Uncensored Money Season Five: What If You’re Not At The Age And Stage You Should Be?
Melissa Browne: Ex-Accountant, Ex-Financial Advisor, Ex-Working Till I Drop, Now Serial Entrepreneur & Author, Financial Wellness Advocate, Living a Life by Design | 08/01/2024
In this episode, Lawsie and Mel talk about three of the questions we’re asked the most is. ‘Where should I be at financially at my age’? How much super do you think I should have at my age? And how much should I be investing at my age? Plus we share where we were at in our thirties and you might be surprised which of the two of us would have been MUCH further ahead financially in their late thirties.
Books and resources mentioned in this episode
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Mel: Hey everyone. I'm Mel Brown. I'm an ex-accountant and ex-financial advisor, so I have the theory, but I also have the life experience. I'm now financially independent in my own right after coming back from less than nothing in my early thirties. I want this podcast to be like a chat with your girlfriends about money. My aim is to help you discover why you're behaving the way you are with money, to suggest new ways you might behave that are a better fit for you, and to increase your financial literacy and financial confidence. I hope it inspires challenges, educates and empowers you with how you do money. So let's get into it. Welcome to Uncensored Money.
Mel: One of the questions I'm asked the most is, where should I be at financially at X age? So where should I be financially at 30 or 40 or 50 or whatever, 60, whatever age you are currently at. Or it could be how much super do you think I should have at my age? How should I be investing at my age and so on. Now, one of my answers to this question won't surprise you if you've been playing along for a while now, but one might. The first answer is it depends. Unsurprising I know and Lawsie and I are gonna unpack that today. But the second answer is it doesn't matter. And again, Lawsie and I are gonna have a bit of fun unpacking that one today and hopefully help you feel better about where you are at. And part of the way we are gonna unpack both of those things is to compare us and where we have been so that you can see even with two people that are ex-financial advisors, that we both have chosen not to have kids. You think we would have a pretty similar financial story, but we absolutely do not. So without further ado, Law-dog, let's get into it.
Lawsie: Woop, woop. <Laugh>.
Mel: So the first question, so really is where should I be at financially? So we're gonna look at where should I be financially at X Age? How much super do you think I should have at my age? And how much should I be investing at my age? We're gonna look at those three things separately. So Lawsie, where should I be financially at my age? And the answer was, it depends.
Lawsie: Of course, always it's your favorite line. I feel like you need a tattoo.
Mel: My favourite line, and it depends if you've had children early, depends if you haven't had children. It depends if you've been studying, if you've separated, if you've been divorced, if you've started again, if you've had sickness, if you've received an inheritance. Like it just, I don't believe it matters what you've done up till now. What matters is what you are going to do next. And that's where the, it doesn't matter, comes into it because where should I be financially at X Age? Well it is what it is. It's nothing you can do about it. It is simply a moment in time. What matters is what you are going to do from now on. But let's talk about where we were both in our thirties Lawsie, where you live now.
Lawsie: Yes. <laugh>.
Mel: I wish I could go and visit.
Lawsie: I'm still hanging in there.
Mel: Think of the collagen.
Lawsie: Yeah, I think, I mean you and I have very different stories. If we were to look at it, you know exactly the same or around the same age as I am now being the spring chicken, I am <laugh>. You know, like yes, you know, my husband and I, we've chosen not to have children, we haven't been divorced still in our first marriage each, shall we say that?
Mel: Aw, cute.
Lawsie: You know, and we've done kind of, I guess the traditional thing of working and you know, my husband's had debt and all of those things, like different things. We've had a mortgage, all of those things. But I'm in such a different financial position now to what you would've been at exactly the same age and all because of different life experiences, choices, decisions and stuff that we've made. So. .
Mel: Yeah, the story that most people know is that I divorced at age 33 and as a throwaway line that my ex-husband made that I won't make it on my own. I gave my entire divorce proceeds to charity. What I don't talk a lot about is I probably wasn't in a great financial position anyway by then, probably, yes, we owned our home and we still had a mortgage attached to that. I had a business but I was really unhappy in that marriage. So I wasn't necessarily making wise choices and I felt very trapped. And so I wasn't being smart financially. I think I wish like there was a part of me that were like, ugh, don't glue your life any further <laugh> to this. But it's that subconscious thing, right? So yes, as a result of making of that decision to give that divorce proceeds to charity, which I wished I hadn't, I ended up in six figures of debt and living in a frat house for 12 months, which is not as cute as it sounds.
Mel: It was a basement room for six months of that mould on the ceiling. Eventually I moved out of that six months in <laugh> and had a much nicer room and it was a great place emotionally. But you know, absolutely not. If you said where should I be financially at 33, 34, that is not what I would have freaking chosen. And as a result at, by the time I was your age, I had met my now husband, we'd bought a house together, but my income was abysmal and I was really focused on building my income. I had paid off that debt. My super position was terrible because I was, I don't think I got super paid for me when I first started working. Certainly it was very little. I don't think it was always, I can't remember. I was in very low paying jobs <laugh> when I first started and then when I started my own business at 28, I didn't put super in for the whole time I was in my first marriage because my husband was in an incredibly low paying job and I barely earned enough money to service the mortgage, nevermind put in super.
Mel: So I am that person that I talk about where I talk about business women that are particularly females that don't pay money into super. My hand is firmly up with that 'cause I did it. So if I looked at everything from super to asset position to income by 38 I was clawing my way back. But it was like I was barely coming out of that. And what I was probably concentrating the most on at 38 was learning about investing and building my income. And you're a big part of that. I spent a lot of my profits on coaching where we'd fly up to Queensland four times a year, which I could barely afford. So that we would learn how to increase the income. And I doubled the business business and I increased the business in the accounting firm by either a hundred percent or 50% year on year as a result. So that was my focus for a good five years during that time.
Lawsie: Which I think then just shows like just so different, you know like, because I would look at it and go, well I'm, you know, I haven't run a business. I'm very happy in employee land. I've, you know, continually had super paid for me. I've put extra into super. I've been doing all those things. I've been investing doing all those things, working and I haven't, haven't been through a divorce, any of those things. So my position is just so incredibly different to what you are sort of been at the same age, which again,
Mel: You're in an amazing Financial position. Yeah.
Lawsie: Can't you know, there is no right answer for where I should be at financially because you know, as we keep going forward you've you know, then had leaps and bounds and things to go ahead. So then when we're, I'm the same age that you are now, like our financial positions again will be incredibly different because of you know, actions and interest.
Mel: Although because of the power of compound interest, I wanna argue that your financial position will probably be quite similar because–
Lawsie: Yeah, but I might have retired–
Mel: –You've been so smart.
Lawsie: –and not been working.
Mel: Yeah, but you've been so smart so early. I think that's,
Lawsie: Yeah, it's different.
Mel: The difference. Yeah. But again, if I at 38 if I had compared myself to you, I would absolutely have beaten myself up over it. And that's where we really want you to hear. It doesn't matter where you are now, it matters what you are going to do next. That's the message that we want you to take away. Yes. Be aware of where you are now. It's really important to face it. Yes you wanna know where you are going but it matters what you're gonna do next more than it matters where you are now. So if we look at what super do we think we should have at a particular age, again it depends <laugh>
Mel: But women have less, they have less because they have career breaks and they have career breaks to have kids, whether that's one year, whether that's seven years or more or they have career breaks 'cause they stop to have kids or they start a business. And a lot of the stats around women starting a business is they don't contribute money to super 'cause they think it's selfish or they think it's just a part-time business. So they don't prioritize themselves and their super to put money into. So unless you've been an employee without a career break like yourself Lawsie, you are gonna be in a really different position than a guy anyway and potentially very different position to anyone you are comparing yourself to. So again, I don't believe it matters what your super balance should be at a particular age. It matters when you wanna stop working, how you want to stop working and what you are going to do between now and then to affect that super balance.
Lawsie: Yeah because I think there's also, you know, for younger people, like you need to be aware of how much you're putting into super versus how much you're doing and if you're investing or doing things outside of super as well. Because if you are wanting to work towards choice, and again if I use myself as an example news flash I might not wanna work with you forever and ever Mel, I might like to stop work in five years if I'm allowed to. And so, but as part of that, the importance of me being silly with that.
Mel: Or we might kill one another in the meantime <laugh>.
Lawsie: True and hopefully I'm the surviving one, in which case <laugh> like we're again aiming for this particular amount of money in your super might be irrelevant because you know, like I have always put more into super I've you know pretty well the whole way through. So my super balance looks really healthy and if you were to compare it to some chart on some super Superfund website, you'd go oh wow, Lawsie has got a lot of super. But the flip side of that is because I was making that choice, I haven't necessarily got the same amount or same level of investments outside of super and therefore now if I'm looking at it going, I'd like to retire next year, I couldn't because I don't have enough assets outside of super to see me from when I retire all the way through to when I can actually access my super.
Mel: Which is a bloody long time for you, your little whipper snapper,
Lawsie: But what I wanna highlight with that is again, there's no right amount for how much super you should have because it is ultimately gonna all tie into what your life is, what your life plans are, what you're wanting to be doing. You know, you might have consciously made a choice to be traveling and doing all these amazing things overseas in your twenties and so your super balance could be zilch or very low. And then once you've decided to step into your career or your job and anymore thank, that's when you will catch up on super. So there just is no right amount. And just to be really mindful of, yes super, your retirement funds is part of the puzzle but it's not the whole piece of the puzzle as well. So as long as you're, you're like you just need to be mindful of that when you're working out what's going into super or retirement funds and what are you keeping outside as well.
Mel: It's a New Year, you've decided you wanna do financially better this year, but the problem is your habits and situationships with money aren't going to change once the clock struck midnight on January one. The truth is, to get where you really want to be financially in 2024, you need a plan tailored to your unique situation. But that's not gonna happen all at once. To reach those money goals, you need to take one step at a time, and that's exactly why I am running free training in January that can be the catalyst to your new beginning. No matter where you are financially. It doesn't matter whether you are dealing with massive debt, whether you're good with money, but you want to learn more about investing, whether you're holding on and just trying to stay afloat or you don't know about money and finances at all. This training is for you called your Financial Fresh Start. It's been designed to be exactly that. It's happening from Monday, the 22nd for two weeks. Head to the link in the show notes and make sure you register so that you are doing something different so that you get a different result this year.
Mel: And you really want to like, you can catch up but it's harder to catch up if you wait. So if you are younger, it is also weighing up that, as you said, if I wanna stop work, if you've got a great super balance, amazing but I can't access that till I'm 65. If I wanna stop work at 50, that's 15 years of twiddling my thumbs and eating dust. So I'm gonna wanna build assets outside <laugh> as well. Inviting yourself over for a lot of dinners we've gotta actually got a super catch up calculator where you can put in your career break and figure out what would you have missed and what would be the compounding amount of that as well. And then what's your plan to catch up. So we'll put that in the show notes. because I think people often think about, oh yeah but so if I didn't have super for a few years, does that really matter?
Mel: Yeah it does. So let's actually realize what that is and if you have a partner or just say you've just had kids or you're thinking about it, talk to them now about what's our plan to catch up my super. And it might be as simple as splitting their super with you while you're on maternity leave. It might be because they're a higher income earner and you're not working. They access the super rebate by contributing to you. It might be that you access the co-contribution by making an after-tax contribution or that they, you just decide as a couple to contribute a little bit more every year but have that conversation. Because it shouldn't just be a you issue if you're in a partnership with someone rant over.
Mel: But the third one is investing and often it's well how much should I be investing? And we are asked that a lot, how much should I invest? And Lawsie, what's the answer?
Lawsie: It depends <laugh>.
Mel: It depends what your goals are. And again, it doesn't matter what anyone else is doing. If you've got a friend at work that's putting in a thousand dollars a month and you are not, don't beat yourself up. Sit down and figure out well what is actually right for me? What's my income going in, my expenses going out, what's my surplus? But also what are my goals? When do I wanna stop work or not even stop work? When do I, you know, what's my goals in the next few years or 10 years? If you can stretch that far because that's the thing that should influence how much you should invest not your age or what someone else is doing. So Lawsie, there's probably lots of things we can talk about when it comes to you and you mentioned one of them money inside and outside Super.
Lawsie: I just think like even if you were to look at you and I, again, let's go back to that. So it's like I, if we're like, and let's look at investing including super and investing and whatever, but if we were to then go look forward and go well what is the life that we want when we stop working, retire whatever we like.
Lawsie: Our approaches are so different. You are all about wanting to build up assets so that you've got these income streams coming through and you wanna live off the income streams, therefore that means you're gonna have to have a lot in assets. For me, I'm like absolutely building up assets and yes very happy for an income stream but I'm also really happy to sell off those assets to live.
Mel: And so am I just FYI
Lawsie: Oh you are? I thought you wanted to keep them forever.
Mel: Ultimately like I'd like to not, but if I have to, I have no problem doing it.
Lawsie: Whereas I'm like yeah it'd be great but I'm, you know, I can die with zero, I'll die with zero, you know, leave out a Bill Perkins book and very happily die with zero. So that in itself shows that the amount that we should be investing is very different. You know, layer on top of that, our lifestyles are very different. Like I like camping and I'm very happy flying economy. You like nice, well I like nice hotels too, but for the sake of this example, you like nice hotels and you know, say business class flights or something. So you go therefore that in itself just highlights how the amount that we should be investing is so incredibly different because what you are aiming for is very different to what I'm aiming for. And even though mine's right, I'm joking <laugh> even to neither of them are right or wrong. Just that example in itself just shows why there is no answer for how much should you be investing at your age and it has to come down to what you actually want and therefore you've gotta be taking the action to help get there.
Mel: Definitely because when Tony and I sat down and went, okay, so how do we want to retire? I said to him, I don't care if we never flew overseas again 'cause that's his thing. But I said, but if you wanna go every five years, for example, I'm flying business class like I'm not doing an economy. But for us it was more important that we wanna be able to eat out once a week and to eat out somewhere nice.
Lawsie: No McDonald's?
Mel: No McDonald's.
Lawsie: I'm surprised.
Mel: Yeah and it was more, it was flexibility and options. What was important to me as well is to be able to give back. So you are right that how much I want and it's not how much I need but how much I want is gonna be a whole lot more. But interestingly my husband does not wanna stop working. He wants to, even if that's only two days a week and I can see that I will always wanna do something. So I think I will always have an income from my personal exertion. However, to your point, I want the choice to turn that off or not. So when I'm looking at my income streams, yes it needs to be a higher number because it needs to cover that. Yeah, it's interesting which is where when someone says, oh but you just need a million dollars to retire, right? It's like no, no,
Lawsie: No. <Laugh>, no.
Mel: When we've done the maths for people when we were financial advisors, sometimes people needed 400,000 in super. Like if you are prepared or if you are really happy to live quite frugally and you own your own home, you may not need as much as you think. And that's where it always comes back to what do you want? All of these questions is, it depends. It doesn't matter where you are now and it depends what you want and then what are you prepared to do to get there.
Lawsie: Yeah, I mean the other extreme with that is like the FIRE movement. So financial independence retire early is what it stands for. But the people that are devout followers of that are saving and investing every single spare cent that they have and living–.
Mel: And not owning their own home
Lawsie: Really frugally. Some do still, but it's, they're doing all of these things with the idea of, you know, by the time they get to, you know, somewhere in their thirties or forties they can go done, I'm out. And so again, someone that's following that is doing such a vastly different thing to someone that goes, no, I love what I'm doing and I'm gonna keep doing that through to my seventies. So I'm not as concerned about like they might still be investing in things but they're not gonna be going as hardcore at it as someone that's like really following all of the FIRE principles. So I think again it's coming down to that what do you actually want? And I think so long as you're doing something like today or if you're not that you start today <laugh>, that you're doing something to move forward your financial position. And even if that means you're still taking time to figure out what it is that you ultimately want, if you're still doing something today, you're still, you are doing some investing, you're up, you know, putting to super you like you don't need to worry about where you should be at, but you do need to take the time to ultimately figure out where you want to go. So yeah,
Mel: I love that. And it's interesting 'cause if someone was in FIRE and they were talking to a friend of their own age and they were say six years in if, and they told them how much they had invested and saved, their friend might go, oh my gosh, that's ridiculous. Surely you can just relax now. And if the FIRE person might go, oh my gosh, you are right, I have so much. But if they genuinely wanted to retire in say 15 years, they wouldn't be able to. And that's where it doesn't matter what I should have a particular age, it matters what you wanna do. Yeah, that's a more important question. Matters where you've been and what's done is done. It matters from now where you wanna go and what you are gonna do to get there. But I guess the final comments I think throughout this Lawsie is that comparison culture is the enemy of great finances,
Lawsie: Of great Lives. I'm adding to that <laugh>
Mel: Totally. Like if I looked at you, if when we were both 38 I might've given up and gone, you know what, I'll never catch up and I know what I'm like, I have a competitive streak in me. And we saw it on barefoot bowls recently that if I cannot win, I do not wanna play. And I think that's it's true in life as well. Like if I looked across at you at 38 and went, if I can't be, if I can't get to there, I'm not gonna wanna play. And I see so many people opting out and yet we through our programs, the my financial adulting plan and we did some filming in December and there was one woman there, Catherine, who told the story, was it Catherine or Liz? Sorry, there were so many incredible stories where she said at 53, I own my own home, Liz and I never thought I would like if you told me at 51 you're gonna own your own home in two years.
Mel: She goes, I would've laughed at you. I never believed it was possible for myself. And yet that was her goal. And she thought, screw it, yes there are, you know, people are so much further ahead of me at 51, but I'm not gonna opt out, I'm not gonna give up. I'm actually gonna do what I can by understanding how to make great choices. She was able to do this thing, she never, and she said she walks up that path now and gets chills every single time. But it's gotta start with where are you today? You cannot get around, not looking at where you're at now, but then asking the question, what do you want? And I talked about Mimetic desire on the 1st of January. If you haven't listened to that episode, that's so important in this conversation because Why do you want what you want and are they, your wants are really important, but what do you want?
Mel: And from that you'll understand where, okay well if I've wanna retire in 10 years time and I've got 200,000 in super and nothing outside of assets and I'm 40 I best makes some different choices, <laugh> that if I don't wanna retire till 80, I've got 500,000 in super and I've got a mortgage and I'm looking to buy an investment property, then that might be very different for me as to what I have to do over the next 30 years. So again, it doesn't matter where you're at, it matters where you wanna go or what you wanna do. Lawsie, we've got training as well coming up very soon that people can opt into if you are hearing this conversation and going, I love that, but I don't know what those steps would be.
Lawsie: Yep. So we are running your financial fresh start. So it's a series of training sessions looking at different, all different aspects of your finances, but also the chance to hassle Mel and ask lots of questions in a couple of live q&a scenarios as well. So if you're interested in that, we'll obviously have the links and stuff in the show notes so you can sign up for that.
Mel: So what we encourage you to do, no matter what is to understand that where you are now is, yes, we wanna face it, but the most important question to ask is where I wanna be and do I understand how to get from where I am now to where I wanna be? If the answer is I'm not sure I think so or not as quickly as I'd like, please come and check out our Financial Fresh Start training. And while you're there, maybe jump onto the wait list for the My Financial Adulting plan as well. Thanks Lawdog.
Mel: If you enjoyed this episode, we would love it if you subscribed and give us a review, then make sure you come and play with me on Insta. I'm at @melbrowne.money Remember there's an E on the end of Browne. I'm one of those fancy Brownes, and don't forget to check out the show notes for even more ways you can work with me to transform your finances.