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What happens to your money when you die? · She's On The Money

0:00
Speaker 1: She's on the Money. She's on the Money. Hello, and
0:13
Speaker 1: welcome to She's on the Money, the podcast the Millennials
0:15
Speaker 1: to What Financial Breeding. My name is Georgia King. I'm
0:18
Speaker 1: a copywriter and journalism student with a lots left alone money. Luckily,
0:23
Speaker 1: as always, I'm joined by Millennial Money We's financial advisor
0:26
Speaker 1: Victoria de Band. Hello, Georgia King. Now today on the show,
0:29
Speaker 1: we are going to be talking through exactly what happens
0:32
Speaker 1: to our money when we die. Now it may sound
0:34
Speaker 1: a little morose, but the fact is the world keeps
0:37
Speaker 1: on spinning long after we've left it. So where do
0:40
Speaker 1: our hard earned coppers end up when we're no longer
0:42
Speaker 1: here to control what happens to them? Today we'll be
0:45
Speaker 1: revealing all. But before we get there, Victoria, let's talk
0:48
Speaker 1: money wins and confessions for the week. What have you
0:50
Speaker 1: been up to?
0:50
Speaker 2: Well, I'll tell you my money win in two seconds.
0:53
Speaker 2: But I just like to know do you actually call
0:55
Speaker 2: money coppers?
0:56
Speaker 3: Like?
0:56
Speaker 1: No? I don't you thought that was fun? I have
1:00
Speaker 1: a more creative way of saying money.
1:01
Speaker 2: Fine, I really like it.
1:03
Speaker 4: You did?
1:03
Speaker 3: Well? Ye?
1:04
Speaker 2: Would you like to know my money win or confession?
1:07
Speaker 2: I have a money win for you, which is really
1:10
Speaker 2: exciting because I feel like there was a streak there
1:12
Speaker 2: where I just had confessions, which was not so good.
1:15
Speaker 2: This week, I have a money win related to coffee.
1:18
Speaker 2: I drink a lot of coffee. We could probably both agree,
1:22
Speaker 2: Georgia King, but I'm a bit of a coffee snob.
1:24
Speaker 2: I'm not sorry about that. But I also feel like
1:28
Speaker 2: my bank account might be anyway. My money win is
1:31
Speaker 2: that recently Minor Figures, who I don't know if you
1:34
Speaker 2: guys know, are my favorite oat milk. This is absolutely
1:37
Speaker 2: not sponsored, by the way, I'm just obsessed with them.
1:40
Speaker 2: Minor Figures have recently made their way to Coals, which
1:44
Speaker 2: is very exciting. Not only is their oatmelk available now
1:47
Speaker 2: to purchasing Coals, which sounds really like they literally haven't
1:50
Speaker 2: even sent me free product for me to say this,
1:53
Speaker 2: but I'm really excited about it because it is much
1:55
Speaker 2: cheaper than my local grosser that I have been purchasing
1:57
Speaker 2: Minor Figures at. But the exciting party they also stock
2:01
Speaker 2: the Mind of Figures latte, which is oat milk mixed
2:05
Speaker 2: with coffee cold brew coffee and it is delicious. Really yes,
2:10
Speaker 2: So now in my fridge I have the one leader
2:12
Speaker 2: packet for like five dollars of oat milk glaste that
2:16
Speaker 2: I pour over ice in the mornings instead of walking
2:19
Speaker 2: to the cafe. So, George King, have you got a
2:21
Speaker 2: money win or a confession?
2:22
Speaker 1: For us? It's a money win and I'm really scraping
2:25
Speaker 1: the bottom of the barrel once.
2:26
Speaker 2: I'm feeling more recently you have been really scraping the barrel.
2:30
Speaker 1: Well, there's like there's not a lot going on in
2:33
Speaker 1: G's life. Been spending a lot of time watching free
2:36
Speaker 1: to air television. And that's my money win today, guys,
2:39
Speaker 1: is free to air television.
2:40
Speaker 2: Are you joking?
2:41
Speaker 1: I'm not joking.
2:42
Speaker 2: You weren't joking about the bottom of the barrel? Where
2:45
Speaker 2: are you, Georgia Kie?
2:45
Speaker 1: No, I want to use the platform that we have
2:48
Speaker 1: to give a little shout out to the programs like Mastership.
2:52
Speaker 1: It's over now, but that got me through a very
2:54
Speaker 1: stressful time to.
2:56
Speaker 2: A lot of people through master we stop talking about
3:00
Speaker 2: your unemployed life as well, like I do actually employ you,
3:04
Speaker 2: but okay, it turns out her other part time job.
3:09
Speaker 3: No.
3:09
Speaker 1: So I also wanted to give a shout out to
3:11
Speaker 1: bond I Rescue because that do love it show since
3:14
Speaker 1: like the nineties, that's not true, but my god, it
3:16
Speaker 1: holds up. Guys anyway, It's all there. So forget foxtail,
3:19
Speaker 1: forget Netflix, I forget stan You've got it all right
3:22
Speaker 1: there on your teap. What are money when Georgia Ki,
3:24
Speaker 1: thanks so much. Okay, so that was pretty terrible. But
3:27
Speaker 1: you know who's not terrible, Victoria Facebook. You knew where
3:31
Speaker 1: it was going. Victoria. Which post stood out to you
3:33
Speaker 1: this week?
3:34
Speaker 2: If any so, I have one, As we all know,
3:36
Speaker 2: I do love an alternative milk and so just exactly,
3:41
Speaker 2: and so does Jamie. Jamie has posted money win. McDonald's
3:45
Speaker 2: sell milk, lab arm and milk for three dollars per
3:48
Speaker 2: one liter bottle, and if you guys know, that actually
3:51
Speaker 2: sells for six dollars and ninety eight cents at office
3:55
Speaker 2: works and at any other kind of like supermarket, So
3:58
Speaker 2: that is significant. Obviously McDonald's is making the most of
4:01
Speaker 2: wholesale pricing from them, but this is amazing and you
4:05
Speaker 2: can get it through drive through. So Jamie is now
4:07
Speaker 2: making almond milk iced lattes at home now and saving
4:11
Speaker 2: probably lots of money, given I know they're not that.
4:14
Speaker 1: Cheap through drive for exactly. Well, are we assuming that
4:16
Speaker 1: that is a part of the kind of covid macas
4:19
Speaker 1: setup where they're selling like bread and milk and stuff.
4:22
Speaker 1: I think that's what it would be from I don't
4:24
Speaker 1: think they would have always done that.
4:25
Speaker 2: I didn't know they were selling bread and milk as well,
4:27
Speaker 2: but that's quite fort Yeah. The only thing I buy
4:29
Speaker 2: Macca's drive through is a large fries. Yeah, we're good
4:33
Speaker 2: at that, aren't we, Georgia King, What have you got
4:36
Speaker 2: from our Facebook group?
4:37
Speaker 3: Yes?
4:37
Speaker 1: So mine is from Courtney who has a money win
4:40
Speaker 1: with a couple of bigetts framing that text. So she's
4:44
Speaker 1: written in that on a similar theme to the homemade
4:46
Speaker 1: con butcher post, which I actually mentioned a few episodes ago.
4:50
Speaker 1: She's made her own bread, which I most of Australia's done
4:54
Speaker 1: it at this point, but she's shared the photo and
4:56
Speaker 1: it looks incredible. She's written that when you consider a
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Speaker 1: loaf of quality soured opread will set you back around
5:01
Speaker 1: ten dollars, which is very true. She's considering this a win.
5:04
Speaker 1: She hasn't actually said what she's spending, but I'm assuming
5:07
Speaker 1: you know all you need is yeast, flower water and
5:10
Speaker 1: a good attitude. And you're away. I don't know. I
5:13
Speaker 1: don't know how to make bread. All right? Shall we
5:14
Speaker 1: move along? Yes, absolutely, let's move along all right. So
5:17
Speaker 1: to the main topic of today's show, what happens to
5:19
Speaker 1: our money when we die? So in preparation for today's episode,
5:22
Speaker 1: I asked around my friendship group. So none of them
5:25
Speaker 1: actually have wills or know what happens to their money
5:27
Speaker 1: when they die. But given that death is the one
5:30
Speaker 1: certainty in life, surely this is something we need to
5:32
Speaker 1: be organizing and taking the time to actually think about.
5:34
Speaker 1: Recent stats also show us that slightly over fifty percent
5:37
Speaker 1: of Australian adults don't have a will, despite the fact
5:40
Speaker 1: that one hundred percent of us will die. So, Victoria
5:42
Speaker 1: de Vine, sorry to get a little bit more bit there,
5:44
Speaker 1: but to start us off, can you please give me
5:47
Speaker 1: some sense as to why so many Australians don't yet
5:49
Speaker 1: have wills? Like, is it as simplistic as they're not
5:52
Speaker 1: really caring about their money when they go because they're
5:55
Speaker 1: gone and it doesn't matter, or is there more to
5:57
Speaker 1: it than that? Also, full disclosure, I don't have will,
6:00
Speaker 1: so let's not be too judgmental.
6:02
Speaker 2: Oh my god, don't you Okay, we'll get off this podcast. No,
6:06
Speaker 2: I think that's really interesting. I'm glad that you looked
6:08
Speaker 2: up statistic that one hundred percent of.
6:10
Speaker 1: Us will die. Yes, good research.
6:12
Speaker 2: I actually think this is so important to talk about
6:15
Speaker 2: estate planning, which is what organizing a will is, is
6:18
Speaker 2: something that not enough of us put a priority on
6:21
Speaker 2: when we really should. Now I can completely understand that
6:24
Speaker 2: if you are really young and don't have any assets,
6:28
Speaker 2: it doesn't make a lot of sense to have already
6:29
Speaker 2: gone and organized a will. But I think it's really
6:32
Speaker 2: good to get in the habit of organizing a will
6:34
Speaker 2: when you're young, so that you just updated as things go.
6:37
Speaker 2: I do think it also goes a bit back to
6:39
Speaker 2: psychology as well, Georgia, because no one is prepared to
6:43
Speaker 2: think about the fact that they are going to die.
6:46
Speaker 2: And I'm quite blunt with this. I do talk about
6:48
Speaker 2: death in my job often. Every single client that I have,
6:51
Speaker 2: I have talked about estate planning. I've talked about wills.
6:54
Speaker 2: I've talked about Okay, well, what happens when you die.
6:56
Speaker 2: Let's just be really blunt here. It's not rude to
6:59
Speaker 2: talk about it. Think that we actually need to open
7:02
Speaker 2: the conversation up around this because it's such a tabero topic. Again,
7:06
Speaker 2: much like money, it is something that we need to
7:08
Speaker 2: talk about because we actually need to prioritize it because
7:11
Speaker 2: it is incredibly important, and it actually creates a massive
7:14
Speaker 2: headache further down the track if you don't have one
7:17
Speaker 2: in place, and then you have assets that need to
7:19
Speaker 2: be dispersed and children, potential partners that you've separated from
7:23
Speaker 2: and a new partner like it can get incredibly messy.
7:26
Speaker 2: But a good will and estate plan make that really
7:30
Speaker 2: clear and more practically, Georgia, not many of us actually
7:33
Speaker 2: even know how to establish a will or talk about
7:36
Speaker 2: a state planning. Who do you go to? Where do
7:38
Speaker 2: you go? What do you do? What do you say?
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Speaker 1: We don't know.
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Speaker 2: And then on top of that, I don't know anybody
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Speaker 2: who loves paperwork and the fact that they have to
7:46
Speaker 2: then consider their own mortality. I think the fact that
7:49
Speaker 2: a will is hard is because it's often dismissed. It's
7:52
Speaker 2: popped in the two hard basket instead of taking some initiative,
7:55
Speaker 2: taking some responsibility, and putting it in place.
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Speaker 1: So lots of my gol when I was talking to them,
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Speaker 1: also mentioned that they think they don't have enough money
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Speaker 1: to even worry about a will? Is that something else
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Speaker 1: stopping people from going ahead and doing it.
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Speaker 2: So a will is so much more than just how
8:10
Speaker 2: much money you have. It's about the assets that you have.
8:13
Speaker 2: It's about who gets those assets. It's about you know
8:16
Speaker 2: what you want to happen after you pass away. It
8:19
Speaker 2: can literally be anything from Hey, Victoria, I would really
8:22
Speaker 2: like in my will for it to say that all
8:25
Speaker 2: of my money goes to the Lost Dogs Home. And
8:27
Speaker 2: I've got a client like that, and the Lost Dogs
8:29
Speaker 2: Home is going to benefit significantly when this Burston passes away.
8:33
Speaker 2: But it makes sure that you know, we've put in
8:36
Speaker 2: place all of these values, and you know we've been
8:39
Speaker 2: working towards living by our values. We've outlined them for
8:42
Speaker 2: while we're alive. Why would our values change for the
8:46
Speaker 2: money that we have once we pass away. So for me,
8:50
Speaker 2: it's obviously about going, Okay, well this person gets this,
8:52
Speaker 2: but it's also about what do you want to happen?
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Speaker 2: And I think that that is a really important conversation
8:58
Speaker 2: to have because so many people don't know the power
9:01
Speaker 2: of a will. It's not hey, give all my money
9:03
Speaker 2: to Georgia. It's hey, can you please give my money
9:06
Speaker 2: to Georgia and my other assets to my sister and
9:09
Speaker 2: make sure that Georgie is set up for life in
9:11
Speaker 2: this way. So like in a will, you are actually
9:14
Speaker 2: able to stipulate the structure in which it's held as well.
9:18
Speaker 2: So I might say Georgia can have my money, but
9:20
Speaker 2: she can only have one hundred dollars of it every
9:23
Speaker 2: single year, because that's how I want her to have it,
9:26
Speaker 2: rather than she gets everything and can run a mark.
9:29
Speaker 2: So I think it's really important to talk about it.
9:32
Speaker 2: It's also just remembering that it's not just what's in
9:34
Speaker 2: our bank account. It's also about superannuation. It's also about,
9:38
Speaker 2: you know, the assets that we have might be about
9:40
Speaker 2: our pets, it might be about our children. Like while
9:42
Speaker 2: we are young, you're right, it might not be super
9:45
Speaker 2: important to you, but the second you have any responsibility,
9:48
Speaker 2: it's really important to make this a priority, all righty.
9:51
Speaker 1: So that gives us some context as to why so
9:53
Speaker 1: many people don't have wills. And we will talk about
9:56
Speaker 1: what exactly they are and how we can be creating
9:57
Speaker 1: them soon. But we will talk about wills. It's okay,
10:00
Speaker 1: we will. Before we get there. Where does our money
10:03
Speaker 1: go immediately after we die, Georgia.
10:05
Speaker 2: That depends on whether or not you have a will,
10:08
Speaker 2: as you probably gathered from what I've already spoken about.
10:11
Speaker 2: Technically speaking, a will is a legal instrument that directs
10:14
Speaker 2: how and to whom your estate should be divided. Technically speaking,
10:18
Speaker 2: and in the event that you pass away. If you
10:21
Speaker 2: do pass away and you do have a will in place,
10:23
Speaker 2: your wishes are articulated within that legal document, and the
10:27
Speaker 2: money and assets that you actually have right now will
10:29
Speaker 2: be allocated accordingly from there, and often you'll have a
10:32
Speaker 2: legal representative that helps facilitate that. All of your bits cumulatively,
10:37
Speaker 2: that's a big word. I don't know why I wrote
10:39
Speaker 2: that down, but they are called your estate. So this
10:42
Speaker 2: includes real estate shares, money that you have in a bank, artwork, investments,
10:47
Speaker 2: your engagement ring, jewelry, vehicles, even your Facebook account and
10:51
Speaker 2: your email accounts become a part of your estate. If
10:54
Speaker 2: you do not have a will in place, Georgia. This
10:57
Speaker 2: is where it gets a little bit interesting because most
11:00
Speaker 2: just assume that money just goes to our families. However,
11:03
Speaker 2: that's not actually the case. If you die without a will, though, Georgia,
11:06
Speaker 2: you're classifiers having died intestate. This means assets and possessions
11:11
Speaker 2: are distributed by the government in a specific order. Generally,
11:15
Speaker 2: that order and I've written it down, follows like this,
11:19
Speaker 2: spouses or defactive partners, then children, then grandchildren or great grandchildren,
11:24
Speaker 2: their parents, then siblings, their nephews and nieces, then grandparents,
11:28
Speaker 2: then uncles and aunts, then first connisans, and then after
11:31
Speaker 2: that anyone else that the court may appoint. So that
11:34
Speaker 2: kind of seems like the hierarchy of it all. So
11:37
Speaker 2: once one of the people in that list that I
11:39
Speaker 2: have just read out is living and able to inherit
11:42
Speaker 2: the assets, the entire estate will go to them. Assets
11:46
Speaker 2: can be divided among a wide range of extended family
11:49
Speaker 2: members up to first cousins and Georgia. If there isn't
11:52
Speaker 2: actually any living family members to inherit your estate, then
11:56
Speaker 2: the state, I either government may actually inherit your assets.
12:00
Speaker 2: So I think it's really important to work out what
12:03
Speaker 2: this actually means. And obviously that list that I read
12:05
Speaker 2: out was quite arduous, But if none of those exist
12:09
Speaker 2: for you, your assets might end up going to the state.
12:12
Speaker 2: And I think that that's really important to point out
12:15
Speaker 2: because that's kind of the default, right.
12:16
Speaker 1: Yeah, And I feel like no one would really want
12:19
Speaker 1: that outcome. It just seems a bit like anticlimactic, I guess, yeah.
12:22
Speaker 2: And I just feel like if that is the case
12:25
Speaker 2: for you and that's what you want, sure you can
12:27
Speaker 2: donate to charities and things that are really close to
12:29
Speaker 2: your heart or things that you want to have an
12:31
Speaker 2: impact with. So I think that there's just so many
12:34
Speaker 2: things you could do with it if you don't have
12:35
Speaker 2: a family member or a person that you want to
12:37
Speaker 2: pass it on to.
12:38
Speaker 1: Yeah, So it sounds like wills are definitely the way
12:41
Speaker 1: to go, Victoria. Do you have any experience in actually
12:44
Speaker 1: creating a will? How do we do that?
12:47
Speaker 3: So?
12:47
Speaker 2: I'm a financial advisor, not a solicitor, so I don't
12:49
Speaker 2: actually create wills for my clients at this point. As
12:53
Speaker 2: a financial advisor, though, I do ask my clients if
12:55
Speaker 2: they have a will or an a state plan, and
12:58
Speaker 2: I do help them facilitate that to a point where
13:01
Speaker 2: I help them get to a solicitor, and often I
13:04
Speaker 2: actually will work in collaboration with the solicitor to make
13:07
Speaker 2: sure that the client is completely across their financial affairs
13:10
Speaker 2: and that we can properly articulate their wishes their wishes,
13:14
Speaker 2: because sometimes clients are like, oh, I don't really know
13:16
Speaker 2: what this solicitor actually means by this, and you know
13:18
Speaker 2: what are my options? And often I've had a really
13:21
Speaker 2: good conversation with my clients about wills and estate planning
13:24
Speaker 2: before it gets to there, and then I do actually
13:26
Speaker 2: help a lot of my clients in the estate planning
13:29
Speaker 2: space with distributing income to children and grandchildren, etc. So no,
13:34
Speaker 2: I don't write wills, but do I have a little
13:36
Speaker 2: bit of experience, yes, but would I take me as gospel?
13:38
Speaker 2: Absolutely know. One thing that is really important here though Georgia,
13:42
Speaker 2: is that you do actually need to be overatained to
13:44
Speaker 2: have a will. You need to be an adult, So
13:46
Speaker 2: do our younger listeners. Don't stress, but do listen and
13:49
Speaker 2: have a think about it so that you know what
13:51
Speaker 2: to do when you are of that age. You can
13:54
Speaker 2: create a will in a whole heap of different ways,
13:56
Speaker 2: according to your wealth bracket and the complexity of the
13:58
Speaker 2: assets that you're actually having your name, so you don't
14:01
Speaker 2: always need a lawyer to help write one. I do
14:03
Speaker 2: recommend it though, if you have dependent so if you've
14:06
Speaker 2: got kids. Honestly, the best thing you can do is
14:09
Speaker 2: see a lawyer and have a chat about this. And
14:12
Speaker 2: if you do have a bigger estate, it definitely makes
14:14
Speaker 2: sense to start talking to people about this because it
14:17
Speaker 2: doesn't matter how young you are, the worst things can happen.
14:21
Speaker 2: And I know that that sounds quite dramatic, but I
14:23
Speaker 2: think that we really need to make sure that everything's
14:25
Speaker 2: in line and we are very comfortable with what's going
14:27
Speaker 2: to happen. So first things first, you can totally write
14:30
Speaker 2: a will yourself. You can do it for free. It's
14:32
Speaker 2: super easy to follow an online template. All you need
14:34
Speaker 2: to do is write down your intentions with your finances
14:36
Speaker 2: on a piece of favor and sign it in the
14:38
Speaker 2: presence of two witnesses. I wouldn't recommend this though. It's
14:43
Speaker 2: the bare minimum, like the absolute bare minimum. This is
14:45
Speaker 2: like the thing that you should do. But for the
14:48
Speaker 2: average Joe George, I feel like that's a catchphrase you
14:50
Speaker 2: might use often. And you have a really straightforward a state.
14:54
Speaker 2: It's easy to buy a DIY we all kit. And
14:56
Speaker 2: I know so many people solicitors are going to be
14:59
Speaker 2: listening to this. They're going to jump down my throat
15:01
Speaker 2: and go Victoria will Kitser, the devil. I'm gonna go look,
15:04
Speaker 2: I hear you, but it is better than nothing. So
15:07
Speaker 2: this template, which you can pick up at Australia Post,
15:10
Speaker 2: actually essentially provides you with a template to follow and
15:13
Speaker 2: instructions on how to explain your wishes properly. You still
15:16
Speaker 2: need to sign it on the front with two witnesses.
15:19
Speaker 2: You can buy them online or again through oz Post,
15:22
Speaker 2: but then you submit it and that gets documented. I
15:25
Speaker 2: genuinely think this is a bare minimum. I think it's
15:27
Speaker 2: like thirty five dollars from memory. Don't quote me on that,
15:30
Speaker 2: but I think it's about thirty five dollars to do this.
15:32
Speaker 2: So to me, it's really important. But at the end
15:35
Speaker 2: of the day, I'm talking about people who are in
15:37
Speaker 2: a situation where they are single, had no other partners,
15:41
Speaker 2: and they have no complexity to their financial situation. They
15:45
Speaker 2: have no dependence. If you have dependence, honestly, talk to
15:49
Speaker 2: a solicitor. Get this in place properly, because it is
15:52
Speaker 2: incredibly important. And finally that me leads me into actually
15:57
Speaker 2: talking to a solicitor. If you are dealing with more
15:59
Speaker 2: complex set's hilia to help you out. This could be
16:02
Speaker 2: a specialist estate planner, a solicitor, family lawyer. These experts
16:06
Speaker 2: have a very good idea of what's going on and
16:09
Speaker 2: know the process from A to Z and they can
16:11
Speaker 2: actually act as one of the two required witnesses, which
16:14
Speaker 2: is a bonus. But I think it's really important to
16:16
Speaker 2: just stay yep, cool Whilst I'm advocating four wheel kits
16:20
Speaker 2: and saying that that's a simple way, honestly it's the
16:23
Speaker 2: bare minimum.
16:23
Speaker 3: Okay.
16:24
Speaker 1: Can wills be overridden? I feel like you hear about
16:27
Speaker 1: that sometimes, like say, your great auntie left all of
16:31
Speaker 1: her money to the dogs home, bless but some people
16:35
Speaker 1: might feel they have a claim to that money. Is
16:38
Speaker 1: that something you've seen in your line of work. A
16:40
Speaker 1: will's always set in stone? No, not necessarily so.
16:44
Speaker 2: According to the Australian Government guidelines, a will is valid
16:48
Speaker 2: so long as it is prepared by someone who is
16:50
Speaker 2: over the age of eighteen, is of sound mind, and
16:52
Speaker 2: witnessed by two people who will not inherit from that estate,
16:56
Speaker 2: and a majority of the time the allocations outlined in
16:59
Speaker 2: that will will be upheld. However, there are some occasions
17:03
Speaker 2: where people can contest what is written in a will,
17:06
Speaker 2: and people will go to court and fight for what
17:07
Speaker 2: they believe is owed to them or is theirs, So
17:11
Speaker 2: it's not Honestly, it can get really messy, and it
17:14
Speaker 2: does get really messy, and I have seen it for
17:16
Speaker 2: some of my clients get really hectic. So from clients
17:20
Speaker 2: who have had you know, parents' wills contested all the
17:24
Speaker 2: way through to clients who had a parent who had
17:27
Speaker 2: a large amount of assets that needed to be divided
17:29
Speaker 2: but they didn't have a will in place. They actually
17:33
Speaker 2: needed to go through the Supreme Court, even though there
17:35
Speaker 2: was absolutely no reason to override anything. It was just
17:39
Speaker 2: the Supreme Court making sure that those assets were being
17:42
Speaker 2: inherited by the right people and there was no argument.
17:46
Speaker 2: It was, you know, going to this one daughter who
17:49
Speaker 2: it made a lot of sense. But because there was
17:51
Speaker 2: no will in place, it took more than twelve months
17:53
Speaker 2: through the court system, which is crazy and obviously a
17:56
Speaker 2: lot of paperwork for that person going through that situation,
17:59
Speaker 2: which is arguable an incredibly stressful situation to begin with,
18:02
Speaker 2: because they've just lost a lot of sit It's an
18:04
Speaker 2: emotional time as it is, right one hundred percent, So yes,
18:07
Speaker 2: wills can be argued with, but more often than not,
18:12
Speaker 2: if you've got a really solid will.
18:13
Speaker 1: That's quite hard to do, Okay. What happens to our
18:16
Speaker 1: debts though, Victoria like, do we die with them? Does
18:18
Speaker 1: someone else have to pay for them?
18:20
Speaker 2: Interesting question because remember on our Hex and Help episode
18:23
Speaker 2: we talked about how help debt was the only debt
18:26
Speaker 2: that actually died with you. So backtracking a little bit,
18:29
Speaker 2: so first things first, The first thing that happens once
18:31
Speaker 2: the death has been registered and the bank is notified,
18:34
Speaker 2: et cetera, is that all outstanding debts will actually be
18:38
Speaker 2: paid with whatever money or assets that you currently have.
18:41
Speaker 2: So any debts are paid off with the money in
18:43
Speaker 2: the will, and then the money that is left over
18:46
Speaker 2: in the will will go to the people that is
18:48
Speaker 2: meant to be inherited by. I think this is really
18:51
Speaker 2: important because it means that there could sometimes be absolutely
18:55
Speaker 2: nothing left in the will because it's used to pay
18:57
Speaker 2: off debt, and sometimes they could be debt left over.
19:00
Speaker 1: What happens to our superannuation?
19:02
Speaker 2: So Georgia superannuation is not actually a part of your estate.
19:06
Speaker 2: It's a separate little entity and it's treated as one.
19:09
Speaker 2: So when you pass away, your super will go to
19:13
Speaker 2: your binding death nomination in your superannuation fund, and that
19:17
Speaker 2: could be different to the people who inherit your money
19:20
Speaker 2: in your will. So when someone super is paidd after
19:24
Speaker 2: their death, it's called a death benefit, which consists of
19:27
Speaker 2: the deceased person's super account balance and if they had
19:30
Speaker 2: death cover any insurance benefits that were associated with this.
19:33
Speaker 2: This essentially means that even if the person who has
19:36
Speaker 2: passed away didn't have much in their super, their insurance
19:39
Speaker 2: payment could actually be quite substantial, as in many thousands
19:43
Speaker 2: or even sometimes hundreds of thousands of dollars. So I
19:46
Speaker 2: think it's really important to think about this and also
19:49
Speaker 2: know that these two things are treated very separately.
19:57
Speaker 3: Hi.
19:57
Speaker 1: There, you've breached that ses on the Money mailbox. Money
20:00
Speaker 1: problem you want to help solving? You? Do you have
20:01
Speaker 1: a money Dylan Lama you just want to chat about.
20:04
Speaker 1: Victoria is here to help. Make a quick recording on
20:07
Speaker 1: your phone and send it through to podcast, and she's
20:09
Speaker 1: on money dot comt to you. You might even find
20:11
Speaker 1: yourself on the show. But for now, here's today's listener question.
20:16
Speaker 3: Hello. Hello, A bit of a heavy one, but I'm
20:18
Speaker 3: hoping you can help me out. I've just inherited a
20:21
Speaker 3: bigger amount of money from the passing of my uncle,
20:24
Speaker 3: and now I have thirty K out of nowhere. Feels
20:27
Speaker 3: like real bonus money, as I didn't really expect to
20:30
Speaker 3: be in his will at all. So I'm wondering what
20:33
Speaker 3: you would suggest is the best thing to do with
20:35
Speaker 3: that money. I am twenty nine and I have fifteen
20:39
Speaker 3: K in savings with the long term goal of buying
20:42
Speaker 3: a house. If that helps with some context. Thanks for
20:45
Speaker 3: your help and all you guys do for the community.
20:48
Speaker 1: Alrighty, Victoria kick us off. Where on earth does she
20:51
Speaker 1: begin with all of this inheritance?
20:53
Speaker 2: As much as this is going to feel really foreign
20:55
Speaker 2: to a lot of people, it's actually not that uncommon
20:58
Speaker 2: to receive an inheritance. And as much as it sounds
21:01
Speaker 2: really good and really nice, there's actually a lot of
21:04
Speaker 2: components to this that we need to talk about. No
21:07
Speaker 2: one ever receives an inheritance under positive circumstances. There is
21:11
Speaker 2: always a compromise, and unfortunately, that compromise is the loss
21:16
Speaker 2: of life of somebody else. And I know that I
21:20
Speaker 2: know that whenever I talk to someone who has received
21:22
Speaker 2: an inheritance, they would give all of the money back
21:25
Speaker 2: to have that person back in their lives. So I
21:28
Speaker 2: would love to talk about inheritance in more of a
21:31
Speaker 2: sentimental and legacy way as well as a constructive way,
21:35
Speaker 2: because it's obviously a great opportunity, but it doesn't come
21:38
Speaker 2: without some level of sacrifice, And to me, that really
21:41
Speaker 2: needs to be recognized at the beginning because this is
21:44
Speaker 2: important and I think that too many times people say, oh, Wow,
21:49
Speaker 2: they're so lucky they got a massive inheritance, but they
21:51
Speaker 2: don't see the loss behind that inheritance. And I've got
21:55
Speaker 2: a number of clients who have received inheritances, but I
21:59
Speaker 2: guarantee you they would give it all back in a
22:01
Speaker 2: heartbeat to have their mum or their dad or their
22:03
Speaker 2: grandparents back. So for me, that's really important to just
22:07
Speaker 2: kind of like outline at the start because I think
22:09
Speaker 2: that it's really important. But also Georgia, in the next
22:14
Speaker 2: twenty years, we are going to experience the largest intergenerational
22:20
Speaker 2: wealth transfer in history, which sounds massive because it is
22:24
Speaker 2: because there is an estimated three point five trillion dollars
22:29
Speaker 2: of wealth that will be transferred in Australia, not internationally,
22:33
Speaker 2: in Australia from the baby boomer generation to the generations
22:37
Speaker 2: below it. That is massive and I feel like that's
22:40
Speaker 2: also worthy of recognition, and according to the HSBC's Global
22:45
Speaker 2: Future of Retirement Report, Australians will pass on an average
22:49
Speaker 2: inheritance of five hundred and sixty one thousand, six hundred
22:52
Speaker 2: and thirty six Australian dollars, which is to me massive,
22:57
Speaker 2: and it's something that obviously, you know, on the receiving
23:00
Speaker 2: end of that, that's an opportunity to create wealth. But
23:03
Speaker 2: then it's also something that I don't think a lot
23:06
Speaker 2: of us will ever comprehend because you know, that doesn't
23:09
Speaker 2: mean that every single individual will receive that amount. It's
23:12
Speaker 2: usually divided up among a number of different people and
23:14
Speaker 2: uncles and aunts and cousins and sisters and brothers and
23:17
Speaker 2: all of that. But that's the amount that is actually
23:20
Speaker 2: going to be transferred within the next twenty years. And
23:24
Speaker 2: I think that we really need to start talking more
23:26
Speaker 2: openly about how to have these conversations.
23:29
Speaker 1: Something that we really don't talk about. And I think
23:32
Speaker 1: there's probably a perception out there that inheritance is just
23:35
Speaker 1: like bonus money, like you don't really need to be
23:37
Speaker 1: thinking about what you're doing with it. But I know
23:39
Speaker 1: you're going to say that that's absolutely incorrect, right.
23:42
Speaker 2: Yeah, put that put that opinion in the bin. It's
23:44
Speaker 2: not bonus money. I mean it's something that it's an
23:47
Speaker 2: absolute bonus. It's an absolute blessing to have. But again
23:52
Speaker 2: it doesn't come without some level of loss, and we
23:55
Speaker 2: really need to recognize that. But the first thing you
23:58
Speaker 2: need to do, whether you're inherenting thirty thousand dollars like
24:02
Speaker 2: our listener question, or you're inheriting three hundred thousand dollars,
24:06
Speaker 2: is think clearly, go slowly. If you've had someone in
24:10
Speaker 2: your life pass away, you're not thinking clearly enough to
24:13
Speaker 2: make big decisions. And the best thing in most cases
24:18
Speaker 2: is you don't actually have to make a big decision
24:20
Speaker 2: to begin with. I think it's really important to sit
24:23
Speaker 2: it to the side, get some advice from the right people,
24:27
Speaker 2: understand what you can actually achieve, Understand what your options are,
24:32
Speaker 2: and run like hell Georgia from anybody who says that
24:36
Speaker 2: you need to make a decision really quickly. There is
24:39
Speaker 2: always going to be another opportunity. If a financial advisor,
24:42
Speaker 2: a friend, a family member says, oh, you've got an inheritance,
24:46
Speaker 2: you need to invest it in this as soon as possible. No, no,
24:50
Speaker 2: you absolutely do not.
24:51
Speaker 3: For me.
24:52
Speaker 2: Good investment means that we invest for the long term,
24:56
Speaker 2: not for the short term, and we make a lot
24:59
Speaker 2: of decision but with a lot of education, so we
25:02
Speaker 2: don't have to take it quickly. So if you've received
25:05
Speaker 2: a lump sum of money and you just want it
25:07
Speaker 2: to sit in a savings account with absolutely no interest rate,
25:10
Speaker 2: that's fine. I would obviously recommend a high interest savings
25:13
Speaker 2: account for the short term, but there is absolutely nothing
25:16
Speaker 2: wrong with letting your inheritance sit to the side for
25:19
Speaker 2: a little while while you make a good decision about it.
25:22
Speaker 2: For me, it's also really important to have a think
25:26
Speaker 2: about what you want to do with your inheritance received.
25:28
Speaker 2: I haven't got stats in front of me, but I
25:30
Speaker 2: know for sure that too often people blow their inheritances
25:35
Speaker 2: and they essentially just don't make use of them in
25:37
Speaker 2: the way that they should. So I think it's important
25:40
Speaker 2: to remember where it came from. Someone worked really hard
25:43
Speaker 2: to achieve this wealth and to be able to share
25:46
Speaker 2: that with you and essentially change your life, and it
25:49
Speaker 2: is honoring a massive legacy to essentially put that to
25:52
Speaker 2: work as hard as possible. So keep in mind that
25:56
Speaker 2: you have another level of responsibility. Don't just blow it
25:58
Speaker 2: on something that is not going to essentially provide wealth
26:02
Speaker 2: into the future. I mean, your money, your decision. These
26:05
Speaker 2: are all just my personal opinions, but I think it's
26:08
Speaker 2: really important to not go out and just buy a
26:10
Speaker 2: new car or go out and you know, spend it
26:12
Speaker 2: on a massive holiday. Like I want you to create
26:15
Speaker 2: wealth and I want you to put it towards something
26:17
Speaker 2: that helps you in the future, as opposed to just
26:21
Speaker 2: going all right, well, I got a new car and
26:22
Speaker 2: that's a depreciating asset.
26:24
Speaker 1: So, based on the listener question today, V should she
26:27
Speaker 1: be putting that money towards a house deposit.
26:30
Speaker 2: Absolutely she could. I think what's important to note here,
26:33
Speaker 2: and this is probably more personal opinion, but it is
26:36
Speaker 2: really constructive to understand, is that if you put an
26:39
Speaker 2: inheritance towards a home deposit, yes, it's absolutely going to
26:43
Speaker 2: help you get into a home faster, but essentially that
26:46
Speaker 2: is going to lock you into a mortgage for the
26:48
Speaker 2: next thirty years. So I often see people getting lump
26:52
Speaker 2: sums one hundred thousand dollars, maybe two hundred thousand dollars,
26:55
Speaker 2: and they put that towards their home deposit or that
26:57
Speaker 2: becomes their entire home deposit, then they have a mortgage
27:01
Speaker 2: or payment that they can't really afford, or they're put
27:04
Speaker 2: in a position where they're like, oh, like now I
27:06
Speaker 2: have to, you know, put all of this money into
27:08
Speaker 2: a mortgage that essentially they didn't have or that they
27:12
Speaker 2: didn't want to be paying for yet. So I'm not
27:14
Speaker 2: saying it's a bad idea, but had they invested that
27:17
Speaker 2: one hundred or two hundred thousand dollars or thirty thousand
27:19
Speaker 2: dollars in the case of our listener this week, I
27:22
Speaker 2: think that that puts them in a position where they're
27:24
Speaker 2: creating wealth, but they aren't necessarily having to contribute to
27:29
Speaker 2: that wealth. It's not impacting their future life, it's not
27:32
Speaker 2: impacting their ability to save and achieve goals that they
27:35
Speaker 2: already had. If a home deposit is your goal and
27:38
Speaker 2: it's just essentially turbocharging that, they're okay, no problems. But
27:41
Speaker 2: I recommend in every situation of inheritance that you go
27:45
Speaker 2: and get some solid advice from a financial advisor. Honestly,
27:49
Speaker 2: it'll be worth its weight in gold, because often we
27:53
Speaker 2: don't have the Nolson. We just don't have the financial
27:56
Speaker 2: literacy to know what the best option for us is
27:59
Speaker 2: when it comes to lump sums of cash.
28:01
Speaker 1: As you said before, be as well people who do
28:04
Speaker 1: receive large amounts of money in a lump some can
28:08
Speaker 1: receive a lot of advice from a lot of different
28:10
Speaker 1: people who aren't necessarily the people who should be distributing
28:14
Speaker 1: that advice. So yeah, I would stick to the professionals.
28:18
Speaker 2: One hundred percent. And I think that everybody's got an
28:21
Speaker 2: opinion when it comes to money. And I think that
28:24
Speaker 2: it's really nice that Uncle Jim wants to give you
28:27
Speaker 2: some advice on what to do with your new found inheritance.
28:31
Speaker 2: But take his advice absolutely, be grateful for it. Listen,
28:34
Speaker 2: don't cut someone off and be like, oh, I'm just
28:36
Speaker 2: going to get advice from professionals. Take on the opinions,
28:39
Speaker 2: but know that they're not the only ones that count.
28:42
Speaker 2: Know that you need to put yourself first, and you
28:44
Speaker 2: need to consider whether each option is actually got to
28:47
Speaker 2: suit your personal situation or not.
28:49
Speaker 1: For sure, inheritance is something that you deal with a
28:53
Speaker 1: lot in your line of work.
28:54
Speaker 2: Yes, it's actually something I deal with quite often. I
28:57
Speaker 2: have clients come to me, often for the first time
29:00
Speaker 2: because they have inherited an amount of money that they
29:03
Speaker 2: need some advice on, and for me, I feel really
29:05
Speaker 2: special that I get to be a part of that
29:07
Speaker 2: process of honoring the legacy of someone who has passed away,
29:11
Speaker 2: but also setting you up for future success so that
29:13
Speaker 2: none of it gets wasted. I think around inheritance, there's
29:17
Speaker 2: actually a really large amount of guilt, and I know
29:20
Speaker 2: that if you haven't gotten an inheritance, you might be
29:23
Speaker 2: thinking like, oh, why be guilty, Like it's a nice thing,
29:27
Speaker 2: but it's actually a really big burden for a lot
29:29
Speaker 2: of people. And I think that you need to also
29:32
Speaker 2: speak to someone who understands that and wants to talk
29:35
Speaker 2: that through with you, because one of the best ways
29:38
Speaker 2: to get rid of the guilt that's associated with your
29:41
Speaker 2: inheritance is to understand that that's the thing that the
29:45
Speaker 2: person who's passed or wanted, that's what they wanted to do.
29:48
Speaker 2: They wanted to set you up. And the best way
29:50
Speaker 2: that you can show respect to them and not feel
29:53
Speaker 2: guilty about that is honoring that legacy and live it
29:56
Speaker 2: out and make sure that you're putting it to work
29:58
Speaker 2: and making it work is hard as they worked for it.
30:02
Speaker 2: So for me, it's a really special space to work in.
30:05
Speaker 2: I feel like it's something that I really enjoy doing
30:08
Speaker 2: because I feel like it's really impactful to the people
30:11
Speaker 2: that I end up working with, and it's so diverse
30:14
Speaker 2: as well. Like inheritance isn't always money. It could be
30:18
Speaker 2: an asset like a house, and you then have to
30:21
Speaker 2: make the decision around whether you move into it, whether
30:23
Speaker 2: you rent it out, whether you sell it. It could
30:25
Speaker 2: be shares, it could be other assets like bonds. It
30:29
Speaker 2: could be a collection of cars, It could be anything.
30:33
Speaker 2: So I think that understanding what inheritance actually means and
30:37
Speaker 2: getting some good advice on it is really important.
30:43
Speaker 4: Hi, I'm a twenty nine year old six figure saver
30:45
Speaker 4: and this is my money diary.
30:47
Speaker 1: Now for the pun stuff. What good would a money
30:49
Speaker 1: podcast be without the perby bits? It's time for money diaries.
30:53
Speaker 4: So I guess my attitude to money is healthy and
30:57
Speaker 4: strategically thinking.
30:59
Speaker 1: What is that six figure saver do? How much does
31:01
Speaker 1: she earn and how much is in her bank account?
31:03
Speaker 1: Right now?
31:04
Speaker 4: I'm a librarian. How much I make? It's sister five
31:08
Speaker 4: thousand prandum, but I work part time, so I actually
31:12
Speaker 4: only get paid about fifty grand a year, which equates
31:15
Speaker 4: to about I think fourteen hundred into home bank account
31:18
Speaker 4: in a fortnite, and then how much do I have
31:22
Speaker 4: in my bank account? I have ten thousand dollars in
31:24
Speaker 4: like an emergency fund. I've got a managed fund, like
31:31
Speaker 4: a Vanguard managed shares fund, which is pre COVID was
31:35
Speaker 4: one hundred grand, but host COVID, it's probably sitting at
31:39
Speaker 4: about eighty thousand dollars, I imagine. And there's a few
31:43
Speaker 4: thousand dollars floating around with transaction accounts and other things.
31:47
Speaker 1: So when did our twenty nine year old six figures
31:49
Speaker 1: sab start becoming interested in money?
31:51
Speaker 4: So the reason I first got into money was a
31:54
Speaker 4: book on my dad's bookshelf.
31:56
Speaker 1: It was Noel.
31:57
Speaker 4: Whittaker's Making Money Made Easy, I believe the title was,
32:04
Speaker 4: and I just sat down and started reading it one
32:06
Speaker 4: day and I learned about the magic of compounding interest
32:11
Speaker 4: in that book, which was really cool. And from there
32:14
Speaker 4: I've just continued reading and listening to things and developing
32:19
Speaker 4: my knowledge, as well as talking to my dad, who
32:21
Speaker 4: is quite well informed when it comes to finances.
32:25
Speaker 1: And what happens to her income when she gets paid.
32:28
Speaker 4: I get fourteen hundred dollars a fortnight into my bank account.
32:32
Speaker 4: Before that goes in, I put some money into Super
32:36
Speaker 4: so my salary sacrifice. I think that's about two hundred
32:40
Speaker 4: and eighty dollars a fortnite. I live about fifty percent
32:44
Speaker 4: of my income, so twenty percent goes to a shares
32:50
Speaker 4: portfolio which I've just set up, which is separate from
32:53
Speaker 4: my managed fund.
32:55
Speaker 5: Twenty percent goes to a house savings deposit, and the
32:59
Speaker 5: other is for like fun ledges like buying a man
33:04
Speaker 5: buy or anything like that, going.
33:06
Speaker 1: Traveling, what her thoughts are investing.
33:08
Speaker 4: I have quite aris positive profile as an investor. Being younger,
33:14
Speaker 4: I'm obviously in it for the long term. When I
33:18
Speaker 4: was about it would have been my late teens to
33:21
Speaker 4: early twenties, I set up a Vanguard managed fund account.
33:25
Speaker 4: And I did that because my parents invited me to
33:29
Speaker 4: come along to their financial advisors meeting with them, and
33:34
Speaker 4: the financial advisor let me ask him a few questions
33:37
Speaker 4: at the end, and it was one of the products
33:40
Speaker 4: he recommended. So I did a bit of research after
33:42
Speaker 4: that and got into it.
33:43
Speaker 1: Does she have any debts?
33:44
Speaker 4: No, I've actually never had any debts in my life.
33:48
Speaker 4: I made a deal with my parents that if I
33:50
Speaker 4: paid all my unique fees up front, I could stay
33:53
Speaker 4: home with like rent free, and I did that.
33:56
Speaker 1: What is her big money goal?
33:57
Speaker 4: And my big money goal is to do just in
34:02
Speaker 4: having the freedom to live life well. Money for me
34:06
Speaker 4: is all about enabling opportunities. A good example of this
34:12
Speaker 4: for me was so I've always been a really good saver.
34:15
Speaker 4: So when I was sixteen, there was a little pamphlet
34:19
Speaker 4: I saw in the school news bulletin about a summer
34:22
Speaker 4: exchange to Belgium and Germany, and I was able to
34:27
Speaker 4: go do that. I paid for it myself. My parents
34:29
Speaker 4: didn't give me any money for it cost me about
34:31
Speaker 4: ten grant. I was just able to do it because
34:34
Speaker 4: I can then I had the money.
34:37
Speaker 1: So yeah, it's.
34:38
Speaker 4: Really about providing opportunities for me. Obviously, one day I'd
34:44
Speaker 4: like to own my own house, but I want to
34:46
Speaker 4: move around a little bit more before I settled down.
34:50
Speaker 4: And my dad also retired early. He retired when he
34:54
Speaker 4: was fifty, so I'd like to be able to do something.
34:56
Speaker 1: Like that as well. And what's her best money Habit.
35:00
Speaker 4: Definitely a really good saver. And I'm really good at
35:06
Speaker 4: self awareness and that comes with reflection of how I'm
35:09
Speaker 4: going with my finances, so I regularly reflect and plan
35:14
Speaker 4: and work out if I need to change direction or
35:19
Speaker 4: change what I'm doing in order to reach my goals,
35:24
Speaker 4: whatever they may be.
35:25
Speaker 1: And what is her worst money habit?
35:27
Speaker 4: So my bad money habit is kind of also my
35:30
Speaker 4: good money habit. So growing up I was a bit
35:34
Speaker 4: of a tight ass, but I've certainly worked on that
35:38
Speaker 4: in the last eight to ten years, and I really
35:41
Speaker 4: feel that I've got the right balance of being a
35:45
Speaker 4: saver but also enjoying life and spending money and having
35:50
Speaker 4: a good time and not worrying about if someone owes
35:54
Speaker 4: me ten bucks or not.
35:56
Speaker 1: What would our six be your saver? Great her money habits?
36:00
Speaker 4: Look, I have to give myself an A plus. The
36:04
Speaker 4: only area in which I could probably really improve is
36:10
Speaker 4: my income. So I'm on quite a low wage at
36:16
Speaker 4: the moment, particularly compared with my experience and my skills.
36:20
Speaker 4: So that's one thing I could work on improving. And
36:23
Speaker 4: I also need you, my will.
36:25
Speaker 1: Victoria Devine, Is that not the most perfect money diarist
36:28
Speaker 1: we've ever had in our time here at She's on
36:30
Speaker 1: the money?
36:30
Speaker 2: I think that's a true a class. I'm not sure
36:33
Speaker 2: how we would describe that in any other way, except
36:36
Speaker 2: for the fact that I'm sure that there are a
36:39
Speaker 2: fair few listeners that, after listening to that Money Diary,
36:42
Speaker 2: were slightly annoyed at her for being I guess too perfect,
36:46
Speaker 2: which not a problem, but I can't relate to that
36:50
Speaker 2: if I'm being brutally honest.
36:53
Speaker 1: Well, that's the thing. We don't want people to listen
36:56
Speaker 1: to this and feel like, oh my god, I'll never
36:59
Speaker 1: get there. But I think in what she said, there
37:01
Speaker 1: were so many tips and tricks that we can all
37:04
Speaker 1: pick up on to apply to our own lives so
37:06
Speaker 1: that we can hopefully strive to be where she is currently,
37:09
Speaker 1: which is in a very good spot at a very
37:12
Speaker 1: young age.
37:12
Speaker 3: Right.
37:13
Speaker 2: Absolutely, and I think she's achieved a lot, and congratulations
37:16
Speaker 2: to her, and I think it's definitely worthy of recognition.
37:20
Speaker 2: But I also wanted to point out that this is
37:22
Speaker 2: not the average, This is not what usually happens. But
37:26
Speaker 2: I thought it was something that we really should be
37:29
Speaker 2: having on the podcast because it's totally doable.
37:32
Speaker 1: Like she just.
37:33
Speaker 2: Started early, she's in it for the long term. She
37:36
Speaker 2: was talking about the type of investments she was making
37:38
Speaker 2: and saying that you know, she wants to write it
37:41
Speaker 2: out and potentially retire at fifty like her dad did.
37:44
Speaker 2: For me. That is so awesome because, honestly, it proves
37:48
Speaker 2: that anything is achievable on any salary if you put
37:51
Speaker 2: your mind to it. Like she said, she gets paid
37:54
Speaker 2: what was it, fourteen hundred dollars a fortnight, and for
37:57
Speaker 2: her to be living off half of that and then
37:59
Speaker 2: allocating the other half towards savings and investments and achieving
38:03
Speaker 2: her goals, that, honestly, it's awesome to see and she's
38:07
Speaker 2: absolutely on the right path, and.
38:11
Speaker 1: It is it is so encouraging to see someone that's
38:13
Speaker 1: not earning, you know, six figures and still has that
38:17
Speaker 1: amount in her savings or in her Vanguard account. Can
38:20
Speaker 1: you talk to me a little bit about what that means,
38:23
Speaker 1: because when she mentioned that, I was like, I don't
38:25
Speaker 1: know what you're talking about.
38:27
Speaker 2: So, Georgia Vanguard is a company, and it's not a
38:30
Speaker 2: particular investment. It's actually a company, and they have a
38:34
Speaker 2: number of different investment options. They have index funds, they
38:38
Speaker 2: have ETFs, they have bond index funds, they have lots
38:41
Speaker 2: of different options. What I really liked when she was
38:45
Speaker 2: talking about her investments, though, is that she was saying, look,
38:48
Speaker 2: there was about one hundred grand in there, and then
38:50
Speaker 2: over COVID it's about eighty now. And she didn't seem
38:53
Speaker 2: too phased about that, And I thought that that was
38:55
Speaker 2: really important to note, because that's just how they share
38:59
Speaker 2: my is performing. At the moment we're going through a crisis,
39:03
Speaker 2: it makes sense that her shares would decrease in value,
39:06
Speaker 2: But what that means is that they've decreased in value
39:09
Speaker 2: if she was to sell. It does not mean that
39:12
Speaker 2: she has any less shares than she has before. And
39:15
Speaker 2: as she said, she's still contributing to her shares. She's
39:17
Speaker 2: still putting twenty percent of her income each and every
39:20
Speaker 2: single fortnite into her shares. And I think that that's
39:23
Speaker 2: important because that's how she is creating wealth. That's how
39:26
Speaker 2: she is compounding interest. For me, that makes a whole
39:29
Speaker 2: heap of sense and is something that a smart investor
39:32
Speaker 2: does and.
39:33
Speaker 1: Just a little refresher for maybe new listeners or people
39:38
Speaker 1: like me who have just forgotten compounding interests. What is that?
39:43
Speaker 1: So for me?
39:43
Speaker 2: Georgia, Compound interest is where the interest is paid at
39:46
Speaker 2: regular intervals that build on top of earlier interest paid,
39:50
Speaker 2: So it essentially means that the money that your money
39:52
Speaker 2: makes then starts making you money, and those things increase.
39:56
Speaker 2: And we've all heard this example from me before because
39:59
Speaker 2: I feel like a broken record when I say it,
40:01
Speaker 2: but I want to drill it into all of your
40:03
Speaker 2: heads because it makes sense, and to me, this is
40:06
Speaker 2: one of the simplest ways to understand it is if
40:09
Speaker 2: you started investing at the age of twenty one, and
40:12
Speaker 2: from the sounds of it, our money diarist this week
40:15
Speaker 2: was actually investing way before that, you would have by
40:19
Speaker 2: the time you reach retirement age, saved about two hundred
40:24
Speaker 2: and forty thousand dollars, which sounds really exciting. That's a
40:28
Speaker 2: very big number to begin with. But had you invested
40:31
Speaker 2: it in the share market with an average return of
40:33
Speaker 2: about seven point five percent, including compound interest, that means
40:37
Speaker 2: that the interest earned each year gets added to your
40:41
Speaker 2: sum that is invested each year, you would actually have
40:44
Speaker 2: an investment portfolio worth about one point two million dollars.
40:49
Speaker 2: And I know you've heard this before, but to me,
40:51
Speaker 2: that is incredibly important to understand because that is the
40:54
Speaker 2: power of compounding interest. Whereas if you saved every single
40:59
Speaker 2: year in stace dead of investing and getting a compounding return,
41:03
Speaker 2: you would actually only have two hundred and forty thousand dollars.
41:06
Speaker 2: So that is a massive difference between just saving or
41:09
Speaker 2: investing for the long term. Does that make sense?
41:12
Speaker 1: Yeah, no, it does. And I think that this story
41:14
Speaker 1: is pretty much the perfect example of just being sensible
41:18
Speaker 1: with your investing. And that's why she does have that
41:21
Speaker 1: massive amount in her investments is because of the compound
41:25
Speaker 1: right absolutely.
41:26
Speaker 2: And I'm sure she's contributed a lot, Like she's twenty nine,
41:29
Speaker 2: and if she's been investing for the last ten issues,
41:32
Speaker 2: like if she started at nineteen, then it makes sense
41:35
Speaker 2: that her savings or her investment would be at that level.
41:38
Speaker 2: And she said that she was investing about twenty percent
41:41
Speaker 2: of her income each and every single fortnite. That means
41:44
Speaker 2: that every fortnight she's putting that two hundred and eighty
41:46
Speaker 2: dollars into her share portfolio, she's already got one hundred grand.
41:50
Speaker 2: If her annual interest rate is sitting at about seven
41:52
Speaker 2: and a half percent, which as we know is the
41:55
Speaker 2: Australian average, and she's investing until retirement, so thirty years away, Georgia,
42:00
Speaker 2: that means that in the future she will have a
42:03
Speaker 2: total investment portfolio worth one point seventy five million dollars.
42:09
Speaker 2: That's pretty attractive, I think.
42:11
Speaker 1: And I think that's soolute to me.
42:13
Speaker 2: That's where the power of compounding interest is because if
42:16
Speaker 2: we look at it in even more depth, over this
42:20
Speaker 2: period of time, she's obviously put in or she's obviously
42:23
Speaker 2: already got one hundred thousand dollars, her regular deposits from
42:27
Speaker 2: here on in will be about two hundred and eighteen
42:29
Speaker 2: thousand dollars, which means her investment is going to make
42:34
Speaker 2: her one point four million dollars. That is one point
42:37
Speaker 2: four million dollars that her money is making her. She's
42:40
Speaker 2: not earning that, she's not saving that, it's just because
42:43
Speaker 2: she's exposed to the market for the next thirty years,
42:46
Speaker 2: she is essentially making free money. Like I shouldn't be
42:50
Speaker 2: referring to it as free money because it is earned
42:52
Speaker 2: and you are investing for the long term, et cetera,
42:54
Speaker 2: et cetera. But that is one point four million dollars
42:58
Speaker 2: that she didn't have to go to work and earn,
43:00
Speaker 2: and I think that that is incredible. But it's also
43:02
Speaker 2: why I'm so passionate about investing early and investing for
43:05
Speaker 2: the long term.
43:06
Speaker 1: I think we can probably wrap it there V because
43:09
Speaker 1: we have been talking about this wonderful human for quite
43:11
Speaker 1: some time now. But I think probably the last little
43:15
Speaker 1: note to leave it on would be that she should
43:17
Speaker 1: definitely get around to doing her will. It is our
43:22
Speaker 1: what happens to your money when you die? Episode, so
43:24
Speaker 1: I think that ties him quite perfectly. But apart from that,
43:27
Speaker 1: I think she's good to go.
43:29
Speaker 2: One hundred percent. And I think it's also important to
43:32
Speaker 2: again reiterate this is not the norm. She's incredible. I
43:35
Speaker 2: want to celebrate her. She absolutely deserves to be on
43:38
Speaker 2: the podcast, but I would hate for anyone who is
43:41
Speaker 2: also twenty nine to be listening to this and going,
43:43
Speaker 2: oh my gosh, she's achieved so much more. Well, yes,
43:45
Speaker 2: but we're all in different situations, we're all on different journeys.
43:48
Speaker 2: There's no way that I, who is also a twenty
43:51
Speaker 2: nine year old, has achieved the same thing or had
43:54
Speaker 2: the same type of restraint. I cannot say. And do
43:56
Speaker 2: you know what I wish? I could say that I'd
43:58
Speaker 2: been investing since I turned sick, seen and had my
44:00
Speaker 2: first job, but that's just not the truth and it
44:03
Speaker 2: is just not what I have done. And I think
44:05
Speaker 2: that you know, everyone's a little bit different, but how
44:07
Speaker 2: awesome is it that we are able to learn from
44:09
Speaker 2: her great points?
44:11
Speaker 1: There Victoria as always, but it is time to wrap
44:14
Speaker 1: up the show.
44:15
Speaker 2: Just before we head off, we'd like to acknowledge and
44:17
Speaker 2: pay respect to Australia's Aboriginal and torrest Right Islander people's,
44:21
Speaker 2: the traditional custodians of the lands, waterways and skies across Australia.
44:26
Speaker 2: We thank you for sharing and caring for the land
44:28
Speaker 2: on which we are able to learn. We pay our
44:30
Speaker 2: respects to elders past and present and share our friendship
44:33
Speaker 2: and kindness.
44:34
Speaker 1: Now let's quickly wrap the boring but important stuff. The
44:37
Speaker 1: advice shed on She's on the Money is general in
44:40
Speaker 1: nature and does not consider your individual circumstances. She's on
44:43
Speaker 1: the Money exists purely for educational purposes and should not
44:47
Speaker 1: be relied upon to make an investment or a financial decision.
44:50
Speaker 1: And relaxed. We promised Victoria to mine is an authorized
44:54
Speaker 1: representative of Australia Pacific Trance Management, but prior to limited
44:58
Speaker 1: ab and three four one three two seven ASL three
45:02
Speaker 1: three nine and as always, a big thank you to
45:05
Speaker 1: Ryme John for putting together today's podcast.
45:08
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45:10
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45:13
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45:18
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45:22
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45:30
Speaker 4: It does.
45:31
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45:34
Speaker 2: And that is what we want to do, guys.
45:36
Speaker 1: And sometimes it's just nice to read the nice little reviews,
45:39
Speaker 1: isn't it.
45:39
Speaker 2: It is so nice to read nice reviews.
45:42
Speaker 1: Alrighty, guys, we'll leave it there. We'll see you next Wednesday.
45:44
Speaker 2: See you next week, guys.