She's On The Money - I wanna be a millionaire so freaking bad

Episode Date: December 22, 2020

Think you know what you’d do with one million dollars? Think again. Plus, we discuss why we think of money earned differently to the way we view money won, and we unpack the anxiety often felt when receiving an inheritance. Big show coming your way friends!Victoria is obsessed with it and we think you will be too - download the Get Reminded App for FREE today and start setting reminders that future you is going to thank you for.Love the podcast sick and want more SOTM? We had a feeling that was the case. Join our Facebook page to share your money wins and money confessions, follow us on Insta for daily inspo to keep you on track and absolutely subscribe to our newsletter, the written recap of the pod’s key takeaways, including some bonus bits you won’t want to miss.Finally, if you’re in a money mess and need help untangling the muddle - we’ve got you sorted – simply record your question and send it through to us at [e-mail] and you may just end up on the podcast!Your hosts are Georgia King and Victoria Devine.The advice shared on She’s on The Money is general in nature and does not consider your individual circumstances. She’s on The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. Victoria Devine is an Authorised Representative of Australia Pacific Funds Management Proprietary Limited ABN 34 132 463 257 - AFSL 339151.See omnystudio.com/listener for privacy information.

She's on the money. She's on the money. Hello and welcome to She's on the Money, the podcast for millennials who want financial freedom. My name is Georgia King. I'm a copywriter and journalism student, and each week I sit down to chat all things finance with Melbourne-based money guru, Victoria Devine. Victoria, hello.

Georgia, hello. Hello. Now, today on the show, we're asking one very big question. That is, what would you do with $1 million? Now, we've all fantasized about it. We've bought the lotto tickets. We've applied to be on Eddie McGuire's Who Wants to Be a Millionaire? But when it comes down to it, if you received this massive sum of money,

what on earth would you actually do with it? Is it bad that I've never done either of those things? Or like, sorry to ruin your intro there. You've never bought a lotto ticket? No, nor have I applied to be on Eddie McGuire's Who Wants to Be a Millionaire. We'll be unpacking all of that, plus we'll be hearing from a listener who is unsure about what to do with her inheritance. Before we dive deep, Victoria, money wins and confessions from the week.

I know what you're going to say. Georgia King, I got a dog. I know. So she is literally the most beautiful thing that I've ever seen in my entire life, which is obviously not over-dramatised by any stretch of the imagination. her name is lucy and lucy is nine weeks old and is my money confession this week because of how much money i've spent at kmart on dog toys what are we talking uh look more than i'm willing to admit to because it wasn't just kmart i also went online and then i got a little bit carried away

and found some instagram accounts that had some really fun dog accessories and i grew up with dogs i love dogs i have literally waited my entire life to get a dog if you know me personally you know it is literally all I talk about. The number one thing my partner and I talk about in the mornings on our morning walks together is dogs. I point out every dog that we go past. I'm also on Snapchat with my friends and I pretty much exclusively use it as a dog spotting app and I will take photos of people's dogs and send it to them and be like, hey, number three dog today. You're welcome, friends. Yeah. So I'm a bit dog obsessed and always have been. And now I'm so excited to be in a position where i can actually give the dog of my dreams um the life it deserves

so i'm super excited about her and just super excited about that she's also the official she's on the money office dog because she will be in the office occasionally i don't know how long that'll last though because guys she's gonna get to like 30 kilos at least are they big dogs yeah she's gonna be a big dog what kind of dog is it again she's an old english sheep dog cross poodle thing yeah she's beautiful anyway if you guys obviously just a subtle plug um i made her an instagram account so that's uh lucy the golden sheep a doodle uh for those of you following along at home but uh yeah like that's my money confession slash plug for my dog's instagram i promised myself i wouldn't be that person yet here we are little influencer dog i love that yeah lucy the

influencer stunning it's gonna happen it's gonna happen georgia king have you got a money win or confession for me that could potentially rival a puppy no nothing could rival a puppy doll it is much more uh small scale so recently i discovered this brand called flower makeup brand it's true barry moore's brand quite interesting um anyway i actually can't remember the shade which is going to be frustrating for everyone listening but it's this lovely kind of beige quite neutral toned color and it is delicious anyway big fan it was only ten dollars but i got it half price for five dollars guys so three cheers for george would the color potentially be um spiced petal that's the one that's the one that's the one yeah i have that one too yeah i i have that one it's

the one i keep recommending that you purchase and now you think that you've discovered this lipstick brand all on your own when did you recommend it when you were talking about how you wanted the charlotte tillsbury version of it oh yeah yeah oh my gosh so expensive like months ago georgia king i feel like you are my small sibling who doesn't listen to anything i say and then thinks they've discovered it themselves but that's cool that's cool i'm glad that you've got that money win because it's literally i would argue one of the best dupes for the charlotte tillsbury pillow talk if you guys are into makeup you would know that that is kind of like a cult favorite but it's also only available i think online and overseas yeah and it's also kind of

pricey it's like 45 usd i think it might be oh yeah usd probably yeah it's like an american price but yeah i think that's what it was so it's not cheap but guys flower lipstick is cheap so get that on your flower lipstick yep five bucks chemist warehouse we're not sponsored by them would love to be but oh that'd be good true if you're listening get in touch hun all righty v let's move straight across to the Facebook group. Did any posts stand out to you this week? Oh my gosh yes I have a post this week from our friend Emily who posted money win. Now this one is a long story but also a very beautiful one. In 2015 when she was 19 she met her beautiful husband and a week after they started dating they found out that he was terminally ill. They ended up

getting married which is so cute and had almost two wonderful years together before she lost him in 2017 when she was 21. In that time she stopped work to care for him which honestly is such a beautiful thing to do and it was one of the hardest things that she's ever been through. She was really lost in a very dark place mentally and financially and as you can imagine two years of constant hospital stays and being four hours from her home was extremely pressing financially. So this story is really beautiful because she said you know all of that happened she was living week to week had no savings her parents looked after her which is you know such a beautiful thing to do as well and she said a year and a half later she met her now partner and she's worked really hard to become

mentally and financially stable and now two and a half years after meeting her partner they've just built their first home and I just this story was so beautiful the comments on this were even better I just feel like it is a constant reminder that no matter how bad things can get you can come out of it she said that she had lost all hope and she thought that she'd be you know stuck where she was for the rest of her life but now she's here she's kicking goals and embracing the beautiful things that life has to offer and she just wanted to remind everybody that you should all hang in there and I just think that that was ah this is what our community is about Georgia and these these stories honestly how grateful are we to receive these she took the time to share that

with us and honestly I had a bit of a teary when I read all the comments because everybody was so supportive and congratulating her and just there were so many beautiful comments I have goosebumps um hearing you read that again and I did when I read it myself as well it's just so moving yeah look Emily thank you for sharing that it was really beautiful and she uploaded two really really lovely pictures one of her past partner and one of her current partner and I just think that you know she's honoring both of them in such a great way yeah thanks for sharing Emily Georgia King do you have a money win or confession from the community that you would like to share with us so this is very much a mood shift so mine is a simple little money win uh related to food

and gifting so it's from chloe and she needed gifts for christmas for her personal training clients and she decided to make homemade healthy granola yum it looks incredible so the cost of the eight jars and ribbon that she's used was 15 the cost of the ingredients for the granola was also 15 from aldi little shout out to our mates and the total cost per gift came down to 3.75 and it actually looks delicious doesn't it i love breakfast yet i'm quite interested in stealing some uh but i actually think that looks like such a beautiful granola actually and my favorite part about that was chloe actually gave us the recipe she did she did and what are you going to do with it this week georgie king slap that in the newsletter gals so uh so everybody

Chloe's granola recipe is going to be in our newsletter this week. 100% it is. Now, we'll move on to the main chat today, guys. Before our show today, we asked in the Facebook group what you would do with $1 million. And here is what you had to say. If I won a million dollars, I would buy my mom a house and set her up so she never has to worry about money again. Hey, girls. My name is Erin.

And if I won a million dollars today, I would want to buy a blimp. I don't really know how to justify this outrageous purchase but as far as I know there's only one in the southern hemisphere and there's opportunities for ongoing advertising rights I mean how often do you see a blimp in the sky plus I can sell ride tickets on it too anyway thanks ladies at least enough hungies to roll around in for a photo shoot before I realized I had to kind of be responsible with it. If I won a million dollars first of all I would do nothing and tell nobody probably for like a month and then I would book a financial advisor appointment. I'd probably aim to like keep a hundred thousand dollars for a house deposit because interest rates are quite

low and invest everything else. Now it is a weirdly hard question to answer Vy and I love the variety that we had in that little audio clip from our community there. I think buying a blimp was probably my favorite suggestion even though we realized that they actually cost 40 to 70 million but that's reasonable that one in there so honestly erin go hard or go home yeah and we were saying we could even maybe start a go fund me page and we could all put in for a blimp so another common theme that came up v was buying a house which i feel like makes sense that's pretty seems like a sensible thing to do with a million dollars i'm not gonna lie that's a little bit more achievable than a blimp but yes what were your favorites from uh the suggestions we had in the

facebook group i really liked the vegan um gingerbread house that was life-size i felt like that was really reasonable really realistic i also loved the cars i loved that people wanted to pay off their debt and i also loved that so many of you said that you would share it how kind was that so many people were like oh my gosh i would distribute it among my family give some to charity give some to charity yeah you guys are all epic and i absolutely loved your answers so that was really fun maybe we should get the community involved more send us more voice memos so fun they're the best so sadly though v not all of us are going to win a hot one million dollars out of nowhere nice as it would be what it's not common explain to our listeners

who are at home thinking how on earth is this relevant to me like the girls have lost the plot can you explain why we have decided to dedicate a whole show to this topic look well we have lost the plot it is coming up to christmas but also i felt like this was going to be a super interesting topic. How many times have we all fantasized about winning a million dollars? Or we ask our friends at the dinner table, like, what would you do with a million dollars? Like we've all asked that question once in our lives. But I completely get that this topic might seem a little bit unrelatable. And George, you are bang on. Realistically, not many of us are actually going to win a million dollars. But what I'm really interested in discussing today is two

things. First things first, the psychology around what happens when we do suddenly have a lump sum of money in our hot little hands. And we don't know what to do with that, be that from an inheritance or a mammoth pay rise or winning the lotto. Then secondly, I wanted to talk about what we should be doing with that money. Should we be saving? Should we be investing? Should we be spending it? Should we be sharing it with our friends and family? And I also really want to chat today about why so many people who do win big or end up with huge amounts of money can often end up burning through it so, so quickly. So I get why people might be thinking, what on earth are they thinking? What is this episode about? But I promise you it is going to be a super

interesting chat. And let's start in a very interesting place here. We're going to cut to the million dollar question. What would you, Victoria Devine, financial advisor extraordinaire do with $1 million? Do you save it, spend it or invest it? Do I spend it on dog toys? Like I feel like that's something that I would genuinely do. But if somebody gave me a million dollars today, I would be putting it into my share portfolio because and I've said it before passive income is the thing that I am working towards and passive income from a million dollars if we had a five percent return would mean about fifty thousand dollars a year of passive income and that would be money I didn't have to work for for the rest of my life so a lot of you guys said oh I'd go and

buy a home outright my friends I would not if a home was my goal I would be purchasing a home with the mortgage because at the moment interest rates are really low. We are seeing twos and ones at the start of interest rates now which is crazy and I would use that passive income of $50,000 a year to pay back my mortgage over the long term so that at the end of my mortgage I had a completely paid off house and I still had my million dollars. Okay so that sounds like quite a smart thing to do but the stats show us that a good number of people who win money suddenly do actually burn through it just as quickly. They do. So in one study of lotto winners, 70% of them had spent every last dime of their jackpot within five years of winning. Now, you obviously know a lot about behavioural

psychology, V. Can you explain to us, V, what's going on here and what the key differences are between money earned and money won? Yeah, these stats are not surprising to me, G. I hear about this happening all the time. Not necessarily people who are winning the lotto and then just losing it all, but more people who are inheriting large sums of money and not really having the financial literacy to know what to do with it. This is why I'm so passionate about financial education and why it is so important because even if you do win the lotto or if you have a cozy six-figure salary, that doesn't automatically make you wealthy. Rich on a superficial level, yeah, sure, but genuinely wealthy, no. Of course, if we put a proper plan in place and map out what

we're going to do with that money and set ourselves up for the future and for future you, then you're going to be in a much better place. But ultimately, I think the key reason behind why people are losing their fortunes when they just get them is a lack of education and I wish they had the foresight to see the benefit of meeting with a financial advisor to make sure that that money could set them up for an amazing comfortable life instead of you know living large for five years and then doing absolutely nothing beyond that which is kind of scary. When it comes to money earned I think that most people would agree that it is much harder to part with money that you've actually earned yourself because you've spent time and energy working for it compared to money you

were gifted or if you won when you've had to put the man hours into building these finances you don't necessarily want to just go and blow it all on the weekend whereas if you found a hundred bucks on the ground today george many people would just spend it because it's quote free money or it's a bit of a bonus that they can splurge a little with instead of being like oh this hundred dollars will look really pretty in my micro investing account actually there may be some people in our she's on the money community that would immediately think of that i'm thinking of my friend fiona who is my instagram friend she's the markdown hustle for those of you playing along the home and I guarantee you she would have invested that I know you Fiona I love you Fiona

but I think you get the gist of what I'm trying to say we treat money we are gifted or awarded very differently to the money that we have earned ourselves this perception ends up extending to things like your tax return which people often get very excited about because you guys seem to think that it is free money even though it's money that you've already worked really hard for the government took it from you and now they're giving it back like it is not free money it is money that you've earned and you need to do something with. Won't harp on about that because you best believe I'm going to do an episode on that in the new year, probably closer to tax time though. Just so it's really relevant, kind of hits you in the face and you can't forget it.

Now, this little theory of mine is actually backed up by a few other people. It's not just me saying this, as you guys would probably already know, including an economist called Richard Thaler, who coined the term mental accounting, which refers to the contrasting value we place on the same amount of money. So basically, the theory says that on an individual level, we classify money differently depending on how we've acquired it or what we dedicate it to. Now, our friend Thaler says that the way that we fight against this natural mental accounting is to think of money as fungible, which is very fun to say. So when we say money is fungible, it means that no matter how it is acquired or what we plan to do with it, all money is exactly the same. We can't

think of our tax return as free bonus money. We need to think of it the same way we think of the weeks it might have taken us to earn the same amount. So for me, I think it's just really important to really see the true value of money instead of thinking that some money is free and some money is earned and like that whole thing gets a little bit cloudy. So money is money and that's how we should be dealing with it. Fungible is such a good word. I didn't really know it before today's podcast either. Fungible. It's like spongible. I don't know if that's a word either, to be honest but it's a fun word to say and when i saw it written down i was like oh this is going to be a weird word to say like the word moist yeah don't bring moist into this chat doll okay

sorry friends oh i love it um i actually remember a few years ago when i was on an hourly rate when i worked at the maze uh down on the peninsula a few girls a few of the maze girls are big fans of this podcast and of you vicky d so shout out to the maze girls listening right now my little sister was one of those she was that's how i met um young devo when i worked there i would say i went shopping i would look at a dress and i'd be like oh i really want that but then i'd be like oh no that is like the equivalent to four or five hours at the maze so i'm gonna put it back i don't want it and i just think it's really interesting the way our brain plays kind of tricks on us like that and it catches you out but then other times like if you just found two hundred dollars on the

ground you'd be like oh wow free also like who has ever found two hundred dollars on the ground i don't know can people post in our facebook group the most amount of money they've ever found but also what did you do with it like at what point are you meant to hand it in to someone i don't know like five bucks cool that's a free coffee for you hey look that's me using that oh i'm not fungible at all but also if you found five bucks like i get it i have that same mentality we're talking about it do as i say not as i do my friends but at what point do you need to hand it in like if you found five hundred dollars in an envelope on the ground do you need to give that to give it to the police like I don't know I would assume the police yeah in saying that I have been

known to pick up like two dollars from the ground that's okay right I'm not handing that in to anyone hey someone left this no no that would be weird that would be weird but like what if you found a hundred thousand dollars under a house that you bought because someone had like stashed it there and then like not forgotten about it I don't know how you forget about it but you know what I mean like is that a thing is that something that's happened yeah tell us tell us I'm so interested Post in the FB group and we will approve that immediately. Also, like what is the lowest denomination of money that you would pick up off the ground, Georgia?

It has to be gold. It can't, like I'm not interested in silver, but maybe that's a horribly privileged thing to say, but I don't know. So you're not a bower bird at heart. You only like gold things. It's got to be gold. A dollar I would bend down for.

But only if no one's watching. Anyway, let's get back to the podcast. So I wanted to go bigger here, Faye. We're not just talking about $1 on the ground. I wanted to ask you if you won like $60 million in the Powerball, would you still work? Yes, I would still work, but I'm a bit crazy in saying that. It would completely depend on who you are as a person and like what makes you tick, what makes you happy.

Like some people literally work to live, whereas I live to work, I suppose. Is that the right quote? I think it is. And now I know that I would still work because I literally love what I do and I just feel like that freedom. like how cool would it be if I didn't have to earn any money ever and I could just do she's on the money 24 7 without any money concerns because at the end of the day I am literally like you guys I am trying to create wealth and build wealth and like you know get an income and

all of that other fun stuff but yes I would still work but I think if some people scored 60 mil I definitely think that they'd just quit their job pretty pronto and start living large in saying that though I think it would be really important to also let you know that there are a number of mental health aspects to that. So I think it would be a really big challenge to stop working completely. I was reading through some studies recently in prep for today's episode and found that after unemployment, symptoms of somatization, depression and anxiety were significantly greater in the unemployed than those who were employed. And now, Georgia, while we probably don't need a study to tell us this because it kind of just makes sense for many of us, work gives us somewhere

to go and something to do and I really do think that the value of purpose really can't be diminished so for me I think yes we'd start living large but maybe we'd still work but how cool would it be to have the freedom to choose to not work for money anymore and be able to follow your passion or something that you really love yeah I think that's exactly right as long as you've still got that purpose in some way or another absolutely I also read about this idea called sudden wealth syndrome, which impacts people who come into large sums of money quite suddenly. Can you explain that a little more? Yes, Georgia, I actually love this. It is an idea that was initially coined by Dr. Stephen Goldbart, who is a psychologist over in America. And it basically

refers to the anxiety, guilt and isolation that comes with coming into sudden wealth. Now, I think it would be pretty fair to say that many of us would imagine that winning the lotto would fix all of our problems and life would just suddenly become a breeze. But according to this sudden wealth syndrome idea people who come into significant sums of money can become overwhelmed and overspend or maybe they lend silly amounts of money to family and friends which we all know is fraught with danger and people can also grow super suspicious of those around them because they don't know what their motives are. Now the thing here is that most people who come into huge sums of money be that money won or inherited or whatever that might be is that they don't necessarily have the

financial education to know what to do with that money or the inherited assets so the point here that I really want you guys to take home with you is that winning buckets of cash won't actually solve all our issues it might solve a few of them like the fact that I really really really want another dog even though it sounds super delightful on paper and maybe having your own yacht or like a private jet or something sounds pretty bougie but the reality is often not nearly as shiny as we imagine and I know that some people who do inherit large sums of money or end up winning money because they do have clients in both of those situations Georgia they don't actually tell anybody at all and I think that that is probably a really good thing to take away from

this as well is sometimes the less people know the better about your financial situation when it comes to things like that like I'm all about open honest money conversations and I talk about that all the time but when I talk about having open and honest money conversations I don't necessarily mean tell everybody what's in your bank account or tell your friends what you earn like we can have money conversations without making them personal and that is really important to remember so if you have come into a large sum of money and you're feeling really anxious or guilty about it like you do not have to tell anybody if you don't want to and sometimes it's actually better for you to not especially if you are young and remember as well that I can't remember

which episode we were talking about it but I remember we were chatting about the unwarranted advice that like Uncle Bill may give you at family Christmas oh my gosh you know so yeah if you're going to get advice from someone get it from a financial advisor I mean ask people that you trust like ask family members and obviously sometimes family are absolutely going to know if you have inherited a large sum of money but I think it's really hard because some of my clients have said historically that they wish they hadn't told their friends about their inheritance because it kind of ends up being a pain point for them when they just want to live off their income that they currently haven't invested for the future or whatever it is so I think it's sometimes you

really do want to have those conversations and I'm not saying don't talk about it because I would never want someone to feel like they can't talk about yeah that would be isolating exactly but sometimes in the heat of the moment when everything is really emotional like sometimes the best thing that you can do is just put that conversation on ice like just because you're inheriting money and this is totally going off on a tangent but it's something that I'm super passionate about because inheritance is actually what I specialize in and what I work with with my clients the most sometimes it just needs to sit in your account for six months and you not do anything because you need to deal with the emotional trauma of going through that situation sometimes it'll

take a year sometimes it takes two years I think the most important thing here is that if you have inherited money and we'll get into this later i know you've got some great stats on this because we couldn't stop talking about it before we recorded but if you've come into a large sum of money do not feel any pressure whatsoever to invest that or spend that or do anything with that immediately like that can wait there is always going to be another opportunity yeah and we will talk more about that because today's listener question is framed around inheritance so we'll get there um my last question for you v is about the fashion avenue podcast which i heard you on the other day because like just doing a podcast with you isn't enough i need to listen

to you when i'm not with you you know what i'm saying i love that for you that's not weird at all georgia king the podcast host amber asked you what you would choose one thousand dollars a day until you die or one million dollars right now um so if someone asked me this i think i would be like yes please sir I will have the one million thank you you would too but what would you say what did you say on the podcast so first things first I think that the number one answer here would probably be a million dollars from everybody else because you'd be an instant millionaire like that is crazy but when we start breaking it down passive income for me is always always always going to win Georgia you and I have had so many interesting conversations about this especially

after all of the voice memos from people in our community I think it is one of those things that you know people just underestimate so many people said oh I'd buy a house and it's like well you know you could do that but you could also get a loan and keep your million dollars and have the passive income that your million dollars is going to earn you pay off your home and I think it's just about smart money decisions and shifting our mindset around what can this money do for me not what can this money immediately buy? Like how can I make the money work even harder than it's already working for me? So that is something that I want you guys to take home. But my answer was actually the thousand dollars a day. And I'm going to break it down because I think it's really

interesting when you get into it. And I guarantee after I've explained this, Georgia, you're going to be like, oh my gosh, I'll take the thousand dollars a day too. So a thousand dollars a day is $365,000 in a year. So that's pretty good until you die. Like I could definitely live off that. I don't know about you guys, but I'd be quite comfortable. But $365,000 a year in passive revenue is equivalent to having $7.3 million invested on your behalf. So that's obviously more than a million dollars right now. But also, can we also just preface this? I'm working off a rate of return of 5% because that is super conservative and I think really fair for right now. But then also, I'm obviously, because it's all hypothetical, my friends, not taking into

consideration any tax implications so say you took the million dollars and you really wanted to reach the same outcome that i have because i took the thousand dollars a day georgia you'd have to do one of two things so you could uh invest your million dollars right now and wait 40 years you wouldn't get any passive revenue you'd have to keep working in your day job here at she's on the money yeah and with the average rate of return in 40 years you'd have about the same as what I have so you just spend the time or if you wanted it quicker because obviously maybe let's say in 10 years because you can't have it right now you could invest your million dollars and then Georgia you just have to cough up a really easy $40,000 a month for the next 10

years to match my $1,000 a day in passive revenue that I had right so does the $1,000 a day sound good now I think the $1,000 a day sounds very good so to further compare it as I said before the thousand dollars a day is equivalent to three hundred and sixty five thousand dollars a year but if you had a million dollars invested at a five percent interest rate return you'd only make fifty thousand dollars a year which is obviously epic still like this is all hypothetical this is just more because i want you guys to fully understand the impact of investing and essentially what a dollar today means versus a dollar tomorrow and all of that other fun stuff so the answer here my friends is take a thousand dollars a day because you will be much better off in the long

term and to the short term it seems yeah love it like these are all hypotheticals i wish that people were just like walking around the city and they're like hey you're just giving millions of dollars out today wouldn't that be nice i'll take it if anybody knows where i'm putting my hand up i'll be there with bells on share it in the facebook group uh so to wrap today guys if you win a hot million dollars don't just spend it see a financial advisor and get a plan in place and also remember to view all money as fungible fungible fungible hi there you've reached the she's on the money mailbox do you have a money problem you want help solving do you have a money dilemma you just want to chat about victoria is here to help every

week we'll be playing your questions to help make sense of a money mess you may have found yourself in make a quick recording on your phone and send it through to podcast at she's on the money.com.au and you might even find yourself on this show but for now here's today's listener question hey victoria and georgia someone in my family recently passed away and quite unexpectedly i was mentioned in their will and i'll be receiving a quarter of a house that's valued at about six million the plan as i know it at the moment will be to sell the home and split what it sells for but i wanted to ask you both about the anxiety that i'm feeling about wasting such a big amount of money especially because i'm only 26 and i don't want to waste it i'm also thinking perhaps

I should split it with other members of my immediate family none of whom were written into the will. Hope you can help with advice and ideas. Thanks ladies. Okay V a very big question here with a few elements involved. Kick us off with wherever you want to start. I don't know where I want to start with this one. This is massive and I know it can also be a little bit unrelatable but at the end of the day I think it's also really important to understand other people's money stories because that helps you understand money better and the more you know the more empowered you are and the more empowering you can be to others so that is why we want questions like this on the pod instead of just having things that are always super relatable to you it's all about

like open mindset and growth mindset and just like pushing you to understand different mentalities so i just want to preface that because sometimes we do get feedback that they're not relatable enough and i get that but you are still learning like you are learning so much by hearing stories like this because you now know so much more about wealth and wealth generation and money and I just think that's epic. Another thing I want to preface as well is this wasn't just a listener question this was a listener question that came in that has now converted into being a client of mine because obviously she needs some help so do not worry she is being looked after but it is so normal to have this sense of angst. It is such a big deal to be written into somebody's will and really wanting

to respect that money on behalf of the person who handed it down makes so much sense it can also feel like so much pressure like it is so hard and that goes back to what i was saying before you do not have to make any decision right now and if you are in this situation and you have inherited a large amount of money please do not feel pressured by anyone including a financial advisor to invest it like if a financial advisor ever tells you that you need to do it asap just run for the hills my friend because it is a terrible idea because at the end of the day 50 of investing is mental you have to be invested in it mentally and physically because at the end of the day if you're not comfortable you're probably going to pull your money out and lose the long-term gain of being

invested for the long term purely because you are scared so it just makes a lot of sense to just get good advice from someone who respects you and also respects where it's come from because that is really special at the end of the day we would always prefer to have that person here but let's respect them. Let's create something together that that person would really be proud of you for. So also just to throw in some stats here, I really want to talk about the shift of intergenerational wealth. Can you explain what that means? Absolutely. So intergenerational wealth is where money comes down from inheritance. So it comes from other people. You haven't earned that money. And Australia is actually on the cusp of its largest handover of wealth with

an estimated 3.5 trillion dollars worth being transferred from the baby boomer generation to younger australians over the next 20 years so i said it was unrelatable but it's not going to be that unrelatable for our community because that is you guys so to give you some sense of how much that actually is let's just uh break down what a trillion dollars actually is because it's super hard to visualize one million dollars let alone a trillion dollars so one trillion is one million millions like what a million that's a lot of millions if you went back in time one billion seconds you'd be in 1987 but if you went back a trillion seconds you'd be in roughly 30 000 bc that's a really long time ago so a trillion that's that's a hell of a lot and uh 3.5 trillion is

literally an incomprehensible amount of money so that is a lot of money that is going to be transferred and a lot of you who are going to need advice and uh yeah that that's how much money's coming wow imagine being a trillionaire oh are there trillionaires i don't know how's bezos what's he a billionaire i think he's a billionaire yeah just a measly billionaire um okay so a few questions here then v what did you think about her wanting to split uh the money that she'll receive with the members of her family who weren't in the will I would question that purely because that wasn't the intention of the person you've inherited it from and a very big part of inheritance for me is about respect and it's about honoring that person and that becomes a really big piece

of what I do it's just like I want to know about that person like that person was clearly special to you and you know obviously played a big part of your life and I just want to know who they were what they meant to you how we can honor them what did they want for you what were they like were they nice people because at the end of the day they were such a large piece of your life and I want them to be a part of that growth and yeah that change so for me that's what I would want to do but it's definitely worthy of a conversation because you can essentially do whatever you want with your inheritance but let's go back to that million dollar question before like would you split a million dollars three ways and give that to other people and kind of get rid of a lot of

the power of that money or would you take an ongoing income and be able to help your family for the foreseeable future and still have that million dollars sitting in an investment somewhere you don't have to just split the money to have an impact and help people like your investment could be the passive income that means that you can give your mom at ten thousand dollars a year for the foreseeable future if that's what you wanted to do without ever impacting that million dollars when it comes to the anxiety just going back to that question v in terms of tools so i know you're looking after this client which is amazing but for anyone listening who has received a large inheritance or any kind of inheritance who is feeling that angst what words of wisdom

would you leave them with money is fraught with anxiety and i think that i would just say this is this is what that person wanted you need to get rid of that anxiety you need to put yourself in a position where you can actually feel confident about this because I understand that inheritance is usually a bit cloudy I mean someone's passed away but that person wanted to give it to you because they couldn't be their figure so how do we put that money to work so that it is honoring that person in the best possible way and at the end of the day as I said you don't have to do anything immediately but you do have to work out what is the best way of honoring that person and if you see a financial advisor, you don't have to go through with that strategy immediately,

but at least start educating yourself. I know there are going to be a very small handful of people who are listening, who have an inheritance sitting in a bank account, and it might've been there for a little while. That money sitting in your savings is genuinely giving you more anxiety because you don't know what to do with it. I would say half my job is being a psychologist still. Yeah. Yeah. That makes so much sense. Was there anything else you wanted to add here, V? I was going to ask you a question about your faith in the generations that will be inheriting that 3.5 trillion dollars do you think that we're going to be okay with that how is our financial literacy up to scratch oh we have terrible financial literacy which is why i'm so passionate

about it but at the end of the day i think that we are all smart and we are all going to make the right decisions for us there are always going to be people who just stick their head in the sand about money and they're not going to do what i would advise but at the end of the day these are all my opinions guys that there's no right or wrong you could choose not to invest because it might not be aligned to your risk profile I think it's really important to realize that my opinion is one of many one of millions one of trillions Georgia and I think that you know you might follow me or you might not but at the end of the day you need to make the right decision for you and if that means sitting it in a bank account then you do you there is no right or wrong when it comes to

the management of money and I'm sure that there are some people I mean I'm assuming I haven't haven't met them but this is just a grand assumption I'm assuming that there are some people who might have inherited a million dollars blew it over two years but also said that was the best two years of my entire life so it would be very naive of me to think that my way is the only way yep 100 and now it's time to take a sneak peek into the financial lives of perfect strangers it's time for money diaries hi i'm the 29 year old with her super in her hands and this is my money diary my mom's uncle who was living in australia sponsored my mom during a time that Australia was taking in refugees so yeah my parents ended up in Australia and they had to

start from scratch they came from the village of Vietnam so they didn't have any money they didn't have anything growing up when I was younger my parents used to fight a lot about money and I really paid attention to that and I told myself when I was young that I would definitely make enough money in the future so that I would never ever have to argue about money I would be happy to argue about anything else, but I did not want money to rule my life. My parents do have the expectations that because it wasn't easy for them to find work and make money, that as soon as I get money, that I should buy a house straight away, I should settle down, I should have a family. You've given me the opportunity to have more choices. You've given me the opportunity to,

you know, now that I have an Australian passport, I can go and live and work overseas. You've never had the opportunity. I'm going to use my money and buy that visa and live and work overseas and pay rent and experience life because you didn't have that chance. What does our super in hand money diarist do for work? How much does she earn and how much is in her bank account right now? My first full-time job after graduating uni was a graduate site engineer for a construction company and I've been working in construction management for almost five years now and the salary for site engineer or construction management is usually 75 up to 90 or more depending on your experience. I moved to London this year when the pandemic started and so I haven't really worked

properly for in construction management for about eight months. So at the moment in my bank account it's going to sound crazy. I came to London with 10,000 Australian dollars and so now I have 4,000 in my account. Only I was able to survive because the Australian government said we could withdraw I was super up and I thought okay if I'm not going to withdraw money and don't have emergency money in my account I'll have to fly home right now and I'm like almost 31 if I'm not going to continue trying to live in London and work in London now it's not going to happen again so having that super money that I was able to withdraw really helped me with my confidence and not have that scarcity mindset which I think saved me. What are her thoughts on investing and does she invest in

herself I know nothing about investing I feel like everyone's at different stages in their life with money and for me because I haven't had the experiences in life that because I never had money or like extra money my first thing that I care about is experiencing life and like investing in myself other people who like know who they are blah blah like they would want to invest in other like a house or car or whatever but for me that comes after I invest in myself and I know myself know what i want know what i care about so i've only invested myself like with life coaching when i needed it buying books traveling you know moving out of home and paying rent in like an area that i like being surrounded by community that i like with like organic shops and you know that's

expensive but i feel like investing in the energy the location people that i surround myself with So I, like the money that I made, I invested one day's money's worth at a co-working space just to be in the right energy and like the right mindset. And I think during that time, I was able to attract my first job in construction management. Once I know who I am and settled, then the next thing is invest in a house, you know, save up money, listen to podcasts about money. What is her best money habit? I only buy what I know, like I really, really need.

When it comes to buying clothes, I only buy clothes that I can wear to work and wear out. So it's like I don't have a billion clothes sitting around. And what's her worst money habit? I really try and be a minimalist as I get older because I think it's good for the environment in the world. But I have my non-negotiables and one of that is always getting my nails painted. It's not at the moment, but I'll always get my hair done. I'll always get my nails painted. So like, yeah, I'm not going to be like so stingy that I'm not going to make myself feel good.

What is her big money goal? On my Excel sheet showing my goals. For long-term goals, I wrote I want to own a house at some point and I want to own an event space so I can host things because I just like hosting gatherings of people. What grade would she give her money habits? The grade I'd give it is probably the lowest because at the moment it's not my priority.

But I think when I'm ready, it will become higher and I'll do all the education I need and I'll focus on it. That's why I think I have goals. There's different priorities each year. Is there anything she wants to learn more about or share with the community? Now that the money is sitting out of my suit bar, what do you think I should do with it? I really want to invest it into something. I think it's a great opportunity.

Okay, Vicky D. Just like so much to unpack there. I don't know where to begin. I've got a hell of a lot of notes. Obviously, this is non-judgmental. I just think that investment needs to be investment for future you, not for current lifestyle. and I feel like there's a lot of clarity missing from this individual's money story

and I just genuinely feel like treat yourself is probably the summary of this. Yeah. Whereas I don't think that they see it that way and I'm really sorry that that's my opinion. I just think that this mentality is going to, in the long term, going to get them in a little bit more trouble

than they anticipate. Investing in a space because you like entertaining is not investing, my friend. I'm so sorry. it is not it might be a really nice thing that you prioritize but we really have to prioritize future you and we can't have our cake and eat it too and I feel like that's what this money diarist is potentially thinking yeah is that really mean to say I don't mean it I think um I don't know I think you have to be honest about your take on this you're a financial advisor so

you can't listen to this and be like she is doing everything right uh I love it because that would be contrary to everything else you tell us on this podcast 100% and I just think if you say you want to invest in space because you love hosting gatherings i really like that but i think this money diarist potentially has a lot to learn about money and i know that she's a new listener to she's on the money so maybe once she gets through them all she'll be there and obviously our money diarists they all get a copy of the cash flow and budget masterclass and i think that that could potentially be really helpful but there are a few things that i was concerned about so talk to me about your first concern because there are a few uh the super thing she's taken

$20,000 out of super and she said that I've never had this amount before and I really need to invest it my love it was already invested in your superannuation account and now we are one paying tax on that but we are not making it work as hard as it is meant to be working for you if you are taking money out of super to invest you don't understand the basic principles of investment or the fact that the superannuation environment in Australia is literally the closest thing we have to a tax haven. The superannuation tax rate is only 15% whereas if you withdraw it obviously we have to pay our marginal tax rates which are more than 15% and I know she's experienced significant financial distress this year because you know moving etc really hard but you don't

withdraw money from super to invest it's just a bad idea at the end of the day you are already investing and if you've been thinking about this I think my main advice would genuinely be go and have a look at what your super is invested in and be a little bit more on top of the types of portfolio that you're invested in making sure it's in line with your risk profile making sure it's in line with your goals and values not taking it out to make a decision about investment because we're literally losing money and given the time frames and I don't know if this is true or not so this could be wild speculation I don't know the dates she pulled it out but she potentially had massive losses when she pulled the money out because the market guys obviously went down during COVID

and that's the point in time that most people withdrew money out of superannuation which means you crystallized a loss which sounds fancy but it essentially means you accepted less money per share for that share and took it out instead of waiting for the market to recover so that if you ever were to sell something off you would get a better return so you accepted low return so your money is already backwards and now you're going to invest it in a market that's technically already starting to recover so you've missed out on a period of time where you could have been investing and your money could have been working for you it's been sitting in your savings account I feel like I'm being quite negative and quite harsh but at the end of the day I need to be realistic that

is what you've done and I think that you need to understand that that's maybe not the best thing that you could have done for your money and that's my job to share that with you exactly right and you know we're not just piling on this lovely money diarist I think a lot of people could probably relate to this a lot of people maybe have taken that money out as well and are thinking oh oh God, what have I done? It is so important and special, I guess, that she really values investing in herself, investing in traveling, investing in all of those amazing life experiences. But there are ways you can do that without pulling your money out of superannuation or just spending all of your money on this stuff. As you always say on the podcast, if you work

out your budgeting and cashflow, you can get on the right track and you can afford those splurges from time to time. And like she was on an amazing salary. She's in a great industry. Like she'll be great salary great industry I think that she was doing really well I think I was really concerned though about again I'm really sorry I feel really negative about this but I was really concerned when she said I'll always earn more money later like that's such a future you problem but so many people would think like that yeah it's let's stop making things a problem for future you like I don't want to hear that you'll make money later I want to hear that you are making the most of everything that you have on offer right now the idea oh I'll make money

later is so negative and it's going to put you back because money compounds and the more time that you're investing the more energy I just don't know Georgia I genuinely feel a bit thrown by this potentially because of the conviction that she had in her voice when when addressing this like she wasn't really concerned about it at all no she wasn't concerned about it and I would have been and I think that maybe that's where my views are coming from because that's something that would concern me and I just don't know if she sees the seriousness of you know those values or seeing investment in those things as actual investments when they're not I think that we really need to be clear about what investing is yes there's investing in yourself and yes we absolutely

should be doing that but I don't want you guys to be confusing investing in yourself with investing in the financial markets and understanding that yeah there's a difference there and that difference is really tangible and going to essentially change your life. I think it's probably important to note before we wrap the show as well that, you know, she's not in hundreds of thousands of dollars of debt. Oh no, absolutely not. She's in a great financial position. She's going to have the budgeting and cashflow masterclass course to help her out.

It's going to be okay. And it sounds like she's literally living her best life. She's saved up money. She's moved overseas. She's loving life in what has been essentially what we call a garbage fire of a year. And I think that that's really epic. I think it's just, I need to be super critical of things sometimes because I would hate for you guys to be listening to a podcast and thinking, oh, that's cool. I'll do that. I don't want that for

you. I want you to be in the best possible position because I care so much about literally every single one of you. And I want you to be in the best possible position always. And this is not going to put you there. Yeah, exactly right. It's just a platform for you guys to learn, i guess from these stories let's leave the show there victoria but just before we head off we'd like to acknowledge and pay respects to australians aboriginal and torres strait islander peoples the traditional custodians of the lands the waterways and the skies across australia we thank you for sharing and for caring for the land on which we are able to learn we pay our respects to elders past and present and we share our friendship and our kindness and it is very

important to remember that the advice shared on cheese on the money is general in nature and does not consider your individual circumstances she is on the money exists purely for educational purposes and should not be relied upon to make an investment or a financial decision and we promise victoria divine is an authorized representative of australia pacific funds management proprietary limited abn 34132463257 afsl 339151 oh you did that in one take i'm so impressed with you thanks girl and another thank you to ryan and beck our producer darlings for putting it all together. And we would love it if you joined our Facebook group

where our community shares money, tips and tricks every single day, free of judgment. Search She's On Money on Facebook and join us. If Facebook's not your thing, you can literally find us on every other social media platform. You know our name. Book it up. See you next week, guys.