Jun 15, 2020
When you were a kid, you
probably thought being an adult was all about staying up late and
not doing your homework.
But now that you’re an adult,
you know that there’s a lot more to it than that.
Going to work, household
responsibilities, paying the bills – and having your finances in
order. And it’s easy to get down on yourself when you don’t have
your finances where you think they should be.
But we all have different
definitions of success and different ways of measuring how far
If you think about it, most
Australians are living paycheck to paycheck and have a level of bad
debt. When you realize that most Australians can’t pay an
unexpected bill of $400 or more, you’ll realize that you’re
probably better off than you thought you were.
Today, I’m going to have a chat
with Brett Warren about why so many Australians are bad with
Here’s a number of reasons why we are so bad with
Dunning-Kruger effect. People’s lack of understanding about basic
things prevents them from making good decisions.
every $1 raise you receive, your desires rise by $2 or
spend lots of money on material stuff to impress other people
without realizing those other people couldn’t care less about
have never been able to predict what the market will do next. This
doesn’t deter you from trying to predict what the market will do
get upset when you hear on TV that the government is running a
deficit. It doesn’t bother you that you heard this on a TV
you bought on a credit card in a home you purchased with a
single largest expense you’ll pay in life is interest. You’ll spend
more money on interest than food, vacations, cars, school, clothes,
dinners out, and all forms of entertainment.
- You’re thrilled that the credit card you’re
paying 22% interest on offers 1% cashback on all
work in a stressful job in order to make enough money to have a
stress-free life. You don’t see the irony in this.
- You’re a pessimist in a world where far more
people wake up in the morning trying to make things better than
wake up thinking we’re all doomed.
try to keep up with the Joneses without realizing the Joneses are
buried in debt and can probably never retire.
associate all of your financial successes with skill and all of
your financial failures with bad luck.
- Rather than admitting and learning from your
mistakes, you ignore them, bury them, make excuses for them, and
blame them on others.
say you’ll be greedy when others are fearful, then seek the fatal
position when the market falls 2%.
let confirmation bias take control of your mind by only seeking out
information from sources that agree with your pre-existing
think you’re too young to start saving for retirement when every
day that passes makes compound interest a little bit less
- You’re investing for the next 50 years but get
stressed when the market has a bad day.
don’t respect the idea that “do nothing” are two of the most
powerful words in investing.
feel especially smart after last year’s market rally without
realizing that you had nothing to do with it.
seek advice from a doctor to manage your health, an accountant to
do your taxes, a lawyer to manage your legal problems, a plumber to
fix your plumbing, a contractor to build your house, a trainer to
help you exercise, a dentist to fix your teeth, and a pilot to fly
when you travel. Then, with no experience, you go about investing
willy nilly, all by yourself.
think financial news is published because it has useful information
you need to know. In reality, it’s published only because the
publisher knows you’ll read it.
forget that the single most valuable asset you have as an investor
is time. A 20-year-old has an asset Warren Buffett couldn’t dream
nodded along to all of these points without realizing I’m talking
Links and Resources:
Brett Warren - Metropole Property Strategists
Metropole’s Strategic Property Plan – to help both beginning and experienced
Join us at Wealth Retreat in November 2020 – find out more here
Shownotes plus more here:
20 reasons you’re awful with money with Brett Warren
Some of our favourite quotes from the show:
“The concept here is that once
you earn more, you tend not to save it.” –Michael
“One of the reasons we’re no
good at money, one of the reasons we’re scared of making
investments or decisions is because of all the negativity out
there.” –Michael Yardney
“We are all irrational with
money. We all drive around with one foot on the accelerator and one
foot on the brake.” –Michael Yardney
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