The Importance of Financial Wellbeing #560

In this episode, Lachlan Stuart discusses the importance of financial wellbeing and shares his personal journey towards improving his own financial situation. He emphasizes the key components of financial wellbeing, such as cashflow, savings, and investments.

Lachlan provides a framework of financial checkpoints, ranging from financial dependency to financial abundance, and encourages listeners to determine their own financial goals. He also highlights the importance of having a growth mindset when it comes to money and offers practical tips for learning and improving financial literacy.

Takeaways

• Financial wellbeing is an important aspect of overall wellbeing, and it includes components such as cashflow, savings, and investments.
• It's important to determine your own financial goals and work towards achieving them.
• Having a growth mindset when it comes to money is crucial for learning and improving financial literacy.
• Investing 15-30 minutes a day into learning about personal finance can help remove financial stress from your life.
• There are resources available, such as books and podcasts, that can help improve financial literacy and provide guidance on financial planning and investing.

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Transcript

Speaker 0: 0:51

financial wellbeing. Stop ignoring this. This is from a recent newsletter I put out and I've linked it below if you want to see the images and references to this episode. But I want to talk about money. It is something that a lot of people avoid and over the years as I've had this podcast, I first started utilizing it to improve my communication. Then I was learning from people from all walks of life, but at this point I believe, off the back of our workshop over the last weekend, a lot of feedback was to have conversations around different areas. Now I don't sit here claiming to be a financial expert, but what I wish I got to learn many years ago was from people like myself, or those of you who are listening, who could share things that they were looking at or interested in to improve wealth. Right Financial wellbeing, much like your mental wellbeing and your physical wellbeing, has key components, so I would look at it like cashflow, savings, investments, et cetera, and so that's what really inspired this newsletter and today's podcast. So I hope you guys get value from it and wherever you're listening to this on whether it's YouTube, spotify, apple, wherever else you get your podcasts I would love to have a discussion thread below around things that maybe I've missed or points that you'd like to add to it, because this is a conversation and it's something that we will be discussing a lot more within our man that Can community that you guys can head over and join.

Speaker 0: 2:21

The link is below for just 20 bucks a month. It's a very simple one, but just more to continue these conversation. So let's talk money. It's the thing that apparently makes the world go around. If you want to live a good life, you must have a lot of it right Wrong. I thought that for a very long time, and what I'm about to talk to you about will help you gain a greater understanding and also create definitions and ideas around what money looks like for you and what wealth looks like for you and success. So do you feel uncomfortable when money is mentioned, whether you get asked how much do you earn or you are waiting on a price for something, sitting there sweating about it going. I hope I can afford this. The truth is, money and sex seem to be taboo topics of conversation for most. I want to provide a new understanding for you and share what I've personally done. Not for financial advice, as I said. I just wish more people shared things they did when I was stuck so I could start doing my own research to see what may work for me. The key if you take responsibility, invest 15 minutes a day into learning, you can remove financial stress from your life, and I'm going to attach some helpful books at the end that will allow you to start this journey. So we're going to discuss levels of financial freedom, why people avoid money, financial basics.

Speaker 0: 3:49

I used to dislike money because I had none. I would tell myself people with money rip others off. Money doesn't buy happiness. People with money lose family. They sacrifice everything to achieve it. What I realized was money was just a resource like food, water or a car. It can serve needs, but its value comes through what you can do with it.

Speaker 0: 4:11

I still remember the day I committed to making some money. I had this shift that I wanted to have a great life and that I deserved it. A million bucks seemed like the good number. I remember sitting there thinking, yep, that's the one that's going to make me a success that will solve all of my issues. I was so sick and tired of struggling and I was so stoked to think, if I can do this, everything else in my life is going to be a million times easier. Literally, it was the decision that changed everything, and what I'm about to share was what I wish I knew.

Speaker 0: 4:43

Money is a resource. It's an exchange of value. It allows you to exchange it for what you've got. Some men feel the needs to make lots, others are happy with little, and there is no right or wrong, and I want that to sink in for you as you're listening to this. You may be comparing and you may have set the number that you feel you need to live, based off of what society tells you, or a random number, but things that you need to think about, and I'm going to go through a table in a moment and, if you haven't looked at it, definitely click on the newsletter below to see the photo, and I'll actually post it on Instagram, but it doesn't need to be complicated, right? It's really about knowing what you want. As with everything in our life, I like to find a framework that provides direction and clarity for what I can focus on, and it's something that I use with my clients as well. Then I adapt it along the way to utilize it to suit my needs, so I would encourage you to do the same.

Speaker 0: 5:40

So here are a few financial checkpoints that I've stumbled across and, as I mentioned, go to the newsletter if you want these written down. The first one is financial dependency. So, if you're in that position, your reliance on others for financial support, including family and government assistance. The second one is financial survival Living paycheck to paycheck, struggling to cover basic expenses with little to no savings. The third one financial stability. It's your ability to meet living expenses with discretionary income for savings and entertainment, and it's like your beginning of conscious budgeting being intentional. The next one is debt freedom no, non-mortgage debts. What a space to be in. I've never been a person who really likes debt. So more income can be allocated towards savings, investments and financial goals. The next one financial security. So savings and investments cover basic living expenses for a significant period without employment income and a financial safety net is established. Financial independence income from savings and investments suffice to cover all of your living expenses indefinitely without the need for employment. That for me, was a light bulb moment and that for me, is where I desire to be. And when we look at I might cover this later in the newsletter, but I'm going rogue here, going off script but when we think about that. We can either continue to have to increase our investments, so what our return on investments will be to cover a higher cost of living, or or we can bring our cost of living down to meet where we are at and you get to decide what that looks like for you, based on what you or how you want your life to look.

Speaker 0: 7:30

The one after financial independence is financial freedom. Wealth allows for a luxurious lifestyle and the ability to afford high quality experiences and support charitable causes freely. Look, I like the sound of that, but I also personally don't believe I have the know-how, drive and ambition to achieve that. I love too many things outside of work from my training and family life, et cetera to want to do that Now. Having said that, maybe in the future, as I achieve other goals, I'll be like oh, it's possible for me and it's not too far out of reach. So we'll reconsider that as time progresses, but for now, as I'm recording this, that's where I'm at Final one financial abundance Wealth generation exceeds all personal needs and desires, enabling legacy building and significant philanthropic efforts Cool.

Speaker 0: 8:23

So after I found the checkpoints above, I recognized pretty quickly that I didn't need $1 million to live a great life and chances are you don't either. I looked at the list and one specifically jumped out at me, as I mentioned, and that was financial independence. I loved the idea of having my money work for me so that I can have choice. Not because I don't want to work I really enjoy the man that Can project and what I do for work but I wanted to be able to have choice without the financial stress, and I'm sure a lot of you can relate to that. So yours may be different as well, and that's completely fine, but we're all different and the thing is knowing there is no right or wrong. You work to what you want.

Speaker 0: 9:06

Every decision requires a different sacrifice and something that I was thinking about today and this is not in the newsletter, but I was chatting with a client and he was asking okay, well, if I desire financial independence and I have my idea of what that looks like and a rough number how do I then start brainstorming what else could fall into that? And one of the easiest things I thought of was literally getting chat GPT, writing in chat GPT, exactly what you've just thought of. So I would love to achieve financial independence in 10 years time. My current salary is X. I'm looking at some investment opportunities. Could you list some and help me so I can start researching more and speaking to financial advisors, et cetera, but I would love to do this in four hours a week or whatever it may be. Could you please list down 10 to 20 questions that I should start thinking about and answer, and for me, that would be something then that I would take into my daily journaling to start thinking about a little bit more, because the more you think about things, you can see problems that potentially you didn't consider. You may see or provide solutions a lot quicker to those things. So you can fast track your success or maybe give it if you need to. So you must make your decision and be comfortable with the outcome of that decision. So make sure once again you're talking to people about this, speak to people who have those results, read books on it.

Speaker 0: 10:30

There's so much research that goes into obviously making money. That's why a lot of people never do it. But, as I said, a great little tip is just that 15 minutes a day for a sustained period of time. So if you're like I was, you're bound to have some poor beliefs around yourself and money False money. Beliefs can be like I don't have time to make money, I don't have money to invest, I have too many expenses. What if I lose my money? Money will make me evil. They're an example of some. I'm sure you can add to that list If it crosses your mind. You don't have a money problem. You have a mindset problem.

Speaker 0: 11:04

So I want you to read last week's newsletter, which I've linked there as well, for more on overcoming that with your mindset. But to the point of mindset, you must have a growth mindset. This means you believe that you can learn or acquire anything you desire to achieve. The truth is, you won't always have time, you won't always have the money to invest and you will lose money. That's guaranteed. That is why most men remain stuck is because they don't want to fail, and your relationship with failure has to change, because failure provides lessons and feedback in order for you to make continued progress. So if you want a different outcome, you need the different inputs or new inputs, and there's never going to be that perfect time.

Speaker 0: 11:48

So when you view creating wealth with a growth mindset, you understand that the best action is to, yes, start. This will highlight what you actually know about money and what you need to learn. So things you need to differentiate here. And once again on the newsletter, I have a fixed money mindset and a growth money mindset, so I'm not going to read all of them just because I want to be mindful of time, but I'm going to read the top two from the fixed money mindset. I'm going to read the top two from the growth money mindset. So, fixed money mindset scarcity and limitation the belief that there is a finite amount of wealth they can achieve which limits their financial goals. Secondly, avoidance of financial risk due to fear or fear of loss or failure avoiding opportunities. That requires financial risk, even if they offer potential rewards.

Speaker 0: 12:43

Now let's go to growth mindset. So first one see opportunities for abundance, believing in the potential growth and that actions can significantly impact your financial wellbeing. Second, one embrace challenges, viewing financial obstacles as the opportunities to learn and develop stronger money management skills. There is two key differences here and if you don't have a growth mindset, you're going to really struggle to improve any area of your life, not just finances. Working on having a growth mindset, especially with money, opens you up to more opportunity hands down. It doesn't take away the work that will need to be done. It's not as easy as a lot of people are saying on the internet. You have to learn and, depending on where you're, your journey is going to be different for everyone.

Speaker 0: 13:30

But my initial thoughts sorry, my initial thought is can you imagine a life without financial stress? I want you to think about what that would feel like, knowing that you wouldn't have to stress every time a bill came in, and how would that change your life? How would that change your mood and your relationships? It's possible for all of us, but there is a price. Relationships it's possible for all of us, but there is a price. That is why I believe in getting clear on what checkpoint suits you and the life that you want.

Speaker 0: 13:58

As I mentioned before, for me that was financial independence. From there, you can get clear on what the number is to achieve that. So, for example, I've got a little diagram here about financial independence, because annual expenses totaling up all your expenses for the year, the example is $52,000. So therefore, your investments must be returning $52,000 a year so you can live without needing an income. Once you've got an idea of that, you can then go cool. My next step is to research ways to achieve that and from the answers to that question, you're going to provide or create some new questions that you need to once again find answers for. Don't make it complicated. There are books, podcasts, financial advisors who can help set you up the roadmap. From there you will have the action step to move towards your financial goals and I rarely talk about money within the man at Camp project, but it's been something I've been upskilling in for years.

Speaker 0: 14:55

I own an investment property, crypto stocks and two businesses. I have made plenty of mistakes, lost thousands of dollars, but I'm continuing to learn. I know what my financial number is to live a great life, and I have a plan to get there, and so I want to talk about it a little bit more so that those of you who aren't doing that will start thinking about that more as well. I'm going to continue to share what I learned on the journey to taking control of my financial future, because not only has learning to improve my financial life improved my wealth, but it's also starting to improve other areas of my life, because, as I speak about a lot with your mindset, with your health, with your relationships, what you learn there can be transferred into other areas of your life, which is really cool. So some key areas to start learning about are these Number one planning, so budgeting, financial goal setting and risk management. Number two saving, so your emergency fund and short-term goals. Number three investing, asset allocation and compounding. They say the compounding interest is one of the wonders of the world and it's a bloody beautiful thing. So there is.

Speaker 0: 16:09

I guess the key from here for me, for you guys, is to be patient and just invest 15 to 30 minutes a day into learning about everything I've discussed above. Once you start with those initial questions, you can start finding books on specific things or podcasts or people to follow on social media to continue upskilling and asking, I guess finding more information. So there's no reason why you can't take control of your finances. Thanks for listening this week. Make sure you subscribe and if you want to see the charts and ideas that I compile on the weekly newsletter link is there and I'd love to see you subscribe that comes out every Sunday morning, australian Eastern Standard Time.

Speaker 0: 16:47

Some books for you to read, and these are linked once again in the show notes the Psychology of Money, timeless Lessons of Wealth and Greed and Happiness. Then we've got. Sorry, I said the Psychology of Money, I'll put it in there twice Whoops, but the Barefoot Investor. For those of you who are in Australia Rich Dad, poor Dad, some that come to mind so make sure you check those out. They've had a significant impact on my life and I'm sure they will for you. Make sure you hit subscribe, share this if you got value from it. I look forward to you engaging in the comments below. Cheers.