What is Stopping You from being Financially Free?

Since starting in the Financial Planning profession and working as a client relationship manager, there has been a lot of learnings. You can learn a lot about the technical side of Superannuation, Estate planning, Retirement, Investing, Trust structures, Business/Companies, Budgeting and Cashflow projections…

All are really valid and great to know, however, there is no point learning all of that if you don’t understand how money and your everyday to day behaviour is interconnected. Locked together in a constant battle of wills, discipline and decision making that over a lifetime can lead to Financial Freedom and a great retirement or can lead to living off the age pension and counting your pennies everyday.

Everyone of course wants the Financial Freedom and the ability to do whatever you want, but not everyone is going to get there…

Therefore, today I want to share with you the top tips to attaining financial freedom and being able to significantly change your life at the same time!

And also explain why you have not attained Financial Freedom yet….

Understand the Past to Create the Future You DESIRE!

The key to unlocking your potential, as corny as it sounds, is to understanding your past and what behaviours you picked up from your upbringing. Most psychologists today are learning more and more about how our upbringing and the way our parents treated us truly affects how we behave when it comes to money decisions, and life in general.

The understanding of a psychologist who studies the evolutionary theory, is that we are born with 50% of our behaviours already embedded in our DNA. Therefore, we have no control over some aspects of our life, which makes it even more important for you to understand your strengths and weaknesses.

25-30% of our behaviours come from our upbringing, between the ages of 0-6 years old, where our brains were the most malleable or think of our brains as sponges that were prone to taking in everything from our environment.

The other 20-25% comes from our peers and social groups, where we try to fit in and mould into a group that we can connect with and find purpose.

If we were to take the idea of evolutionary psychology and put it into effect, it makes it even more important for you to understand how your parents view money and whether you are a spender or saver.

Hence, you need to really look back at your upbringing, ask your parents or look back into the past and ask yourself, what is money to me?

Do I save up every penny? Or do I spend most of my money? (If you are like the 80-85% of us, you are a spender, so don’t feel bad if you are)

Did my parents complain about money or see it as “Bad”? Do I?

Were my parents comfortable with debt or were they always stressed about the mortgage? Do you find yourself also becoming stressed?

What was your first money memory? Was it of piggy banks and saving to buy your first toy? Or were you given everything?

There is no right or wrong answers here, you should not feel guilty about your upbringing or blame your parents for the way you are now, although there is partial responsibility on their part.

What you need to do is start to understand your past, and start to understand that you can make life easier by setting up a plan based on your behaviours and how you view money now. The key is to become aware of your own behaviours, to stop and reflect, which is difficult at first, but like anything, the more you do it, the easier it becomes.

Having a VISION of what your FUTURE is like and bring your PARTNER along for the journey!

It may sound a bit corny again, but truly having a vision of what your future looks like, even tastes, smells, sounds and feels like, is going to make it way more likely for you to succeed.

Once you have an understanding of your past, you need to set your eyes to the future, and you need to truly envision what it will be like in 1, 3, 5, 10 or even 20 years.

For most people, you don’t think all that often in the future tense, biologically, we are more adept at surviving in the here and now, therefore most of us will always be thinking in past or present tense. But, for true financial freedom, there is a necessity to think about the future.

Therefore, to buck the trend, to “escape the rat race,” you need to do what most people are not.

One of my favourite exercises to do which will help you to envision your future is to ask yourself, “what is a day in the life [insert your own name here] in 12 months time?”

**Remember, there are no right or wrong answers, it needs to be reasonable, but let your imagination take effect here. What does your morning look like? What are you doing throughout the day? Who are you with? Where are you going and where do you live?

Take at least 15 minutes to type or write this down, my preference is to write as you are more likely again to achieve this if you physically write it down. You are taking it from your minds eye to a physical manifestation in written form.

The key to this is to do it multiple times, to live it in your minds eye and to describe it as accurately as possible. You will find it difficult at the beginning, however with practise, it will become easier and easier. Or, if you are not a visionary and it is not a strength of yours, ask your partner to help you and to build a vision together.

If you do not have a partner, discuss it with friends or family, someone you can truly open up to and let it all out.

Create a SYSTEM and have the DISCIPLINE to stick to it!

Once you have an understanding of your behaviours and what you actually you want to achieve, you can look to breaking it down into manageable steps to getting you to that overall vision.

The best way to do this is to find someone who has done what you want to achieve previously, which I can guarantee there is someone out there who has achieved your vision of life.

Otherwise, talk to a professional, someone who lives and breathes helping people to live their goals and vision of the future everyday.

Either of these people will be able to help you formulate a system, however if you want to do it yourself, you can always look to creating your own systems.

You can do this by simply doing what I call reverse engineering, where you make your vision and create a goal around that vision. An example is you may want to be financially free and for you to do that you need to earn at least $90,000 per annum.

How do you get to $90,000 per annum from a mix of passive and active income streams? Where will it come from essentially?

Investments? Property? A business? A YouTube/podcast channel?

There are multiple ways you can do it, it all depends on your vision and understanding yourself, how you behave and what your strengths are!

Once you have the vehicle (investments/business, property etc.), you can step out goals to work on everyday to help you bring your vision to life.

That system may mean that you set up your bank accounts correctly, automating your savings so when your pay goes in, your savings goes out to another account, maybe even at a different bank.

The system could be simply you sit down every two weeks to revise your budget and spending, understanding where you money is going. Or getting your partner to do it, because they may be better at it then you.

Once you have set up a system, you just need to keep doing it, week in, week out. Having the discipline to make sure that it is on track by reviewing it and setting little milestones in which you can celebrate once you hit them.

A great way to make sure that you are keeping on track is to talk to someone, a partner or professional, who will keep you accountable. The power of telling someone you are going to do something is significant in helping you to living the vision you wrote down, just having someone to be there when it gets tough or discipline wanes. It is very underrated in our current society anyhow.

If Financial Freedom comes down to only three things, why don’t you have it in the first place?

Because most people get stuck in the day to day, they forget about their dreams and visions they had as a child growing up, they forget about being curious and don’t have time to reflect.

They grow content and settle for what they have, which is fine, if you are happy and living the life you want to live, but most people are not!

The other reason is simply because financial freedom takes TIME!

You need to have PATIENCE, and do what my wife calls “building your empire.” We live in such a fast pace society that we forget we have 90-100 years of life in us, not everything is going to come to you straight away and sometimes takes years if not decades of work and perseverance.

Hopefully this has effected you in a way that you will stop and think a little bit about your own life and where that is going.

But until next time,

Take Back Control

The road to Taking Control of your Finances starts with this…

The amazing thing about life, and truly the most important thing about being human, comes down to one thing I believe. It comes down to the hopes and dreams we all share for the future…

What does that do with taking control of your finances you ask?

What if I told you that every dream, every hope, every desire and want, comes down to how much money you have and how you control your finances!

Money is simply a tool, much like the sword/plough was a tool in the middle-ages, used to take/till so that dreams could come true.

One of the biggest dreams in Australia and the US is to own your own home, to be able to have something and call it yours, so that you can sleep soundly at night and protect your family.

Another, especially within Australia, is to travel and to see the world, to see more and experience more…

All of this costs money, and it always has, but now we live in a time where we can accrue more money in a year than any of our predecessors or ancestors could even dream of.

We live in a pretty golden era, that is for sure, but with all that money, we can also lose sight of what we truly want, giving in to entertainment and gluttony.

We are only human after all, and not everyone looks to the future all the time. We either live in three phases, the past, the now or the future and the majority of us, based on multiple studies, live mostly thinking about the now and the past. We do not look forward all too often, due to everyday stresses and the fast pace of Western society.

Which is why we need to create a system that can keep you on track and create security around your future.

That system we call a budget!

But, budgeting can have bad connotations, it leaves a sour taste in our mouth, because generally we think budgets are restrictive. But like a bad diet, if you have a too restrictive budget, you will never be able to keep to it.

We are only human after all…

Hence, to set yourself up for success, the best way to start a budget is to look back into the past. Let me share with you a simple system I have created to budget, which takes a bit of effort and time to set up, but once it is done, you can set and forget or you can spend 10 minutes a week/fortnight if you want a bit more control completing it.

Step 1: Write down your Goals/Dreams

You need a reason to create a budget in the first place, if you want to achieve something, you need to write it down, speak to your partner about it and truly understand what you want.

Of course, this is easier said than done and I will be writing a later blog this year on how to ask the right questions to understand what you want and where you want to go.

Step 2: Look to the past and learn from it!

The scariest part about a budget is probably learning something about yourself. I realised pretty early on, after doing my first proper tax return, that I was a bit of a spender. I spent $10,000 in one year on eating out and take-away…

Now there is nothing wrong with that, except I had only earned $60,000 for the year, meaning I had spent almost 17% of my income on eating out!

I was amazed and felt a bit guilty, but I knew that I would never let my spending habits take control of me again.

It may be scary and you may not like what you find hidden in your bank statements, because it truly does reflect a little bit about yourself, but if you can get through that, you will also learn why a budget is really important too, as I did.

Therefore, we need to print out 3-6 months worth of bank statements and, using an excel spreadsheet, fill out what you have spent over the last 3-6 months.

To attain the excel spreadsheet I use, simply fill out the form below and put in the Subject: I want to Take Control of my Finances!

Once you have done this, you have done all the leg work needed, but it is not the hardest part, not by far.

Step 3: Work out how much your goal/dream is going to cost

Understanding where you want to be, now that you know where you are currently and where you have been in the past is paramount.

Therefore, a bit of research is generally needed, depending on what your goal or dream is.

Want to save a deposit and own a home, you need to understand how much you want to spend, you need to know what your partner is willing to contribute and how you will work together to do so. That is one example, but this is the fun part, talking about your goals and dreams with a partner or friend, researching and truly working towards what you want!

Step 4: Once you have a figure, you can work backwards.
Let’s say that you want to own a home and you want to spend the median house price in a suburb you want to live in, which comes to $700,000.

You want to have at least a 15-20% deposit, 20% means you will not need to pay lenders mortgage insurance, which is dead money anyhow.

Therefore, lets use the 20% deposit. Simple math says that $700,000 x 0.2 = $140,000

If you already have $20,000 in savings, you know that you will need to save $120,000.

Step 5: The final step, how much can you save and how quickly can you save it?

If you earn $80,000 per annum and your partner earns $60,000 per annum, after tax for simplicity sake.

You will need to look at your budget and work out, how much you are saving currently, let’s say currently it is not weekly or fortnightly and you just put money in the savings account when you can. Based on the 6 months, you have saved $10,000.

That means that you will need to save for 5 more years, before you can even think about going for a house. But you want to do it quicker, this is where things get hard and difficult conversations need to be had.

Rather than say you can be in your own home in five years, lets make it 2 years. That is $50,000 per annum, or $962 per week.

Your main living expenses come to $1,200 per week based on the budget you completed earlier, but you generally spend at least $1,108 per week on incidental things.

Hence why you have only been saving about $385 per week. ($10,000/26 weeks = $385)

Between you and your partner, you need to make up $577 per week in savings, which means you need to stop going out as much or going on less dates and sacrificing a little bit in the short term.

But that means you can still spend $531 per week on discretionary things, like eating out, dates, shopping etc.

Once you have worked out the figure you need, you need to simply create a savings account purely for that goal, whether that is a house as used in the example above, or for any other goal/dream and each week you take out that $962 out of your pay and put it into savings.

I would also highly suggest that you put the $531 per week in a different transaction account, with a new card, so that way you can split up your discretionary spending like eating out with your non-discretionary spending like bills and fuel.

And that is it, that is how you budget, of course it is a bit of time and effort. But if you truly want to take control of your finances and you truly want to achieve the dreams/goals in your life, it requires a little bit of time and effort.

Once you have done it though, it is so easy to either set and forget through creating a recurring transfer in your bank account or to sit down and do the transfers yourself once a week or fortnight depending on when you get paid.

Budgeting does not have to be about restricting yourself either, because truly you have control of when you want to achieve your goals/dreams by. Therefore, if you want to live it up a bit more, you just don’t save as quickly as the above example.

It all comes down to what you want and when you want it by!

Until next time,

Take Back Control

Wealth Tip -The MOST Important Number to Know

The end of the year is probably one of the busier times, it is not called the crazy season for nothing, but if you look and prioritise, you will find a few pockets of quiet. Time where you can set out for reflecting and most importantly, understanding where you are RIGHT NOW!

When it comes to understanding your wealth and understanding whether you are improving it or losing it, there is no more important number to know than your NET WORTH!

Before we go into how you can easily calculate your net worth, it would be pretty poor of me not to go through a few housekeeping rules surrounding your net worth first.

Rules to understanding Net Worth

1. Your Net Worth does not define YOU and who YOU are!

Your net worth is just a number, and when it comes to understanding yourself, there is so much more to you than just a number. Therefore, when you go to calculate your net worth for the first time, you may feel nervous, or even ashamed, but I want you to take a deep breath and just relax.

YOU are not defined by a number, you are not a bad person for having too much wealth or too little. Our happiness is all based on perspective, some will be happier with more, and some with less. Hence, when you calculate your net worth, just remember, it is just a number.

2. Your Net Worth is a Metric

Your Net Worth is a great way to see where you have been and to measure your wealth building over the years. A great example of this would be if you sit down each year and calculate your net worth, you can see how much your wealth has been building over time.

An exceptionally good way to do this is by using a graph, once you have calculated your net worth over a few years. Check out the below for an example;

Liv and my own Net Worth over the last two and a half years, since I have been tracking it!

3. Leave a Legacy

Everyone should know how much they are worth, if not for the very reason that it will make leaving your legacy to your kids, grandkids or family members that much easier.

(Sure, if you are in high school and you have $5,000 to your name, you know what your net worth is straight away, as long as you have no car loans or debts to family members, you will just have $5,000 in net worth.)

Understanding your Net Worth is truly important, because when you make a will, you need to understand all the intricate details or your assets v. liabilities, not to mention insurances and a few other details. Your net worth will be the legacy you leave behind to loved ones, so why wouldn’t you want to know your Net Worth?

4. Do not compare your Net Worth to anyone else, you are playing a solo game!

I deliberately left out the $ figure in our own net worth graph above, so that you would not be able to compare, because there is no point leading your life in comparison to others. For your own happiness and sanity, it is best to be in the game without looking at the other players.

Social media has truly made our lives a lot more superficial and highlighted judgements, comparing to each other and even more dangerously, an us vs. them, or you vs. me, mentality.

We are all playing our own game, we are all just journeying through our lives at our own pace and you do not need to compare your own net worth to others. See an article that states the average net worth for your age? Don’t read it, we are all in this together, experiencing things in our own way, with our own history and perspectives.

The more you compare, the more likely you are to move into dangerous territory, like “keeping up with the Jones’s” territory, where you will take on more risks like getting personal loans and increase your liabilities. Of course, it all comes out in the wash, once you have calculated your net worth, you will know whether you are trying to “Keep up with the Jones’s”!

So, how do you calculate your Net Worth?

There are a heap of great Net Worth Calculators online, but I must say, one of the better and more simple ones has been created by the Australian Government.

The Money Smart : Net Worth Calculator

I have been using the Money Smart calculator for the last two and a half years to track our Net Worth and it has been working a treat, it is simple to use and will take you less than five minutes.

All you need to know is your bank balances, super balances, investing balances, loans and approximate value of your cars/boats/furniture etc.

During this day and age, you can come up with most of those figures at the click of a button and then once you have calculated your net worth, you can simply print the page or save it as a PDF on your computer like I do.

You have to do the work though or Hire a Financial Planner!

The hardest part of calculating your Net Worth comes down to discipline, doing it every year!

A lot of people would struggle to sit down at the end of the year or end of financial year and actually calculate their Net Worth. Which is why having someone to be accountable to is truly important, someone such as a Financial Planner who can do the calculations for your and review it once every year.

A Financial Planner will be able to reassure you and keep you on track with your strategies of wealth building, so that your Net Worth never goes backwards.

If you are one of those people that don’t like money or don’t like numbers, or you have a much more complex situation with investments, trusts, self-managed super funds etc. Hiring a Financial Planner will save you a whole heap of time, keep you accountable and make sure that you don’t so anything silly along the way that could affect your Net Worth.

Now you know what to do, so you just need to TAKE ACTION!

If you have any questions on calculating your Net Worth or need any help with it, please reach out to me - can do so via LinkedIn, Instagram, Facebook etc.

I would be more than happy to help where I can,

Until Next Time,

Take Back Control

How to Make Sure Christmas Doesn’t Break the Bank!

T-B-C Special Christmas Edition

Here at Take Back Control, I have been running around, getting those last minute Christmas gifts and have almost finalised everything for what has to be the best time of year…

But, it can also be the most expensive time of year, if you let it. Which is why this special Christmas edition is going to focus around making sure that Christmas doesn’t put you out financially, leaving you reeling and feeling horrible when that Christmas hangover hits.

We have all been there before, when we wake up on the 2nd of January in the new year and think, wow, where did all my money go?

Or worse yet, you have to deal with paying back a heap of Buy-now Pay-later apps and personal loans, just to get those gifts that make people “feel” like you love them.

So, do you want to know the trick to not breaking the bank at Christmas time?

Ok, let’s see if I can save you a nasty Christmas hangover (and not the alcoholic kind)…

Tip 1: Communicate with Your Family and Friends

Probably the hardest task to do off the bat, because I believe in getting the hardest things done first, the rest is easy after this. You need to have a conversation with anyone who you will be getting gifts this year and having dinner’s, lunches, drinks with on Christmas day etc.

You need to talk to them about creating a budget and planning how much we will spend on gifts or food/drinks etc.

Without having this conversation, and coming to an agreeable amount, Christmas can be difficult.

You need to make sure you ask first, and don’t just tell people what to do, which means getting in early, before people have brought gifts.

Asking simple questions like;

• How much are you wanting to spend on gifts for Christmas?

• How are we pitching in for Christmas Lunch/Dinner?

• Should we just bring our own food and drinks? (Probably the best way to control your own spend)

The best way to do this is through talking with the host of Christmas this year or making a group chat. Having a family group chat can be great for many things, we have one with just my brothers in it, where we ask questions about what is everyone getting for mum and dad etc.

Coming together and discussing it, you learn more about each other and can become even closer because of it.

Tip 2 - Bad/Dirty Santa/White elephant- The game that will save you $$$

The best way to save money I have found, which has become a bit of a family tradition for us over the last three to four years, is playing a game we call Bad Santa Kris Kringle. There are many other names for it, but I will leave a link below for the description of how to play the game.

- How to Play Bad Santa -

In fact, our friends have even suggested it this year, which means rather buying a $30-$50 gift for each person, costing potentially $120 to $200 or more, you can buy one gift, have fun playing the game and enjoy each others company even more.

Let’s quickly do the math, say you have a family of ten, a group of friends that number as 8, that is potentially 16 people that you will need to buy for. Say you have a budget of $30, that is still $480 of gifts you have to buy, but most of the time if we are honest, it is more than $30. $50-$100 each sounds probably about right these days, which could make it a very expensive Christmas ($800-$1,600 just on gifts alone).

Suggesting this to generally the mother, or mother-in-law, because we all know who is boss during Christmas time, will leave you with the highest chance of success for the family.

My friends who suggested it simply created a group chat labelled ‘Friendsmas’ and we even chose a theme for the gift buying.

The game is even fun with kids, but of course, we all know Santa is coming for the kiddos.

Tip 3 - Create a Budget!!

Pure and simply, making sure that everyone is on the same page and knows what the maximum to spend is on gifts and food is pivotal to not breaking the bank over the Christmas period.

My brothers all agreed last week we wouldn’t spend more than $40 on each other this year, and that goes for the whole family now, as cost of living has really hit a few of us in the family.

We are accepting and feel better for communicating it with each other, not to mention, it has brought us closer together, without judgement of one another’s situations.

We are all bringing our own food to our little Christmas get away to Phillip Island for the Harvey family and have delegated roles and spend to everyone for our Christmas Eve dinner for the Perryman/Joyce family.

Tip 4 - Kids Gifts

The hardest part about Christmas has to be what Santa gets the kids for Christmas, and can definitely blow out to be the most expensive.

Setting expectations early is pretty important, as kids will always want more and more. I still remember wanting the most expensive thing in store, until I learned about the value of money.

If you begin buying them hundreds of dollars worth of gifts from a young age, they will always expect more. Therefore, one neat little trick that I remember from my parents is saying that Santa only gives you one gift. Every boy and girl only gets the one gift and of course you can base it around whether the child has been naughty or nice, but that is not the best way to go about it.

Because more than likely you will find Harry, the meanest kid in the school, gets the best presents and then your child will look at their gift and wonder what they did wrong.

Santa could also just get them something small, from the North Pole or something that is truly memorable and magical. You can leave the “big gifts” to those that are from “Mummy and Daddy” or “Mummy and Mummy” etc.

Instead, start teaching your children about the value of family, connections, experiences and place a lower value on material goods. You need to do this from a very young age, and you yourself need to lead by example. If you have all the latest gadgets and the impeccable furniture, your kid will want that too, but even more than that.

Maybe even start getting your children to save up for Christmas if they truly want something big and expensive and tell them you will pay the other half, what a great way to teach the kids the value of money and the time it takes to accrue it.

Tip 5 - Make a list and check it twice!!

I mean the big man himself is a list person, and if it works for Santa, why can’t it work for you too. You need to sit down, write down all the people/bad santa gifts that you are going to buy for and start brain-storming ideas.

Why waste all the time looking around the shops and dealing with the crazed people rushing about, when you can get in, get the thing you have already put down on paper and get out!!

If you are to do none of the above this Christmas, at least do this one, because if you don’t have a plan, you plan to fail!

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Hopefully you can use some of the above to save some $$$ over the Christmas season, even if it is just one of the tips, I am sure it will help.

We have one more blog before the end of the year, maybe two more depending on how much time I can find during the holiday rush.

Therefore, if you don’t read another blog by the end of the year, I wish you all a very Merry Christmas and Happy New Year!

From my family to yours, have a safe festive season.

With love,

Joel Perryman

Take Back Control