Right. Welcome to how to Become Financially Organised. As I was saying before I hit record, this is some topics that I set up sort of earlier this year to run webinars. And this one I have to meanit I'm excited about and I hope you will be as well. So I'll kick into it. So for those who don't know me, my name is Alpha O. We've got someone else coming as well. That is actually my real name because I do get asked that question. My mother was inspired when trying to pick a name for her daughter. And I work with business owners primarily to help them understand their money mindset and then connect personal business finances. I do primarily work in the personal finance space. I am an ex corporate tax accountant so I have that sort of skill set as well. But I love helping people understand money because I'll move on to my next slide because this ultimately started as my own journey. Even though I studied accounting and I worked as a tax accountant in the corporate space and then moved into manage consulting for many years, I didn't have confidence with managing money because you don't get taught this anywhere. And I always find it so just fascinating that we're told that money is hard. Let's trym. But then we're not actually taught it and there's an element of our own personal life as well that needs to come into this to provide clarity. So anyway, so I didn't really have much of clarity in that regard. So I set off on a bit of a personal development journey and then also studying financial planning because I had a financial planner that I wasn't happy with. Every time I asked a question, he couldn't really answer it. So I wanted to know more because I thought, what is this thing? As I was getting into my late twenties, I thought I probably should start figuring this thing out and it took me quite a while. So once I got my kind of world together, I had some friends and friends of friends who started to see what I was doing and that's how I ended up kind of on this journey is to really just share what I've learned and then also what I've optimized along the way. And I love systems. I hate duplicating stuff. If I can automate it, I will. Yeah. So I really enjoy being organised to the point where it means I don't have to think about it. That's to me what being organised means. So I will take you through. There is quite a bit of content in this. And I know a lot of webinars are just a lot of what's not necessarily how to. But I do go into quite a bit of detail. So please ask questions and ask me to slow down if I'm going too quickly as well. So what we will be covering today, and because I believe you can't really delve into anything until we work on a little bit of mindset. So I will cover off a bit on what mindset and money actually is. What is that mindset behind the money? Then we'll talk about so of bit of a checklist, so a little bit of a health check about what are the main things that you need to consider if you want to become financially organised. And then also one of my favorite topics is how to systemize and automate the process as well. Because there are things you can do. And to be honest, once you get over the initial sort of hurdle or uphill of learning a lot of it is pretty boring. You just, you set it up and you let it run and then you resist the urge to check it too often because it just keeps on going and going, which is the nice part. So what is money mindset? Now? I put the money in brackets because to be honest, this applies to mindset in general. In every aspect of our life, whether it's health, relationships, et cetera. Our beliefs are the cornerstone of a lot of things. What we believe about ourselves, what we believe to be true, the stories we tell ourselves, then that influences the experiences that we will have in our lives. And quite often the beliefs come off around. There's culture where we live, there's our families. There's so much that. So it's not as simple as just saying, oh, it's just your beliefs that's it can't be changed, or that's just the way it is. We can change it, but our experiences reinforce it, which does make it a little bit harder. And then because we have repeated behavurss as a result of those experiences, they become habits. And so we end up thinking, behaving and actually speaking around money in a certain way that doesn't necessarily serve us. So we'll go into that in a little bit more detail. So if you've ever read James Clear's Atomic Habit, some of this will be familiar. I remember when I first read that book, because I've read it twice now. I was just like, oh, my goodness, he's talking my language. But where we start and what I call the Formation, cycle. This become a bit of And a lot of our lives are cyclical and as humans we tend to stick with the familiar because our brains handle that a lot better. So we have our sense of identity or our sense of self. So who we believe we are and then that is influenced by our beliefs. So the identity influences our beliefs and based on our beliefs we behave a certain way and then when we have repeated thoughts and behaviourss they become our habits and that just keeps on going. If you've ever had that thought of oh yepy, that just happened. I expected that to happen. It always happens that way. A lot of us have used that sort of vernacular and that languaging and it's pretty normal because we often get what we expect. But those expectations are based on our beliefs about ourselves and that sense of identity that goes with it. And this will perpetuate and reinforce itself again and again until something interrupts that loop. The interruptions can either be imposed on us or we can become aware and interrupt them ourselves. Quite often however, it's stuff that's imposed on us and they can be some sort of trauma, an illness, a relationship breakdown, something else that's somewhat dramatic and traumatic. The other thing that can do this as well, especially for women, is having a child. I remember that's what really propelled me on a different trajectory when I had my daughter. I was like oh my goodness, I am now responsible for not just me but someone else. I don't think I've ever eaten as healthily as I did when I was pregnant and breastfeeding because I was like wow you. There's a sense of responsibility here that goes beyond any ##thing I've experienced before. And it also shook my entire identity to its cor. I was like well who am I now? What do I want to do? The purpose that I was looking at before I became a mother, it changed quite a lot. So things like that, that was a positive thing. But we can do it deliberately. And the first step to a lot of things is becoming aware. So the purpose of this then is to create awareness that there is such a cycle, if you're not already aware to interrupt it at some point. And you can do that either by challenging your beliefs, by challenging your habits. And we hear a lot about habits these days. It's become a buzzword and there's so much out there. I have a bit of an obsession with habits so I read about them quite a lot and the psychology behind it is really quite fascinating. I won't go into that today, though, because that's not the point of today's topic. But that sense of identity that really is the cornerstone of that is really interesting. But the main message here is that you can interrupt this loop if you would like to. In order to do that, however, it's really important to be clear. And this is one of the things I found along my journey. And when I work with people, this happens or comes up a lot. And it's usually the first thing I work on is, what is it that you want? Because the amount of times I've heard, oh, I bought the big house because I thought I should buy the big house, but now it just sits there with most of the rooms unused and we just have to clean it. Or One of my personal favourites is, oh, you know, we have no garden and I really want to garden, but everything is tiled and all they can do is pots and they're like, well, you can do gardens with pots, like a potted garden. They're like, oh, but I want space with grass and land. I was thought, well, that maybe should have clarified that before buying the house. So, I mean, a lot of things are 2020 hindsight, and quite often we don't know what we want until we've experimented a bit. But having some idea of the vision that you have for your life makes it a lot easier. The reason a lot of us procrastinate, and I'll go into this a little bit more shortly, is because we're not clear on what we're meant to do. We sit and we ponder and we go o. We put off and we come up with excuses because we don't actually know what we want. So having an idea of a vision, and that's not to say it has to be super duper detailed and clear and will never change. As humans, we evolve and we grow, so our vision will likely grow with us. Some people have their goal and what they want and they just go for that. And that is fantastic. Generally speaking, I would say I've seen more changes than anything else. But from that vision or that idea of what you want, we need to create some goals. How do you actually want that to happen? You've got to kind of work backwards a little bit. And then once you have some of those goals, and they might be financial goals or they might be where you want to be, living goals, or they might be relationship goals or career goals or business goals, there'lots of different facets to our world. So once you've got that then, okay, well how are you going to reach that? Then the next step back becomes, well, I need to create a plan, some steps to take some tasks. And then because there's usually more things on that list than we have time to actually do, we need to prioritise them. Otherwise we just look at the list and go, oh, wow, that's so overwhelming. I'm just going to like leave it and go watch Netflix or go for a walk or something. But you need to actually prioritise it, otherwise it's really hard to do. I love post it notes. I write lots of post notes every day. I have three things and I like to tick it off. I know it's a bit old school and I do have the online kind of project management style softwares as well, but I love my post it notes. Ticking it off and then scrunching it up at the end of the day and throwing it away. I feel like I've achieved what I set out to achieve. And it's a nice feeling to be productive. But clarity is ultimately where you need to start. And if you're having difficulty understanding what that vision might be and how you actually come up with it. Visualizing is a really good one. But I like it to be really sensory so that we take in. Because all of us have different emphases that we place with our senses. Our education system tends to prioritise the visual. However there's, if you see the amount of insurgence of fidget toys, there's a lot of really kinesthetic, tactile people out there. Auditory I'm very auditory when it comes to food. I smell it before I eat it. So we use all of our senses if we can. So I would really encourage you to take pen and paper at some point in the not too distant future when you have at least 20 minutes to yourself and just start to daydream. Just allow your mind to wander and go, okay, what do I see? When is it I see this? Is this a near future thing or is when I retire, this is where I'd like to be. And just imagine what it feels like. Imagine what it smells like. Are you smelling ocean or city fumes or trees? Pine forest even. You can get as specific as you like. It's probably sitting around there in your head somewhere. But write it down. And it's a really nice exercise to do if you want to just go sit out and in nature, anchor yourself on the ground. Bare feet on grass is a really good way to do that. And just dream and write it down after you've dreamt. Because ultimately, the relationship that we have with money and it's interesting, we spend a lot of time. Well, I see a lot of things where it's about relationship with people, relationships within organizations, within family, families, friends, all of this. And money is such a large part of our world, it impacts us on a daily basis, pretty much. So looking at how that relationship is actually sitting with you right now and which scale like I've got in front of me here, you re more on. The purple scale or more on the green scale. And it's not to say that you're going to be in one. Absolutely. Or the other. Absolutely. It is a scale. And so you can be somewhere in the middle or moving towards. As long as you're moving towards the green, that's where we want you to be. So overwhelm is so easy these days. There's so much information out there and trying to discern from that, what's actually applicable to you is where having some of that clarity becomes a lot easier because then you can go, you know what, I don't want the fancy car or I don't want the big house. I might want just a nice reasonable one. So I can get rid of anything that's talking about going down property development path. Because trust me, I've tried all sorts of things. Someone'coming in. Ive learned about share trading, I've learned about property investing, property development, all of that. Until I realized ultimately I just like simplicity, which is why I called my business Money Made simple because I just like simplicity. But if you like that bigger, grander kind of vision, then you can definitely go there. But it's just making sure you're clear that you know that about yourself. So moving from overwhelm to confidence is where we want to get. And a lot of that is to do with knowledge. A lot of these are connected as well. So from overwhelm we then experience procrastination because we're like, oh, there's too much. Im just going to like go do other things. The house needs cleaning or I'm going to do something else. I'm going to organise my sock draw. You know what we'll find. It's amazing the things you can find to do when you procrastinathing. And that takes us away from action. Often we don't do that because we're not clear at what we need to do. Like I mentioned before. And with that then comes indecision. Partly we have too many decisions to make. Even just walking into the supermarket the other day, the milk aisle, I'JUST go, and I have non dairy milk. But there's even just so many versions of each of them. Like not even, you know, one version of almond milk, one version of oat milk. There's like five different types of almond milk. You've got to read the ingredients. Them just, it gets sometimes, usually let you know, I'm just going to make my own. It's just simpler. So it just the levels of decision that we have to make. So it's trying to again discern exactly what our priorities are so that we can then make the right decisions that are actually going to shift a needle in our life, organize the right things in our money rather than going, you know what I have to do all of it or none of it. And if we look at trying to organize everything all at once, it's overwhelming, we're not clear. So we procrastinate, we can't make any decisions because we don't know what we're doing because we're overwhelmed and we're procrastinating. And then we have a fear of failure which holds us back as well. And that's that whole, oh, I don't want to make a wrong decision because I don't want to lose money, I don't want to do it badly, I don't want to be seen to not know what I'm doing. This, the perception value is really intense and the counteractt of that is to learn. And that's what you're doing here today, wanting to learn about how to become more financially organised as a start. And then when all of that has happened, we're feeling all that overwh one, procrastination, etcetera, etcetera, we feel frustrated. And to be honest, I actually like it when you get to that point of frustration because it's an energy that you can push through and you go, you know what? I am fed off. I'm so fed up with not doing anything, with not being able to pay my bills or check in my bank account before I go to pay the groceries, or not knowing what's going where or where things even are and that, and you can harness that. And that's why when we talk about that whole concept of oh, we need to calm down or manage our emotions sometimes you can get angry, you can get frustrated. Use that energy though, for good and then you can go find out what you need to do and then just do one thing. Because even just completing one task will make you feel so much better than worrying about 10 tasks, you know, and then you don't get any of them done. So that's peace and happiness is where we want to get to. You know, the happiness ultimately I think is where. And that's a different definition for everybody. But I really feel that's where we all would like to be. So please feel free to comment in there if you have any questions. And even just as a little test, on a scale of 1, 2, let's just do 5, with 5 being the most kind of happy and 1 being the least. Where are you currently feeling in relation to your money and the level of organisation and knowledge that you have? You don't have to share, but feel free to in the chat if you would like to. So moving on to the money checklist. So the money checklist here, it is quite generic. There actually a I will put it in the chat actually, this is a checklist that I have which is free. A4. Oh, that's pretty good. That's not too bad actually. We can see if we can get you to five though. So the personal checklist, this is a lot more detailed and it goes through pretty much everything you'll need to do for personal finances. But here, here is an overview to get you going. So first of all, do you have a budget? And I hesitate to use the word budget, but ultimately, as. Do you know where your money is going? And this is one of the things that I find it's often of the first hurdle is visibility. Knowing you. How many bank accounts do you have? How many credit cards do you have, how many loans do you have? Do you know how much is going where? Do you know what your interest rates are? And all the various things, Whether it's money that you're like receiving or money that you're paying, it's important to at least have an understanding of what all these things are and where everything's going. If there's too much and it's too complex, then the first thing you d need to do to organise it is actually streamline it. And we'll talk about that a little bit later as well. So just having your eyeballs on your money is one. What's coming in, what's going out? If you're run a business, do you know what's coming in? Do you know, you know, some of your key numbers, your key metrics? And even in your personal life, do you know how much you're paying yourself? If you're a business owner and you're not paying yourself a steady salary becomes really different, difficult, sorry, to manage the personal finance aside. So the first thing is getting your eyeballs on your money and then when it comes to spending, what is essential versus discretionary? And this really depends on your needs. Like there are some fundamental needs we all have. Like we all need shelter, so somewhere to live. Whether we're paying rent or a mortgage, we all need food and we all eat differently. Like I'm primarily vegetarian and I like to eat organic if I can, or at leastray free. So the costs of that are a little bit different. But that for me is essential. So it's part of my values to have clean food and I try and grow food, which I have varying levels of success with. And then for some people the mobile phone these days has become essential because we need to be able to communicate, we need to be able to contact people or be contacted. Having an Internet connection, you know, if 20 years ago that would not have been seen as essential, but these days it pretty much is. So being able to have basic food, clothing, shelter, all of that and having safety around transport too. So whether you like to bicycle or you can catch public transport or you have a car or a scooter or a motorike, whatever your transport of choices, being able to get somewhere has become pretty essential as well. So understanding what those things are and then what you conf. Flex within them. So even in your essential expenses, do you really need the highest level of Internet like the unlimited or can you do with 100 gigama months? You just look at your usage and you can start to get an idea. So there are ways to flex, but it's understanding what you're spending first of all. And that comes back to that first one which is having your eyeballs on it. And then also what can you do within what you've already got? And it's not stuff that you have to do often. Like I usually look at this once a year I keep an eye on the expenses and things and I'll talk about that also on a monthly basis. But doing an overall review of one are my insurances because they go up every year how can I renegotiate what other sorts of things can I do with my mobile phone plan or data sharing if I need to, with my daughter or you, whatever it happens to be what can you do? And like I said, it doesn't need to take a huge amount of time, you just need to prioritise doing the task. And that's partly down to clarity of what do you need to do and what needs to be done first. So if, look your main, so if you look at your main issue at the moment, if you are trying to save for a house, then how you set up to do that so as a percentage of your income going towards saving for that house or are you saving for a holiday or a new car, do you have that discipline to be able to do that? And we'll talk about how to do things in Parallel as well. So do you currently invest outside of super or retirement savings, depending on where you are in the world. So in Australia we have a system called superannuation and it's sort of like a forced retirement saving but invest. And that is all invested as well. But that's one area of wealth. Do you invest outside there? If so, what in. So it's understanding how that is working for you. Are you paying off debt and investing again? I hear that question a lot. It's like, should I invest while paying off my mortgage? And like, absolutely yes. And I will show you a bit more about that shortly as well. But is that something that you're doing question to ask yourself on your checklist, how many funds do you have? So if in Australia every time you work for a company you get a new super fund, typically these days you can choose your own. But for some of us are a little bit older, we will have picked up a few along the way. So it's basically consolidating them so that you don't paying multiple fees, you're not being charged multiple insurances potentially. So it's consolidating again to simplify things and to also make your money a bit more efficient. And do you add anything extra? So if you're a business owner, a, are you paying yourself the right amount each year? And secondly, can you pay any extra? And if you are employed and an employer is paying your superannuation, is there anything extra that you can add in every year as well? Because it is tax effective in Australia. Other countries, I'm not as familiar with their systems, but you'd have to look into whether or not it'd be worthwhile adding to your retirement funds. BEES is a big one and it's something that we don't often look at. So looking at what your fees are in your retirement and or superannuation fund it's big. And this is one of the things that actually ticked me over the edge. When I had a financial planner, I was looking at the fees I was paying and I was paying over 3%, which is a lot. If you're paying over 1%, I'd be looking at why. But I was paying the financial planner the RAAP funds that he had me in and then the multiple funds within that wrap fund. So I was paying like three layers of fees. And I looked at this and went, whoa, there's a lot going out there. And all of it was passively invested, so it wasn't any active portfolio management going on. I was like, that's a lot for not doing a whole lot. So that's what actually then kicked me into the education space to try and find out what's going on. So ye. So find out what your fees are, because they're eating away at your returns, which is eating away at your retirement income. Personal insurances. So these are things like life insurance total and permanent disability, trauma insurance, even income protection insurance as well. These are sort of like your fundamental personal insurances. So we're not talking about ensuring your car or your home or your pet or anything else. This is ins. Insuring you personally and mostly inside a superannuation fund or retirement funds, you can have life insurance and total and permanent disability. The costs are different. Depending on whether you have it inside of super or out. If you have it inside of super, it is actually eating away your superannuation balance. And your ability to access it is a bit limited. So it's important to talk to a specialist to make sure that that's set up correctly for you. So that's one other thing that's really good. That's probably a down the track thing to sort out. Budgeting and figuring out where your money'going and putting money aside in the right way is probably more important. Something that is really important though is making sure that you have a will and an enduring power of attorney. So a will is your wishes for when you pass. Never a pleasant discussion or thing to think about, but it is important. And an enduring power of attorney is if, heaven forbid, that you actually become incapacitated while you're still alive, somebody that you trust needs to be put in charge of your affairs. So that's something that's also important. And once you've done them, most of the time you don't have to change them unless something has changed in your. Like either you get married, you get divorced, or something else, you have a child, sometimes you can build that into your will as well. If you have a lawyer preparing it for you. I know my lawyer did that when my husband and I got married. And then we put a clause in it for if I have a child, these are my wishes. And then sure enough, not long after, my daughter came along and I didn't have to update my will because it was already built in there. But in some states and Australia and different countries operate differently as well. You just need to check and make sure that your willeel is still valid. You can have guardianship wishes and things in there as well. But again, this is where a lawyer will really guide you in this space. And do you know what your current and projected net worth is? I'll go into that shortly. But net worth is, it's a really good measure and guideline. But like I said, I'll get into that in a sec. So what I call wealth in motion. So this is kind of a consolidation of a lot of those questions together. And this image here represents that. Where this is on the left here is like our typical timeline in our lives where we grow up, we have our blissful childhood, which our parents do most of the things for us. And we grow up, we get a job and then we kind of play around a little bit with money because that's what our 20s are for is to figure things out. We may or may not save and if we do, hopefully we're saving for something significant like buying a house. Then say we buy our home and then we spend the rest of our youth paying off that house and maybe investing in some property if we're that way inclined, maybe a little bit of investment and then we retire. A lot of things are done in a linear way. I know this is all curvy here, but it's all one, it's sequential. That is not going to be the way that you can actually end up with a comfortable life and retirement financially. The best way to ensure that is to do things in parallel. And this is where it's really important to be more organised because you can carve up the net income that you have and put it into defined areas again based on your vision and of your lifestyle and what you actually want to achieve and by when. So if you haven't heard of that fire movement, which is financial independent, retire early. That's the core of their premise, is to be able to become financially independent as soon as possible. Some people do it in their late 30s even. Theres different definitions around financially independent, but. So I won't go into that. But if that's your goal, then your level of organisations has to be like super precise. Otherwise for most of the rest of us we just need to make sure that we're at least keeping our eye on making money saving money, investing money and paying off debt all at the same time. And I'll go through a visual of how to look at that as well. Net worth. So if this is a term you can let me know in the chat if this is a term you've heard of. Its probably not too unfamiliar, hopefully to most of you but it's essentially what you have in the current point in time, so what you own. So they're considered your assets. So they could be your home a car to a certain extent. Although as an accountant basically anything that you could sell and get money for is considered an asset. Which is why when you have your contents, insurance, the insurance company will ask you what are the value of your contents? Because they do have a value. Grants are probably not a huge value. And even with a car, as soon as you drive it away from wherever you've bought it from, it's decreased in value, but it still has some residual value. So if you write a list of all of those things and Just gauge of the amounts. It doesn't have to be exactly bang on, but then also write alongside each of those if you have a debt for them. And then once you get to the end, so you've got a full sort of total of what you owe. So the assets that you have and then the debt that you have on everything and then you take the debt away from the own, so the liabilities away from the assets and that's your net worth. And sometimes it can be negative, but that can also be part of your strategy if you're okay to take on extra debt because you know there's assets that are going to grow in value over time, that could be okay for a period of time as long as you can see the tipping point when that turns around. And it's important to look at this not just in the now, but even when you do recognise it's a point in time, it's not something to completely deflate you and go, oh, I'm not even going to try, this is terrible. No, it's a point in time as information so that you know what to do next. And you can start to look at. There are ways to extrapolate out what that will look like in five years if you continue on the same trajectory. And then in 10 years, if you don't like what the 5 year and 10 year views are showing you, you can start to make changes in the now. So do you need to invest more, do you need to save more, do you need to pay off your debt faster? What do you need to do in order to reach those milestones? And I say five and 10 years because you can't. Not too many changes will happen within the one to two year timeframe. And 10 years on its own seems too far away. Five years is a little bit more tangible. And beyond 10 years, we kind of been that whole. Oh yeah, yeah, I'll deal with that when it comes. But it's important to know that you can make some changes now to influence the results. Managing cash flow, this is something that comes up quite a lot. And this is part of. One of the main areas of becoming organised is managing cash flow. And I prefer to say cash flow rather than budgeting to be honest, because it just sounds a bit nicer. But it's important to have again that view. And if you can have it annually, that's really good because we often pay things monthly these days. But there are still quarterly bills that come in and there might even be some annual ones. So if you can Kind of take months, like all your expenses down one side, the months along the top and then you can put in what you've done historically, then at least you can sort of see that sort of eyeball view of where everything is so that you get an idea of where your money is going. And a lot of banks these days can even help you with that. They can do like monthly. Well, they try and categorize it. I don't find their categorizations sort of work overly well. But if you can at least download your bank statements and ChatPT these days will actually help you do some of this as well. But at least if you get your eyeballs on statements to start with so you can start to see where all your money is going on a monthly basis and then make sure that you carve up your money and I call it the money pie. And I'll show you why in a sec. To actually allocate your net income into all of the different areas that you want it to be based on your vision and your values as well. And if you're a business owner, like I said, paying yourself a steady salary is the ideal to strive for if you're not doing that yet because it helps you automate a lot of the things in your personal life. So if you're paying yourself the same amount every month, you can automate the amounts that are going into the different accounts. And your business account, you can automate calculating it, but you'll probably still need to manually actually make those transfers. But at least you know how much there are bank accounts now that I've started to see for personal bank only percentages. So you can actually start to add your percentages into a bank and it will transfer those amounts into different accounts. So this is why I call it the money pie, because it looks like a pie and I've just made it quite colourful because I like colour and it's not quite as boring this way. So if you're a business owner then this one's for you. We'll get to the personal finances in a moment. But it's ultimately looking to make sure that you pay yourself provided that you can. And this is probably for slightly more mature businesses where you have a bit more of a monthly profitability. But if you keep about 30% of your net income in your transaction account to cover any income and expenses that you have, and that's usually say a three month forward look, put some money into profit if You've ever read Michael Maelovich's Bought Profit first, then this will be familiar to you as well. But it's mentally a discipline to be able to put money and profit and see it grow. So whether it's 10%, whether it's even just 1% in the beginning, just put some money aside there, watch it grow, it'll feel a lot better and it will have a mental impact on you to see that your business is growing in some way, shape or form. Tax is a really big one. The amount of times I have business owners who have not put moneyide for tax or they have these huge unexpected tax bills. They've been putting some money aside, but it hasn't been accurate. So at the end of the year they get this huge tax bill and I was like, oh my gosh, it would be so stressful. And then they go on payment plans for years to try and pay it back plus interest. So it's important to make sure you're putting the right amount of tax away. And your owner's salary is that, that's the steady amount. So if the percentage itself is too volatile, you can replace that with a dollar value. You can say, okay, well, on average, this is the dollar value that that percentage turns into each month. So I'm just going to pay myself that. And then having a holding account, this is what I call it's for excess profit. And I say it's for any time there might be like a spike in expenses, one month or just cyclically, some months of the year, like I have some clients in the education space, and December, January or the lowest months. So it's to cover the down months with revenue so that you can still pay your expenses and your staff if you've got team. So that's essentially breaking up your business money pie. And then we take the personal salary you pay yourself and this will then apply if you're employed as well. So the salary that you receive forms your personal money pie. And this is where you get. This is pretty much as complex as the organisation really gets. So on average I see around 70%. If you have a mortgage, this could be 80% as well. But if you're up over the 80% or even over the 70%, I would say you need to review your expenses, see where you can pull things back. And I realized with the interest rates being what they are, that has made things complex. So see what you can do to try and reduce that expenses and debt down from 80% and try to get it around the 70. If you've already paid off a lot of your mortgage, then this will be a lot lower and you can shift the percentages into other elements of the pie. But the bulk of it will probably sit in expense in spend, which is your expenses and debt or bills. Then emergency fund. You can call it emergency. I personally prefer the word buffer. It just sounds a little less intense and dramatic. But I've heard it also called. The fire extinguisher fund or the rainy day fund, whatever works for you. Call it that and actually have a separate bank account to put money in that. And you can have a limit. It's not a bank account that you have to keep adding to forever more. I have a dollar limit which I reached and now it just sits there and earns extra. And it just grows by interest now each month. Unless I have to draw from it in which case it goes down. But then try and keep it at that limit that you have. That whatever makes you feel comfortable, whether that's six months worth of expenses or 12 months worth of expenses. Again, whatever works best for you and how you feel comfortable. I'm a little bit more conservative so I have about 10 months worth of expenses sitting in there. Fun fund. Absolutely vital that we have a fun fund. Because if you think about, if you've ever been on a diet, you can manage you the contraction of food and you know, the limiting yourself of the things that you would normally love to eat for a certain period of time. Then after that you're like bust out. You're like oh, I'm so sick of you know, denying myself the things that I love. So for instance I can't do diets without chocolate because I just love dark chocolate. So I just have to build that in, into whatever I'm doing because that's a non negotiable I've discovered. But fun is important. Whether it's traveling or photography or going to the theatre or going to sporting events. Whatever that fun means for you, you need to have money in there to cover that kids future. This might be schooling fees, it might be an investment fund for your child. Whatever you can do one per child or you can just have one fund to one bank account for all your kids. It depends how you want to do it. But then also investing, this is important as well. So the ones I consider non negotiables is everything there except perhaps the kid's future. Depending on what. If you have children, maybe they're grown already, whatever it needs to be. You could also have a car fund. I used to have a car fund in there because my car was very old and I knew it was going to die. And I had a limit of what I wanted to spend on another car. So yeah, it stayed there until we reached that. And then funnily enough, two months after I reached the goal I wanted for the new car my old car died. So I was like w funny that and now I don't need a car fund for a while, hopefully. And eventually when the car is a bit older again, I will start another car fund. So it's just getting into that habit of identifying and being clear on what do you want the money for and where does it need to go. Because it feels so much more relaxing to come back from a holiday and to know that you've got money in the account to cover the credit card bill that you know is coming. So. Or you can pay for things upfront and it just takes the stress out of it so you don't end up, you know, we all come down off a high after a holiday anyway. You don't want the financial side of it to really be impactful. And the emergency fund, it allows you then to take time off if you need to care for a sick child or a parent. I know I've had a lot of happen with my dad recently so I've been able to actually take some time to go help him. And I know everything's covered so it's a nice way to give yourself sort of peace of mind because. Yeah, that's the whole point of being organised is to give you that peace of mind. Now I'm hoping it making sense and I'm not going too quickly. Please let me know if you want me to cover anything in a bit more detail. So when I say here, track the detail and manage the trends like I said, having your eyeballs on there and if you have the ability to create graphs, then at least you can start to see where your trends are. This works really well in business but it also helps in personal life as well and it helps you understand how much money you need to put aside and which months are going to spike so that when they do. So for instance, for me, January to March is when both my business has a lot of expenses and seems like almost all our insurances come due in that three month period. So I know that first three months of the year has a huge amount of outlay that goes out huge, a lot of outlay. So I can see that because I can see the spike in expenses and in business as well. It just gives you an idea of when things are really ticking along and when you need to make sure that you're covering things when they, like I said with that client of mine who is an education, it declined and then it also made her able to go, you know what, I can actually build in another product that I can sell that will cover those periods as well, something else that doesn't require tutoring. So it just makes it a lot easier than to make decisions and make the right sort of decisions that will actually have an impact rather than just going, you know what, I don't want to do what I don't know what to do, so I'm going to do nothing or I just do something and see what happens. It gives you a little bit more clarity. So in the investing space, because this is also part of the organization, is to make sure that you're actually investing as well. I just, I put it just a little bit because a lot of people say to me, okay, so what actually is investing? Because a lot of us think of investing purely as investing in property shares. I was like, okay, shares in a company. Yes, but there are other ways to invest in companies too. So just a little bit of a summary of the different ways. So your superannuation or your retirement fund, excuse me, is one form of investing property. You can invest in commercial property or real estate or sorry, residential property. So you can buy an actual house that you rent to somebody or you could buy a commercial building. That obviously requires a lot more capital outlay. You can also buy units in a property trust as well. So you don't actually have to outlay hundreds and thousands of dollars, if not millions to buy a single property. You can actually buy a unit in a trust that invests in property and you can do those on the stock exchange as well. So a share in AOM of shares, which we all stocks, same thing we think of as buying a particular company. And then comes that whole, well, how do I choose the company? There's blue chip stocks, there's tech. Which one do we choose? This is where it's possible these days and it's opened up the field so dramatically. It, you can buy what we call like bundles of assets inside like managed funds, where you buy a unit in a managed fund or exchange traded funds, which is ETFs. These ones you can buy like an infrastructure. You can buy ethical. You can buy green companies that operate in those ways you buy. You can even buy gold ETFs if you don't want to buy like individual gold bullion. You can buy all sor. And then a lot of them in companies will give you dividends. So if you're buying something that's a company that's growing and has income, then you can get dividends from that as well, which you could either reinvest and buy more ETFs. Or you can get the cash out. And that really is a personal choice also depends what age bracket you're in and what you want to achieve. But it's made investing a lot cheaper because you can buy into ETFs with like $100 if you just buy one. Whereas managed funds usually have a minimum betweenar 5 and $50,000 for a standard retail fund. Some of the other ones aren't even accessible to a lot of people. They're the ones that the superannuation funds tend to invest in. But it takes the guess work a bit out of it because you're spreading your risk across bundles of assets and companies. So you can even within some of them, if you're buying top companies, you can even partly invest in Apple, Microsoft, companies that we would never necessarily be able to afford otherwise. You can also invest in foreign exchange. That one is complex and I would highly recommend if you go down that path to get educated because it's quite volatile digital assets, so cryptocurrencies like Bitcoin those ones are also again if you're going to go down that path I would recommend getting a little bit more educated in that space. NF Ts are non fungible tokens. These ones I've read about but I personally don't understand too much about it. It's yeah, a different space. So again I would look into that if you're interested. And then there's other things like you can buy gold, you can buy silver, you can buy commodities like nickel. Lets the other one I'm thinking of IR ore there's other things you can buy and then art if you like art and antiquities jewels, different levels of liquidity go with some of these. But probably your main ones are in the top areas here. But they're just different ways that you can invest. But I highly recommend doing that alongside superannuation or investment fund while you're paying off your debt and while saving for those other buckets as well. So just as a little bit of a comparison to sort of show you the difference between your saving and investing. So just as an example here, if you're saving these days you can still get around a 5% per annum return. Who knows how long that's going to last. So I've done it on 4% here. So if you saved $100 per month over 10 years out of 4% return, you'd end up with just under $15,000. If you invested the same amount. So that $100 per month over 10 years. And you had 0.8% in fees, which, with some of those EFTs or ETF, sorry, it's very, it's realistic and say an average of 8%. That's still on the low side, but trying to be conservative here, you'd have $17,000. So just to give you a little bit of an indication of a difference and that's with compounding returns then as well. So investing obviously does return you more, which is why you need to do both, because there's also different risks in both saving less risky. If you're in a bank account, there's pretty much no risk. But if you're investing, there is risk, which is why you need to do a longer time frme to hopefully manage any of the ups and downs. And then the difference here, this one was really fascinating. So this is paying off debt. So if you have a mortgage, just to illustrate. So make sure that if you want to organize how you pay your mortgage. And this is, all this is doing is changing the frequency. So this is $500,000 loan. If you're paying a repayment fortnightly versus monthly, it's the same amount every month, but one of them you're just paying fortnightly, it reduces the length of the loan by three years and it reduces the amount of interest that you pay by almost $63,000. Just that level of organization by paying fortnightly rather than monthly is a huge difference. So these are often things that, of course a bank's not going to tell you this because they want your $63,000. But when I first looked at this, I actually had to do it twice because I thought, oh my gosh, that's such a big difference. Just by making a small different change in behaviour. I do have one client who pays weekly and it does make a difference, but not as much as fortnightly to monthly. But yeah, it's quite a leap. So I would d highly recommend you looking at how you're paying your debt at the moment and just run the numbers as well and see is it worthwhile doing it if you can do it fortnightly. And unless you're doing that already, if you are, great. Okay, so estate planning again, like I said, we've got a will, an enduring power of attorney. An advance health directive is something that exists in Australia where you can have. So for your will, it's primarily looking at your finances. Advanced health directive is looking at your health so you actually prepare this with a doctor. Its a legal document, but you ass sign like a health power of attorney, somebody that you trust to manage your decisions around health, and you put all of your wishes down. As well. Again, not a happy topic, but once it's done, it's done and you can go, yepah, great, I've ticked that off. Now I can rest easy knowing it's complete guardianship. Wish is again, again not a pleasant topic at all. Especially you've got younger children and then we've also got what we call in Australia a binding nomination. And you can have a non lapsing one nowadays as well, which if you're not familiar with this, your will covers your estate as such. Like anything that you own and ownw, your superannuation actually sits outside of that because it's a separate sort trust structure and so you actually have to list your wishes for that separately because it's not covered by your will. And that's where you need to have a binding or a binding non lapsing nomination. And again you need to revisit that to make sure that it's still current, especially if there's been any kind of relationship issues that you need to consider. And then the personal insurances that I listed out before. So if you hear the word estate planning, that's essentially what all of that collectively means and having that sort of set up. And the person that you primarily need in this space is a lawyer for your will, enduring power of attorney advance health directive, you'll need a doctor as well. Guardianship sits inside, generally inside your will, unless your lawyer sets up a separate document. Personal insurances, you'll need a financial planner or you can go directly to an insurance company as well, but somebody with a financial license. And then also your binding nomination, you can do that with your super fund, you don't need anybody to do that for you. So that's what makes up your estate plan. If you can get all this sorted again, like I said, just put it aside and go, yay me, I've done it, I can move on now that level of organisation is done. So coming to doing a bit of a review, I always find it, it's a nice thing to do and it makes me realise how much I have actually done in the year or the things that I set out to do that I haven't done. And then now, like for instance, you've still got about six weeks to get it done if you still want to this year. But it's a nice reflection. And you can do this in relation to just money or you can do it in relation to your whole life and business if you want to do this holistically. But what are you proud of you know, what have you done this year that you are proud of? Write it down. What goals did you hit? Did you intend to put a certain amount in your emergency fund or did you intend to save? Or maybe your goal was to go on a holiday where you didn't take on any debt that you actually paid for the holiday outright. And if you did acknowledge that and go, yay, I did it. And if not, then it can be something you can continue to work towards. This isn't about making you feel bad, it's about making sure that we take the acknowledgement. Because quite often we only focus on the things that didn't work, focus on the things that we achieved. Even if what we achieved wasn't a goal we set out to, if we achieved it, it's still worth acknowledging. Did you start doing something this year that you want to keep on doing? Then what did you learn? And are there some things that were favourite memories? Again, just take them in, consider what they are and just be conscious of them. And what do you want to leave behind in 2024? If there's a thought pattern physical a relationship, a physical habit that you've done, what is it that you want to not keep doing? And then what would you plan? What did you plan to do this year that didn't happen? And you can look at why that is and sometimes there might be a valid reason and you might just not want it anymore or you might go, you know what, I really should have done that. But I need to get clear on specifically what I need to do. And that's why it's really good to do this reflection so that you can look into the next year. So again, what do you want to stop doing? So that's leaning forward from, is there something that you've been doing this year that you want to stop doing? Do you want to stop working 12 hour days? Do you want to stop drinking as much alcohol? Do you want to stop watching as much TV orever scrolling on your phone or whatever it happens to be. Just think about it and write it down and then what do you want to start doing? And this isn't just about a news resolution that you're going to make and then drop within a month. What are the things that you can see yourself consistently doing? And you need to set your life up to support that as well. Because if you want to be able to go and do like, do exercise in the morning, but you never set your alarm early enough and it's not going to happen. So I've literally just started setting my alarm 15 minutes earlier and I'm actually amazed how much more I have in the morning to do, how much time I have and how I can actually get in a little bit of just downtime with my daughter. I do reading with her every morning, but just something fun like playing with Lego or we have this strategy game we play and I have time to do that now just because I set my alarm 15 minutes earlier. But if I didn't do that, I would constantly berate myself because I haven't got the things done and I'm rushing in the mornings. But just that thing has supported what I wanted to start doing. And so when you think about the next year, what gets you excited? Do you have some plans and some thoughts and ideas, things that will actually get your blood flowing and your energy moving? Again write that down to. And is there an income or revenue number that you want to hit? And what would it be? What would you do? Or what would it be actually if you knew you couldn't fail? Because we often hold ourselves back because we don't want to write down a number and then do an exercise like this at the end of the year and not achieve it and feel bad. So let's just do a little bit of stargazing and see where you end up. Systems. All right, so systems, what are they? First of all, they are repetitive processes that help you run your business and your life more efficiently. And we look, consistency, clarity is really important. Softwares are really, really good to help us with this. Banks nowadays. Like for instance, there was an up was a new app that I discovered. I think it's come out by the Bendigo bank. And you can actually put percentages so that money pie, you can figure out what your percentages are and actually put it in there and it will transfer that automatically each month so you don't have to think about it. You can automate paying into investment funds. I use Vanguard's investing platform and they automate investing as well. You can do micro investing roundups automatically and you can invest automatically through micro investing apps. I personally use Raise, but there are plenty of others out there. If you're interested, on my website I do have a micro investting guide if you'd like it too. And so there are processes that are often in your head as well. So anything that helps you not have to do the same task again and again writing it down. And if you have an assistant, if you're lucky enough to have an assistant, you can get them to do a lot of that stuff, or at least just writing it down. Freeze your headspace for when you have to go back and do it again. So you're like, okay, it's this, this, this, this, this chick, tick, tick, tick, done. I don't have to go through the thought process of inventing it every single time. I do the same activity. Setting up your money system so that you can calculate some things automatically. You just enter in your data. This is what I do, enter in your data and then it comes out with the money pie linked and it comes out with the numbers automatically. And so that becomes like a really easy way to manage your money, organize it. But you've got to have the clarity first and the data to put in it so that it can then spit out the information and then offer your rock and rolling. So those systems really make things a lot easier. I use Trello to help with tasks of stuff. Like literally my Christmas list is in Trello, so I can tick off that. I've got everybody sorted and I've got the food all sorted. So I use project management software to manage Christmas. But I can be a little bit of an extreme case and I'm conscious of time, so I'm going to zoom through this a bit. So to streamline it, identify any systems that you already have. And this is about removing duplication, if anything. Like you have too, too many different debt things to pay. Look at consolidating it into one. Look at consolidating perhaps credit card debt into one, doing like a balance transfer, finding one perhaps that has a zero percentage interest rate or a lower one, and then hammering that just so that you take away the mental load around the amount of things that you have to do, the amount of bank accounts. And I realised what I've showed you has had multiple bank accounts. But if they're clearly identified and the money goes into them and you can see it growing, that at least is still, there's an organisation there that makes it worthwhile. And then being able to see things progressing over time as well and looking at your net worth and then you can start to go, okay, you know what? I can see this is working. And that motivation alone helps you save and budget and invest and grow as well. But just look at what you've currently got. If it's too much, how can you reduce it? Like I said, debt consolidation is a really good one. Making sure you don't have too many different accounts all over the place. How you can maybe put it into one bank. There's bank accounts now where I use Eubank, where you have one overarching account and these sub banks and sub accounts and they earn a high interest rate but it's all in the one. So whenever I go there it's all together and I can see it and it's nice and organised. Automating your transfers, like I said, is really, really important. Its so easy to do. You set it up and it's done. So what we went through today like I said, there was a lot there. So hopefully I haven't completely overwhelmed or have had tried to reduce the overwhelm mindset around the money side, the checklist and then how to systemise and automate and then generally what all of that looks like. And feel free to come back and watch the replay of this if you'd like to as well. That checklist that I put the link into, that has a lot of it all listed out and you can literally tick it off. If you would like some more help with any of this, I do offer a one off session where we look specifically at you. You can bring a partner along as well. We cover up business and personal if you want, or just personal. And I give you the template for the tool that I use that I've created to help you with that. Organize, manage side of your money and you can have it for business and personal or just personal again. So I customize that so that's a one off session for a one off amount. And then I also have a program that I use for business owners to help them identify their personal side and their business side and connecting the two and how to do that. And that's a live program that I run. I do it three times a year so it's a waitlist at the moment. So if you want to get on the wait list, there's no obligation. You can just pop on there and then you'll get some emails to let you know when the program'open again, which will probably be in February. And then you can come along to that if you want. Now, any questions, feel free to pop them in the chat. Oh, sorry. The meaning of superannuation. Sorry, only just saw that message. Superannuation is in Australia it's the government's mandatory retirement fund. So they call it Superannuation. It's like a 401k in America. Yeah employers pay superannuation into us an account specifically for retirement and people can't access that money until they're from 55 to 65. And it's a way to make sure that the government can afford to pay people when're or the people have enough money when they're older to not rely as much on the government. I think in Canada's RSA it might be called Does that make sense? I hope so. But yeah. Any other questions, please feel free to ask. I'll just You're welcome. I'll stop the recording in case Hang on. In case you don't feel comfort.
