Money

Personal Finance Book List: Edition #1

I absolutely love to read, and recommending books to others is an absolute joy. Today I want to introduce you to some fantastic books to read on your personal finance journey. They cover a range of topics from investing to minimalism.

The Year of Less — Cait Flanders

This is a phenomenal book that really makes you examine your relationship with the stuff in your life, and whether you are a mindful consumer. Cait provides a refreshing and honest view of she overcame her unhealthy relationship with money and material possessions. The book definitely made me start selling my unused items on Gumtree and think about my purchasing decisions. Ask yourself — ‘Do I really need it?’

The Simple Path to Wealth — JL Collins

If you’re looking for a book that gives you a no-nonsense approach to planning your financial future with the greatest level of ease possible, then this book is the one for you. Although written from a US perspective, JL certainly includes useful aspects in this book for all readers and is a huge advocate of making money simple and easy to understand. One of the reasons so many people stay away from the share market, is the sheer number of products and companies out there to choose from, but JL cuts through the noise and points you in the direction of index funds, or ETFs (for Australians) and examines the simple math behind building wealth through it.

The $1000 Project — Canna Campbell

This book has a big focus on starting your saving and investing journey, by breaking it down into achievable $1000 chunks. She goes through most of the traditional money saving methods such as selling your old stuff and renting out a room while putting her own spin on it. It’s worth a read if you want some help in setting your financial goals and intentions out.

Unf**k Your Finances — Melissa Brown

This is the financial freedom handbook for Gen X & Y. In this book, Melissa teaches you how to ‘financially adult’, by helping you sort out your financial life, become financially resilient and finally to become financially well. The book breaks down key financial concepts into easily digestible bites, from your financial goals to debt. Melissa runs an accounting and financial planning business and is a regular writer in Australian financial publications.

People say that money is not the key to happiness, but I always figured if you have enough money you can have a key made. ~Joan Rivers

Millennial Money — Patrick O’Shaughnessy

Patrick uses this book to explore one of young people’s greatest advantages, ‘the chance to build a fortune by making early investments in the stock market’. He clearly steps out how to get started, and reminds young people that holding cash over time erodes your purchasing power. The book introduces three key principles to follow when investing in the stock market: go global, be different, and get out of your own way.

Feel free to let me know your favourite personal finance books in the comments below.

Until next time,

Kate

June 2018 Letter

Welcome to my June 2018 monthly wrap-up! It’s been another big month at work with the launch of a new product, and I wrapped up another two university units. It feels good to be making progress on that front, and I’ll be glad to reach the halfway mark in a few months.

One of the interesting things that happened last week was speaking to a journalist from The Age on how and why I invest outside of my superannuation. It all happened very quickly, and suddenly I was on the front page of the Sunday Age Money section — they say we all get five minutes of fame! The article features a few different points of view and is worth a read, as I think it’s an important topic to discuss and think about.

I particularly enjoyed seeing a new face in the analyst team at Forager Funds Management by Chloe Stokes. Read her recent analysis of Zara and the fast-fashion industry over here.

Another great read on the topic of Self-Directed Education and transitioning away from the traditional education industry over on the Alliance of Self-Directed Education‘I wanted students to be empowered, take control of their own learning, and feel free to experience real life outside of the four walls of the classroom. Self-direction is a fundamental skill required to learn and adapt in the rapidly-changing world we find ourselves in.’

Are you looking for a job and want to brush up on your interview skills? Check out College Info Geeks recent article on How to Ace Your Next Job Interview: 35 Proven Tips.

When thinking about financial independence, an area I hadn’t really thought about was the hidden cost of working. Pat the Shuffler points out that ‘we spend more time on work than just our work hours, and we spend money on our work that needs to be taken into account when working out our real hourly wage.’ He also breaks down the costs of working, which are really interesting to see and consider.

If you’re interested in Exchange Traded Funds (ETFs) — check out his great little video by one of Australia’s ETF providers, BetaShares.

Until next month,

Kate

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


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