If you were forwarded this email, welcome! Sign up to the newsletter here.

Your Taboo Money Perspectives

“How you behave is more important than what you know” - Psychology of Money by Morgan Housel.

We have both recently started reading this book, which has long been on our “to read” list, widely regarded as one of the best personal finance books. It feels like a fitting time, with this current series, to continue to learn more about what influences your money mindset, and what makes someone financially “successful”.

TLDR: There are many things that influence the way you think and feel about money... The way you watched your parents interact with finances, the first job you ever had, the friendship circle you find yourself in, and what you value today will create a unique emotional experience when accumulating and spending money.

But one of my favourite parts of the book so far, is the retelling of a story about two people. One, a conventionally successful executive in the finance industry, and the other, a janitor. The story ends with the finance executive dying broke, and the janitor leaving behind $8 million… $2 million to his children and $6 million to his local hospital. The key lesson? The author can think of no other industry where a janitor, or [insert job title here], can outperform the expert.

I found this quite motivational. Knowing that a huge part of our financial success comes down to the individual’s psychology of money, which is something I can tangibly work on and control.

So this week, we challenged the way most of us think about money by discussing the social norm of splitting the bill. We asked, would you split the bill with your friends, if the split was based on your income?

But before we get into the main questions… I feel like we need to address the elephant in the room… Our “would you rather” on this week’s episode was: Would you rather have the details of your financial or love life made available to the public?

The response? Pages upon pages of ‘financial life’.

So then the real question, what on earth is going on in all of your love lives that you’d prefer your money memoirs out for all of us to see?!?

Would you split the bill based on how much you earn?

It is safe to say that most of us feel protective over the money we make, and consider it our own, not to be “shared”.

And we don’t blame you! We have felt all the same feels. It’s easy to default to a “no” when the approach is relatively uncommon in western society. When we’re socialised to be private about money, the notion of whipping out our latest paycheck on a night out with friends to determine what we all owe, in the pursuit of creating a more even playing field, is incredibly foreign. Instead, we sit back and think about how hard we worked last week, and struggle to see the fairness in giving it up for the sake of others.

But the most surprising element of these conversations was how quickly so many people either said or insinuated that someone who is making less isn’t working as hard. Why is this the default? Who’s to say that a teacher on a salary of $70,000 is working any less hard than a consultant making $100,000, yet we just assume that someone earning less is lazy? It all ties back to what we’ve been taught to believe growing up: if we work ‘hard’, then we will be rewarded. And so our brains default to believing that someone making less money is not doing the hard yards.

The conversation as a whole has highlighted the deeply psychological and cultural nature of money. In western society, the prevailing narrative is one of individual accumulation, which has been subtly conditioned from a very young age. And so we strive to build personal wealth over communal well-being.

One community member made a great point…

This is why money isn’t black and white, and splitting based on income might not always work. I can guarantee that my managers at work make a lot more than I do, but they also have the responsibility of kids, a mortgage, their parents etc. In different life stages, we make different financial commitments and often, more money can come with greater responsibility.

However, in some instances, sharing based on income is working…

One interesting story from a community member regarding her rent situation overseas:

This led to an interesting conversation around values. You can’t make assumptions on someone’s financial situation based on where they choose to spend their money. For one person, a gym membership may be their safe haven where they work on their mental and psychical health. For another, spending on rent may be important so that you have a nice home, which may also also act as your office or be where you spend the majority of your time.

The outcome of the rent increase conversation…

How do you navigate pay as a freelancer?

Valuing yourself as a freelancer is challenging because there is no rule book. There may be some vague rates depending on the industry you are in, but it takes confidence and self assurance to value yourself correctly, and more often than not we will undervalue ourselves in the aim of winning the work, or not understanding what we’re really worth.

One community member has struggled on her journey with social media:

We have found this on our journey with the podcast. A particular example that comes to mind is being asked to speak at corporate events. We have done a lot of these for free, as they’re a great opportunity to build our brand. But when big corporates reach out who we know are likely to have some kind of a budget for events and workshops, we will ask whether it’s a paid opportunity. There has been more than one occasion where, when we reply with our rates, we get ghosted. Often we are left thinking, did we charge too much? Or do they just not value what we are doing?

All of this is to say that, we feel you! And it’s tough! Even though we’re now 3 years on in the industry, and have hosted multiple events where the feedback has been outrageously positive, when a brand ghosts you the default thought is to doubt your skills and feel undeserving of the rates you put in the email.

It is such a fine balance and one that we are slowly finessing with time.

If you are struggling with what rates or prices to charge, here is some advice that has been given to us previously:

• Feel free to ask people. More often than not, other freelancers know the difficulty of valuing yourself and will be transparent.

• Do industry research - if you are selling pottery, find some Instagram pages and check out what they are charging. It will help you set up a range.

• If you are offering a service, create rates by tiers. Offer a gold, silver, and bronze package, providing brands with more flexibility to choose something within their budget.

• Ask for feedback from brands or customers if your rates aren’t sticking. You might not always get an answer but gosh, it will be helpful when you do.

Are you expecting or relying on an inheritance?

When we asked you for the taboo money topics you wanted covered, wills and generational wealth came up a lot.

Our generation is finding it hard to get ahead financially, and although the baby boomers may tell us to ‘stop buying avocado toast’, the fact of the matter is that times have changed.

A house in the inner suburbs of Sydney used to cost 4.5x the average salary. Today, it is close to 15x the average salary. This sets us back significantly when it comes to trying to save for a deposit or get into the market early (which we hear over and over again, is something we should try and do). And this is just one example of the growing wealth gap between generations, so it’s no wonder that a larger conversation is brewing about the trickle down of wealth.

If you are wanting to start a conversation about inheritance with your family, here are the tips our community passed on:

• Don’t have any expectations, but ask your parent or guardian if they have a will and whether they have had any thoughts about it?

• When starting the conversation, it can be helpful to address it from the point of view of what plans your parents have already established, and if there’s anything they want you to be responsible for when they die.

• Understand that the amount of money your parent or guardian has saved will likely change over the years. For that reason, a conversation where specific $ are discussed might be off-putting or even feel risky for parents wanting to avoid setting expectations.

• Be sensitive!! This can be a tricky topic for people, to think about their eventual death and what they will or won’t be able to leave behind for their children.

A big thank you once again for an incredible week of convos. Your openness and willingness to engage in these tricky conversations means a lot.

Tomorrow’s ep with Dyl Buckley is one of our absolute faves and includes lots of practical advice on how to build a positive relationship with money, so be sure to tune in!!

Until next week,
Mads and Soph x