagine holding a glass of water out in front of you. It’s easy to do because it’s not heavy. But what if you had to hold that glass of water in front of you for an hour or an entire day. What if you tried to keep it in that position for a month?

The glass doesn’t get heavy; our arm gets tired. The same is true for our unhealthy habits. We can think that accounts here and there, a credit card here and there, are manageable, but over time if we keep adding just one more, we will be overwhelmed.

Luckily, the same principle applies in the opposite direction! If we decide to make just one more payment on our credit card, instead of one more payment from our credit card, we will slowly start to pay it off.

If each day, week or month, whatever is workable, we decide to reinforce one more healthy habit and release one more unhealthy habit, we may not see any change until all at once; we’re debt-free, healthier and happier. Not because of what we have, but because of the person we’ve become.

‘Your mind will take the shape of what you frequently hold in thought,’ Marcus Aurelius.

How we engage with our money reflects what’s going on inside our heads, which is an extension of what’s going on inside our hearts. They’re all connected.

Our feelings affect our thoughts, which in turn direct our actions – but we can also turn that around by changing our actions to create new patterns of thinking, which in turn can change the way we feel about things. Regardless of the direction that change takes place, our mind is at the centre of this process.

This means that the actions we take with our spending, savings and investing (our money habits) will not only be shaped BY our thoughts, but can also shape the way we think and feel. It is why we often experience cognitive dissonance, or buyers remorse, after making money decisions.

The term cognitive dissonance describes the mental discomfort that results from holding two conflicting beliefs, values, or attitudes. When there is an inconsistency between what people believe and how they behave, it motivates people to engage in actions that will help minimise discomfort.

Buyer’s remorse is an example of post-decision dissonance, where we feel stressed by a decision and seek to decrease our discomfort. Purchases that require high amounts of effort but do not bear high rewards are likely to lead to buyer’s remorse. If we focus on them, these thoughts will contribute to a largely negative mindset.

If we always regret purchasing risk products that protect us in emergencies or ill health, we will be more inclined to cancel those policies. It’s hard to spend money on something that will only benefit us in the uncertain future; cognitive dissonance will be fueled by thoughts that are inconsistent with trusting the process. If we are constantly looking for immediate gratification (spending and receiving, investing and seeing growth), our minds will be limited, and our thoughts will affect our feelings and actions.

Marketers know this well, so in most product booklets, they begin with a congratulatory message for choosing their product. If we want to shape our minds, we can set up systems of support that help us remember why we’ve made certain decisions that will be healthy for our future self. This is how we ‘hold in thought’ the choices to keep a healthy mind when it comes to our money (and all other things in life!). 

Support systems include working with a financial adviser that we trust and keeping a written record of our financial plan and policy portfolio (a one-page overview is a great start). We can also set milestones for moments of celebration and acknowledgement, like clearing our debt, saving a specific amount of money, or improving the way our family communicates about money. The bottom line is this: the more we think about something, the more likely it is to manifest in our lives. So if we keep thinking that we will never have enough money, we will most likely never have enough. But, if we learn to work with all we already have and hold thoughts of gratitude and awareness of our abundance, we will continue to have more than we need. It will directly affect how we feel about our money and the habits we form.

We all know that the only two certainties in life are death and taxes. Even after we’ve gone, taxes are still levied against our estate. The more money we make, the more money the taxman looks to take.

Tax can be a serious stumbling block in our financial mindset, especially when we think about all the ways in which we are taxed, where that money goes and how it is ultimately invested into our community, whether it’s local or across the entire country. As we also know, most of our success in life happens in our head; how we think and what we think about are crucial to making healthy decisions and choices. So, if there’s a mental stumbling block, we need to flatten it or learn how to jump it.

First, we can change our perception of tax and accept that there are elements that we will never fully agree with. This is because tax is not just for us, but for everyone else too and whilst you can keep some of the people happy some of the time, you can’t keep all of the people happy all of the time.

We can think about our country like a country club. Every country club offers benefits to its members, and in order to enjoy these benefits, membership fees need to be paid on time. This keeps things equal, and it keeps the country club in a position to keep providing benefits to its members. The committee that runs a country club needs to account for ensuring that the ideals of their community are upheld and maintaining the facilities with the membership fees paid.

It’s a simple illustration, but it’s a helpful way to understand that when we choose to live in a country, we too need to pay the fees to maintain the resources, infrastructure and ideological leadership. The complexity with tax is that we move from a couple of hundred people in a very similar demographic to millions and millions of people across multiple demographics. But at its core, if we understand that tax is designed to help us contribute to shared resources, we can start to flatten or jump this mental hurdle.

Second, we can change our behaviour when it comes to earning money and paying taxes. Life is already so busy and complex, if we don’t pay regular attention to our money and our taxes, we will always find ourselves rushed and stressed over the tax season. Here are a few things to do differently this year:

1. If you’re not money savvy (most of us aren’t), find a financial adviser, planner or coach who you trust and make sure you have regular meetings with them.
2. Keep track of your income and your spending. This is the fundamental basic law of good money management; your financial adviser will help you with this.
3. If you don’t pay tax every month, keep a small savings account active where you can pay your estimated tax. Smaller monthly amounts are far easier to stomach than bi-annual or annual payments. You’ll also accrue interest on the saved money, which will help you when payments are due.
4. When you check in with your financial adviser, stay up to date with tax exemptions or tax-free savings initiatives to maximise your financial potential, both in the short and long term. These options and rulings are often updated in annual budget speeches and will affect how you move towards financial independence.

Being tax savvy is not about working hard at the end of the tax year; it’s about understanding that tax is part of our daily financial planning. If you need to chat – let’s set up a time and ensure your financial situation is at its healthiest.