My final unlearn pillar is a big one: action.
My final unlearn pillar is a big one: action.
It’s the pillar that can make or break your financial success. It’s also the thing that most people don’t know quite enough about to really make it work for them.
The thing about action that most of us need to unlearn is that there is no single thing you need to get or do in order to make your financial goals a reality.
Rather, a cascading set of actions is needed – it’s not difficult once you understand what you need, but is it impossible to truly succeed if you don’t know what you need to get you there.
There are many aspects of action that most of us need to unlearn. The most basic one, but often the toughest, is actually doing something. I know I want to lose five kilos, but am I really prepared to give up that morning muffin? My lack of action toward losing that five kilos means it’s a pipe dream: not something I am prepared to action to get what I want.
Funnily enough, money works pretty much the same way. Know you need savings, but there is never anything left at the end of the month? Well pay the savings first, before you spend a cent of your income, and adjust to living off the rest.
Know your family would be in trouble if you got sick, or worse? Do something about it and look into the right kind of insurance.
Most of us delay action, because we are delaying, on a grander scale, pain. It’s been said by many psychologists that as human beings we are either moving toward pleasure, or moving away from pain. So the muffin is short-term pleasure, and the tight pants are long-term pain.
Getting life insurance is hard to understand, expensive and just plain boring to organise, but having the worst happening would create deep long-term pain.
So at this point in the journey of unlearn, I am going to share with you the biggest single thing I did to change my financial future and take action.
My husband and I picked the right financial adviser.
“What?” I hear you say. “It’s got to be harder than that?”
No, not really. Of course, there were many lessons along the way that I had to learn. You can read about the other of four pillars and my challenges with them here.
But, to take action, the best thing we did was to find the right adviser.
It was through this relationship that we were able to come up with a solid plan of action. One that gave both my husband and I total peace of mind about our future – across all scenarios.
The process they went through was fascinating – and it included a lot more couples counselling in there than you might suspect.
This was because the really big, hard questions needed to be asked of us by our adviser, in order to get to an actionable plan.
Questions that we had to consider included:
- Who would get the kids if we were both to croak?
- What money would leave individual family members?
- How much insurance did each of us need if the other one died? What would the living one do with it?
- If sometime did get the kids, how much money would we leave them to look after them?
- What would we do about power of attorney if a terrible accident happened?
You may ask what has this got to do with wealth, but the reality is, all these questions really need to be answered in order for you to have a failsafe future plan that is to weather any storms.
Once we hashed these out (and boy, that was an interesting process) which actually took a few weeks, (lots to think about!) we could then set up tick boxes for some more solid actions that took us step-by-step towards our financial goals.
How much per month did we want to spend in retirement? I realised my fantasy life as an oldie was going to cost 50 per cent more than what we would have in super by the time we retired. This helped us to understand how much extra we needed to put in super now, in order to hit our goals then.
We also put a solid timeline around the following:
- Credit cards – how long it would take us to pay them off and never rack them up again
- Emergency savings – could we get three months in a high interest account and never touch it unless we were burning?
- Our kids’ future – could we put away money every month that earned compounding interest for our kids’ university fees, cars, lives?
- Living money – how much did we really need in order to have a good life every month? The rest we moved at the start of the month so we did not get tempted.
- Investing outside of super – what funds, what timeframe, and what should we pay?
While I am have been in the financial services industry for well over 20 years, and probably knew the investing part pretty well, the other steps, which are in fact far simpler, were the ones I needed to take to get my wealth plan on track.
These things don’t all happen in a matter of months. This cascading plan takes years to achieve – but with a plan you can tick the list off – knowing that you are moving ever closer the future you want.
It’s a great feeling. Remember that show The A-Team? I always loved it when Hannibal would say “I love it when a plan comes together.”
That’s how I felt when we found the right adviser. And you can too.
Which is why the next part of my unlearn series is going to be directed towards how to find the right adviser. I know you may have read the press: “don’t trust advisers, they are dishonest.” Or thought there was no way you could afford one; or that it would be embarrassing to share just how bad with money you were.
Let me tell you, while there are some advisers who are not the ones you want to pick (just like in any other profession), there are thousands who are incredible at what they do.
You just need to know how to find them, what questions you should ask of them, and what to pay them.
I am going to help you do just that in, in my new book, out later this year.
Because I wholeheartedly believe in the power of great advice. There’s no financial gain in this for me. In fact, my education business spends it time training financial advisers, and making them even better at what they do, to help you.
So think carefully about the action you need to take to get peace of mind and what you want.
Because you deserve it.