Melissa Browne – How to Unf*ck Your Finances

HOSTS Alec Renehan & Bryce Leske|13 April, 2021

Meet your hosts

  • Alec Renehan

    Alec developed an interest in investing after realising he was spending all that he was earning. Investing became his form of 'forced saving'. While his first investment, Slater and Gordon (SGH), was a resounding failure, he learnt a lot from that experience. He hopes to share those lessons amongst others through the podcast and help people realise that if he can make money investing, anyone can.
  • Bryce Leske

    Bryce has had an interest in the stock market since his parents encouraged him to save 50c a fortnight from the age of 5. Once he had saved $500 he bought his first stock - BKI - a Listed Investment Company (LIC), and since then hasn't stopped. He hopes that Equity Mates can help make investing understandable and accessible. He loves the Essendon Football Club, and lives in Sydney.

Melissa Browne is not only an accountant, ex-financial advisor and entrepreneur, but also a financial wellness advocate, financial coach and occasional therapist, alongside finding work as an educator, speaker, advisor and an owner of multiple businesses.

She’s been a multi-award winning serial entrepreneur: as co-founder of The Money Barre, a financial planning firm for Gen X and Y; the co-founder & Director of Business at Thinkers.inq, an innovative long day Preschool based on creative and critical thinking; and until 2019 (when Melissa sold the business to an ASX listed accounting firm), she was CEO of A&TA, an award winning Accounting Firm.

Today she joins Alec and Bryce to talk about investing, financial advisors, key tips and lessons, and ask Melissa to talk about the memories and lessons of her first investment, her approach to ‘financial adulting’, and where to start when you finally decided to sort your money out.

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Bryce: [00:01:11] Welcome to Get Started Investing feed in this podcast, we cover all the basics that you need to start your investing journey. We unpack all the jargon in the confusing bits here, your investing stories with the goal of making investing less intimidating. And we want to have a good time along the way. My name is Bryce and as always, I'm joined by my Equity Mates Ren. How are you going? [00:01:29][18.3]

Alec: [00:01:29] I'm very good Bryce. I'm very excited for this episode. We recently did our 2021 listener survey. There was a lot of requests for more on personal finance. Yeah. Now I am definitely not a personal finance guru. You're better than me. You got a lot of spreadsheets, you know, a lot of very sort of some ETFs going up multiple times. But we've we've brought an expert in who can really help us unpack some of the elements of personal finance that, you know, that we probably can't speak to as well. [00:01:59][29.2]

Bryce: [00:01:59] That's right. It is an absolute pleasure to welcome Melissa Brown to the podcast. Melissa, welcome. [00:02:03][3.7]

Melissa: [00:02:03] Thanks for having me. [00:02:04][0.6]

Bryce: [00:02:04] So for those of you who haven't come across Melissa before, the resume is quite extensive. I'll just I'll just go through some of them. Now, she is an accountant, ex financial adviser and entrepreneur and a huge advocate for financial wellness. She's a multi award winning serial entrepreneur, having co-founded the Money Bar, which is a financial planning firm for Gen X and Y, co-founder and director of business at Thinkers Inc, an innovative long day pre-school based on creative and critical thinking. And up until 2009, when the business was sold to an ASX listed accounting firm, she was the CEO of a and take an award winning accounting firm. Melissa, a lot going on. But before I finished, you have also written for children. [00:02:53][49.1]

Bryce: [00:02:59] Morfe issues Fabulous but Broke and the global bestseller UNEF, Your Finances, and most recently as well. Budgets don't work, but this does so huge. [00:03:11][12.2]

Alec: [00:03:12] we were going to talk about personal finance, but maybe we should start with time management. Where do you find the time? [00:03:17][4.6]

Melissa: [00:03:18] Oh, look, part of it is absolutely and I say this unequivocally, I don't have kids yet because there is I have that extra time that other people don't necessarily have. And I, I just have the ability to get shit done. I just I'm an implementor, so I have a lot of ideas and I follow through on them. I think a lot of people talk about stuff, but they don't do it. Yeah, but I do it not clearly. [00:03:41][23.0]

Alec: [00:03:44] So I'm would like to start with a bit of a game in these interviews. It's a true or false game and it's really about, you know, some of the beliefs on the myths about investing that are pretty common for beginner investors. So we'll start with this question. True or false, your very first investment has been your most successful false. And can you tell us what happened with the first investment? [00:04:06][22.4]

Melissa: [00:04:07] Well, I guess the first investment was my house. And I guess it was successful in that I bought a house and land package back in the day. I think I was on seventeen thousand dollars income and I had to buy it a long way away from where I lived because I couldn't afford anything. But it wasn't my success. Most successful in it? Yes, it meant that I've been able to buy a home, but it's certainly as far as right return on investment hasn't been the most successful. [00:04:36][29.0]

Alec: [00:04:37] I'm just taking from that that you managed to buy a house on seven types of [00:04:40][3.2]

Melissa: [00:04:41] land for memory was forty eight thousand. I mean, this is how long ago it was and the house was about the same size. Oh, yeah. [00:04:49][7.7]

Bryce: [00:04:49] That holds true or false. You had a strategy in place before you started investing false. [00:04:58][8.4]

Melissa: [00:04:59] Yeah, definitely. I absolutely won. It is not [00:05:03][4.2]

Speaker 4: [00:05:04] right wing [00:05:05][0.6]

Melissa: [00:05:08] blaming that on the headache. Yeah I absolutely. At first it was winging it. Yeah. [00:05:12][4.5]

Alec: [00:05:13] Yeah. And then final question, true or false, is investing as hard as you thought it would be before you got started. [00:05:19][6.3]

Melissa: [00:05:19] No. False, definitely. And I wish part of my regret is I never regret the things I do. I always regret the things I don't do. I wish I had started earlier. I wish I'd back myself more. And I, I wished I had held longer. Look, if that was there things that I could go back and do, that's [00:05:39][19.6]

Alec: [00:05:39] great, because that's exactly the message we're trying to get across here. [00:05:41][2.3]

Speaker 4: [00:05:42] So I can [00:05:43][1.8]

Bryce: [00:05:46] certainly see you, as we said in the intro, have written four books that focus on everything from, you know, Kate K sort of topics in personal finance, business, all sorts of things. So we would encourage our audience to go and check them out. They are budgets don't work. But this does which we'll have a chat about UNEF, your finances, more money for shoes and fabulous but broke. So there's a clear, I guess, indication here that you are passionate about finance, what got you so inspired about this this topic? [00:06:16][30.0]

Melissa: [00:06:17] I was thinking about this. I'm actually not passionate about finance. Right. [00:06:21][3.5]

Speaker 4: [00:06:21] And I'm not inspired by finance. So I got interview on. I went down. [00:06:27][6.5]

Melissa: [00:06:28] But I am inspired by the results you can have. OK, so I don't sit down and geek out, OK? I don't sit there for an hour going, oh, I just want to read about finance. And yes, I'm inspired to learn more and I'm inspired to educate myself and to invest. But I'm more inspired by the results and the transformational results that you can have by giving a shit about finances and particularly the fact that it can give you a choice. So for me, I'm passionate about freedom and options and living a life on my own terms. And as a result, I have to be interested in finance. [00:07:02][34.2]

Alec: [00:07:03] Yeah, yeah. So before the interview, we were talking about how, you know, financial literacy isn't going up. It's probably declining in Australia. Yeah. And, you know, we're not told about it in school. Most people aren't taught the basics of managing our own finance, you know, and then we sort of get to a certain age and we realise we should know this and UNEF your finances, I guess, is an essential guide to financial adulthood. And I guess before we get into the nitty gritty of managing our finances and personal finances, what is financial auditing and what does the end result look like when you, I guess, financially grow up? [00:07:42][38.3]

Melissa: [00:07:44] You know, I think it depends. And my answer is always it depends, because I believe finances is personal. And I think the myth is that there is this one size fits all approach. And often that's what we hear from our financial advisers, that this is the seven steps to achieve wellness. So you have to have a budget or there is to pass. You have to own your own home. And there's supah and maybe if an investment property where is financially doting for me is realising there's multiple paths, it's actually giving a shit about finances and it's figuring out who you are, where you want to go and making a plan to get there rather than just figuring out, OK, my parents did this or the media says to do this, therefore I'm just going to run finances by default and not actually figuring out what's going to work for me. So true financial doting, I believe, is figuring out who you are, what you're where you're at. So facing potentially the mess that is your finances and then figuring out where you want to go. Because if if I had three people here, chances are the answers as to who they are, what their finances are like and where they want to go, it's going to be completely different. So it shouldn't be this prescriptive one size fits all approach, which is where we need to actually give a shit about finances and be inspired by the result, not inspired by the process. Mhm. [00:09:15][91.6]

Alec: [00:09:16] Yeah. [00:09:16][0.0]

Bryce: [00:09:17] So when you say, you know, if someone was to feel like they're in a position of trying to sort their money out, you've, you said, you know, first thing is to figure out who you are. Yeah. What does that actually look like. I'm sure it doesn't mean going sitting on a mountain and [00:09:32][15.0]

Speaker 4: [00:09:35] finding yourself to climb higher. [00:09:36][1.6]

Bryce: [00:09:38] What, like from a finance perspective, how does knowing who you are start that process of sorting your money out? [00:09:45][6.2]

Melissa: [00:09:45] So I've been talking about this for, I reckon, a decade and budgets don't work. That book is all about this. So I believe that until you understand who you are, you can't have great finances as and what I mean by that is both nature and nurture. It's your money story. So figuring out what's the money story that I inherited from my parents, what's the money story that I've picked up from the media, and is that serving me or is it sabotaging me? Do I need to lean in it and amplify or do I need to rewrite it? But it's also figuring out how do I inherently behave? So what's my money type? And I believe there's four different money types to discern are the relator, the creator and the worker. And depending on your money, time will depend on what investments will feel most comfortable for me. How should I set up my financial life so that it becomes a rip tide rather than any jacket? So, for example, my husband is a worker that he just wants to 24/7. He just needs jobs. [00:10:53][68.6]

Speaker 4: [00:10:54] Yeah, he you don't. [00:10:56][2.0]

Melissa: [00:10:57] I know you would think I have from everything that I've done, but I do that from my DNA. So for me the idea of nine to five doesn't make sense, but I can work hard. To strategically put things in place, if it makes sense to me, where is he will perpetually be frustrated by people that work less than him, but have a better financial result because he's so busy working that he's not investing. And a worker will also potentially hoard cash and not want to invest because that makes them feel safe. Whereas a relator firm, on the other hand, needs to put their own financial oxygen mask on first, and they're most at risk of sexual transmitted debt and rescuing others. The creator is the most at risk, at risk of just blowing everything because they need it to look a particular way off or just sitting back and going, you know, I'm just going to manifest finances, which, you know, could work if you're also taking action steps in and potentially hiding their investments away from themselves. So when I say who you are, it's that it's figuring out both my money story and my money type and then setting up habits in an environment that's right for me. And I think that's the first step that most people don't do. [00:12:18][80.9]

Alec: [00:12:18] Hmm. So the first step is figuring out who you are. You are the final step is having your finances sorted. What are some of obviously everyone's financial journey is different. And, you know, you said that everyone has to go on like their own path. And it depends on, you know, what their goals are and who they are and all that stuff. But are there any commonalities that everyone who's listening can sort of take away is like key things to think about or take things to implement. [00:12:42][24.1]

Melissa: [00:12:43] So for me, it's making sure that you're doing the basics right. So I'm effective at not having all of my money in the bank account and then trying to rely on my own self-discipline and self-control to figure out what bills, what savings or even moving the money into savings myself. You know, there's a reason the bank automates your mortgage, your payment, because they don't trust that you're going [00:13:07][23.8]

Speaker 4: [00:13:07] to do it. [00:13:08][0.4]

Melissa: [00:13:08] And most of us wouldn't. If that's a good call. I said we should act like that for our own personal finances. So I think the basic bank accounts you need everyday account, a savings account and a bills account, and to automate those payments into eat I call eating from the smallest balls are eight from the every day account. And when that's gone, I don't go to credit, I don't go to buy now, pay later. I act like a uni student and I might have rice for dinner or I might have to sell something like it's it's going back to basics. I don't believe when it comes to investing, I don't believe that there's a one size fits all in that everyone should own their own heart or we should all work to pay off our own home. I think more and more home ownership may be something that we reject. We may still own property, but it might be through rent vesting or it might be through property trusts or something instead. So we'll have a property investment. But it may not be your own home, but I still believe for everyone it's having that beautiful, diversified basket of I've got I'm investing in shares, I'm investing in property and potentially investing in business. And I have a cash buffer. So there are still some commonalities around what I'll have it just how it's set up and what it looks like might not be the same for everyone. [00:14:31][82.8]

Bryce: [00:14:32] Where do you stand on the credit card versus the millennial Afterpay find out the hard cold cash or Ren trades gold golden. [00:14:43][11.1]

Melissa: [00:14:48] So I am such I'm so anti Afterpay and I will bang on about it all day. So I believe Afterpay is Krak for millennials. I hate how they market to women, particularly millennial women. So at an age where I should not be looking at instant gratification, I should be using the compounding effects of the time that I have in starting to invest. Instead, I've got large companies started by blokes. Sorry guys. I'm marketing to women saying, hey, I'm going to use the power of framing and psychology to get you to spend more. It's just makes me so furious. So I say to Sportsbet for the guys in Afterpay for the girls and I really liken it to that. But credit card and buy now, pay later are both bad debts. And what we want to do is not be sucked in by bad debt and instant gratification. And even if you're not paying a cent in interest, even if you're not paying a cent in late fees, the research of digitised payments are that when we're using cash, lights up the ancillaries in our brain, so we feel pain so we spend less, doesn't happen with credit, doesn't happen with vinyl pay later. So we spend more. And the research says we spend as much as 100 per cent more. So for that alone, we want to reject it. [00:16:03][75.3]

Bryce: [00:16:04] Yeah, for me either, you know, even though there's no interest, it's just about the. It like it just gets about half cash flow management saving, particularly with this before pay as well. Now that's coming through to. Yeah. You know, depending how you used it. [00:16:18][14.4]

Melissa: [00:16:19] And again, let's have before pay or pay now or one of the many different options, it's marketing to people that are on a low income that we I just don't believe they should be for profit products for low income where it's designed to get them potentially into trouble. [00:16:36][17.1]

Alec: [00:16:36] So now I just want to play devil's advocate here. I think I think and tell me if you disagree, but I think by now pay later is better than a credit card. It's just not good. [00:16:48][11.1]

Melissa: [00:16:48] It's better. OK, so I would agree that if you are paying interest, that you could see that it's better than a credit card. But what I know is the framing effect of those full cuts of 25 payments. You're not thinking that I'm spending 100 bucks. You're thinking you're spending 25. You got no problem upping that to 35 where you would never have spent one hundred and forty. Yeah. So I would argue that they were saying, OK, OK, because of that framing effect. [00:17:13][25.3]

Alec: [00:17:14] And then the other one I was going to say was before pay is better than a payday loan. [00:17:18][3.8]

Melissa: [00:17:19] Yes. Because of the interest rates. But again, I'd rather not have to use it and look at furphies, look at other sort of things instead and or even if I'm in so much trouble that I need that to talk to Good Shepherd microfinance and see if I qualify for an interest free loan or something else instead. [00:17:37][17.5]

Alec: [00:17:37] Yeah. Yeah. Now we have a question on budgets, and we were going to ask you, how important are they? And you know how you think people can approach them? I think the title [00:17:47][10.1]

Melissa: [00:17:48] title gave it [00:17:49][0.8]

Speaker 4: [00:17:49] away. [00:17:49][0.0]

Alec: [00:17:51] Budgets don't work, but this does show maybe. Can you give us your thoughts on budgeting, what doesn't work, what you think we can learn from it. But then maybe if you can tell us about the. But this does. [00:18:02][11.9]

Bryce: [00:18:03] Yes. Excel, obviously. [00:18:04][1.1]

Melissa: [00:18:06] That's an excellent idea [00:18:07][1.0]

Speaker 4: [00:18:08] that I love. [00:18:08][0.8]

Melissa: [00:18:10] And that's where it's like someone else will listen to go. Oh, God. Excuse me. Now it's horses for courses and it's got to be what works for you. And so I don't believe budgets work in the same way that diets don't work. They're super restrictive. You stick to them for a period of time and then you bust out and overspend. So you grab that money. And when you could, you'd go to Bali or you buy the latest toy or gadget or if you're a chick handbags or whatever. But I do believe in understanding how much it costs you to leave each month and and and having that basic understanding. Right. What are my bills per month, but not budgeting to the nth degree. But Professor Ilan Kempson, who's emeritus professor in the UK, she actually discovered that budgets don't work. This is not something that I've made up as she was going away to research what why that was. But I think that anyone who's ever been on a diet understands that that analogy of well, no, we know that doesn't work long term. So we know budgeting doesn't work long term. [00:19:15][65.1]

Alec: [00:19:15] It's the it's the playoff between motivation and discipline and life. With diets and budgets, you get incredibly motivated for whatever reason. And you put yourself on like the and it's the ultimate calorie restriction or ultimate budgeting. But you're not building good habits. You're just like you're trying to ride the taxation for as long as possible. But it's like, how do you build financial discipline or like dieting? Discipline is really the long term thing. [00:19:40][24.5]

Melissa: [00:19:40] And I see I see so much synergy between food and exercise in finances. And often what works for you over here will work for you over here. So for me, when it comes to food, I will binge on chocolate like nobody's business. But I have a great base I don't believe is good or bad food. I just eat well. It's the same with money. I don't think it's good spending or bad spending. I don't think money is evil. It's just a tool and it's about spending and saving. Well, so how you do that is set up your habits. So you're a bit different bank accounts, you're automation's, but you also get excited about the result. And I think your motivation comes from that life you want to design and being so excited about that that you're prepared to suffer in the short term. And I kind of look at it as marathons and sprints. The marathon I want to I want to run is potentially a never ending one to get me to that life. I want to design all the time. I want to stop working or have choice. So the sprints I'm going to do in the short term might be financial challenges, might be a rules and reward type thing where I'll try and and have 90 day or 30 day sprints where I'll say, right. When am I prepared to suffer for in that short term to get me to that long term? And I think reframing your finances like that can actually be helpful. It's it's going to hurt sometimes. I'm not going to be able to buy the. That thing or do that experience, if that end result, that marathon I want to run is so attractive and for me it was all about having the choice to stop working in my 40s. And that was exciting enough that that's why I did all the things and wrote the books and started the businesses and did all the crazy things that you read out in the industry. Because I was so focussed and I did I worked seven days a week through my 30s because I just wanted to not I wanted to have the choice to work or not in my 40s. And so that that was motivating enough that I did it. [00:21:46][125.3]

Alec: [00:21:46] So that that sounds a lot like there's a lot of echoes of fire coming through. So I wouldn't mind getting your thoughts on that. [00:21:52][5.9]

Alec: [00:23:17] you know, a lot of what you're talking about there, about retiring in your 40s, you know, being quite frugal with your spending. You mentioned earlier that if your everyday account goes to zero, you'll eat rice until you get paid again. So what do you think of the fire movement? [00:23:32][15.0]

Melissa: [00:23:33] I think it's a great option for people that are incentivised by that. It is absolutely not for everyone. And that's where I truly believe finances are personal and where we can develop great financial literacy. Is understanding are there is this thing called fire that exists where I can go hard, be super frugal, but then have choice to stop working later? But don't get me wrong, I was frugal. But also, I don't know if you have. You probably haven't. I have a shoe Covid that if you've seen it or if you've ever seen me on Instagram. There's a reason. My first book was called More Money for Shoes. [00:24:07][34.6]

Speaker 4: [00:24:08] Yeah. And your Instagram handle is. Yeah, yeah. [00:24:11][2.9]

Melissa: [00:24:12] I do spend some money on stuff and I travelled a lot for work, so I travelled overseas. I was travelling regularly so I didn't need to spend extra on that stuff. So I'm not. So for me it wasn't about a complete denial, it was just having choice Ren this is what I'll overspend on and this is what I'm happy not to spend on at all, whereas I know other people aren't motivated to stop working in their 40s. For them, it's really about they're actually quite comfortable working to 70 and having a very different kind of lifestyle where they spend more now, but they're still saving. So they don't have to work when they're 70 and they don't have to drink cask rosé and wear crocs and potentially move in with five other families because they haven't they've spent everything younger and haven't looked after themselves. So I'm absolutely an advocate of that. Finances are personal and it's rejecting this one size fits all. This is what our lives should look like and realising we've got choice. [00:25:16][64.2]

Bryce: [00:25:18] My spending accounts running low at the moment. You don't want to know what I had for dinner last night. [00:25:21][3.3]

Speaker 4: [00:25:23] It was grim. Very. Now, you know, [00:25:29][5.8]

Bryce: [00:25:30] I can't wait for payday, which is still I got to get through a weekend to get through the footy's. And it's looking grim anyway. So a lot of our community ask about the value of financial advisers for someone early in their money journey. You know, how do you view the role of a financial adviser? I guess the question is always value, very cost. And and when is the time to pull the trigger, if ever? [00:25:55][25.5]

Melissa: [00:25:56] I really hard, because I believe that the younger you are and even when you don't have cash, that education in that financial advice actually so valuable, the right education in financial advice. The problem is it's expensive. And where it's not expensive, it might be free and inside a large institution where we know it's not independent. [00:26:18][21.9]

Speaker 4: [00:26:19] Thank you. That you sent it. Yeah. [00:26:23][4.7]

Melissa: [00:26:24] Yeah. So I'm a fan of advice. However, it's got to be the right advice. It's going to be the right advisor. I always tell people if you if you're going to speak to a financial advisor date, if you I'm not talking left swipe left or right. Go and talk to financial advisors. Isn't don't don't just look up the hashtag stock talk, which apparently they're billions of you. So you want to go to an expert for help. But it's also not for everyone. I don't think I can. I I've worked out for a long time. I've never used a personal trainer, but I know loads of people that use a personal trainer and really need that. And because they've paid a personal trainer, they turn up and they do the work and they have that accountability. So again, it's figuring out what do I need if I'm going to spend a lot of money on a financial adviser? Am I more likely to do it? Because that's my personality. And if I am, maybe that alone is the reason to speak to a financial adviser, whereas it is not for everyone. [00:27:28][63.6]

Bryce: [00:27:28] Yeah, so I was going to say the question that I always think is, you know, I feel like I'm in a reasonably good discipline of of my money. [00:27:37][9.1]

Alec: [00:27:38] You say Bryce and they go out for dinner last night, but [00:27:42][3.4]

Bryce: [00:27:42] I didn't go in the credit card. So for me, it's like understanding what is the what is what would it look like if I went to a financial adviser? If that makes sense, I would say 10 times, what are you [00:27:55][13.6]

Alec: [00:27:55] doing following your own? [00:27:57][1.2]

Bryce: [00:27:58] Yeah, it's hard to know the times or would it be? You know, that's the question that I have personally. [00:28:03][5.3]

Melissa: [00:28:04] Yeah. And I think that's the question to ask the financial adviser as well as what do you invest in? Because if they're not investing or you're not comfortable with how they're investing or think you. Going to want to be with them, but there's also stuff you can do yourself, so the Australian share market has the share market game so you can go and educate yourself about investing. If you love the idea of share investing and that's your only reason is speaking to a financial adviser, you may go and do something like that first and you may choose to use a financial adviser at the end of it, but at least you then have a clue what they're going to talk about. Or you might then feel comfortable. You know what? I reckon I could I could do this myself, but I think that's also the popularity of ETFs, exchange traded funds and different things, because people are realising, hey, I can do this myself. And actually the returns I get from those sort of products are are actually equivalent to what I might be able to get from a financial adviser. So where is there with that? [00:29:03][58.9]

Bryce: [00:29:04] Yeah. [00:29:04][0.0]

Alec: [00:29:04] So one more question on financial advisors, and I ask it knowing it may be an impossible question to answer, but I'm going to ask it anyway. Let's say I'm, you know, listening to this podcast, I'm a new investor. I've got two or three thousand dollars saved up. Yeah. And I do feel like I want a financial adviser. Yeah. Is there anything I can do? [00:29:24][19.2]

Speaker 4: [00:29:27] Yes, I do. So it might be impossible. So I think [00:29:30][2.7]

Melissa: [00:29:30] there's a couple of things is A, you could invest in financial education, education with that. So for example, people like myself have courses where we teach you how to invest. You create your own strategic plan and we hold you accountable. So you could use that money for that. Or there are financial advisors that offer monthly payments. So with that, you might be able to pay by the month, get the help and also be able to do some savings as well. So there are more and more financial advisers setting up for Gen Y and millennials who don't have a lot of cash. So I would do my research into who are they and and how can they help me? [00:30:15][45.0]

Alec: [00:30:16] Yeah, it's a really tough one. I think you answered it well, given that it was an impossible question [00:30:19][3.5]

Melissa: [00:30:21] because chances are it could cost three to five for Bryce financial adviser and a good strategic plan. [00:30:26][4.7]

Alec: [00:30:26] We've got that question a lot from our community. And we reached out to a whole bunch of financial advisors trying to understand the lay of the landscape. And they were saying that even just to prepare a statement of financial advisers, at minimum, I think we could find 800. But, you know, you're talking four figures and, you know, they've got a whole bunch of costs. So it's not on financial advisors, but it's just it's tough for people, you know, listening to this podcast. [00:30:48][21.9]

Melissa: [00:30:49] And that's part of the reason I handed back my financial life. Am I? I'm no longer a financial adviser and I educate and where we actually teach people, this is how you create your own strategic plan. This is the concept of seven streams of income and give them the tools that they can go away and do it themselves. Or they can take that to a financial advice advisor, say, hey, I've done this now. Can you just help me with the investing piece? So therefore, your financial advice may be cheaper because they're not coming up with that extra for you. [00:31:20][31.5]

Bryce: [00:31:21] Speaking of investing, let's move to that before we close out with a few of our most common questions. How would you how do you talk about investing for people that are early on in their money journey? Where does it sort of fit with the whole understand who you are? Let's talk about ETFs where? Yeah. [00:31:38][17.2]

Melissa: [00:31:40] So what I talk to them about is what sort of life do you want to design? Because when young people think about investing, I think they default to owning their own home and that massive deposit and therefore they potentially opt out and go play with buying up later. Because, you know, I may as well have a good time now and my future self can do with that. So for me, it's sitting down and saying, well, what what life do you want to design? If home ownership is not for you, but you really want to invest in property, then maybe it's an investment property and you rent first. Maybe it's starting small and investing in shares while you invest for that home deposit box. You don't necessarily want to start doing that yet. Maybe it's co contributing a little bit more to super, but it's realising that you have a choice even though you don't think you have a choice, even though this asset that you thought you should have the home might be so far in the future. So you opt out. My conversations with Emara don't opt out because there are other things that you could do. [00:32:42][62.3]

Bryce: [00:32:43] Yeah, yeah. Building wealth doesn't have to be through bricks and mortar. [00:32:46][3.2]

Melissa: [00:32:46] Absolutely. And there are so many ways to invest now. And one of the reasons I love the share market is I believe it's the great equaliser. I don't need the massive deposit I can invest with as little as five hundred bucks or even nothing if I'm going via an app. Yeah, it's it is truly one of the great equalises. [00:33:03][16.7]

Alec: [00:33:04] Yeah. So on that investing theme, one of the key questions we got, we reached out on Instagram before this interview, asked if people had questions, one of the most common questions we got back. Was about investing while in debt, and I think there's probably two sides to this equation investing while in, you know, someone who doesn't listen to you and got a whole bunch of by now pay later debt or credit card debt, should they be investing or should they be paying that off? But also for people who have, I guess, good debt for want of a better term, who have a mortgage, but so should they be putting more money to pay the mortgage off or should they think about other investment avenues that obviously everyone's circumstances are different. But from a general perspective, what are your thoughts on [00:33:46][41.8]

Melissa: [00:33:46] investing now that you just said that last piece will keep asset [00:33:48][2.3]

Speaker 4: [00:33:50] so [00:33:50][0.0]

Melissa: [00:33:50] generally? So I've said two answers to that. If you've got bad debt, if you're paying high interest on a credit card, then my thoughts with that is to figure out how quickly can I pay this off. So within 12 months, let's smash that credit card off or credit cards, or by an hour later, it might be transferring it over to a nil no interest credit card. And if you've been able to do that, then you may choose to pay off the debt that's existing on the credit card with the interest rate, but then have an automation for the time that you have that no interest card and you could be starting savings while that's being paid off, because I'm not I don't have any interest at that point. But my my usual takeaways are if you've got bad debts, sort that out first and then start investing. But if you have a mortgage, I get really frustrated by people who are fixated on paying off their mortgage to the detriment of starting investing, because there's an old adage that you can't eat your house. [00:34:52][61.0]

Speaker 4: [00:34:53] So I don't want it, but [00:34:54][1.4]

Melissa: [00:34:54] I want people to end up at 70. And sure, I've got a home and I've got a little bit of super and that's it doesn't give me a choice. Yeah. So my options then how do I downsize? Do I bring in a border? I'm an introvert. I want to live with anyone. So if you can afford to pay your mortgage at an extra two to three percent because we are in an artificially low interest rates, so that way we're building a buffer and if rates go up, we're not stressed, then my thoughts are we need to start investing at the same time. And I know people have if you've got a large mortgage, that may feel impossible. So then my question to you is, what sort of life do you want to decide? Do you want to find you want to have a good time now and the dream home, but find it 70. You have to sell that because you just can't afford it anymore. And I've had people where they've made the decision to downsize because they like, you know what? I don't want to not be able to start investing for the next 10 years because I just have to get this mortgage out under control. So it's it's even rejecting those money stories about I have to have the dream home or this is what my life has to look like. But no, I I'm a big advocate for it doesn't matter if you have good if you've got good debt, if you've got Okay. Debt kick start investing. [00:36:12][77.8]

Bryce: [00:36:14] You did mention there briefly are the artificially low interest rates. How are you thinking about saving cash versus I guess investing with rates so low at the moment. [00:36:24][9.7]

Melissa: [00:36:24] So if you are investing, if you're saving for something, so if you're saving for a property and you know that's a short term time frame, then it's got to be in cash. You know, you want to risk that by putting that in the share market or something like that? That would be my opinion. But you would also want to keep your buffer potentially in cash or if you've got a mortgage in your offset account, because what we saw at the beginning of Covid was people like myself had talked about buffers for a long time. They're not sexy. They're not exciting. Yet suddenly when Covid hit, they were sexy and exciting. And we want that liquid. So we want that in cash, even though it's not going to earn us anything. But for the rest of it, I don't want that in cash because it's not earning me anything. If anything, I'm going backwards. And this is a rude at chat I've had with my hubby and different people like him who there are people and I know we hear a lot about spenders when it comes to money, but there are also people that hoard cash that need great wads of cash and actually don't feel comfortable if that goes down. Yeah, so I would be saying to them, like I did with my hubby, what what amount makes you feel comfortable? What amount would actually give you to sleep at night? And some and I know if if someone's listening that they're like, I can't put a figure on that. Well then you need to go away and think about that because there needs to be a ceiling. And once you have that, then start investing and move that away from cash, because all of the research is you'll go backwards if you have that money in cash and you're not investing [00:38:01][96.3]

Alec: [00:38:01] your numbers a million dollars, isn't it? That's why, you [00:38:04][2.1]

Speaker 4: [00:38:04] know, you just say, oh, yeah, that very rare and. [00:38:12][8.1]

Alec: [00:38:14] So, Melissa, we want to thank you for taking the time today. We do have a final three questions that we like to end the interview with. But before we do, if people want to find out more about you or want to follow you online, where should they go? [00:38:27][13.1]

Melissa: [00:38:28] So social media, it's more money for shoes online. It's Melissa Brown Dark Horses or Melissa Brown Dotcom. Today, you and I'm a fancy brand. I've got me on the end. [00:38:37][9.0]

Alec: [00:38:41] So the first of the final three questions are what was the biggest myth you found out about investing or money? [00:38:48][6.9]

Melissa: [00:38:49] The biggest myth, I think I think it was that this is the path. And there's one path. And I grew up in the western suburbs of Sydney where it was very blue collar. You buy a home, then you buy the investment property and you just work hard. And that is a total myth that I was very happy to bust. But that myth around hard work equals Dollars. But also everyone has to own their own home. And then the next logical step is the investment property. That is a total myth. And part of my story is, is busting that and having people realise finances are personal. [00:39:27][38.0]

Bryce: [00:39:28] Hmm. Hmm hmm. What was the best resource you used to help start your money or investing journey or perhaps that you would recommend, obviously, other than your own courses? [00:39:38][9.7]

Speaker 4: [00:39:39] Exactly. [00:39:39][0.0]

Melissa: [00:39:41] I read everything. So I when I realised and so I, I built my wealth through business, property and shares. So I read everything I could on that. When it came to business, I studied an MBA. I did the ASX share market game. I talked to people that had invested with property. I went to seminars, I educated myself and then I just did it. So if you're interested in shares, I know I've said it a few times, but the ASX share market game's great. There's so many podcasts and books that you can read now. And what I would do is read them critically and say, do I like this or does it just is it just wrong? And then figure out why. And that's how you can start to financially educate yourself around. This is what could work for me, because I got perhaps book The Barefoot Investor an amazing place to start, but it is so not right for everyone. But you can pick out what you love and then move on to the next thing. And it's another one. Colquitt Like a millionaire. I love her her take on investing, but it's so not for everyone. There's books on fire, there's podcasts on fire. So it's just starting to get interested. [00:40:54][72.7]

Alec: [00:40:54] Yeah, I thought there you were going to finish with Scott Pape's book is so not right. And I was here for the well yeah. [00:41:01][6.9]

Speaker 4: [00:41:03] So I don't write for anything and so I don't write for everyone. [00:41:08][5.4]

Alec: [00:41:08] Yeah. Yeah. I like John Hampton. The Australian investor has a quote that has really stuck with me, which was every investor should write five investing books. It doesn't matter which five just right. [00:41:18][9.8]

Melissa: [00:41:18] Yes, I agree with that. [00:41:19][1.0]

Alec: [00:41:20] It's just about like just reading broadly. Yes. [00:41:21][1.8]

Melissa: [00:41:22] Listening broadly. If you're not a reader. Yeah. You just got to get interested. My husband's into cricket. He can quote you all the stats, all the players kills me, but he'll say, oh, but I don't get shares. I'm like, honey, it's stats. Yeah. If you could approach shares like you do with cricket, you would just. Yeah. Get it. So it's just realising it's another skill. Yeah. [00:41:44][21.7]

Bryce: [00:41:45] And to close it out Mellissa, if you had advice for your younger self when you did first start, what would it be. [00:41:53][7.3]

Melissa: [00:41:53] Yeah, I think I said it at the beginning, start earlier, hold longer and back myself. I wished I backed myself, but I just wasn't confident. I looked around at those that were older or that I thought were doing it better or that I thought maybe went to a better school and thought, OK, do I need to emulate that bit? Start early. I hold longer back myself. [00:42:13][20.4]

Alec: [00:42:14] I like that. That's a really good message to to finish on. So hopefully everyone heard that. So, Melissa, we want to really thank you for taking the time to speak to us today. I'm sure we got a lot out of it. Hopefully this time next month, Bryce won't be heading Bryce. He can take so [00:42:29][15.0]

Speaker 4: [00:42:30] out what he was. [00:42:30][0.6]

Alec: [00:42:32] But yeah, massive. Thank you for joining us today. [00:42:35][2.1]

Melissa: [00:42:35] You're very welcome. Thanks for having me. [00:42:36][1.4]

Speaker 4: [00:42:36] Thank you. [00:42:37][0.2]

Speaker 3: [00:42:38] Get Started Investing feed is a product of Equity Mates media. All information in this podcast is for education and entertainment purposes only. It is not intended as a substitute for professional finance, legal or tax advice. The hosts of Get Started Investing feed are not financial professionals and are not aware of your personal financial circumstances. Before making any financial decisions, you should read the product disclosure statement and if necessary, consult a licenced financial professional. Do not take financial advice from a podcast. For more information, head to the disclaimer page on the Equity Mates website, where you can find the ASIC resources and find a registered financial professional named. In the spirit of reconciliation, Equity Mates media and the hosts of Get Started Investing feed acknowledge the traditional custodians of country throughout Australia and their connexions to land, sea and community. We pay our respects to their elders past and present, and extend that respect to all Aboriginal and Torres Strait Islander people today. [00:42:38][0.0]


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