Posts

What is financial independence and why is it so important?

We bang on about financial independence a lot at Money School. It features heavily in our blogs, and it appears in our education for kids.

But what does it actually mean, and why should you care?

What does financial independence mean?

We define financial independence as being able to support your lifestyle without having to work.

In money terms: you don’t need a wage to meet your costs. You’ve got enough income (rent, dividends, interest etc) coming in from your assets (cash, shares, bonds, property etc) that you can feed, clothe and house yourself in the style to which you have become accustomed.

These are technical definitions and can seem a bit nebulous. Here’s what financial independence really means (in my personal experience): Read more

Real lost super: could 93% of your superannuation disappear?

When we hear ‘lost super’, we imagine lots of funds that we don’t know about. This story is about another kind of lost super. It’s the money you had in your super account, but it’s disappeared.
 
So, could 93% of your superannuation disappear?
 
Very short answer: yes.
 
Longer answer: if you stop contributing, and you’re paying fees and premiums, it can happen. Do that for over a decade, and you could have next-to-nothing left.
 
My statements come from a real-life example, not a hypothetical one.

Read more

Lacey Filipich - Money School Financial Training Courses

Becoming a self-funded retiree: more of Fran’s story

If you’ve read anything about Money School, you’d know we wouldn’t be here without Fran, the mother half of the our mother-daughter team.

Fran’s a bit shy. She’s more than happy to be in the background. Getting in front of a camera was a daunting task for her, but with a little coaxing we got there. It’s a shame she’s shy because Fran’s is the more inspirational story in our opinion. Starting investing at 48 years old and now a self-funded retiree, her life proves it’s never too late to start.

We’ve finally convinced her to tell more of her story. Here it is, in her own words:

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Are Extra Superannuation Contributions the Best Decision?

I recently had an interesting (and somewhat frustrating) discussion with a financial planner about making extra superannuation contributions. In general, she thought it was a good idea. In general, I was against it. We both agreed that specific situations warranted different approaches, but in my specific case – a mid 30’s woman – she thought extra contributions were wise. I disagreed.

I believe most financial advisors would recommend extra superannuation contributions to minimise tax and boost retirement income. So, what else should you be aware of when making this decision?

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Book Review: Money Master the Game by Tony Robbins

When asked what books about finance I recommend, my response ten years ago was:

They’re still my go-to books for self-education on finance and I haven’t seen anyone do better on those topics yet. Reading those books has been pivotal in my investing life.

In recent years I’ve added to my list:

Then, in late 2014, Tony Robbins released ‘Money: Master the Game’. I immediately preordered the book, wondering if it would become another financial ‘Bible’. Read more

Money Mindset: Ask the right question

By Lacey Filipich BEng(Hons) MAICD Cert Gov (NFP)

When talking to people about their financial goals, a common question they seem to ask themselves (and me, and I assume their financial planner) is:

How much money do I need to retire?

It’s an interesting question, but it’s not the right question. Read more

Super and your home do not mix

By Lacey Filipich BEng(Hons) MAICD

When I saw Joe Hockey on the news in March suggesting that superannuation (super) may one day be available to help First Home Buyers get into the property market, my jaw dropped. Could it be possible that our country’s most senior financial decision maker has such a limited understanding of the purpose of super? Or was this simply an off-the-cuff comment aimed at taking the population’s temperature on this issue?

Though it would still make me unhappy, as it’s an irresponsible way to poll opinions, I hope it’s the latter. If it’s the former and Hockey’s understanding of super and what constitutes an asset is that dismal, quite frankly we’re up the creek with no paddle. Read more

Australia’s financial future and what it means for you

By Lacey Filipich BEng(Hons) MAICD

The 2015 Intergenerational Report (‘The Report’) was published on 5 March 2015. It’s a predictive exercise: based on today, where will we (Australia) be in 40 years? Assumptions abound and of course you can spend a lot of time on whether those assumptions are reasonable or not, but it’s far more interesting to consider the implications for those of us who still plan to be around in 2055. So what did The Report find?

Findings of interest for those interested in money

The following figures are based on Commonwealth of Australia data, taken from the 2015 Intergenerational Report.

1. We will live longer, healthier lives

A child born in 2015 can expect to live to their early 90’s whereas a child born 40 years later may expect to live to their mid 90’s. Read more