The Importance of Financial Education

“A wise person should have money in their head, but not in their heart.” ~Jonathan Swift

Over the last few weeks the financial services industry has been all over our newsfeeds, TV and newspapers, and if you’re like me the Royal Commission has made it into the lunchtime conversations at the office. There’s been some devastating stories and disgraceful misconduct exposed, and countless articles on questions to ask your financial planner and how to avoid being ripped off by your financial institution.

My big takeaway from all of this, is that you can never truly trust any sole person or corporation with your life savings. I wonder how many times we have to hear these devastating stories, before we take control of our finances? Who knows what the consequences will be for these individuals and corporations? A warning? A fine? Maybe even jail-time?

Only one thing’s for sure — you need to take control and responsibility of your finances, and you need to financially educate yourself.

You are going to learn most of your financial lessons along the journey, but it needs to be your journey, When you outsource your finances to someone else, they make the mistakes and they learn the lessons, and you miss out on so much. Yes, sometimes it is appropriate and even necessary to seek out professional financial advice, but without a basic level of financial literacy you have no way of knowing if the information they provide to you is in your best interests.

I have definitely made mistakes and lost money along my own financial journey, but I have owned those mistakes and I have learnt from them. It’s not something that you can master overnight, rather I think of financial education as a lifelong journey of knowledge and lessons. I can’t promise you that your journey will be easy, but I can pretty well guess that it will grow and empower you.

“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” ~Ayn Rand

While all of these news stories may make you want to run and hide from the industry all together, it is important to know that for every bad seed out there, there are countless others who are passionate and dedicated to the industry and to providing you with high a high quality service.

I know young Australians want to learn about their finances and take control, but they often feel as though it is out of their power. Let me tell you right now that no one can force you into signing the dotted line for a financial product. You can choose everything from your transaction account to your superannuation, but most people don’t realise how much choice they actually have when it comes to their finances.

The main thing that I hope you takeaway from this — is that it’s never to early or late to take back control, and get started on your financial education journey.

If you want to get started, the most important resource I would like to suggest to you is ASIC’s MoneySmart website, which has such a huge wealth of knowledge contained within. They also offer free downloadable guides that cover a whole range of topics from first-time investing to planning your superannuation.

Another good resource for those interested in investing for the first time is the Australian Securities Exchange (ASX) website, where they offer free online courses, videos and even the ASX share game (where you can try out investing without using your own money).

I’d love to hear your thoughts on financial education in Australia, so please feel free to reach out via email at hello@katecampbell.info or in the comments below.

Until next time,

Kate


April 2018 Letter

Well, that’s a wrap on another busy and exciting month! I’ve been busy working on my RG146 qualification this month which has been interesting, and it’s definitely been a learning curve. I’ve also been smashing out a few university assignments, so it’s good to see some progress there.

If you’re looking to kick-start your morning routine, one of my favourite podcasters and bloggers has a great episode on starting your day off on the right foot — check it out! While you’re there — make sure you check out his article full of examples of great personal portfolios and websites, if you’re thinking of putting one together.

I’m not sure how I came across this video by Michelle Phan, but I found it deeply moving. She left Youtube a year ago and made this video to share why she made the decision to leave it all behind.

Money can’t buy happiness, but it can buy time. Sometimes you have to let go of things to move forward and create your own happiness.

I was also referred to MealPal this month by some colleagues, which is a subscription service where you can skip the queue and get meals for less than $8.00. I think at the moment they are only operating in Sydney and Melbourne CBD in Australia, with over 100 local restaurants offering meals every weekday and the ability to pre-order your meal and skip the queue. I’ve really enjoyed MealPal so far, and it’s definitely saving me money on lunch in Melbourne CBD (which is getting quite pricey).

New on the How To Money Platform

HTM Article: What is a Bond?

HTM Article: Getting Started on How To Money

HTM Podcast Episode 11: Getting Familiar with Bonds

Interesting Reads from Around the Web

The Ultimate Guide to Studying for Tests and Exams — College Info Geek

How to Take Notes in College: The 6 Best Systems — College Info Geek

17 Ideas for the Modern World of Work — altMBA

How to Build a Micro-Niche Site — Bren on the Road

If we Taught Walking in School — Derek Magil

If we Taught Bike Riding Like we Taught Careers — Praxis

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Have a wonderful month!

Kate

Discovering the FIRE Movement in Australia

FIRE stands for Financial Independence, Retire Early (or as some people like to call it, FIOR - Financial Independence, Optional Retirement).

It’s as much of a mindset as it is a way of life or an aspirational goal. Over the last year, I discovered this movement in Australia (which is already quite large in the US), and have dived deep into learning as much as I can.

FIRE is all about increasing your savings rate, consuming less, pursuing happiness and having the financial freedom and flexibility to choose if, how and when you work. FIRE is not necessarily about frugality (although some pursue it that way) and retiring to do nothing all day. The retirement part is optional, but by being financially independent you have more opportunities to direct your life and make decisions out from a position of strength.

When you achieve Financial Independence you gain the ability to live off of your personal finances, without the requirement of a salary to maintain your lifestyle. A common aim of the FIRE movement is to have 25x your annual cost of living invested in a diversified portfolio, with a safe annual withdrawal rate of 4%.

I guess the big attraction of financial independence for me, is the feeling of empowerment and self-sufficiency it can give you. For me, it’s not necessarily about early retirement (although I may choose that), but the ability to make choices from a position of strength and give back to the world.

My discovery of FIRE came from reading through copious amounts of online content and clicking from site to site. To get you started I have listed below some of my favourite FIRE resources from around the web (which I will add to regularly).

Here are some of the best FIRE resources from around the web:

And some more resources that are specifically Australian:

And of course some Podcasts (via iTunes):

And finally some of my favourite financial independence-themed books at the moment:

As I continue on my FIRE journey I plan to share what I learn and discover here, as a record of my discoveries and growth. Please feel free to share your FI questions or stories with me, I’d love to hear from you!

And as I read in the April 2018 edition of Money Magazine Australia - ‘Don’t make your life about money. Money is a means to an end, not an end in itself. Don’t get lost along the way.’

Until next time,

Kate

March 2018 Letter

I’m writing this on the way home from a short Easter weekend trip to New Zealand to visit family. There’s just something about the rolling hills and valleys over there that fills you with peace and happiness - and it gave me a chance to reflect on the busy first quarter of 2018. This month I smashed through two university subjects, saw Ed Sheeran live, published an article about ETFs on How To Money with BetaShares and traveled to NZ to visit family - and next month is going to be just as busy!

One of my favourite Self-Directed Learning advocates is Blake Boles - and I highly recommend his latest post on the Alliance for Self-Directed Education (ASDE), titled Hail the Almighty Diploma. Blake highlights that ‘most formal education is about showing off—a.k.a. “signaling”—not building actual skills. After learning basic reading, writing, and arithmetic, the majority of schooling is functionally useless to the majority of students. You don’t go to school to gain skills, you do it to signal your intelligence, diligence, and conformity to future employers.’

There is a lot of truth in what Blake says in his article, and it always reminds me to truly consider why I’m studying my degree. Yes, it’s definitely a signal to society and opens up more pathways for me, but I’m also doing it to learn more about business and research in a practical way.

New Content on How To Money

Exploring ETFs with BetaShares

Risk, Return and Diversification

HTM Submission Guidelines

What is a Share?

Interesting Reads from Around the Web

5 Ways to Create Value Through a Blog Post - Praxis

Six ways to get fiscally fit without ever breaking a sweat - Money Magazine Australia

303 Life Lessons We All Learn But Keep Forgetting - Niklas Göke

How Students Can Build Their Personal Brand While in University - The Mission

Have a wonderful April!

Kate