The answers to 5 financially embarrassing questions, goals and tall poppies.

Hamish Mexted Managing Cash

The answers to 5 financially embarrassing questions, goals and tall poppies.

Most Kiwis loathe talking about money – we’re afraid of being a tall poppy, or of people doubting our financial literacy. This means for people who set financial goals, more often than not they keep the goals private and don’t share them with others.

The downside of keeping goals private is threefold:

  1. There’s no one holding you accountable to achieving them
  2. There’s no one giving you feedback on whether they’re set too high or too low
  3. There’s no one providing support to help you hit the goal

The first step to creating wealth and achieving goals is trusting people and talking to them.

Here’s how to open up about money

  1. Ditch a DIY approach. People often go about creating wealth on their own. They’ll buy a business, buy a rental property or choose a Kiwisaver plan off their own bat – it’s the Kiwi DIY approach. This holds people back – discuss your plans with others, preferably professionals, who can help design them with you.
  1. Share your goals and aspirations. Ditch the embarrassment of other people knowing what you earn or how much you’re planning on saving. Being open with your plan and having to explain what it is will reinforce it in your own mind. It will also help improve the financial literacy of the person you’re sharing it with.
  1. Execute the plan. Find someone you trust who will hold you accountable to the plan and can help you improve on it as you grow.

By sharing your goals you’re more likely to:

  • Achieve the goals with external accountability
  • Set more challenging goals
  • Receive the support you need and know how to ask with a second opinion

Here’s what people feel when it comes to money

  1. Uncomfortable – I can’t even talk to my spouse about my debt/income.
  2. Concerned – I’ve worked for the last 20 years and have nothing to show for it.
  3. Nervous – I don’t know how much I need for the future
  4. Uncertain – I know how much I need, but I don’t know how to get there

Here’s what people aim towards

Robert Kiyosaki, the author of “Rich Dad Poor Dad”, has a goal of:

“… stay[ing] focused on assets over income. That’s how we get (and keep) our money working for us — instead of working hard for money (i.e.: a paycheck) all our lives. By creating or acquiring cash-flowing assets — in any of the asset classes — my wife, Kim, and I grow our wealth.

Alexa von Tobel, the CEO of LearnVest is focused on:

“For 2016, my husband and I will be focused on making sure all of our financial plans and documents — such as life, health and homeowner’s insurance, financial plans for childcare, and our will — are up-to-date to reflect all of these life changes.”

For myself personally, I’m focused on making the earnings of our business independent from my input and reliant on the team we’ve created at work. I’m also focused on buying a rental property (which you’ll all hold me accountable to doing now I’ve said it publically).

What you can do now

Here’s five things you can do today to help build wealth:

  • Divide your income into different “pots” – a pot for spending, for saving, for debt repayment, for investing and for donating.
  • Cut out one recurring expenses you have every month. Start small – just one.
  • Get rid of “dumb” debt – that’s the credit card or short term finance.
  • Find a mentor – a sounding board and someone to give an independent perspective
  • Plan for your first/next $1,000,000 – with that mentor, come up with a plan to create your first or next million dollars.

Next step

Hiding your goals and being reluctant to discuss money holds us all back. Open up about money, work through the five things above, create a plan and achieve your goals.

If you’re after more, check out our very simple personal budget template here, or schedule an appointment to get real accountability around your financial goals.