Financial Autonomy

I try my best to avoid financial jargon, but “mean reversion” is one piece of jargon well worth being acquainted with.

The “mean” is just a fancy way of saying the average. The concept of mean reversion then, is that investments and markets tend to want to pull back to their average over time.

This week we’re going to dig into what mean reversion is, and perhaps more importantly, its implications for you as a long term investor.

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This week we’re talking all things financial modeling with Jacob Kettler from Intelliflo.

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Often when I ask new clients when they would like to be able to retire the answer is “tomorrow”, with a smile and a chuckle.

Retiring as early as possible is seen by many as the pinnacle of financial success. This is interesting, because if you had someone who had been made redundant and was finding it difficult to get back into the workforce - early retirement but not at a time of their choosing - they're unlikely to be in a happy state.

This week I want to explore a few alternatives to retiring early, and some reasons why you might like to consider these as part of your plans. If early retirement is the choice in life that you’re shooting for, go for it, by all means. But if your deeper goal is to live a happy and healthy life, perhaps these alternatives might provide a viable way forward for you.

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This week we’re talking career change. For many of the clients that we work with, the choice being pursued is a career change, usually because the job they’re in is not making them happy. Sometimes it might be following a redundancy.

Now our area of expertise is around the finances, so our focus is on how to make the career change possible financially. But there’s a whole lot more to a successful career change than just the dollars.

I’m joined this week by Kate Richardson. Kate is an Executive Career Coach, who orchestrated her very own career change 4 years ago. Today she helps people like you and me succeed in their very own career transition.

Link: www.katerichardson.co

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I came across a great story recently that got me thinking. A successful woman in her 50s observed that several of her younger colleagues at work, all in their 20s, were furnishing very expensive handbags. She realised that she'd never had a luxury item like that, and if these young folk could afford one, then surely after all these years of work, she could too. She mentioned this to a few friends, and they were all encouraging - splash out, enjoy yourself, you've earned it.

She had a look around and found a Chanel bag that was to her liking. Apparently she even needed to make an appointment to buy the bag. But when the time came to hand over the credit card and make the purchase, she pulled back. She couldn't bring herself to do it. Spending thousands of dollars on a status symbol just wasn't something that she could do.

In this week's episode I wanted to explore the idea of luxury, particularly as it pertains to financial autonomy. Once you've got yourself into a financially secure position, what use do you put that to?

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The focus of our podcast is to help you gain choice through the achievement of what I’ve called Financial Autonomy. A very close cousin of the idea of financial autonomy is Financial Independence. Financial independence is the concept of owning assets that produce income such that it is not necessary for you to engage in paid employment to produce the money you and your family need to live.

I'm sure most listeners are familiar with the FIRE acronym. As we've canvassed in past episodes, whilst this is a cool and catchy acronym, most advocates of this philosophy have come to the realisation that the RE portion, the retire early portion that is, is probably misguided. The financial independent piece though, the first half of the acronym is a valid pursuit, and that's certainly something that aligns well with us here at Financial Autonomy.

The bulk of the people we work with are in their 40s and 50s, and so that's why this week I thought I'd share with you the key strategy elements we use to help people like you achieve financial independence. I hope you find it useful.

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You'd have to have been living on a deserted island for the last 18 months to not know that interest rates have been on the rise. Central banks around the world are endeavouring to return rates to normal levels, following sharp cuts through the pandemic. Normalising rates is not without pain however, as many who bought homes two or three years ago are very well aware right now.

But higher interest rates have impacts for investors too. So this week I wanted to dig into four ways in which today's higher interest rates are impacting your share portfolio.

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If you've listened to a few of these podcasts, or read our weekly email, you will know that our core theme is helping you Gain Choice in life. Today's episode covers a few different systems which we can use to make better financial decisions.

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This week we're going to look at 6 core personal finance concepts. These are concepts that it's easy for those of us working in the space to assume everyone understands. It might also be that your understanding of what these terms mean differs from the industry definition. So let's run through these core concepts together and make sure we’re all on the same page.

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Given the large increases seen in property values in recent decades, combined with more and more of us living well into our 90s, the problem of being asset rich and cash poor is becoming increasingly common.

Another way to frame this problem is something an old neighbour said to me once, “Paul, you can't eat bricks”.

It's great to be financially secure and have significant assets behind you, but you need cash flow to pay the bills and put food on the table. That's easy enough whilst you are working, but once you retired you either need your assets to be throwing off income, or else liquidated to be available for spending.

In this week's episode we're going to look at a few ways that you, or perhaps an older family member you care for, might be able to solve the problem of being asset rich but cash poor.

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