Hi, and welcome to this week's episode of Money with Alpha. Today I'm going to talk about the concept of whether or not you can have a money crystal ball. And basically that's just looking. Can you tell the future with your money? And the answer is, it depends which is the answer for most things, really.
Um, but it really, it's possible to look into the future, work your way back. And that's what I really wanted to cover today, is just to get you to think about it a little bit more, because I know Deb, day to day is hectic. There's so much information thrown at us.
There's so many decisions to make, so many choices. There's just so much that we tend to put off making any kind of decisions until the future. And then the future comes and we're like, my goodness, I wish I'd done something five years ago, 10 years ago. And that time has just flown and is.
And it hasn't been lost necessarily, but there's certainly missed opportunities that come with that. So, uh, I wanted to talk about three different concepts around the concept of a money crystal ball. And one is time. The other one is looking to the future to clarify what you're doing in the present.
So time, clarity, and aligned, uh, action. So they're the three components, really, of what I want to get across to you today to just start to think about it, because it's very easy to go, you know what, it's too hard, too far in the future, too, you know, too, too, too.
Whatever. The other two word comes after that is. And you can get away with that when you're in your 20s to a certain extent, but the longer you le, the bigger it gets, the bigger the changes that you need to make, the potential sacrifices that you need to make.
So the sooner you do things, the more power you have for the incremental. And I love making incremental change because our brains don't really handle big changes well. They will throw obstacles in our path just to prevent us from bucking the system, from changing something that's been working. They're like, if it ain't broke, don't fix it.
The thing is, it doesn't have to be broken to fix it. And it doesn't need to have, like, a massive fix either, but our brains and. And the energy that goes with that. So if you've noticed, anytime you've tried to make, like, a really big, massive change all in one go, and I'm not talking about moving country, there'll be obstacles that come in the path.
I've seen and heard stories so many times from people who say, oh, I, you know, I did this and I did and I tried to do it all. And then something happened, someone got sick and it all fell apart. Or you know, I've been saving up and I've been doing all these things and my kid broke his leg and all of my emergency money had to go to medical bills and there's so many things that go with that.
And that's part of the identity piece that we have that's linked to our beliefs and our habits. So there's a lot of mindset that goes in there which I will touch on a bit today because I feel like it's really important to understand the mechanics of our mind as well as the soulful, energy, spiritual part of us that all blends in together.
So I don't believe that you can, you can divorce those things. So when we talk about the pragmatic side of money, yes, there's certain things that you need to do. But unless your whole sense of identity, your belief systems, your stories and all of that are on the journey with you, there is the opportunity for self sabotage.
And that happens way too often. We impose ceilings on ourselves and we think our abilities or our uh, capabilities to do things are lit, limited. And all of these words keep us small. There is abundance in the world. Like you think of every breath you take. There are more breaths provided we are alive to breathe them.
I mean it's, I don't want to go down that path too much. But you know, there is, there's more air, there's more things. There's, you know, there's natural resources even we're finding stores of them. And the earth regenerates, our bodies regenerate. I'm going down a whole like rabbit hole at the moment about um, body regeneration, hormones, um, the foods that we eat, all of this.
And it's, it's, it is a mindful. But the, the power of the human body is extraordinary. It repairs, it rejuvenates, and yes, we do age, but there are things we can do to help support that in a way that we can stay healthy and strong for longer. So with our money, it's the same kind of concept.
We need to make sure that our minds are prepared for whatever changes we make, that our bodies are aligned. And this is where, you know, the third uh, step I was talking about, which is aligned action is really important. It's aligned not just with our mindset, but also with what we want.
That level of clarity. And it's interesting, this has come up a couple of times recently. I was listening to a Marie Foley podcast, and she was talking about dream school and that clarity about what we want. And then there was an interview, a couple of interviews. She's had one with Seth Godin, where, again, it comes out about clarity.
You need to have a certain strategy, and in order to do that, you need to have clarity. So it's. It all really fits in together. And so we need to understand ourselves first and foremost. What do we value? What kind of lifestyle do we want? How much money do we need for all of that?
So this is why you can't take the mechanics away from the mental, emotional, spiritual side of it all, because it is all interconnected. We are multifaceted human beings, and especially women tend to think on these different planes as well. Um, I am stereotyping here. Men have a tendency to be a little bit more linear.
Um, so the mechanics probably are a little bit easier to do because they don't attach the same level of meaning to everything that goes around that. Um, but it's then just acknowledging that we do things slightly differently, and then we need to alter how we operate, but the actual principles behind it, they still remain the same.
So we still have time and that the impact of compounding is where the time really starts to kick in. So I've done a lot of this recently, so if you want to watch some of my previous podcast episodes, I did one in which we talk about. I talk about the, um, most money questions that I've had asked.
And in there I delve into the concept of compounding and how to invest a bit more as well. And something else that I'll be delving into a bit more, which I'll tell you a bit more about, um, is a package I put together just for Black Friday. And it's an introductory product.
And I'm going to keep it going because I think it's super duper valuable. And it touches exactly on this. So it talks about how we can future project because it's important to do that. Otherwise we just keep staying on the treadmill doing what we're doing. We don't really know what we're doing it for.
There's that purpose factor tends to go away as well. And I talk about that a lot as well with money and how we actually deal with it. Because we're like, okay, we have. We have what we have right now. In the future we'll have more. But what do we really want to do with it, what is it going to give us in the end?
Um, so that's why it's important to figure that out, so that you can make the, take the steps to take action and implement things. So let's start with the time factor again as well. If you think about a dollar now in five and ten years won't be worth what it is today.
So if you do nothing, then the value of the dollars start to decline. If you invest well, sorry, I'll start with saving. If you save right now, the interest rates are uh, still actually below the official inflation rate. So just saving, um, your money's devaluing as well, so you can't just save.
Investing typically obviously more risky, but it depends what you invest in. Um, but if you're just doing standard, like index, um, ETFs or exchange traded funds and standard sort of things, you can earn higher than the value of inflation. So your money actually then starts to grow. If you think of the value or the interest rate on your home loan compared to what you can get investing, it's important to do both simultaneously because the return you can get on investment is still likely to be higher than the interest rate you're paying on your home, depending where in the world you are so doing those things in parallel.
So saving, investing, paying off your home, putting more into your retirement fund. So whether it's a superannuation, your, um, 401k, your, um, IRA, RSV or whatever, wherever you are in the world, if there is a fund that your government has set up, look into how to optimize using it.
Um, if not, then you can create your own fund. But, um, you've got to be really disciplined to not touch it. That is for retirement. Um, so that discipline will then also allow you to have a better quality of life in the present as well. You can go on more holidays if that's what's important to you.
You can go to the theater more if that's what you want. But again, knowing what you want makes it easier because then you can start to save for it. So you put your money into all these little pie slices, as I like to call it. Things to build on, things to enjoy, things to enjoy in the short term, things to enjoy in the longer term.
And you can start to go, you know what, in three years, I want to take the entire family to Disneyland. So I know that's going to cost me, say $25,000. If I start saving now, this is how much I need to put aside every month in order to have that money in five years time.
So I'm not digging into my home loan or going into personal debt or putting it on credit card in order to pay it. So it just takes a little bit of forethought. But time will then be your friend. If you do something in the now, you can have that in the future.
But it's that delayed kind of, I suppose, gratification, for want of a better word. Um, and it's something that we've sort of lost in the last 10 to 20 years. We get everything, everything is so instant. We carry little computers in our pockets. If there's a question on something, you look it up straight away.
Um, there's been a couple of words that have come up in books when, you know, we read to my daughter at night and rather than just getting my phone out, I'm going to the dictionary because I was like, I have a really big dictionary that I got given when I was 15 by my grandmother.
And I love that thing. It's the, you know, the binding starting to fall apart, but it's still a, um, valuable, beautiful book. And so I'm like, I'm going to look at that book instead of coming to my phone. Um, but we get answers for everything. We payments happen instantaneously.
We want something, we get it on our doorstep the next day. We want food, we don't even have to get off the couch. Like there's so much that's instantaneous. We've kind of lost a little bit of that ability to wait for things and to plan and grow and build and invest in that future.
So I'm encouraging you to reconnect with that part, to start to value the now from a future perspective. So that when you look back and try and imagine this, think of yourself now and think of yourself 10 years ago. If you were talking to that 10 year younger self, what would that younger self have liked to tell you as well?
And what would you like to tell them that they should do now that would have benefited you now? Because your 10 year future self would love to say the same thing. Maybe slightly slight variations to it, but something similar, I'm pretty sure. So think about it in those sort of terms too.
And you don't have to go too deep with this, but just allow your mind to wander a little. And this is where, you know, white space, time, a bit of meditation can help with it too because it then helps give you the space and time to have some clarity.
So that's why time is really, really important. And then looking to your future to clarify your present. It's an interesting concept that I find is much better to show visually. Um, I don't want to overwhelm you with a spreadsheet, however, so I'm not going to show it now. But just try and sort of imagine the concepts I'm talking about, and that is to see what you've got now.
And if you just extrapolate things out now into five and 10 years, what you would have and then what? Allows you to do. And when I say what you have, I'm talking about assets. So if you own a home, so you could even just write a little list, you don't need to do it in a spreadsheet, just get a pen and paper, just write it down, take your favorite pen.
Because I don't know about you, but I love nice stationery. So when I hold my favorite pen, things just feel nice and it's less intimidating somehow when I'm holding my nice pen. Um, so write down, you know, if you have a home, how much it's, how much it's worth right now.
Um, and if you're not sure, there's real estate websites that are bound that can tell you at least vaguely what it's. And you'll probably have some idea and then what you owe. So in one column, write down what you, what it's worth right now. And then the other column, the dollar value of what you owe on it.
And then if you have a car, do the same thing for the car, what you think it be worth. Like if you wanted to sell it, what would be worth? You can look on like there's car sales websites that can help you with that as well. If you're not sure if you have a debt on the car, put it in the same column as what you owe for the house, put the same thing in there for the car.
And then you just go down and all the things that you think if you could sell, what you would get for them. It's a little bit like if you look at your insurance policies, they do the same sort of thing. They will look at what you owe, what you, um, own, and they will kind of come out with like a net value.
So at the end of one of the columns you write down everything, the value of what you own right now, and then you write down the value of everything that you owe right now. And what I'm then saying is if you uh, if what you own also includes things like a savings account or an investment fund, uh, self managed super fund, investment properties, your business, whatever it is, list all of those assets out, anything that could potentially be sold for a value and then the debt that goes with any of them as well.
So if you have an overdraft in your business, put that in the debt column. And then when you have those two figures, um, all tallied up, what you owe what you own, sorry, the value and then the tallied up of what you owe, then you take what you owe off what you own and that's your net worth.
So it could be a positive, it could be a negative depending on where you are in your life as well. So. And there might be valid reasons for why it might be negative. It might be you've just taken out a business loan, but you've got a big shipment. So say for instance, you have a product based business and you just had to pay for a huge shipment of product.
But you know that within six months most of that will be sold and it'll be turned into revenue. So that's, there could be reasons for it. But when you look at that and you go, okay, well that's where I'm at right now. Now I would highly encourage you to not apply too much emotion to that just yet because that is just a starting point.
This is like the starting. I know that I'm a huge fan of Monopoly, but this is the starting point on the board. So let's just kind of, whatever's happened in the past, let's just draw a line in the sand and go, here is, here is start. And then what do you need to do to go forwards?
And that itself is a little bit like looking at a blank screen with the little, you know, um, the icon just clicking there, waiting for you to type something and you're like, oh, what do I do? And that's generally where most of us get stuck. We see that blank screen and go, right.
If you're writing something, you can look to AI to help you for this though, you have to actually look a bit more within and try and go, okay, well what do, what sort of imagining do I have of a lifestyle? Do I want to have paid off my home before I retire?
Okay, I'm this age now and I want to retire at that age. Will I have paid off my loan by then? How much do I have to pay off every week or month in order or quarter or fortnight? In order to have paid it off by then, you might want to pay it off five years before you've retired.
And there are calculators around. I will put the link to a few calculators in the show notes. Um, so there's some really good ones on the Australian government's Money Smart website that can help you start to calculate some of these things and put numbers around it because it's all well and good to go.
Oh, you know, it's a 25 year loan and when I took it out to, when it's done, it'll be paid off. In the meantime, you may have redrawed, you may have done extra Repayments you might like. There's so many different variables. So you need to recalculate this on a semi regular basis, like 6 to 12 months, every 6 to 12 months, so that you can see what the current reality is.
And that's what I will. That's what I have put together for the Black Friday say, which I've called the Money Planner. And it has that template already there. It has the links to the, um, calculators and there's a video of me showing you how to use it. So you can start to kind of look forwards from now and go, okay, well, and there's certain assumptions that you can make.
And the assumptions might be, I could put an extra hundred dollars into savings every month. Great. What will that look like in five to 10 years if I keep doing that consistently every month? Okay, it'll look like this. Great. If I invest $50 a month, every month for the next five years and 10 years, what will that look like again?
A calculator will calculate that for you. And you just input it into the spreadsheet and you can go, right, great. Then you start to look at any other assets that you have. And if you keep doing what you're doing, what you will owe, uh, and what you will own in five and 10 years, then you also have to look at how your cashflow is being managed, which is a separate piece, to see if you can afford those assumptions.
Can you afford the $100 a month saving? Can you afford the $50 a month investing? You might then look at your cash flow and go, actually, I can afford more than that. This is really exciting. So now I can up my calculations from $100 a month for saving 250.
But now I'm going to up my investing to $200 a month. I will see what this looks like. And you're going to also make assumptions on the annual return that you make. And all of that is documented so that you can go back to it again and go, okay, well, the market has changed, we're in a downturn.
So I need to reduce the annual return that I think I'm going to get to this amount. And I can only now put this amount in. Or you might go, you know what? I've actually been watching, I've started implementing so I can see what return I'm getting. I'm actually getting more than what I've put in my assumption spreadsheet.
So I'm going to up the interest or the, um, return on investment from say, 8% to 10% and I can also now, because I've been so disciplined and so good, I can now put in an extra $50 a month into my investments. And then you can start to calculate what you have, but it's important to do that.
And then you go, okay, I can look into the future. Now I'm like, oh, wow, I'm actually gonna have, like, $2 million when I'm, you know, 65. If I had done nothing, I might only have one, and that wouldn't be as much of a fun retirement, so. Or you might go, you know what?
I'm actually going to retire a little bit earlier. I'll have a little bit less. And I'm okay with that because this is the lifestyle I want in retirement, and then I can retire a bit earlier. So this is, this is where people who kind of adhere to that fire movement, that financial independent retire early kind of look at as well.
It's very much in that case, though. It's a lot of sacrificing in the present in order to have the future you want. But I'm saying you can try and have both. You just need to have, uh, your eyeballs on it, some clarity and a little bit of planning and action.
Aligned action. So that's number three. So when I say aligned action, I'm talking about aligned to your values. Um, the values is a different piece. So I won't go into too much detail about that. Now, I have spoken about it previously, so I do have an episode that talks about, um, value.
So you can go back and listen to that. Um, but it's also then what kind of lifestyle you want. So. And if you have a partner, you can do this together. So you can put all of your things together in that net worth calculating spreadsheet to go, okay, well, I'm going to take your retirement fund and my retirement fund, um, all of the properties we own together.
Of your properties or their investment account plus my investment account and see how it looks together. And then you can add everything up and go, okay, wow. Well, in 10 years, we're actually going to be pretty comfortable. That doesn't mean you rest on your laurels and go, that's it.
I don't have to do anything. You still keep looking at it and you still keep tracking it because things do change. You might decide, uh, you know, there's a couple of really amazing trips that you want to take in retirement. And that might mean they're $50 each. Sorry, 50.
$50,000 each. Oh, my goodness. Wouldn't that be great? Um, and Then you can go, okay, well, I now need to make sure that I'm factoring in an extra, say, 50 to $100,000 for these awesome trips. I might want to do this, you know, luxury trip along all of the European rivers.
Uh, you might want to go on an amazing journey through South America. Um, and you don't want to carry a backpack everywhere. So it might be a little bit more luxurious. So what is it that you want? And then you can start to. Because what happens then is rather than just starting at your base level of survival, once you start to see this happen, your imagination really kicks in and you go, uh, the possibilities open to me now.
Oh, wow, I've always wanted to do this, and now I know that, you know, the basic level is possible. I'll see what the next level is about. And then when you start to make plans and you start to see yourself achieving that next level, you're like, I'm going to up level again and start to go.
Or you might just go, you know what? I'm great with this and I really want to leave my kids some stuff, or I have other things I want to do with my money. But it gives you choices because it's. As soon as you have that visibility and that clarity and you put things in place and you have time, five to 10 years, 15, whatever it is.
And you can see how time is helping you or hindering you, because it depends on what age you are right now. Um, you can actually start to make some really, really cool decisions, and you can start to see what those decisions are going to manifest into. So it's not just sitting there and kind of going, oh, and I'm a big fan of manifestation, don't get me wrong.
But it's not just about sitting there and imagining it. You actually still have to do something about it and having that clarity and the visions. And if you read anything about manifestation, one of the biggest things I talk about is visualization. And this is very much part of that.
But this is putting the numbers behind the visualization so that you know exactly what you need to do to achieve it. So I get very passionate about this when you take a breath and encourage you to really start thinking about this. And if you are interested, the Money Planner special that I'm running starts on the 29th of November.
It'll run for the whole Black Friday weekend, but that special introductory price will end on the 2nd of December. Um, I will mention it again a couple of times just to, um, sort of remind you of it, because I know, I like to be reminded of things. I was like, oh, yeah, that's right.
You know, that's coming up. Okay, cool. Oh, they've reminded me. Sweet. I don't have to remember it. So it becomes really, really handy when somebody reminds you. So I'm going to do that because I know I like it. So if you don't, I'm sorry. Um, but yeah, so coming out on the 29th and if you're on my email list, if you're not, then please send me an email and I will add.
And um, you'll get the reminders for when it's happening as well. It'll be all over my social media too, so hopefully one way or another you'll see it. Um, but I'm really excited about it because I believe in the power of this because having that clarity and that future vision that you bring into the present is incredibly important.
And it's something that we don't get taught anywhere. Nobody does it for us. Um, even your, uh, you can have other professionals who will help you a little bit with it. But how to connect that then to your day to day management of your money is not something that really anybody else is going to do because it's ultimately your money.
So I hope you've found that helpful. Inspiring. If you have any questions out of it, um, please send me a message. I do free clarity chats as well and some because sometimes this stuff is just need to talk about it with somebody and go ask some questions and then you're good to go.
So but if, um, if you have any questions, please reach out. All right, Enjoy the rest of your week.
