Rating: Good
She's on the Money blurb excerpt: Honest, relatable, non-judgemental, and motivating, Victoria is a financial adviser who knows what millennial life is really like and where we can get stuck with money stuff. (Did someone say 'Afterpay'...?) So, to help you hit your money goals without skimping on brunch, she's put all her expert advice into this accessible guide that will set you up for a healthy and happy future.
Learn how to be more secure, independent, and informed with your money - with clear steps on how to budget, clear debts, build savings, start investing, buy property, and much more. And along with all the practical information, Victoria will guide you through the sometimes-tricky psychology surrounding money so you can establish the values, habits, and confidence that will help you build your wealth long-term.
My opinion:
A perfect book for Victoria's target audience. Someone I am not. "She's on the Money" is a guide for women to gain control of their finances. The book provides practical advice and strategies to help women navigate the often confusing world of personal finance. With a focus on empowering women to make informed decisions, "She's on the Money" covers topics such as budgeting, saving, investing, and managing debt. Whether you're just starting out or looking to improve your financial situation, this book is a valuable resource filled with actionable steps and inspiring stories. It's the perfect read for women seeking financial independence and the confidence to make smart money decisions. For those considering this book, be aware it is written for an Australian audience.
Lessons from She's on the Money:
Money Stories:
Money stories are the subconscious and conscious beliefs and values about money and prosperity that we develop early in our lives. Whether we like it or not, they contribute to what we feel is financially possible, and they dictate our behaviour. As much as your money story is defining your habits right now, you have the capacity to change your trajectory.
When we use our values to make decisions, we focus on what is important to us or what we need in order to feel a sense of well-being.
Earn, Spend, Own, Owe:
The key to starting a budget and understanding what you value is to document what you earn, spend, own, and owe.
Earn - Any income that comes into your bank account on a monthly basis. Where variable, select the lowest amount or the average.
Spend - How much of the money you earn is currently leaving your bank account.
Own - List your assets (super, home, savings account, stock, etc).
Owe - List all your debts.
Now it's time to do a deeper audit. Look at your fixed/necessary expenses and discretionary expenses and ask yourself the following questions:
Where is the majority of discretionary spending going?
Did you think that was where it was going? and does that align with your goals and values?
Are you happy with how you are spending your money?
Do you regret any of your purchases?
The basis of financial freedom comes down to two things: Spending less than you're earning and regularly and continuously saving and investing.
Mapping out your money gives you more control and the ability to automate everything. It means that money doesn't disappear or dissolve into thin air, because you have accounted for every single dollar and given each one a specific job. Look at your budget before setting your goals.
Cashflow:
In order to increase your cash flow, you need to either increase your income, decrease your spending or do both. Managing your cash flow is the single most important thing you can do for your future. The first step to creating a solid cash-flow plan is to have the right banking structure in place. To do this you will need 6 bank accounts:
Your cash hub - This is where your direct debits come from and you should not have a card attached to it. If you have a mortgage you may want to consider having this as an offset account. Automatic payments to all other accounts should come from this central account.
Personal Spending - Food, Fuel, Fun.
Emergency Fund - Covers 3 months of your necessities.
Short-term Savings - Pay off any personal debt or credit cards before contributing to this account.
Medium to Long Term Savings Account - A high-interest saving account.
Not an emergency but still feels like an emergency account. It's good practice to transfer any excess from your personal spending account to this account at the end of each pay cycle.
HELP Debt: When it comes to paying off debt, HELP is something you shouldn't make extra payments on. This is for two reasons:
You're better off using your money to pay off your other debt and build your wealth.
HELP debt dies with you. Unlike credit cards and personal loans, which your family members inherit, HELP debt is absorbed by the government scheme.
Paying down debt: List all of your debts from smallest to largest. Pay the minimum amount on all debts besides the smallest one and pay as much as you can towards the smallest one. This will build momentum.
Saving: If you are having issues saving:
Re-examine your values
Map out your money
Identify whether your purchases are in line with your values. If they're not, go back and adjust your budget so your dollars can do the jobs you want them to do.
Identify your "why"
Put time between you and your purchase - try waiting 24 hours and seeing if you still want it as badly.
With every new savings goal, ask yourself the following 5 questions:
What are you saving for?
How much money do you need for this?
When do you want to meet this goal?
What surplus of cash can you allocate to this?
How will you feel when you've reached this goal?
Superannuation contributions: There are two types;
Concessional contributions occur when money goes into your account from your pre-tax income, meaning you are not paying income tax on this money. This is taxed at 15% when it enters your super fund. Contributions are capped at $25,000 per year.
Non-concessional contributions come from your after-tax income. The annual cap is currently $100,000 and you can't contribute if your balance is over 1.6 million. You may be able to claim this as a tax deduction.
When it comes to super, performance is more important than fees; don't be afraid to pay for a bigger return.
Investing: When it comes to investing consistency, time and diversification are the 3 important elements of your strategy.
Four asset classes to invest in:
Cash
Fixed Interest
Share Market
Property
Bonds:
Investing in bonds basically means you are lending money to a company or government and receiving interest in return.
Bond ETFs - exchange-traded funds. By purchasing bonds in this manner, you're investing in a collection of bonds.
Exchange Traded Bond Unit (XTB) - XTBs represent a single ASX-listed corporate bond. These offer more predictable income amounts and a fixed maturity date before you invest.
Exchange Traded Treasury Bonds (ETB) and Exchange Traded Treasury Indexed Bond (ETIB) - these funds track government bonds, and both provide fixed-interest returns for the life of the security.
ETFs
Pros:
Gives you exposure to international markets with less risk
Provides quarterly statements
Cons:
The shares are not in your name
There is not a lot of transparency
The fund manager can sell a share at any point without consulting you
The cost of exiting the fund can be prohibitive because of the capital gains tax
Unit Trust (or Managed Fund) vs Separately Managed Account (SMA).
Unit Trust - An investor purchases units in a managed fund that owns the underlying assets. Individuals do not own the shares themselves, the fund does. If investors leave the fund they do not get to take any shares.
SMA - Each investor purchases specific shares or assets selected by the investment manager, which means they own them directly in their own names. An investor can transfer their ownership to different managers without the need to sell.
Where to purchase shares: Vanguard, BlackRock, CommSec, IG
Property: depending on the rent returned and the amount of your mortgage payments + expenses, a property can be geared in one of three ways.
Negatively geared - income is less than expenses
Neutrally geared - income is equal to expenses
Positively geared - income is greater than expenses
In Australia, there are multiple types of home loans to choose from:
Fixed-rate loan - a standard loan with an interest rate that doesn't change over the life of the loan.
Variable rate loan - a standard loan with an interest rate that can fluctuate.
Interest-only loan - a standard loan, but you delay the repayment of the borrowed amount and only repay the interest, not the principal.
Guarantor loan - a standard loan, but you have someone guaranteeing your purchase by putting their property on the line.
Low doc loan - a standard loan that is popular among self-employed individuals who don't have access to the same documents to provide a lender.
Line of credit loan - when you borrow an amount of money based on the equity in your home.
Non-conforming loan - an option for self-employed individuals who have previously filed for bankruptcy or have poor credit.
*Banks are going to look at your income, spending, debt, and potential to get into debt. Even if your credit card balance is zero, they will count the limit on it against you.
* Just because your loan has a low-interest rate, doesn't make it the best option
Personal Insurance: there are four types of personal insurance and you should consider what is right for you.
Income Protection
Life Insurance
Total and Permanent Disability
Trauma
There were sections that covered refinancing, taxes, insurance, side hustles, relationships and money, financial abuse, family planning, estate planning, how to ask for a raise, and how to select a financial advisor. These didn't provide anything new to me, so no notes were taken on these. There are also a number of activities to complete, which are a great investment of your time.
She's on the Money Quotes:
“Money is intended for spending, sharing, and investing - nothing more"
"Wealth isn't created by how much you earn, but rather, how much you're able to save and invest"
"You can achieve everything, just not all at once"
"If you live fake rich now, you'll live real poor later"
"It only takes $27.40 a day to spend $10,000 a year"
"Know your worth, and then add tax"
What Next:
If you are interested in this book, you may want to check out Making Money Made Simple.
Comentarios