Episode 131 | Bridging the gap in financial literacy | Jessica Brady, Fox & Hare Financial Advice

A top financial planner takes on the topic of relationships, household financials and  women and financial literacy. 
In today's episode our hosts chat with Jessica Brady, financial planner and co-founder of Fox & Hare Financial Advice, which specialises in providing financial advice to young couples and individuals. We discuss the gap between women and men in the financial literacy levels, why you should never defer your financial to your partner and how to find the most appropriate advice to your situation.

Here’s what we covered:

• Why women have a lack in confidence in their financial literacy

• Why women usually defer their financials to their partner

• Why is it crucial to share details of financials with your partner

• What happens when men take on more risk than women

• How to start talking about money.

• What honest conversations should you start having with your partner

• Why should you be getting financial advice earlier in life

This weeks Dumbo:

• Using credit cards and personal loans to get the deposit

RELEVANT EPISODES:
Episode 97 | Jacqui Pollock
Episode 111 | Sharon Bradley
Episode 130 | My Millennial Money 

GUEST LINKS:
https://www.ladiestalkmoney.com.au/part-one
Home Buyer Academy Facebook Live Q&A for First Home Buyers - Wednesdays at 7.30pm
https://www.facebook.com/HomeBuyerAcademyAUS/

HOST LINKS:
Looking for a Sydney Buyers Agent? www.gooddeeds.com.au
Work with Veronica: info@gooddeeds.com.au

Looking for a Mortgage Broker? www.wealthful.com.au
Work with Chris: hello@wealthful.com.au

Buy the book - AUCTION READY How to buy property at auction even though you’re scared s#!tless:
www.getauctionready.com.au
Use the coupon ELEPHANT for your 30% listener discount.

Send in your questions to: questions@theelephantintheroom.com.au

EPISODE TRANSCRIPT: 
Please note that this has been transcribed by half-human-half-robot, so brace yourself for typos and the odd bit of weirdness…
This episode was recorded in June, 2020.

Veronica Morgan: You're listening to the elephant in the room, property podcast, where the big things never get talked about, actually get talked about I'm Veronica Morgan, real estate agent buyers, agent cohost of Foxtel's location, location, location, Australia, and author of a new book called auction. Ready? How to buy property at auction, even though you're scared shitless.

Chris Bates: And I'm Chris Bates, mortgage broker, and together, we're going to uncover, who's really making the decisions when you buy property.

Veronica Morgan: Don't forget that you can access the transcript for this episode on the website, as well as download our free, full, or forecast or report, which experts can you trust to get it right? The elephant in the room.com.au,

Chris Bates: Please stick around for this week's elephant rider bootcamp, and we have a cracking Dumbo, the weight coming up

Chris Bates: Before we get started. Everything we talk about on this podcast is generally nature and should never be considered to be personal financial advice. If you're looking to get advice, please seek the help of a licensed financial advisor or buyer's agent. They will tailor and document their advice to your personal circumstances. Now let's get cracking

Veronica Morgan: Back in February. In episode 111, we interviewed writer Sharon Bradley to discuss her research into homelessness in Australia and uncover the shocking truth that women over 50 are the fastest growing cohort. It seems incredible that in 2020 women are still significantly worse off financially. The men there's a pay gap of 13.9% in Australia. Women retire with on average 27% less in super than men and 80% of women don't retire with enough money to live a comfortable life. We wanted to start the conversation in February and continue throughout this year to put a spotlight on financial literacy for women. This has been hijacked over the last few months by the coronavirus. So today we're getting back on track, what can be done to create change? How can we equip the next generation of young women to avoid this pattern? In this episode, we pick the brains of one young woman who has embarked on this mission. Financial planner, Jess Brady, having worked for CBA Macquarie bank and Zurich, just co-founded Fox in here. Financial advice in 2017, after realizing that young people were more interested in planning their meals and holidays than their financial futures is passionate about bringing diversity to financial advice and making it more accessible, especially for women. And she's recently launched ladies talk money and eight part video series tackling the complex issues that keep women from having financial security. Welcome, Jess, let's talk money. Thank you. Thank you so much for having me.

Chris Bates: Hey Jess, how are you doing?

Jessica Brady: I'm doing well. Thanks Chris.

Chris Bates: Good to chat. I guess w we've had lots of conversations around you know, the impacts of money on, you know, different people and different generations and, you know, different economic sort of backgrounds. What made you kind of tailor and target sort women

Jessica Brady: And what made you start our ladies talk money? Sure. So as mentioned in the intro, I worked in financial services for over a decade. And actually my clients, when I was, you know, in the lacks of Macquarie were financial advisors. And what became really obvious to me was that financial advice in Australia is often targeted to wealthy white men. Yeah, there's nothing wrong with that. Wealthy white men do need financial advice. I'm sure, but that's not the only person in the, in the society that we live in today that really does need financial advice. So my business partner and I in 2017 started Fox in here and Fox, and here is a financial advice business. And we really work with people who are 25 to 45. And so that's women, that's men. We work a lot with the LGBTQ plus community. Basically we want it to be a safe space for younger people to just get their financial wealth so that younger people in Australia are highly aspirational and they want everything and we want it now.

Jessica Brady: And it's about, well, how do you get there? And then I guess what was emerging from the conversations that I was having was just this real lack of confidence, particularly with women around money and this feeling of shame and guilt, and really feeling like, you know, everyone else has got everything sorted except me. And it just became really obvious that we need a platform so that we can really tackle the last stereotype, which is women are bad with money and women aren't good with money. And then, you know, they spend everything. And, you know, I think that this is largely because we don't teach people about money, guys, don't girls and women have this self fulfilling prophecy where they don't think they're good with money. And so they don't engage with, you know, financial literacy. And then if they enter a partnership, typically someone else takes over the, the finances in the house and then they just lean at further and further out.

Jessica Brady: So ladies talk money was born to create a safe space, to just talk about money and to be able to say, without any shame or stigma, I don't know enough about that. Where can I find out more and start the conversation, which is really exciting.

Veronica Morgan: I'm quite astounded to hear. I mean, cause obviously, you know, I'm not going to give my exact age, but I'm in that cohort of the growing cohort of homelessness. I'm still going to have an opinion, of course, but I'm astounded to hear that women in their twenties entering into a relationship with a man, assuming that the heterosexual would differ even today, they'd still defer to the male partner in financial matters. Is that really still happening in a, in a significant sense?

Jessica Brady: Yes. And it was, it, it was a shock to me because I just had assumed similar to you about the sounds, but this was, you know, of eras and generations that had gone by, but no, I am seeing that pretty regularly and it doesn't matter. What would dictation level or income level someone has it look naturally in a partnership, one person tends to take over more of the financial stuff in a relationship, but I have had you know, people who are very well educated say to me, Oh, I'll just let my partner deal with it. And I'm like, no, no, no, no, no, this is your money too. You need to come along for the ride. So yeah, I think this is definitely still a problem that we need to tackle.

Chris Bates: Yeah. I mean, it's interesting. The first six short, 2007 to 12, I was dealing with lots of older clients in their sixties, seventies, eighties and a hundred percent. It was definitely generally always the male side of it. And I had cases where the guy would even tell me not to tell his wife about certain money. I'd had after death. So I've actually had women find out that the husband had money that they didn't even know about and things like that. I do think it's shifting a little bit. It's still in, through in my, my clientele are very similar to you, you know, in that 25 to 45 and it there's always, usually one more dominant partner. And I would say if the scales are kind of evenly kind of split, I would say it's definitely more on the kind of male side, which is quite frustrating. And it's, it's when it, when you write it's a hundred percent as a partnership and both need to be heard. Unfortunately one usually dominates the other and generally it's the male. 

Jessica Brady: What I find interesting Chris is a couple of years ago, a really interesting piece of research came out from one of the financial advisor associations in Australia. And what it looked at was financial literacy through gendered lens. And so it looked at two things, it looked at competence, competency levels, and it looked at confidence levels. And so you can probably imagine, but I'm venturing. Thanks so far. What I found was that by and large men feel more confident with money related matters. And yet when we looked at the competency levels through agenda lens, they were in fact about equal.

Veronica Morgan: I think this is fantastic. You've heard in, in in recruitment years ago I was in recruitment. We had this thing called the Peter principle. Have you ever heard of that?

Jessica Brady: I haven't. No.

Veronica Morgan: So the Peter principle in a job sense is that and, and he's man men will rise to the level of their incompetence. And, and then I think it was Hewlett Packard or IBM, one of those two that did this research sometime ago that looked into why women weren't moving up the ranks within the organization. And they worked out, I think it was something like women would only apply for a job if they felt they could do sort of upwards of 95% of everything that was listed in the job description or the job ad, whereas men would apply if they could do say 60% which you can understand why then they will rise to the level of their incompetence. Cause they'd get the job. They could do 60% of it. They never actually master a hundred and that's where they stay. Whereas women wouldn't wouldn't push themselves. And it sounds like a similar things playing out in, in the domestic financial

Jessica Brady: Space. Yeah. And look, I think it's really important to also call out that that research showed that if you have a higher level of financial literacy, irrespective of what gender you identify as improves all areas of your life, your last satisfaction score goes up, your relationship score goes up like financial literacy and having a high level of finance financial literacy can change your life across many different elements. And so I am really passionate about this. I'm certainly not anti men. That's really important to call out things that women need a lot of help to feel confident and to want to lean in. And I think everyone benefits from that.

Chris Bates: I think you're really right as well because the, what I've seen over the years as well is that you know, a lot of men's traits in terms of taking on risk, making quicker decisions potentially. Aren't great for financial outcomes, right? Because what we want to do is we want to conduct, take action and, you know, solve the problem and invest. And unfortunately they, they lead into sort of get rich quick. And and I, and generally it's taking more risks than you need to, like you start playing with Forex and stop trading and you know, and it's, it's what ends up happening is they don't, there's rushing without actually taking the time to truly understand what they're trying to achieve. And I feel like, you know, this is not about genders, but I feel like a women sometimes sit back on the fence to try to gather the information and then try to really figure out what the right path is. And I think approaching finances, it's a much better approach to, you know, just gather information, really consider things rather than just taking one piece of information and then taking action.

Jessica Brady: Yeah. There was some great research done a couple of years ago around portfolio managers and women portfolio managers versus guys. And what they looked at was the fact that female portfolio managers, they trade less and they do have an element of, of risk in, in, in you know, thought really well thought through as part of their portfolio management. And yet it was just quite interesting to see the outcome of that. And, you know, the concept was we'll do women make better portfolio managers than guys, irrespective of the fact that by and large that space is dominated by men, the interesting piece of research, but, you know, what's funny in a day to day sense from a financial advice perspective, you know, sometimes I have to have pretty courageous conversations about taking less risk for some of our members and then really also encouraging particularly women to take more risk.

Veronica Morgan: When it comes back to that confidence bias, doesn't it, or overconfidence bias. You know, we see buying property as well. Obviously we see it at options that people who are more inclined. And I think, you know, once again, we don't want to go in the slamming of men, but there is a definite display amongst more Men of their overconfidence by, Oh, overconfidence bias, sorry. Then there is a display of that amongst women or potentially other genders. And, and I think too, because just socially, you know, white, you know, middle class men, you know, society has been constructed by and for them. And so therefore they haven't had to really fight, you know, I don't know this is sort of getting into more philosophical feminist argument, but they haven't had to fight for the same things that others have had to fight for. And so therefore it's easier. So therefore there's this assumption that they can do it. And, and that's probably underlying a lot of this wouldn't you Agree to disagree?

Jessica Brady: No, I do agree. I mean, if you look at superannuation by and large, that is designed for that top of avatar, someone who never leaves the workforce, someone who stays in the workforce and participates the whole time, full time, you know, the constructs like that have been designed with that sort of stereotype in mind, and that is not helping a huge proportion of society. So I definitely think that that sentiment is true. So what do you think

Veronica Morgan: Is the solution? Do you have a solution in mind? I mean, if you're talking about that, that fundamentally women are still in a situation where they're deferring their I guess if they're in a heterosexual relationship with a man, or even if they're single or not coupled with a man that they're potentially that they're delaying or deferring financial decisions, because they're thinking that they're not confident and they're not competent, even though they may be, and they have a level of shame and guilt around that. And they think that everyone else has got it sorted out, not them. And so they don't speak up about it. How can we get to a point where we demystified and actually opened the doors for them?

Jessica Brady: I think it starts with one very small thing and that is, we need to start talking about money. I really believe that the fact that we do not feel confident to have money based conversations in 2020 is a crime and it helps no one. Yes, we can talk about all of the structural inequality and that definitely needs to be addressed. But I also think that that can sometimes make people tap out because it's too big and too overwhelming and it doesn't feel like I can have any impact. And so, you know, I put my head in the sand. I think the best thing that we can do is start to normalize money-based conversations and to be perfectly Frank, I think covert is helping that in some way, because very first time we're having conversations like, you know, have you lost your job? Are you still getting paid?

Jessica Brady: Are you on job seeker? You want job keeper? Did you take money out of your super, like, these are conversations around money that we haven't had before. And you know, all the bad stuff that's coming out of. COVID, I'm actually hoping that this is the start that we've needed to say, Hey, to say that you don't know, you know, something to do with your super or understanding what an ETF is or managed fund that's. Okay. But darn stump there, you know, start asking your friends, what do you do? It can just be something really simple. We've done some money guides on ladies, talk money, and we have found that the response has been amazing. And it's just simple questions to ask your friends and family simple questions to ask your partner, because people just are quite fearful about having these conversations still.

Chris Bates: Yeah. I mean, it's obviously a lot of relationship. It's kind of like a taboo subject, right? I mean, we still find when we're doing mortgage applications, that we do a credit check on all our clients and we ask in the you know, kind of the introductory email, can we do a credit check? And, you know when we do that, sometimes they don't realize, we find out everything about, you know, their credit cards and things like that. And the amount of times we find out that some partner didn't know, the other person had, you know, credit card debt or credit card limits, or, you know, we're hiding something and it's, it's because of either fee or, or just haven't had that conversation. And that's just pretty disappointing, right. When, you know, you're, you're you're together, but you kind of having to not talk about something because of fear, I guess.

Jessica Brady: Yeah. So I think if we can start to normalize money-based conversations, if we can start to teach people that it is okay, that you don't necessarily have a huge understanding of all things, finances, but as long as you accept it and decide to lean in that is important because we don't get taught it at school, which blows my mind all to chance or perhaps your parents. And for a lot of people, they didn't get a huge amount of, you know knowledge from their parents or the people around them. But that doesn't mean that you're stuck with that situation forever. It can just be very overwhelming. And again, because of all of the financial jogging that exists and, you know, a lot of stuff, if you look at, if you look at brochures and pants, that's increased, I'm sure you've seen lots of them in the financial advice world. Like it's typically two senior people on a beach running like that. Doesn't really speak to a lot of Australia. We're trying to shake it up a bit, which I think is important. Now,

Veronica Morgan: The things I watched in one of your videos, you use the analogy that if you had a heart problem, you would go to your heart surgeon and you would have no shame in, in, in showing that you had no ideas about the workings of the human heart. You would easily say to the surgeon, look, I'm going to defer to you. And you, you draw the comparison between that and going to an expert to get some financial advice. But the problem is with that is that really fundamentally we do need to understand the fundamentals with your heart. I guess you've got to understand, you know, things like healthy eating and exercise, et cetera, et cetera, but there's a bit more to it. Isn't there with financial literacy. And I mean, I guess certainly on the property side of things, I see people coming to me all the time with a belief around property that comes out of a lack of financial literacy.

Veronica Morgan: They don't understand that there are other options. I don't understand the traps that they're about to fall into because of the, a bit of a blind faith in, in property. And so, you know, I think that there's a requirement and I agree with you that to not teach us as school is just criminal, but there is a requirement of each individual to actually start to learn. But if there is shame around that, and also if it just seems too hard, I mean, how can you say just talking about it, that's fine. And that's a good first step obviously, but how can we get over that shame barrier? Do you think just talking about it is going to be enough?

Jessica Brady: Well, yeah, so my analogy was around the fact that many people have come to seek advice from me and they've sort of done the thing where they clean for the cleaner. They want to get themselves in a position where then they can come to me and be like, okay, I've done this thus far. Was that good? And you know, I guess what I was trying to say in that analogy was like, it's okay, you don't have, you don't have to come with shame around, you know, Oh, I just wanted to wait to get financial advice until I was out of debt or I've had X amount of savings. That's not okay. It's okay to, you know, to front up and be like, I'm not a hundred percent sure what I've done is correct, but here it is. And let's move ourselves forward. I think the shame is a, is a complex one because we often think of money as just numbers on a spreadsheet, but it's absolutely not. It's so much more emotional. You know, it's a lot around how we feel about money, what I'm like money story is what we've learned or didn't learn from our parents and what we watched around us.

Jessica Brady: And that does build this whole emotional story about money, which can leave with us forever if we don't realize it and can be detrimental to how you make money decisions in the future. So I think that your question is a really complex ones to solve without doing a lot of work of understanding. How do you think about money and how is that impacting the decisions that you are making, or you're not making in your world right now. And is that going to lead you to where you want to be from a financial security perspective in the long term?

Veronica Morgan: I was, sorry, you go, sorry. I was talking to a, a young woman the other day, she's a lawyer. So she's obviously, you know, educated and in a, in a very good job. And she was taught, we're talking about buying her first home. And she was saying to me that, you know, she'd been sort of delaying it because she was thinking, well, surely I'll meet someone and surely we'll partner up and surely we'll do it together.

Veronica Morgan: And she's got to a point where she can afford to buy a property herself, but she's got this dilemma of, well, do I buy something, just suits me. And then what happens if I do meet someone? You know? And so there's, there's all these sort of challenges to early in life, generally, whether you're a woman or a man, I guess in terms of sort of financial decisions that are, that are quite the sort of, what's the word they're sort of mutually exclusive, you know, you can't do two things at once you choose a path, you know, so that's the real challenge. And, and I guess, how do you, how do you

Jessica Brady: Guide people, particularly women through that sort of thinking what astounds Beaver on a cake is? How many people come to me with absolutely no idea what they want to do. They go to work every day, they work really hard and yet they have no clue what they're working for. And so I think it's quite interesting that a lot of people haven't okay around Jan one, we're very good at that. This is going to be the year and I'm going to change all my things. And I'm going to be my best, you know, new year, new you sort of thing. But fundamentally, a lot of people are getting up and going to work every day, every year for decades with no real plan around what they're going to work for. So I think a lot of their work needs to come back to what are the things that are really important to you?

Jessica Brady: Not what your parents told you to do, not what your friends are doing, not what everyone else need to do. Like what are you want to do? And what are the values that are super important to you? Because if it's that you want to travel for six months every year, then you're probably going to have a different value set to someone who wants to stay in the same house forever and never travel. So I think getting clear on that is the first sort of foundation piece. And then you can build goals on top of it, knowing that they'll change. But I think this concept of choice fatigue, where there's so many options and there's so many different paths, so you do nothing cause you're so overwhelmed is real in the financial sphere. And people just sit on cash, particularly at the moment, which is not only anything flash and figures at the moment, it's, it's really scary. And so sometimes it's a matter of doing something rather than waiting for everything to be a hundred percent perfect because you might find that that time never comes. That's a good point.

Veronica Morgan: I thought we buy as Chris and I took a birthday to say something yeah, I thought you were gonna say something and that softens 

Chris Bates: I mean, I think you're right. It's a really interesting, and I was like, wow, what a delight to us. I just wanted to kind of clarify my thinking on it a little bit because you're right. I think it's really important for them to take a deep breath and really consider, you know, where they are in life, where you're going, this is both a problem for men and women who are single or and we just don't know when life can change, right? You, you know, not everyone wants to have a partner and go down a family route. That's totally cool. But a lot of people do want to have a partner and do potentially want to have kids.

Chris Bates: And especially when you start getting around that, you know, you go into your thirties and et cetera, and you think, well, it's, you know, it might happen soon, you know, et cetera. And it could change very fast, right? You can meet someone in a cafe or Ron, I think they use Bumble now, but you know, it can end. I think it's really hard to play when you're single and you, you're wanting a relationship. And the problem is if you then go use all your assets and invest and a property you can then very quickly go, Oh, actually I want that money now. Cause we want to buy a house together. And it's a really difficult thing to conduct to plan for. But I agree with you is kind of going back to your own sort of personal responsibility and your, where you really want to go in life and kind of making your decisions based on that. And hopefully being able to be flexible should your life plan change. And I think that's one of the reasons why some people shouldn't potentially just go rush out, buy a property because you know, there's just, there's unintended consequences that could pop up if you haven't thought about it.

Jessica Brady: Absolutely. And we are very strong with people when they make big decisions like investing in property around the hold period, like the minimum hold period. But we would expect someone has so that they can get the growth that they need from that asset. So yeah, definitely wanting to make sure that they understand that if this is a path that they're going down, they need to be very clear. You know, I say this both from a property and an investment perspective, you know, I say to people, okay, we're investing in this investment portfolio. Ultimately you can access the money whenever you like, but I want you to pretend that this is a minimum 10 year hold and that's how you need to think of it. And then if things are happening within the next 10 years, we need to be really confident that you're not going to need to rip that money out because that is for X goal. That's a longer term time horizon. And that's how we've calibrated the risk for that portfolio as well. So that is definitely a consideration that needs to be made up from,

Veronica Morgan: And it comes back down to that research. You mentioned before about fund mat fund managers and where it showed that women fund managers might've or had outperformed male fund managers, but it's not so much about gender in that regard. It's because of the, the, the number of transactions, the number of changes, the number of deals, you know, with that portfolio. And, and there's been quite a bit of research on that, that I've read some of that, some of that too, that, that people are trying to ride the market, you know, buying, sell, buy, sell, buy, sell, rather than picking quality stock and letting it sit and do its work, its magic over time. It's the same principle with property. You buy a caulking property and let it work its magic over time. And yeah, I think people underestimate too. I think there's a lot of belief around property still to this day.

Veronica Morgan: I'll be doing a lot of work with first home buyers at the moment. And there's a lot of, a lot of talk, a lot of belief that all property goes up in value despite headlines, despite evidence to the contrary. And so when you got that belief, you're not really thinking about timelines, you just I've got to get in and it doesn't matter if for other, not just sell it and I'll get my money and then I'll buy something else. It's actually, well, there's costs associated with that and you might not actually make your money. So it's important for people to understand all of these things,

Jessica Brady: Completely transaction costs in tax can erode all of the returns if you haven't factored all of that in. So yeah, completely agree.

Chris Bates: So Jess, when you, for example so that was a lot on the single of planning for the future and you know, the complexities of how your life can change. And you've got to be conscious of, you know, rushing into an investment because you could shoot yourself in the foot. And that whole process could have been a lot of risk for no reward really in terms of when you get couples you know, obviously one partner will reach out to you or potentially they'll both do it, but how do you kinda make sure that both are really on the same page and you're not kind of always just dealing with one party and one's kind of just letting the other party take control. How do you kind of really make sure that they really understand need to understand that they're both going to benefit going through the process?

Jessica Brady: Yeah. So for us, before we put a plan in place, this is from a financial advice perspective. Before we put a plan in place for a couple, we do something called a goals and values session, and this is evolved as our learnings have. You know, as we've progressed and we've learned more and more. And so we make both parties tell us their core values and sometimes they can be really aligned and sometimes they can really compete. And that's really important to flag upfront.

Veronica Morgan: You have a counselor on staff.

Jessica Brady: So Glen, my business partner and I, you know, first year giving advice, we went and did a what's called an act therapy course because we really, we realized very quickly that we were ill-equipped to have some of the conversations that we were having was sometimes quite heated and quite confronting, but act is about accepting and change therapy.

Jessica Brady: So it's about accepting where you're at and, and making commitments to move yourself forward and change, which was quite interesting. But yeah, sometimes I feel we need a marriage counselor onsite as well. And we do goals conversations for couples and both parties need to be at that session. And I had a member a couple that I've said to them, unfortunately, we can't continue working with you if only one of you comes to the meeting. I was really conscious that it was just being defaulted in this instance to the husband. And I understand they have a young family, they have small kids. And so it's not always practical to have both people in the room, but I also just felt that there was a level of engagement that wasn't right, because I have to give advice and I wanted to make sure that both parties were involved in since that pretty Frank conversation, there's been definitely a huge improvement to her interest. We have created internally some financial literacy programs for people who honestly just feel like they don't really care and to just get them excited about why they should care and what it could mean for their life, which has had a good impact as well, a big impact as well.

Chris Bates: I think that was really interesting because someone will be listening to this right now. Right. And I doubt they might be there with their partner next to them. Or they could just be wherever they are. Right. Who knows whether listening to these podcasts. But you know, I think a lot of people listening will be considering themselves as the person who does it for their couple or their relationship, but they probably haven't really thought about it potentially in a lot of depth and thought how important it is to get their partner on their same level. Because just by not bringing the partner on the journey, it's very easy. You can start to, you know, allow them to not be as confident with their financial decisions because they're not getting to make any, or they start to feel resentment because they're not getting heard, et cetera. So, you know, that's, there's, there's a lot of benefits of even if you are the one doing it for the relationship, you've really got to be putting yourself in the other person's shoes and thinking, I need to also make sure you're a part of all your decisions because before you know it, if a big decision goes wrong et cetera, you really need to both be able to deal with that together rather than, you know, you having to take all the brunt yourself, vice versa. If that makes sense.

Veronica Morgan: Oh my God, we see these in property all the time. And, and our, our getting started session is all about getting our clients to fill in a wishlist each separately. And every time I say right, I want you to fill them in separately and not cheating and not one of you filling for both and not even in the same room if possible. And always one of them has a really big smirk on their face. And it's like, right. That's, that's the one that doesn't feel like they're being heard. Right. Because it is often you know, you find that one is a little bit more dominant than the other and the other one tends to capitulate. And if it goes wrong, the one that capitulated, Oh my God, they never let the other one forget it. And that's not a very nice relationship to be. And so it's really good point to get them both on even just for was it damage? Was it damage prevention? Yes.

Jessica Brady: Yeah. And you know, I actually don't have up to date stats on this, but pre COVID, it was something like one in three people stated that they were financially stressed and a huge proportion of Australians went to work every day, feeling really stressed, especially around money. And so if you look at how that impacts relationships, we know that finances has a huge impact on overall relationship satisfaction. And we're not having these conversations. We're not having money date nights. We're not having monthly check ins. We're not recalibrating goals together as a team, you know, in any other context, if that was a work team where just one person did all the work in the other that you choose, that's not true at all. And so, you know, we know that this is impacting lives right now. We know this is causing huge amounts of angst and frustration, and yet we're all still really scared to talk about it.

Chris Bates: I think it's the relationship and the relationships breaking down as well. And this might be one of the reasons it's breaking down is that just not having the conversation around money everyone wants certainty, right. And you know, and then when potentially a relationship's gonna end financial, situation's going to potentially dramatically change. Assets are going to get split, et cetera. And then the fear of going down that route then keeps them in the relationship which isn't a healthy relationship. And so then the fear of not aware, you know, the relationship ending is stopping the conversation cause that could cause it to end if that makes sense. So it's kinda the cascading effects of just not having these conversations can actually be what I'm brings the relationship anyway. So it's so important just to have it upfront, constantly be talking about it before things gonna blow up because it's just too late.

Veronica Morgan: Well, I guess that's a good litmus test, isn't it? Because money is a challenging conversation for people, as you said, you know, particularly for women who, who feel a lot of shame and guilt around discussing it, we'll discuss anything, but we don't necessarily discuss money. And so it's like, if you can have a conversation around money, then potentially you can have conversations with other really meaningful about other really meaningful things in your relationship. You know what I mean? So in a way it's a proxy for a good, healthy relationship, but anyway, yeah. What have you got for lose a lot, if you don't do it, you can lose heaps.

Jessica Brady: Yeah. I mean, I guess the question is like, if you're not doing anything about it and it's causing tension and getting on the same page like that, that's, that's a great stop.

Veronica Morgan: You'll lose more by not doing it. Now we, I opened up this conversation by saying that you know, the, the fastest growing cohort of homelessness in Australia is women over 50. Now there are so many reasons. I mentioned the pay gap. I mentioned, you know, less in super, but obviously women have babies, not all women, but if you do have a baby, obviously that takes time out. There's lots of inequity in terms of the load, I guess it typically falls on women and biologically, there's a load that falls on women that men cannot, it doesn't matter how committed they are. They can't take. So, you know, because all of these things are the knock on effect of this. And also, we also talked to him and Chris, you, you mentioned about clients have been hiding things from their partner and, you know, you think, okay, so if you've been in a relationship and then it falls apart, and if the man has been in control of the money and if there's been stuff hidden you're at a disadvantage for starters, you're not going to negotiate as hard on your settlement. I mean, there's, there's a whole massive knock on effect, which does set up women for financial insecurity. Right.

Jessica Brady: And definitely, and even basic things Veronica, like when you potentially go on parental leave, if you're having a period where you're being if it's unpaid leave, you know, thinking about things like is your spouse splitting their super with you where you're not working? Like there's things that can happen along the way that, you know, mean hopefully that you are as a team both working together to make sure that, you know, the female is an ending up with something like 42% less sooth or whatever it is that, that, that the stat has shown. But yeah, there's definitely a huge risk with divorce deaths or disablement throughout life. And that leaves people in later years in very financially vulnerable positions. And so it's thinking about, well, what do you need to do today to put yourself in a position that's going to mean that you haven't mitigated as many risks as you can.

Chris Bates: Yeah. It's interesting when couples, you know, come into a relationship at different stages of life, different backgrounds, different current assets, maybe different debts you know, different professions, different incomes. And then you're joining things together. And then, you know, people that it's kind of, then someone feels like they're brought more into the relationship and then someone feels, you know, a bit disappointed or a bit resentful or a bit ashamed that they haven't got as much, but then they earn more money and then one goes on maternity leave and you can very easily see how, you know, people are doing different things. And if you're not really aligned on these kind of joint sort of we're in this together all of a sudden it very easily can start to kinda, yeah. Basically start arguments over. We're not, you know, not doing the same or, you know, exactly if that makes sense it's not equal. Yeah.

Jessica Brady: And then we also need to be very pragmatic about this and say that something like one in two marriages doesn't survive. That is not a, it's not the most romantic thing to talk about when you're giving advice to a couple, but it's important that we have an awareness of this and, you know, make sure that people are not going to be left in financially desperate situations because they were uncomfortable about having a clear conversation around assets.

Chris Bates: Yeah. A hundred percent. I actually see that it's either two, you're going to get the two, a couple that are both really keen to take ownership of this. And they're both on the same page and they're both working on it having lots of conversations on and they are taking action. And when they feel like they're potentially just going through a cruise mode, they kind of ramp it up a little bit and keep on going. I then get the Quan couples who have potentially come a little bit later and they're both being very conservative. They've both been very not wanting to take control of this problem. So they both put their heads in the sand and then they get to potentially, you know, early forties, even potentially late forties, early fifties, and the right now we really need to do something for, you know, our financial future. And unfortunately, depending on what they are and what they've done, you've got to play catch up and you're starting from a much smaller base and you need sort of compounding takes time. So, you know, sitting either you've really got to fund, even if your partner is not taking control of this and you're not confident, you've kind of gotta be the one that really tries to get you both on the same page and moving forward. Yeah. And I think,

Veronica Morgan: And gets advice when they're about five years out from retirement. Wow. A little bit light then guys. Oh, that's scary. And this is why some, and look, I do, I've met so many people who, who have got advice but not from advisors. You know, that, that is where they're at most at risk of this get rich, quick schemes and certainly a lot of property spruikers prey on that type of that demographic. You know, there's a lot of those people that have used whatever they've had in super, which they felt wasn't enough and then tipped it into a, off the plan property purchase from their self managed super fund and lost a lot,

Chris Bates: A hundred percent. And that's one of the, I mean, just you work with a twenties five to 45. I do the same in that sort of demographic. But my early years were on that, you know, 55 to 60, 65 range, exactly what you were saying just five years to go. And unfortunately, generally speaking, you know, you have to work miracles because there's a huge shortfall in what they really need in five years time and where they are today. And the only way to get there is through leverage and, you know, ridiculous sort of investment strategies and things like that, which carry way too much risk for someone. So it's actually damaged limitation at that point in time and actually saying, look, you can have to change your goals and you know, or potentially work longer or potentially save harder and change your lifestyle today. And all of these things are really great and fun conversations and a lot of pain. So I think you're right, like it's, and then generally speaking, they go to advisors, unfortunately at that age as well. And so, you know, there's a good trend though, but a lot of that older advisors are kind of moving out and a lot of younger advisors sort of targeting younger people to get them actually taking action with money much earlier.

Veronica Morgan: How many, how many women? Oh, well, what's the proportion of financial advisors that are women about 20%, right? Yeah. So, and it's that sort of it's a growing proportion. I actually don't know the stats on that. Chris, do you know if it's growing?

Chris Bates: I don't know, but there's a huge reduction in adviser numbers at the moment. You know, we're talking 20%, I think it is in the last year. And you know, a lot of the older sort of the compliance challenges with advice potentially leaving the industry. So we're getting the average advisor, I think it was 56, maybe five, six years ago. So he had a very 80% men, 80%, you know, the average age of 56. So you said a lot of advisors in their sixties who were men and that just doesn't appeal to, you know, the real problem where you need to be getting advice when you're younger and, and then you write a lot of men. And I actually think that's a, yeah. A lot in that. And that turns off most you young couples cause they just see their advisors and they go, I don't really want to use getting advice from my dad. Well my dad's friend, do you know what I mean? And so a lot of people don't seek advice because the advisors out there aren't really who they want to talk to, if that makes sense.

Jessica Brady: Yeah. We have a massive amount of work to do in the advice community to increase diversity in all its forms in those advice, because then it's going to appeal to a much broader subset of the society that we live in adding is multicultural. That is of lots of different ages. You know, they have different religious, you know, there's just so much diversity and we are just talking through agenda lens. You know, we need lots of other types of diversity in a day.

Veronica Morgan: It's sort of an aspirational aspect to it though. I mean, dude sort of people think, okay, well, I don't really want to take advice from somebody who looks like me and sounds like me because, because they might know as little as I do. Is there ever that sort of I guess perception,

Chris Bates: I think there is, I think there is that in the past you were like, I want to go seek an advisor that has potentially done what I want to do. And so you seek more of a mentor sort of person, but I, unfortunately I think a lot of the advisors haven't really, you know, it's like a taking care of their own shop. You know what I mean? And haven't really gone and achieved what you want to achieve. 

Veronica Morgan: Well they're still advising in their sixties. I suggest they haven't just,

Chris Bates: So I think that is there is. And then, but I also, this is one of the reasons why we kind of really just stopped working with people in their fifties and sixties is because the challenges today in 2020 or 28, you know, whatever, even if you said 10 years ago, 2010, the challenges for younger people are completely different to how a 50 year old or a 60 year old is thinking about the world. And you know, what's worked for them over the last 20 or 30 years doesn't necessarily mean that's what the next generation aspire to or will be able to achieve, you know, based on the, the, the way the world basically was for the last 20 years. So I think if you don't really, and a lot of advisors maybe do 10% of their work with people in their forties and thirties, majority of their work is clients near 50 60. So they're not really even getting exposed to the challenges of younger people by the clients they're seeing, because they're just not seeing that many. So, you know, you really, I think the challenge is for younger people is they're better off going to see younger advisors who are day to day dealing with those problems themselves. And actually most of their clients are like that because they really understand where they're at. I guess if that makes sense.

Veronica Morgan: Well, though, just being devil's advocate here, I mean, you've both talked about a lot of people getting advice too late, so they're in their fifties the first time they get advice. So they haven't necessarily done anything better. Well, they're definitely haven't done anything better than a young person today that haven't necessarily made the best out of any there's no systemic well, there's no systemic situation or structure that is allowed them to benefit. You know what I mean? They haven't actually amass any fortune. So you could argue that those people have actually just done, what is the temptation for young people today, which is basically put, bury their head in the sand, just get on with life, you know, putting the too hard basket.

Jessica Brady: I think a lot of I think a lot of older Australians have been able to generate a lot of wealth through property and that's quite aspirational for a lot of younger Australians living in a city and locations that want a house that they own, that they live in. And obviously there's a lot of complexities and conversations that need to go around that. But I definitely think that the younger cohort on much more experiential driven, there is a lot more pressure, whether it's true or not around, you know, having all the things, you know, they want everything, they go everywhere and they, they want property. And at some point they need to realize that there have to be trade offs. Whereas I think in, in generations gone by, you know, they made a lot of money from property, but they also didn't travel to the same extent. And, you know, they, they probably wouldn't as experiential driven

Veronica Morgan: Travel was a lot more expensive. Certainly when I was growing up, I mean to go overseas, I would say honestly, the cost of a, of an overseas economy, class, overseas ticket. Not that you can get one at the moment. But it's, it's not dissimilar now to what it was 20 years ago. Oh my gosh. 30 years ago, we're growing.

Jessica Brady: In fact we're going to McDonald's, wasn't the most exciting thing for me when I was growing up, because it meant that was when we were allowed to have McDonald's through the drive through cause we were going on some road trip to some sort of caravan park somewhere than it sounds like when I was young.

Veronica Morgan: It is. I mean, but yeah, so, and obviously with the lowering of costs of travel means that obviously the temptation is, is greater because it's more achievable. And so you're more likely to actually make those, those trips because the, the amount of saving web as a proportion of your salary to actually get an overseas ticket or be able to borrow on credit card, it's a lot, a hell of a lot easier. So I can understand how a young person who is seeking this is just beyond me. There's no way I'm ever going to buy a house burger. I'm going to go on, have a, I'm going to take a month off. I can totally understand why, why that might be the decision that is made on a regular basis

Jessica Brady: Over knock it as a preying on this a little bit with this whole like treat, yoself just put a $1 down payment on a holiday and then the rest, when you come back, like because of Instagram and social media and all of that stuff, you know, it's almost becoming this thing where it's like, well, everyone else is doing it. So I'm just going to do it as well. And I'll, I'll pay it, I'll pay for it somehow later. So there's also this, this, you know, very big trap that we need be across as well and understanding what is instant gratification doing to your longer term goals and just making sure that you understand the trade off that you're making financially today.

Chris Bates: So Jess, if you've got a property Dumbo for us,

Jessica Brady: I do. I wish I didn't, but I see. So one of the very first members that we started working with Fox and Hare came to us with a really good income. And he said, I've got something to tell you. And I said, yeah, he said, I have taken out three credit cards and a personal loan to get into posit, to buy my place in Waterloo. And he owns an apartment in Waterloo, which unfortunately in new South Wales, in Sydney and fortunately the value of that property hasn't increased as he had expected it to, because of course that was going to be the saving grace. He would take out all this you know, credit card and personal loan debt, but it would be fun because soon the property would be worth more and he would just re mortgage the place. And he could just sweep all of that debt into, into the mortgage and pay a lower interest rate. And he really thinks for the fact that that's potentially not going to happen. And lo and behold it didn't happen. So we've been working with him for the last two and a half years and he has just paid them all off and it has been the most traumatic process for him and his banker and I, and he has told anyone that will listen, that that was the, one of the stupidest financial decisions he's ever made. Wow,

Chris Bates: Interesting. So realistically, you shouldn't be able to do this. And so the banks have got something called like her genuine savings, et cetera, but did he yeah, essentially how he actually physically were able, able to do this. I get personal line is probably easy to get, but the credit cards, I don't know how he's ended up getting that for deposit. Maybe start a cash advance on his credit cards or something. So what does he borrow? 90 or 95% or something

Jessica Brady: 95%. And this would have been in 2016. Oh right. Almost the peak of the market as well. Yeah.

Chris Bates: For lender that didn't really look at genuine savings, or somehow he's been able to Dodge the system because, you know, generally speaking, you need to have like three months of savings kind of of 5% deposit just sitting there. So unless he knew that rule got the money off the personal loan then waited. So I don't know, it's, it's actually, there is a process in the bank application to stop people taking out short term credit to buy property, but he, somehow he's got through the system and yeah. And then he's going to borrow it potentially a poor asset, like a, an apartment in an area where they're building a lot of other apartments. So there's no shortage of stock. With the future, I, you know, just banking on future growth. The problem is with the 95% loan, he's not even going to be able to crystallize that debt or, you know, combine that debt to that property has got equity under 80%. So, you know, that probably has got to go up a lot for that to happen.

Veronica Morgan: Just did he buy brand new or off the plan? Do you know?

Jessica Brady: Uh I actually don't know because by the time we started working with him, he was already living in the property, but it was a new build. So I'm not sure exactly when he purchased it. He was living there and he was the first person to live there. I believe when he bought,

Veronica Morgan: Which is another, another reason why obviously he's bought it highly risky property. Even the fact that because brand new off the plan, you're paying genuinely a premium for being brand new. It's like driving a new car or the showroom it's immediately worth less so than he's got no equity in the first place. Cause he's, he's behind. Oh dear. Wow.

Jessica Brady: You know, I think he had a lot of, again, he had a lot of shame about it coming to see me, but he couldn't this cycle of huge interest rates and, you know, just, he was earning good money, but it was just all going and yeah, it was pretty courageous conversations around it.

Veronica Morgan: I'm good on it. But obviously his level of pain was so high that he had to do something. So that drove him to get advice. And now you've been sort of, he's learned the hard way, I guess, about, about being a bit frugal. Right. And being bit careful with his money.

Jessica Brady: Yes. It's funny.

Chris Bates: There are like sometimes we do get clients who are in that position where there are a lot of money and a light bulb has gone off and, you know, they've kind of lived it up and instant gratification, which you were talking about and traveled and, you know, entertainment, all these sort of things and money just kind of been coming in and going out. And then they've kind of, maybe they've hit a age milestone or they've had a lot, you know, an event happened to them. It shocked them and they got actually know what I need to take this serious to start saving. And they're saving really hard to save up a 10 or a 15% deposits a long way, but they're earning a great income. And there is actually an argument that potentially taking out a short term loan to allow them to get into a property can actually work if they're on a very strong income.

Chris Bates: And so he strategy motivate. Okay. It's just that I think he's, he's done a couple of things wrong. He's gone a bit too soon. He hasn't, he probably should have saved for a bit longer, got a bit more runs on the board. And then potentially has gone and bought a poor asset. So he's just kind of dragged his decision, you know, rushed his decision a little bit there, but there is an argument though that when you are in that really strong savings period, that a small personal loan can help you potentially just is actually a good strategy potentially for some

Veronica Morgan: Not without advice though. Of course, Jess, thank you so much for your time. We will put the link in the show notes to your ladies, talk at money series video series, because I think it's important that you know, we all view them and share them amongst people who would benefit. And, and I agree with you. I think getting the conversation, going, encouraging all of us to talk about money really, but certainly if you know, I'm blown away by the fact that at 2020, you know, the, the up and coming new generation of young women are still having this sort of psychological barriers in their way and, and beliefs and all the things that need to be challenged in order to actually have better financial futures for themselves, you know, I'm astounded. So we've got to do what we can to really get this conversation going. So people and women, but all of us can do better for ourselves. Agree. And thank you so much for having this conversation today. I'm, I'm so very passionate about this and yeah, definitely excited about where ladies talk money can go and getting some expert advice on all of the different complex areas where we can improve female financial literacy in Australia.

Chris Bates: Amazing. Jess really appreciate it. I mean, there's you know, there's a number of advice outfits coming out in this kind of younger demographic, but I think you and Glen are doing an amazing job in terms of challenging the norms around what financial advice has been and where it needs to go and creating a movement around that. So well played. We want to make you a better elephant rider and this week's elephant rider training is

Veronica Morgan: Let's go a little bit further on the conversation we just had with Jess around the importance of having these conversations, money conversations with when you're in a couple. Now, obviously any property conversation is very intrinsically linked to money. You can't have one without the other. However, it is amazing the amount of deferment that goes on in relationships. And I guess what I would do, this is not a relationship podcast, but I guess what I would say is that it's a danger sign in your relationship. You can't have these conversations and it might not mean your relationship's doomed. It just means that really it's not as healthy as you might want it to be. Because if you can't have these sort of conversations, then there's a reason that's stopping you and you'd need to look into that. And so I'd encourage you to go out there and, you know, talk to a therapist and explore that, be brave enough to explore it.

Veronica Morgan: Your relationship will be better if you're both willing to lean in and that's a word or term that just use quite a lot. The thing is though, and I have witnessed this both in my selling career and also my buying career that you can go along. You know, often we do leave a bit unconsciously. We sort of going down a path and we're not really questioning it too much, or we're not game to question it too much. But the amount of times that I have come across people who have really got to the brink, buying a property and then realized they don't want to be with that person any longer. And it's actually been the catalyst to end the relationship. Now that's pretty drastic, but it has happened. And in fact, I even remember back in my selling days, a couple that I'd actually sold their house.

Veronica Morgan: They bought another one. And at, at the removal and the day of removal or the day of moving in, the husband actually said, look, I've actually put all my stuff at the back of the truck and yours is at the front. And we're going to unload your stuff and I'm going on to somewhere else. And that's pretty drastic, right? But the reason that I don't know why that relationship came to that, you know, that head at that point, it was pretty harsh. And, and I wouldn't recommend anyone doing that. But the reality is that these big decisions do bring to the fore, a lot of subconscious stuff for us because they are really challenging decisions and buying a property is extraordinarily challenging. So I guess what we're saying in this bootcamp is have the conversations before you get to the brink and staring over the edge of that brink is what forces you to realize that you don't want your life to look like that anymore? You know, maybe those relationships were salvageable may be a they're having those conversations as Jess has suggested. Maybe having money conversations actually does have a positive impact on your relationship as a lot of these studies have indicated. So I'd encourage you to do it because the, the flip side of that is really catastrophic. And if there's stuff that needs to be dealt with it, it doesn't go away.

Chris Bates: Yeah. I think there's two parts to the property side. I think if you're thinking about going in, whether it's your first time or upgrading or buying an investment property and you're engaging with a professional and you're going to have reach out, have a phone conversation, you know, everyone's got smartphones nowadays. It's really easy to do a three way call. And I would just, if you're going to do it, then I would get your other party involved. And our center, the advisor to have a three way call with you. And even if there are different offices and you know, doing different things, it's so easy to kind of patch everyone together every day today, you don't have to do like a teleconference. And that just that simple thing will get you involved from day one. And then every conversation that you have, if it's an important conversation, it's not just, you know, ask answering a couple of questions, then try to get back that, you know, your, your other party involved in that conversation, just because it allows you to get that third person independence that allow allowing you to really think through your decision, that's actually getting prepared to buy a property.

Veronica Morgan: And then this is a really a call out for buyers agents. The biggest value. One of the biggest radio ads I see with buyer's agents is that independent sounding board to question you when you've got those niggles, and it's not really matching your brief to stop you kind of buying the wrong property because you haven't thought through because you've fallen in love with something else and you haven't been no, one's there to really stop you buying the wrong property. And so I think that's why it's so important to have that third party there with the property decisions. And you're all on the same page, questioning each other, rather than just doing it alone as a couple. So true.