Hi, and welcome to this week's episode of Money with Alpha. Today, I wanted to talk about a concept that's come up a couple of times in the recent few weeks in my world, and that's a concept of a money school. So I wanted to talk today about money school fundamentals, 'cause when you think we don't get taught about money, and where do we do most of our learning? In school. And so, how do we build this knowledge without having to go through the painstaking process of experience? Yes, we can do courses and we can learn from others as well, but there's still... I don't know, that schooling environment is still kind of it's like a methodical, structured way to learn something. And once you learn it, it's like riding a bike, which is why I'm wearing, if you're watching this, my bicycle earrings because I only learned to try to bike when I was in my 30s. I did not learn as a child so I found it a lot harder . And it's like a lot of things. Like, I learned a second language as a child, made it a lot easier. I've tried to learn other second languages as an adult, and it is harder. So we need to kind of approach the idea of learning about money a little bit like schooling. So I'm just going to go through what I consider, like, the fundamentals of money and how if we'd had, you know, the proper schooling about money, what it would kind of look like, keeping in mind that one of the greatest lessons or the learnings that I feel like we have as adults is our life experience. And that, unfortunately, you don't have yet when you're, you know, you're a teenager, and you're in school, and you're sitting there learning stuff because you're told you have to, and it's often in a very linear, sometimes, you know, not exciting way. So we can, we can make it a little bit more interesting when we're grown-ups because we have a little bit more autonomy and we've got a little life experience to throw at stuff, so when we talk examples, we can actually relate to them. So this is why I was like, it's actually... Even though we don't learn about money as children, I think to a certain extent, even if we did, we wouldn't get the full complete education that we would as a grown-up anyway. So it's almost like you have to do this in a couple of parts. Learn some of the fundamentals as a child or as a teenager, and then have some life experience, start to figure out who you are, make a couple of mistakes, miss faults, and then relearn... Not relearn, but add to the learning in a way that actually gives you a lot more wisdom. So it's not just knowledge anymore, it becomes wisdom. And so let's take that approach of we're building our wisdom here through, you know, the school of money. So again, I I have five areas, but I do have a subset of points for one of them. And I contemplated breaking them out, and I thought, no, they're all kind of subsets of the same thing. And I've grouped them in terms of like the main kind of issues that we encounter. And the first one is, what is money? And then the second one is, how much money do I actually need and want? And then, how do I earn? what am I doing to make money? And then what do I do with the money once I've earned it? I know that sounds fundamental, but that's an important thing. What do we do with it? And then the fifth step there is to automate it and then go and enjoy life because you got your money sorted. How lovely does that sound? So I'm going to break each one of those down, and 'cause there are sub-elements to quite a few of those, but they're sort of like the main... And I find that a lot of the questions that we ask ourselves, I got really stuck in the but how, but how kind of mouse wheel when I was in my 20s, and I wasted so much time. I look back now and I go, I wish I could go back to my, you know, 20-something-year-old self and go, 'Stop asking how. Figure out the what and the why, and then the how will present itself.'" You know? And it's hard to have that level of trust until you've experienced it, but it's true. It's how things work. So I wish I stop asking the how. So the only how I've got here is the how much, because that then tends to guide a few decisions that you make. So the first one that I mentioned was, what is money? And money, it's a really, really interesting thing because it has changed so much over time. I was at a chocolate master class, 'cause I love good chocolate over the weekend and the lady there was saying how chocolate actually, or cocoa more specifically, was a form of currency way back when, especially in Mexico, which is sort of where the cocoa sort of bean and the concept of chocolate sort of first started to originate. They had like a cocoa drink xocola or something like that. I can't quite pronounce it properly. And it was then I heard it was monks in Spain, whether or not that's true or not, who actually created, like, chocolate, and then hard chocolate, like the bar of chocolate, I think came about in France. Anyway, there's a lot of history around it, but... So chocolate or cocoa beans could have currency back then. People would exchange something for cocoa beans. Spices have taken that. Shells have taken that place. And we had gold coins and silver coins and notes and actually, there were so many different things that were sort of the concept of value exchange. So that's essentially what money is. It's an exchange of value of some sort. And instead of exchanging services or goods, which was bartering, they had this common currency of some sort that you could say, okay, well, let's say... Well, I think the lady was like, it was like 10 cocoa beans for a rabbit or something like that. And I was like, okay, is that a fair exchange? I don't know, but as long as the two people exchanging it think it is, then all right, I guess that's fine. It's a bit like, bit like now in a way. How do you put a price on something? Because we've cultivated that method or that system over so many years, it's a little bit easier for us to comprehend. It's a bit like trying to convert from, you know, empirical to metric and back again. We're familiar with the system we learned growing up. So that's essentially what money is. So it becomes the tool for exchange, where we'll you know, we want something, we've got, we've got the money and we use that money to exchange it for the other thing that we want or we need, whether it's shelter, or food, or drink, or clothing, or whatever else it happens to be. And, and our needs have expanded a lot over time too, so, so it's important to kind of put money into perspective. When we think about our holistic life, there are so many things that are more important than money, but at the same time money can facilitate making those things better. So like health is very important, relationships are very important. Do you need money to have those? Not necessarily. But if you get sick, money can help pay for treatments, so it's good in that way. In terms of relationships, I don't think they should be based around money at all. I don't think anyone's worth should be have anything to do with you know, their bank account or anything monetary whatsoever. So that's probably the one exception. Whereas with health, having access to better foods more wholesome organic or spray whatever foods that you can get access to, and being able to pay for medical care if you need it, or even holistic treatments. I'm not always a big fan of going straight down the medical route but even if you go down the holistic path, there is still a cost. So money can help facilitate that side of health. So that's where you're like, "Okay, well what, what is money? What, what do I actually use it for? Like why, why is it consuming so much of my brain space and I'm holding the emotions so much in my body?" We need to, to demystify that a little bit and just really acknowledge that it is a tool. And once we understand the tool and we know what we, what we need and how we need it, which is what I'm going to go through in these like money school fundamentals, then hopefully we can start to move beyond the hold that it has on our mental and emotional and physical state. So that's, that's the what. Now, the how much. How much money do you actually need and want? I, I put the want in there too, because if we just look at how much money do we need, it's actually probably not that much. If we look, like really scale it back, we need somewhere safe to, to live somewhere. You know, there was a big thunderstorm here the other night and I was laying there with my daughter listening to the rain going, "I am so incredibly grateful that we have a, a nice, dry home, safe home to live in." So you need somewhere safe to live. You need clothes, and not just any clothes, but clothes that suit the climate that you're in. 'Cause if you're the northern hemisphere, and we're going into winter now, if you don't have appropriate clothing to to, you know, live in that sort of temperature, then your, yeah, health won't matter anymore because you will, you will get sick. So that's sort of, so it's looking at your needs and wants. And because we're humans and we want to be able to, to grow, we want to have experiences, and, you know, we live in a world where we are privileged to be able to have choices, where we can have experiences. Again, like I said, I, you know, my, my husband, daughter and I went to a food and wine festival on the weekend, and they had a chocolate appreciation class, master class. And yes, it's a bit of a splurge, but I was like, "I, I love good chocolate. I love learning about it, I love, you know, everything about it." It's just something, I don't drink coffee, but I love good chocolate. So I was like, "This is something I'm doing, yes, it's for me, but I'm sharing it with my family as well, so they also get to expand their horizons." And my daughter loved it. She was just, she came away going, "Oh my gosh." And I'm also, I'm kind of wondering actually if she might end up going down the sort of chef culinary route, 'cause she just like was absorbing anything to do with this, and loves cooking and food and all of this. She likes to create her own stuff though, which is not always, you know, that tasty. But anyway, I digress. So how much money do you need? How much money do you need to live the lifestyle you want now in, you know, two years, five years, 10 years, in retirement? It's, we always sort of think about this finite, it's in the future. "Oh, well, you know, I need, I need money for the future." Okay, well how far in the future is the future, and what does the future kinda look like? I mean, you don't, you can't plan it exactly, but have an impression or at least some idea of the lifestyle that you'd like at various points in your life so that your money can help you get there. And again, the money is the tool, so unless you are specific about what you want that tool to do, then it's, it's just, it's not going to work as effectively for you. It's a little bit like that, you know, you have a, you know, you've got your knife set, and you look at chefs and knives are like their lifeblood. If they don't keep those knives, they don't have the right ones for the right thing that they're doing, and they don't keep them nice and sharp, then they're not going to be adequately doing the job that they need to do in order to get the result they want to get. So our money is a bit the same way as well. So you have to figure out how much that you actually want, and that comes with some unique clarity around that. And then the third one is earning. So making money, earning money, whether you're expending your effort, like you're physically doing something, or it's your intellectual property, it's your, your knowledge, whatever it happens to be, whatever you're exchanging for money, and whether it's a direct exchange, like that time for money, or whether it could be you're investing or you're scaling, so you're doing it, you know, one to many versus one to one, or you're doing an online course, you record it once and out it goes into the world or even investing to a certain extent and you get the income as a result of that, but that kind of comes more into what you do with money, which is next. I'm talking about like the, just the initial earning. Like if you started with nothing and you had to earn money, what would you do? What do you enjoy doing? Do you want to have an impact? Like how, how is that going to look? So having a review, like do, look into that as a way of being conscious about it as well. And it's not just what you're good at either, because I've fallen into that trap. ... where I went into a career that I was good at, I didn't really like it. And that was accounting. I could do it, and I could do it pretty well, but I just, it I just didn't, it my heart wasn't in it. I enjoyed solving problems, and helping with the... and I liked numbers. And so I get to do that now with the work I do. So I've, I've kind of cultivated something that suits how I love to do things and the passion that I have, and I love helping people. And what I'm doing now, fundamentally, is there to help, to inform, to give you clarity, help with guidance, be someone that others can ask questions of when they don't know who else to ask. So that's, so I've cultivated my own, or I've created my own career path, in a way through the work that I do. But it's important to have a look at, well, how do you earn money? How do you want to earn money? How much do you want to work as well? Like I made a very determined decision after I had my daughter that I was only going to work part-time. I wanted to be able to spend as much time with her as possible, and even when I was at work in the early days when she was still very little, my mum looked after her. So at least she was still with a family member, and she got to cultivate a beautiful relationship with her grandmother as well. And I think it's important to have that generational sort of wisdom and experience, and getting, just being comfortable around different people of different ages and different backgrounds and experiences and, and wisdom, all of that. So that, that really played into my values, so that worked well. And then when she went to school, I still stayed part-time, and then I ended up eventually starting my business a little bit by accident, because I had all this knowledge that I'd amassed, all this wisdom, and I wanted to share it 'cause I, I felt it held value. So that earning part is important to be conscious of, because quite often we just fall into things, and we stay. And it's a bit like a relationship, you're like, "Oh, well, you know, we've been together for 10 years. Do we get married?" Like do I, as in, "Do I get a promotion or do I keep going, or do I pivot and do something completely different?" And sometimes that's difficult to, to do, especially the longer you've been in it. At least I'd only been in accounting for six years before I, I made the, the jump, and I was still in my 20s, so I had, I had time on my hands. But it, it's still possible. I see people making all sorts of changes in their lives in their 40s, in their 50s. So it is still possible. So number four is then, "I have this money now. What do I do with it?" And this is where I've got a few subsets. So the first one is saving money, and then there's how you spend money, and then there's also how you invest money. And it's important to look at the three of them side-by-side, which is why I've grouped them under, "What do I do with money?" Because you cannot... Well, you can't avoid spending money. That's unfortunately unavoidable. But you can do something about the, the saving and the investing. So let's, let's look at the three in parallel, because you've got to have visibility over what you're spending in comparison to what you're earning and what your needs are. So we're sort of working back up the chain here to then be able to understand, "Okay, well then, what do I need to save?" 'Cause I've got to have that step two was about clarity, how much do I need? So how much do I need to then save? How much do I need to invest in order to get where I want to go? And then that will also help keep me in check with the spending. So again, that question I get a lot is, "How do I stick to a budget?" And I was like, "Well, if you're clear on why you want money, how much money you need, and then what to do with it outside of the spending space, that's not even a question." It's a little bit like the "but how" question. It's the "how do I stick to a budget?" I'm like, "Well, that's not actually a relevant question once you get everything else clear." So the saving... And some people are like, "Oh, you don't need to save." Saving is, is the best place to start. It will give you the discipline of putting money aside, but you've got to have a purpose for that saving. Otherwise, it becomes really difficult to stick to. So save, get, and get used to saving rather than putting things on credit. And buy now, pay later, oh my goodness, don't even get me started on a, on the whole Afterpay thing. Just, if, yeah. If you have that sort of debt, please try and pay it off as quickly as you can and then don't use it again. Credit cards have their place, but pay them off at the end of every month. Just, yeah. So, so the saving is a discipline. Save for a holiday. Save for a car if you can. And I, I know it's, it, it's a bigger thing and it takes a bit longer, but it took me two years to save up for the car that we, we got. You know, it's, it's, it, it is possible. So save as much as possible so you get into that discipline of just waiting a bit longer for things, and you can save for it, you can pay it, and then it's done. You've, you know, you've got that, that sense of achievement that, "Oh, wow, I, this is me. I didn't need any..." Not that you didn't need any help, it's not a matter of help. It's like, "I didn't have to go into debt in order to get this depreciating asset or to pay for an experience." Experiences are important, but you don't want to go into debt for them if you can avoid it. Buying a an appreciating asset like a house even especially a home to live in, it's important to have that level of safety and security. So that, that's the area where you can use debt as leverage in order to help fast-track you getting there. And that is okay. Like, that is, that is for an asset, which is a different kind of debt, and that's part of your spending. But then look at where you're spending your money. You know, are you eating wholesome food? Are you eating out a lot? Are you getting, I don't know, DoorDash or Uber Eats or whatever on a, on a very regular basis? And you're not eating that nourishing food, and as a result, probably not sleeping as well, and you're, you're a bit sluggish to get up and exercise in the mornings, and all of this. So it all compounds on each other. So that's the spending side. And then investing. If you've listened previous episodes, you know I'm a, you have to invest. Like it's, it's literally in order to actually get ahead financially, there is no other way around it. You can do it in different ways, so there's your superannuation if you're in Australia and you have you know, your investments inside your, your retirement fund, your super. Different countries have different systems, like your 401 in the US, the, you know Oh, mental blank on some of the others what they're called now. But that is a way of investing.And then investing outside of that as well is important. You can get investment properties, you can get shares. There's other ways of investing as well. Become informed on the ones that feel right for you. And sometimes you have to actually learn about them in order to know if they feel right for you. Like, I've done share trading courses. the trading side of share investing, no. Not for me. I've done property investing, property development courses, and I'm like, "Mm, different stages in my life, I would have been prepared to do some of that." But where I've gotten to in my life now, I'm like, "No, I'm done with all of that. I'm just interested in shares now." So, and then I do that in my own way as well. So I, I invest in ETFs. I keep it simple. I invest in things I understand, so that type of thing. So it's important to invest. So that's the what to do with your money, which was step four, which is, you know, you save it, you can spend it, and you can invest it. And understanding what your needs are, because you figured that out in step two, after you've then started to earn it, and the earning side of it, which was step three, can actually help you with understanding how much you might need to earn. And you might need to do a few different things in parallel in order to earn enough to achieve what you want to achieve once you're clear on what you're going to do with it. So all of these steps build on each other. You know, they come, they beautifully come together. And then the fifth one is to automate. You can automate so many things these days, it's not funny. Like I literally have ... And I used to be a little bit gun-shy on the automation. I was like, "Oh, I'm just going to lose visibility and lose control on it." One of my core values is control just as an FYI. And but I have a spreadsheet which I update every quarter. I go so I know where everything is, and I have two different micro micro investing accounts, and I have a sub-account in one of them for my daughter. Automatic transfers go into those every, every month. Easy as pie. I have my, some of my savings I do manually, mainly because business fluctuates. So of course your income and, and and profits go up and down, so I, I have to calculate that manually and do some of those manual transfers. But the process itself is super simple, because it takes me like half an hour to do all of it now, 'cause I've gotten so practiced at it. But the investing, I have that automated as well. So I, I picked whichever day of the month has historically worked the best, and then I just have a certain amount that goes into an investment account, and it's, gets divvied up by, into, I think three different ETFs. And that just ticks away. So when I do my performance report at the in every every month go, every quarter, sorry, I'm like, "Oh yeah, how this, all this is going." I salary sacrifice. I do extra into Super. I have an investment from it. So I do have stuff all over the place, but it's very much on autopilot. And it, it just makes it so easy to know that all of that's ticking away and has momentum. And it's so simple and possible to do. And so now I'm just like, "And step number five, after the automation, enjoy life." And know that you've got the resources there, so that when something does break ... we had to buy a new pool pump the other day because our old one stopped working and the pool was starting to look very murky. I was like, "Great, we'll just go get a new pool pump." We are gonna try and see if we can fix this one, but we, you know, if you've got a pool, you realize you cannot leave it without a pump for any length of time. So we're gonna try and get the old one fixed. But in the meantime, we've got this newer one to at least keep the pool from, from turning into, you know, a pit of algae, especially as we enter summer, -laughs ] here in the tropics. Definitely need to have the pool working. So but just things like that. You know, if there's something that, that breaks or if, you know, for instance, we replaced all our bicycles this year, 'cause I'd had mine for a good 10 years, and my husband as well. My daughter's growing so she needed, you know, a bigger one. And we just, we all replaced our bicycles, 'cause we had the ability to do that rather than constantly grinding on you know, brakes that weren't working terribly well anymore. And there's certain things that you just couldn't get fixed, you'd have to replace. So it's like, "Well, if I'm gonna start replacing things on an old bike, I would just prefer to get a new one and have everything." And I've got these new ... Loving my hydraulic brakes on my new bike. It's awesome. So it's just, it makes life so much easier and so much calmer. And then if you do need to, to donate to to places that you want to donate to, you can. If anyone needs help, you can help. It's just, it, it's such a, it's such a beautiful, easy kind of feeling once you get everything sorted. So there's what I would call the Money School Fundamentals. I'll go through them again. First one is what is money. Let's demystify it and de-emotionalize it. That's not really a word, but you get my meaning. And then number two is how much do you need and want for now and progressing into the future as well. So keeping that holistic view of you and getting clear on that. Three is how do you earn it and what amount do you need to earn in order to achieve the how much do you need kind of thing. How what, what do you need to earn in order to achieve that? And then number four is what do you do with the money once you've earned it. And the subsets there were to save, spend, and invest. And then number five is automate it, and you know, automate the saving, automate the investing as much as you can. Automate as much as you possibly can so you can enjoy life. So that's the simplicity and the fundamentals of Money School. So I hope you enjoyed that. Please reach out if you have any questions or topics that you would like me to, to drill down on. I'm more than happy to do that. So enjoy the rest of your week.
