Uncensored Money: Ask Mel Anything – How to Get Ahead & Financial Education
Melissa Browne: Ex-Accountant, Ex-Financial Advisor, Ex-Working Till I Drop, Now Serial Entrepreneur & Author, Financial Wellness Advocate, Living a Life by Design | 12/05/2023
Show Notes
Welcome to the ‘Ask Mel Anything edition’ of Uncensored Money.
In the ‘Ask Mel Anything’ series, Mel answers your questions in the hope you realise you are not alone and that it helps to increase your financial literacy and confidence.
In today’s Ask Mel Anything edition, Mel answers two very different questions:
- How do you get ahead financially while on maternity leave? I feel like I'm just maintaining our current position. The couple of hundred I have put into super feels like nothing and $2,500 into shares feels like such a worthless amount when I'm 38.
- What are your thoughts on financial education memberships like Andrew Baxter's Australian Financial Education (trading) and Invest Diva?
If you feel like you’re pressing pause or looking for some financial options this episode is for you.
Resources mentioned in this episode:
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Transcript
So today, I have two questions. And again, I try to pick questions that are fairly different just so that it keeps it interesting. And the first question is all about maternity leave and getting ahead. And the question is, how do you get ahead financially while on maternity leave? I feel like I'm just maintaining our current position. The couple of hundred I have put into super feels like nothing, and two and a half thousand into shares feels like such a worthless amount when I'm 38.
And the reason I picked this question was that I don't think it matters if it's maternity leave or it's sabbatical, or you're just not feeling like you're at the age and stage and you're looking at other people and thinking, how are they further ahead than me? And I really felt that in this question. I really felt that ‘I wanna get ahead, but I'm stuck and then I'm comparing, and it doesn't matter’.
The reason I picked this question is cause I feel like as if you've played with me for a while, the stats are that financial literacy with women in Australia is 48%. That's how many of us are financially literate, meaning the majority of us are financially illiterate. And if you're in the rest of the world, do not pack yourself on the back. You're about the same. And I also know that most people, if I said to them, cost of living's rising, what do you do? They would say, tighten my belt, reduce my expenses. But the thing is, we don't know how to find more income. And I know this because in Australia when Covid first hit the government and they needed to do things quickly, right? But they said, right, if you need to, you can grab $10,000 out of your superannuation. And yes, some people needed that, but what Illian, which is a credit agency did, and they went and looked at who took that money out and they found that around 65% of men and women grabbed that money and then spent it on nothing. So women spent it on clothes and shoes. Men spent it on online gambling. So they spent it on nothing.
And what that showed me was that a), we like to spend to feel better about ourselves when times are when times are hard. But also that we don't know how to find more income. Otherwise we wouldn't just be grabbing money out of our super. So if you are someone that doesn't know how to find more income and if you are on maternity leave, there are so many things you can do to find more income.
It doesn't matter your situation, you can find more income and I've got a free webinar called 50+ Ways to Find 10k in 12 months, and I've run that webinar specifically to address that question of, I don't know how to find more income. I feel like I'm at a point where I'm stuck and I don't have cash.
One of the suggestions is a second job in that 50. There are so many other ways you can find income, and some of them, if you are breastfeeding, would be amazing if you're sitting there at three o'clock in the morning, bored because you gotta breastfeed for a while. There are some things that you could do, like maybe do a couple of online surveys. There are so many ways you can find more cash. Maybe it's just that you are savvy on how you buy your goods and services and you sign up to cashback sites and then you use that. And I think sometimes we need to be really kind to ourselves because there are seasons, I don't have kids, but I have had other seasons where I've just started a business and I don't have the cash flow for maybe doing things that I wanted to. If you're on maternity leave, and that as a couple you've chosen for you not to work. There might be seasons where cash is a little tough and that surplus cash is tough. So I wanna acknowledge that there are seasons as well. But what we don't wanna do is get caught in that season, we don't want that season to stretch out endlessly.
So some things that you could do is a look at that 50 plus ways to find 10 K cause that will definitely, put your creativity to good use. And I promise you, there are at least 10 things that you can do if you are earning no or very little income and your partner, depending on what your partner's income is in Australia, there are things that you can be doing.
To supplement your super, like the co-contribution or the rebate that's available. So talk to your accountant and your partner as well to find out if there's a way to boost your super and also get some money back from the government. But also I want you to really be careful cause I know that in this question it says, ‘the couple of hundred I've put into super’. So if you're on maternity leave, I'm such a proponent of splitting your partner's super with you while you are on leave. And I know a lot of people will say, oh, but you get it if you split up anyway. Why the freak shouldn’t you share it now? If their salary going towards the household now, are you saying, ‘just put in what we need. If we split, I'll get the rest’. No! You are sharing that salary. Why shouldn't you share the super too? Because after all, the only reason your partner's able to work is because you've both made the decision for you to stay home, and if they push back on that, I would ask the question. I'm curious as to why you're pushing back on it. If we've made the decision for me to stay home, I think it's really important that we make the decision to split your super. So I think that's a really important thing to consider as well. So it's one of the reasons why the super gap exists. It's one of the reasons why women over 55 are most at risk of homelessness. And I've seen way too many women when they go to split go, ugh, it's fine. I can't be bothered fighting. So I just really want to hammer that home, that it's really important thing to have that conversation with, but also another thing that you can do during that time.
So yes, find more income. Talk to your partner about splitting super and contributing to your super. Yes, be aware that this is a season and that it might only last for a couple of years and then you still have so much time, but also you might use this time to educate yourself. You might use this time to say I don't have a lot of money to invest, but I've got some, and the power of compound interest means that sum is still worth investing, but I'm going to learn all I can. I'm gonna put a financial plan in place for myself and my family so that. When the time comes, I'm gonna be in such a great position. Or you say to your partner, I know you are the one earning the money at the moment, but I wanna be the one that's joint with you in the finances. So you’re not the only one making financial decisions on our behalf, which I see happen way too often because they're earning it and I'm abdicating responsibility. Say, I'm doing some financial education. I want to get involved and certainly there was a US survey done some years ago where 93% of the men and women surveyed said that men made better investors than women. And yet there's been many longitudinal studies, including a Warwick Business School longitudinal study that showed, while both men and women outperformed the FTSE Index, which is the UK share market, the women outperformed the men. And part of it is cause our risk profile is often different. How we invest is different. So you should be coming to the table around these sort of decisions as well. That's what a true partnership looks like.
So I mean, there's lots of ways you can learn. You can listen to podcasts, you can read books or certainly on Sunday the 14th of May, this coming Sunday, the My Financial Adulting Plan opens its doors to everyone. And that's a beautiful way. I've got 2300 women and a lot of their partners and their kids that have done the course. And it's a beautiful way of you being able to give back to your family by being able to really develop your own financial literacy. So there’s lots in there not just if you're on maternity leave, for anyone that feels like they're treading water or they feel like they're stuck or they're comparing yourselves.
The second question is a very different question, and given that I'm about to launch my own program again, which I do three times a year, the question was what were your thoughts on financial education memberships like Andrew Baxter's Australian Financial Education, which is a trading education, or Invest Diva.
And these are two really different financial education places, and the reason I chose this question was because I think it's really important to understand there's a difference between investment and financial literacy. I see that a lot of people want a silver bullet. They want to be able to make money quickly. And if you look at Andrew Baxter and Invest Diva, there’s a lot of talk about, from mum to millionaires or you can trade your way in the share market to being a millionaire. And I'm not suggesting that there aren't some people in their group that has done that, but certainly when I was an accountant I saw many clients lose all the money that they put into share training or share options because there's a reason professionals do that and have to learn for years and years because it's a skill. And for most of us, we don't have the time and the skill and the inclination. And instead of share trading, we actually might be better off with an index fund. So you're still investing, you are just not trading.
And I see these things as a bit of the ‘cherry on top’, if that's something you wanna add. But I see this as I'm going straight into learn triathlons which, let's be honest, about 5% of the population will do, rather than developing a great base of fitness and trying to figure out what fitness regime is actually right for me and what nutrition's right for me and what's my physiology.
So instead, what I'm a fan of is something like my course and I know I don't say that lightly. I've got 2300 people through the course. I have extraordinary testimonials because the reason my course is the only one of its type and is radically different is because you understand who you are. You understand about your money story and your money type, but then you create your very own financial plan. And that's the only course I know of where you do this. So it's just something that you'll pay a financial planner $3,000 - $5,000. A financial plan is something you want before you go and learn about investing or trading if that's your jam. Because how do I know what my long and short-term goals are? You shouldn't be trading my house deposit. How do I know about risk and return? How do I know about my risk profile? How do I know about debt and leveraging and all sorts of things. If we don't have a good grounding on that, then we shouldn't do it.
As I said, it's starting with a triathlon rather than getting that base level of fitness up. So we go from there, from creating your own financial plan, from where I am now to where I wanna be, to answering questions like how much is enough? And then what are the financial habits that are right for me?
And then how to invest in shares and property and business. And as I said, I think a lot of people are looking for the silver bullet, they're looking at programs like these as their silver bullet, but we gotta start with the basics cause these programs are not right, I think, for 95% of us. For 5%, they absofreakinglutely in the same way that triathlons are right for some people. In the same way, the FIRE movement, the financial independence retire early movement is not right for the majority of people, but is absofreakinglutely right for some. But again, it's figuring out what's right for me. It's figuring out where I am, where I wanna go, what my natural tendencies and inclinations are, but until we know that, doing things like this is actually problematic for a lot of people because they haven't got their house in order before they then go and sort themselves out.
So I'm certainly not saying they're problematic. I think trading and options are, I've gotta be completely honest, it’s advanced. Not a lot of people make money trading. And Warren Buffett, one of the greatest share investors, has said the best time to invest was yesterday in the second best time today.
And when they asked him, when should I sell? He said, never. For most people it should be a long-term hold. And then if you wanna do courses like Andrew Baxter and Invest Diva, it might be for say, 10% of your wealth, cause you are happy to risk that in these sort of things that are a little bit more risky. But you don't wanna risk the 90%. But if you don't have the 90% set up, if you haven't figured out your risk profile, then you don't know that. And you might be tempted just to risk the whole pot, which actually might not be right for you. So hope that makes sense. I will put a link to the My Financial Adulting Plan, which as I said, doors open on Sunday, so that you can come and check that out.
We are actually offering 15 minute, Zoom spots if that's something that you just wanna talk to a human. And if that's you, just DM me on Insta melbrowne.money, and there's an e on the end of money, and I'll send you the link or flick us an [email protected] au. You can find that on our contact page.
All right, everyone. I hope you've enjoyed today's Ask Me Anything. I've loved your questions. I find that they're so varied, they're so interesting, and yeah, I love that. Hopefully, some of them or even all of them are resonating with you.
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