Blaize Pengilly 00:09
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Blaize Pengilly 00:26
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Dan Jovevski 00:45
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Blaize Pengilly 00:51
G'day G'da Welcome to Episode 34 of We Talk Cents a podcast produced by WeMoney. I am one of your hosts Blaize millennial who knows very little about money but that is quickly changing as I do this pod. And we're joined by Dan Jovevski money expert Dan How are you?
Dan Jovevski 01:10
I am wonderful Blaize. How you going?
Blaize Pengilly 01:13
Dan, I am I'm doing fabulous. I'm feeling good feeling great. And as always super pumped about the show today. On today's show, we are chatting to a Fremantle local. For those who aren't familiar with Fremantle. That's about 20 minutes south of Perth city. And her name is Lacey Filipich. She was a chemical engineer. And now she works in the money room. And we just had such a great interview with her. Lacey was so engaging, so encouraging. I was smiling the entire way through the interview feeling really inspired about finances and mini retirements, which is what she joins us to talk about. And it gets feel like she's a bit of a cheerleader. She left me feeling really uplifted and positive about my own financial future. And I hope she does for you as well. But before we press play on that interview with Lacey, as always, Dan news headlines, there has been some fantastic news. For those receiving minimum wage this week, would you like to share it?
Dan Jovevski 02:15
This some great news for a lot of Australians were paid packets, or for those who are looking or at the minimum wage? Is it a cop that $20 per week after an independent review has decided that the economy will improve if people are paid slightly more, which is absolutely great. And this has obviously come from lots of robust conversation amongst the unions and other employer groups. But it's awesome that it has been ratified by the government. So it's a awesome win for workers all across Australia.
Blaize Pengilly 02:49
Yeah, I think this is really exciting, and something that we talk about job seeker and job keeper being raised. And I think I feel like the topic of minimum wage needing to be increased has been in and out of the news for as long as I can remember. So saying that those people that are in minimum wage will receive a little bit of extra cash in their pay packet, I think it it's an extra 49 cents an hour, from the old rates, which 49 cents doesn't really sound like a lot when you're thinking about each individual hour. But over the course of a week, it can really add up. So I think it's fantastic news for our minimum wage recipients. In article I saw that it will affect 2.5 million people. So if you're one of the 2.5 million, get the party poppers out pop some champagne, time to celebrate. But yeah, then like you say, I think it's really exciting that the government has listened made a change, and it's going to positively impact out those people on minimum wage.
Dan Jovevski 03:46
Here also in the news is that we have seen a big increase now in fixed rates for mortgages. We talked about in the last couple of shows with Reserve Bank of Australia is in the it's a funding facility with the banks, which basically allows banks to access cheaper forms of capital to then pass it over into low fixed rates. But that seems to be coming to an end right now, with a lot of banks, increasing their rates, particularly in the terms of people who get four or five year rate fixed mortgages. So it could be a good time to review your home loan, particularly if you're really thinking about hey, my fixed rates are about to expire, I'm going to variable rate I was potentially looking to fix sounds like the ever so creeping conversation about Rates coming up is taking place. So it's a good time for people to maybe keep that in mind as they're thinking about either buying the first time or potentially considering refinancing your existing home lines to achieve a better rate. So that's it for the news this workplace.
Blaize Pengilly 04:47
interesting when you say fixed rates increasing Do you mean the amount of fixed rates on fixed rate homelands on offer or the amount of people taking out fixed rate homelands or both?
Dan Jovevski 04:57
Know the rate itself. So the private fixed rate home loan So the rates are creeping up amongst a whole variety of different banks. So yeah, it's right itself. So if the right interest rate goes up, it means effectively you pay more interest on your mortgage. So, yeah, that's the number to look out for is the right itself, particularly on the four and five year rate mortgages. Cool.
Blaize Pengilly 05:21
Thank you for clarifying. Shall we get into the interview with Lacey Dan,
Dan Jovevski 05:25
Let's do it Blaize, I'm excited.
Blaize Pengilly 05:26
Now, just before we press play on this interview with Lacey, there are two things that I'd like to make you aware of. One is that Dan was a little bit unwell that day. So if you're hearing nasal sounds, that is why but it is a very, very fantastic interview to listen to. So I'm very excited to press play. The other thing is that there is a content warning. So at about 23 minutes into this episode, there is a mention of suicide. So feel free to skip over that part, if that's something you'd prefer not to listen to. Alright, let's press play.
Blaize Pengilly 06:01
Then, when you sit back and think about your future and think about retiring, what are your plans? What are your retirement plans? Are you a fisherman? Are you going to be traveling to Australia? We're in a caravan. How will you be spending it?
Dan Jovevski 06:16
Well, I don't think we'll be traveling the caravan ever since COVID happened. I am navigating up and down my street, all of our people that are semi retired, and I can't find a path on my street anymore. So I don't want to be annoying people that does that. But maybe my wife, we have set a plan that we're going to retire in the south NWA in a beautiful idyllic place called Denmark, not Denmark. Country. There is a place in who Denmark. And we kind of say to ourselves, where's a good place in the world where you can see rolling green pastures can we build but also have a look at the ocean. And that was the only place that that we've managed to find so that's a goal. And the sooner we can get there, the better but that's, that's that's an essence where we want to be?
Blaize Pengilly 06:59
Well, you talk about the sooner you can get there, the better and which is why I asked about retirement. That sounds divine. Denmark is a beautiful part of who for those of you listening that haven't heard of it, have a cheeky Google hit up Instagram because then Mike is beautiful. But the reason I'm asking about retirement is because I heard of this concept of mini retirements this week. So I invited a very special guest on to enlighten us on the idea of these mini retirements. So the concept that we don't have to wait till the end of our lives to enjoy this. Sounds pretty good if you ask me. So our guest joining us today is actually a chemical engineer and a mom of two that lives out of Fremantle in Western Australia. She may not technically be a finance person, but she's super passionate about money. So I must say that she has written a book on it and started two businesses, the money school for grownups and make her kids. She speaks in women's prisons and even teaches kids how to start businesses. She presented the topic of financial independence and mini retirements at the TEDx talk and ewe back in 2018. And she joins us now to cover exactly that. tuning in via video link. Welcome Lacey Filipich. How are you Lacey?
Lacey Filipich 08:09
I'm great. Thanks for having me, guys.
Blaize Pengilly 08:11
Thank you so much for joining us, Lacey. Now, Lacey, I'm super excited to hear about these mini retirements. But before we get into that, I have to know, you have a really interesting story. You're a chemical engineer that now runs to businesses based around finance. And you've wrote a book on personal finance. How does that happen? Tell us your story. How did this start for you?
Lacey Filipich 08:33
It does sound quite random. And it has been a meandering road, definitely to get here. So I guess my interest in money has been lifelong. And my my first memories of it really are around when I was you know, 10 years old. So it's not new. For me this interested in money has been around my most of my life. But rather than going into finance, I found I love problem solving. And I'm that school kid who loved maths and physics and chemistry. So I ended up choosing engineering, and went into chemical engineering specifically, which is actually really popular with women. I think a lot of people think most engineers, men, my class was half male, half female, back in the early 2000s. And from that, yeah, it was great. And you know, it's it's an interesting one, too. We talked about it as being the girls engineering. But it's that concept of being less mechanical, I think, and, and less physical and visual in front of you. Chemical Engineering is a little bit more esoteric, a little bit more a thrill, if you like, but very popular place to do engineering if you're female. And of course, chemical engineers go wherever there's a raw material being turned into a final product. So they end up all over the world in all sorts of industries. Typically oil and gas, I managed to duck that and went into mining instead, which is really not that different, but a little bit more fun. Because fewer things blow up and move to the west. And so I moved from moved from Brisbane to Calgary. And began basically a 10 year career in money. But at the same time, as I was studying and going into that early career, I had already started investing. I've been saving half of every dollar it burned since I was 10. When my mom taught me that compounding Wow. Yeah. And you know, she just planted a seed, right? Like she didn't sit down and lecture me. She was just like, you know, that money could make more money. Lacey. What explains to me? Yeah, and this is back in the days, right when interest rates were closer to 10%. Much more exciting than 1%. Right?
Blaize Pengilly 10:29
I wish I had money at those days.
Lacey Filipich 10:32
Hey, times the big equaliser, right? You know, that's the morrow with All Things money. I'm just very fortunate that I learned that lesson early and saved like a demon work through high school, at least, at least 12 hours a week, during term and 30 hours a week on school holidays. So I saved a lot of money, and was going to buy a car and my mum, again, planting a seed when I see that'd be the deposit on an apartment, and I would want it Oh, my goodness. And so we have a property investor 19, which everybody thought out saying, Yeah, my lecturers, my classmates as my second year of uni, they're like, you can't afford that. It worked out to be cheaper than being in a rent out rental house. It's my mortgage is about $110 a week and I rented out the second room for 90 bucks a week.
Blaize Pengilly 11:16
Yeah. $110 a week?
Lacey Filipich 11:19
Lacey Filipich 11:19
Yeah. And it was my gosh, I know it was the mortgage is 75 grand, like you can't even picture it now. Right? Except, I have seen apartments pretty much identical for 120 to 130 grand in the last two years in Perth. They've been in Rockingham and places like that. But you can still find those really cheap. They're hideously ugly. Like, it was not fun to live in initially. But it gets into that property ladder. And so you know, although it's a massive thing, you know, obviously, I got it 20 years ago, you know, that's a long time ago. And I've had that benefit of that time. But there are still small properties you get to do Anyway, I digress, I started investing. And then I got a decent salary. When I became a graduate, you know, you go from living like 10 or 15 grand a year as a student, and suddenly you're earning like I was 45, or 15, my first year. So you feel really flushed, but I kept saving, because I had that habit. So I bought another property at 23 and other one at 25 there and discovered shares. And that was because my employer had a share scheme. And I said, What's this shares thing, I played the share market game in high school, but had stuck with property because I liked the tangible side of it. But then shares was just fascinating. So I started investing that as well. And I just kept investing and saving and investing and saving and investing and just carried on that way. Because I'm pretty cheap to run. Like most engineers, we pride ourselves in being really stingy. And, and the result was all the time I got to my early 30s, I was earning enough income from those assets. So the dividends from the shares, and the rent from the properties and I pay down a lot of the debt that I found that I could support myself if I wanted to just living off those. And so that was wonderful time, because that's when I had my first child. And I had the luxury of deciding whether I'd go back to work and all my friends were going, how come you don't have to go back to work? That's not fair. And I was like, Well, what are you even doing with your money. And it turned out, they'd be getting car loans and racking up credit card debt. And the monomer equivalent, of course, would now be our buy now pay later did as well. And, and I was like, well, who didn't teach you? What you what your parents teach you this stuff. And I hadn't really thought about the fact that my friends hadn't been learning about money. And it was just that I'd won the ovarian lottery. And my parents had taught me that I'm really lucky. And had really good timing, you know, I was I was working in that first 10 years during a boom, and I just managed to stash away lots of cash and buy great assets. So I guess I recognise that a some timing in it. But also this whole, you need a bit of knowledge behind you. So I guess that's why I really love what WeMoney is doing that whole we're trying to empower people through knowledge and, and give them the skills that they miss if if mom or dad didn't we go into it, which a lot of parents never did, because their parents didn't teach them. And although it's in the education system, you know, it's, it's not well done yet, I think we can see from the financial capability scores that we get in Australia. So I'm doing that now. That's because I had this luxury of choosing how I spend my time. And that's where I want to spend my time helping people learn about money.
Dan Jovevski 14:08
That is absolutely amazing Lacey, and going back into your early part of your life like 10 years old, and some of these powerful life lessons and the power of compound interest. And having a look at some of the some of your teachings and some of the phrases that you've got in your book. I mean, what are some of the big takeaways here? for people because a lot of this like your experience in engineering, there's a lot of concepts or rules of thumb or almost laws in life that we if we literally early we can come out and take advantage of it. It certainly is evidenced by the fact that in your early 20s that you had it was foresight and now you get to live a life you know what you would call what we've discussed here in a part of life, you know, in abundance, right? You don't have to choose to go to work. You can choose whether or not you go to work or not go to work. This is pretty amazing. And I think some of these lessons and I'll tie this back into your experience. It sort of maybe in school children, but just talk to us about some of these really powerful concepts that you've taken away. And, and why do we miss it as human beings? Why do we always wake up at 30 years old going, Holy Moses? What am I done with my life?
Lacey Filipich 15:17
That is actually really impressive, honestly, that mostly in 40, and 50 year olds, it's usually 50 year olds and come to me going, I haven't got enough super. So I think if you're, if you're 30, or under or under and listening to this, gosh, you, you really will ahead of the curve. So I wouldn't panic if you suddenly go, Oh, she started when I was 10, which is 10. What about me? No, you're seriously, the sooner you start, the better, obviously. But if you're like under 50, you really have got enough time to do this stuff. And I think that's what I have learned through practice is that the sooner you start, the more mistakes you can make. And I made lots of mistakes with that first property, I made lots of mistakes with my early shares. And in fact, I still continue to make mistakes, I'm not immune to them, you know, my biggest step up with property was on my fifth property investment, which is quite embarrassing, because I should have known better by then. But I think we've got a long timeline, you can make those mistakes. And I think that's the advantage of starting early. I think the other thing that I guess I challenge around the lifestyle stuff is, we have this cultural expectation, and that there's a good reason for it, because of how our society has evolved, that you would work your gutter and then spend the last few years of your life sitting on a porch or playing golf, right, you know, or caravanning around Australia, whatever you're going to do, but then you are going to work your guts out to have those few years of reward at the end. And I think that's a concept, we have to challenge this idea that it's all gonna wait to the end, because we're living longer. We're still going to retirement age now mid 60s, but people might live to their mid 80s and beyond. So 20 plus years of that, why don't we wait to get old to get that enjoyment to get that freedom. And you know, when you talk about that choice about not having to go to work, the important part there is you can choose to do something else with your time. So instead of me going and being an engineer in the mining industry, I get to teach people about money. And I get really excited about the idea of what problems young people are going to solve if they don't feel like wage slaves. Because I really think there's a lot of innovation that could be released. If there are young people who don't go, Oh, well, I've got to take that job as a lawyer or a doctor because I need the money. And my family needs the money. And I'm not going to follow this really deep need to solve another problem elsewhere. So I think that's one to challenge, I think on the side of money. The interesting thing is there's actually few rules, right, like genuine rules, there's so many ways to skin a cat with money. The three general principles that I stick to save, that's number one, and I always do it first pays off first, because there's never any month left at the end of the money. You'll be tempted to spend it because our brains want those chemicals. So that's the first one. The second one is to buy assets. And I really like the Rich Dad Poor Dad Robert Kiyosaki definition as a functional definition. I know there's an accounting definition. But the moment that I see a car put as an asset on my balance sheet, I go, that's not real. My cousin, an asset that's taking money out of my pocket. So I like the definition of an asset puts money in your pocket,
Blaize Pengilly 18:09
Lacey, just interrupting. For those listeners, I've actually been listening to the audio book, Rich Dad, Poor Dad this week. And it's been really fascinating. But for those of our listeners that aren't familiar with the book, and Robert Kiyosaki his definition of what an asset is, could you please enlighten us and how it differs to the regular definition of an asset?
Lacey Filipich 18:27
Okay, so the regular definition of an asset comes from accounting rush, and it has a very technical name. And it's for a really good reason, because accountants have to have very clear definitions so that they all follow the same rules. And it's basically it's something of value, right? Like, that's the accounting essence, for you. It's a it's a thing that you own that has value. Unfortunately, what happens is with that definition, things like cars get put in there. So we say that has a value, you can sell that car, you might have bought it for 15 grand, you could sell it for 10. It's got a value. Now the reality is if you're trying to get to financial independence or abundance, that point where you get that passive income, things that take money out of your pocket that are liabilities. And really, I would think of them as liabilities accounts wouldn't, but I would that they cost you managed to run. So car, for example costs you petrol maintenance, you have to pay registration
Blaize Pengilly 19:17
Lacey Filipich 19:18
Yes, yes. So even and I realized the irony of talking about this now because there are certain groups of cars that have actually gone up in value that we've never seen do that before because of the shortage of oil drives and people wanting to go camping, right? So I get that there are some people who may be bought those things as investments, but I'm going to hazard a guess that most people were just lucky and just happened to have the right car or got in at the right time. And that's why the value has gone up. Most of the time. They take money out of your pocket most of the time. They're not going to grow in capital. So don't be fooled by that think of an asset as as Kiyosaki says, as something that puts money in your pocket. That's what you're aiming for. And I guess if I had not focused on that, when I was investing, if I had picked assets that would just count Growth didn't produce an income that I would still have to work. So it's really important if you know what your aim is that you pick the right type of asset for you.
Blaize Pengilly 20:07
Awesome, thank you so much for that explanation. Number three is to avoid bad debt.
Lacey Filipich 20:12
Now, why I say avoid rather than completely, don't go anywhere near it, you know, is that debt can actually be very useful if it's used well. So I use a credit card, I pay it off in full each month. You know, I've never paid interest on it. But the fraud protection is great. So I wouldn't say I know a lot of people will say just don't get debt at all. Sometimes it's a useful tool, but you have to use it really well. There is good debt, which is for assets that are going to grow in value, if it makes sense. But there's no blanket rule that this debt will work and it's great. And this one won't, there's much more on the white side. So I suggest avoiding bad debt, if you can, if you're going to use it. If you can use it for assets, then you've got a better chance of having a good outcome.
Blaize Pengilly 20:56
Dan Jovevski 20:59
just jumping in here with a very quick little interruption, if you're looking to get a better picture of your finances, want to track your multiple bank accounts, see your spending, and also understand your credit score, then give away money app ago, download the WeMoney app from the Apple App Store or the Google Play Store. And if you use the referral code podcast, you get $5 for simply connect to your eligible account. Now back to the show.
Blaize Pengilly 21:27
Lacey just going back to what you said before about studying, having if you start early, that you have more time to make mistakes, reminded me something that I heard on another podcast actually that's really stuck with me and really sort of been playing back in my mind. Oh, yeah. I think it was matter of kind. He said, if you're not making mistakes, then you aren't trying. And in my book, if you're not trying that's failing. So making mistakes isn't failing, but not doing anything as failing. So I think that was really exciting to hear that yes. Well, they you started at 10. I'm a couple of years behind that now. But starting to get my finances in order now. And you know, under 30, it's an exciting time to still get on track and start making good decisions, and probably some poor decisions. But the point is that you're studying and able to use still got the time to recoup and hopefully make a financial change for my future. Exactly. I
Lacey Filipich 22:21
I really think being directionally correct is more important than being absolutely correct with this stuff, right? Like, soon as you hit it in the right direction. It's the same with food and exercise. So long as you're like 80%. on the right track, you can have 20% that you mess up and you're recuperate, right? And you do have to live a little. But I'm particularly people like me, I'm an engineer, I learned by doing by breaking things. And by fixing them, and by seeing what it looks like after I've broken it and then going okay, I'm gonna fix that, you know, if you learn like that, you've just got to accept that you're going to make some mistakes and not beat yourself up over it. So good for you. Blaize you get in there.
Blaize Pengilly 22:55
Thank you Lacey.
Dan Jovevski 22:56
Boise love what you think like, it reminds me that, you know, maybe I could have been an engineer, but maybe my masqueraders weren't strong enough. So to become the way that you think is surprisingly, alarmingly very similar to why that I think, as well, maybe with less preciseness and yeah, just just your clarity of thinking. And we've talked about the concept of time, we talked about making mistakes and making more mistakes, actually very good. Because we learned that we we evolve. But you know, that's your earlier thread, which is this concept of mini retirements. And I just want to hear more about this as a fascinating concept. You know, people fantasise about it, right? They think all the time. But not many people do it. Right. I want to hear just in your own words, how does this concept come or come alive to you? And if you just let the audience know about your TED talk as well, I think it will be super fascinating for our audience to learn more about this concept of mini retirements.
Lacey Filipich 23:55
Yeah. And look, for me, it's it's the Corker. It's the point, the mini retirements is the point of the money, you know, money is lovely. But it's just a tool. And I guess I first learned about mini retirements by having a complete physical breakdown and ending out bedridden for five weeks. And because I've worked myself into the ground in my mid 20s. And I just had worked too hard. I was really enjoying myself, but I just got really sick. And at that point, I had that like, Oh my gosh, what am I doing? What is life about you know, those typical moments that you have when there's a point of crisis, and often it's triggered by things like death and redundancy, disease, divorce, the DS, they call them, those things can trigger these life crises. And that's what happened to me. And I actually, you know, the silver lining of that is that that did happen so early in my life because I wonder if I had just put it along if I ever found this concept, but of course, having had a crisis, and then another crisis and another crisis, I had three in a row one that should have been a good thing, getting promoted to superintendent and then discovering oh my gosh, I'm just more meat in the sandwich. I thought I was going to become autonomous and have a bit more decision making capacity, but in big organisations, I don't think that ever happens. And then very sadly, my sister passed away, she took her own life, she was only 24. So those three things happening within 18 months made me go, oh my gosh, what is life about. And during that period, I had my first mini retirement. And I didn't know that's what it was called. But someone recommended a book to me called the four hour workweek, which is a very popular book written in 2006, by Tim Ferriss 15 years ago, and he introduced the concept of mini retirements, which is this idea that instead of waiting till the end of your life, for that 20 plus years, why not bring some of that time into your earlier life, while you're young, while you want to travel while you have interests, why don't have short breaks of that three to 12 months can be less can be more. But the point is that it's not the two or four weeks that you get a year of annual leave, because that's not enough to really unwind. It's not enough to do anything new. It's not enough to experience life. And you know, Dad, I'm with you on going south, I moved down to Busselton, for many retirements initially, you know, so I would work the winter, so I'd work six months from like, April to October, and then we'd spend November to April, again, living in Vusselton. And you get to experience life at a much slower pace. And you know, I think we spend so much time being busy, you really do need a few weeks to unwind. So that's where I think the benefit of the mini retirement is because usually you do your holiday and you've unwind, and then you go back to work, right, like two days later, you know, a couple of them here. Again, the idea of the mini retirement is you get that unwind feeling you don't wake up with an alarm clock, you get to enjoy that sense of having freedom, which is what you would get at retirement, you just having a bit earlier. Now the great thing about mini retirements, of course, is that you don't need to be financially independent to get to them, right. Like I started my mini retirements before I had enough income to support myself. And I was still investing. But what I used for those early mini retirements was savings, I just saved like a demon, and then had six months off. And it's really cheap. When you don't have to work, my costs dropped by 25 to 35%. At each mini retirement, you don't have to join the commute. You don't have to rush, you don't have to get takeaway. And you know, all those sorts of things, that convenience stuff that we pay for, really dropped back so you can make your money last a long time. And then of course, becoming financially independent has meant that that's an option anytime. So my husband, for example, is just clocked up two years off. And he had a year off in 2017. And he's had another two years off. He's enjoying being home with our kids while they're young. And I really think is that that's the point. It's not necessarily that you go to a particular place or that you travel, that can be what you do. The point is that your time rich, you get to choose how you spend your time. And that is the point of money. So I think many retirements can be really appealing for people to set up even before they get to financial independence well before that, because they can get that sense of what am I doing this for and that real freedom that we just don't typically get in modern life. we're expected to work for 50 years and have four weeks off a year, you know, maybe a long service break once every 10 years. seems really outdated to me.
Blaize Pengilly 27:58
I think the idea of many mini retirements is much more exciting than the four weeks a year or the 20 years at the end of your life. So I am completely on board with the mini retirements. Now you mentioned how you saved you funded them by saving in the early days. How many retirement sounds great, but were you living super frugally to do so. Or we still able to actually relax and enjoy some nice things or we you sort of because I'm just imagining for myself if I was to do a mini retirement right now, if I took six months off, I would bloody love it. But I would definitely be on omega only diet. So how to do how to key maker possible.
Lacey Filipich 28:39
Yeah, look, I guess this is a an interesting philosophical point about how much you need and what you need. Now. I just don't like a lot of things. It's not something that I went studied minimalism. It's, as you can see from my book collection, I'm not I'm not someone who doesn't buy stuff, right? Like, I like my books. I like good food. I like I used to, like want to stop drinking things. I don't like, Oh, I'm ambivalent to I would say clothes come as devices. Yeah, all sorts of stuff. You know, there's things that people spend a lot of money on, that just don't do it for me, and I don't need them. You know, so I have this almost inbuilt advantage that I don't really care about buying stuff. And so our costs have always been low. And I guess this is a really typical engineer thing. So Dan, you mentioned that thought pattern you probably assume I just did a lot of engineers because I hang around with a lot of them obviously. But we have a really strong focus on waste. We don't like waste, you know, because it's this energy that you spent for no good reason. So why would I go on earn money to buy something I don't really get a lot of joy out of I've just never done it. And although I love window shopping my mom and I used to love going to the sales together and you know, it was a strong theme in my childhood. with Ben we've always been conscious buyers. I think we've always looked for the best deal, you know and get satisfaction out of getting a good deal. You No, that's kind of like winning, you know, when I get a point two 5% discount on my mortgage cuz I caught up on my cool. That sort of stuff, I get a real kick out or so I think I'm just awesome. Yeah, I'm just naturally bent that way. I don't mean bent in a terrible sense. But you know what I mean, I'm that sort of direction. But and also my husband's very similar. So we've never had that wrestle, we've never had that, like I will I want to go and buy our own, what other women my age, but spend lots of money on beauty products or clothing or anything like that, just because it doesn't do anything for me, you know, if I wanted it, I'd buy it. I just don't really care. So that's an advantage. I think the other point people forget use how much your expenses drop. So I mentioned it briefly, then, you know, so my husband and I, before children were living on about 45 grand a year. That's what we needed to cover our expenses. And when you when there's two of you, obviously, you get that advantage, you know, you're splitting some costs. So that will sound low to a lot of people. But I never feel like we missed out. Like we spent three months in South America, we went to Galapagos Islands. We hiked to Machu Picchu, we went to Rio Carnival, we blew money on the things we cared about, you know, so I will drop 30 grand on a holiday be I've never dropped 30 grand on a car. So I think that prioritisation really helps, that the costs going down is a big thing to even backpacking. I know it's you can't do it right now, which is a bit depressing. But when I moved to Busselton, you know, our rent went from, you know, 350 bucks a week to 200 bucks a week, it's a big difference if you're able to move somewhere out of a capital city. And you're able to go to the local farmers market, buy in season produce and stuff like that a lot of your overheads, the base level, living costs just disappear. It's really interesting. Well, they dropped dramatically. And so I think what you might be living on, I don't know, maybe 1000 bucks a week. Now, you might only need seven to 800 bucks a week when you're off work, because you don't have to pay for the transport the clothes, the convenient stuff, the lunches out all those things. So I think you sometimes overestimate how much you need. But just having a goal helps players think about how many months you want to be off for and how much you think you might need. And then suddenly, it becomes very motivating. When you go, Well, I only need this much. Oh, hey, I can have my time off. Now. It's a it's a great reward.
Blaize Pengilly 32:09
I think I would like all of the months off. I will still need to be chasing five that
Lacey Filipich 32:17
you might get forward though. You'd be surprised. I love three to six months, longer than six months. I do get bored. It's funny, you know, you think it's going to be great. But, you know, I one of my mini retirements. I wrote a children's book because I was like I could do something. You know, and and something about you two strikes me that you wouldn't sit around on your hands the whole time. You know, it's great to have some downtime. But I think having that mental space for creativity, you might find something else that you love doing. And then you also might get bored and want to do something more serious.
Dan Jovevski 32:47
Now, Lacey, if you think he listened to the pod now, are you thinking? Goodness, no, right? I didn't start saying we lost him while he did. And what do you say to them?
Lacey Filipich 32:57
Don't beat yourself up? First of all, it's not I know, there's FOMO about this, you go Oh, I've missed it. It's like everybody with cryptocurrency, right? Oh, I missed it. You haven't missed it. Okay, you have not missed it. Yes, you started a bit later than me. But there's nothing to stop you from getting there faster even than I did if you wanted to, and you had the capacity and you'll your life enabled you to, there's always going to be lifestyle factors that affect people and I just happened to win the ovarian lottery, everybody starts at a different point. So please don't take that personally, or beat yourself up on it yourself for that. If you didn't have parents that taught you about money, and you didn't have the ability to earn an income like I did, and you didn't have these great properties that you had time to look forward. That's not necessarily your fault. Please don't blame yourself. But now that you know, you can get in there. And if if you're under 50, you've got a really good chance of getting to five if you're earning an income. So take the shot. You know, don't beat yourself up, just start now. And even if you don't get to fire as quickly as you want to, you'll be making your financial position better. You might be able to start taking mini retirements if you like them, and you might get there eventually it's worth taking the shot. So don't feel bad just because you didn't start at 10 very few people started at 10. I think I'm just quite unusual.
Dan Jovevski 34:09
Rosie? Yeah. Well, I see. Well, this is really awesome stuff of the one thing that we really love spending time talking about is farm to education, particularly amongst our children. Right. And, you know, I've got one that just left the house to go off to school a moment ago. But when we think about learning some of these core concepts, what what's your thoughts about financial education and literacy in Australia? I'd love to get your thoughts on that.
Lacey Filipich 34:34
It's such an important topic. So first of all, it is in the curriculum. I know a lot of people say it's not taught in schools. It is in the curriculum, which is great in financial maths and business and economics. What varies is how its taught and how it's connected to real life. So some teachers are fantastic at it, and some of them and I think sometimes it's because teachers maybe don't know a lot about money. There's a bit of variability and you see that in our Pisa scores. We know you There's an international test that gets done every five years and our financial literacy results are dropping, very sad and completely inexplicable in a country that's got such a good education system and is so wealthy. I think a lot of it ease this expectation that we'll be able to shove it into the curriculum and body and take out. So every time we put something in, what are the kids not learning, there's only so many hours in the day. I also think parents tend to be intimidated. Sometimes, you know, I hear people say, I'm not good with money, I really want them to say I'm not good yet, or I've had a, you know, a bad history with my I made some silly decisions, that's fine. I think the really important thing is that we start talking about and overcoming that cultural issue, which is why I love your podcast. And what you're doing. Getting people talking about this openly is actually a really big cultural shift that's happened in the last 10 to 20 years. It used to be a taboo subject, you couldn't ask people about what they are, or how they spend their money, or what their mortgage rate was, there just wasn't the done thing. So I think that progression is naturally going to help. What I encourage parents to think about is you don't have to have all the answers, you just have to be one lesson ahead. And if you can teach your kids to save, pay themselves, first, you're there. I think the other thing is, we tend to think we need to wait. And you don't actually need to wait. I've found I've been experimented on my own children, of course, but working with a lot of kids. And look, I had my first conversation with my daughter about money before she was three, we didn't talk about money, we talked about waste. So the same way that we talk about waste with kids to do with electricity, you know, turn the light off, to talk about water going down the drain, turn the tap off while you're brushing your teeth. That's why I strive if we can get kids thinking about money as a resource, just the same as we think about electricity. The same as we think about plastic, the same as we think about anything else in our lives to do with the environment. If we can get them thinking about it as don't waste this resource, they'll make really good decisions. And they don't need the maths for that, which I think is where people really stumble. People think, Oh, I'm not good at maths, so I can't be good with money. The maths is like 10% of it, you know, 90% is your values, your ethics, how you think about money, and then how you've automated stuff, so that you don't have to think about it every day. And that stuff doesn't really require maths so much more as just some structure. And I think if parents feel empowered to talk to their kids, they don't need to be the expert, I think it's really important, don't feel you've got to be the expert, you don't have to
Blaize Pengilly 37:19
as someone that is really, really shocking with maths, that is really exciting for me to hear that. And I love the way that you've framed of money as framed money as a resource. And when it goes to waste, I can't tell you how many times I have unexpectedly come into some extra money, whether it be $50 in a Christmas card from my nanner or, you know, I've picked up an extra shift or whatever it is, I've come and go gone. Oh, great. I have all this extra cash now. And then in two seconds, it is completely gone. Because I have not seen it as a resource that in. I mean, it's not fine out. But in that instance, it was because you have to wait for next Christmas or whatever it is. Yeah, I think if I had learned to frame it as waste the way as as being less wasteful, I think my spending would be quite different.
Yeah. And part of that is your brain. Unfortunately, your brain farts you. It sees that money. And it goes, Oh, I'd like some feel good chemicals. Please go spend because that's what your brain knows. It's just like food, drugs, sex exercise. Your body wants that heat of chemicals. So don't blame yourself blame. It's actually a brain working against you there and the more you can automate around your brain and don't fight it, the easier it becomes.
Blaize Pengilly 38:35
Alright, Brian, I hope you're listening because I need to be spending less so stop chasing that dopamine hit from spending. Speaking of the brain, how do you make decisions, Lacey? Because I feel like, I feel like there's a lot of fear around money, right? Like, I would love to start. I've just started investing, but I'm still really quite afraid of it really. And I would love to take some mini retirements, but I'm kind of like, Oh, well, what would that mean for my career? How do I how do I take time off work? Can I get a job that I can take time off? Or how do you get past the fear of the what if it doesn't work out? And how you making decisions when you are chasing financial independence or fi? Really good question. So
Lacey Filipich 39:21
I think there's two parts to that first bit about how how do I overcome that fear? Firstly, somehow I was born with an unjustified but viable high level of self confidence. And, and I don't know also what my parents did, or what was in my genes or my raising that i i guess part of it is feeling secure and loved and safe most of my life. You know, that's, that's a big part of it, which I recognized not everyone head. I've just always thought if it goes wrong, I'll work it out. And I might as well take a shot off. Now that's not in everything. Like for example, I'm a massive scaredy cat with physical stuff like I did artistic gymnastics for years. And I refuse to jump from the low bar to the high bar. And children, half my heart could do it. So don't think that it's everywhere. But for some reason, anything that was about me working things out and solving problems, I figured I'd be able to work it out. That was just some innate belief of mine. So there's that first, the second parties, I guess, there are things that I found terrifying quitting my job, and leaving in Korea was terrifying. selling a business is terrifying. making big decisions that I feel equipped to make, like, for example, the Barefoot investor tried to buy money school in 2017. And I was like, how do I make this decision? Yeah, you know, things like that. We just don't expect these things to happen. And you're not prepared for. And I frequently feel overwhelmed by those. What I find really helpful is writing what I'm worried about down. And I do two things. This is my engineering, brain risk management, I look at what could I do to prevent that thing going wrong? So is there something I could put in place now that would stop what I'm worried about happening happening? And then I put that thing in place? And even if I don't do it, at least I've thought about it made a decision. And then if that thing goes wrong, what am I going to do? So for example, when I had that first mini retirement, it was like, oh, what job Am I going to come back to what if I end up in a job I don't like and I wrote down my action plan, which is like, well, I can always change company, I could, you know, call these people keep this network going, I can, you know, look for other jobs. So I had a list. And just having that list written down, I didn't end up needing it because everything went fine. But having it written down knowing that I had a plan, and that I could just pull the plan out of the drawer when I needed it was really helpful. And anytime I'm stressed about something, you know, there's that that phrase that worries the absence of a plan. That's why you worry because you don't know what you're going to do. And once you write down what you're going to do, it all feels a lot more manageable. And if the worst case scenario for me is that all my investments fail, and I go broke, like, what would I do, I would sell everything and find a rental, but I know how to rebuild. You know, because I know how to rebuild. I don't feel as worried about that. I don't want it to happen. But if it happened, I'd work it out. Now I can say that from a place of incredible self confidence, and luxury. Not everybody feels like that. But if you were worried about making a decision, you know, for example, you're talking about investing in shares. What's the worst that can happen to you? Blaize? What is the worst thing that can happen to you with investing issues?
Blaize Pengilly 42:16
That's a great question. The worst thing that can happen is I lose my initial investment. Yeah, yeah. Which would really, I don't even lose, I lose all of it, it would suck. But I might not even lose all of it, I might lose a small portion of it, I might gain a lot of it, I might gain even more.
Lacey Filipich 42:31
Exactly. And it's that set trade off, what are you giving up by not doing it because of the downside. And we all have to take a little bit of risk you get in a car, you take a massive risk, that's most likely why you'll die today. So we tolerate risk, we just when it's something new that we're not familiar with, we overreact. And that's sort of self preservation, it makes sense. I think sitting down and being very systematic about it. And and having pen to paper just helps me, everyone else will have a different strategy might be a chat with a friend, it might be, I don't know, a diary, it could be you know, having a big fat buffer fund, I find a big fat buffer fund solves all my problems. Because I'm like, I've got some savings or you're at, I'll work it out in the time it takes me to exhaust that fund or have come up with a solution. Those sorts of things. I think if you can have those in place, it's really important that you can sleep well. Really important that you can sleep well at night that you're not stressed because it's not worth it. If you're if you're stressed, what's the point? I'm just shortening your lifespan. So I think that that's really important. I think with financial decisions. as I've gotten older, you can afford to take more risks, but that first 100 grand it's well acknowledged is the hardest 100 grand to get to. And it's the most stressful time it's the riskiest time. Once you get past it, everything gets easier. Compounding speeds up you feel more confident, but that it's normal to feel nervous and stressed in that first period. I think knowing what the potential downside is and saying, am I willing to risk that going in with eyes wide open, you're less likely to panic or to second guess yourself or end up with procrastination.
Blaize Pengilly 43:58
That is very sage advice. And yeah, I appreciate you asking that question. What's the worst that could happen? I think that's a really, really good approach. Especially if you're listening to this or sitting on the edge like me going, Oh, should I invest? Should I quit my job and take this mini retirement? Should I do this? Should I do that? I think that's really, really sage advice. So thank you, Lacey, Lacey. That is all we have time for today on the show. It was such a pleasure having you join us. I've been smiling the whole time. I've seen Dan smiling the whole time you've been such a joy to have on the show. You're very, very wise and very charismatic. So thank you so much. If our listeners want to find out more about you or your businesses, where should they go?
Lacey Filipich 44:36
best place to go is moneyschool.org.au. We've got lots of free blogs and our financial independence calculator you can check out and of course, have a look at the TEDx talk if you haven't seen it because it's a much more succinct and eloquent summary of mini retirements. And if you're at the library or at the bookstore, pick up money school, the book.
Blaize Pengilly 44:54
Alright, awesome. We'll do that. And we'll check the links to that in the show notes as well so you can find out more about later. See, Lacey. Thank you have a lovely week ahead.
Dan Jovevski 45:03
Thank you, Blaize and Dan, it's been a pleasure. Thanks. I really appreciate your time today on the show.
Blaize Pengilly 45:13
Thank you so much for tuning in to another instalment of We Talk Cents Produced by way money. We'll be back next week,
Dan Jovevski 45:21
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Blaize Pengilly 45:56
Yes, if you could please leave us a review. That would be really awesome. We love seeing your feedback. And we are so passionate about helping people learn about money. So if reviewing is the way to spread the word then we would love Love, love for you to leave us a review. Anyway, that's enough from us for now. We'll see you next week. Have a good one. Bye
The author is not a financial advisor and the information provided is general in nature and was prepared for information purposes only. This article should not be considered to constitute financial advice. Accordingly, reliance should not be placed on this article as the basis for making an investment, financial or other decision. This information does not take into account your investment objectives, particular needs or financial situation.