Season 3 Episode 12: Should I Pay Off My Mortgage or Start Investing? It All Comes Down to Your Why.
IN THIS EPISODE
Money has a way of shining a light on the beliefs we don't even realise we’re holding.
This episode begins with a moment of real honesty as Darlene reflects on her son's recent engagement, the unexpected emotions it brought up, and the way it encouraged her to truly walk her walk. And Mel gets real about the challenge of running a business you’re truly passionate about while also trying to show up for your family in the ways that matter most.
From there, we tackle one of the biggest questions we hear from clients: should you pay off your mortgage, or start investing? While there's no one-size-fits-all answer, the best financial decisions start with understanding what's important to you.
We chat about:
Why personal growth often means learning to let go (even when it’s hard)
Why having a clear purpose matters more than chasing an arbitrary financial goal
How taking a long-term approach can help you build wealth with confidence
Plus, in our educational segment, we explore the important topic of coercive control and financial independence
We’re your big-sister hotline as we unpack what coercive control can look like when it comes to money, why everyone should be informed when it comes to family finances, and how maintaining visibility can provide confidence, security and choice.
As always, we hope this conversation encourages you to reflect on your own money story and remember that the best financial decisions are the ones that align with your values and the life you want to build.
ABOUT THE MONEY COLLECTIVE PODCAST
Financial Wellbeing with The Money Collective brings together the stories and experiences of working with thousands of Australians when it comes to money, this is no holds barred, honest podcast. Darlene and Mel have been working in banking and finance for over 50 years and break down the barriers that we face everyday when it comes to our relationships, families and finances.
READY TO GO ON THE JOURNEY OF FINANCIAL WELLBEING?
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💬Book a time with us to chat about money to ask questions and talk all things financial wellbeing, home loans, and more. Email team@themoneycollective.com.au
✨Take action and uplift your own level of financial wellbeing with our online course: https://www.themoneycollective.com.au/onlinecourse
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00:00:00:06 - 00:00:21:17
Welcome to the Money Collective Podcast. We're here to uplift your financial well-being. Your hosts are me, Mel Pearce and Darlene Neu. We are the co-founders of The Money Collective and together we have over 50 years of finance and banking experience. We provide the tools, information and guidance to better understand your money and feel confident making money decisions.
00:00:21:19 - 00:00:51:06
Hi, I'm Darlene and this is Mel, and we are here for a new episode of our Uplift Your Financial Wellbeing podcast. Um, we always start with the truth, so I'm going to go first. And my truth today is the week and I'm still working through it. I'm going to let you know. So my son is 25 years old and he got engaged.
00:00:51:08 - 00:00:55:05
Yay!
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Oh, my gosh.
00:00:56:02 - 00:00:59:11
I didn't know what the correct response is there.
00:00:59:13 - 00:01:39:07
Mel, Mel has had to live with me for the last few weeks working through this. All I. I didn't react the way I would think. And that has really challenged me and to me. Now I'm this far in. I am loving the challenge that he is putting on me because it's helping me really grow. Andy Now, in relation to money, it comes down to like what we think that we have to be about controlling situations, right?
00:01:39:07 - 00:02:02:11
And I'm always a big believer, you know, people should be able to live their own life, do what they want to do. And this has been a reality check for me that I'm actually not walking my walk. And that has been very traumatizing. But I'm it's helping me let go of B.S., you know, working through this thing. Right.
00:02:02:11 - 00:02:24:22
Because we have we have I thought maybe I'll step back a little bit. So my son is in university. He's in his last year. So he's on got, you know, a semester to go and he's not working. And it's this is very stereotype, you know, behavior, which I do not.
00:02:24:22 - 00:02:25:22
Like of you.
00:02:25:23 - 00:02:31:14
Yes. Yes. I do not like of me. So the way I felt about that. Right. So he's not working.
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He's not working, not earning an income. And his partner does some, you know, some work. And but your.
00:02:40:13 - 00:02:43:23
Belief that they're not in a position to get married?
00:02:44:01 - 00:03:02:21
Well, I don't believe this. There's so many elements to this. I don't believe in marriage. And I know that's a really strange thing for me to say. Thing is, I've been married since I was 19 and I'm 55. How many years is that? I don't track it very well. Sorry. 30 something, because I don't hold. That is an honor.
00:03:03:02 - 00:03:29:13
So there's lots of elements and trigger points for this. So there's the money thing. There's my belief around this. And, you know, I love commitment, you know, commitments. Right. But and then there is actually a thing that you've got a human being that, you know, in love. Whoa. Getting married. And, you know, and we've talked about ageism on this podcast before.
00:03:29:15 - 00:03:46:09
So, you know, that's a step in ages, that step in life that happens. Like, you know, if you track your life journey, you know, your children in, some people might be really happy with that. You know, children getting married, getting independent, doing their own thing, you know?
00:03:46:15 - 00:03:47:14
Yes.
00:03:47:16 - 00:04:02:11
That I really have. Well, not they talk too much about their clear plan, but does that matter? Why do I even need to know? It's like, you know, it's all those thoughts have been running through around my head.
00:04:02:11 - 00:04:17:08
I haven't been controlling him or you didn't care about his outcomes. And he's come up and you're like, You hang on a minute. You are not doing any of the things that I think that you should be doing right now. And this is not tracking to what makes sense to me in my brain what I think you're.
00:04:17:12 - 00:04:23:05
Doing and how I've reacted. And that has been such an emotional reaction. This is.
00:04:23:07 - 00:04:25:09
It's and you didn't even know it was there, did.
00:04:25:09 - 00:04:25:17
Not.
00:04:25:22 - 00:04:37:10
So it's a subconscious thing that is was lying dormant yet but ever present. Yeah yeah and that he probably knew in some ways and.
00:04:37:12 - 00:04:40:18
He probably couldn't talk about it with me because of my Yeah.
00:04:40:18 - 00:04:47:23
That's why a lot of these things Yeah we know somebody is like a little bit of a racist. Yeah, you're right, you know.
00:04:48:01 - 00:04:49:21
No, I do. I do know.
00:04:49:23 - 00:04:55:22
Mom's a little bit off about something your mom really cares about, how I what my outcomes are or how I go about my life.
00:04:55:22 - 00:04:57:07
Right.
00:04:57:09 - 00:05:01:19
Yeah, It. And. And how we can't. We don't have control over it.
00:05:01:22 - 00:05:03:20
But how we shouldn't have control over it.
00:05:03:20 - 00:05:16:19
Our awesome thing is that it's reared its head and you're going, This is my next challenge. Yeah. If he hadn't gone and gone and proposed, you got engaged yet, you wouldn't have been triggered in this way that it just came out.
00:05:16:19 - 00:05:21:13
I wouldn't have because it's, I would have gone along obliviously, you know, thinking about, Yeah.
00:05:21:13 - 00:05:22:23
I'm good at this.
00:05:22:23 - 00:05:23:18
Things. It really is.
00:05:23:18 - 00:05:25:03
Is. It really. Yeah.
00:05:25:05 - 00:05:26:00
It really is.
00:05:26:04 - 00:05:31:01
Like I wonder how many I reckon we're all walking through life doing this in some way.
00:05:31:01 - 00:06:04:10
So many unconscious things that we do or think or believe or so. Yeah. So the message I've got is really challenge yourself on that and I've had so many great conversations and friends and you know that and just my own time and thinking and really challenging myself because also we've been on really just this about kids, right? And kids and you know how we want them to you know, we talk about kids and money, you know, for example, and how we want them to live their lives and how we, you know, teach them skills or whatnot.
00:06:04:12 - 00:06:29:06
And as I think about my daughter, who's 15, we are in, I think our relationship is better than it's been probably ever, because I think I'm parenting differently. Yeah. And that's rather than being directional, you can you can't know. Yes, but blah, blah, blah, it's actually letting them make their decisions. They're human beings. It's their life to live, not mine.
00:06:29:08 - 00:06:40:02
And yes, I'm here and supportive. And, you know, I want to be your cheering, you know, cheering person. Not, you know, you've got to do it my way or my beliefs or my values.
00:06:40:02 - 00:06:48:21
And success looks like me, right? You're a winner. And I've been a good parent. If you've done this right and you finish that degree, you go get a good job and then you go and get married.
00:06:48:21 - 00:07:07:14
That's right. I think it's not really, you know, and I do not say get married and not ever get married. I do think this is a it's for me, it wasn't a reflection of me. Maybe I could be challenged on that. I don't think it's like, oh, what are people going to say? Or I don't have any of that.
00:07:07:19 - 00:07:28:23
I don't Kilis, you know, it's not it's not that at all. It's you know, that aspect of their own well-being and you what your view of what my view of well-being is and what you really being, you know, are you going to be happy. It's trying to control happiness actually, like, yeah. Are you going to be happy? You know?
00:07:29:00 - 00:07:30:17
Yes, I'm.
00:07:30:19 - 00:07:34:13
He's trying to share the happiest moment. And I'm I'm for a very long time.
00:07:34:13 - 00:07:38:04
I'm down you know, like I know I don't want to do that.
00:07:38:04 - 00:07:40:09
It's not happy for you for a little bit.
00:07:40:11 - 00:07:41:06
Which is so.
00:07:41:06 - 00:07:44:06
Rubbish. Yeah, yeah, yeah.
00:07:44:08 - 00:07:46:14
So yes. No, because.
00:07:46:14 - 00:07:47:12
We can't control things.
00:07:47:12 - 00:08:04:08
That's right. And we might say things. So really challenge that underlying why we might say things. Oh, you don't have enough money, you know, where are you going to leave, how are you going to do that. But you know what, people for hundreds of thousands of years have gone on a journey and figured it out actually could be part of the excitement.
00:08:04:11 - 00:08:08:01
I don't know. You know, but it is like this.
00:08:08:01 - 00:08:09:13
It just turns on a person to share.
00:08:09:13 - 00:08:11:10
It will. Right. And that's amazing.
00:08:11:13 - 00:08:12:02
Yeah.
00:08:12:04 - 00:08:17:00
You know, really, what do we want? Connection is so important to happiness, so it's awesome.
00:08:17:03 - 00:08:18:12
Well, I'm proud of you, darling.
00:08:18:12 - 00:08:19:03
I'm working through.
00:08:19:03 - 00:08:33:05
It is a lot better than putting your head in the sand. Yeah. Now you're. And I think, too, when something comes out and you go, I know that was kind of ugly or not the desired response. I could have had that straight away.
00:08:33:05 - 00:08:33:19
Like.
00:08:33:21 - 00:08:37:11
A automatically. It's like, Hey, you're going to work through this quicker.
00:08:37:13 - 00:08:38:16
Maybe because I realized.
00:08:38:17 - 00:08:51:16
Did you click on Yay? Oh, and congratulations and then on the inside for all of these things. And then in five years gone, I told you this would make you think this would never work.
00:08:51:18 - 00:09:16:09
You didn't have any money and you know me. Why would I know it would be? And you're actually manifesting those things out there, right? So, yeah. So it's exciting. It's an exciting time for them to, you know, stop in the next chapter or whatever they planned to do. So yeah, but yes, there obviously is a big money overlay with those initial thoughts and where I went, you know, how are you going to do that?
00:09:16:09 - 00:09:18:15
How are you going to afford to leave?
00:09:18:15 - 00:09:19:14
You have to.
00:09:19:14 - 00:09:39:14
Because you had to buy a ring and do you have to help them and all of those things. But really, I feel like there's surface level things if you're really, truly honest with yourself, because you don't have to do anything. You don't know, it's what nobody's making you do anything. I had a call the other day.
00:09:39:14 - 00:09:58:04
It diverts, but it is sort of relevant to adult kids living with a single mom at home, single moms doing, you know, you know, trying to make ends meet, paying for the adult children at home. There are ones on the wage ones that you need to has part time job.
00:09:58:06 - 00:09:58:19
Yes.
00:09:58:19 - 00:10:04:06
And not contributing at all at home. Yeah and she's you know, just trying to Yeah.
00:10:04:06 - 00:10:05:11
It's beyond me. It's beyond.
00:10:05:11 - 00:10:06:02
Her means.
00:10:06:02 - 00:10:31:01
And yes, I know we're dividing here, but I've got a thought on that. Yes, I see that quite a lot when there's been a marriage separation. So a child has got two parents, but the other one, like one parent will say, I can't not do this. I've got to do all these things for the kids. Otherwise they're going to go and be left with that other parent and to keep some sort of relationship with them, they almost buy them.
00:10:31:01 - 00:10:50:09
Yeah. And then they dig themselves a bit of a hole and this is really hard to get out of. So we're not empowering our kids. We haven't done the hard yards of lack of uncomfortableness. Yeah. Well, what if your kid doesn't want to spend time with you because Dad's bought them a puppy and Mom's liking you to do jobs like it's hard.
00:10:50:11 - 00:11:14:05
Right? This is where that emotional tie can overcome the monetary. But my advice to, you know, that person and even in a situation if you've got adult children and they're doing their life and something doesn't work out and they come back to you, you've got a choice. You absolutely have a choice. And how do we de-link our emotion to that choice?
00:11:14:05 - 00:11:15:18
That's right.
00:11:15:22 - 00:11:22:02
Yeah. Because you can still love your people without having to give them money. You know.
00:11:22:04 - 00:11:27:20
Maybe what you do is love the emotions. And then you got to, like, take a bait.
00:11:27:20 - 00:11:35:05
That's right. And if you are going to do it, make sure you're sorted first, because you can't help people if you're not sort of this.
00:11:35:08 - 00:11:37:16
Is the best example they'll follow.
00:11:37:17 - 00:11:59:00
And if you do, I say I say give money. When I was asking mail the other day about Logan without give money, without ties. Now that's a really hard thing to do because the giver might do that, but the receiver still might have them. So maybe, yeah, that. But you definitely want no, I would.
00:11:59:00 - 00:12:10:03
Say the receiver almost always has more of an issue with receiving money, like in my experience because they feel more worthless yet.
00:12:10:06 - 00:12:34:13
More worthless. It's exactly the problem. Yeah, and I can see that too, where, you know, maybe if you've got to figure something out yourself and just stand back from your kids, is what I'm saying, and don't jumping to solve their immediate issue, then maybe they'll figure it out. And if they don't like to ask, maybe I don't have all the exact answers, obviously, but this is life stuff to work through.
00:12:34:13 - 00:12:44:11
But you do have gone before me and I thank you very much. I praise you down, you walk on because I am listening.
00:12:44:13 - 00:12:44:17
Yeah.
00:12:44:17 - 00:13:13:02
So I try and I think as all parents, we're trying to be a better version of ourselves or improve on maybe what we thought our parents did so that we can give, you know, not be our parents in a way or do it differently. And so and that's definitely the way that I've gone with my kids. Like, I had experiences growing up where I'm like, Oh, I'm not going to do that with my kids.
00:13:13:04 - 00:13:39:16
And one of them, one of those things was sitting around the dinner table every single night, and we had to there was a whole system around it where everyone there was everybody had a seat and her parents were at the head of the table and we had to eat properly knife and fork in the right hand posture. We couldn't talk and to our elbows on the table.
00:13:39:18 - 00:13:41:13
Well, wait your turn.
00:13:41:18 - 00:13:42:19
You wouldn't have had my house.
00:13:42:23 - 00:14:05:22
Right? And I'm like, and I actually believed all those things were true. And everybody, not everyone I knew, everybody didn't do that. But like that etiquette was really important. When I met Percy, my husband, he came from a family like yours. There were dogs and I saw. And I'm like, What is this stuff? You do not hold your not from that head.
00:14:06:00 - 00:14:15:03
So I'm like, melting down. I'm like, How are we going to have the family dinners every single night? Right? So, like, I didn't immediately, like, break out of my brain, thinking about who had these beliefs.
00:14:15:03 - 00:14:17:11
So conditioned it took like you.
00:14:17:12 - 00:14:34:12
Me, And I've really relaxed in the last few years on this and I've relaxed to the point where I don't meal prep, I don't enjoy cooking because I don't have the time. Like maybe if I was a really great stay at home mom who had the time to do this stuff, or I would put more effort into it.
00:14:34:12 - 00:14:45:09
But now I buy meal kits. Okay, it comes in a box. I may, if I have time, maybe choose the things that they send me in that box. But by the time we're at the mercy of the box.
00:14:45:09 - 00:14:47:12
Whatever the box is, that's great. This list has.
00:14:47:16 - 00:15:08:14
Gradient. We have to chop them up and cook them. It's easy. I don't have to worry. Anyway. My daughter hates this. She thinks, Mom, you're the worst cook. If I do try and cook something, it's not the greatest. And I also have relaxed so far that it does not matter where you ate. You could stand around the kitchen bench.
00:15:08:14 - 00:15:19:07
We could try and mumble a few words to each other. It's okay if you want to eat in front of the TV, it's okay. Also, if you want to watch your phone while you eat your food. All right, I'm gone.
00:15:19:07 - 00:15:21:16
You've gone right the other way, I guess.
00:15:21:18 - 00:15:41:09
And she's like, Mama, last night, this really triggered me. Like it triggered all the moons. I'm like, she goes, Mom, we can't even talk to each other. We don't know how to talk to each other. And I just want a family meal together. Yeah, I can talk. I'm like, What have I done?
00:15:41:11 - 00:15:43:08
Mm, Yeah, because you come.
00:15:43:10 - 00:16:15:11
Yeah. So she bought me as my birthday a few weeks back and she bought me a cookbook and she said, my mom's like something together. The thing. Can we make the meal? Can we stop the meal boxes and, and start doing this? And it might go just like little boxes, which has mean we are left in like it is a it's a find your own food adventure shitstorm at the moment in our house like that's how it feels it's like and we're all off doing our own things obviously eating out.
00:16:15:13 - 00:16:32:09
I think she's been thinking about it for quite a long time and I'm like, the relation to money in all of this is that I have made decisions in so many ways on how I want to live my life to build this business. Like I'm very passionate about my family, being very passionate about the money.
00:16:32:11 - 00:16:36:11
Class, same things I am proud to mean a priority order, maybe a.
00:16:36:11 - 00:16:44:11
Struggle. No, we wouldn't. We both know. Good. I've learned and I think our kids know. I think that's the message.
00:16:44:11 - 00:16:46:23
I think they do. Yeah.
00:16:47:00 - 00:17:13:10
So it hurt. And I'm like, when you choose to do things like when you choose to run a business, you don't necessarily get all the monetary gains. But I think we're building a business that is going to be I think it's it I can see it paying off like it's going to be so worth it. It's a great asset that we're building, but it's at the sacrifice of all of these things all of the time.
00:17:13:12 - 00:17:26:16
But you can't just drop it and go because it's this it's this long term thing, you know? But how do you. Kate, reconnecting in and doing being a good mom, right. Or listening to the.
00:17:26:16 - 00:17:31:17
Person and with the humans that you want to, you know, you love? Yeah, it is a balancing act.
00:17:31:17 - 00:17:35:09
And then I'm thinking, what am I doing it for? And who am I doing it for?
00:17:35:15 - 00:17:36:15
Right.
00:17:36:17 - 00:17:46:14
All the time. So it's a good reality check. I'm still like you. I'm processing. I haven't come out the other side of this thing. Yeah, but it. Yeah, yeah.
00:17:46:16 - 00:18:21:19
Yeah. Just to I do think even some of the little things and the things that we do, you know, over time that work and whatnot, because I that that really resonates with me. I, we are really, really busy at TMC at the moment so every work and my husband Dennis isn't working at the moment so that's definitely helpful in a day to day in practical sense because I can spend every working every daylight hour, not even daylight night time as well, every open, you know, a waking days.
00:18:21:19 - 00:18:44:04
I'm awake, I'm working on time, say at the moment. I made a decision very early on that I don't want to apologize for, that. I want to own it. And I do because I love you know, you've got to have your own brand maybe, or, you know, you need to be an individual as well as being part of a family.
00:18:44:06 - 00:19:03:12
So in my belief system. So I really like that. But I do get those checks as well. And then when I'm too far the other way and then it's like, okay, no, no, no coming in. So my daughter, I can fully relate to this comes in every night and leaving last night, my son, they all do. Mum, tea's on the table.
00:19:03:12 - 00:19:04:15
Oh, they've cooked it for you.
00:19:04:15 - 00:19:05:14
They do it all the time.
00:19:05:20 - 00:19:08:12
And so what you are looking at going wrong. What's for dinner.
00:19:08:13 - 00:19:14:06
Oh, no, no. So my family. Oh cool. Which is lovely, but they want me to sit and eat.
00:19:14:06 - 00:19:15:20
With them, which so.
00:19:15:22 - 00:19:42:09
We always and again, some of the things you, it says that traditions can be good and not controlling like we always and it wasn't even consciously that we all sit down and eat together. So when that doesn't happen, say I've got a night appointment or something that is. So some nights might be where we don't, but sometimes they'll white or they love they love that sitting down together.
00:19:42:11 - 00:19:47:04
Break this because I need my family to do that for me and.
00:19:47:09 - 00:20:11:21
They're all adults. Yeah I mean, I don't love a roster system. I don't even have that. So yeah, you know, it is a thing that really doesn't really pitching. She's just what's for dinner. Let's sit and eat. Yeah, but definitely. Dennis Cork's Logan and Sophie Cook. I have not cooked. I cannot remember. Yeah. Thinks like definitely the last six weeks.
00:20:11:21 - 00:20:12:14
I don't think northwest.
00:20:12:14 - 00:20:27:00
At all boxes worked Like for me I'm like, I can open the fridge, I know that I can work in and there's something that we can eat yet. And when we is a meal being prepared, at least it gives us that opportunity to dinner's ready. Has you day yet?
00:20:27:02 - 00:20:28:23
It reminds me those in.
00:20:28:23 - 00:20:32:03
Free full currently with boxes.
00:20:32:03 - 00:20:33:07
So maybe it's just one.
00:20:33:08 - 00:20:37:05
Everyone being happy about it because they want different more varied food or.
00:20:37:05 - 00:20:38:06
Yeah they're sick of.
00:20:38:06 - 00:20:39:12
Yeah no one.
00:20:39:16 - 00:20:43:14
That's right. Maybe it's just a thinking it's the food.
00:20:43:14 - 00:20:45:06
Yeah. And that if it's not.
00:20:45:07 - 00:20:55:09
It's not the food, but the food brings you together. It's like one thing that we can sit and just be present together for something and a meal can be that. I reckon.
00:20:55:14 - 00:21:15:08
Can I just say one last thing to bring us all a little bit money ish, right? So we choose to live our life like this and have our business because we're trying to create something that really is amazing. Other people, This is how I see it. I could have chosen, I could tap out of this and go get a job and then I'm not.
00:21:15:10 - 00:21:30:01
My brain power isn't like if I had a job that I could just go home into. There's so much more free space and my energy available for my family. Right. And I haven't prioritized that. And I still don't want to yet. I think I can work and, you know.
00:21:30:02 - 00:21:31:14
Balance it out some other way.
00:21:31:15 - 00:21:36:15
That's like, yeah, we do that. Like it's like, what do we really want and what are we prepared to do?
00:21:36:15 - 00:21:56:12
It's such a big thing to understand that everybody and don't feel like it's being done to you. That is the risk. Depending on your financial position that you feel like you've just got to work more and more and more and then you actually taking more and more time away from those things that matter. So time is your biggest commodity and I've always just kept trying to balance it out.
00:21:56:12 - 00:22:12:18
But those I do think for us, meals are a good time to connect and I do try and give some time on the weekend occasionally. Yeah. Yeah. Mm. Yeah. But anyway yeah that's, there's a lot in that go.
00:22:12:18 - 00:22:13:02
We just.
00:22:13:04 - 00:22:14:00
That was long wasn't.
00:22:14:00 - 00:22:17:16
It. For listening everybody we hope. Thank you.
00:22:17:16 - 00:22:43:00
You get something out of that balance. Is you too important and try and find ways to keep connected. Yeah. All right. So today we want to talk about a common question that we get asked all the time is I want to start investing. Or it might be the other really common one that we I get is I've got a home loan.
00:22:43:01 - 00:22:53:16
Should I put my money into the home loan or should I invest the money? Yeah, that's really, really popular. Yeah. And so we wanted to talk a bit about, you know, that today. Oh.
00:22:53:18 - 00:23:09:02
I'm having had this one come up a few times even this week is I paid off the home loan or what. Or there's some people I spoke to somebody actually or even a couple like that were so planned out, it's like, this is how I'm going to do it. I'm going to have the home loan paid off in like eight years.
00:23:09:04 - 00:23:27:13
And then what's my plan for after eight years and I was no legend. Yeah. Hello. This is what we're talking about when we're talking about planning these things. My life throws curveballs. You don't know what the plan is going to turn out. Yeah, but, like, if you have a plan to be on your way to somewhere.
00:23:27:15 - 00:23:27:20
Yeah.
00:23:27:20 - 00:23:52:06
So I love that. And I just think because some people don't even think like this, some people aren't interested at all in, Oh, well, some people say it is growing well, yes. And it is growing our wealth, our money, I suppose. But the reasons I think if we can connect that to building our bigger financial resilience is what we really cool.
00:23:52:06 - 00:24:26:07
Yes. So financial resilience is all around having choice, being able to pull some triggers, being okay if something great happened in life, or because if we have resources to pull on, it gives us more choices on how we can react to things. And that could be things like the way we live our life, like our actual lifestyle, or like I said, if something bad happened or timing of being able to turn down work, you wanted to at a certain stage.
00:24:26:09 - 00:24:50:05
Look, yeah, I think the first question that I always ask is to my question, it's always that, you know, you say you want to start investing or why? Why, why does that matter? It could be that I feel not safe. It could be that I want choice in my life when I retire. It could be, I don't know, a million.
00:24:50:06 - 00:25:07:03
What about like I've got a corporate job, I'm on the money. I want to make it work for me. I don't want to waste. I think a lot of people are like that. Like I'm I'm doing the job. Maybe I don't love the job yet, but I'm going to make it work for me. I'm doing this job and I'm going to make my career and I'm going to make sure that we have a house.
00:25:07:03 - 00:25:10:17
It's paid off, and then we're going to do X, Y, Z. Yep, yep.
00:25:10:19 - 00:25:32:18
Definitely. But understanding the why you doing it, not just the thing, brings me back to a call. I'm I had this week where it was that question of should I pay more of the home loan or put more into superannuation for example. And it was about what I why that matters. And once how did you want to live your life?
00:25:32:20 - 00:26:02:00
You know, so ask that question to these people were in their forties, said they got young children so you can, you can put all your money into the future. But do you want exactly what we're talking about before Ellen how much time do you want to enjoy your children as well? So it's really trying to understand the trade offs, but also rather than asking what to invest in to get the most like how much do you need?
00:26:02:01 - 00:26:16:06
What how much like and why? Why is that? Why is that your number? So this person said $2 million and I said, okay, why $2 million? How did you come up to that number? And there is nothing. There is.
00:26:16:06 - 00:26:18:04
No. I heard it some way once.
00:26:18:06 - 00:26:38:08
Yeah, I don't it's just like it's just plucked out of thin air, walked out. And how long does that last you for and what does that mean? And you know, so and then even the money that you're putting away, how much difference is that going to make? So the wrong question is what I should do. It's what I'm trying to achieve first.
00:26:38:10 - 00:26:55:12
Yeah, this is just I've just had a brain. Yeah. Like thought when somebody when you come across somebody who's like that, I need $2 million. Let's say they're on their way. They're much more vulnerable. If that plan get screwed up, their failure easier. You know what I mean? Oh, my God, This is the worst. Or they will protect it.
00:26:55:14 - 00:27:12:22
Yes, right. We have to do this. Whereas when I see people who have got a plan, they might have $2 million already or they've done it and I know this and they ready to stop or they can pull, they can see the big picture and the reasons why they've done it. And then I had somebody who had built this wealth.
00:27:13:03 - 00:27:28:23
They weren't even extremely like maybe they were 50 like that. I think they and they're like, I'm going to give half of it to my daughter. And I'm like, Don't you need that for retirement? No. And then she could tell me her whole strategy on how she had it all planned. And it didn't matter that she had half the amount all of a sudden.
00:27:28:23 - 00:27:31:13
Yep. Because she knew she was going to be okay.
00:27:31:15 - 00:27:36:07
I'm like, That is amazing. Yeah. Most people want to know that they're going to be okay.
00:27:36:12 - 00:27:43:15
I just think you're going to be you need to be out to be challenged. Right. And know the answers. Yeah.
00:27:43:17 - 00:27:44:13
That's right.
00:27:44:15 - 00:27:48:05
And so then there's heaps of different ways that we can invest right there.
00:27:48:07 - 00:28:10:02
There is. So then so you've got your plan, you've got your goal, and you know why you want to do it so long to you values and your beliefs and how you want to live your life. That's the starting point. And then I would say the second most common thing that I see people want someone to tell them, I really struggle with this one.
00:28:10:04 - 00:28:17:22
Are you saying that you want to go somewhere and you're like, Hey, might develop out of buying this thing? And here's the strategy. I am not an awesome.
00:28:18:01 - 00:28:38:23
I am not that person. You will need to explain to me why that's a good idea in a million different ways so I can make my own decision. But what we do see, and I think this is a bit of an Australian way, a bit we want to. It's like people are happy to outsource, you know, their investment strategy, which is really not.
00:28:39:04 - 00:28:43:15
They're outsourcing how I want to live my life like that blows my mind.
00:28:43:15 - 00:28:56:22
Like because there is an assumption that somebody knows how to do this and you don't, right? Right. That somebody knows this. Perfect. The code, the key. They've got the little pathway and that if you do what they say, it'll happen. Yeah.
00:28:56:22 - 00:29:01:05
If they don't understand you firstly, how can they even do that? Because they don't understand what's important to you.
00:29:01:05 - 00:29:07:14
I can say most people who are trying to sell you something like that are going to be making more money off you than you probably make off the move.
00:29:07:17 - 00:29:31:12
And I agree, right. You know, so I want financial wellbeing since we talk a lot about financial education right now, that's empowerment in education. So understand and learn a bit about the stuff that you might be considering yourself. So gosh, internet is at our fingertips. You can do it or I now, Oh my gosh, you could use an AI.
00:29:31:12 - 00:29:41:04
You can really do some own research and look at lots of different ideas about what you could invest in.
00:29:41:06 - 00:29:41:18
Yeah.
00:29:41:20 - 00:30:06:12
And then you can start to explore those further and what that would mean for you. You know, maybe even just start with starting to invest on the money. Smart website has some really good ideas, but you know, some of the key things they have, you know, is about diversification. You know, I've certainly leave my thoughts in life about not having all I caught all my eggs in one basket.
00:30:06:12 - 00:30:18:13
But, you know, like really think about what's out there, how it works, do it's going to take some work. But anything I have this belief, anything that's good, take some work and some understanding.
00:30:18:13 - 00:30:24:01
So I think if you know how it works, you're more likely to really commit to it.
00:30:24:04 - 00:30:26:02
I reckon that is very true.
00:30:26:03 - 00:30:29:03
And if you don't know exactly how it works and it goes tits up a little.
00:30:29:03 - 00:30:30:12
Bit, you're happy to blame someone else.
00:30:30:12 - 00:30:34:10
Or pull out. So that sounded bad, but that's it.
00:30:34:11 - 00:30:55:20
That's it, that's infinity. But that is true. We and you know, here like you can listen to podcasts and things on about financial wealth and planning and you know, one of the things is human nature wants to pull out when things are going bad, right? So back to the terms versus actually that's when you're going to realize your loss.
00:30:55:21 - 00:31:02:11
Right. But that takes a lot of courage and understanding of your numbers and emotions. This is in.
00:31:02:11 - 00:31:26:04
Numbers and then you're protecting. It's like, but oh my God, my $2 million instead of going, hang on, markets do this. That's right. This is how it works. Also, you know, how you saying about AI and researching. Oh, so products are much better now at disclosing. Yeah, like timing. Mark if you were to look at a financial product online, it would say this needs 7 to 9 years.
00:31:26:06 - 00:31:47:19
And so if a product like that and that that might be shares or ETFs and we're not going to really go into all of the details of these things, but you will see some products you need to understand that, right? With the money goes in, I need it to be I need to not look at it. I need to the investment to do the thing that it's planned on doing for that period of time.
00:31:47:21 - 00:32:10:10
And that I want to put the the money that I put into those type of investments. I need to be okay to let go of not watch like a hawk side because somebody else is investing this better, you know, into that product. And yeah, not have that knee jerk reaction to that investment strategy or whatever your strategy is.
00:32:10:10 - 00:32:14:06
You need to understand the duration of it and commit to it is.
00:32:14:06 - 00:32:15:01
Really really.
00:32:15:02 - 00:32:19:06
Case. And it could be property or shares or superannuation.
00:32:19:08 - 00:32:32:10
You have to have the plan of how long I want to do this thing for what it's going to be. There are no quick wins in it. Everybody would love the shortest pathway to A-To-B to make the most money in travel.
00:32:32:14 - 00:32:35:13
I would invest in managing it.
00:32:35:18 - 00:32:49:04
And I know so there are no quick you know get rich quick schemes people I mean that you know and we talked you know if you are lucky and it needs luck if you are lucky enough to hit the jackpot on something.
00:32:49:05 - 00:32:49:12
When at the.
00:32:49:12 - 00:32:53:09
Right time, that is luck. But otherwise.
00:32:53:11 - 00:32:56:05
Otherwise, at this point in retrospect, it's like, oh, I wish.
00:32:56:05 - 00:32:57:00
I wish have done.
00:32:57:02 - 00:33:08:01
And then you don't do it. But like if you actually had a plan and you realized that, hey, it'll get this return over this time and see the cool.
00:33:08:03 - 00:33:24:22
That's right. So think about investing. Not as gambling because that's what it is or really think about. Compounding would be the word that comes to mind. So just, you know, one step in front of the other a little bit by little bit. Keep the course, know what you're doing.
00:33:25:00 - 00:33:51:01
That's right. Yeah. But it is gambling a little bit, but it's like how much risk do you want to take right away? Throwing everything the baby out with the bathwater if it goes wrong or is it a protected type of a is a balanced type of investment that I'm making your decision. Right. So you need if you need to kind of look at the investment and go, well, what is the worst thing that could happen if I buy this investment property and the market goes down and nobody rents my house out, what would I do?
00:33:51:01 - 00:34:14:21
It's like, what would I do if, let's say I've invested in something, but then I need to take my money out because something else happens. Would I be okay with that? Yes. I'm not a failure. I've kind of thought the plan out. What would I do if all of these things happened, though? Being able to answer those questions will answer the type of investment that your would might be best for.
00:34:14:21 - 00:34:17:12
You are a better fit than others.
00:34:17:13 - 00:34:38:04
Yeah, absolutely. So, you know, if I had to dot point, you know what to look for when I'm thinking about investments, definitely the risk profile of the investment. So, you know, what are the returns being like, the volatility, you know, those sort of things. And does that align with your risk, you know, profile or not? Contingency planning is great diversification.
00:34:38:06 - 00:34:41:09
You know that it does.
00:34:41:11 - 00:34:41:20
Balance.
00:34:41:21 - 00:34:56:08
Balance your risk. Maybe if you've got different, you know, investments, that's important. Tax rules are really important. So learn about, you know, what they are and the how long you need to invest in the original.
00:34:56:09 - 00:35:02:07
Yeah, that's me. You don't just walk away with all the money you make. You pay capital gains tax. How much might that be?
00:35:02:07 - 00:35:30:13
That's right. And just, you know, know that I mean, history is part of, you know, what the future might do, but it's not the only factor. So nobody has a crystal ball. It just does not exist. Like about, you know, you know, if this if that had been solved, everybody would be doing it. Yeah, we don't know. So, you know, you've got to be empowered to, you know, understand and make your own choices.
00:35:30:18 - 00:35:45:00
Part of that is financial education for yourself. Part of that is then engaging experts to understand and learn more. But you want to be in charge of the decision you make, not outsourcing it to somebody else. That's my advice.
00:35:45:02 - 00:36:04:10
And when we say that, we mean that in combination with your partner. If you have. Oh yeah. Which brings us onto the last topic of today is it's all about being on the same page in our money with our partner. And in particular we wanted to talk about coercive control.
00:36:04:13 - 00:36:41:14
Yeah. So this is our 1980s philosophy in first of all we would say being able to identify it. So what? What is that? Yeah. And this better came up not long ago. We have one philosophy is is bank account structure and visibility of complete your complete money. So if you're somebody in a partnership or a relationship and you don't have complete view of all the money coming into the household and where it gets distributed, it doesn't mean you can't have single joint accounts.
00:36:41:14 - 00:36:56:21
That can still happen, but you're doing it eyes wide open. That is one of our philosophies around doing that. But we were challenged on that because what if you're in a situation of coercive control? So to begin with, what is coercive control?
00:36:56:23 - 00:37:23:13
Well, I would say it is when decisions are being made for you, not by you or with you. Yeah. So an example of that would be, oh, yes, we do investing and we have all of these things, but I don't know how much or how much they're worth. I'm having a very feminine voice. I mean, I am being very sexist, but and I don't know how it works or how much we have.
00:37:23:16 - 00:37:40:00
My husband looks after that. That would be coercive control, in my opinion, because somebody has done things to you and your money has been used to invest in something that you don't know how it works or what it is or why.
00:37:40:01 - 00:38:09:07
Yeah. So the thing is, you could have you could have openly signed up to that or were you encouraged to sign up for that? So if you've if you've openly signed and I see this quite a lot where people have just signed, you know, you might have signed your house for, you know, some sort of investment or, you know, other types of investments that you've signed up to, but you have no idea how they work.
00:38:09:09 - 00:38:20:02
So first of all, I guess that's your responsibility to know. But you might feel you're forced into that if you know, that could be a type of coercive control.
00:38:20:02 - 00:38:50:12
Yes. And so it's a little bit like a Rolling stone now. And it just keeps getting momentum. And it's hard to like back out of this that it just keeps on rolling on and then, oh, my gosh, one day it's usually things happen. But the main problem with this and where I usually sit or where we see it happening is when there is an in innate equality in the income being.
00:38:50:14 - 00:39:09:16
Yeah. And then you may give you a right over to somebody else who is earning more money, or if you've stayed at home caring for children and then you're like, I don't have a say over how we spend our money. He's money person, he's earning it. So I can't say I'm being very sexist. Again, I'm very gender specific in roleplaying.
00:39:09:20 - 00:39:10:07
It can.
00:39:10:07 - 00:39:12:05
Be the other way, but it's definitely we.
00:39:12:05 - 00:39:38:16
Do we do see it because that's how it works. Yet general women are the caregivers and do take that time off work and go into more the caregiving roles in our society, which are lower paid. And we like to say we take the slops at work, you know, you might come back and you're doing part time work, but you haven't driven your career, you know, so you get what you given.
00:39:38:16 - 00:39:45:20
We're just so used to getting what you're given and then that can play out at home. Yeah. Money. Yeah. And self-worth.
00:39:45:20 - 00:40:12:22
Yeah, that's right. So, you know, even that brings me to a case I wouldn't call this coercive control. So I want to bring that out because I don't think it is intentional whereby you do your money together and say you're on what male's talking about a lower income and then your partner might be any more money and you have different responsibilities with your money.
00:40:12:22 - 00:40:36:13
You don't do your banking together. And what we predominantly say is one person might be earning more money, they're paying the mortgage and they're doing the savings. You know, they could even be in joint accounts. They're doing that. And, you know, savings might be enjoying a canceled mortgage, for example. Maybe they keep some money for themselves. And then and that's feeling okay.
00:40:36:15 - 00:40:57:03
And the other person is on the lower income, but they are paying for the cost of living. So groceries, eating, making, you know, everything else, work, work. And the view might be that you're a spender, You spend more money. I don't know what your problem is, You know, why can't you make this work? You know, we've got this.
00:40:57:03 - 00:41:24:21
You know, I'm doing my end of the bargain. But then when you look at the disparity between wages coming into the household and that you know, that job that someone's trying to do and how challenging that is, and then, you know, again, not understanding your money enough to make sure enough is allocated to cost of living. You know, maybe you're not spoiling your money the right way and maybe having visibility of everything coming in and making joint decisions on where the money goes is the better.
00:41:24:23 - 00:41:54:08
So I suppose what we're saying is don't give up your decision making in any situation you want. You want to have equal say at the table on what your choices and life goals are. Coercive Control. One of the things that I would say is more direct, though, is when somebody is actually controlling all the money. I had a case not that long ago where the parties were going into the same account, so it was starting off like, that's okay.
00:41:54:12 - 00:42:15:22
But one partner was taking all the money out of the two people and then giving a little bit backing to the bank account. Full cost of living. That's coercive control because the rest of the money is being controlled and you're giving feels like, you know, back in the old days an allocation to go and get food.
00:42:16:00 - 00:42:25:18
I know this is what I have a friend who are making multimillionaires. And she said to me, I can't afford to go out for coffee with you.
00:42:25:20 - 00:42:36:01
So no, no no, no control of any of the money and where it's being spent. And you're actually where it's deliberately you've only got access to a little bit that is coerced.
00:42:36:01 - 00:43:13:14
And I would ask your spouse or partner for money for something. Maybe you want to throw a birthday party for a child or something else or do something or how do you socialize with other people when you are so restricted? That is absolute. And so this came up to us like we were actually called out on this recently because the system that we recommend for managing money is like what you were saying, darling, where the money goes into one account and then you put money into other accounts, you deliberately allocate all of your money in into an automated system.
00:43:13:14 - 00:43:38:14
So you or bills account are spending, account and savings and goals account. And, and we're being challenged on it a few times because if it because that system requires both people knowing and having access to the money and ultimately setting it up and spending the money, you know, in a real way. And that has amazing outcomes because we're not fighting against each other.
00:43:38:14 - 00:43:41:03
We're working together and it's really powerful.
00:43:41:03 - 00:43:51:01
You can have, you know, separate spending money accounts. That doesn't have to be the same amount, but that's your guilt free and your fund money. So, you know, for whatever you want. But there, you know.
00:43:51:02 - 00:43:51:11
Yeah.
00:43:51:12 - 00:43:52:23
Still deciding together.
00:43:52:23 - 00:43:53:08
Yes.
00:43:53:08 - 00:43:55:08
How that's going to work And so.
00:43:55:10 - 00:44:26:14
Some people like it but what happens if let's say your relationship isn't great and you want to leave and all the money together is nothing separate yet, that could be really difficult. So it really depends on everybody's individual situation. Absolutely. And we did some work, some women's legal rights groups last year, and they have a very strong know you do not mix money like you must be an independent woman.
00:44:26:14 - 00:44:37:04
You must not ever hand over anything to a man. And so we're not of that because we don't want to be living like that. Ultimately, if you're in a relationship, you want to give it.
00:44:37:04 - 00:44:38:13
And trust it and you want to.
00:44:38:18 - 00:45:03:02
Yeah, yeah, all of that stuff. Yeah. So it's like eyes wide open. If there's red flags and you can't see them sometimes and your friends are saying or you know, if you've had a boyfriend that maybe raised something with you and then you're like deep down, that makes sense. Maybe question that a little bit more and change this.
00:45:03:02 - 00:45:20:12
And I'm going to make this a women's rights issue because I think it is. How do you want your daughter to be? If you have a daughter or you see a young girl, who do you want them to be? And we can only lead by example. Yeah. And I'm not saying that women can't coercively control.
00:45:20:13 - 00:45:22:06
Oh, definitely they can.
00:45:22:09 - 00:45:23:21
Absolutely they can.
00:45:23:22 - 00:45:25:09
If they are saying that, do.
00:45:25:11 - 00:45:29:06
Yes. So if you don't want to do that people. No, no, no.
00:45:29:08 - 00:45:30:03
No.
00:45:30:05 - 00:45:44:15
But sometimes, like genuinely, people can make it work if you seriously want to be in it. I'm all for being an independent person. I don't think everything needs to be tied up with another person. I just know it is absolute rubbish. Saying Yeah. And is it this episode that we talked about Logan.
00:45:44:17 - 00:45:46:01
Or is that it was this.
00:45:46:01 - 00:46:01:03
Episode, right? Okay. Because like in that when we're tied to somebody, we don't want all of our outcomes. And I think that's why you ultimately don't love marriage. It's because you don't want to. Where's your independence gone as a human?
00:46:01:03 - 00:46:02:15
Very sexy, always.
00:46:02:17 - 00:46:08:07
In finance all the time. Like why is my spouse's income on my tax return?
00:46:08:13 - 00:46:10:12
Mm hmm. Like, it.
00:46:10:12 - 00:46:14:03
Pops up everywhere. Ask salutations, Miss. Mrs.. Mrs..
00:46:14:03 - 00:46:15:12
Like we how do.
00:46:15:12 - 00:46:23:20
We make informed, independent, individual decisions and we choose to choose to do that together?
00:46:23:20 - 00:46:45:07
I Exactly, yes. So thinking about, like if you're in a relationship and you think so, there's two things that come to me with coercive control, really, because they can be really subtle. So really look at the situation and what's going on and saying, Am I the table? Am I doing all I can to be at the table? And then if that's restricted, you know, you might want to change something.
00:46:45:07 - 00:47:04:13
But if you're at the beginning of a journey and you're going in with trust, and I'm to do life with this person and this is fantastic, I would say sit that up and have those discussions. Will What if we separate along the way, make plans? Because you're going in what? Eyes wide open. You want to do life together if you can't.
00:47:04:13 - 00:47:09:12
Have those conversations. Red flag at the beginning, red flags, people.
00:47:09:14 - 00:47:26:13
That's right. And maybe you'll say we have these safety accounts on the side for us. If this ever happens in individual names and we put money into those, what's wrong with that? That's fantastic. If you know. Yes and otherwise make decisions and just keep saying really conscious lane flags.
00:47:26:14 - 00:47:45:01
Good communication. Yeah. Open. Yeah. Everybody knows how much money we have shared goals. Yes. Respect about having individual goals. Yes. Yeah. Yeah. Red flag not sharing, not knowing some important information.
00:47:45:03 - 00:47:46:17
Controlling decisions.
00:47:46:22 - 00:47:50:13
Money not being able to answer questions about your.
00:47:50:13 - 00:47:58:04
Finance. Yeah. Yeah, exactly. So, yeah, for anyone out there.
00:47:58:05 - 00:47:59:22
This is your big sister hotline.
00:47:59:22 - 00:48:04:03
Yes, Big sister hotline. Absolutely can talk to us any time about.
00:48:04:05 - 00:48:04:18
Your care.
00:48:04:19 - 00:48:13:20
Even if you're not sure about it. But what I would say is, yeah, just think about your own situation and yeah, maybe, you know, if you need to make some tweaks.
00:48:13:22 - 00:48:16:19
Yes. You got this. All right, so you.
00:48:16:19 - 00:48:29:01
At The Money Collective we provide financial wellbeing premium coaching, mortgage broking and workplace financial wellbeing programs, which we couldn't do without the seamless support of our fabulous team.
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If you'd like to find out more, head to themoneycollective.com.au or our socials to take action and engage our services. In our Facebook group, join the conversation and help us break down the taboo around money.
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All content in this podcast is for educational purposes only and is generally nature. For tailored personal advice, please seek out a professional.
This podcast provides general advice only. It does not take into account your objectives, financial situation or needs. Before acting on any information provided, you should consider the appropriateness of the information and the nature of the financial product in regards to your objectives, financial situation and needs. We recommend discussing your personal situation with a financial professional.
Podcast by:
MEL PEARCE & DARLENE NEU
Co-Founders, Financial Wellbeing Coaches and Mortgage Brokers
The Money Collective
Book a chat about money with Mel
Book a chat about money with Darlene
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