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FRIDAY DRINKS: What's going on with inflation? · She's On The Money

0:00
Speaker 1: She's on the Money. She's on the Money.
0:23
Speaker 2: Hello, and welcome to She's on the Money, the podcast
0:26
Speaker 2: for Millennials who want Financial Freedom. Today is Friday, which
0:30
Speaker 2: means it is time to sit back with the girls
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Speaker 2: with a bevo in hand and unpack our favorite moments
0:36
Speaker 2: of the week and of course, to celebrate the amazing
0:40
Speaker 2: She's on the Money community. As always, we're going to
0:43
Speaker 2: be sharing our favorite money wins, we're going to be
0:45
Speaker 2: talking about what's making news in the finance world, and
0:48
Speaker 2: we're going to be helping answer a juicy money question,
0:50
Speaker 2: which this week is all about inflation. But first it is.
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Speaker 3: Time to recap the week that was.
0:57
Speaker 2: Jess Grici talk us through Monday's Money Diary episode.
1:01
Speaker 4: Monday's Money Diarist was an absolute delight, but it was
1:04
Speaker 4: definitely a heavy episode, a little content warning for everyone.
1:08
Speaker 4: We discussed mental illness, specifically eating disorders, and she was
1:13
Speaker 4: very very open and honest and these so were you
1:15
Speaker 4: as well about your past experiences and how that has
1:19
Speaker 4: continued to impact in the way that mental illness so
1:22
Speaker 4: often does. So it was really insightful and inspiring, and
1:26
Speaker 4: we were so grateful that she was prepared to share
1:29
Speaker 4: so much of herself with us, particularly because she said
1:31
Speaker 4: that a lot of her friends and family didn't know
1:34
Speaker 4: that she had gone through this process and these struggles,
1:37
Speaker 4: So for her to be so open and comfortable was
1:40
Speaker 4: incredible on a podcast yeah to so many people, which
1:44
Speaker 4: was really really inspiring. And she's just kicking dreams, she
1:47
Speaker 4: started her own business, she studied, she's done it all.
1:50
Speaker 4: It was a really really fantastic episode, and if you're
1:53
Speaker 4: in a place where you can hear that kind of content,
1:56
Speaker 4: I would highly recommend a listen.
1:57
Speaker 2: Honestly, it was incredible and Jess the thing. Obviously, all
2:01
Speaker 2: of our money dirests are engaging and we're so excited
2:04
Speaker 2: to talk to them, but I feel like this diarist
2:07
Speaker 2: was on another level. She came with practically an essay.
2:11
Speaker 2: She's like, I've written out my money story.
2:13
Speaker 3: I'm ready.
2:13
Speaker 2: I don't even need you guys to ask me the questions.
2:16
Speaker 2: I've got them all written down and I have responded
2:18
Speaker 2: to them. And I was like, oh no, like thinking
2:20
Speaker 2: that maybe should sound superscripted, but oh my god, this
2:25
Speaker 2: woman was a powerhouse. And to know that she had
2:28
Speaker 2: gone through so much and that it was such a
2:31
Speaker 2: significant part of her life to Jess, being a business
2:34
Speaker 2: owner and having saved up enough money to buy a house.
2:38
Speaker 2: She had one hundred grand in savings. She was only
2:40
Speaker 2: twenty eight, and she felt like she was behind. I
2:43
Speaker 2: was like, girl, you're gonna sling all the way forward.
2:47
Speaker 2: You are on top of this. She was honestly such
2:50
Speaker 2: an inspirational money diarist. Like I say this every week, though,
2:53
Speaker 2: don I. I'm always like, oh, that was my favorite,
2:55
Speaker 2: and then a new one comes.
2:56
Speaker 3: I'm like, no, that's my favorite.
2:58
Speaker 4: I suck so special and so great. But yeah, I
3:02
Speaker 4: definitely felt like we could totally be best friends.
3:05
Speaker 3: I'm pretty sure we are. So there's that.
3:08
Speaker 2: Moving on though, Georgia King, what did we discuss on
3:12
Speaker 2: our Wednesday deep dive.
3:14
Speaker 3: Hello Ladies this week?
3:16
Speaker 5: It was a super juicy topic actually, and it's one
3:19
Speaker 5: that we spoke about a few weeks ago on the
3:21
Speaker 5: podcast very briefly, and that is financial equity in relationships
3:27
Speaker 5: versus financial equality. Yeah, if you're unfamiliar with what that
3:31
Speaker 5: actually means, Basically, equity is what is fair, whereas equality
3:38
Speaker 5: is what's even. So that's kind of like a neat
3:40
Speaker 5: little way of thinking about it. Essentially, it means that
3:42
Speaker 5: the higher income earner in the relationship will perhaps contribute
3:46
Speaker 5: more to the bills, to the rent, to the mortgage,
3:49
Speaker 5: whatever it may be, as compared to what the lower
3:52
Speaker 5: income earner contributes. So it was super interesting. And gosh,
3:57
Speaker 5: I popped a thread in the Facebook group and it's like,
4:01
Speaker 5: it's quite a controversial topic.
4:03
Speaker 3: Oh, it's so spicy.
4:05
Speaker 2: This came off the back of me posting on Instagram,
4:08
Speaker 2: and I feel like over the last few weeks I've
4:10
Speaker 2: been posting, so what would you say obinionated Instagram stories. Yes,
4:14
Speaker 2: and I made a reel on financial inequality and maybe
4:20
Speaker 2: considering splitting bills differently and oof to the amount of
4:23
Speaker 2: men in my dms, guys telling me, oh, women just
4:27
Speaker 2: want to rebride, or she won't work as hard anymore,
4:30
Speaker 2: or oh my gosh, you wouldn't want this if it
4:32
Speaker 2: was flipped to the other.
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Speaker 4: Way, Like why I really present that because those comments
4:37
Speaker 4: just inherently assume that the higher income earner is always men.
4:41
Speaker 4: And if you've listened to can.
4:43
Speaker 3: Tell you this.
4:44
Speaker 4: Yeah, I mean, I know statistically that's the case, but
4:47
Speaker 4: if you listen to the episode where we discussed it
4:49
Speaker 4: Friday Drinks, I think we called it getting the band
4:51
Speaker 4: back together. But I shared that in my relationship currently,
4:53
Speaker 4: I'm the higher income earner.
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Speaker 3: And so a bougie lady.
4:56
Speaker 4: Absolutely, but I think that that mentality as well, of like,
5:00
Speaker 4: even if it is your partner that's earning less, even
5:03
Speaker 4: if the male is the lower income earner, what we're
5:05
Speaker 4: discussing is still absolutely applicable. We're just because you're a woman,
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Speaker 4: you should pay less. We're saying that consider the option
5:13
Speaker 4: of ensuring that everyone's in the best position that they
5:15
Speaker 4: can be.
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Speaker 3: One hundred percent.
5:17
Speaker 2: And I think it's so aligned to the Sheese on
5:20
Speaker 2: the money values as well for us to be talking
5:22
Speaker 2: about this stuff. If we're telling you guys to be
5:24
Speaker 2: open about your income and talk about this more, and
5:27
Speaker 2: then jess and I are on the podcast being like,
5:29
Speaker 2: oh yeah, but like, let's not talk about our personal situations.
5:33
Speaker 2: Like Jess, I saw your TikTok the other day, which
5:36
Speaker 2: you've been going ham.
5:37
Speaker 3: On like become TikTok famous.
5:40
Speaker 2: I know you are, because your content is absolutely pumping
5:44
Speaker 2: out and oh my gosh, the amount of times I
5:47
Speaker 2: snorty laugh at your content. If you guys don't follow
5:50
Speaker 2: jess yet, obviously, Jessica Ricki on TikTok. But you sitting
5:55
Speaker 2: there with your smug little face being like, ha ha ha.
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Speaker 2: My mum said that I wouldn't turn a good job
6:00
Speaker 2: being creative that now I earn six figures making content.
6:03
Speaker 3: I'm like, get a girl one.
6:06
Speaker 4: Celebrate the wins, you know, just dot Ricky on TikTok.
6:09
Speaker 4: If you want to give me a follow, wouldn't be
6:10
Speaker 4: mad about it.
6:11
Speaker 2: But you're like, I'm going viral through on the money.
6:14
Speaker 4: Two thousand percent? What am I here for if I
6:16
Speaker 4: can't write off your coattails?
6:18
Speaker 3: That's that's literally it.
6:20
Speaker 2: We just want to be talking about this, and I
6:22
Speaker 2: think something else to preface, and we talk about this
6:24
Speaker 2: on the episode. This might not be right for you,
6:26
Speaker 2: and that's totally okay. It is just a suggestion, is
6:29
Speaker 2: just a thought. It's not Georgia, you have to do
6:33
Speaker 2: this because equity in your relationship might be completely different.
6:37
Speaker 2: You might not want that, but I really wanted to
6:40
Speaker 2: break down this stereotype. Is maybe the word I want
6:43
Speaker 2: to use, that women have to be fifty to fifty
6:46
Speaker 2: to be independent, and I just don't believe that to
6:49
Speaker 2: be true, Like you aren't a not independent woman because
6:54
Speaker 2: you and your partner have decided to split your bills
6:57
Speaker 2: in a different way, and you're only paying thirty percent
7:00
Speaker 2: of the bills and your partner pays seventy percent because
7:02
Speaker 2: he earns significantly more than you. Like you are still
7:05
Speaker 2: strong and independent and an epic human regardless of how
7:10
Speaker 2: that splits. A strong independent woman stands up for a
7:12
Speaker 2: self and wants equity, not equality. So I think that
7:15
Speaker 2: it is just so important to know the difference because
7:19
Speaker 2: I've been having this conversation for the last few weeks
7:21
Speaker 2: of my DMS people being like, oh, I just thought
7:23
Speaker 2: that if I asked that, I wouldn't be empowered, or
7:26
Speaker 2: I'd be going against feminism, or I'd be you know,
7:29
Speaker 2: maybe not putting my best foot forward. But that's not it,
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Speaker 2: is it.
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Speaker 3: I'm like, no, it's not.
7:34
Speaker 2: We need to be asking for equity in relationships because
7:37
Speaker 2: sometimes your partner is going to earn five times more
7:41
Speaker 2: than you and that's totally okay, but that doesn't mean
7:44
Speaker 2: that you can afford the same lifestyle that they can.
7:47
Speaker 2: And if you turn around and go, you know what,
7:49
Speaker 2: I want to pay fifty percent of everything, well, that
7:52
Speaker 2: means the other person has to make a bit of
7:54
Speaker 2: a lifestyle compromise, and even though they could pay significantly
7:58
Speaker 2: more rent, they don't because they're living within the means
8:00
Speaker 2: of your income. And that's fine too. But yeah, there
8:03
Speaker 2: was a lot of spicy content. If you want to
8:05
Speaker 2: go to my Instagram read the comments.
8:06
Speaker 3: This is a world ride.
8:08
Speaker 4: Am I right in thinking as well? You guys did
8:10
Speaker 4: a little role play action in this episode right to
8:13
Speaker 4: kind of give people some examples of how they could
8:16
Speaker 4: maybe have these conversations if they're not sure how to
8:18
Speaker 4: bring it up.
8:19
Speaker 3: It was interesting. That's a whole new kind of spice.
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Speaker 3: It was different, it was it was unusual.
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Speaker 2: I felt like that was something that was really necessary
8:29
Speaker 2: for this conversation because too often I feel like I
8:33
Speaker 2: say bring it up with your partner and you're like, yeah,
8:36
Speaker 2: but how yeah, or yeah, but my partner says that
8:39
Speaker 2: that's not fair and that he works the same amount
8:41
Speaker 2: of hours as me. You go, okay, But sometimes you
8:45
Speaker 2: just need to hear a little role play. And as
8:48
Speaker 2: someone who has a couple of degrees in psychology, I'm
8:51
Speaker 2: not sure I of a role play. I spent most
8:53
Speaker 2: of our university degree role playing in class, so I
8:57
Speaker 2: was ready.
8:57
Speaker 3: I don't think George was though, Hey, I was in
8:59
Speaker 3: the U twelve drama play You're right.
9:06
Speaker 2: You both as far as thank you, thank you, thank you.
9:10
Speaker 2: But speaking of deserving oscars, Georgia help, but she's on
9:14
Speaker 2: the money community.
9:16
Speaker 3: What are your money wins of the week?
9:18
Speaker 5: Some rippers as usual? Gosh, that thread always pops off,
9:22
Speaker 5: doesn't It's it's a joy, Okay. Our first win today
9:28
Speaker 5: comes from Ashley money Win. I have a full time
9:31
Speaker 5: job and have been thinking about getting a second casual job,
9:34
Speaker 5: just for a couple of nights a week. A local
9:36
Speaker 5: restaurant posted on their Instagram that they were hiring for
9:38
Speaker 5: delivery drivers and front of house staff, so I DMed
9:42
Speaker 5: them and.
9:42
Speaker 3: Started the next day. Oh cool, all.
9:45
Speaker 5: Of that extra money will be going straight into my
9:47
Speaker 5: savings account, and I opened a space ship account. Great
9:50
Speaker 5: time to do it and put a bit of money
9:53
Speaker 5: in there too.
9:54
Speaker 2: Actually, no, George, it is a really good time to
9:56
Speaker 2: do it. It might not be a good time to
9:58
Speaker 2: have previously invested in it because the market's sight off
10:01
Speaker 2: at the moment, but sees the opportunity when the market
10:04
Speaker 2: is low.
10:05
Speaker 5: On you, ash Okay. Next win is from ed She
10:09
Speaker 5: just did her first no spend month, and even with
10:12
Speaker 5: an unplanned motorbike service, she saved nine hundred and fifty
10:15
Speaker 5: dollars from the month before.
10:18
Speaker 3: Impressively, Why oh, I had to really consider that.
10:20
Speaker 2: I'm like, what's a motorbike service? Just that facial like
10:24
Speaker 2: I had no idea. She got her motorbike service, Victoria,
10:28
Speaker 2: I still have COVID brain. You've got to forgive me, honestly.
10:31
Speaker 2: And speaking of no spend months, Jess, I believe you're
10:35
Speaker 2: going to tell us what's going on with frugal feb
10:37
Speaker 2: in a little bit.
10:38
Speaker 4: Absolutely, we have something very fun coming up. I think
10:41
Speaker 4: we're going to chat about that after the break.
10:42
Speaker 3: So we are.
10:43
Speaker 2: Yeah, So I'm just like dropping it so that they
10:46
Speaker 2: nicey yes, yes, thanks George. Back to you.
10:50
Speaker 5: So the next win Gals is from Emily. So she's
10:53
Speaker 5: starting her last semester of UNI, and remember that she
10:56
Speaker 5: needed to buy two textbooks for a subject. Textbooks are
11:02
Speaker 5: so expensive.
11:02
Speaker 2: They're so weik and they're always outdated in like five
11:06
Speaker 2: minutes exact, and they tell you which volume you have
11:08
Speaker 2: to get because like one page might be significantly different.
11:12
Speaker 2: You're like, it's the theory not the same, and like
11:15
Speaker 2: who does their Uni readings. Really, I don't know, don't
11:19
Speaker 2: we all just like skim it or like looking over
11:21
Speaker 2: to our partner that sits next to us and go,
11:23
Speaker 2: did you do the readings?
11:24
Speaker 3: And they say yes, and you're like, thank you. I
11:28
Speaker 3: would do that.
11:30
Speaker 5: So both of the text both the textbooks, we're between
11:34
Speaker 5: one hundred and fifteen dollars and one hundred and forty
11:36
Speaker 5: five dollars brand new, but she managed to score both
11:39
Speaker 5: of them secondhand for one hundred and fifty five dollars,
11:43
Speaker 5: which is just over the price of one so, you know,
11:45
Speaker 5: still expensive but look still expensive.
11:48
Speaker 2: But that's so much money for a textbook for a
11:51
Speaker 2: pile of paper that you's for twelve weeks.
11:54
Speaker 3: Really, I mean that people use them beyond.
11:57
Speaker 2: But hypothetically, if I went to Universe City, I would
12:00
Speaker 2: find ways to hypothetically download them for free and keep
12:05
Speaker 2: them on an iPad. But that's you know, hypothetically, if
12:08
Speaker 2: I went to university.
12:10
Speaker 5: Yeah, not speaking from experience, No, I've got none. The
12:14
Speaker 5: next win is from Ashling. So she picked up eight
12:17
Speaker 5: hundred dollars worth of clothes at the opshop for sixty
12:20
Speaker 5: five dollars.
12:21
Speaker 3: Oh my god, money win?
12:22
Speaker 2: How good's an Opshop money win though you just feel unnecessarily.
12:26
Speaker 3: Entitled about it too.
12:27
Speaker 5: You want to tell people for sure, and the shoes
12:30
Speaker 5: in the money community is the place to do that.
12:32
Speaker 2: I would say, I feel that you do this dress
12:34
Speaker 2: as well. Like when you've had like a good little
12:36
Speaker 2: Deep Pop win, I'll be like, oh, yes, that dress
12:38
Speaker 2: looks so good on you. You're like, oh my god,
12:40
Speaker 2: I got on Deep Hop for twenty bucks.
12:43
Speaker 3: You have to share the prime.
12:44
Speaker 4: You have to be like so cheap.
12:48
Speaker 3: No, I'm all about it.
12:49
Speaker 5: The next win is from Gemma, So money win in progress.
12:53
Speaker 5: I booked myself a little European Kentiqui on a Boxing
12:57
Speaker 5: Day sale and decided that I was going to do
12:59
Speaker 5: all of the optional activities. She worked out that she
13:02
Speaker 5: would need roughly eight hundred dollars to do all of
13:04
Speaker 5: those activities, and as of today, she's sitting at eighty
13:08
Speaker 5: percent of that goal. With my tour not starting until May,
13:12
Speaker 5: I'm excited to see how far I can blow this
13:14
Speaker 5: goal out.
13:15
Speaker 3: Of the water.
13:15
Speaker 2: Oh so, will we please check back in?
13:18
Speaker 5: But is Kentiki euro trips a thing again? When did
13:21
Speaker 5: this happen? Why? Somebody?
13:24
Speaker 4: Oh my god, she's on the money in Europe.
13:27
Speaker 3: She's got the money on tour.
13:29
Speaker 4: I'm just throwing it out there, like, could we could
13:31
Speaker 4: record the podcast seaside from Italy? Right?
13:34
Speaker 2: It actually makes sense because less than one percent of
13:38
Speaker 2: our audience are actually international bustiness. So I just feel
13:42
Speaker 2: like it would be a no brainer to visit them.
13:44
Speaker 3: It's toime to so global. Okay.
13:46
Speaker 5: The next win is from Elie. She uploaded a ton
13:49
Speaker 5: of stuff onto gum Tree during lockdown and genuinely forgot
13:53
Speaker 5: that she had done that, as it's been a while
13:55
Speaker 5: since she's been on there. And then yesterday she got
13:59
Speaker 5: two hundred two dollars in one day from a bunch
14:01
Speaker 5: of people behind stuff.
14:03
Speaker 2: Oh, I was just like randomly like.
14:05
Speaker 3: She justgot that.
14:06
Speaker 2: People were messaging her being like is this still available?
14:10
Speaker 2: Apply to me?
14:11
Speaker 5: Is this like is it just similar eternal messaging place?
14:15
Speaker 2: Yeah, it's like an internal message, but like it sends
14:18
Speaker 2: it to either your phone or your email.
14:20
Speaker 3: Yeah surely. So, like maybe checked one.
14:22
Speaker 4: You just wanted to take the lot.
14:24
Speaker 2: That's the dream, right, That's a good money win, low effort.
14:28
Speaker 2: We like the low effort money wins.
14:30
Speaker 5: Okay, I've got two more wins, gals. Second last one
14:34
Speaker 5: is from Lisa. She hasn't used after pay or PayPal
14:38
Speaker 5: for a fortnight legend. Yeah, we love it. The final
14:43
Speaker 5: one here, ladies, is from Imagen. She is passing it
14:46
Speaker 5: as a money win even though it sucked. She got COVID,
14:49
Speaker 5: didn't we all literally shame. So she missed her friend's
14:54
Speaker 5: hen's weekend, which should have done it on zoom.
14:57
Speaker 2: Honestly, we're recording on zoom. She's right, apparently then very expensive.
15:04
Speaker 5: Yeah, so she missed going to the wineries and she
15:08
Speaker 5: thought that was a good thing because you know, she
15:09
Speaker 5: would have drunker purchased a few too many ones as
15:12
Speaker 5: I did last night, which is when my voice sounds
15:15
Speaker 5: weird today. So apologies everyone, you're not sorry, not at all.
15:19
Speaker 3: Should we go to a break.
15:21
Speaker 2: Let's go to a break before we out Georgia and
15:23
Speaker 2: her drinking habits. All right, we are straight back in,
15:27
Speaker 2: And Jess, I alluded to it before, and by alluded,
15:31
Speaker 2: I mean I flat out set we're going to talk
15:32
Speaker 2: about frugal feb. But you said after the break, and
15:36
Speaker 2: I was like, okay, So it's now after the break, Jess,
15:40
Speaker 2: what are we doing this year for frugal FEB?
15:42
Speaker 3: As a community.
15:42
Speaker 4: Ah, So we did this last year and I absolutely
15:45
Speaker 4: popped off. I think post Chrissy, post New Yark. We're
15:48
Speaker 4: all feeling it in the hip pocket a little bit.
15:51
Speaker 4: So frugal fab as a concept is essentially just kind
15:54
Speaker 4: of pairing back your spending. We've all maybe got a
15:56
Speaker 4: little loose with the cash holder and it's time to
15:59
Speaker 4: kind of reset, get back on top of your budgets.
16:02
Speaker 4: So you would have seen if you're in our Facebook group,
16:05
Speaker 4: if you're not, seartch shees on the money. We did
16:06
Speaker 4: it on Instagram as well, but on the first of
16:10
Speaker 4: February we launched the Frugal feb Challenge. We had some
16:12
Speaker 4: really fun little templates that people could fill out, and
16:15
Speaker 4: the goal is essentially just spend less money. So if
16:18
Speaker 4: you want to go hard, you can cut out discretionary
16:21
Speaker 4: spending all together, none at all.
16:24
Speaker 3: Track it.
16:24
Speaker 4: We recommend tracking everything that you would have spent and
16:27
Speaker 4: putting it in a separate account. So, oh, I'm going
16:29
Speaker 4: to buy a coffee this morning, just kidding, No, I'm not.
16:32
Speaker 4: Four dollars fifty into my savings account, and then at
16:35
Speaker 4: the end of the month you can see all the
16:36
Speaker 4: money that you saved, put it towards something, put it
16:39
Speaker 4: in your savings, put it in your emergency fund, invest it,
16:42
Speaker 4: whatever you want to do. You should have a tidy
16:44
Speaker 4: little sum there. But if you're not wanting to go
16:46
Speaker 4: that hard, totally get it. I'm probably not. Maybe pick
16:50
Speaker 4: like one area to focus on. Maybe you don't want
16:52
Speaker 4: to be spending on takeout, or maybe you don't want
16:55
Speaker 4: to be buying any new clothes. So we've got a
16:57
Speaker 4: few fun little resources that will drop throughout the month
17:00
Speaker 4: on Facebook and Instagram, and we're going to be checking
17:02
Speaker 4: in every Friday to see how you're doing, share your tips,
17:06
Speaker 4: check the dollar amounts you're out, if you want to
17:08
Speaker 4: share it, and just kind of get around each other.
17:09
Speaker 4: I think it'll be a good time.
17:11
Speaker 2: We're also going to be sharing it on the podcast
17:13
Speaker 2: during February, which is going to be super fun. But
17:16
Speaker 2: my favorite part about it is it's super flexible based
17:19
Speaker 2: on your goals. Like Jess was saying, like, it's not, hey,
17:22
Speaker 2: here's one goal that you all have to do. If
17:25
Speaker 2: it's coffee, cool, it's coffee. If it's literally no spending,
17:29
Speaker 2: I think great, But I know I wouldn't be able
17:31
Speaker 2: to stick to it, So I think being really realistic,
17:34
Speaker 2: knowing yourself and knowing your limits. Like, let's just set
17:37
Speaker 2: realistic goals that we know we can achieve that we
17:40
Speaker 2: can then celebrate and reset, because that way it becomes
17:42
Speaker 2: sustainable practice in our lives instead of going, oh, I'm
17:46
Speaker 2: going to go so hard for one month, like it's
17:49
Speaker 2: like a crash diet in one, not going to enjoy
17:52
Speaker 2: it in the slightest two You're going to probably fall
17:55
Speaker 2: off the bandwagon after two weeks because you're not feeling
17:58
Speaker 2: the results yet, and then you'll feel a little bit
18:01
Speaker 2: let down at the end of the month. So let's
18:03
Speaker 2: pick things that we know we can achieve and then
18:06
Speaker 2: prove ourselves later. I just feel like it's such a
18:09
Speaker 2: good idea, and Jess, I'm excited that you're going to
18:11
Speaker 2: do it with the community and that you were like me,
18:13
Speaker 2: this is what we're doing. And I made the cute templates.
18:16
Speaker 2: Like guys, she's made a little bingo chart. I can't
18:19
Speaker 2: it's so cute. I'm gonna cry.
18:21
Speaker 4: I think that'll be coming the week next week because
18:24
Speaker 4: he's going up Friday.
18:25
Speaker 2: So yeah, I know I'm staying there for everybody, but
18:28
Speaker 2: I get to do whatever I want.
18:31
Speaker 3: It's the fun part of being the boss Lady, isn't it.
18:33
Speaker 4: Lol?
18:34
Speaker 5: It is Friday, which means it's time to answer your
18:37
Speaker 5: most burning finance, career and life questions. If you need
18:41
Speaker 5: help untangling a knotty dilemma, no matter how big or small,
18:44
Speaker 5: send us through a voice note to podcast at She's
18:47
Speaker 5: on the Money dot com dotau and we'll help you
18:49
Speaker 5: find the answer you've been searching for. Now, let's take
18:52
Speaker 5: a listen to today's listener question.
18:54
Speaker 6: Hi, She's on the Money. My question is what is
18:57
Speaker 6: all this talk regarding inflation at the moment? I've heard
19:00
Speaker 6: that it's higher than expected, but what does this mean
19:03
Speaker 6: for me? Is someone wanting to purchase their first home
19:05
Speaker 6: this year? Is this something I should be concerned about? Thanks?
19:09
Speaker 3: Victoria and Devine. Is your middle name Anne? No? It's
19:14
Speaker 3: what is it? Mary? No? Is it Maurice?
19:18
Speaker 1: Louise?
19:19
Speaker 2: No?
19:19
Speaker 3: Is it Louise? No?
19:21
Speaker 2: That's my sister's middle name, so okay, it's a good guest.
19:24
Speaker 2: And Anne's actually my mum's middle name, so also good
19:27
Speaker 2: guess You're gonna ask me what street I grew up
19:29
Speaker 2: on and what my first pets name was as well?
19:31
Speaker 2: Is that where we're going with this piece of conversation.
19:34
Speaker 3: Look, I didn't mean to take it to this tangent.
19:36
Speaker 3: Just do you know my middle name? It's not like
19:38
Speaker 3: it's a secret.
19:39
Speaker 2: It's lately on the financial advisor register, like it's sadly
19:43
Speaker 2: not a secret.
19:44
Speaker 3: It's Catherine. Yeah, exactly, please.
19:48
Speaker 4: Because I am basically Victoria.
19:52
Speaker 2: Jess is like, did you actually want her first pets name? Also,
19:57
Speaker 2: do you know her pin?
19:58
Speaker 3: Because you ready number what she's got it all? Yeah,
20:02
Speaker 3: she's got Victoria.
20:03
Speaker 5: Catherine. Talk us through the answer to this question, because
20:07
Speaker 5: what's going on with inflation?
20:08
Speaker 2: Oh my gosh, everybody is being so dramatic about inflation
20:12
Speaker 2: and I'm seeing it all over TikTok, people like it's.
20:14
Speaker 3: Out of control?
20:16
Speaker 2: What this means for you? How this means you're never
20:19
Speaker 2: going to buy property as a millennial, as if it's
20:21
Speaker 2: some joke that millennials somehow can't afford property at the moment.
20:26
Speaker 2: But I think it's a good conversation to have because
20:29
Speaker 2: it seems after COVID and I don't know if you
20:32
Speaker 2: guys are seeing this either, but we didn't used to
20:34
Speaker 2: have conversations like this as a demographic. Wein't used to
20:38
Speaker 2: you know, when the inflation changed, have deep conversations about
20:42
Speaker 2: what this means for us. But now it seems to
20:45
Speaker 2: be the post pandemic. We're having these conversations that are like, oh,
20:48
Speaker 2: inflation increase, what does this mean for us and our
20:51
Speaker 2: you know, our goals and stuff. And I just think
20:52
Speaker 2: it's it's a very cool shift in mindset and conversations
20:57
Speaker 2: that we're having. And I know history, when like the
21:00
Speaker 2: RBA changed interest rates, everyone was like, yeah, interest rates
21:03
Speaker 2: have gone down, like that was pretty much it. We
21:06
Speaker 2: didn't really understand the crux of it. We didn't ask
21:08
Speaker 2: those questions. And now people are like, Bee, what's this mean?
21:11
Speaker 3: Has this work? I don't know. I just get really
21:12
Speaker 3: excited about it.
21:14
Speaker 2: So let's talk about inflation. George and Jess Are you excited?
21:19
Speaker 4: I'm so excited.
21:19
Speaker 3: Tell me what does it mean?
21:20
Speaker 4: All right?
21:21
Speaker 2: So let's backtrack a little bit because I think this
21:23
Speaker 2: is a really good conversation, but I want to make
21:24
Speaker 2: sure everybody else is on the same page. So inflation,
21:28
Speaker 2: to begin with, is actually the definition of it is
21:31
Speaker 2: an increase in the price of goods and services that
21:33
Speaker 2: are typically purchased by households. So we're talking bread and
21:37
Speaker 2: milk and cheese and all of those exciting things, and
21:40
Speaker 2: inflation is actually measured as the rate of change of
21:43
Speaker 2: those prices over a period of time. So if we
21:46
Speaker 2: go back a little bit, you've probably heard me silk
21:48
Speaker 2: about it that fifty cent cones aren't fifty cents anymore,
21:52
Speaker 2: And whenever I talk to my parents about that, they're
21:54
Speaker 2: like Victoria.
21:54
Speaker 3: They used to be like.
21:55
Speaker 2: Twenty cents something. I don't remember that. But essentially, inflation
22:00
Speaker 2: is just how much the cost of things on average
22:03
Speaker 2: grows over time. And it goes back to the theory
22:06
Speaker 2: as well. And this interlinks really well of the concept
22:10
Speaker 2: that a dollar to day is worth more than a
22:13
Speaker 2: dollar tomorrow, and the reason for that is if you
22:17
Speaker 2: purchased it today, it's going to cost you less than
22:20
Speaker 2: what it would in the future. So if we looked
22:23
Speaker 2: at what goods and services cost even in nineteen ninety,
22:27
Speaker 2: so the year before I was born, so like ages ago,
22:31
Speaker 2: thirty one years ago, in fact, goods and services that
22:35
Speaker 2: cost ten bucks then actually in today's dollars would cost
22:40
Speaker 2: two hundred and eight dollars and seventeen cents. And if
22:43
Speaker 2: we went back to twenty ten goods and services that
22:47
Speaker 2: originally cost ten dollars in twenty ten now cost one
22:50
Speaker 2: hundred and twenty.
22:51
Speaker 3: Four dollars fifty six.
22:53
Speaker 2: So I think it's important to understand that before we go.
22:56
Speaker 2: What does that mean for your home buying journey and
22:58
Speaker 2: how that's going to impact you. Summary, goods and services
23:02
Speaker 2: are going to increase in price, and that's why hopefully
23:05
Speaker 2: each and every single year your employers give you pay
23:08
Speaker 2: rises in line with CPI or inflation, which they should be.
23:12
Speaker 2: It's a bare minimum from my perspective, although some employers
23:15
Speaker 2: don't do that, which I just think is borderline bruge.
23:18
Speaker 2: But inflation seems to be making news throughout our community
23:22
Speaker 2: throughout TikTok. Jess, you and I were talking about videos
23:25
Speaker 2: we'd sen on TikTok and Instagram recently about energy inflation
23:29
Speaker 2: and food inflation, and fuel has been inflating recently, Like, guys,
23:33
Speaker 2: do you put petrol in your cars? Is it more
23:35
Speaker 2: expensive at the moment? Yes, it's cooked from my perspective,
23:41
Speaker 2: but essentially the cost of things is increasing and rising
23:45
Speaker 2: and it's very likely that it is going to stay there.
23:48
Speaker 2: So when it comes to what's going on in Australia,
23:50
Speaker 2: because I feel like lots of these videos are very American.
23:53
Speaker 2: According to the most commonly used measure of inflation in Australia,
23:57
Speaker 2: because there's a few, the Consumer Price Index, which over
24:00
Speaker 2: two before is CPI. Inflation increased by zero point eight
24:05
Speaker 2: percent in the July to September quarter, so the third
24:08
Speaker 2: quarter of last year, and it increased three percent over
24:12
Speaker 2: the twelve months all the way up until September twenty
24:14
Speaker 2: twenty one. So interestingly, that has obviously increased relatively significantly.
24:21
Speaker 2: That was actually not what people were predicting. We were
24:24
Speaker 2: expecting it to be much lower than that. So I
24:26
Speaker 2: think that because it was three percent, people like, what
24:28
Speaker 2: does that mean for interest rates? What does that mean
24:30
Speaker 2: for me? And there are actually two main reasons inflation happens.
24:34
Speaker 2: The first is cost push inflation, and this is where
24:37
Speaker 2: the costs of producing the goods and services go up
24:40
Speaker 2: so that price rises are then passed on to customers. Jess,
24:44
Speaker 2: you are currently talking about building a house, so you
24:46
Speaker 2: would know the conversation around, oh my gosh, house things
24:50
Speaker 2: are so much more expensive, like wood and labor is
24:53
Speaker 2: just so much more expensive at the moment because of
24:56
Speaker 2: the demand and.
24:57
Speaker 4: That lad shortages.
24:58
Speaker 2: Yeah, it's actually really frustrating as somebody who's planning a
25:02
Speaker 2: renovation literally talking to our builders and what we're doing
25:06
Speaker 2: at the moment. He's like, we need to add thirty
25:08
Speaker 2: percent to a budget. So we haven't just added thirty percent.
25:12
Speaker 2: We've actually had to rejig the budget and change what
25:14
Speaker 2: we're doing and change quality of a few things so
25:16
Speaker 2: that the increased costs of goods and like wood and
25:19
Speaker 2: stuff that we are having brought in is going to
25:22
Speaker 2: be accounted for. Because I'm like, well, that was our budget, Like,
25:25
Speaker 2: I can't just add thirty percent to a renovation, Like
25:27
Speaker 2: I just don't have that when it's.
25:29
Speaker 4: Already really like expensive exactly, like an extra things.
25:32
Speaker 3: Oh, just an extra thirty percent, babe.
25:34
Speaker 2: This isn't a McDonald's one dollar cone, Like this is
25:38
Speaker 2: like that's a lot of money for us, especially because one,
25:40
Speaker 2: we've been saving for it for so long and I
25:43
Speaker 2: don't want to take out a loan for this renovation anyway.
25:46
Speaker 2: Side thing, the second main reason for inflation is demand
25:50
Speaker 2: pull inflation, and that is when something is so popular
25:53
Speaker 2: that the supplier can't actually meet the demand of it,
25:56
Speaker 2: and then prices go up to reflect that. So yes,
26:01
Speaker 2: a good example is rats recently, and then you remember
26:04
Speaker 2: when face masks were really expensive and hand sanitizer, Like
26:08
Speaker 2: I'm not saying that hand sanitizer is the reason for inflation,
26:11
Speaker 2: but it's really good to understand the basic theories as
26:14
Speaker 2: to why these things happen. So I won't go through
26:17
Speaker 2: like hell it's measured and what that means, because it
26:20
Speaker 2: doesn't actually help you. But when it comes to inflation,
26:23
Speaker 2: to make sure that we're okay, there is a way
26:24
Speaker 2: that it is controlled. So the Reserve Bank of Australia
26:28
Speaker 2: actually has a specific responsibility for low and stable inflation.
26:32
Speaker 2: That's literally their job. They have to make sure that
26:34
Speaker 2: we have full employment and they need to be promoting
26:37
Speaker 2: the general welfare of the Australian people.
26:40
Speaker 3: So like that's their job.
26:41
Speaker 2: If you guys didn't know, because I think a lot
26:43
Speaker 2: of people just assume the RBA's bank, like they just
26:47
Speaker 2: make bank things happen. But they're there to look after
26:50
Speaker 2: us and the government has a set target of two
26:53
Speaker 2: to three percent for inflation on average over time, so
26:57
Speaker 2: it's clearly at the top end of the inflation scale,
27:01
Speaker 2: which is why I think a lot of people like, eh,
27:03
Speaker 2: what does this mean? But what does this mean for
27:07
Speaker 2: your spending? What does this mean for you? As I
27:09
Speaker 2: said before, it will mean an increase in the cost
27:12
Speaker 2: of goods and services that you purchase. The rising prices
27:15
Speaker 2: of goods and services means that unless your income is
27:18
Speaker 2: rising as well, you're just going to find it more
27:20
Speaker 2: difficult to afford things that you would normally buy. So
27:22
Speaker 2: it's not something that you should be super shocked about.
27:25
Speaker 2: But this is why I'm such an advocate of speaking
27:28
Speaker 2: up and talking to your employer and if you didn't
27:31
Speaker 2: get a pay rise in the last twelve months, talking
27:33
Speaker 2: to them about you know what you can do and
27:35
Speaker 2: how that might work. Because at the end of the day,
27:38
Speaker 2: from a personal perspective, this absolutely isn't you know, the
27:41
Speaker 2: legal mandate, it's not enforceable all of that, Like, your
27:44
Speaker 2: employer doesn't legally have to give you a pay rise.
27:48
Speaker 2: But from my perspective, it would only be fair that
27:51
Speaker 2: your salary would increase in line with CPI each year
27:55
Speaker 2: so that you are still able to afford the same
27:58
Speaker 2: lifestyle that you were a foe the years before. So
28:01
Speaker 2: we're not saying, oh, Jess, you need a fifty thousand
28:04
Speaker 2: dollar pay rise because like you need a different lifestyle,
28:07
Speaker 2: Like I want you to be able to purchase bread
28:10
Speaker 2: on your grocery budget because we have made sure that
28:13
Speaker 2: CPI has been taken into consideration with the income you have,
28:16
Speaker 2: so that you're not stripping money from another part of
28:19
Speaker 2: your budget because you have to buy groceries, and over time,
28:23
Speaker 2: those groceries are going to be more expensive. Does that
28:25
Speaker 2: make sense?
28:26
Speaker 3: Is it just one of.
28:27
Speaker 4: Those little sneaky kind of things where I know that
28:29
Speaker 4: we're talking a lot about inflation. It's obviously quite front
28:32
Speaker 4: of mind in the public eye right now, but it's
28:35
Speaker 4: not as if the supermarket's going to turn around on
28:38
Speaker 4: like Tuesday, the first of February and say hey, everybody,
28:43
Speaker 4: everything's going to cost three percent? No, right, is it
28:46
Speaker 4: just those prices will kind of be put up, maybe
28:49
Speaker 4: not everything at once, just here and there. Yeah, and
28:52
Speaker 4: you might not necessarily notice it.
28:54
Speaker 3: Yeah, here and there.
28:55
Speaker 2: I think that we are feeling it a little bit
28:57
Speaker 2: more in small business and things that we're importing from
29:02
Speaker 2: overseas because at the moment, importation is so expensive, so
29:07
Speaker 2: you might have gone and bought you know, I'm looking
29:10
Speaker 2: at leggings at the moment. As you guys know, you
29:12
Speaker 2: might have gone and bought leggings for one hundred and
29:14
Speaker 2: twenty bucks and now they're one hundred and twenty five
29:16
Speaker 2: dollars because the company's just making sure that the cost
29:20
Speaker 2: of their services and you know, getting that product into
29:23
Speaker 2: your hands has been taken into account with how much
29:25
Speaker 2: you're paying for it, So costs over time are going up.
29:28
Speaker 2: I'm saying, lots of small businesses go, hey, cool, like
29:30
Speaker 2: it's more expensive for me to do the use makes sense.
29:33
Speaker 2: It's all very fair in the world of love and war.
29:35
Speaker 2: But at the end of the day, that's why I'm
29:36
Speaker 2: such a positive advocate of talking about your salary and
29:39
Speaker 2: making sure that you're talking to your employer about consistently
29:42
Speaker 2: having pay rises every year. We're not saying that you
29:45
Speaker 2: need massive bumps, but it should be in line from
29:48
Speaker 2: my perspective with CPI. But to get to the goods,
29:51
Speaker 2: to get to the question that you know, this question
29:53
Speaker 2: is actually asking. This obviously is about a few things, right.
29:57
Speaker 2: So loans, the reserve bank, this is actually their realm,
30:01
Speaker 2: and the reserve bank they set the interest rate, right,
30:04
Speaker 2: So they set the interest rate that the banks then
30:06
Speaker 2: adopt and then you can get loans for and that
30:10
Speaker 2: is the primary tool that they use to control inflation.
30:14
Speaker 2: As inflation goes up, the Reserve Bank tend to be
30:16
Speaker 2: a little bit more willing to raise interest rates. Meaning mortgages,
30:21
Speaker 2: personal loans, credit cards, they're all going to become more expensive.
30:26
Speaker 2: But given we have just come out of COVID, I'd
30:29
Speaker 2: be very apprehensive to think that the government would actually
30:32
Speaker 2: allow the RBA to increase interest rates dramatically quickly, given
30:38
Speaker 2: how much financial disadvantage the entire country has been through recently,
30:42
Speaker 2: Like that would just put us into a bigger hole.
30:44
Speaker 2: More people couldn't afford their mortgages, more people couldn't afford
30:47
Speaker 2: their personal loans, they'd be in far more debt. Like
30:49
Speaker 2: it's not a positive thing from my perspective to put
30:52
Speaker 2: the interest rates up. But in saying that, that's why, Guys,
30:55
Speaker 2: when you go to see a mortgage broker, and Jess
30:58
Speaker 2: I keep referring to you, you're going through this process
31:01
Speaker 2: at the moment, it's very exciting. They don't just assess
31:04
Speaker 2: you for that two percent that that mortgage is going
31:06
Speaker 2: to cost you each year at this current rate, right,
31:09
Speaker 2: They actually assess you for double or even triple to
31:12
Speaker 2: make sure that if interest rates go up, you're still
31:15
Speaker 2: going to be able to afford it, because bank doesn't
31:17
Speaker 2: want to take the risk of being like, all right, Jess,
31:19
Speaker 2: no problems, come in, sit down, We're going to give
31:22
Speaker 2: you a mortgage. It's right at the top end of
31:24
Speaker 2: what you can afford. But if interest rates go up,
31:27
Speaker 2: you're kind of screwed. You won't be able to afford it.
31:29
Speaker 2: So banks actually cover their own butts by assessing Jess
31:33
Speaker 2: as paying a higher interest rate. So it's not something
31:36
Speaker 2: that hasn't been not taken into consideration. But at the
31:39
Speaker 2: end of the day, if you've been calculating mortgage or
31:41
Speaker 2: payments and doing your budget like, it's a it's pretty
31:43
Speaker 2: shitstick to be dealt, right, Like you don't want someone
31:46
Speaker 2: to turn around and be like, oh my gosh, now
31:48
Speaker 2: it's so much more expensive. We don't want to be surprised.
31:51
Speaker 2: But that is what a rising inflation rate means for
31:54
Speaker 2: your loan.
31:55
Speaker 4: Yeah, I think for again, like speaking from current recent
31:58
Speaker 4: personal experiences, I was assessed at around six percent.
32:02
Speaker 3: I think is my pretty standard.
32:05
Speaker 4: Yeah, I guess I would just say to this listener
32:06
Speaker 4: and anyone else who's in the same boat as me,
32:09
Speaker 4: who is looking at buying or building and is probably
32:12
Speaker 4: on the Money Smart website every day looking at that calculator,
32:15
Speaker 4: figuring out what you can afford, how much, how that
32:18
Speaker 4: works into your budget. I would say to plug those
32:20
Speaker 4: numbers in at a significantly higher interest rate than what's
32:24
Speaker 4: going around now, and then what you would qualify for
32:26
Speaker 4: six or seven percent was kind of the benchmark we
32:28
Speaker 4: were looking at, And to be honest, I would say
32:31
Speaker 4: kind of overinflate it rather than underinflated, because you'd rather
32:34
Speaker 4: be overprepared than taken by.
32:36
Speaker 3: Surprise, exactly.
32:37
Speaker 2: And that's why Jess apologies for throwing you under the
32:40
Speaker 2: bus there, but it's really relevant and you're going through
32:43
Speaker 2: that at the moment, and it's not something that I
32:46
Speaker 2: think a lot of people think of when they're like,
32:48
Speaker 2: but I have the deposit, Like, okay, but we're actually
32:51
Speaker 2: going to assess you at a higher interest rate than
32:53
Speaker 2: what you're going to expect to pay. And the reason
32:56
Speaker 2: for that is to protect you and to protect the bank,
32:58
Speaker 2: to make sure that if this happens and inflation does
33:02
Speaker 2: go up, you're protected and everybody is safe and okay,
33:05
Speaker 2: because in the US, you know, during the global financial crisis,
33:08
Speaker 2: things change, people can't afford it. We don't want to
33:11
Speaker 2: see something similar to that happen in saying that not
33:14
Speaker 2: everyone's looking for a loan. So what does that mean
33:16
Speaker 2: for your savings? What does it mean for your investments?
33:19
Speaker 2: So first things first, if your savings do not grow,
33:22
Speaker 2: and this is going to be a little bit of
33:23
Speaker 2: a rude shock, if your savings aren't growing at the
33:27
Speaker 2: rate that is at least equal to inflation, your wealth
33:30
Speaker 2: is shrinking, which is not nice to hear because just George,
33:37
Speaker 2: are your savings returning three percent in the moment?
33:40
Speaker 3: I wish?
33:40
Speaker 2: Yeah, I know, right, So for example, inflation is now
33:44
Speaker 2: literally running at three percent, but cash in I guess
33:47
Speaker 2: a current bank account, in a high interest savings account
33:50
Speaker 2: is on average earning zero point one percent. Like, we
33:55
Speaker 2: are not getting ahead and its value is being really
33:58
Speaker 2: eroded with every day that is passing. And I don't
34:00
Speaker 2: need to be super dramatic, but that's what is happening.
34:03
Speaker 2: And a lot of people are like, yeah, but I'm
34:04
Speaker 2: sitting on cash and I'm fine. But you know how
34:07
Speaker 2: we're talking before about the inflation of goods and services
34:10
Speaker 2: that cost ten dollars in twenty ten. Ten dollars in
34:13
Speaker 2: twenty ten today is going to cost you one hundred
34:16
Speaker 2: and twenty four dollars. So this is really important to
34:18
Speaker 2: take into consideration when we're doing things like projecting for retirement,
34:23
Speaker 2: projecting for future investments. We need to take into consideration
34:28
Speaker 2: the present value of a dollar because what we can
34:30
Speaker 2: buy today, like if we go down to the shops
34:33
Speaker 2: and a loaf of bread is four dollars, in the future,
34:36
Speaker 2: that loaf of bread is not going to be four dollars.
34:39
Speaker 2: It might be eight dollars. And if I say, heys,
34:42
Speaker 2: how much do you think you'll need in retirement?
34:43
Speaker 3: You go, oh, gin know what?
34:45
Speaker 2: Like if I own my house out right and I
34:46
Speaker 2: don't need too much, do you know what? Sixty grand
34:49
Speaker 2: a year would be more than sufficient because my groceries
34:52
Speaker 2: cost one hundred dollars a week, and this costs this
34:55
Speaker 2: a week, and you go through your budget, Well, groceries
34:58
Speaker 2: might today cost you one hundred dollars a week, but
35:00
Speaker 2: with inflation in the future, that's going to be a
35:02
Speaker 2: lot more. So we need to take inflation into consideration
35:05
Speaker 2: when we are talking about investments, because if we don't
35:08
Speaker 2: and we project it out and go, wow, I could
35:10
Speaker 2: have a million dollars in thirty years, what is that
35:13
Speaker 2: million dollars actually going to buy you? And is that
35:15
Speaker 2: sufficient to provide the lifestyle that you want to have
35:18
Speaker 2: or want to maintain. So important to talk about because hypothetically,
35:22
Speaker 2: if you had ten dollars ten years ago, if you
35:25
Speaker 2: had invested that, it should have doubled, so that money
35:29
Speaker 2: over a ten year period of time instead of costing
35:32
Speaker 2: you money. If it was invested, instead of just sitting
35:35
Speaker 2: in cash, it means that you would have more than
35:37
Speaker 2: you had to begin with. So I think it's important
35:40
Speaker 2: to think about that and what that actually means because
35:42
Speaker 2: a lot of people think that they're doing the best
35:44
Speaker 2: possible thing for themselves when they just hold a whole
35:47
Speaker 2: heave of cash in their savings account. But one hundred
35:50
Speaker 2: dollars today is actually worth less than one hundred dollars
35:53
Speaker 2: tomorrow based on current CPI and current inflation rates. What
35:57
Speaker 2: does that mean for your investments?
35:59
Speaker 3: Though?
35:59
Speaker 2: Because a lot of at the moment, guys and you
36:01
Speaker 2: would see this in the Shoes on the Money community
36:03
Speaker 2: messaging us going what's going on with spaceship, what's going
36:05
Speaker 2: on with race?
36:06
Speaker 3: What's happening with my investment?
36:08
Speaker 2: And we literally spoke about this on a Friday drinks
36:11
Speaker 2: a couple of weeks ago. But when inflation is rising
36:14
Speaker 2: or it's already high, holding assets like shares or property
36:18
Speaker 2: or even bonds can actually be more attractive than keeping
36:22
Speaker 2: your money in cash, which I alluded to before. But
36:25
Speaker 2: shifts in inflation and in interest rate expectations can also
36:29
Speaker 2: spook us. It can make us a little bit worried
36:31
Speaker 2: as investors, especially as first time investors getting into the market.
36:35
Speaker 2: You're like, oh my gosh, this is so expensive. I
36:36
Speaker 2: don't know if it's the right time, because it does
36:39
Speaker 2: create a little bit of market volatility. And volatility is
36:42
Speaker 2: when the share prices or the price of anything goes
36:45
Speaker 2: up and down over time. And the more volatile and
36:48
Speaker 2: asset is, the more likely it is to kind of
36:50
Speaker 2: look like a wave. It will go up and down
36:52
Speaker 2: over time, and it can just result in unpredictable asset prices.
36:57
Speaker 2: So at the moment, I'm seeing a lot because I
36:59
Speaker 2: followed lots of finance people on Instagram, Guys like I
37:02
Speaker 2: am a hoot at parties, but lots of people like,
37:05
Speaker 2: oh my gosh, the shell market's so volatile at the
37:07
Speaker 2: moment it's going up, it's really unpredictable. Yes, there's a
37:10
Speaker 2: lot going on in the market, and that's why as
37:13
Speaker 2: a financial advisor, I really back a theory of investment
37:17
Speaker 2: that is around dollar cost averaging and making sure we're
37:20
Speaker 2: not trying to time the market, that we are just
37:22
Speaker 2: investing at the times that are right for us and
37:24
Speaker 2: investing consistently over the long term to make sure that
37:27
Speaker 2: we're making the most of the high days and we're
37:29
Speaker 2: making the most of the low days, so on average
37:31
Speaker 2: we have an average return instead of trying to time
37:34
Speaker 2: the market because we cannot time the market because we
37:36
Speaker 2: don't know what's going to happen tomorrow. Like, no one
37:38
Speaker 2: saw this coming. Even the people at the RBA who
37:41
Speaker 2: were predicting interest rates didn't see inflation coming in at
37:46
Speaker 2: the top end of three percent. So I think it's
37:48
Speaker 2: important to remember that this stuff is going to happen,
37:51
Speaker 2: and the best thing you can do for you is
37:53
Speaker 2: to actually just be educated on it and not freak
37:56
Speaker 2: out when things like this happen or not be scared away,
37:59
Speaker 2: because from my perspective, when it comes to purchasing property.
38:02
Speaker 2: There's no such thing as timing the market or when's
38:06
Speaker 2: the right time to buy, because the right time to
38:08
Speaker 2: buy is actually when it is the right time for
38:11
Speaker 2: you to buy based on your financial circumstances. Like Jes,
38:15
Speaker 2: the right time for you to buy isn't when there's
38:17
Speaker 2: low interest rate or you know, when property prices are dropping.
38:21
Speaker 2: It's actually when you've got the funds available to you've
38:24
Speaker 2: got the financial security behind you to get you know,
38:26
Speaker 2: qualified for a good loan. It's when you are mentally ready.
38:29
Speaker 2: It's when you have the time and energy and effort
38:31
Speaker 2: to put into the home buying process and that search.
38:34
Speaker 2: And so I think from my perspective, it's really important
38:38
Speaker 2: to kind of take ourselves out of this and go,
38:41
Speaker 2: is this actually going to affect me in the way
38:43
Speaker 2: that the media seems to be making up that it will.
38:46
Speaker 2: Does that help? Does that answer it? I don't know, George,
38:49
Speaker 2: summarize what I said, because I.
38:51
Speaker 5: Rant I will give you my take on what you
38:53
Speaker 5: just said. So I've been voraciously making notes because there
38:58
Speaker 5: was a lot there. So basically, the impact of inflation
39:01
Speaker 5: on millennials, all of us right now is that the
39:04
Speaker 5: costs of everyday goods and services will increase.
39:08
Speaker 3: That just is what it is.
39:09
Speaker 5: Your oat late is now going to cost five dollars instead.
39:11
Speaker 3: Of four dollars fifty I have noticed that actually in
39:13
Speaker 3: my local cafe. Kind of rude. It's inflation. I get it.
39:17
Speaker 3: If there is more business, though, I'm happy to pay
39:19
Speaker 3: them more.
39:19
Speaker 5: We'll also be able to save less because of the
39:22
Speaker 5: costs of those goods and services. But hopefully our incomes
39:27
Speaker 5: will go up if our bosses help us out. And
39:33
Speaker 5: then from a home buying point of view, the costs
39:37
Speaker 5: of our mortgage will increase because interest rates are increasing.
39:42
Speaker 2: Very likely, but as I said, given the current state
39:45
Speaker 2: of the world, inflation isn't going to just sting us overnight.
39:49
Speaker 2: Like over a period of time, it might increase. And
39:52
Speaker 2: this is where we could have a conversation about fixed
39:55
Speaker 2: versus variable loans. And you know, people often want fixed
39:58
Speaker 2: because they get that certainty of Okay, well, I know,
40:01
Speaker 2: even if inflation impacts and the interest rates go up,
40:04
Speaker 2: I'll still only pay that lower amount for that period
40:07
Speaker 2: of time versus variable, where people like no, if the
40:10
Speaker 2: interest rate goes down, like I want to be able
40:12
Speaker 2: to make use of that. So I think it's interesting
40:14
Speaker 2: to have a look at your loan structure at this
40:16
Speaker 2: point in time too and go, hey, if you can't
40:19
Speaker 2: actually afford to, you know, have any change in your
40:22
Speaker 2: mortgage repayment amount obviously increasing because we all want to
40:26
Speaker 2: pay less, but now would be a really good time
40:29
Speaker 2: to talk to a mortgage broker. Like, if you don't
40:31
Speaker 2: have one and you want to have a chat, hit
40:32
Speaker 2: us up on the Shee's on the Money website and
40:34
Speaker 2: we can match you with a broker that'll work for you.
40:36
Speaker 2: But it's one of those things where you should be
40:38
Speaker 2: having that conversation to make sure you're in the best
40:40
Speaker 2: possible financial position. And even if you talk to a
40:44
Speaker 2: broker and they're like, nah, Jess, you're fine, that just
40:46
Speaker 2: gives you the peace of mind that you're like, no,
40:48
Speaker 2: I checked, I'm okay.
40:49
Speaker 4: Yeah.
40:50
Speaker 2: But I do think that is all we have time
40:52
Speaker 2: for today. So just before we head off, we'd like
40:54
Speaker 2: to acknowledge and pay respect to Australia's Aboriginal and Torres
40:58
Speaker 2: Straight islander people's. They're the traditional custodians of the lands,
41:02
Speaker 2: the waterways and the skies all across Australia.
41:05
Speaker 3: We thank you for sharing at the caring for the
41:07
Speaker 3: land on which we are able to learn.
41:10
Speaker 2: We pay our respects to elders past and present, and
41:13
Speaker 2: we share our friendship and our kindness.
41:15
Speaker 3: See you next week, guys. Bye bye, guys,