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The Fierce Girl's Guide to Finance

Get your shit together with money

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Fierce Girl

Hi there, I'm the Chief Fierce Girl. I work in the finance world, and moonlight as a blogger helping to empower women financially. Thanks for stopping by; I can see we are going to be great friends.

Fear, failure, shame: are there red flags in your relationship with money?

Money is never just money.

Money is feelings.

Money is fear or worry or failure or shame. It’s hope or excitement or success or freedom.

It’s a currency that we use to communicate things.

How much you spend on a gift reflects how much you love someone.

How much you spend on a wedding reflects your standing in the world.

How much you spend on a car reflects how successful you think you are.

It shouldn’t, but it can.

Money is never just money.

It’s wrapped up with how you feel about yourself and your worth and your future and your past.

I wonder if that’s why women have a complex relationship with it. We are often in our feelings.

It’s why opening our banking app is rarely a neutral experience. It’s not like checking the bus timetable. We open that app and we feel things.

We hope there’s enough money in there. Or we feel happy there’s more than expected. Or we feel satisfied with our savings. Or we feel disappointed with our spending habits. Or we feel ashamed that we aren’t where we think we should be.

How did you feel last time you thought about money?

Was it this morning, when your inbox had a bunch of emails about the new season collections from a bunch of stores? Did you feel desire? FOMO? Annoyance?

Was it last night, when you had to pay some bills for super boring stuff? Did you feel annoyed about the pain of adulting?

Was it yesterday, when your kid’s school told you about the next thing you have to pay for (excursions, costumes, sports, devices)? Did you feel exhausted?

I think it’s useful for all of us to identify and unpack some of the emotions behind our finances. My hunch is that many of them are negative. And is there any better way to turn your emotions around than to feel them, speak about them, hold them up to the light?

How about I tell you some of my feelings, and you can think about yours. 

If I had to pick two words that I associate with money it would be: fear and safety.

The fear is about not having enough to do the things I want, to live the way I want. I don’t really know where it comes from. Maybe my family. My dad was a successful lawyer with a tendency towards impostor syndrome. He was always looking at the downside and planning for it. (What if he lost his job etc.)

Maybe I picked up some of this; maybe I was just born with it. Either way, I’m scared of not having money, but on the other side of fear is safety, and that’s what I aim for.

I would much prefer to have money in the bank and a good income, so I can plan against the slings and arrows of outrageous fortune. My ex used to accuse me of being obsessed with insurance; I’d argue there are worse thing to be obsessed with. But he’s not wrong.

I’m not saying this is the only feeling I have about money, but it’s kind of the bedrock to everything else. I prefer not to buy expensive things for the sake of it, because that money could be better used to shore up my safety barrier. It also means I experience guilt when I do spend, because I feel like I’m chipping away at that barrier.  Guilt is a default setting with me though, so it’s not that big of a deal, and I do still spend money on shit (hello new Mecca palette!).

Overall, this emotional relationship to money has worked well for me. I was able to leave a marriage and land on my feet, financially, because of the decisions I’d made. I have a manageable mortgage and an old car, because I have distaste for debt. It means I can take some career and income risks at this stage, because I’m not a slave to a giant black hole of home loan and car debt.

Sit down and check in

I encourage you to think about how you feel towards money. I see a lot of people, especially women, feel shame about it.

They’re ashamed because they don’t feel in control, think they spend too much, or don’t know enough about it. They think it’s somehow their fault – when in fact society has done literally everything possible to make them feel like this – from not socialising us to discuss money, through to telling us we are ugly and fat if we don’t buy products to fix ourselves.

So please, sit down in a quiet moment and list your emotions about money.

See if you can unpack them a little. Do they stand up to scrutiny? Are they serving you well? Or are they holding you back?

The good thing about feelings is we aren’t just stuck with them. We can always change them, with some work. Time to have a long chat with money … and show it who’s boss.

 

Should I move to a fixed rate homeloan? And other questions for a 1% world

There was a big to-do this week about fixed rate home loan rates falling below 3%. And sure, it’s kind of a big deal.

Consider, for example, that our parents were paying up to 20% for their (admittedly, very small) home loans back in the 1990s. (God they talk about it like it was the depression and they had to walk to school in the snow, when they just had to hand over approximately $20 a month on their cheap-as-chips four bedroom home.)

What’s changed in the last few months?

Well obviously there were two interest rate cuts from the Reserve Bank of Australia, bringing the cash rate to 1%. I could go on about the reasons for this, but the too-long-didn’t-read version is that inflation, employment and economic growth is, in the immortal words of Flo Rida, gettin’ low, low, low, low, low.

And since the rest of the world’s rates are low too, and there’s no actual plan to boost growth, it’s kinda like ‘well, this is my life now’. Rates will be lower for longer.

How do I know? Well here’s quick explainer on bond yields (accuracy not guaranteed). Please skip to the photo of shirtless Thor below if you don’t care.

Bonds are a way for governments (or companies) to borrow money. They agree an interest rate on that loan, just the way you would with your bank.

In this case it’s a fixed rate loan – we set it now, and it stays that way (unless it’s a floating rate, but we aren’t discussing that here).

Now, if you’re agreeing a loan for just a couple of years, you’d have a pretty good idea of where rates will be in 2021, so it’s not that big of a deal.

But if you’re agreeing a loan for like 10 (or even 30) years, you’re taking a gamble.

It requires some serious crystal ball gazing. Imagine someone demanding that you predict what style jeans will be in fashion in 2029.

Like, we would all want high-waist to still rule. But what if we have a moment of madness and see the return of Britney-style low-riders, with muffin tops just spilling everywhere like the good ol’ days of the early 2000s?

I know, I don’t even want to consider it. But that’s what the people who issue and buy bonds are doing: making a prediction about what the interest rate will be over that 10 year loan period.

The other aspect is how to price the bond. Once it’s issued, you can buy and sell the bond to someone else (known as a secondary market). The bond will therefore have a price, based on market demand – it might be above or below the price it was issued at, depending on what people are feeling.

I swear to God, a huge part of our economic system is based on people having ‘the feels’ about what’s going to happen. Like sure, they have graphs and shit, but ‘sentiment’ is also key – and that’s a fancy word for a feeling.

Anyway, the things that matter when it comes to bonds are: the interest rate, the length of time and the price. When you add the first two together, you get a ‘yield curve’ – which is meant to be some magical view into the future. You know when Frodo looks into Galadriel’s magical water feature in Lothlorien (Tolkien nerd alert!) and sees what may be the future, but also, may not?

That’s basically the same as a yield curve.

At the moment the US yield curve is inverted, and I’m not going to explain what that means because it hurts my head. Except to say, it’s like a guy with dreadlocks and firesticks, chatting you up at a party: kinda weird and not that great.

The Aussie 10-year yield curve is like that guy’s creepy quiet friend, silently giving you a bad feeling.

According to my boss, who knows about these things, we are in a new and unfamiliar phase of the interest rate, economic and property cycles. While we are ‘late cycle’, that doesn’t mean it’s going to end soon, and in fact we could be hanging around in this low-growth phase for a decade or more.

So, now that we all understand interest rates (right?), let’s talk about our home loans (either real or aspirational).

And here endeth the yield curve lesson.

There is no reason for this picture except general thirst.

chris-hemsworth-shirtless-in-thor-3-trailer-new-poster-01

What’s happening with home loan rates?

Interest Rate Buffer gets a glow-up – Until just over a month ago, banks were forced to assess mortgages with a serviceability buffer of over 7% interest. Meaning they worked out how much you could reasonably borrow if rates went up to 7%.

But in fact, rates haven’t been that high since Beyonce was still part of Destiny’s Child. And in this low-interest-rate world, it’s unlikely they’ll get that high again, at least not before the Destiny’s Child reunion tour (not counting the joyous moment in Homecoming where they have a cameo).

So, the regulator had a rethink, and now the banks get to pick a buffer linked to their current rate. If the rate being offered is 3%, for example, they see what you could afford with another 2.5% on top. It doesn’t sound like a lot, but when you’re dealing with big house price numbers, it can mean a difference of $50,000 or more in terms of how much you can borrow.

Investor loans come in from the cold – A couple of years ago, the regulators were (quite rightly) freaking out about the property market free-for-all that was sending prices through the roof, and encouraging investors to load up on huge piles of debt.

Their solution was to tell the banks they had to put a handbrake on the growth of loans to investors.

Now, if you were a bank, you could do this by, I don’t know, just saying no to more loans, right? Wrong! Don’t you know anything about banks?

Their solution was to make them more expensive! And so, we saw a growing gap between owner-occupier rates and investor rates. Even for people who already had the loans (my old boss called this ‘repricing the back book’ and as an ex-banker, he thought it was dodgy AF).

Anyway, now that property investment is about as cool as last year’s platform sandals (ugh), the investor rates are coming back down.

Fixed rate loans are so hot right now – The banks are falling over themselves to get people locked in to one of these, hence the 3% on offer (by comparison, my variable loan is around 3.4%).

Now before you get all excited and think ‘well of course that sounds awesome, why would I pay over 3%?’, remember what we know about banks.

They never do anything to be nice.

Like the bond issuers discussed above, banks are betting that interest rates are coming down further. So they want to lock you in at today’s rate.

Sorry banks, but I’ll take my chances on a variable rate thanks very much.

Look, some people like fixed rates because they mean more certainty around cashflow. You know exactly what you’re paying for the fixed period. If that’s your thing, you do you, boo.

But fixed loans are normally attractive in a rising rate environment. Quick, lock in before rates go up!

In a falling rate environment, I struggle to see the attraction.

So don’t get all caught up in the breathless media stories. If you have a variable mortgage already, there’s a good chance it will go down further (according to all the smart people who predict these things – not just me).

And I’ve already said a lot now so let’s just end on a shirtless photo of Wolverine. Because, why not?

(God, my search history is messed up – yield curve to shirtless Wolverine).

The-Wolverine-Logan-shirtless-again

Made to measure? Ready to wear? All about off-the-plan apartments

Last week I witnessed the glorious sight of 120 women drinking wine and listening to a seminar on getting started with investing.

Girls Just Wanna Have Funds was a puntastic pleasure. I liked Molly’s description of investment being like the free weights room at the gym: full of men and very intimidating.

(Personally, I am that bitch – the one who struts around the weights room, frowning at men who don’t unrack their weights).

Anyway, the seminar focused a lot on listed investments such as shares and ETFs. This is great, because they can be a wonderful way to get started. (Click here for an explainer).

But I know that when many Australians think of investment, they think of property. And so, I wanted to talk about something in the news recently: buying off-the-plan apartments.

I know people who have done this successfully, so I’m not here to throw shade at the whole idea.

But when a big developer went bust last week, it added to the negative headlines around this sector. Remember the infamous Opal Tower, whose residents were evacuated at Christmas thanks to some big concrete cracks? It was followed by a similar issue in Mascot recently.

As a result, people are scratching their heads about whether purchasing off-the-plan is such a great idea. So, let me give you a quick rundown on the pros and cons of this style of investment.

Why do developers sell off-the-plan?

So they can borrow money to build. Most developers don’t just use their own money for a project; they usually need a loan.

And the lender wants to know that buyers have put their money on the table to provide ‘debt cover’ for the loan. Once the lender feels comfortable that they could be repaid if things go wrong, they’ll stump up the money for construction to start.

Why do people buy off-the-plan?

Lots of different reasons, but here are some:

  • Brand spanking new – nobody else has lived there when you move in. Some people really like that. You can often choose the fixtures and finishes too, so it is like buying a made-to-measure wedding dress  – the design is standard but the details are yours.
  • Lock in a price upfront – this is appealing in a rising market. Say you agree to pay $500K and then the market rises by 5% over the next year – your asset has increased in value by $25K without you doing anything.
  • Have time to save up – the time that the developer spends marketing and building the property is often a couple of years. So, you have that time to keep saving and boost your deposit/reduce your mortgage – all the while knowing you have locked in a price that won’t go up.
  • Depreciation tax benefits – when you buy a property as an investment, you may be able to claim ‘depreciation’ as the property ages. It’s quite complicated, but it can give you some tax benefits.

So, there are definitely upsides to the idea. But there are some risks to consider too:

The project may not go ahead. The developer normally has to wait and sell a good chunk of the units – maybe 75% or more – before building can start. In the market peak, when projects sometimes sold out in days, that wasn’t such an issue. But at this point in the cycle, sales have slowed significantly.

So, it could take months or years to reach the minimum debt cover; and in the worst case scenario, they never get there. That doesn’t mean you lose the deposit – you have just have that cash locked up in some sort of trust account, earning little to no interest. The contract should have a sunset clause that says if the project doesn’t start by X Date, the buyers can have their money back. So, be clear what that date is when you sign up!

The value of the property might fall by the time it’s finished. As explained above, you can make money in a rising market by locking in a price and just waiting. Perhaps that $500K unit is worth $550K the day you move in.

But in a falling market, it can lose value instead, and the unit is now valued (by a professional valuer) at $450K.

It’s only a paper loss at this stage – i.e. you don’t lose the money until you sell it. But where it can cause trouble is if you’re getting a mortgage. The bank will agree to lend a percentage of the VALUE, not the PRICE. So, if they are providing 80%, it’s 80% of that $450K. If they won’t go any higher, you need to find the extra money somewhere else. If you can’t find it, you may have to walk away … and lose the deposit.

The finished building may be poor quality. That’s what happened with the Opal Tower. Most finished buildings end up with some defects, anything from broken tiles to leaking windows. Many only appear over time, and the builder is contractually obliged to fix them within a certain period from completion.

It’s when that period is over, or when the cause of the problem is unclear, that things can escalate.

I should point out that this isn’t unique to new buildings. My own apartment block is 20 years old and had a very expensive water seepage issue a few years ago. That’s why the strata has insurance and collects a sinking fund. Although if that’s not enough, you can get hit with a ‘special levy’. Home ownership can be hard!

The developer could go broke before it’s finished. This is a remote risk, but the key is to be aware of what your contract says. We don’t know all the facts yet, but word on the street is that Ralan, the developer who just collapsed, had convinced its buyers to release their deposit to cover interest costs. This is highly unusual – some are saying it’s even illegal – but the fact is, everyday buyers wouldn’t have realised what they’d signed up to.

And if it’s true (as some have suggested) that the conveyancers they used were recommended by the developer, it’s even fishier.

Life pro tip: whatever big purchase you make, always get your own, independent advice, from mortgage brokers through to lawyers. Don’t use the people your vendor recommends!

So, should you buy off the plan?

It’s totally up to you. Like every single investment, there are risks and rewards. The key is to see them all in advance.

One option is to buy recently completed apartments –  this ‘residual stock’ may be marketed as ‘Final Release’ and is made up of the units that weren’t sold in the pre-sales period. They don’t want to dump them on the market in a fire sale, so they sell them off one by one. These are an option if you want a brand new place, but also want to see it first – like a wedding dress that’s ‘off the rack’.

Overall, any investment comes down to your personal goals and preferences. Buying property for investment creates concentration risk – i.e. putting all your eggs in one basket – but some people like the feeling of being able to see and touch their investment. If you’re buying to live in it, the risks (and benefits) can be different, but they still exist.

Before you make any decision, be sure to have a clear view of your timeframe, risk appetite and lifestyle preferences. And please, if you do go ahead, get decent legal and tax advice. Think of it as part of the cost – you need someone providing you with objective advice and pointing out any red flags.

 

What you need to know about money, explained by Taylor Swift songs

No tricks in that headline. Just legitimately good life advice from T Swift.

Ok maybe you don’t play TayTay every time you need a pick-me-up. (But I do)

Maybe you don’t judge your nieces for only liking her new stuff and not appreciating the country years. (But I do).

And maybe you missed the clever reference to Begin Again in those last two lines. (But I do. And if you didn’t, you’re kind of a loser).

But let me assure you, there is some solid sense to be found in Taylor’s music, and I offer it to you here. You’re welcome.

Taylor Swift I Knew You Were TroubleI Knew You Were Trouble – We all know those people. They come into our lives, sweeping us up in romance and excitement, but in our hearts we know it’s going to end badly.

This is because we don’t listen to our gut: that inner voice telling us that something’s not right.

And if you’re facing a financial decision that feels a little … off, then it’s telling you something.

The people who lose money to financial scams, poor advice or just super risky investments probably had that moment of thinking I knew you were trouble when you walked in.

The key is to school yourself on the basics of money e.g.:

  • The higher the return, the higher the risk. Know your risk appetite and work from there.
  • If it sounds too good to be true, then it is.
  • Always find out who’s getting paid, and how much, when a product is recommended. It explains a lot.

It’s easy to be bamboozled by all the information out there. But trusting your own research, and your own gut, can actually be really empowering.

Read more here: If financial planners are greedy, dishonest or stupid, who should we trust?

bad blood newBad Blood – A classic tale of love/friendship gone wrong. You just never know when things will turn sour and you have to create a secret society of female assassins. Or maybe just leave a dodgy relationship.

The key lesson is that whatever ‘mad love’ you had, be ready in case it turns to ‘bad blood’. Have an emergency fund, keep some of your finances separate, and always know what’s happening with the money going in and out of your accounts.

Read this post for more: The single biggest risk to your money is probably not what you think

Who-Taylor-Swift-I-Did-Something-Bad-AboutI Did Something Bad – We all did, didn’t we? We spent too much on a new dress that wasn’t remotely on sale. We didn’t do our tax return for far too long. We ignored our super for years and paid way too many fees. Whatever your guilty secret – big or small, low-grade or serious stuff-up – it’s ok!

A lot of us get caught up in the guilt and shame spiral, which makes it hard to act. You had a spending blowout, so you think bugger it, I’ll keep going. You didn’t do last year’s tax, so you may as well not do this year’s. You lost track of your super and now you figure it’s too hard to find.

How do I know this? I did it myself. Confession time. My life admin was a mess after my divorce. It started when someone changed the locks on my house and ‘couldn’t find’ a bunch of my paperwork. It ended up with me totally overwhelmed by my tax.

In the end, after much proscrastination and a kind and supportive accountant, I sorted it out, and the relief was amazing.

If you’ve done something bad – or, more likely, not done something good – then take my advice. Just do one thing. Send one email. Call one super fund. Compare one insurance quote. Whatever it is, just getting started is both the hardest and the easiest thing you’ll do.

Read more: Fierce Girl Action Plan: Part II – Super fun!

taylor-swiftShake it Off – The social conditioning of the patriarchy, that is. Yeah, shake off the shit that people might talk about you.

But more importantly, try and catch yourself believing the bullshit that the world teaches young girls and that we drag into adult life. Here I present a random list of beliefs you should shake off, Taylor Swift style:

  • That you’re no good with money – you totally are, in the same way you can be good at winged eyeliner: with time, attention, a lot of practice and strong self-belief. (God I fucking nailed my eyeliner today. I’ve come a long way).
  • That investing is too hard and risky to tackle – you know what’s a risky investment? Waiting for that fuckboy you’re dating to turn into a fully-fledged human person. If you’re willing to invest time into something like that, with little-to-no chance of success, imagine investing some money into something like the sharemarket, which most definitely goes up far more than it goes down.
  • That finance is just too boring to bother with – sure, a lot of the finance information out there is boring. But not all of it. And if you can spend an hour on The Iconic looking for the perfect short-sleeve turtleneck (I didn’t find it btw), then you can read some stuff about money. Check out some women-friendly resources like Financy or Ellevest.

These are just some of the limiting beliefs that we can hold us back. Try and police your own negative thoughts, and see if you can shake them off!

Read more: What if you’re actually smarter with money than you think?

Two insider tips from the finance industry that may just make you rich

Haha sorry about the clickbaity title. But it’s kind of true. These two things may just help you get past your fear and lack of confidence about investing.

You see, there are a lot of vested interests who like to make investment seem haaaard and scary and complex. (So you pay them to do it for you, ya see?).

But it doesn’t have to be that hard, I swear. So, here I offer you two truth-bombs to consider.

1. It’s all about the big picture, not the details.

There’s an investment concept called ‘asset allocation’, and before you hit the snooze button, let me explain why it’s important. It refers to the big ol’ mix of investments you have, like a  recipe.

A bit of property here, some shares there, here’s a parcel of bonds, and here’s a pinch of alternatives!

Each ‘asset class’ has its pros and cons, and when you mix them all together you get a delicious mixed fruit cake. (psych! fruit cake isn’t delicious at all).

People selling you investment products will often tell you theirs is the best. Performance this, fees that. But you know what’s more important than the separate ingredients? The recipe you start with.

(Actually that assertion is a hotly contested debate in the industry, on a par with the great Kimye vs T Swift battle).

Broadly speaking though, having a good, diversified mix of investments is pretty damn effective for building wealth. The recipe should be matched to your goals and timeframe.

When you go to a robo-advice service like Six Park or Stockspot, they are helping you choose the right recipe for you. They’ll also help with the ingredients, of course, through ETFs and Index funds (more on that below). So robo-advice can be a good (low-cost) way to get your head around the whole shebang.

The takeout: Don’t worry about finding the ‘perfect’ fund manager or picking the ‘hot’ stocks. Just make sure you have the right mix of investment types (i.e. asset classes) to meet your goals. 

2. Investors do stupid things … all the time.

That’s why markets are so choppy. At the moment, some of the most valuable stocks on the ASX are trading way beyond their intrinsic value. Take Afterpay – the favourite frenemy of the cash-strapped millennial shopper.

It’s currently overpriced because investors are piling into it in a frenzy.

The stock is currently trading at an astronomical high – a Price Earnings (PE) ratio of over 180 forecast earnings. You don’t need to know what a PE ratio is, you just need to know that even hot-tech-fave Google only has a PE of around 20.

Basically this stock is as popular as a fidget spinner in the playgrounds of 2017 (and personally, I think it’s heading for the same fate).

Markets boom and they bust. Particular stocks are in fashion, then they aren’t. Investors get caught up in ‘irrational exuberance’, and pile into the same companies, based on a good feeling and  some comforting projections in an Excel sheet.

When a professional investment manager does this, it’s called ‘active management’, and they charge handsomely for it. Unfortunately, they aren’t always worth the money.

But you can avoid these professionals and their big bets by just ‘tracking the index’. You see, there’s an alternative to active and it’s called – surprisingly – passive!

Rather than picking particular investments, you just follow the market. The passive-vs-active debate is a long-standing one and I’m not here to adjudicate. (Unlike Kim vs Taytay, where I am team Taylor to the death).

I will say, this week the New York Times published a piece (which I stumbled across today – after I’d planned this post), where the author opines:

I had accepted the imperfect choices and high fees imposed by so-called active mutual funds, and I had compounded those liabilities by buying and selling at the wrong times.

“The Dalbar data leads to the inescapable conclusion that most investors, this one included, are bunglers: We panic and exult at the wrong moments, impairing our chances of success.”

He goes on to conclude:

“Most people, including me, would be better off if we gave up on being smart and stuck with a simple approach: long-term holdings of diversified, low-cost index funds, using only money we can afford to tie up for years.”

So if you are wondering how to get in on this passive investing gig, you could do worse than read my aptly titled post ‘WTF is an ETF‘, or check out Canstar here. If you want to dip your toe in the water, I like Raiz, because you can invest a small amount.

The takeout: there are simple, low-cost ways to access investments like shares, and they are totally within your reach and skillset. 

Ever feel like finance isn’t your thing? It’s not you, it’s them

Sometimes I just can’t keep my mouth shut.

Working in finance, I’m constantly surrounded by a majority of men. It’s not my ideal but it’s a fact of life.

But last week I couldn’t hold myself back. I opened a financial advice industry magazine and was confronted by what I can only describe as a sausage-fest.

It’s an ‘industry roundtable’ organised by a major life insurance company. Don’t be fooled by the two women in the photo; only one was actually allowed to be part of the roundtable. I assume the other was rounded up to give some gender balance to the pic. FFS.

So I got fired up and emailed the editor to complain about this. Something of a risky move, given I have to pitch stories to him occasionally. But hey, when the feminist fire is burning within you…

He was actually great and accepted that it’s not a good look, and as I suspected, it was the paying client who made the call. He said they normally have a minimum 30% females at their events. I’ll take him at his word.

Anyway, it got me thinking about my Fierce Girls. No wonder so many of us feel like finance isn’t our thing. No wonder we don’t feel inspired to work with investment professionals, when they are largely white guys in suits.

In case you (or the men’s rights activists, who take a strange interest in this blog) think I exaggerate, check this out.

I went to two of the ‘go-to’ finance industry sites to get a feel for the visuals. Here’s a panel of ‘investment experts’.

Oh hey there white guys in suits. But wait, maybe I’m just picking one example. Here’s another.

I mean, sure there are more white guys in suits, but maybe I am just being selective. Here’s one more.

Don’t be fooled by the glasses or the bald heads; these are all different people. The only diversity is the depth of their tan and the choice of whether to wear a tie.

I’m not blaming the publication completely for this. These are the spokespeople that the investment managers put forward.

Anyway, just to round out the example and test my hypothesis a little more, I jumped onto another industry website. Here’s a list of the ‘industry expert’ articles.

You guessed, more white guys! Surprising, I know.

But I’m not just here to throw shade at the ingrained gender imbalance of the finance sector. Although that is fun.

And I have nothing against white guys in suits personally. (Let’s be honest, they form a significant part of my dating portfolio).

What I want to say is this.

If you feel excluded from the financial world, IT’S ABSOLUTELY NOT YOUR FAULT.

If you feel like money, investments and finance are complicated concepts, remote from your life, IT’S TOTALLY UNDERSTANDABLE.

If you don’t identify with the blue-suited, white-shirted men of the finance industry, IT’S COMPLETELY REASONABLE.

There are definitely smart and talented women in finance. I know a bunch of them.

There are wonderful female advisers and money coaches like Vivian Goh.

There are boss-lady investment managers like Catherine Allfrey (ok I don’t know her personally but she works in my building and I secretly fangirl her from afar).

There are great female executives running super funds like Deanne Stewart (I fangirled her at an event once, in person).

There is even an amazing woman on the Reserve Bank of Australia Board! I’d go so far as to say I know Carol Schwartz, but I don’t think she knows me.

There just aren’t as many of these women as there are men. And it’s taking aaaaages to address the imbalance.

In the meantime, what can you do in the service of smashing the financial patriarchy?

  1. Search out like-minded women and their businesses. Women supporting women is obviously the best way to start. There are so many great women, so ask around or get Googling.
  2. Be conscious of the bias, then ignore it. Feel totally free to reject the notion that finance is a white guy’s game. It’s totally open and accessible to women who want to get acquainted. Resources like the one you are reading are evidence of that.
  3. Call out gender imbalance when you see it. Like I did to the poor editor mentioned above, if you see events or articles or even companies that are far too male, comment on it. We accept the behaviour we walk past. Also, feel free to take your business elsewhere.

And if all fails, just create your own squad, Taylor Swift, Bad Blood-style. That’s my master plan. Are you in?

Just a conversation with a (very) sassy friend who has mastered the art of life

So that title is a quote about me. I love it, but feel a little fraudulent because I have definitely not mastered anything.

Anyway, it’s by the awesome Erika Jonsson, and we are having a bromance, but the girl version. (Why isn’t there a female version of that concept? Oh that’s right, because it’s socially acceptable for women to admire and be supportive of each other. Yasss gurrrrl!)

She interviewed me for over an hour and somehow made sense of my feminist ramblings, publishing it on the Six Park blog. So, here I am, spilling the tea. Enjoy.

WHAT WAS THE FIRST THING YOU REMEMBER SAVING FOR? HOW LONG DID IT TAKE?

I didn’t really get proper pocket money as a kid, but when I was 13 I started working at a printing shop for $5 an hour and I saved up for a boom box – it was a double-cassette plus CD player, so I could use it to make mix tapes. I reckon it took me about six months and I had it until well after I moved out of home, so it was a pretty good purchase!

WHAT PROMPTED YOU TO START THE FIERCE GIRL’S GUIDE TO FINANCE?

I was doing work on what was then called Money Smart Week, and one of the things they asked everyone to do was have workplace events. So I got a bunch of PR girls together and ran these lunchtime seminars preaching the gospel of superannuation and it went from there.

In terms of launching the blog, I started out treating myself as though I was a client and considering my objectives and channels. But perfect is the enemy of done, so I just ended up starting and building the site myself (which is why it’s not very fancy).

Not that long ago I was listening to Gloria Steinem in conversation with Oprah, and her advice was: “Do the thing that only you can do.” There are so many strands to unpick before we can get close to gender equality, but the thing that I can unpick is helping women realise it’s not unfeminine to be good with money. I want to change that thinking that says we’re all about spending. Money is at the core of how much power we have.

WHY DO YOU THINK EXPENSIVE SHOES (THINK LOUBOUTINS AND MANOLOS) HAVE BECOME SUCH AN IMPORTANT REFERENCE POINT IN TALKING TO WOMEN ABOUT MONEY?

My theory is that it’s women signalling success to other women. I think women are particularly socialised to talk about how we spend money but not about how we make it or invest it. But money itself doesn’t signify power; it creates power by giving you choices and opportunities. If you’re spending that money on shoes that aren’t even very comfortable, you’re not taking control of that power fully.

One of the things that troubles me a lot at the moment is the obsession with cosmetics and injectables and really expensive beauty treatments. I’m not judging women who use these services, by the way, but every time you’ve got a 26-year-old woman getting Botox, it’s a way to disempower her, because she’s now embraced a spending pattern that will last through her 20s and beyond. We’re talking about hundreds and hundreds of dollars being spent, mostly by women, who think this is what they need as a minimum to show up in the world. It’s fine if you have all the money – great, go get a facial – but don’t do that before you’ve paid your bills and set yourself up for a life that will give you power and opportunities.

FIERCE GIRL IS FULL OF GREAT POP CULTURE REFERENCES, INCLUDING ICONIC FILMS AND SERIES SUCH AS LEGALLY BLONDE AND SEX AND THE CITY. WHO ARE YOUR FAVOURITE CHARACTERS AND INFLUENCES WHEN IT COMES TO MONEY?

One of the biggest singers in the world at the moment is Billie Eilish, who’s quite androgynous, and I find that really exciting – she’s giving a different version of femininity that’s not all about crop tops or high heels. When it comes to money, though, the women I admire the most are probably Beyonce and Rihanna. They’ve kept control of their business decisions and their empires and they’ve flipped the narrative. I know that’s a very capitalist way to look at things but if women can take away even a small amount of the thinking that says money isn’t about what you can spend but about the choices and opportunities it gives you, we’d all be better off – we’d all be a bit more Beyonce, right?

YOU WROTE A POST ON SPENDING LESS AND SAVING MORE THAT WENT “LOW-KEY VIRAL” – WHAT ARE THE MOST POPULAR POSTS ON THE BLOG, AND WHY DO YOU THINK THEY’VE RESONATED THE WAY THEY HAVE?

The one I wrote about how to structure your bank accounts was wildly popular – it’s not rocket science, but it was a great simplification of how to think about things. By far the most popular ones, though, are the ones that are the most personal, including a recent post about the single biggest risk to your money. As someone who’s come out of a divorce, I’m fortunate to have an income and a career, but I didn’t come out of that situation in what I thought was a very fair way. If I could go back in time I would have protected myself a bit more. I think people really resonate with the authenticity of those kind of blogs. People connect with people, not instructions or tables – they want to hear stories.

(Erika’s note: one of my personal favourites, and the one that introduced me to Fierce Girl, is the Mindful Spending Manifesto, which doesn’t decree that you shouldn’t buy anything, but that you shouldn’t buy everything.)

WHAT WAS THE FIRST INVESTMENT YOU MADE OUTSIDE YOUR SUPER?

I’ve been putting extra into my super since I was 21 – though I lost a decent chunk of that in my divorce – and everything else has gone into my house. Other than a little Raiz account, I’m probably overweight in property! A lot of my wealth has gone into my home, but I’ve done that quite consciously because I do have a decent amount of super so I just really want to smash my mortgage while I can. When I feel like I’ve done that a bit more, I’ll probably go outside and invest in ETFs.

HAVE YOU EVER WRITTEN ABOUT BUYING FEWER COFFEES?

No! I’m not going to tell you how to write your Mindful Spending Manifesto! You need to decide what’s your splurge and enjoy it – then be clear about what you’re having and not having. You should see my premium spirits sideboard – there’s nothing on there that’s less than $70 or $80 a bottle, but I won’t buy cocktails at a bar. Everyone has their own thing that they have to work out. You shouldn’t have to feel bad about the things that make you feel good about your life, but you should put time and effort into thinking about them. Ask yourself whether the behaviours you’re engaging in bring you closer to your goals or push you away from them.

WHAT’S THE ONE THING YOU WANT EVERYONE TO KNOW ABOUT MONEY?

The thing I really want women to believe is that perfect is the enemy of done. There’s no perfect investment, there’s no perfect way of doing things – just do something. Don’t wait to be a perfectly informed investor – you don’t have to be Warren Buffett; there are so many small things to do like reviewing the dull insurance and consolidating your super. Get in there and have a go. You can always do a little bit better without having to be perfect.

Final note from Chief Fierce Girl: this isn’t a sponsored post or anything, but if you are wondering how to get started with investing, Six Park is totally worth checking out.

3 Key Investment Concepts explained by The Spice Girls

It’s Sunday morning, I still have glitter all over my face from last night’s Oxford St make-up, and I’m drinking coffee in bed. The only thing that could make today better is dropping some knowledge bombs on you all.

If you didn’t hear about the Great Disappointment of 2019, last week Mel B told us that The Spice Girls were coming to Australia, before clarifying that actually it was just a vague intention.

Anyway, since this Girl Power phenomenon was a huge formative influence on my life, I decided to give them their own Fierce Girl post. And sneak in some learning at the same time.

So, here I give you three important investment concepts they should really teach at school but usually don’t.

Capital Growth – this is when an investment or asset increases in value over time, without you having to do anything.

Capital Growth is the Spice Girls of the investment world. For that brief moment of joy where we thought the band was touring Australia, my friends and I considered how much we’d pay for tickets. ($1000 was too much, $999 we agreed was ok). Those girls haven’t made an album in decades but they get more valuable over time!

With assets, homes are the most common example of a capital growth play. We buy them and hope they’ll double in value every seven years and in a rising market, that does happen. But all markets follow a cycle, so if you buy at the wrong time, you may either miss out on capital growth, or see it go backwards. (Read this post for more info).

When people buy shares, they are often looking for capital growth, especially if it’s an up-and-coming company that doesn’t make a profit. You don’t get any dividends in this case, but hopefully in a few years those $1 shares are worth $5. I already wrote a whole post about how buying shares is like choosing husbands (here). But when I think about it, it’s kind of like creating a girl band. They could end up as the Spice Girls, or they could go the way of Bardot (sorry Sophie Monk).

Ouch, my nostalgia-o-meter just kicked into overdrive and I feel old AF

Yield – Income – Dividends

These are all basically the same thing, and refer to the cashola you earn from owning an asset. Also known as passive income.

Do you ever wonder how Sporty Spice seems to live an A-list lifestyle, even though we haven’t heard much from her since the 1999 dancefloor banger ‘I Turn to You‘?

Yep, that’s right, she’s living off royalties. Apparently all five girls have co-writer credits for their songs and get paid when people play or perform them.

This is the kind of passive income I want in my life, but since I have zero musical talent, and am probably past my prime girl-band age, I’ll have to buy some blue-chip shares instead.

Retirees are big on ‘yield stocks’ like Telstra and the Big Four banks, because they need  income to live on day-to-day.

For myself, as a young investor, I’d rather re-invest that income to grow my nest egg, and in fact many companies have an option for doing this. It’s called a Dividend Reinvestment Plan (I know, they could have catchier name). Say you have $1000 worth of Telstra shares and they pay a 7% dividend, instead of taking that $70 and putting it in the bank, they just give you $70 worth of their shares. It all happens automatically once you sign up for it, and you don’t need to pay a broker (which is normally the case for buying shares).

It’s as easy as letting Spotify create a Pop Queens playlist for you. (Athough, tbh, I’ve made my own and it’s great. You’re welcome).

When it comes to property, rent is the key income stream. If you have an investment property where the rental income is enough to cover the costs of the mortgage, strata and other bills, it means it’s positively geared. (‘Gearing’ refers to debt, so it basically means the income is greater than the cost of servicing the debt).

If the rent isn’t enough to cover the costs of owning the property,  you have to put your hand in your pocket to top it up. This means it’s negatively geared – as you’re making a loss on an investment.

If you’re thinking ‘wait, what, why would anyone want to make a loss on an investment?’ then you have obviously never experience my dating life, which is all about putting in more than I get out. (Although I’m down with that now).

The key insight here is that investment losses are tax deductible. So, say you have to cover $10,000 a year of investment property costs each year, you can reduce your taxable income by that amount. i.e. maybe get a sweet little tax refund.

Like, I see how this is good for people who hate paying tax to the government (ok, literally everyone). But I personally don’t relish the idea of finding extra money all the time, which is one of many reasons I don’t have an investment property. But if you do, that’s great and no judgement – you do you, boo!

I just think people get excited about negative gearing but forget they are still making a loss, AND the strategy relies on the property increasing in value (capital growth) to make it work. Which is not happening much at this point of the cycle, and also is dependent on where and what you buy.

Anyway, this isn’t meant to be a rant about Australians’ obsession with property, but a rant about how important the Spice Girls have been to our lives (if only I had a photo of my platform sneakers from 1997.) So let me get to the next point…

Diversification 

Of course there are more investments you can make than just shares or residential property. There are bonds, REITs, commodities, infrastructure etc. A sensible portfolio will have diversification, and that is exactly where the Spice Girls have excelled.

Each member is unique and brings something different. Well, I think Posh’s contribution is minimal, but someone may want to fight me over that comment.

When we were young women looking at the fab five, we could all identify with something, whether it was their hair colour, fashion sense or personality. Having a bit of everything helped to make a great band.

Finance is the same. If you just put all your money into property, then you might be missing out on the returns of shares, for example. These asset classes are often ‘uncorrelated’, which just means they do their own thing: while property is falling, the sharemarket could be soaring – which is happening right now. So if you have a bit of each, you spread the risk. When Ginger Spice was in a bad place of eating disorders, yoga videos and questionable solo songs, Posh was marrying Becks. Markets and people all move in their own cycles.

Wow, this was quite a long post so if you’ve stuck with it, well done. Your prize is a night on the Spice Girls red bus, which is now an Air BnB. Enjoy!

Sleep well surrounded by 90s nostalgia, Fierce Girls!

3 useful things to help you win the war on adulting

I’ve been adulting hard in 2019. I  finished a bathroom renovation and I got my car registered. Ok, maybe my dad took the car for a service and inspection, but I most definitely did the paperwork.

Anyway it got me thinking about what it means to be a fully functioning adult. Because even though I’m now 40 (wtf), I sometimes feel like a 21 year old, just trying to keep all that adulting, life-admin shit together. (Hence why my dad steps in now and then).

I don’t even have kids and I find it hard – so let me salute all the ladies out there who can deal with car rego and school permission slips (do they even have them anymore or is there some sort of app?). Anyway, I don’t know how you do it all.

But when it comes to money, I am doing ok. So I want to share with you a few things that every girl should have as a serious, responsible adult. This is not an exhaustive list, obviously, but it’s not a bad place to start.

1. A stash of emergency cash – An emergency is not a new outfit for a wedding that you forgot about. It’s your car breaking down and needing expensive repairs; it’s your hot water system exploding and needing immediate replacement; it’s getting out of a bad relationship that’s affecting your mental health.

The spectrum of reasons is wide, but the solution is the same: put at least a few thousand dollars aside with a different bank  –  so that you can’t see or easily access it in your everyday banking. Ideally, you want to have three months of living expenses in there. But if you can only manage a hundred or a thousand, do that and keep building a little at a time.

Some is better than none, so don’t let the ‘three month emergency fund’ rule keep you from getting on top of it.

2. A good banking or budgeting app – One thing I’ve learnt about money is that it’s a needy friend. Your bank account is totally NOT OK with sporadic texts and comments on her Insta posts.

She wants you to check in with her all the time, see how she’s feeling, has she been too busy, is she feeling sick, did someone absolutely flog her on the weekend at a bar around midnight. Ya know, the usual.

We really need to be frequently reviewing our spending, looking for cost overruns and also checking there are no suspicious transactions (cybercrime is real, y’all). Otherwise it becomes an avoidance thing of ‘God I don’t even want to look’. And a spiral of stress.

The next level of adulting to consider is a budgeting app that helps you set up buckets of money and lets you know if you’ve hit them. This is for the advanced level saver, and I know it’s not everyone’s gig. But something to consider.

When I feel like I’m getting a bit outta control, I track every dollar I spend (as per my new year resolution). I enter it into the TrackMySpend app, and it shows me where all my money goes. I like to enter it in manually  (as opposed to just reviewing my bank transactions), because it makes me think about each purchase.

In a cashless world, it’s easy to ignore exactly how much cash you’re dropping. So this is one way to create an additional mental barrier. (And yes, ‘Personal & Medical’ category, I see you and your outsize contribution. So what if I spent $400 at the naturopath? I haven’t even been to Priceline, so there).

3. A decent income protection policy

I know this is boring, but seriously, what happens if you can’t work because you’re really, seriously sick. Cancer, depression, an accident.

For a while there I was paying for this through my superannuation. Which is totally fine and if you do this, then great. I ended up getting a professional insurance review (for free, when I worked in a financial planning company). The outcome is a Rolls Royce policy that even pays my super if I can’t work. It’s very expensive, and I wince when I pay it every month.

HOWEVER, I am a single gal with no safety net other than my family, so I want the best. And then I hear about people like Kim, who beat breast cancer at 30 and had a double mastectomy; and is now battling cancer a decade later. Or the guy I met on the weekend (who is super cute and sweet, but that’s not relevant). He was in a car accident at 22 and spent four months in a coma before having to relearn pretty much everything in subsequent years, due to traumatic brain injury.

And I think damn, I guess I can afford it.

So, if you have an income, you should probably insure it. Talk to your super fund if you aren’t sure how to get started. (Also, note this is not the same as Life and TPD insurance that comes as a default; you need to add it yourself with most super funds).

Read more about the exciting topic of insurance here! We’re all going to die – so let’s just talk about it here, then move on

And that, my friends, is a completely randomly chosen list of things to help you win the war on adulting.

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