Your Financial Future

Ben Crowther 0:02

Testing one, two testing 1212 testing. Beautiful.

Allen Chan 0:29

good that we're providing value and adding more content, which is what we want to do with our audience. Yeah, just try and give people a bit of a helping hand, which we'll have a bit of a discussion about before the podcast ends about some things that we've got coming up.

Ben Crowther 0:00

skirts tap.

Okay through to one. Oh, hello,

Allen Chan 0:14

a good Ben,

Ben Crowther 0:15

another another zenergy finance podcast begins really looking forward to it. And number five it is now. So starting to oil halfway to double digits and said,

Some exciting times.

Allen Chan 0:48

understatement, exciting things. Yeah, you know, rates and increasing, there's things happening. But I think it's good to talk about it. Because now I think it's already important to have that financial gym happening being bad, sir. That's

Ben Crowther 1:05

it, you know, get training, you tried everything else. We're told to train everything else in our life. But we there's no way to train for to get your finances in better shape. So hopefully, by the end of this podcast, today, we'll we'll be able to share a little bit of information of what we've coming up coming up and, and how we can help people get whipped into shape and financially.

Allen Chan 1:30

Yeah, I think at the moment, we've a lot of things from the government happening, there's things you can control, and you can't control. And I've been like telling my team, it's focusing on things that you can control, and creating that financial certainty. And one of my mentors, I mean, he released a book and it says, having those tools and implementing it, which is the most important taking massive action, and getting that experience to become unshakable. I think that's the word that I really want to aim for. If you master these 10 points, or the content that we're doing, I feel you feel a lot more certain moving forward, in terms of whatever financial stuff that you want to do. Hopefully, not hopefully, it will give you that certainty.

Ben Crowther 2:15

I think it's right, though, if you if you if you build yourself into a strong situation or drunk, strong position, then then barring an act of God, and even some of those that you can insure against, right.

Allen Chan 2:28

And that's that certainty that unshakable you and if you die, you can be financially. I mean, well, for the loved ones, it's not a good, pleasant thing to talk about. But these are the planning to have in place, and

Ben Crowther 2:40

I'd be married. I'd be buried in a pine box. Yes.

Allen Chan 2:45

And in fact, yeah, that's where I, you talk about insurances? Me and my wife recently review that. So we'll talk about that point and elaborate bit more. Yeah, sure.

Ben Crowther 2:53

So I guess today, the the, the topic that you and I have been discussing is, is building someone's financial fitness, making sure that they're, they're ready to, to prepare for anything that might be thrown at them. Any challenges. We've come up with a few solutions and a few things that, that need to sort of take place to make sure that you're in the best situation you could possibly be. So when things do happen, that they always happen.

Allen Chan 3:24

They do. Talk about my past experience.

Ben Crowther 3:26

Yes, exactly. Right. Yeah. Then it's best to, to know that you've got that peace of mind, make sure that you're okay. Everything might not be rainbows and kittens, and but you put yourself in the best possible situation. I know, from personal experience, sometimes bad things happen. And because I hadn't acted earlier, you're in a bad, the situation is made worse by where you are. So I think as a responsible person, or a father, whatever it might be a caregiver, putting you making sure you're in the best situation you can be in personally, not the best situation that someone else can be in. But understanding your personal situation. Yes. I think you can feel better about yourself. When something does happen, you know that this is the best way you can deal with things. Yeah. And

Allen Chan 4:23

I think the way best to start then is knowing where you're at. You know, are you in a good place? Are you not in a good place? So those that have committed and listen to our fifth episode, probably they want more, someone that wants more, or you know, your financial shape isn't the best that it could be, and wanting some sort of solution to rectify and take it to the next level.

Ben Crowther 4:44

That's exactly right. So I think, and we've talked about this before, but I truly believe in that is, first things first. Look at your finances. Be honest. with yourself, create a budget. I think that's it's the most basic thing. That while it sounds basic to me, or to any sort of anyone, I mean, I think it's the stick in, in every, in at least one episode of every sitcom that I've ever watched, you know, teaching someone how to budget. And it's still, it's still true now people, people get to sort of weigh age 35 and have never created a personal budget. So they don't know how to do it. They don't want to do it because it gives them a it puts one of sense of responsibility that they don't want to do. So they want to go out and buy those. I don't know, what's Nike T NS or something like that, that cost $700. They don't have to justify it to themselves, because the money's just sitting in their account.

Allen Chan 5:53

That's fine. But I think, you know, definitely, that's the strategy. Like, I won't go through it today. One, one of the big things for myself, when it's, you know, embracing this financial journey is definitely the mindset is quite important. But again, we won't focus that because Ben saying is a budget. But I think more importantly a bit before if you're honest with yourself, because I believe the truth will set you three, is that is this a symptom? Or is this the course? Right? When I don't have money? Yes, people see this as a symptom. But the cause is, I don't have a budget and haven't stuck to it.

Ben Crowther 6:27

That's right. Yes, the truth. Right, it's 100% 100%. And, and I know personally, when I make a budget, and then blow it, you know, something happens, and I blow it, I feel bad. Like you, you know, you've done the wrong thing,

Allen Chan 6:43

at least your way you blown it. And then what can you do? Like people don't, you know, plan to fail, they fail to plan. But if for that one month, if you failed, or you feel like that didn't achieve the goals that you want, but then you got the next two months write it, because I don't know how often that you budget, Ben, but I see people they look at it monthly or weekly. But sometimes it may be a bit more custom if it's a quarterly budget, right. So a bit more flexible in terms of how you're budgeting because bills don't come monthly. Sometimes they come quarterly, right? So even though you overspend, don't hit yourself and beat yourself in the head and say, Hey, this is it. And I won't do it again. It says, what's the progress? And what have you learned?

Ben Crowther 7:24

And I think it's not even I think most people will budget from their pay cycle, you know, so if they've got a weekly pay cycle, this is my weekly budget, you know, but then you've got to also take into consideration like you said, quarterly bills. But then what happens when your car registrations do what happens when your car needs a service? What happens when you blow the flat, you get a flat or what happens when one of the one of these things that happens every year, these recurring payments comes in? What about your council rates, things like that? Yes, you buy, I think you've got to us right there, you've got to expand your horizons to not just think from pay to pay, you've got to take a look at your entire financial situation, you know, okay, you weren't 75 grand a year, how much of that is already spoken for? Before After Tax depending on how the way you want to do it, and then then work out a plan from then.

Allen Chan 8:13

And I feel also, you're talking about some of the unexpected, which is, you know, the six point that we're talking about slight emergency, we're jumping a bit, but you know, hopefully we covered the 10 points. It's just a recent example that I had been that you need to have, you know, a buffer for unexpected expenses. I mean, we own a home and unfortunately, the aircon the compressor blew up, and it costs 4000 something to fix. And my wife was like, hey, it's you know, to fix this 4200 Or you would you like to replace for 15,000 Right? So it's more around our having that budget or it for those that have read a book or like Robert Kiyosaki in his cashflow game he they call it the doodads, right? So it's the unexpected expenses that you need to buffer for. And that's where you need to have that contingency fund and the emergency fund, not just like for acorn, it could be health, it could be other aspects, the kids like, you know, it could be excursions that happened Who knows right? Well,

Ben Crowther 9:15

then that being said, I mean, the aircon blowing an aircon blowing up in Australia during the summer. Yes, can honestly, if you've got older family members or things like that can be really detrimental to someone's health. Yes. And your incident is spending what Australian summer three, four months of 40 degree heat, you know, that that can be unbearable, not just not just to someone's health but to people's psychological health. It's it's not great. And if you can't come up with a solution quickly, you know, that's that's a big deal.

Allen Chan 9:49

And that's why coming back to the budget is having that kind of buffer in place, not just budgeting So every dollar is maximized, but have we put some considered contingency is in place. So it's a bit more robust, a bit more flexible. I'm not saying hey, every month, I'm gonna have a compressor change, let's face it, but I kind of like blew my contingency fund for the next quarter or half a year. But it kind of helps with your psychology. So it's not like, oh my gosh, I need to pay for it using credit card or personal loan, it's I've counted for that I knew that it's going to happen. It's not the best thing that has happened. And again, you're in more certainty and control of your finances.

Ben Crowther 10:30

And just to add on to that, I've been in a situation where my car's blown up. And I needed, you know, I needed to get to and from I needed to work to earn more money. So I have to then redirect funds from other things. And something like that can take months to recover from because once you behind on something, you're always behind the eight ball, you've got to you know, and you've got to take big steps in order to recalibrate, look at the budget and all you read budget, and you're trying to build onto that. So it's not only just budgeting, it's, it's making sure that you're budgeting the right way. Which we're going to be we're going to be putting some stuff out there for you guys. So make sure that everything's accounted for so that you don't we're gonna take a lot of the hard work out of that for you.

Allen Chan 11:20

And even if it means that, yes, I had that replacement with their air conditioning, but is there other accounts within the budget that can give way for example, like, now the acorns are we going to have more Uber Eats and then then we used to, or the deliveries, right? Maybe less, right? So it's kind of like reducing from that going out spending right to make up for that doodad. Right, or unexpected expense. And that's where the flexibility of the budget, I don't want us to be so rigid that this is the dollar and cents that we must be spending. But when you have that, at least you accounted for. And that flexibility, that's when we'll make the budget work. And I

Ben Crowther 11:58

think that's I think that's a trap a lot of people fall into is they don't want to commit to a budget because they think that a budget means that they can't have any fun that they but you can have fun, but you've already you've already planned for you, you know what is available, and what's within that budget. But it doesn't mean you can't go out and have dinner or go to the movies and that you sitting at home eating, you know, crackers every night and you know, staring at a nice bank account but not really doing anything. That's that's not what a budget is about a budget is making sure you're living within your means. You're making your life better for you and your partner and your family. But that you're enjoying life as well and and enjoying life. It means not having to worry when those things do happen.

Allen Chan 12:51

That's what you got to budget or you're like crazy things that celebration the troops. That's part of it. So you know, if you designed it well, it everything will be incorporated in the budget. That's why symptom of the course. That's a really key thing to take away. Exactly.

Ben Crowther 13:05

And you just brought up a good point there, which we're talking about the big events. Now, I know, you've got some articles on this energy website that talks exactly about things like Christmas and celebrating going on holidays. If and there's tips and tricks and things, but working on creating a budget for that event that works within within your existing budgets. Yes. That's that's the way to do it. Don't go hey, I got a five grand bonus at work and just that's your that's your budget? Because, you know, you what's, what's your favorite saying about failing to plan?

Allen Chan 13:46

Yeah, go? Well, you don't want to plan to fail. That's right. People fail to plan. But hopefully look, I mean, this is just point one. And hopefully it gives the audience a bit of a, you know, something to think about. And there are ways to resolve it. Because I've had a lot of experience and conditioning in my self. One thing is the mindset like I was talking about but won't go through because these are the strategies that if you implement, it will work. But I think let's get to point two, right? Yeah. Oh, point three, you're saying I just

Ben Crowther 14:18

I just sort of follows up? Yeah, because look, we do we mentioned a few things that could happen there. Such as you know, your car breaks down. You hate cold blows up, things like that, that do happen. And but in the end, those are things to be a little bit more serious for a second insurance. There's multiple types of different multiple types of insurance, and most of them are there to make to secure and give you that peace of mind. But there's things like loss of income. You know, if you're injured at work, something like that, that doesn't allow you to fulfill your time. asks, a lot of a lot of workplaces will have something in place to help, you know, work cover, for example, things like that. But a lot of that says you're operating at a certain percentage of your usual income. Which, as we've just noted, if you've budgeted out and every dollar is accounted for, and you lose 25 40% of your income, overnight, it's not going to take you very long to eat into that, that emergency fund, it's not gonna take you very long to sort of burn through any goodwill you have with your creditors or anything like that. So I something like income protection, I think is a bit of a must. You know, Home Home, home contents, home insurance. Look, these these, this might sound quite obvious, but I can tell you right now, the amount of people I know who don't have home insurance, out of personal experience, I live I live in an area where there's quite a few. It's all acreage, okay, now we had this a guy who moved in down the road, it was brand new subdivision, he got he has like five acres, literally built, built his dream home with his wife and his kids. And they moved in. Three weeks later, the house burned down while he didn't have any insurance. Wow. So not only was he without a home, on an what I can only imagine was an it very expensive, five acre property, right. He had no way of off claiming the back, he was paying a mortgage on a house that no longer exists. And him and his family had to buy old coaches like buses, and convert them into temporary housing. That was 10 years. And after about five years, they moved into a giant shed out the back that they'd repurposed. But it made me happy. Not long ago, maybe 1218 months ago, they put the finishing touches on their brand new house. Yeah, sure, which says exactly. But that was 10 years ago. That happened 10 years ago. And he's only just they've I don't know if they've recovered from financially, but they're now in a situation where now I don't know if that means that he's got to work another 10 years, or because the situation that he not having that insurance. Put him in was, I mean, you heartbreaks for the guy. But on the other side? Look, it might be an extra couple of $100 a month out of your budget, or whatever it might be. But and you always say is never gonna happen to you trust me. I've had a house burned down. It's not fun. And you don't want to have to deal with it. Yeah. I mean,

Allen Chan 17:57

that can happen. Right? So I think just like, insurances. I was sharing that. My wife and I review our insurances, right? So it's not something that you should be like, if you're reviewing that you should be canceling. I mean, do you need it and so forth. But I think the King come, I mean, we insure our cars, which is a very common thing in Australia to buy, because when you need it, right, I mean, there's different types of insurance, which I won't go into. But as a basic, you need the green sleeve, right, which is for third party injury, and so forth. But that's a car right, which is a depreciating asset. But if you've got an income coming through, and you're not insuring that like, you know, that's just nuts, right? So I'm not a financial planner, I'm not, you know, providing a referral to a different product in any way. I feel it's just a mentor. He said to me, it's not how much you earn, or, or how much you have is how much you keep, right? So keeping is not just like, yes, the budget income minus expenses, but do you have adequate, adequate insurances to protect it? Right, if should anything happen? And I think that's the key thing. But protect is even one thing, one of the learnings is really reading the policy what you protect the for, right? Because if you do have to claim they're not claiming the right thing. Right. Some some policy may be exempted, and you're not qualified for right,

Ben Crowther 19:10

look, look at what's happened out where I'm from, with the floods recently, right. You know, a lot of people weren't covered for the level of flooding. And that's simply because the insurance company knew more than they did. They'd research more, and they wouldn't provide that let that next level flooding insurance. So, you know, again, puts you in a very tight spot when something like that happens,

Allen Chan 19:34

which is like not just getting the insurance, which is an activity but being clear, and what am I covered for? I think that's that's a key thing. Unfortunately, that's happened, but I think that's something that you know, you need to review and review means that's a skill set. Not only just budgeting but looking into the details, what am I covered for I think that's the key. So, I know we're jumping around a little bit, Ben, but hopefully it's giving a bit of value because there's not the right order. aptitude these,

Ben Crowther 20:02

these are the these these Guess where I just? I think I think we're just trying to humanize some of these issues. It's I know finance can sort of bog people down a little bit of the minutiae of it. I think if you given your understand that both Alex and I, we, we've had some experiences with on both the positive and the negative side of these, these situations. And I think giving him a human face sort of helps instill that in people, you know, that helps them understand that, you know, it can happen to you, and better to be prepared.

Allen Chan 20:41

That's right. And what's the next point, we're going to cover? Ben,

Ben Crowther 20:44

I think, you know, we've we've sort of been a bit of a Debbie Downer for the last little bit talking about all the bad things that could happen. But talking about ways to improve your position. So not just maintaining and looking after what you've got, but then also putting in the time and the effort to expand what you have, and and to look at things with and to look after yourself with other people's money? Yes. So

Allen Chan 21:14

I think what you're referring to is probably investing, right? So I won't go into a specific asset class, but I think investing is probably a skill that you need to have, and you can't just sit or your money into just, you know, returning low returns, it's more exploring, what can you do and get a better return than what you're getting in terms of cash or term deposits? Right. Not providing financial advice in any way. But it's just like to increase your earnings. Whether it's cash flow, whether it's capital growth, is this doing something else with your money, right, rather than having it in cash? If it's cash in the sense that it's physical bills, it's not going to double itself? Is it?

Ben Crowther 21:55

Right, yeah. Well, you know, you put you put $100 on the bed, and then 50 years, it's still $100. But I mean, it put it in an s&p, you know, yeah, well,

Allen Chan 22:05

I mean, you're gonna deal with inflation, you're getting the same amount of buying purchasing power. That's what the government's talking about. But I guess the key thing is, hopefully, this is a driver to look at, and I'm not in any way recommending any investments. It's just having that skill set to get good at what you're returning in

Ben Crowther 22:24

terms of your money. And I guess it's what you're comfortable with as well. I mean, it doesn't have to be property. I mean, if you if you've got a term that you want to put in a term deposit, or if you want Bitcoin, if you or a crypto or bloody NF T's if that's what makes you comfortable, as long as you do your research, and you understand the risks, the pitfalls and the possible gains, then everyone should make decisions that suit them.

Allen Chan 22:52

And I think look, a good website to really look at and this is a government website Money Smart isn't 100%

Ben Crowther 22:57

Money spy has has ever analyzed analyzes everything. They're gaining absolutely nothing by by giving you the advice, other than, you know, less people on welfare, I guess.

Allen Chan 23:11

But it does talk about even I think EF T's talks about shares, talks about mortgage broking, everything that you can think of up to superannuation, they really break down. I mean, the government's done a fantastic job. But again, it's not about you know, the resources. It's whether you're actually going to the website and actually reading it, and more importantly, implementing some of the strategies that not strategies, like really understanding and implementing into your investment game.

Ben Crowther 23:38

That's all. That's right. Yeah. And again, money invested is better than money saved, in my opinion.

Allen Chan 23:44

Yeah. So next point, what do we have been?

Ben Crowther 23:47

So I think when you when you're looking at things like budgets and insurance and investments, things like that, investments 10 People tend to look at as, as big milestones, you know, buying a home, something like that. That's that's a huge achievement. I mean, that no one should be proud of. Yeah. And commitment. Yes. But I think everyone needs I don't know about you, but I also need little wins. You know, whether it's work or my private life, whatever, and I need a little win every now and then you know, if you're, if you're slogging it out, seven days a week, and you know, you don't feel like you've got anything out of it at the end. It can become, you know, mundane, it can be a slog, it's like ice skating uphill. So, I think it's important that you set yourself some short term goals. They don't have to be big things if you don't have a savings account. Go Hey, can I say $500 this month? No, but make them achievable. Make them based on what your your income is. You know, if you if you want to buy some shares, go, Okay. Well, I'm going to, I'm going to use I'm going to put $100 a week away. Yeah. And then at the end of that month, I'm going to look at go speak to someone about buying some shares, whatever it might be, they don't have to be huge goals. Not everyone's Warren Buffett, you know, when it comes to investing, do do what you what suits you create a plan, play, create short term goals that'll make you feel like you've won. And throw them away afterwards. Stick to them once you've got that plan once you've done 500 Okay. 5000. Yeah, keep building.

Allen Chan 25:33

I think what you're aiming for? Well, what you're referring to is creating short term goals, things that are achievable, and breaking it into bite sized spaces. I mean, if I talk about my experience, and you know, like November's probably 10 years in business, and every year has been profitable, and I've got multiple businesses now, it's not around Hey, ours, then all this, it's about where did you start in the beginning, right? Of course, registering like with the like, ATO or the company or ASIC sorry, to get the ABN. That's, that's the first step. I never knew where I was going to be now, right? But it's like exactly what you said, like bite sized pieces that you can achieve and reward yourself. Like, you don't need to set five hours of dollars. Like what Ben said, like, can you start off with $50? Right? Can I have a meal, like, you know, I talked about the Uber DoorDash, whatever it is, I'm not promoting it in any way. Like, just like, it's more like, hey, I'll get my takeaway, right? So that's something that you know, you're budgeting within. So you feel like you're winning, right? And then you get the bigger ticket items, right? And then you work towards your way to a car and holidays and so forth. Like, I have a friend and I'm just talking about he's, he's got a family of two kids. And he puts holidays as part of it as a bus, whether their business doing well or not. It's what he's budgeted for. Right. So it's kind of like his goal as a must that he needs to go on a holiday to Fiji, he needs to do this. Right? So if it's budgeted in and it's where the business I mean, his business is doing well. But even if it's not, it's budgeted for, then he realizes, hey, that's why we're doing these sort of strategies and making it happen. I mean, that's the reason.

Ben Crowther 27:12

As we've always we said before, you know, budgets don't always have to be a bad thing. And holidays, I think, are something that, you know, you need a person needs time away. You know, I know, you run multiple businesses, I have multiple businesses. Sometimes I'm staring at my computer screen for 16 hours a day, if you're doing that 200 days a year. That's, you know, sometimes it's better to be looking at the waters, you're having a fish than, than it is to, you know, I think this hole you've got to grind every minute of every day is wrong. I don't agree. I don't think it's healthy. I don't think it's the right way to go about it.

Allen Chan 27:55

I think you'd need to check every minute. Like, it's not like a business is turning over 100 million, like a few 100 billion that you got to focus on every day what your accounts are reconcile, I mean, even for my businesses, which leads to point four, right, one of the points is running your personal finances like a business now, does that mean every single day I'm checking my accounts and reconciliation? No, right? I mean, if it's like a simple one, like I said, is a quarterly, right? I mean, for those that are single, of course, like you're checking it once a quarter or once a month, right? It's whatever, you're just keeping track, right? Am I doing well or doing not? Well, right? That's the kind of like, you're looking like, if you're losing weight, Ben, I'm just said as an example, right? You you go on the scales, right, you're checking, if I lost weight, have a gateway, what do I need to adjust? Right? So I think that's the key thing that we're trying to have. Like, if you don't look at the scales at all, you're not really tracking your weight at all right? So therefore, running personal finances, I mean, myself, because there's multiple businesses, as an insurance policy, I have a monthly meeting with my bookkeeper. That's kind of like where I'm checking in. Am I doing well? Am I not doing well, not one of those, like, you're not doing well, you have a drink? Then you're doing well, you still have a drink? Right? So I think it's just like we said in the beginning, the truth will set you three. And that comes with your personal finances and hopefully, like one of my legacies is to raise the financial intelligence when it comes to your finances. So hopefully, we're through these podcasts and, and the resources and the tools and the webinars seminars and so forth, giving you that that that muscle, right, you know, training for that financial muscle that you can build on?

Ben Crowther 29:30

Yeah, no, I That's exactly right. I think the the idea of running your personal finances like a businesses is a great one. I think, you know, when you're running a business, a payment comes in, you put away for GST you put away for, you know, for tax, whatever, you've already got commitments, the moment that dollar crosses the line. Yeah, you know, 30 40% of it's gone. Okay, so, you've got to make sure that, yes, you've got to be able to pull it, pull it up, put it up. I think the same way about every dollar that you earn personally, I think if you can, if you can come to that mindset, then you know you're not look, the way I phrased it, there is exactly how a lot of people think about it. Oh, it's already gone. It's not. That's a responsibility taken care of.

Allen Chan 30:17

Yeah. And so accountability, I mean, personal finances. I'm talking now more in terms of business owner. When I meet with my bookkeeper, I always say, Hey, where's my best? Right? So bas? In a sense, what's my GST commitment that I have to pay for that quarter? And what's my PAYG withholdings, because I've got stuff that I need to pay. So it's I know, that number, which is pretty much I can see it through my accounting software, which I personally use is zero, but it could be any other accounting software, but just know that you need to come up with that money, right? Because the government, the ATO will collect that money from you. Right? Well, let's say gotta come knocking at some point, right? For those that are not running businesses, like how much tax and like, is there enough withholdings from the employer? Is there other things that I need to contribute more? This is where you need to run your? You know, I mean, we've go through other stuff, which is super and so forth, but keeping track of how much taxes do I have to pay, right for this year? Have I paid enough for my pay slip? So these are the optics? Or, you know, not so much budgeting but checking right, have I do I have to pay tax this year? Or do I get a refund? Right?

Ben Crowther 31:17

That's exactly right. Moving on to point six, which we've already sort of talked about quite a bit, but you know, having that emergency fund, and I'll just we'll just talk briefly on that. But you know, include the emergency fund in your budget, put, put money away every week, month fortnight, whatever it might be your pay cycle is and just ensure that you've got, you know, a little bit of a safety net. Look at each one of the years, whatever is a safety net for for you is gonna be different for someone else. You know, depending on what your expenses are, but, you know, even $1,000 Saved can can really take the pressure off if if something comes up.

Allen Chan 31:59

Yeah. And I feel is building that psychological muscle, not when things come up when your car breaks down. Oh, here we go again, and how am I going to get the money? Right? You already have that budgeted money to kind of off $1,000 Yeah, no problems, I've got 3000 saved or whatever it is, right? It's just giving that financial like certainty muscle that we're talking about that, hey, you have the available funds, right? But you got to be smart about it. Right? So it's willpower

Ben Crowther 32:23

as well, you know, not having that money sitting there. It doesn't it's not. It's not hey, I want to go on a holiday. That's not what that's for. Yep. You know, it's that's, I know, sometimes going on a holiday can feel like it shouldn't is an emergency. But you know, it's having that willpower, that strength to to know what that money is for, leave it there and just, you know, maintain the path, keep on tracking,

Allen Chan 32:48

and what's what's 40 Like, that's why it's emergency like people can die if you don't have the money for it. Right. So I kind of relate back to a movie. I don't know if you've seen a Disney movie caught up in the beginning, like they had to save like coins, and they were trying to adventure. Sorry, save for an adventure, which never happened because all these doodads happen. What was it? It was a broken tire layup, you know, it was a lot of other events. So this is where I imagined that movie, right? Yeah, your holidays may not be a priority, but you're taking some of the monies from there, if it's from the emergency fund, but if you have budgeted for that, that that would still go ahead. So it's really important to have that clarity again, is it the symptom? And what's the cause? I think that's the key. Now, if it's not working, and it's negative after the budget, then we need to adjust a few things, right? Let's face it, if you're putting everything you want the handbag on the holiday, and when everything else, the expenses are looking very beefed up, and you don't have enough income to support it. That's when you really gotta be the truth will set you three like what is it that I'm going to willing to, you know?

Ben Crowther 33:55

A little bit and that's it. I think the whole idea of a budget is short term sacrifice for long term gain.

Allen Chan 34:03

But what I love about it, it just doesn't discriminate this formula income minus expenses. I don't like it. You could be Australian, Asian, any other ethnicity, right? That kid color race or whatever it is. It happens everyone it's talking about what is income minus expenses? Universal? That's right. All right, what's the next one I've been?

Ben Crowther 34:24

So make saving a priority. You know, if you've got a goal, and I'm talking more long term goals here now, it's going to take some effort, it's going to take you know, focus, but make it make saving a priority. You know, a lot of people will put would put down oh, you know, if I if I have anything left at the end of the month, then I'll save then I'll save it. It's the wrong way. You know, it's okay, so this is what I'm saving this month. And that should be part of of everything you do. The first thing you should do is savings.

Allen Chan 34:59

Yeah, yeah. I think look, just going back to some of the personal development courses that I've done. It's about baking cake. Right. You know, John bit the dog or the dog bit, John, I mean, definitely a different experience for both John and then the dog. Right? If the order of events, I mean, if this financial certainty muscle is something that you want to build, definitely, that's something that you need to commit to. Right. So savings would be the first, right. I mean, yeah, and it's like making a recipe, if you want to assure the quality of the cake, when you're building a view following the recipe, it's not only the amount of gradients that you need to have, it's it's the order of events that it's put in and made. And I think in terms of the financial building muscle, this is the key. savings is the mass, it's the building block, like once you have that lump sum of savings, then we can talk about that investment, again, not recommending what investments are getting to at least you've got a lump sum, whether it's X amount to invest to and get a return on investment, make

Ben Crowther 35:54

that money work for you. That's right, you know, passive incomes, the best income. And speaking of another form of saving, that really helps, because you can't touch it afterwards. Or at least not for a little while. Yeah, sure. contribute a little bit extra to you superannuation.

Allen Chan 36:13

Well, yes, it depends on the age group that you're in, and what your risk tolerance, right. But the reason is speak to your accountant, it's more the taxation environment that you can be entitled to, when you're contributing extra to your superannuation, rather than getting tax in the government taking away from it straight away. Right. So I mean, these are the facts, I mean, Money Smart has it in there, like the concessional contribution for individual Pay As You Earn is 27,500. That's as of 2022. this financial year, it's quite all these facts. So it's about, you know, do you want it to be in a lower tax environment or higher depends on the income that you're earning, of course, but of course, if you're putting more money into that, super, you can't touch it, like what Ben saying, but then it helps you boost your retirement savings and reduce your taxable income, potentially, right. So that's, that's an extra bonus.

Ben Crowther 37:07

Yeah, and of course, if that's your, that's super sitting with someone who's who's investing it for you already, if you're not ready to invest by yourself, I mean, this is that's a, that's a good way to sort of get things moving.

Allen Chan 37:20

That's right. And what's next, um, so I

Ben Crowther 37:23

think the next one sort of leads me into a bit of a split course, but be mindful of your debt. You know, it's, it's very rare that most Australians have debt. Basically, everyone nearly has debt at this point, one way or the other. But not letting it get on top of you. And, you know, we've mentioned, you know, things happen, and, but debt can build up very, very quickly if you let it. So the best thing is, stay on top of it, do what you need to make it make your repayments, because unlike a lot of the other things on this list, debt can debt can be detrimental to your credit file. Yeah. And your credit file is definitely something that you need to maintain it in this day and age. And you still you we spoke about to begin with having making sure you know where you stand. And it's the same thing with your credit file. I have a friend who had a bad debt for nine years or so about nine years ago, and I said to him, you know, you should be fine. It's been seven years now. It's gonna fall off your credit file. No, he wouldn't do it two years, it took me to convince him to check his credit file. And his credit was perfect, because he'd had that one mistake when he was a kid. And, you know, but he was so scared of what he was going to see that, you know, a lot of a lot of the things like buying a house and things like that, that he'd he'd written off, even though I told him even though I'd said mate, seven years, whatever, or five years, whatever it might be, depending on the type of debt, it's going to fall off you, you record, he wouldn't have it because he was too scared of what he was going to see. And I think that's

Allen Chan 39:13

where the motion needs, getting into the way. And hopefully, like, we're giving you a lot of strategies. And it may sound good, and you're listening towards the end of the podcast, but it's more hopefully the motions and in the feed doesn't grab, grab a whole view and prevent you in doing something right. Like exactly what Ben is made that example would have cost him two years like it could have been in the property market or he could have done something. Right. Right. But it's, again, these tools do check your credit file, right. Do you know what your credit score is? Right. I mean, that's where Ben and I are designing like, you know, your scorecard, your financial scorecard. And I think it's quite important. Like, how do you measure like, I mean, if it comes to your academics, whether you're an engineer or whether you're a builder or your accountant, yes, you do a good degree. Eli bachelor and that's the upticks in how good you are or how much you know. But when it comes to finances, which is what we said, it's universal, right? We need to come up with a better scoring system in terms of how well you're going. I have clients, yes, I'm a mortgage broker that come to me, they don't have a clue in terms of whether their credit score, right, whether it's good, bad or indifferent. Right. I mean, that's kind of like, if we were to do that scorecard that would add points to your scorecard. Be mindful of where you're at. I mean, that's really important. But going back to your point on debt, Ben is, I believe, not all debt are equal. So that's the one thing that we need to be mindful of. That's good debt is bad debt. It's kind of like, you know, you talk about payday debt, that's probably the worst debt that we can even obtain, right, or even a solution that we go to, now I'm getting more common, it's like, your zip pay your your afterpay. Right, those sorts of debt. So, I mean, this is definitely a credit facility, it's not something that we like to see when it comes to lending and so forth. But just be mindful, like the amount of debt, what type of debt, right the good debt or the bad debt, if you're not sure what I'm talking about. And hopefully, you can come and join us in our live webinar or some seminar, and then get to an expert that can kind of clarify that. And very important because the amount of interest charge is very different on these different levels of debt.

Ben Crowther 41:22

And, of course, certain debts, like you said, a positive if you if you're staying on time, that's building, that's, that's a positive for you, you know, if you can stay on top of this debt, so just be aware of Yeah, like you said, the type of debt, the amount, and whether it's feasible for you, because, you know, although institutions do run through, you know, run you through a lot of, of parameters to make sure that you're there, you know, sometime sometimes things are a little honest, that clear, and you can get yourself into a little bit of trouble.

Yeah, anyway, so, moving on point 10. Our final point for the day, for a good time to sort of wrap up. But it and you've mentioned it before, but first of all, you said, you know, make sure you know where you're at. But secondly is know where you going know where you were, where you are all the time. So reviewing your finances. Not only we get a nice little kick to see that you're going in the right way, in a positive way. But you know, I'll put it this way for marketing, when we put a marketing campaign together, we launch it. And now I've seen some of the most amazing marketing plans in your life. Okay, some of the best you'll ever see. And you go, this is a winner, this, we can't lose, you get two weeks into the campaigning on this is terrible. This is not going away. And you know, then you know, then. So the differences in finances, it's pretty hard for things not to go to plan if you do the right things. Okay. So review your finances like I review my marketing reports. Okay. So you know, where you always ask. So you know, if there's changes that needs to be made, you can make them quickly. You don't want to be going down the path too long, where it's too late. And you know, you've already made the mistake. So review your plans or your finances consistently.

Allen Chan 43:29

Yeah. And I think, look, that's where when you're going great. That's fantastic. You'd be reviewing it, you should celebrate. But if it's not going the right way, you really got to beat yourself up and go, Hey, man, is this really where I want to be in? And often because you left it too late, and you like, you know, you're not doing well, right? You're kind of like, prolonging it. I just don't want to see the actual results. And and sometimes you left that too late, like six months and 12 months when you go to rectify it in month one, right?

Ben Crowther 43:58

That's right. And I guess a lot of the time this is because people don't want aren't being honest with themselves. If you if you start off being honest with yourself, speak to the right people understand what your plans are. It's pretty hard to go wrong if you've got the right people in Utah. But, you know, if you if you're not being honest with yourself about your spending or things like that, and you're constantly missing your budgets, then yeah, I mean, you might be in trouble.

Allen Chan 44:24

Well, I think that's where I kind of still review when I was at a fairly young age when I had my first property where it's at in terms of net worth, and I'm still tracking it today. Right? So I mean, that skill set has led me so if you're taking you know, I'm sure like the likes of very successful business people they still track right, whether it's through an accountant, if they're not tracking that's a bit silly, like I don't think so how can we how can they track like if they're doing well or not? So therefore that skill set needs to be translated doesn't matter. Like again, universal language, right? This is is a skill set that we must have. So striking the budget expenses? How are you? Well you're doing if you're not sure, go and talk to an expert, or like, you know, join with us one of the live webinars and all the seminars that you can really get that clarity into. So what I really need to work on, right, because yeah, there's so many products out there, like even the banks are doing a tracking what you're spending, right in terms of the like apps and so forth, that the key thing is I don't care what app you use, but how often do you track it? And you know, is it am I going well, am I go not? Well, I think that's

Ben Crowther 45:35

how many apps out there are out there. Now that way, you can set notifications and reminders if something goes wrong. You know, you don't it's not like you have to be staring at every second of the day. But you know, you can you can get a text, get someone to send you an app send you a text message if something goes wrong. Yeah. You know, and that being said, there's apps out there that do that for your credit file, if something changes on your credit file. That's a great idea. That's right.

Allen Chan 45:54

But it's not the strategy that will set you free. It's what you willing to implement?

Ben Crowther 46:01

Well, I mean, if you're worried that something's gonna go wrong, that's probably because you haven't put the right steps in place.

Allen Chan 46:06

That's right. So I mean, we can talk all day in terms of all these different strategies, but hopefully you got some value out of our session today. What's next, Ben?

Ben Crowther 46:15

So look, a couple of things coming up. Next podcast, we're actually going to be getting a few special guests who work within the housing industry. So we can have a little bit of a roundtable, people who come from the real estate industries construction, mortgage broking. So, you know, that'll be I'm really excited to see, you know, what sort of conversation that will come up in that. The next thing we've got as well is we're working on a new project, project product suite to help everyone out there achieve these financial fitness. And we're calling it the scorecard. Financial, financial scorecard. So we're going to give you the the ability to view where you're at financially, using some of the ideas that you've heard here with us today, then we're going to give you the skills and the information to get training with that financial that that Toby financial body into a lean mean, machine financial machine. I should have practiced that pun. I think that's a segue. But yeah, look, we're working on this at the moment. Big things are coming in the next month to launch it. We're really excited to share it with you. Check out this energy Facebook page, other social media, keep track of what's going on. You'll be seeing more there. The next podcast is coming in two weeks. At which point we'll give you a little bit of an update on the launch times for for the financial sports card.

Allen Chan 48:05

Yeah, I think it's follow us like us. You can have all different social medias were in there. But I think like if you want to like I think learning, right? If I'm not wrong, Ben. It's about immersing yourself and dedicating that time. It's about like learning a language. Right? So how often, if you really want to learn, for example, Italian, for example, do you learn it spaced out every week, right and one hour for 52 weeks, or you just go in there and just fully immersed 52 hours or a weekend or a weekend into Italy? With no language options, but to speak Italian right?

Ben Crowther 48:43

What I talked about way from that is that I should definitely move to Italy for a

Allen Chan 48:47

while I think the key thing is like anything that you commit to do, I think you just need to like immerse yourself around people, and then the language and the strategies. But more importantly, like I said in the beginning, it's shifting your mindset. I mean, if it's going well, that's fantastic. We can take it to the next level, but those that are not going so well in terms of their finances, I think it's one key thing that we're going to work on what's that psychology behind it? Or what's the not so much the symptom, but what's the source and give you some tools and if you implement, then we can get you on the right track. Yeah,

Ben Crowther 49:18

sounds fantastic. Okay, well, thanks for today. That's another other episode wrapped up that will add all the contact details and everything, all the information at the bottom of this podcast, and we will see you next time.

Allen Chan 49:34

Sounds good. Thanks, Ben.

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