20 Sep It is time to ‘un-learn’ what you think about money – Vanessa Stoykov
Vanessa Stoykov believes that to truly grow long term wealth, we need to un-learn everything we think we know about money. Vanessa explains what she means as she gives us her five pillars for creating financial success.
Kevin Turner: After going on a 25 year journey of discovery, Vanessa Stoykov now believes that to truly grow long term wealth, we need to un-learn everything we think we know about money. As a result of this journey, Vanessa has crystallised this knowledge and experience down to five pillars for creating financial success. Vanessa joins me to talk about those pillars, and how we can get started.
Kevin Turner: Vanessa in your book ‘The Breakfast Club for 40-somethings’ you talk about un-learning money and re-inventing yourself. Hello and welcome to the show. What do you mean by that?
Vanessa Stoykov: Hello, and thanks for having me. Well really what I mean is, what are the behaviours you have around money, whether they’re conscious or unconscious, that may be holding back your financial future? And that’s really how the five pillars diagnostic test was born on you know, are you spending too much on credit cards which is the pillar called Desire? You know, is that the thing that’s holding you back from long term providing for you to have a comfortable retirement?
Vanessa Stoykov: Do you have a deep-seated belief that probably started with your parents or your family that you know, you don’t make enough money or money’s hard to keep or there’s never enough to go round? Because those kind of beliefs are very limiting on how you spend your money, and how you view money.
Vanessa Stoykov: There’s a third one, which is called Action. So most people know buy a house, put money in the bank. But that’s probably a 1970s, 1980s version of how to grow wealth. Because property’s pretty much at its peak. It’s starting to drop. So buying a property isn’t the real answer to wealth creation.
Vanessa Stoykov: So most people need to see a financial planner. But you know, they don’t know what, you know, they don’t want to admit what they don’t know, they don’t trust financial planners. So you know, I’ve built a guide on our website to show how to identify a good financial planner. Because you know, if you know the right questions to ask, you can find someone very good. So it’s jut a matter of knowing what to ask.
Kevin Turner: Can I take you back to one of the first points you made, and that is about desire. Is it about the fact that we don’t quite know what … we get our wants mixed up with our needs? What we really need.
Vanessa Stoykov: Well exactly. And I think the older you get, I mean I wrote the book and made it about 40-somethings, because I think you know, I’m 45, smack in the middle of that. I think you get to an age where you realise another new car, or another overseas holiday, or another watch, or all the things that you might be into, are the things that if you just kept what you had for longer, and then put that money that you’d spend on that into an investment, or into your super, I mean then you’re going to be paid back in spades. As opposed to buying something which is a liability, not an asset.
Vanessa Stoykov: And most people don’t understand that. Assets are things that appreciate and make you money, and liabilities are are pretty much everything else. Jewellery, cars, dinners out, furniture, all those things are liabilities. And that’s sort of a very basic explanation of how people need to view their consumption.
Kevin Turner: In the book, and also in your five pillars, you spend a fair bit of time talking about mindset. Mindset around money. And you touched on a point there about almost delayed gratification.
Kevin Turner: I’m much older than you, but when I was educated by my parents, one of the things we didn’t talk much about was money and how to handle it. But it seems to me that this current generation, and I know that’s a generalisation but this current group of young people coming through seem to be a lot more savvy about money, and the need to save.
Vanessa Stoykov: Yeah, I’d like to think that. I think the super system’s been in place now for a long time, so you know, we’ve yet to see a full cycle of that. I think it’s started pretty close to when I started work, but you know, I’m not near retirement yet. But I think this generation is much closer to digital, to information at their fingertips.
Vanessa Stoykov: Does that mean they’re better with money? I think they’re better at talking about it than previous generations, but I still think they need help. And they sort of need to be exposed to dinner table conversations around legacy, what you want to leave your kids. You know, we’ve been doing some interesting research on that, and people are very divided on what they want to leave their children in Australia.
Kevin Turner: Yeah, there was a study that I did an interview on just this morning actually, that talks about how two in three Aussies believe that parents should be providing more, or sacrificing more for their siblings’ financial future.
Kevin Turner: I struggle with that. I really do. I just think that you know, we’ve got to make our own sacrifices as we go along.
Vanessa Stoykov: Yeah, look it depends on your financial situation you know. There’s obviously some families that are doing everything then can and you know, the fact that they get their kids to the point where they can then work is as much as it’s possible for them to do.
Vanessa Stoykov: But there’s others that spend money in a way that if they had a better plan and a way to use it, they could set up a legacy for their kids that meant that they could have a house deposit, or they could pay for their university. Or you know, things that people’d like to do, but don’t really know how to go about planning for it.
Kevin Turner: It’s a matter of giving them a start.
Kevin Turner: I mentioned earlier about you know, my experiences in growing up. But certainly the lessons that I would’ve learned from my parents don’t necessarily apply today. Because things change.
Vanessa Stoykov: Yeah exactly.
Kevin Turner: They evolve.
Vanessa Stoykov: Our parents made their money off property. You know, all you had to do as a baby boomer was hang on to a property that you paid 20-something grand for, and watch it grow. Particularly if you’re in a big city. So-
Kevin Turner: Talk to me for a moment about mindset. How important is that in the overall equation? It’s … I mean it comes up in your belief systems?
Vanessa Stoykov: I think it’s everything to be honest. Because if you don’t have the right mindset around money, then everything else falls out from that. So you know, I know a lot of people who are under a lot of pressure, and these are people who either earn great money and just let it slip through their fingers, or people who don’t make much money and think that’s the situation they’re in for life.
Vanessa Stoykov: And they’re the wrong mindsets in both ways. I mean if you’re making a lot of money, how to free up cashflow and invest it so you don’t have to work like crazy is a mindset in itself. And if you’re not making as much, how to get a side hustle and think differently about how to bring in more income and then invest it.
Vanessa Stoykov: You know, you’ve got to have the mindset of, “I want to change my financial situation. I want to do more with it.” And everything comes from that. It’s exactly like losing weight. I sit there and look at people in bikinis and think yeah, I’d like to look like that. But am I willing to do the work? Hell no. So …
Kevin Turner: That’s exactly right. I think that’s a beautiful way to finish off and sum up as well. Vanessa thank you so much for your time. And a great read; it’s called ‘The Breakfast Club for 40-somethings.’ Vanessa’s been my guest.
Kevin Turner: Thanks for your time Vanessa.
Vanessa Stoykov: Thanks for having me.