Erin Davis 00:00
Before we start the podcast today, I just want to share with you a masterclass that I am hosting. It is how to read your profit and loss statement. Now, this is for women in business who obviously have a profit and loss statement, but they don't know what they're looking at. They don't know the questions to ask. It feels messy. It feels overwhelming, and it feels like they should already know this information. So by the end of the 90 minutes, these women business owners will understand what their profit and loss statement is telling them, so that they can look at their numbers instead of feeling overwhelmed or judged by them, now I know that we all have a profit and loss statement. If we're a woman in business, we have a profit and loss statement. But I would question how many of you actually go and look at those numbers. How many of you run the reports? How many of you know what that report is actually telling you? So this masterclass is all about how to read that profit and loss statement. What is the information telling you? It is about knowing where to look. It is about understanding profit versus cash, and it is about knowing what to ask next. So, if you are wanting to take control of your money, feel like you are the one leading it rather than just being reactive all the time, jump into this masterclass. It is going to be beautiful, hands-on, connected. We have a workbook for you that you can work through, so that you will come out of it feeling confident instead of overwhelmed or judged. So today I'm super excited. I have Sarah Meghanson with me, who is just an absolute powerhouse in this finance world. Now, Sarah is the author of How to raise rich kids, which I have the book here. She has over 20 years of experience in property finance and investment journalism. She's a trusted expert who shares regular insights across lots of multimedia channels. She's radio, print, sunrise, Channel Nine News Yahoo Finance. She is also a member of the Finder team, so that is pretty exciting. And she has had her advice shared in the media over 3500 times. She holds a bachelor's degree in communication and a Tier One generic knowledge certification, which complies with ASIC standards, so that's pretty cool. Thank you so much for joining us.
Speaker 1 02:46
Oh, thank you for having me. Such a pleasure to be here.
Erin Davis 02:49
Ah, as I just mentioned to you, your book, How to Raise Rich Kids, I actually finished it last night, and I don't usually read books. I tend to fall asleep, but this book was so cool. What inspired you to write a book for parents about how to raise rich kids?
Speaker 1 03:08
Yeah, well, my own kids really, because I could see a lot of the habits and the lessons that I was teaching them. I could see how much work it was, how intentional you've kind of got to be, and I also could see around me and my friends and family what happens when you don't have intentional conversations about money. And you know, for most of us, we absorb our money beliefs. We grow up with whatever we grow up with. That's where we learn about money. And in my book, I talk about my money beliefs. You know, I grew up in a family with a lot of financial insecurity, so I my belief growing up is that money is really hard to come by. It's very stressful. If you don't have enough money, you're going to fight. So you've got to hold on to any money you get, and you know, money just caused me a lot of stress. And even when I had plenty of it, I was still stressed, still worried that I was going to lose it. So yeah, I was really inspired by this idea that our next generation is growing up at a time where money is less tangible than ever. It's very digital. We don't, you know, exchange cash much anymore. There's so much opportunity to spend these days. It's just crazy, you know. Every day we're being advertised to in every platform, whether it's social media or text messages or emails or you know everywhere we go, there's ads, and we can spend money we don't even have. You can buy now, pay later a burger for lunch if you want. So I think it's really difficult for kids to navigate, and I wanted to create a bit of a roadmap for parents.
Erin Davis 04:40
Yeah, I think that's so important because everything is instant now, right? We can tap with our cards. We don't really realise that it's like what money is going out of our account because it's just so easy and it's so convenient. And I think coming back to that cash piece can be really powerful for for a lot. Of people, not just kids, but parents as well, when they're struggling with, you know, keeping track of stuff.
Speaker 1 05:06
Absolutely, and I think we've we've traded convenience, like so we've grown in convenience with money, but we have lost a lot of friction, and we've we've sold that as if it's a benefit. But friction is a really important part of a purchasing process as a as a consumer as the buyer. Friction is the part that gives our brain a second to think: Do I really want this? And you know, when I talk about friction, I I mean things like having to stand up and go to your wallet and get your credit card and put those details in. That can be enough of a blocker or enough of a pause for you to go. Do I actually need this thing, or am I just seeking a little dopamine here? And you know, I was talking to a friend the other day who said when we were talking about this book, and she said I need to get a copy. I need to share with my kids. She had two teenagers, and she said we were they were driving. The teenagers were driving in the car. They drove past a fast food restaurant, and her daughter said, "Oh, I really want that. I'll Uber it when I get home. And they were driving past it, so her habits were so deeply entrenched in convenience that she didn't even want to spend the four minutes to turn around, go back and buy it, and get it hot and fresh, and pay 30 to 40% less for it because she just kind of that-that's what this generation grows up with. If they don't have some sort of intentional guide to help them navigate it all,
Erin Davis 06:31
yeah. And I think we get so busy too, right? We're trying to juggle everything, particularly as mums. We we've got the mental load of raising kids, working, family, all the things, and that convenience is really such an important piece for us to be able to manage our day to day. But the downside is things like that that you just instantly do things without thinking. Well, what's the implications or what's the ramifications of that? And those tiny little habits just start to snowball, and all of a sudden, you're just spending so much on, say, Uber Eats that then delivers food that's not real healthy for us most of the time. Never looks like the picture when it shows up. It's cold. It doesn't taste good. And then we are like, ah, what have we done? And then we've wasted some money on the on on it as well,
Speaker 1 07:21
and we just grow to normalise and accept all of those concessions. So even though it's more expensive and it doesn't taste as good, and it's probably arrived 45 minutes later than you expected, we accept all of that for the convenience. So we've really, really promoted convenience as our highest value, and and I don't blame kids or the younger generation for for doing that because that's what our society has created now. And so, if you have kids who are used to this convenience society and being able to order anything at the click of a button, you know, my daughter was in a dance competition. She's 15, and she was at a dance competition all day. So she and her friends Ubered sushi in for lunch, and I was like, "That's actually quite smart. And in that, I like that it can encourage kids to be a little bit more, you know, independent and and thoughtful and curious, and and they can create their own answers. But that is a great way to problem solve for that situation where there was nothing to eat. She'd forgotten to pack lunch. Great, but when we're talking about kids who are doing this two or three times a week and they're using, you know, buy now pay later to buy things that they can't really afford, we're setting them up with some really bad habits. So a lot of, as you mentioned before, a lot of parents don't have the habits themselves to be able to model it for their kids. So that's why I wanted to create this book. It's designed for parents to help their kids, but my hope is that parents along the way will recognise some opportunities for themselves as well.
Erin Davis 08:55
Yeah, that was one of my questions. As in, you know, my audience are women, and a lot of those women are still figuring money out themselves. So how how do you navigate well the thought of well how can I teach my kids how to get good with money or how to have good money habits if I still haven't sorted it out myself?
Speaker 1 09:17
Yes, and I mean that's that's the the million dollar question, isn't it? And that's why why I wrote this book was I could have written a book that was aimed at kids to help them figure this stuff out, but I really wanted it to go to parents so that they get some tips and advice and some strategies that feel really easy to implement along the way because it can feel it can feel like homework. It can feel really exhausting and overwhelming. And I think as women, in particular, we will be really open and conversational about you know hair care and like this latest treatment we got and facials and wellness and health. We will talk about all of that stuff. But when it comes to. It's a little trickier. We we can there can still be a bit of shame and a bit of taboo. I know a lot of like women I have in my circle. You know they can feel a bit ashamed if they're not where they thought they should be, and so many times I remind them like what you see of other people is is not necessarily a reality. We can, you know, we can show the image we want and and the story behind it. Campaign store
Erin Davis 10:26
campaign, yeah, totally different, right? Totally. So don't
Speaker 1 10:29
compare yourself to someone else's to your perception of someone else, and just comparison is the thief of joy. It never brings anyone any closer to their goals. I think if I ever see someone doing something I'm envious of. It's it's a goal. It's like amazing that they've achieved that. I would love to unlock that for myself. How do I do that? If you can use it as an empowering goal, great. But if it makes you feel bad, you got to stop comparing because it doesn't help anyone. But there is so much that we can do that. But if we don't know what we don't know, then how do we do it? And so, like a really good example of that, one thing that I do for my daughter is with superannuation, and I've got a whole chapter in the book about this. But with superannuation, if you're earning under right now, the threshold has just increased as of the first of July. I think it's about 49,047, or 49,000. If you're earning under that in a financial year, you can benefit from the government's co contribution scheme to super. Now, most teens, if you're 15, 1617, you're probably earning under that. It's probably a part time job. My daughter has a part time job in a bakery, so she definitely earns under that, and it means that we can contribute up to $1,000 a year into her super and get another $500 as a government co-contribution. So we have started that with her. I said to her, "If you contribute half, I'll contribute half. So I have a direct debit of $10 a week that lands in her bank account. She then contributes her own $10, and then $20 a week goes into her super fund. If we do this, I worked out, you know, based on average annual returns of 9% per year. If we do this for five years, so when she's 1516, 1718, and 19, just for five years, we will be contributing $5,000, and the government will contribute another $500 a year. So in total, it's seven and a half $1,000 that gets added to her super. But because she's got so many decades ahead for that to grow, it's likely to sit somewhere around $300,000 by the time she's 60. So that to me is a really small action you can take now to have a really big impact down the track, and I shared this on Instagram, and it's so fascinating to see people's different money mindsets come through. And so many people were complaining, saying, "Well, the government's just going to tax it anyway. Other people were saying, "Well, that's not fair. That's taxpayer money. Why should I have to subsidise your kids? Like some really interesting and fascinating mindsets shared, and I thought, wow, like I want to take every opportunity I can that is available to me to help my kids, you know, get ahead. Not even get ahead, just have a fair start. You know, I don't want my kids to be ahead of anyone else, and again, that's kind of why I wrote this book because I thought it's a little bit unfair that kids who are just lucky enough to have parents who are in the know will set them up with these things. There are other parents who don't know about this who probably can afford $20 a week, but don't know that this is an option. And if we can get that information out there, you know that is a really powerful way. I imagine, like I've got three kids. If I did this for all three of my kids just for five years, that's $900,000 worth of wealth I can create for them. Like that just gives me so much peace of mind, knowing if that's all I do for them, then I'm pretty happy with that.
Erin Davis 14:00
Yeah, and I think you know, like you said, you don't know what you don't know, and my kids are the same. They're fortunate that I am across this stuff, so I'm able to help them. But a lot of people aren't. They don't know this, and they don't know it for themselves as well. So even if you are a low income earner as an adult, you can still access this co-contribution. It is not limited just to kids. And so, if we've got women who are working part-time or they're stay-at-home mums, you know they can still access this co-contribution and build their super. Which then just, you know, when we have more money as women, we just do so many good things in the world, and we just create that level playing field. So I love that you shared that because that co-contribution is such an easy win, and you would be spending, or like my kids spend $20 on rubbishy food.
Speaker 1 15:00
Yes,
Erin Davis 15:01
they would be spending anyway that doesn't satisfy them. That they then need to come and eat afterwards. So why don't we just redirect that one payment?
Speaker 1 15:10
Yeah,
Erin Davis 15:11
one payment only. That's it, and it makes such a big difference.
Speaker 1 15:15
And I said to my daughter, "I'm happy to go halves with you. So I said, "You know, 10 bucks a week. It's like one matcha latte or whatever it is that you're an iced tea, whatever it is you get with your girlfriends. And I said, this is really like $10 from you, $10 from me, $10 from the government. If we commit to that for five years, that's just such a big impact. And that's just one of the things that we can do for our kids. That is, like, I'm really big on making things as accessible as possible. The great thing about the government co-contribution too is that if you're eligible, it happens automatically. You just need to you need to make sure the money comes from their account, not your account. It has to come from the Superfund holder. But if you do that and you lodge a tax return and you're eligible, it all just happens. So I love it when something's easy. Just
Erin Davis 16:01
reduces that friction, right? You don't have to think about it. You don't have to do anything. You just set up automatic payment, and it just happens.
Speaker 1 16:10
See, that is a great example of where removing the friction is helpful. And too often we see this friction removed from the spending and not from the the better money behaviours. So a great example is if you want to sign up for a subscription for something, it's a one click sign up. It's easy to do in less than 30 seconds. But if you want to unsubscribe, you know, if you want to get out of an agreement, it can be you got to go through the weeds of a website to get to the page, and then you need to wait 30 days, and you know there can be so many terms and conditions. And I believe there's legislation that's looking at that. You know that there's an investigation to look at it, but it is is definitely. I feel we've got the friction in the wrong place there. So whenever we have a lack of friction in a place that helps us, I'm celebrating.
Erin Davis 17:00
Yeah, yeah, I love that too. Now, what age do you reckon that parents should be speaking to their kids about money? And I know in the book you've got different sections, you know, that's different age-appropriate like conversations. But what do you sort of recommend? When should we start? Like, what's the ideal place to start?
Speaker 1 17:25
Yeah, it's a great question, and I've been asked it a lot since I released this book. And I think it's different for every family, but I think it's sooner than you would think. I know for a lot of parents, myself included, and a lot of people I talk to, we obviously don't want to stress our kids out, and we can think that we're kind of protecting them by not involving them in big discussions and stressful discussions. But I've actually taken the opposite approach because I really found as a child my parents would have these very stressful conversations. I would pick up on bits of them because no matter how much you think you hide things from kids, they hear everything. We pick up everything. They hear it, and I would hear bits of things behind closed doors or from arguments or passive aggressive comments in the car, all that kind of thing. And I would piece together my own story of it. And what most kids do is they plug the gaps in themselves with information they don't have. So they well, I certainly did as a kid. I would make it up, and then we create our own story about it. And it can create actually even more insecurity if you don't know the full picture. I I have taken a more radical transparency approach with my kids, where I share everything, like the good and the bad, when something bad happens, and I think it gives context. So when I say something bad, it might be that you know what a really bad one was when I got a $1,000 fine because my seatbelt was not over here; it was under because I had it like an injury in my shoulder, and it was really irritating. It and I put it under for a one hour drive, and a camera got me, and it was $1,000 fine. Very upset about it. I shared it with the kids, and by talking about it, I was kind of like, "We've just got this $1,000 fine out of nowhere. Wasn't expecting it. Really mad about it. Like this Friday night, we normally do movie night and takeaways. We might not get takeaways. I think we're just going to do breakfast for dinner and just cook at home because that extra 100 bucks on takeaways. I kind of need to put it towards this silly bill. So it's just like those opportunities to model decisions. And in your house, like depending on your financial situation, $1,000 bill might be you know like we're not having takeaways for the next few months and that's actually okay to share with your kids and you can find a way to make it actually empowering for them like we've got this bill and it is really high for us like that this is a lot of money so what we're gonna do is. Going to be really responsible. We're going to face it head on for the next two months. We are going to make Friday night like anything goes night, and that means you can have cereal for dinner, or you can have ice cream before dinner, or dessert first, or whatever. Like we're going to make it really fun, but we're not having any takeaways for the next couple of months because we just need to do the right thing and get this bill paid, and once it's over, we will celebrate with your favourite takeaways or something. Just kind of taking them on the journey with you means you can alleviate any stresses they might be holding, or you don't. You're not necessarily passing your stress onto them, but I just kind of approach all conversations with a lot of transparency and openness, so that they feel comfortable asking questions. Because what happens with anyone, kids or not, but when we don't get the full picture, we just we fill in the gaps. And you know, an example was a was a couple of months ago. I was talking about something. I can't remember what it was, but my daughter was in the other room. She only caught a last little fraction of it, and it was something I can't remember. It's something to do with taxes or something. And she said, "Wait, what have we lost our money? And I said, "No, no, no, haven't lost our money.
Speaker 1 21:10
I'm talking about the taxes that we paid. And you know, I'm so glad that she was immediately worried. And they went, "What was that question? And then I was able to answer it and relax. It's fine. No, this is what I was talking about. And so they know about things like taxes and charity deductions and giving back and supporting and inflation and all of those kinds of things because we talk about it really normally all the time.
Erin Davis 21:34
Yeah, I think those normalising conversations are just so powerful. It's not to take away the stress of having, say, an unexpected $1,000 bill, but it's navigating with curiosity. Well, how do we how do we approach this? How do we solve this problem? What are what do we need to do? What resources do we need? How do we need to set ourselves up so this is not going to be an issue if it happens in the future? Rather than just letting them crash and burn and having to figure this stuff out as they move into adulthood, we're actually preparing them along the way by leading by example. And I think it's okay for us to show that stress and that worry, but then also to show, well, what did we do to navigate around it, and how do we solve the problem? Because that problem solving then allows them to see well how can we how can we approach this question or what questions do we need to ask?
Speaker 1 22:29
That's exactly it, I think. And and I love what you said there about them crashing and burning. I kind of want my kids to crash and burn, but in a really supported way. So
Erin Davis 22:40
we're the same too. We've got three kids as well, and very different neurodivergent. All three of them, and it's just really interesting to see their different approaches to money. And I've got one at the moment that is probably going to crash and burn very soon. But it's like, well, how do you support and navigate with them, but still allow them to learn the lessons.
Speaker 1 23:06
Exactly, and you know, I have a great example of this at the moment. It's not great at all, but it's an example of this, where I have like a relative of mine who's a teenager who wants a job. They've finished school. They want a job. They want to work in hospitality. They do not want to work weekends, and they're now I think week seven of job hunting. And every like everyone in the family is saying you're going to have to work weekends. And I I said just like last weekend to our family we were talking about. I said no one has to keep telling her that because life is telling her that like she's going to these job interviews and they're telling her we only need like we need people on weekends. So she is learning that lesson and she's now you know unfortunately in the pain of it of being seven weeks in with no income is really tough. So I think as parents we want to step in and help a lot, but I like you said. It's just trying to find that balance between kind of letting them crash and burn, but not in life-altering ways. Hopefully, in ways that
Erin Davis 24:10
you know challenging, where they
Speaker 1 24:12
learn a lesson, but you know can recover.
Erin Davis 24:15
Yeah, yeah, yeah. So many of us grew up in households, like you said, where money was not mentioned, it was not talked about, or we just picked up on the the the fights or the little bits and pieces. What do we need to unlearn when we're now teaching our kids about money?
Speaker 1 24:37
Yeah, I mean, I think that is again such a great question, and I think it would be different for every person. You know, my husband and I, and this this is the interesting thing too. If you're in a relationship and there's two of you, you can bring in completely different money habits, money beliefs, also. You know, you talked about neurodivergence there. Like when you have things like ADHD in the mix, that that is there's such a compulsion element of that. And I'm certain my dad had undiagnosed ADHD. He used to do things like come home with a car that he's just bought. That you know, he hadn't talked to my mum about just here's our new car. So she he had no idea whether we could afford it or not, but she would have to be you know she was the the budgeter in the family and she would have to be the one to figure it out, and he was always doing come home with a puppy with a dog and just these crazy things that mum had to then deal with, and that is that can add like a whole extra layer of fun into this whole thing, and that's I guess why I'm even more passionate about everyone, but especially women understanding their money and how it works because that can be a really stressful place to be. And if you're if you're in the marriage, and you know sometimes you've just you've got to deal with what you've got. Like ideally, you want things to move forward and you want that that behaviour to stop. But if it's not stopping, how do you set yourself up so that you don't feel you're taken on this ride and that you feel comfortable? And that might be, you know, that could be something like setting up your own separate savings account, your own little pot of money that you know you've got your own emergency fund, even if there's the your joint finances are a bit chaotic. But yeah, I think women in particular, we just don't have the same relationship with money that men do. You know, men will really quite, and I'm generalising obviously, but men will quite openly kind of have a chat about crypto and stocks and did you see the latest thing with Elon Musk and blah blah blah. Women, we're more likely to do that about you know menopause symptoms and the latest face serum we're using and things. So, I someone said something the other day, to me, about I can't remember exactly what it was, but it was about how my content is really easy to consume and and really fun. And I was like, that's the biggest compliment to me because I want to try and help women interact with their money in a way that feels light because it can feel so heavy and it can feel so exhausting. And you know, of course, money is tied to so many really important things. It's our sense of safety and security, and our ability to make choices and to leave bad relationships or bad jobs or bad situations. So there's a lot riding on it, and that can make things feel even more stressful. So wherever we can plant some seeds to make it more streamlined and easier to manage, I'm a big fan.
Erin Davis 27:42
Yeah, what happens if a mum is watching this and she's like, "Oh man, I've left it too late. Like, I should have started so much earlier. My kids are early teens or late teens. I've missed the boat. What do I do? What do you say to those women?
Speaker 1 27:59
Yes, there no boat has been missed. Yeah, it's never too late. And I actually address this in the book too because my kids are 1013, and 15, so we're a bit further down the road. And at any age, you can start to take action that is going to put you ahead. And I actually have a little chart in the book that says, you know, if you start at age zero as a newborn and you invest this much, this is where you to get to. I think it was to get to a million dollars, you you put this much in. But if they're already three or they're five or they're 10 or they're 15, you know how much you'd have to catch up or how much extra you'd have to put in. But any age, there are steps you can take. It just might mean a different timeline or a different outcome. But for instance, the superannuation strategy I was talking about, your child could be 19, and if they're earning under that threshold, you can put that strategy in into play. There's also, I think, between about 47 and 62,000, you get partial contribution, so there's still benefit for doing that. Anyway, so those types of things can make such a big impact, and it might be the case that you think of, say, say your child is your child could even be in their 20s. Say they're in the 20s right now, you could go right. I'm going to put $20 a week aside into this ETF, like not financial advice, but ETFs are pretty straightforward investing structures. So you could say, I'm going to put $20 a week into this ETF for the next 20 years, and when they turn 45, I'm going to give it to them. Whatever's in it, I'm going to give it to them. And just doing taking that action, you'll end up with a pot that might be, it could be worth anywhere from you know 10,000 to 150,000 by then. I I can't do the numbers on the fly, but you know any principle
Erin Davis 29:52
is the same though, right? Like yes, I think you just need to start from where you're at, and it's about what can you manage what what. Sustainable, and don't put yourself into this space of feeling guilt or shame that you haven't started or you haven't done it early enough. You know, we've all made decisions in the past that maybe were not great financially, but we can't go back and change those. So, what do we need to do going forward to allow ourselves to be financially stable, but also give that financial literacy and stability and head start to our kids, that at the same time doesn't mean that we go backwards.
Speaker 1 30:34
Exactly, and I think it's like that feeling when you go to a buffet or you eat a really greasy meal, and afterwards you feel so sick, and you're like, "Why did I do that? I'm such an idiot! And you don't feel good about yourself, but it's like the next day is a new day, and you can make better choices then. And you don't know, you don't know this stuff. It's not like you know you got this information and willfully ignored it, but you didn't know about it. And now that you do know, you have options. And I, I complete. I remember when I did the first edit of the book. One of the one of the copy editors wrote through it, and she said, "I feel so relieved now because at the beginning I was thinking I'm so behind. I've missed the boat. I've made a mistake. I should have started earlier. And she's like, "The more I read your book, the more I realise there's still so much time, and I feel really comforted by that fact that I haven't missed the boat, and I really hope that's the takeaway that people have because there's always more time to make different choices.
Erin Davis 31:32
Yeah, yeah, and I think particularly with kids, kids are going to be in the market for a long time, so it's not about timing the market; they are time in the market, but even for us as women, we still have plenty of time too. So there's no reason why. Like when I was reading the book, it made sense to me. There's lots of things in there that just made sense as an adult that we can be doing for ourselves now to help ourselves financially. So I think it it applies to our kids, but it also applies to us too. That you can just start now. You you haven't missed the boat. You still have the opportunity. And yes, you're not going to have as much time in the market as what your kids are, but you've still got you've still
Speaker 1 32:18
got time.
Erin Davis 32:19
Years, 30 years, whatever that looks like.
Speaker 1 32:22
Absolutely,
Erin Davis 32:23
start now.
Speaker 1 32:24
And I think the language we use when we talk to ourselves is really important. Whenever I'm talking to a friend, and you know, it sounds boring, but we do talk about superannuation quite a bit. But when I talk to a friend and they go, "Oh, I've only got 140,000, I say, "Get rid of only 140,000. Like, is a huge amount, and let's project that and see what that's likely to be by the time you're 65, and we can look at that and take steps. And if you're like, that's not enough, let's look at what it's likely to be, and then we can look at the impact of an extra $20 a week or $50 a week or whatever you might be able to afford. But I was even I was talking to a financial advisor a little while ago about women who are older, you know, like probably in their late 50s to their late 60s, who are nearing retirement and feeling like I've missed the boat. And she said, even at that age, whatever pot of super you've got, let's say you've got 250,000, and you're 65, and you're planning to retire at 67. You might think, "Oh, I've only got two years left. But she said, once you retire, you're not going to take that whole money as a lump sum that day. It's like in the first year, you'll draw down some of it, but the 90% of that wealth is going to stay there and continue to tick over and invest and grow. So it's it's never too late, and I think if you are feeling concerned about it, get some advice. Whether that's a financial advisor or your super fund, they often have financial advisors within the fund. If you if you you know it's not affordable to get your own personal advice, and just see where it's all gonna where it's likely to land, so that you can have a bit of reassurance about what the future is going to look like.
Erin Davis 34:04
Yeah, I think that's such important advice. If someone reads this book, what's the one main takeaway? Which I think you probably already know what you can say. But if you had to say just take one piece of advice out of the book, what would it be?
Speaker 1 34:24
Start today, whatever it is. Just get started, and it doesn't matter what it is. That's my main thing. It could be shares, ETFs, property investing, like whatever it is. Even crypto, that's not my risk profile. But if it's your risk profile, that's fine. And I do go in the book. I go into a little bit of detail about how to work out which investment style you're most comfortable with. But what you invest in matters way less than just getting started. And and you know, there's this great graph that was done. It was on the cover of the Australian Financial Review a few years ago, and it had. A a $10,000 investment over a period of I think it was 30 years, and it showed all the different investment types and where it landed. And I think the very very top one was maybe international shares, and then the next one was Australian shares. The next one was investment properties, and all the way down, the lowest one was cash, like just putting your cash in the bank. But the most important thing is that all of them went up. And what happens is people spend so much time trying to figure out which one, and I don't want to get it wrong, that they don't do anything, and then you miss the time in the market. So you're much better off investing in something that only grows at 6% than missing out altogether and not investing at all. So get comfortable, get a bit educated, and just start with something with anything.
Erin Davis 35:52
Yeah, I think that's such important piece of advice for all of us. You mentioned in the book there's this pay gap that starts really young, like under 12, and boys are earning about $10.30 a week. Girls are earning $7.50 a week. I thought that was really interesting that that pay gap is starting super early.
Speaker 1 36:16
It's so funny you say that because I've just got. I'm just looking on my phone. Just got the latest research, so that one in the book was from last year, and now I mean we've had a bit of inflation. The average pocket money is now over $20 a week per week for kids under 12, but there's still a gap. Boys are still getting more than girls, and I think we've done a bit of. There's so much academic research into this, and I've done a little bit myself. And some of it still comes down to this idea of visible work. You know that boys are doing the really visible stuff. They're washing the car and the pushing the the mower across the lawn and taking the bins out. And it's really quite like performative. And I don't mean performative in like in a negative way, but I mean that it's very big visible tasks. Whereas women and girls can be doing the the less seen work of cleaning the bathrooms and putting a load of washing on and doing the stuff that kind of can happen in the shadows. So that can play into it, but also I did a report last year called "The State of Women's Wealth, and we had this research in there. And I actually went through every age group from from like childhood through to menopause and retirement, and just looked at the the challenges and opportunities at each last stage. And for the for the children, when it was around pocket money, like we saw that, that's where the gender pay gap starts, and it just continues, and it like chips away at every age. So it starts with a little bit of a difference in pocket money, and I I actually spoke to quite a few parents at the time, some who came forward and said like I hadn't even thought about this until I read your report, and then I realised like I actually give my son more than my daughter because my son is more social and he goes out every weekend, so I give him more money and she's more of a homebody and so I don't give her any. Or you know my son is really outgoing and boisterous and vocal and he asked for 20 bucks a week so we gave him that, but my other kid didn't ask for anything so we've realised we haven't been giving him anything, and you know, there's like so many of those little biases that can creep in, and then it's it just becomes systemic and you know society wide that women generally work in careers that don't pay as well. We don't value those caring careers as we do as much as office jobs and all of that kind of stuff just continues and flows through.
Erin Davis 38:44
It's really interesting, though, isn't it? That it starts so early without us even realising, and we're just we're just not paying attention to it. And then all of a sudden, that just develops unconsciously that self worth, that deservingness, what I can ask for, what I can't ask for, and it just escalates or perpetuates as you grow and as you get older.
Speaker 1 39:10
Yeah, yeah, absolutely. And I know, you know, I'm in these discussions quite a lot, and I spoke to a friend, a male, and he was like, "But men are just better negotiators. And I said, but why do you think men are better negotiators? Like, there's a reason for that. And I said, you've never walked into a workplace setting and had someone try to touch your body or make a disparaging comment or look at your boobs while talking to you. You know, like women have. There's a lot of moments that kind of shake your confidence a bit that men just will never understand. So just saying, well, men are better negotiators is such cop out. Like I could be a better negotiator if we all had to go to work in a grey sack and everyone looked equal, and you know there was no opportunity for any of the. Kind of harassment that women get, it would be a different story. But you know, it's something that men I don't think will ever fully grasp.
Erin Davis 40:08
No, no, I don't think so. Just a couple of final questions. Now you're a commentator. You work with Finder. You work in this space, what's what do you see for women financially at the moment? Where do you see women are at, and where do you see some opportunities for us to really like narrow this pay gap or narrow this lack of financial literacy?
Speaker 1 40:38
Yeah, I think it's such a great question. One thing that I often suggest to women is to think ahead. So, where do you want to be, and whether that's in five years, 10 years, or 20 years? Like, what do you want the future to look like? And then you can make that plan going backwards. Because I think you've got to stick in your own little individual lane. Because if you think about all of the stuff, it gets really overwhelming. So just stay where you are and stay really clear on your goals. And so I had a friend who she went through a really nasty divorce a couple of years ago, was starting again in her 50s and like literally had raised children and had never worked, and suddenly was like in her 50s and now having to find employment and it's whole new world, right? And navigating it all for the first time, she'd never paid bills because her husband had always taken care of it. So it's like brand new, and really confused about what the future held. And so the first thing I did was say to her, like, "You're you right now. You're 52. Where do you want to be when you're 70? Like, what does that look like for you? And we were able to work out that she wanted a home, and we were able to, you know, help her tease out exactly what that home would look like. Like, you know, if you want a home like the one you grew up with with your family, you're going to have to have borders because you can't afford that on your own. But how does a townhouse feel, or how does an apartment feel? Like, where do we land in all of this? And we jumped into her online super, found out what that was like, did a projection to see where it's likely to be by the time she's 70, and I showed her that. Obviously, I'm not a financial advisor, so it wasn't financial advice. This was just like a friendly chat between
Erin Davis 42:18
conversation, though, isn't it? Yeah, yeah,
Speaker 1 42:19
yeah. So I wasn't like giving her advice, but I was just showing her the tools that she had, and I was like, when you log into your super, you can see where it's likely to be. So we looked at the difference between her working to 65 and 70, and there's a really big difference. And I said, I know the idea of working an extra five years probably doesn't feel amazing, but this is likely to be the difference in your future, you know. And I just love information is power. It's not a what do you call it? It's not like a directive like this is what you have to do. But I was just able to show her like these are the options. So yes, you could get into a big family home again, but you're going to need someone to buy it with you, or like your kids stay living with you till they're in their 30s and different things, or like this is a more feasible option. Like, could you look at a townhouse? You know, she lived near the beach, and I was like, I just I don't see that being feasible for you in the future. But this is what is possible, and this is where you could be heading, and so she just afterwards she's like, I just feel like a giant weight has been lifted because I'm now not living in no man's land with no idea what's ahead. I'm like, I feel that there's potential for me to get my life back on track, and so that was such a long-winded response to your questions, but I think figuring out what is really important to you and what you want the future to look like is the the best way forward. Because even if you have pie in the sky dreams, there it's good to know them, know what they are, and where you might be able to pull some levers to get there.
Erin Davis 43:59
Yeah, I love that. My whole philosophy is the grounded rich girl, so it's create your own version of rich. But in order to do that, you need to have your money sorted because money gives you freedom and it gives you choice. And so I really love that that you said, like work out where you want to be, and then what levers do you need to pull? How do you need to get there? And that is about then creating the life that you want, which is so different for everybody, right? We've all got different ideas of what that looks like, but as you said, if you don't have the information and you don't know where to go to look for these things, it can feel like you're just running around in circles and not getting anywhere. So I absolutely love that. Thank you so much for joining us. Where can people get your book?
Speaker 1 44:44
Yay! She's very pretty. She's bright yellow. You can get the book at all bookstores and airports. It should be available everywhere. You can buy it online at bookshops, and you can find me online on Money Margarita on Instagram. I'd love to connect with you there. I love chatting. To people about this stuff, so feel free to drop me a DM. And I'm so glad you liked the book; it's so fun. And the more that we've chatted here, I can see we have very similar philosophies.
Erin Davis 45:09
Yeah, thank you. And as I said, I I normally fall asleep reading. Like that's my downside. I did not fall asleep, and I was so proud of myself because, yeah, as I said, this is the stuff that I love talking about too, and I know that the conversations that I have had with my kids have just impacted them so much already. My daughter said to me, "Oh, thank you so much, and I'm like, "Okay, what did I do? Just teaching me about money. The conversations her friends are having with her are so very different. Like she's now speaking to them about well, what she's doing, which just you know puts that information out there, and then it leads curiosity for them to say, oh, well, what else can we do? What can we do differently? And it all just starts with us having the conversation and learning as we go.
Speaker 1 45:59
That's exactly it, and that that whole ripple effect that you're talking about-that's what I'm so passionate about. Like, I-I kind of looked at my kids, and I'm like, "You're going to be fine because you've got my advice, you know, to help you get sorted. But what about your friends? What about the community? What about everyone else who should have the same access to this info? So, yeah, I fully agree.
Erin Davis 46:20
Yeah, perfect. Thank you so much for joining us.
Speaker 1 46:23
Thank you.
Transcribed by https://otter.ai