Money can often feel like a mysterious, taboo subject that we're reluctant to discuss with our friends and family. It's often seen as rude or unsavoury to talk ...
Today, I want to talk about something crucial that can shape your financial journey: the difference between good debt and bad debt. You'll learn how to identify the difference between the two and discover strategies to manage your financial obligations effectively. So, why do we need to understand good debt versus bad debt? Many people are just embarking on their financial journeys, and others may never have been taught these differences. Identifying these can be crucial for financial health and planning.Good Debt vs Bad DebtBad Debt: This is the debt you've accumulated buying items that don't grow your wealth, like furniture, cars, holidays, credit card spending, and more. They're called "bad" because they don't generate income and aren't tax-deductible—only dragging you down with interest payments.Good Debt: In contrast, good debt contributes to potential future wealth. This might include an investment property or loans taken out to buy shares. These investments generate income, making the interest tax-deductible and integrating positively with your financial plan.Practical StrategiesDetermining what’s good and what’s bad debt is part of my job, and I advise clients to repay any bad debt quickly. For example, if you have a home loan (not income-producing), I actually consider this to be bad debt, and you should aim to pay it off swiftly. Meanwhile, if you have an investment loan, focus on paying off the home loan first.If you have considerable bad debt, list it out and start the snowball method: knock off the smallest amounts first to permanently close those debts. Then, proceed to the bigger debts. This method not only clears your debt but also builds additional financial capacity for future investments.Your Financial PathRemember, every person’s financial journey is unique. If you’re nearing a payoff on your home, consider utilising that equity for investment to build a more robust financial portfolio. Collaborate with professionals to shape the strategy best suited to your needs.LinksWebsite: https://goldentrianglefinancegroup.com.au/
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9:08
What to do with your money through the decades
Finances can feel like a topic shrouded in secrecy, something we're taught not to discuss openly. Whether you're a teen or in your sixties, understanding the best ways to use your money can be empowering. Here's a decade-by-decade guide to help you make the most out of your income, no matter where you are in life.Teenagers: Building FoundationsLet’s start with the teenage years—a perfect time to begin cultivating good money habits. My biggest tip for teens is to save 10% of everything you earn. Whether it's from a part-time job or birthday money, paying yourself first and setting aside that 10% is crucial. This habit will build you a nice little nest egg and teach you the discipline of saving early on.20s: Step into the Property WorldYour twenties are a time of exploration and laying down crucial financial foundations. While it might feel challenging, buying a property—whether to live in or as an investment—can be a game-changer. This decade is the time to get your foot on the property ladder and think about long-term goals. Remember, property values can fluctuate, but historically, they've trended upward.30s: Strengthening Your Financial HealthBy the time you hit your thirties, you may find yourself more settled in your career and perhaps thinking more about the future. If you haven’t already, continue saving that 10% and consider increasing your superannuation contributions. An extra $50 per pay period can make a significant difference down the line. It’s all about making consistent contributions over a long period to ensure you have a secure financial future.40s: Investment InsightsThis is when financial strategies start to ramp up! If you haven’t already ventured into investment property, now might be the time. Leveraging the equity in your existing home can open doors to additional income sources and asset growth. This decade is about ensuring that your financial future is as secure and fruitful as possible.50s: Focus on FreedomIt's time to pay off your principal place of residence if you haven't already. Owning your home outright by retirement is one of the greatest financial freedoms you can grant yourself. This is the age to focus on clearing that mortgage, ensuring your retirement years will be less financially burdensome.60s and Beyond: Retirement Reality CheckYour sixties are all about maximising your retirement funds, ensuring that you've got enough to live comfortably. Increase your contributions to super if you can here and investigate strategies like salary sacrificing. Consulting with a financial planner can provide tailored advice to maximise your retirement savings and plan effectively for this next chapter of life.No matter where you’re at in this roadmap, I highly recommend seeking guidance from a financial planner. They can offer personalised advice to equip you for each life stage. Although their services can be costly, especially in the later years, they can save you money and stress in the long run.For further reading on this topic, I recommend "The Richest Man in Babylon" by George S. Clason. It's a timeless read that distils key money management principles through engaging parables. Whether you’re just starting out or well along your financial journey, this book will offer valuable lessons.Here's to building a secure, financially prosperous future, one decade at a time. Until next time, stay wise with your money!LinksWebsite:
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12:19
Common money mistakes
Many of us shy away from talking about finances, leading to a lack of open discussion and the perpetuation of bad habits. That's what we're here to change. As a mortgage broker who sees the ups and downs of financial decisions every day, I'm here to share some common pitfalls people unknowingly fall into, and how to steer clear of them.Understanding Your Credit HistoryOne common mistake is a lack of understanding about credit history. It's essentially a record of all your financial decisions, good or bad, and it significantly impacts your ability to obtain finance in the future. Many young people unknowingly damage their credit by making too many applications for loans or credit cards. Even if you don't go through with a loan, just applying can leave a "dirty mark" on your credit history. Be cautious about the number of applications you make; they might come back to haunt you.The Importance of Making Payments on TimeAnother mistake is missing payments. Even when you have enough money, being disorganised about where your funds are can lead to missed payments, which banks do not look kindly upon. Consistency is key to maintaining a good financial record. Always ensure the right amount is in the correct account when payments are due.Building a Safety Net with SavingsA major error is not having savings, particularly for those with families. An emergency fund is non-negotiable. Whether it's medical emergencies, sudden repairs, or unforeseen events, having a safety net prevents reliance on credit and the cycle of debt. Depending on your circumstances, aim to have a few thousand dollars at least saved up as a buffer.Utilising A BudgetWhile it might seem boring, having a budget is crucial, especially in today's cost-of-living environment. My husband and I take the time every pay cycle to review our budget, ensuring we're aligned on necessary outgoings and planned expenses. It's a simple routine that provides clarity and helps us prioritise.Avoid Dipping into Your SuperannuationAnd finally, don't make the mistake of dipping into your superannuation unless absolutely necessary. What seems like a quick fix now could severely impact your financial future. Keep it there to grow, ensuring you have a stable retirement without depending on your children for support.If any of these points struck a chord, you're not alone, and you can make changes today. These insights come from a place of experience, not judgment. My goal is to share knowledge in hopes it benefits you and prevents costly mistakes. For more on building better habits, I recommend reading "Atomic Habits" by James Clear. It might not be directly about money, but developing good habits can significantly impact your financial life.LinksWebsite: https://goldentrianglefinancegroup.com.au/
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12:12
Top tips for starting a business
Starting a new business is an exciting and challenging venture. As a new business owner, you're likely juggling multiple roles and responsibilities, from managing operations to nurturing client relationships. One of the biggest hurdles you might face, though, is not just running the business itself, but navigating how your business decisions, particularly financial ones, impact your personal financial goals.When running a small business, it is common to work closely with your accountant to figure out how to legally reduce your tax. Let's be real here: who doesn't want to save money on taxes? However, here's something crucial I've noticed in my experience—many people may reduce their taxable income so much that it impacts how they appear to lenders when they're looking to make a large purchase, like buying a home.I've had clients approach me, handing over their financials, proudly stating they've been in business for a couple of years, only for me to see that their net income is barely enough to get by. They explain how they've managed to get there – through depreciation, interest deductions, and different things like invoice holdovers or prepayments. That's all good – paying little tax can feel like a win, but we need to look at the broader picture.These financials are not just for keeping the tax man happy; they go to the bank too. When you want to tell a lender, "Hey, look, I make enough to support my lifestyle and fulfil my debts, and now I'm in the market to upgrade to a bigger house," those financial numbers need to back you up.So, here are my top tips for balancing tax minimisation with long-term financial goals if you're starting a business:1. Plan Your Financial Future: Start conversations with your finance broker and accountant as early as possible. Let them know your goals for the next year or two, like upgrading to a new home or investing in another property.2. Understand the Balancing Act: It's crucial to be strategic about how much you minimise your taxes. While it's essential not to pay more than necessary, you need to present your business and personal finances in a way that reflects stability and profitability to lenders.3. Communicate Openly: Your accountant and finance broker are your allies, not just when it comes to taxes but in your broader financial life. Keep them in the loop about your plans and ensure they understand the narrative you're building for your financial future.By being mindful of these aspects, you can better position your business to support your personal life goals, such as buying that dream house. The journey of a business owner is all about finding that perfect balance between managing your current financial needs and planning for future aspirations. With the right planning and communication, you can achieve both your business and personal financial goals.LinksWebsite: https://goldentrianglefinancegroup.com.au/
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12:54
Welcome to the Teach Me Money Podcast
Money can often feel like a mysterious, taboo subject that we're reluctant to discuss with our friends and family. It's often seen as rude or unsavoury to talk about finances openly, but I'm here to change that narrative. Money doesn't have to be complicated, though it's not necessarily easy either. It all comes down to making those small, consistent steps that can shape your financial future.With over 20 years in finance, five years as a mortgage broker, and running my own finance and mortgage broking business for the last three years, I have the qualifications and passion for sharing my knowledge with you. Through my work, I've witnessed firsthand the challenges many families face when it comes to managing money. Some have been taught well, while others just need a few tweaks to change the trajectory of their lives. And then there are those recovering from costly financial mistakes.In "Teach Me Money," we'll break down the how, why, and what next of money management in a straightforward way. I'll tackle your toughest questions, debunk common myths, and most importantly, offer actionable tips to help you get ahead. Whether it's making your money a non-negotiable part of every pay cycle or understanding how to finally buy that property to grow your wealth, I've got your back.If you're just starting on your financial journey or have already faced some bumps along the way, you're in the right place. Join me every fortnight as I dive into practical tips and share inspiring stories of clients who have successfully navigated this path. Together, we'll make sense of money and craft a plan for your financial success.Please note, this podcast is for general information purposes only and not financial advice. Always consult with a licensed financial planner before making decisions about your personal finances.
Money can often feel like a mysterious, taboo subject that we're reluctant to discuss with our friends and family. It's often seen as rude or unsavoury to talk about finances openly, but I'm here to change that narrative. Money doesn't have to be complicated, though it's not necessarily easy either. It all comes down to making those small, consistent steps that can shape your financial future.
With over 20 years in finance, five years as a mortgage broker, and running my own finance and mortgage broking business for the last three years, I have the qualifications and passion for sharing my knowledge with you. Through my work, I've witnessed firsthand the challenges many families face when it comes to managing money. Some have been taught well, while others just need a few tweaks to change the trajectory of their lives. And then there are those recovering from costly financial mistakes.
In "Teach Me Money," we'll break down the how, why, and what next of money management in a straightforward way. I'll tackle your toughest questions, debunk common myths, and most importantly, offer actionable tips to help you get ahead. Whether it's making your money a non-negotiable part of every pay cycle or understanding how to finally buy that property to grow your wealth, I've got your back.
If you're just starting on your financial journey or have already faced some bumps along the way, you're in the right place. Join me every fortnight as I dive into practical tips and share inspiring stories of clients who have successfully navigated this path. Together, we'll make sense of money and craft a plan for your financial success.
Please note, this podcast is for general information purposes only and not financial advice. Always consult with a licensed financial planner before making decisions about your personal finances.
Australia