Episode 30

Take control of your money – nobody else is going to do it for you

Welcome to Finance & Fury! On today’s episode we take look at the best ways to secure your financial future

  • I’m going to share the rules I follow – And how to not be a victim
  • It isn’t hard – it’s actually really simple… but simple can be boring and repetitive
  • What you can do and how you can implement these things

Preface – Don’t be a victim

In today’s culture it seems that outrage and victim-hood are held above taking personal responsibility. Most of you won’t be like this as you are obviously doing something to help yourselves through learning – but being the victim seems to be better than succeeding for some people.

  1. Outrage at CEO pay, outrage at wage gaps, outrage at anything
    • The solution is always to make “them” less wealthy, not to improve your own position – because that is hard
    • What if the answer was to teach everyone else how to get there? And not through redistribution
    • What if all of this energy was used to improve your own position rather than rage at things you can’t control?
  2. When it comes to finance – You can be a victim or not
    • If you think of yourself as a victim you are the one victimising yourself
    • If you take control, then you are setting yourself up to succeed
    • If you can’t beat them – join then – Don’t hate the wealthy, but become one of them as they are people too

Simple Rules to live by

  1. Always remember that you are investing in your future
    • You can negotiate with your future self, and your future wealth
      • Be furious about it – if you want it, you can get it
    • Start now and never stop… because the future catches up on you at some point
    • Earlier you start the more you will have – the more your future-self will thank you
    • I have been investing for the past 15 years, and my current self is happy
      • I can see the funds, I couldn’t see the money I spent though
      • My past self-felt a little stingy – but compared to others it has paid off
    • Think long term and big picture
      • Think about what your future looks like
        • What you want to do, and how much you need to do it?
        • Rule of 20 – Plan to get a 5% income off investments. For example: $100,000 = $2,000,000 asset base
        • If you aren’t sure what this looks like, work it out! You need to have a plan in place as it is hard to work towards something that you’re not sure of
        • Don’t try to go for big wins quickly. Doing this is the only way I have ever lost money – investing out of hope
        • Invest well and don’t lose money. Quality – Don’t invest in hope of large instant gains
        • In Wednesday’s episode – it took years to get good gains, didn’t happen overnight
    • Losing funds will destroy your future
  2.  Diversify
    • At least 15 – 30 companies (or a few ETFs/LICs)
    • Get more than the top 10 (large cap)
  3. REMEMBER: Invest in line with the big picture
    • Passive income of 5%
    • Having 20 properties is no good if they are negatively geared – costing more than you earn
  4. Ignore your emotions
    • Avoid selling low and buying high
    • Rationality is your friend
    • Be patient – don’t rush in based on fundamentals like PE or Yield
      • RFG example – Wanted to buy a little while ago, thought that $1 was good – but saw it going down more – $0.48 now
      • Has a Yield of 62% at the moment – but will be 0% once they update their earnings
    • Track your progress to get to your ideal future
      • Be honest with yourself – somebody has to (or have your partner keep each other accountable)

Putting it in place

  1. Figure out what you want to do
    • This is the hardest part for some people to answer
    • Look at your expenses – What does your ideal lifestyle cost?
    • Also, when do you want it by?
      • Time matters thanks to inflation – $1 today is not $1 in 10 years
    • Apply the rule of 20
      • What asset base will you need?
      • Apply inflation – 2.5% by the time
    • Reverse engineer your targets
      • Play around with online calculators with how much you need to save each money to get there
    • Just do it – Action is more important than planning
      • You can know what to do – but if you don’t do anything then it will never happen

Conclusion

  • Don’t be a victim – don’t blame others!
  • Take control as nobody else will do it for you

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