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Chapter 1: What is the main topic discussed in this episode?
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Please remember that all of the information in this podcast episode is limited to general information only. That means the information is not specific to you, your needs, goals, or objectives. So you should seek the advice of a licensed and trusted financial professional before acting on the information.
And before you acquire or apply for a financial product, please read the PDS or product disclosure statement, which should be available on the issuer's website. Lastly, please keep in mind that past performance is not indicative of future performance.
In this episode of the Australian Finance Podcast, Kate and I are talking about all of the changes that have come about as a result of COVID to people's personal financial strategy, including our own. We also talk about and answer the question of whether or not it's still worth creating financial plans given everything that we've just been through.
I hope you enjoy this episode of the Australian Finance Podcast. Kate, welcome to this episode of the Australian Finance Podcast.
It's good to be back and we're recording our very first live episode, so no Zoom this week.
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Chapter 2: What changes have occurred in personal finance due to COVID-19?
I think when you invest in yourself, I think it's one thing that you don't notice the benefits of until you are well away from having to do it. So, for example, what's the saying? We overestimate what we can achieve in one year, but we underestimate what we can achieve in five.
And I think a lot of people, when it comes to lifelong learning, we say lifelong, but it probably takes three, four, five years to really feel the benefit of that. You've got a degree now, right? Yeah. And that took you quite a few years.
Yeah.
But now you are more employable, right? But when you started that journey, it felt like an uphill battle.
Yeah, and you don't really notice the effects of any of these qualifications immediately for most things.
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Chapter 3: Is it still worth making financial plans during uncertain times?
Like I don't feel suddenly more skilled because I have the piece of paper, but over the next five to ten years, I'll actually be able to use those skills and they'll sort of filter through into my work.
Yeah.
I've actually finally got a frame for my certificate, so that was one positive that happened yesterday.
I don't even know where mine are. I've got three of these things that cost a lot of money.
I found this small Australian business that actually makes the frames to measure and post them. And so, yeah. Oh, cool.
Maybe we can put a link in the show notes. There are probably some people out there like us that never got around to this.
Yeah, we'll share that business because they're a fantastic service. I wanted to find someone local rather than just going to Kmart. And yeah, it was delivered all, I think, handmade and delivered in about a week. Nice, good shout out.
We don't know the name of this business, but we will get it to you.
Something like Aussie Frames, but I'll find the link.
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Chapter 4: How can flexibility improve financial planning?
A huge rally. And if they forget, which most people probably will, to actually go back in their super and turn it back onto balanced or high growth or whatever they want, they might be sitting in cash for years. Yep. And that's a huge opportunity cost. So I think it's...
If you haven't been burnt, maybe reflect on that and make sure that you sort of reassess and work out a plan that works for you going forward. There's nothing wrong with being a balanced investor even in your 20s. You can have different goals and different targets and you don't have to be a high growth investor just because you're young.
You've got to work out what works for you and what allows you to sleep at night so you don't really make these drastic decisions like changing your super to cash and leaving it there for the next five years.
I reckon everyone would just be better off if someone else chose for them. Like honestly, um, in their super, because there was a lot of people moving to cash and it was absolutely disastrous. It was, I think we said it at the time, what a crazy idea that would have been. Like, where did you get that advice? Like who, how did you come up with that? Um,
don't know I think one person says it and the next person you're like I've got to protect my super it's gonna be decimated and then people were sharing that idea yeah and then yeah most of them will forget to turn it back on to any type of investment they're just gonna be in cash for years which is really scary
And the other one that's sad is that people, there's this surge towards investing right now. A lot of people don't know what they're doing. They're just jumping the gun thinking that it's like a elixir or some sort of cure for their wealth. You know, they need this. Then they're going to get knocked around. They're going to lose a lot of money.
They're going to walk over their tail between their legs and they're never going to come back.
Yeah.
And that's what we see all the time. I speak to these, particularly people that have a bit more experience. So that's another way of saying a bit older. They say, oh, no, the share market's gambling. Like, is it? Do you know much, if anything, about it? Or have you just had an experience that was negative? You can definitely make gambling. It's just what we're seeing at the moment.
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Chapter 5: What role does an emergency fund play in financial security?
Okay. So it's about the importance of having a financial plan. Should you still have a financial plan?
Yes.
Okay. What is your financial emergency plan?
My financial plan, having an emergency fund, sort of growing that for maybe two years. I'll see what feels right for me. I haven't quite worked that out. And just sort of working out different income streams and different backup plans career-wise and how I can sort of change and adapt to this new world.
Okay. If you don't make a financial plan now, will you regret it?
Yes.
Okay. Last one. Do all financial goals need to be big goals?
no no i think that's definitely something you don't need to worry about you can have smaller goals and i think at the moment that's even more important just set yourself a goal for the next month of how much you want to save or something you want to learn or something you want to sort out you want to sort out your super you want to get your taxes done just set yourself small measurable goals
Especially at the moment, it might be way too overwhelming to have a 10-year plan. Just do it a month at a time. And then once you get out of this period, start to think about, well, what could the next year look like? And then go from there.
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