Education

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


Project Management: A Practical Exploration

“A goal without a plan is just a wish.” ― Antoine de Saint-Exupéry

As part of my Business Management Degree, I recently finished a unit on the Fundamentals of Project Management. While I found this unit slightly challenging, I really enjoyed learning about the concepts and real-time application of the project management theory and frameworks.

The great thing about this degree is that the assignments can all be applied to your own workplace, which is useful because at a financial technology company there’s always a few projects on the go. So what exactly did I learn from all this? Well funny you asked because I’ve elaborated on some of my key takeaways below!

I discovered what exactly Project Management is and what the key components are.

Project management can be defined as the ‘application of knowledge, skills, tools, and techniques to project activities to meet the project requirements’ (Jeong and Bozkurt, 2014, p.183). Jeong and Bozkurt (2014) also highlight that project management can then be broken down into five process groups; initiating, planning, executing, monitoring and controlling and closing.

These components are important parts of the project lifecycle, which ‘consists of several stages during which deliverables are created and end with approval of the deliverables’ (Assudani and Kloppenborg, 2010, p.68).

I learnt about project charters, and why they’re important.

Project charters are the documents that spell ‘out the nature and scope of the work, and management’s expectations for results’ (Harvard Business Review Staff, 2016). The project charter also includes the project’s goals, which define the direction and destination of the project and provide the bigger picture to all involved stakeholders (Belicove, 2013).

Project charters are important because of the communication piece, as so often with teams there is a lack of communication between departments and management. Having a project charter means that someone has to sit down and nut out the details and expectations for the project, providing greater clarity for the entire team.

I had fun trawling through the PMBOK (Project Management Body of Knowledge).

As part of the coursework, I planned my project using the Project Integration Management (PIM) framework. This framework is internationally recognised and is part of the Project Management Body of Knowledge (PMBOK).

The key components of PIM are as follows:

  1. Initiating — Develop Project Charter

  2. Planning — Project Management Plan

  3. Execution — Direct and Manage Project

  4. Monitoring & Control — Monitor and Control Project and Perform Integrated Change Control

  5. Closure — Final Product

I learnt why stakeholder analysis is an important consideration in any project.

In stakeholder analysis, it is important to consider ‘which functions or people might be affected by the project’s activities or outcomes, who will contribute resources (people, space, time, tools, and money), and who will use and benefit from the project’s output’ (Harvard Business Review Staff, 2016). This means understanding the needs of both clients and staff, in order to achieve a better outcome.

I also learnt about the importance of considering the requirements of the businesses investors and board members, who are heavily invested in the future success of the company (in my particular case).

And lastly, I tested around 10 project management softwares to discover my current favourite…

And the winner is monday.com, formally known as Dapulse (they recently had a name change).

Image sourced from    monday.com

Image sourced from monday.com

There are some great features within this software such as; task management tools, timeline visualisation, the ability to assign team members to tasks and communicate within the program. It’s definitely worth checking out as an option if you need some task/project management software for your business.

Project Management has definitely been an interesting unit and I’m looking forward to starting my next two units shortly.

Until next time,

Kate

Get in touch with me at hello@katecampbell.info 


References Used Above

Assudani, R. and Kloppenborg, T. (2010). Managing Stakeholders for Project Management Success: An Emergent Model of Stakeholders. Journal of General Management, 35(3), p.68.

Belicove, M. (2013). Understanding Goals, Strategy, Objectives And Tactics In The Age Of Social. [online] Forbes.com. Available at: https://www.forbes.com/sites/mikalbelicove/2013/09/27/understanding-goals-strategies-objectives-and-tactics-in-the-age-of-social [Accessed 17 Dec. 2017].

Project Management Institute. (2018). Learning: Featured Topics. [online] Available at: https://www.pmi.org [Accessed 12 Jan. 2018].

Harvard Business Review Staff (2016). The Four Phases of Project Management. [online] Harvard Business Review. Available at: https://hbr.org/2016/11/the-four-phases-of-project-management [Accessed 12 Jan. 2018].

Harvard Business Review Staff (2016). Your Project Needs a Charter. Here’s What That Means. [online] Harvard Business Review. Available at: https://hbr.org/2016/11/your-project-needs-a-charter-heres-what-that-means [Accessed 12 Jan. 2018].

Jeong, K. and Bozkurt, I. (2014). Evaluating a Project Management Simulation Training Exercise. Simulation & Gaming, 45(2), pp.183–184.

Financial Decision Making

I find it fascinating how much the media and general trends affect our decision making processes. I often see this clearly exemplified on the ASX (Australian Stock Exchange) where retail investors often follow the trends, and one media article can cause a huge swing in buying and selling behaviours.

I understand that when it concerns their hard earned cash people get scared. They may be wanting to follow the crowd if they're feeling nervous about loosing money, or worrying that they might be missing out on a huge opportunity if they don't act quickly. The funny thing is that sometimes these trends are purely based on speculation and rumours, and could potentially be fake news spread around so someone could make a profit.

We saw this with the Telstra (ASX: TLS) share price recently. Although there were in this case some cold hard facts regarding a dividend reduction and lower than expected annual report profits, everyone suddenly went scrambling to get Telstra shares off of there hands as quickly as possible. This resulted in a very noticeable drop in share price, which in turn prompted others to sell, often at a loss.

While this was happening plenty of online sites were spreading speculation that the share would never be the same again, which further added to the growing alarm towards the future for Telstra shareholders. I don't know what will happen with Telstra, but I do know the good financial decision making is now more important than ever.

It's important when making any financial decisions that you fully understand the implications of what you're doing, and are comfortable with the risks involved. Don't just sign a contract because your friend recommended the product without doing your own research first. Similarly if you're putting money into an investment, make sure you understand who is holding your money, and whether they are regulated or not.

Here are some important points to consider when making a financial decision:

  • What are the risks, and do they outweigh the potential rewards?
  • What a the management and performance fees (if any)?
  • Is the company regulated by APRA or ASIC?
  • Where are the funds held, and what security do you have over them?
  • How and when can you get your money back?
  • What will be the tax implications of any gains made?
  • Does it sound to good to be true?

All the best, 

Kate