Disclaimer: This is not investment and/or personal advice and the content of this article is of general nature – as per financial regulator’s (ASIC) classification. Also, let’s be honest no one knows what is best for you, so better to seek personal advice. Which is tailored to your circumstances, purpose, needs, return/risk preferences and don’t wants which usually defines the wants. This series is easily absorbable distilled wisdom for your ChatGPT (Input: Latest AI Wave) response to the most read, best books and heuristic knowledge on the subject matter. The detailed sources, book lists and authors are quoted within and at the end of this post.
As for me, with over 12 years of immersive experience in the investment management and superannuation/pension industry, I have had the privilege of playing a vital role in supporting investment decisions making, strategy, governance and product for Super/Pension Funds entrusted with securing the retirement of 2 million Australians. On a personal level, I have been privileged to have significant financial independence in the early-mid 30s, building a diverse portfolio of real estate & investment assets that continue to generate sizable passive and portfolio income. I fundamentally believe: the secret to your financial success is inside yourself. I am certain that together, we can navigate the intricacies and uncover the knowledge needed to shape a secure financial future.
Introduction:
Back in 1720, Sir Isaac Newton owned shares in the South Sea Company (the Apple equivalent sassy stock of that time) in England. Sensing that the market was getting out of hand, the great physicist muttered that he ‘can calculate the motions of the heavenly bodies, but not the madness of the people’. Newton dumped his South Sea shares, pocketing a 100% profit totaling £7,000. But just months later, swept up in the wild enthusiasm of the market, Newton jumped back in at a much higher price — and lost £20,000 (or more than $3 million in today’s money terms). For the rest of his life, he forbade anyone to speak the words ‘South Sea’ in front of him (As they say now a days (Emmmoootiooonaaaal Daaaamaageee)
If you’ve failed in investing so far, it’s not because you’re stupid. It’s because, Sir Isaac Newton, you haven’t developed the emotional discipline of successful investing. In the end, how your investment behaves is significantly less important than how you behave. Being an intelligent investor/financial literacy is more a matter of ‘character’ than brain (IQ) ~ Intelligent Investor, Benjamin Graham
“A person can be highly educated, professionally successful and financially illiterate” – Robert Kiyosaki, author of Rich Dad, Poor Dad (“RDPD”)
Step right up, ladies and gentlemen, as we take a wild detour into realities that we might consider TOO COOL for, but guess what? They’re right at our doorstep! Hold on tight because here is the truth:
Over 50% of people worldwide list ‘MONEY’ as their biggest fear. Yes, you heard that right – the fear of not having enough money to live a good life or survive old age.
In Australia, the highest proportion of homelessness is made up of single and/or divorced WOMEN in their 50s. Can you believe it? Females accounted for a staggering 81.7% of the national homelessness increase since 2016 (Total Female: 53,000). We need to change this narrative!
Financial problems are estimated to cause 40-60% of all divorces in America (Read More). Down under in Australia, we’ve got around 50,000+ people who’ve decided to say goodbye to “till death do us part” and opt for “let’s stay alive and happy apart.” Relationship goals, right?
Only 25% of Australians can answer basic financial literacy questions correctly. Can you imagine? Half of the population doubts their financial knowledge for a comfortable retirement. But wait, there’s more! Australian women already exhibited the second-highest financial literacy gap compared to men of all G20 countries.
In Australia, the lack of Financial IQ exists in a similar fashion to other human biases/ignorance(s) – same as mental health is across the pan class, race, creed, culture – the financial literacy of a blue collar worker isn’t that far off from a white collar worker.
Even the corporate big shots aren’t entirely confident about their retirement savings, with only 36% feeling prepared. Only 18% of the individuals working in hospitality, marketing, and the arts think they have enough saved up for retirement. Knowledge is power, folks!
Also, turns out salary does not determine improvement/exposure to financial IQ with 42% of those earning $150,000 or more not knowing they can seek financial advice from their superannuation provider – Superannuation Research Report 2022
In Australia, 1/5 women are underpaid in their super, costing them at least 40,000 from their nest egg, not to mention the 7-11% return per annum over 30+ years to retirement. The overall impact of this is a super swindle of $10.8billion over the past 7 years (Industry Super Australia).
I am flabbergasted, 46% of women surveyed said they “had no plan” or “did not know what they needed for retirement” in comparison to the 73% of men stating they have a “general”, “good” or “exact plan” for how they will financially prepare to reach the retirement lifestyle they want – Vanguard, 2023)
Only 24% of Australians have a mortgage (6 million) – which essentially means that ⅔ people have a home and ~1/3 of the population rents (7.7 million). ONLY ~2 million people have a property in addition to their main residence. On the contrary, everyone I have ever spoken to NOTES it as their biggest dream and therefore they are either saving for a property and/or thinking about it. It’s the classical case of constantly finding themselves and never arriving anywhere useful – this crowd is usually very good with matching outfits with their shoes/bags but words with actions – huff that’s too much for the easy going crowd!
Distress and personal debt have haunted 40% of Aussie adults, causing more pain than family breakdowns and loneliness combined. It’s a tough reality, especially for middle-income Australians who’ve faced suicidal behavior in the past year.
Here’s a startling fact and something that is very close to my heart – MEN make up for 75% (>700) of ALL ADULT suicides in Australia. (Call LIFELINE at 13 11 14 if you or someone you know needs help with this very normal/distressed conditioned that one way or another all humans experience by consequence of existence)
Brace yourselves for a mind-blowing epiphany about the world we inhabit. I am personally gobsmacked that most people do not want to talk or work on their financial literacy – the very tool they need to craft a better life. I can partly empathise given the personal and vulnerable nature of the topic. But fear not, for we’re about to embark on a journey of enlightenment and empowerment!
Financial IQ means freedom of choosing how you spend your TIME. Freedom to have personalised meaningful pursuits in your life. More importantly, peace of mind during challenging times – when you can’t work, need medical assistance, or have a sick child or parent or any other form of unchosen hardship life brings to all of us.
The Financial literacy at its CORE means you have to be SMARTER than money otherwise it’ll rule your life and make you work for it. If you have financial IQ you’ll be its master and you will make it work for you. In the words of Robert Kiyosaki, Many rich people aren’t rich because of their desires, but because of FEAR. They thought that money can eliminate the fear of being poor, so they amassed a ton of it, only to find out the fear gets WORSE. Now they’re afraid of losing the said money or what their friends & family will say about them or will they still be considered affluent and as privileged as Joneses, Bezos, Biden and Kardashians. “Avoidance of money is as psychotic as attachment to money”.
Rich people are rich not because of the income they make, it is HOW MUCH YOU RETAIN and FOR HOW MANY GENERATIONS. In my opinion, a person with a $500,000/year job is again a hamster wheel dash, which is as strong as our weakest link i.e. law of impermanence and ageing/time.
Financial survivability is defined as the ability to maintain your lifestyle without working – The number of days/months/years you can live your values and purpose* without working are the fruit of your Financial IQ.
I know you will be thinking, here we go with the acronyms and long concepts which I don’t have time to read, then think and apply in life. This article isn’t looking to sell you anything like exotic assets which are under the sea, use financial jargon like hedge fund, private and alternative assets or wants to marry you.
The sole purpose of this piece is deciphering ancient wisdom on which millions of books are written into easily implementable DAILY HABITS which build your Financial IQ. As they say, as per your need, ability and personalised wants in life.
So that we both don’t get lost in translation of Financial IQ. For this piece I’ll MOSTLY focus on the HARDEST element of building wealth – Emotional Discipline/Internal fortitude. If you commit to reading this piece, I can assure you at least will gain FINANCIAL AWARENESS.
The Dilemma:
“Financial Awareness is the cornerstone of ALL financial IMPROVEMENT” – Adnan
People’s lives are forever controlled by two emotions, FEAR and GREED. First, the fear of being without money motivates us to work hard, and then once we get that paycheck, greed or desire starts us thinking about all the wonderful things money can buy. The pattern is then set i.e. You offer people more money and they continue the cycle by increasing their spending – this is called THE RAT RACE – Robert Kiyosaki
Financial awareness allows you to get free from the Rat Race. Money and Pleasure are cruel masters and living life in fear is not resilience – at best it’s just merely breathing while already being dead inside. More importantly, financial awareness frees you from fear and greed. Do not get me wrong, emotions are a superpower BUT you have to do your own thinking – I don’t know anyone who outsources accountability/responsibility of their life to others and lives a meaningful life.
Throughout the world, from Monarchies to Dictatorship, they’ve realised that there’s no automatic transfer of Kingdom/State’s wealth to PERSONAL wealth. I know the title, power and clout gives a lot of people hope and comfort around their financial survivability. However, if that was the case Vladimir Putin/Xi Jinping wouldn’t have $1+ billion in his own name and around $250 million in the gymnast girlfriend’s name. Like they’ve been ruling something for three decades or so – they still understand the importance of MINDING YOUR OWN BUSINESS. The King of England also has a structure to convert someone’s land into His Highness’s land (personal portfolio asset not to be confused with KINGDOM’S land). King Charles inherited $500 million from our beloved Queen. Charles’ inheritance reportedly has made his wealth total over $2 billion (£1.8 billion) [The Guardian]. The fore of assets includes investments ranging from estates and artwork, to jewels, racehorses (excluding Queen Consort), stamps and cars. The Crown Estate is valued at about $20.5 billion (£15.6 billion) and generated an estimated $410 million (£312.7 million) in net revenue by the end of fiscal year 2022.
Do your own thinking independently, be a chess player not a chess piece – Ralph Charel
I am not preaching to you to give up your sense of importance/job description as self description if that supports your hope/ambition generation mechanism. In my opinion, everyone works for somebody, from the bottom of the totem pole to the CEO, to voters to the Prime Minister, the Jestre to Kings. But that doesn’t mean we can leave the responsibility for financial survivability and well-being to the organisation, boss, employee, state, country and kingdom.
However, I do preach that not understanding employment/Rat Race boundaries does a lot more disservice in your silver years/when retirement happens to you compared to the emotional/ego highs it delivers in professional glory days. As RDPD notes, JOB (Just Over Broke) is a short term solution to a very long term problem and yesterday’s home runs don’t win today’s/future games i.e. groceries/wishlists/luxuries
Freedom:
Who ever has a ‘WHY’ with figure out a ‘HOW’ – Friedrich Nietzsche
If you don’t remember anything from this article. I request that you remember this one simple equation:
“Ditching the Race, Key to Wealth & Financial Survivability = Conversion of ‘ORDINARY’ income (Paycheck/trade/service) into ‘PORTFOLIO’ & ‘PASSIVE’ income. Understanding money doesn’t solve any problems, knowledge, financial education and implemented learnings (Key Daily Habits) do – that’s the key to financial freedom”
Let’s collectively define some terms, which will help us make more progress on things, instead of getting bogged down to their rationale. Same as other things we use on daily basis but don’t ‘really’ understand e.g., artificial intelligence, social media, how does excel calculates numbers when I write (=) into the top thingi and to be honest how refrigerator processes current to stay cold for that matter:
Financial IQ = The same way we know all cars/planes have engines & tyres even though we don’t understand the in-depth mechanics of every single part to use them for daily commute/(dream pipeline)holidays. Well, unless we are personally interested in them and/or BMW/Qantas is charging us $3,000 for shinier alloy and better air quality. Similarly, you don’t need to have an accounting degree/investment background or economist to know the core components of financial education.
Accounting: Accounting is like learning the language of numbers, enabling you to understand financial information. Accounting is like the foundation of a house; it helps you build a strong understanding of your finances.
Investing: Investing is the process of using your money to make more money, combining both art and science. Investing is like planting a seed and watching it grow into a fruitful tree that provides you with more fruits.
Markets: Understanding markets involves grasping the dynamics of supply and demand, which play a crucial role in financial decisions. Markets are like the ebb and flow of a river, affecting the course of your financial journey.
Law: Knowing the legal aspects, especially tax advantages and protections provided by local & global law, can accelerate wealth-building compared to being an employee or a small-business owner. Law is like a shortcut that helps you reach your financial goals faster, bypassing unnecessary obstacles.
These four (4) core areas are foundational elements, which I am sure will be exceptions to and each of them will have exclusive rabbit holes & mutation based on how commoditised the financial segment is in your local area/country/region – proliferation of capitalism or any other ‘ism’ in your surroundings. For example, Negative gearing (benefit to investment property holders) in Australia – it represents all the core elements. Also, remember the people who give accounting/investing advice/real estate advice will also claim it to be a side benefit of what they are flaunting.
Remember, you don’t need to be an expert in these fields; having a basic understanding of these core components of financial education can significantly impact your financial decisions and overall well-being.
Expertise makes something ‘complex’ appear ‘simple’ and ‘intelligible’. Bullshit makes something simple appear ‘unnecessarily complex’ & ‘unintelligible’. A lot of what passes as “financial/life advice” is simply narcissism dressed up like confidence and sold at a premium to unconfident people – Mark Manson
- Balance Sheet = Assets & Liabilities. Assets put ‘money in’ in my pocket and liabilities take money out of my pocket. Some investments/acquisitions start as liabilities and become assets such as Home/Property and others start as an asset and become a liability i.e. son with a drug habit/the fully paid Ferrari that you crashed on the way out of the showroom or that intelligent cousin who you were impressed from and he ran a ponzi scheme.
- Income Statement = Income & Expenses. Income can be any income (paycheck, inheritance, service tips, click bait revenue) and expenses (food/shelter, necessities to lifestyle, fences/LV bags & things to gain validation/waste time/impress others but mainly feel good about ourselves). The income statement is like a financial report card, showing how much money you earned and how much you spent.
- Rat Race = INCOME always EQUALS (=) or LESS (<) than Expenses. The rat race is like running on a treadmill, where you keep going but never really get ahead.
- Saving = Income sometimes (like once in a year) MORE (>) than Expenses. Saving is like putting money into a piggy bank for a rainy day.
- When EMOTIONS are HIGH. Financial IQ is LOW and when emotions are used for objectively looking at things, curing ignorance and human biases (confirmation & desirability) and primarily for analysing instead of criticising – the Financial IQ is probably the HIGHEST. Financial IQ is like having a smart financial advisor who helps you make wise decisions.
- Freedom Multiplier = Your freedom and fulfillment in life are influenced by what you do, when you do it, where you do it, and with whom you do it. The freedom multiplier is like a formula that determines how much control you have over your life.
- Being Busy = Being busy doesn’t always mean being productive. It can be a form of laziness if you let emotions dictate your actions without considering their importance. Being busy without purpose is like spinning your wheels without moving forward.
- Doing something ‘Unimportant’ efficiently DOESN’T make it IMPORTANT. Spending more time on something DOESN’T make it more important. Lack of time = Lack of Priorities and being overwhelmed DOESN’T equal being PRODUCTIVE. Productivity is like a puzzle where you focus on the most critical pieces first to complete the picture efficiently.
- Cash Flow = Cash Flow is all about understanding how much money comes in (your allowance, paycheck, Youtube videos) and how much money goes out (when you buy things, treat friends & family and get shinny things). Just like a piggy bank, you want to make sure you have enough coins left for all the special treats you want.
- Cash Flow = Making sure there is actual CASH between Payday (15th of month) – (Minus) Bill/Expense day (hair/makeup, childcare, utility bill, night out & footy nights).
- Having healthy cash flow keeps the loan sharks, mum/dad’s curses, financial stress/trauma and debt collectors away.
They say pictures say a thousand words: With the summary above, please look at the Balance Sheet & Income Statement of a Poor, Middle Class and Rich person – for educational and knowledge pursuing purposes not having an existential crisis (which actually happened on a date) due to egoic human nature – comparison is the killer of all joy.
Source: Photo from RDPD – Robert Kiyosaki
Let me emphasise, IT DOESN’T matter which picture accurately reflects you due to personal life circumstances/journey/decisions, WHAT’S IMPORTANT, where do you want to be.
Everything popular is WRONG – Oscar Wilde
The actual epiphanies that will help you get into the right mind set, to pursue financial freedom is as follows:
- The core difference between poor, middle class and rich is of ‘thoughts’ & ‘actions’ – Instead of saying ‘I can’t afford that’ they start by asking ‘HOW can I afford that’. Instead of state-funded financial freedom, they think of ‘self-financial reliance’. I like this line from RDPD, Broke is temporary, but POOR IS ETERNAL.
- The poor and middle class, either due to circumstances or unconsciousness usually FOCUS on paycheck and expenses. Their life is a function of ‘Income Statement’ (an accounting term, but you can think of it as a budget – which has Income & Expenses).
- The rich ONLY focus on their ASSET COLUMN – where money/income/lifestyle is not dependent on them, the asset column grows on its own, brings more income and makes more assets. Don’t get me wrong, inactivity is not the goal. The goal is being all you want to be and do all you want to do without losing the income, lifestyle and benefits of time.
- The old-money people, the long-term rich, build their ASSET COLUMNS first. Then the income generated from the asset column buys their LUXURIES. The poor and middle class buy luxuries with their own sweat, blood, and from children’s inheritance.
It is vain to do something which can be done with less – William of Occam
- Money doesn’t solve problems, INTELLIGENCE does! But intelligence also brings arrogance, pride, cynicism and laziness. Most so-called PROFESSIONALS/INTELLIGENT people with the list of titles/degrees/books they have read and their intellectual agility are only ONE SKILL away from great wealth – THIS ONE!
- The Rich work against self-doubt and use it to their advantage. The real genius uses fear to turn it into power and brilliance. Always remember, Cynics Criticise and Winners Analyse (‘RDPD’)
- The Rich know that savings are to create more money and not to pay bills. Middle class & poor are in the business of filling a leaking pot – which starts cracking due to lack of diversity in sources of income (usually only features paycheck) when unchosen suffering comes knocking at our doors.
- Also, let’s break the widespread misconception – You do not need to run a small/medium/large business to become rich. ‘Minding your business’ means keeping your job BUT build and keep your asset column. Once a dollar goes into your asset column, it becomes your employee. The best thing about making money work for you is that it works 24 hours a day and can work for generations. Here to all my fellow insecure overachievers (Professionals/Intelligent friends), Keep your day job, be a great & hard working employee, but keep building that asset column.
Did you know, Income TAX isn’t an Existential thing: Taxes were FIRST levied in Britain when Napoleon was causing a stir in Britain, the government needed some extra coin to face the challenge. And what’s a better way to do that than taxing the good ol’ citizens? From 1799 to 1816, taxes were levied, and the trend continued during America’s civil war from 1861 to 1865. But wait, there’s more! In 1874, England thought, “Hey, this taxing thing seems pretty nifty,” and made it a permanent fixture for its people. Not to be outdone, the United States jumped on the bandwagon in 1913 with the 16th Amendment to their Constitution. As the government’s appetite for revenue grew, the burden of taxes trickled down to the middle class, while the rich found ways to play by different rules and enjoy incentives that reduced their tax obligations.
So instead of focusing on the LEFT & RIGHT wing political ideologies (Slave/Master Morality) divide us to get voted in/out of the government and focus on something far more important – your own FINANCIAL SURVIVABILITY. Make sure ELECTION CYCLES don’t take away your financial security in the years when you have a health scare, unable to work, want to pursue a different passion/career. Not just that, to have freedom in life, to focus on other core areas i.e. health, family, religion, legacy and it also gives you the ability to choose how you spend your time without loss of income.
P.S. Do you know how much Capital Gain Tax (CGT) you pay on an investment property? The tax effective methodologies to not incur some of it, part of it or none of it? Without overly complicating and dying in the archaic language of Australian tax laws, here’s my poor attempt at something profound:
An investment property that you held for 12 months, requires you to pay tax on 50% of profit (net capital gain) on that asset.
- You bought a house for $1million and after one year sold it for $2million.
- Gain = $1million x 50% = $500,000. If you make no income for the year, this will add to personal income tax, which means this 500k will be taxed at 45% (Income tax bracket based, don’t worry we only notice them when we get a Robodebt letter). What would be your CGT for that year??
The magical number behind door number 13 is….$225,000 (probably the amount of money any of us haven’t saved in all of our lives)
But hold on, here’s the fun part! Want to make that $0? Drumroll, please! You can do that by living in the property after you purchase it. Yes, you heard it right! By making it your home sweet home, you make it CGT-free for around 7 years. It’s all about Financial IQ, and now you’re armed with a nifty trick to keep more money in your pocket.
Again, REMEMBER: KEY TO WEALTH = Conversion of ordinary income (Paycheck/trade/service) into PORTFOLIO and PASSIVE income.
Self knowledge:
The Japanese say there are three main powers “The power of the sword, the jewel and the mirror.” The sword symbolizes the power of weapons. The jewel symbolizes the power of money. There is some degree of truth to the saying, “Remember the golden rule. He who has the gold makes the rules.” The mirror symbolizes the power of self-knowledge. This self-knowledge, according to Japanese legend, was the most treasured of the three.
Remember, when I said, no one knows what you want. I often joke with my mother that the same way, I can’t have food and expect her to have a full stomach. We cannot hold ourselves responsible for things we have no control over – despite our good intentions/knowledge/sense of contribution, things such as other people’s actions, emotion, finances, happiness, weather, orbiting the sun etc etc.
Financial Awareness, requires your personalised WHY (Purpose) as a foundation. This purpose can be:
- Your personal list of DON’T WANTS, which will define the ACTUAL WANTS. As Robert Kiyosaki says, I did not want two kids and a house in the suburbs. I wanted to choose how I spend my time, I wanted to travel/pursue meaningful activities and do it while I was young. So you need to define what you don’t want AND want before listening to a lot of rich people in seminars/conferences for get rich quick schemes
OR
- Are you contributing anything useful to this world or just shuffling papers banging on a keyboard, and coming home to a drunken existence on the weekends? Purpose is opposite of boredome: Excitement. Not merely buy all the things you want, but to do all the things you want to do, and be all the things you want to be – Tim Ferris
In my personal opinion this WHY is best approached by ‘YOUR’ core VALUES in life. The same way everyone has a personality irrespective of their awareness of it. Even if you’ve never thought about it or listed your values – they are ALWAYS shining through HOW you spend your LIFE in light of personal conditioning, experiences, narratives and decisions etc etc.
Values: The unique ‘Thermostat, Equilibrium or Zen’ around how one goes about spending their ‘limited time’ on the planet! – عدنان
For example, you VALUE personal development therefore you are READING this article. However, to do so, you’re GIVING UP on watching TV, swiping TINDER/BUMBLE to do this activity. Similarly, you DEVELOP your PASSIVE INCOME after work/go to gym/take care of your grandmother, INSTEAD of getting drunk/gamble with work colleagues – that shows the way you spend your time/life, more importantly it shows your personalised ‘WHY’ to things you do/filter/spend your time building your ideal life. For example, time in absolution doesn’t mean anything, it is only when you compare relative value of time with alternatives that you derive actual ‘value’ of that time.
There are no ‘wrong’ choices in life, just the unconscious ones which dictate the direction & quality of your life and you end up calling it destiny. Everything else comes out in the wash over the long-term as time only moves in one direction – عدنان
Here’s the reality – If you cannot get control of yourself, DO NOT TRY TO GET RICH. It makes no sense to invest, make money, and blow it. It is the lack of self-discipline that causes most lottery winners to go broke soon after winning millions. Out of all the financial wisdom, advice, literature and get rich quick help I would say that PERSONAL SELF-DISCIPLINE is the MAIN delineating factor between the people who have financial freedom and the ones who don’t.
Read More: Values: The only metric of success that matters!
- Getting Started:
Wealth of information creates a poverty of attention and a need to allocated that attention efficiently among the overabundance of information that one might consume – Herbert Simon
The million dollar question, “Where do I get started?” or “Tell me how to get rich quick”?
Note, this is a judgment-free zone – If I was on centrelink (social security) for 10 years and I ask you that I want to be an astronaut. You will say, I admire your wisdom, empathise with your resolve and have compassion & support for the cause. However, you will advise me to see the basic educational, knowledge, psychological and physical requirements to pursue an astronaut career. Similarly, if I want to be a concert pianist, I have never played an instrument in my whole life. You will tell me to understand, learn and practise basic notes. Similarly, If you want to be rich, you need to be financially literate.
I am not about empty promises or one-size-fits-all solutions. I genuinely admire your wisdom and determination to seek a better financial future, and I am here to support you every step of the way. I believe in empathy and compassion, knowing that everyone’s financial journey is unique and deserves respect.
Education and profession aren’t enough. Financial awareness is the key to real freedom” – عدنان
Read the second part of this series. Whether you’re a financial novice or a seasoned investor, I invite you to join me as we delve into the world of finance together. The goal is to provide you with easily implementable DAILY HABITS, valuable insights, practical tools, and relevant resources that build your financial IQ and enable you to take charge of your financial destiny. All it takes is a willingness to learn and a belief in your own potential.
Where to Start? Read More: Financial literacy (Part 2): Essential Daily Habits and Your Wealth Toolbox for a Strong Financial IQ
Most importantly, the secret to YOUR financial success is inside YOU!
P.S. Thank you for reading. Given the attention span, same as financial literacy of my generation, I thought I will give you summarised Tiktok/insta emoji version of the series for reference:
- FINANCIAL IQ = Knowledge of CashFlow/Accounting➕ Investments➕Markets➕Law
- Key to Wealth = 💲Ordinary Income 🟰Passive Income 🏘️➕ Portfolio Income 💹
- Rat race 🐀🏁 = Expenses >🟰 Pay checks and 🚫🙅🏽♀️ ASSET COLUMN(🏘️💹💲). Rich focus on ASSET columns 🏘️💹💲which grow on their own and produce income.
- Poor and middle class 🟰 Focus on Income/Expenses and buy EMOTIONAL liabilities (Big Homes🏠) which they think are assets.
- 🆙Emotions = Financial IQ⬇️😓. Everytime 💲1️⃣🟰 You get you have a chance to be poor, middle class or rich, your SPENDING HABITS reflect that already!
- Money doesn’t solve problems, INTELLIGENCE does! But intelligence also brings arrogance, pride, cynicism and laziness. Most so-called people with a list of degrees/books they have read and intellectual agility are ONE SKILL away from great wealth – THIS ONE!
Sources:
- Rich Dad Poor Dad, RObert Kiyosaki
- 4 Hour Work Week, Tim Ferris
- Principles – Ray Dalio
- 100 Million Offers – Alex Hermosi
- Divorces in Australia – Australian Government
- Survey: Certified Divorce Financial Analyst® (CDFA®)
- Revealed: King Charles’ Private Fortune Estimated at £1.8 Billion
- Intelligent Investor, Benjamin Graham
- The 2023 Global Slavery Index estimates that on any given day in 2021, there were 41,000 individuals living in modern slavery in Australia. This equates to a prevalence of 1.6 people in modern slavery for every thousand people in the country. Within Asia and the Pacific, Australia is ranked 26 out of 27 countries in terms of prevalence of modern slavery. Modern slavery includes forced marriages/relationship related abuse of humans by humans.
- Australia is one of the best places in the world for women to get divorced. It is such an epidemic that King’s Counsel is trying to make it safer for rich, divorced men. Modern family law was created to correct the unfair economic treatment of wives and mothers in marriage breakdowns. The result is a divorce system designed to protect the financial interests of the man or woman with the lower earning capacity, which remains, in most cases, the wife. This equality has turned Australia into one of the best places for a woman to divorce.
- Playing with a squared ball: the financial literacy gender gap
- Super Insights 2022 – KPMG
- Australian women underpaid by $1.3 billion in superannuation over a year, new report finds
- ‘Women being ripped off’ by quarterly superannuation payments
- Supporting women to grow their super
The Suicide Prevention Australia Community Tracker found at least 40% of Aussie adults experienced distress beyond normal levels caused by cost of living pressure and personal debt in the June 2023 – a trend consistent for the past 12 months.
- Cost of living and personal debt was the leading cause of elevated distress, ahead of family and relationship breakdowns (23%) and social isolation and loneliness (20%). The survey of 1,038 also revealed 38% of us know someone who has attempted suicide in the past year, an increase of 8% from the March quarter and 13% from 2021.
- Distress is highest amongst “middle wage” Australians with more than three in ten (29%) of those living in households earning $100K-$149K per year, report having experienced suicidal behaviour in the past 12 months, which is more likely than those living in households earning less than $50K per year (19%).
8.6 Australians die every day by suicide. That’s more than double the road toll (ABS, 2022). 75% of those who take their own life are male – 676 Men & 253 Women(ABS, 2022). An unknown number of Australians attempt suicide every year, with some estimates suggesting this figure may be over 65,000 (Slade et al, 2009). Suicide is the leading cause of death for Australians between the ages of 15 and 44 (AIHW, 2022a).
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Great article with some fascinating facts. The quote from Rich Dad Poor Dad “A person can be highly educated, professionally successful and financially illiterate” is unfortunately so true here in Australia. The Financial literacy of many Australians needs improving.