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Chapter 1: What are the five important money lessons learned since high school?
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Chapter 2: Why is self-initiative crucial for financial education?
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Welcome to the Australian Finance Podcast, a podcast for people who want to learn more about their personal finances and get the most from their money. This series is hosted by Kate Campbell from HowToMoney and Owen Raskovich from Rask Finance.
The Australian Finance Podcast is provided for educational purposes only. The information is general in nature and does not take into account your needs, goals or objectives. What that means is the information does not apply to you specifically. So consider getting the advice of a licensed and trusted professional before acting on the information.
Kate, welcome back to the Australian Finance Podcast. Thanks, Owen. And good to be back for our What, second or third episode for 2020? Second episode together for 2020. And we have some absolute gold for listeners today because you're going to share some of your secrets.
Yeah, so I've been in a very reflective, I think both Owen and I have been very reflective mood for the last few episodes and just sort of looking back over the last few years of what we've actually learnt about money and personal finance and especially doing the podcast last year did force us to revisit a lot of the basic concepts that may have changed somewhat since we started learning about personal finances and it's really good to revisit.
Like I learnt so much from putting money podcast together last year and I'm pretty sure Owen did too.
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Chapter 3: What should you avoid when it comes to financial schemes?
Sorry, you've got your other podcast as well, right? Like How To Money. So you're interviewing people there.
Yeah. And interviewing people, you learn a wealth of knowledge from each person and so many different topics. So I think, yeah, running the podcast has been an amazing way to brush up on our basics of personal finance and learn a lot of things that we might not have learned any other way. So in this episode, I wanted to talk about five things that I've learned about money since high school.
So about five years ago now, so not too many years, but I have been working full-time since then and I've done a degree online during that time. So
I have sort of got sort of went face first into the workforce and had to figure things out and maybe work some things out the hard way and there's a few things that maybe I wish I'd known straight out of school but I guess they were lessons I've learned but some of them were more expensive lessons so if you can avoid some of those lessons I definitely would recommend.
Yeah, I mean, some people learn from their own mistakes, but it's probably easier to learn from the mistakes of others as well as the triumphs of others.
So I'm really keen to get stuck into these, learn some of the five things because distilling it down from so many things that you've learned to just five things is really valuable for listeners because it's like, this is what you can walk away from this episode with. And yeah, I've got a few of them in front of me now. So let's just get stuck into them.
Yeah, so the first one that pretty much sums up the last few years since leaving school is that no one's going to tell you about how everything works when it comes to money and most things in life. So you actually need to self-initiate when it comes to learning about your finances and It's not going to be presented to you on a silver platter. It's not going to be taught to you in high school.
You're not probably going to learn it in your uni course or in the workforce. Your manager probably won't know much either. So it's actually, it's something that you're going to have to decide for yourself. I want to learn about the basics of personal finances so I can take charge of my own financial future and I don't have to rely on the institutions to tell me what's right and wrong.
I want to be empowered. I want to know the basics. So when I do come to the table and want to get my first home loan, I can go to the bank and I know what the basic terminology they're talking about and they're not completely in power over me. Actually, I can take place part of the conversation.
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Chapter 4: How can discussing salaries with friends and family benefit you?
You need to find your receipts from the year, all the things that you need to work out what you can claim. And maybe you pay someone a lot of money and just fully abdicate responsibility. But I definitely recommend taking some of the control and learning the basics yourself. And I think just even doing your first tax return, it's an opportunity you could fully farm out
an expert or you could take the time to go on the ATO website because they have a lot of information. Read about the kind of things you can use, you should keep receipts for going forward as deductions and that knowledge is going to help you throughout your life. and learning about the sort of things, records you need to keep.
And so going forwards for the next tax year, you actually keep better records. You put those donation receipts in a folder or you scan them and keep them in a certain place in your computer. So when it comes to tax time the following year, It makes it a lot easier. So that's just one example of where you can use each new challenge you face as an opportunity to educate yourself.
And that's a way that you can upskill your personal finances that's going to help you throughout your life.
How about, and that's a really good one, kind of just learning by fire, I guess. Yeah. How about books or anything like that? Was there anything in particular for you that I guess gave you a better understanding of how the finance world works?
Yeah, I think I started, most people, I wasn't talking to anyone. I went onto Google. And I think we do that a lot as young people and maybe older people too.
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Chapter 5: Why is it important to start investing early and small?
Instead of asking someone, we go onto Google and look. And there's a lot of information there. You definitely have to be discerning with where you go because not all of it's in your best interest. Some of it's Everyone's got some natural bias, whether it's a bias because they're working for a company and it's marketing related bias or if it's just personal preference.
Like I personally talk about investing in shares and ETFs a lot more than property just because that's where my current knowledge level sits. So that's even I'm not trying to be biased towards anything. shares in ETFs. It's more just because maybe ignorance or just because I don't know as much. So that sort of stuff comes up online.
So you have to be able to read widely and start to evaluate sources. And the way I started there was looking on the Money Smart website, which is the government's personal finance and
um basics of everything to do with investment so that was a great place to start because it gave me a really good foundation of all the basic it's quite basic but it does give you a really good overview of each area of many areas of finance from home loans to ponzi schemes to buying etfs so that when you actually go and look at other sources online um and as i um
have sort of grown in my financial knowledge over the years. I've looked at more particular sources. But using the Money Smart website, you get a really good foundation. And then when you look at other places online, people give you advice. You at least know, is what they're saying kind of factual? And you can sort of common sense check it better because you know some of the basics.
Cool.
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Chapter 6: What mindset should you adopt when saving your first paycheck?
So I like that one. So no one's going to tell you how everything works or what to do. Maybe just take it upon yourself to start learning. I would say shamelessly, just listen to this podcast whenever we release an episode. But number two, Kate, this is a good one and strikes close to home. What's your second thing that you've learned since high school?
So the second thing is steering clear of get rich quick schemes. So they come in many, many forms. And the thing I'd like to say with that is that in finance, greed is your enemy. And it might only, you don't think you're being greedy. You're like, oh, I just want to you sort of fall for a product because it's offering a really high return.
And maybe you're not particularly a greedy person, but you just get sucked into the marketing pitch of whatever the product is because it's very enticing. And this isn't just about investing. I mean, sometimes multi-level marketing schemes are very – They have a great ability to suck people in and I've seen that quite a lot and it has dramatically impacted people's finances.
So just being really clear about where you put your money and where you put your time and not getting sucked into something without fully understanding the pros and cons of which pretty much anything in your life this advice applies to.
But yeah, being discerning about where you put your money, where you put your time and not trying to get quick overnight because the biggest thing I have learned about finance is it doesn't happen overnight. When it comes to building your knowledge, building your investment portfolio, saving up $1,000, it's a small bit each day, each week, each month, and it does build up and snowball over time.
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Chapter 7: How can you build a financial safety net through savings?
Yeah, great. That's a good one. And it's not just, like you said, it's not just a scheme. People seem to hang on to the word scheme in that get rich quick scheme, but it can be like the psychology behind it too, like putting all of your money in a small cap stock or a penny stock or anything like that. So, okay. So that's great. So we've got, so far let's take stock.
We've got, you need to learn what you need to learn effectively because no one else is going to tell you everything. We've got get rich quick schemes. Let's avoid them. Greed is your enemy. I find that's a really good phrase. What about number three?
Yeah, so my third one is it's good to start talking with your friends and family about salaries because the more you don't talk about it, the harder it is to negotiate, to know what you're worth and to ask for more. it's something that can dramatically impact your finances over the long term.
By not asking for a raise when you're in your 20s, you might be missing out on hundreds of thousands of dollars over the long term if you had invested that money and had more money going into your superannuation. So starting to talk about it, and I think it's becoming more common. It used to be something you'd never talk about. You'd never discuss your salary, but you now might have –
especially as graduates and just finishing uni, getting part-time jobs, getting full-time jobs, if they're comfortable talking or getting a ballpark figure, maybe you can say, oh,
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Chapter 8: What resources can help improve your financial knowledge?
Are you in the 50K bracket or something like that? So they might not want to get too specific because everyone, it is personal. That is personal finances are so personal. But starting to talk about and getting an idea of even what they did.
Maybe someone who's a few years older than you in your workplace and saying, if they did get a pay rise last year, what steps did they take to negotiate that pay rise? So even knowing what to look for and how you might be able to achieve that as well and what sort of ways you can add value to your firm to go about getting your own pay rise. being able to negotiate as well.
So when you go to a conversation about a pay rise at work, actually coming to the table and saying, this is what I'd like, this is why I'd like it, and this is what I've done to deserve it. So having a sort of building your own business case for why you should get a pay rise, because it is a cost to the firm. It is something that they're going to spend more money on. So why...
How can you justify why they're going to spend more money on you essentially?
Yeah, that's the most important thing. It's the why, right? It's not like the what. People just go in with, this is what I want, but why are they going to pay you that? And I think that's a really good point. Think across the table. What are they incentivized to do and why would they do that for you? Okay. That's great. I love that advice. And we keep coming back to that throughout this series.
It's just getting a pay rise can be one of the most powerful things you do because it's effectively free. And it also means that it's pretty much better than most investment returns you can get because it's a consistent stream of income. So number four, Kate, is I think pretty motivational for people who are maybe just tuning into their finances for the first time in 2020.
Yeah, so when it comes to investing, you want to start small and early and learn as you go. So people will spend years and years, make their whole careers out of trying to master investing and still they don't always get it right. And every... expert and founder and CEO that I've interviewed on the podcast, their biggest tip is start early. They wish they'd start earlier.
They recommend that every young person starts learning about their finances in their 20s. They start giving investing a go. They make the mistakes early and I think that's a really common theme that I've heard over the last few years is wow, you're in such a good position to be learning about this in your 20s. I wish I had done that too.
So you can be one of those people that gets started in their 20s. You learn about your personal finances. You start investing. You get on top of your super and you're going to make changes in your life that will flow on into your old age, really. That will completely change your financial future.
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