Fund Your Future Freedom

Most people think retirement is something to worry about later. The problem is that later arrives much faster than expected.

In this episode, Mai Harris is joined by financial planner Nicholle Shepherd to discuss why building wealth and planning for retirement should start much earlier. Together, they explore the small financial habits that can have a significant impact over time, and why creating financial freedom isn't about reaching a certain age: It's about having choices.

The conversation covers the importance of understanding your current financial position, making the most of superannuation, and creating a strategy that aligns your long-term goals with your tax and wealth-building opportunities.

Whether you're in your 20s, raising a family, or starting to think seriously about retirement, this episode highlights the value of planning early and seeking advice before time becomes your biggest obstacle.

In this episode, Mai and Nicholle talk about:

• The common reasons people leave retirement planning too late
• The importance of building strong financial habits early
• Investment options beyond property, including shares, ETFs and managed investments
• Why your investment strategy should reflect your personal goals and risk appetite
• How much money you may need in retirement and why the answer is different for everyone
• Practical ways to understand your living expenses and future income needs
• The benefits of aligning tax planning and financial planning
• Why seeking advice early creates more opportunities and choices later in life

This episode is a reminder that financial freedom doesn't happen by accident. The earlier you start planning, the more options you'll have when it comes time to decide how you want to spend your future.

If you'd like help aligning your tax strategy, investments and long-term wealth goals, reach out to our team at www.myaccountingadvantage.com.au. You can also submit questions or topic ideas via the Ask Mai link at the top of the show notes.

Learn more about My Accounting Advantage

Disclaimer

The advice contained in this presentation is general in nature only and should not be acted on without first seeking professional advice.

Your personal circumstances have not been taken into account, and you should consider the appropriateness of the advice to your individual needs.

Transcript

Welcome And Why Timing Matters

Speaker 2 0:03

Hello, and welcome back to the podcast My Accounting Advantage. Today, I believe is one of the most important topics we're going to touch upon in this season. And it's a topic that people leave way too late. And as we know in this world, the future belongs to the prepared. And today we're going to be discussing when you get that moment of your life when you can do whatever you want. Are you funded in the right way to do it? Bringing her back into the program, Mai Harris, welcome back to your podcast.

Speaker 1 0:37

Thank you, Lee. Nice to be back. And it will be a really good session today.

Speaker 2 0:42

Well, it's a perfect follow-on from last week's session with Luke. And we had a massive response to that as people didn't understand they have so many options, yet they just think in this one channel. And we definitely confirm that having finance accounts talk to each other is the game changer. So we're going to add on to that

Retirement As A Freedom Plan

Speaker 2 1:03

today.

Speaker 1 1:03

Absolutely.

Speaker 2 1:04

But let's talk about a word, the word I don't like in the world the most, and the word is retirement. And retirement actually means no longer in use. It was brought in many, many years ago to get rid of politicians. It is. And retirement shouldn't be like that. It should be one of the most exciting times of your life. You've got the freedom to do whatever you want. Yeah. And we misplan it and we don't do it early enough. Whereas, actually I feel quite fortunate on this one. I was 23 years of age when my employer, Mr. Rod Jones, God bless him, said, Lee, I'm getting you set up with a self-managed super fund. And I had virtually no super. Yeah. And I said, Why am I doing this? He said, Just one day you'll thank me. It was the greatest thing that ever happened to me. Mai, what's your view on why people leave it too late?

Speaker 1 1:56

My view is people leave it too late because they think they have a lot of time up their sleeve. And then they go, Oh no, we don't have to think about this until you know we hit the age of 50. But to me, if you actually plan earlier, that's going to give you a much better time to prepare. And also you understand what your current financial position is and whether or not what you um you are doing will actually lead you to the the um the end that you wanted. Well, the it's not the end of the road, but it's the the end of you know the working life and the next chapter to your freedom.

Speaker 2 2:39

Love it. And to have the choice to go to work or not is a financial position. Because most people have to go to work to pay the bills, to pay the mortgage, and keep food on the table. But there's got to come a stage, and that stage can be earlier than later where you don't have to stop work, but you can stop having to work if you didn't want to.

Speaker 1 3:00

It's a choice. When it becomes a choice, that's when it's, you know, it's a game changer for a lot of people because they want that financial freedom and they also want, you know, their time back so that they can just do um work whenever they feel like it. And that to me is it's a bit of an a sweet spot for everybody because you don't want to stop and entirely, and you don't want to lose your identity either. But you want to be able to choose whether or not you want to do it.

Speaker 2 3:33

Well, to do that, we're gonna bring in a specialist, yes, Nicholle Shepherd, who's another third part of your business. Explain this part, because we we we had the business finance and home loans last

Why Most People Start Too Late

Speaker 2 3:45

week. Take us into this one.

Speaker 1 3:46

Yes, so Nikki's a dear friend of mine, and um I've known Nicole, I call her Nic, so just um giving her a nickname there. So Nic's been a friend of mine for over 25 years. She's a very well-experienced financial planner and um extensive experience with looking after, you know, clients who want to grow wealth and help them plan for that, you know, financial future and um what retirement looks like for them. I asked her to join me in my business seven years ago, and I never look back. So I wanted to introduce her to, you know, our listeners.

Speaker 2 4:28

Well, she joins us now, Nicholle Shepherd. Welcome to the podcast. Thank you. Yeah, Nicholle, we're very fortunate to have you on here today because you're on the coast. You're part of the My Accounting Advantage group. But prior to that, you were corporate, you were with the Commonwealth Bank and Westpac. How is your time advising for them for their customers?

Speaker 4:50

Um, I well, obviously started with their experience. I got a lot of my compliance from them. So it really sort of gave me that stepping stone to be able to be here and start my own business and do what I'm doing now. Gave me the building blocks to have the confidence and yeah, be here running my own business and helping clients the way I want to uh want to help them.

Speaker 2 5:14

Fantastic. Can I ask you before we get into the detail of our program today, but just from observation of being at the bank, being here on the coast, why do people give no thought at all to the retirement process? And that word retirement, I want to call it the freedom process. Why do they give no thought to that? Does everyone just think I'm 21 forever? What happens?

Speaker 5:40

Yeah, probably a little bit of that. But I think it's also where like we have like stages, we have our sort of, you know, our uh parts in life where we're going through like when we when we're in our 20s and we're enjoying life, having fun. Some people want to settle down a bit earlier, but then they're looking for a home. So it's like you've got to sort of put them into sort of, I guess, uh building blocks for your life. So

Meet Your Financial Planner Expert

Speaker 6:05

when you're young, you're not thinking about retirement, you're thinking about maybe buying a home or investing and whatnot. When you're sort of uh in your, you know, 30s to 40s and you're having children, that's a different life stage as well. So you're looking at um trying to care for your children and trying to give them the best life that they you you could try and uh uh achieve for them. And then all of a sudden it's like, well, the kids are grown up. And then you go, well, what am I going to do with my life? And do I have enough money to live on? And, you know, where are my assets? So the earlier you can start, the better. But understand that it's um it's just a bit of a process and it's a bit of a life cycle that you need to go through.

Speaker 2 6:47

Nicholle, I got so excited when Mai announced you were coming on to the program. But I got excited because I have six children and nine grandchildren. And I look at the wonderful family that we have, and every one of them's going to listen to this audio, locked in a car, where they can't get out with central locking. Yeah. Because financial behaviour is what we're speaking about. All the kids listen to this now, think, oh, but I'm young, I've got heaps of time, I don't have to worry about it. If that decision was made today to have better financial behaviours, you can have whatever you want, but you can't wait till the end and look back and say, I should have, could have, and I didn't. How would you define financial wealth as before being the financial planner? Um, but just as in your world of looking and observing all these people, what's your definition of financial wealth for someone?

Speaker 7:45

That's a very tricky question to answer because everyone is different. Financial wealth for you, for me, for Mai or any one of my customers.

Speaker 2 7:56

I think Mai's gonna be all right. But anyway.

Speaker 7:59

So it's really depends on the individual and what they want out of life, really. And like I said, like you're not worried about initially you're not worried about your retirement, but if you can sort of maybe start to like go even, oh well, I'm gonna put $20 a week away into super, do it, whether it's salary sacrifice for before or after tax, it's really going to go, you're gonna get to that end after the kids have like off your hands basically, and start to think about retirement and you go, oh, I've actually got more than I thought, and I don't have to sort of try and rush and panic to try and build my wealth up at the end. So if you can start doing little things at the beginning, it's going to help you in the end.

Speaker 2 8:46

Nicholle, superannuation is the pathway to wealth.

Small Habits That Build Super

Speaker 2 8:50

And if all our young people listening this right now, anyone at any age just brought that habit in, oh, I'm gonna store it there, I'm gonna store it there. And the greatest thing about super is you can't just go and crack the piggy bank and pull it out. It it's a one-way channel in, you can't touch it, you can invest with it, which is a whole different conversation. But in that observation, the people that have done really well, and let's go for a little scenario. Mum and dad working normal jobs, they're not investors or anything like that or rental providers. They're just working, paying the mortgage with their kids, could be on a combined salary of $200,000, $220,000 a year. What's the best channel for them over this period?

Speaker 9:33

Like even if you can put $20 a week, it's just about forming those habits. So starting early, so like I said, in your 20s, even if you could put $20 a week away, it's not really going to be a big impact to your bank balance and your savings. Keeping in mind that you knew you need to have a balance between putting money into super, like when you're sort of getting older and not being able to access that, versus putting money like, you know, having access to funds. But even just doing a little $20 a week, you did that from when you're in your early 20s up until you're 60 when you're retired and you can access your super, it can really make a difference.

Speaker 2 10:13

Mai, how do you and Nicholle work best together?

Speaker 1 10:17

Well, we work really well together as a team, often because, you know, clients ask me tricky questions like, what should I invest in? And I'm like, I'm sorry. I my my scope is really at, you know, tax planning and also um tax minimization. So um investment strategies is often, you know, a financial planner thing. So um I will refer um the clients to n to Nic. Often, you know, it's more complex than people anticipated because everyone's different. They have different goals and they also have, you know, different risk appetite. So um you need to understand that before you go into, you know, investing in financial products. And Nic will actually explain all of that to you and also match you with the right financial strategies and product that meet your risk appetite and your situation.

Speaker 2 11:22

Nicholle, I'm interested to know what's on the full menu. Because for me, I've always done property. Why? I'm from the real estate world. Yet I've got many people, way wealthier than me, that are in the share markets and all these things. Give us an example of some of the options out there for people that don't want to buy a property but do want to invest. What's on the menu?

Speaker 11:46

Firstly, I think it's about your goals and what you sort of want to achieve. And that will sort of set the sort of um start of where we're going to invest. And there's a whole range of investments. So you do have your property, can be a great investment, but uh property also you can't access if you need funds. So you can't just go and sell off a bedroom and whatnot. So it's really good to get a balance. And to do that, we can invest in, you know, direct shares, exchange traded funds, ETFs, property trusts, um, and all of those different assets that are more flexible, but will also, again, depending on the risk appetite, will depend on where you're going to be investing with your like shares, because they're high risk, right? They you don't want to be going in and thinking you're going to be earning this great sort of you know eight, 10% return, and then all of a sudden the share market crashes and you're earning a negative return. So it is definitely about the risk appetite, but there are flexible investment options, like, you know, you do, like I said, your direct shares, having a share trading platform, but there's also, you know, wrap style investment accounts, which

Investing Options Beyond Property

Speaker 12:55

actually like provide an administration structure to um help you manage all of those investments as well.

Speaker 2 13:02

Well, one thing that's very clear in today's podcast is get some advice because you don't know what you don't know, but the days and and years are ticking by, and everyone says that. I can't believe it's five years ago. No, that was 20 years ago that happened. Uh guy Sebastian won Australian Idol 20 years ago. That's crazy. But it gives you a a step in time when you think that kid with a fro, that was that was 20 years ago. And you think it's yesterday until you see the footage and then okay, it's all grainy. Well, life's like that. It is. And no matter what age you're at, you've got to start today because the future belongs to the prepared. A light question for you. Let's say our mum and dad on the combined income of 220 grand have been living their life. They've been doing well and putting money aside and maybe in even bought an investment property that they can sell later on. How much money do they need to have to retire?

Speaker 13:59

Million dollar question. And that's one of the biggest questions that everyone asks. Like, what do I need to retire on? And again, everyone's different. Although you might be earning 220 grand, that's before tax, we've got to take our tax out of that. You're paying a mortgage and whatnot. So what you think you may need to retire on is probably a little bit less than that after you take out into account all of those sort of uh factors. It is definitely an individual question for everyone. I was told when I first started advising 25 years ago that there's a very general benchmark, 10 to 15 times what you need to live on, is a sort of a like a this is very broad guideline. Yeah. Um, give or take. So if you needed $100,000 to live on, yeah, you need 1 million to $1.5, give or take. That is just providing you with sort of, you know, the standard sort of living expenses, maybe a holiday every maybe year or every second year. But you then you also need to take into account other expenses, like, you know, you're gonna have to upgrade your car and all those sorts of things. So it might be a little bit more than that. So it really is an individual sort of a question.

Speaker 2 15:14

It's a good point, though, isn't it? Because there's like three phases to retirement. When you first retire, you're gonna travel, you run around like a lunatic, and then oh, my knees are knackered, I'm moving, I'm moving into stage two. And then at the very last part, you're not drawing on a lot of funds. So those three steps are are there. But it's a great question because people need to work out now what are you what do you cost to live? Well, a lot of people don't know that number. There's just it's in, it's out, it's in, it's out.

Speaker 15:45

Yeah.

Speaker 2 15:45

What's the best way of finding out that number?

Speaker 15:48

I think that if you, for example, are living on a credit card and you have all your bills on your credit card, that it provides you a bit of a guideline of what your actual annual expenses are. So if you're putting like three or five thousand dollars a month on your credit card and that's covering groceries, pay. Dan Murphy's. Dan Murphy's all those are insurances like your car, like um uh house insurance, all of those sorts of expenses, that sort of gives you a broad sort of uh benchmark to sort of work for. But then you've also got other expenses like your, you know, your holidays and all those sorts of things that you do have to take into account. But I guess as a starting point to go, okay, what are my basic expenses? And if, like you said, if you use a credit card or even if you just use a savings account where you're putting,

How Much You Need To Live

Speaker 16:40

like if you get paid fortnightly and you're putting $100 a fortnight into the savings account and know that's your bills account, that still gives you a bit of a benchmark to go, okay, that's what I'm spending each year on and what I basically need to live on. And then you need to go expand from there.

Speaker 2 16:57

So, Nic, when you've got that analysis or that assessment, um my tax was done yesterday. So there's a full snapshot there. I can then pass that to you and say, what should I do?

Speaker 17:09

Um, so yeah, I think that is like, you know, a great point with Mai. We need to work together. And she does all the tax planning and the strategies and whatnot. And she can say, well, you can, you know, to save some money, you can make a contribution to Super and claim a tax deduction for it. But at the end of the day, does the clients have the money to do that? So it's really important that we do work together. We can sort of determine what, like, you know, the tax strategies are. But if you don't have the money for it, how are we going to get the money to actually do what you want to achieve and to provide sort of greater tax benefits for you? Whether that be contributing to super if you've got that money available, or it could be a case of we start, it might be a case of starting and then over the next sort of, you know, 12 months we go, okay, well, this is gonna, this is a strategy that uh Mai's given me to provide tax savings. But then I can't do that at the moment. But next year I want to do that. So it's an ongoing support that we can provide to actually get you there. And then how are we going to invest that? So when it does, like if it's a superannuation or is it is it like gearing for investments, like borrowing money to start investing or whatnot, that can be quite tax effective for you as well. So it's I think it's all about that ongoing support to go, well, how are we going to achieve what my strategies are and what your goals are and how do we align that together?

Speaker 2 18:36

What a brilliant moment, coachable moment of this podcast. I think a lot of people listening to this think they need to see you, Nicholle, right before the grand final. Whereas they've got to be doing it right through the season of life so that, okay, you can't do that today. But if we worked on this over the next two, three years,

Align Tax Strategy With Wealth Plan

Speaker 2 18:55

you'd be in a position too, and they go, really? But there's no conversation at all. They think it's right before retirement, what do I do? And usually it's too late at that point. There's been no planned approach that brings it all together.

Speaker 19:08

I think it's like your grand final instead of starting like at the end, like preparing for your grand final, you've got to do your pre-season. So that pre-season is, you know, starting to plan for your investments and savings and retirement.

Speaker 2 19:20

Well, Nicholle, thank you so much for joining us today on the podcast. Definitely turn the lights on for a lot of people and for all my children listening to this. Get yourself together is my little advice point there. And uh thank you for joining us, and we h hope our people reach out and get the advice they need. Mai, final words from you.

Speaker 1 19:42

My final word would be if you're building wealth and not sure whether you're on the right path, do reach out to us and um we'll help you align your tax strategy and financial plan properly. So thank you, Nicholle, for coming on my show today, and we'll see you again next time.

Speaker 20:01

Thanks, Mai and Lee, for having me. It was great to be

Final Advice And Next Steps

Speaker 20:05

here and uh provide my wealth of knowledge.

Speaker 2 20:08

And that concludes another podcast of My Accounting Advantage. We look forward to seeing you next week.