How Thought Leaders Can Have More Money and Time To Pursue Their Passions

How Thought Leaders Can Have More Money and Time to Pursue Their Passions

By Matt Hern CFP速

Introduction This message is for you if:

• You are busy commercialising your passion and expertise, which means you can spend lots more time pursuing them.

• You are building an income generating practice rather than a business • You recognise the need to create wealth by investing some of your surplus income • You want managing money to be easier and more enjoyable

Passions Expertise Ideas More time and money to pursue your passions

And if you feel like this about investing:

• It’s not as easy and fulfiling as sharing your message so you find it easy to postpone financial planning • You’ve heard too many unpalatable stories about financial advisers so you’re reluctant to get outside help

… then this message is ‘on the money’ for you This book is all about helping you have more time and money to pursue your passions by wisely creating financial freedom.

Commercialise your passions

Reinvest in growing your practice

The philosophy is that if you create financial freedom you can spend all of your time pursuing your passions without the need to be paid for doing so. (Note this does not preclude being paid – I am all for commercialisation of your passions.)

Invest some surplus in growing wealth

Creates Financial Freedom

Further if you can create and manage your wealth efficiently you will have plenty of time for your passions. © MattHern.com.au

Enough Money to Pursue Your Passions

Page 2

What’s Inside Seven Recommendations

The Benefits

1.

Save For The Significant

More Money for What’s Important To You

2.

Start With The High Impact Low Effort Actions

More Time and More Money

3.

Plug Leaks

More Money

4.

Protect What You’ve Achieved

Keeping Your Hard Earned

5.

Do What You Love; Outsource The Rest

More Time (and probably More Money too)

6.

Stick To What You Understand

More Energy (Less Stress)

7.

Demand Information “My Way”

More Enjoyment

Plus an eighth tip hidden on page 18

© MattHern.com.au

Enough Money to Pursue Your Passions

Page 3

Save For The Significant

(1) Save for the Significant. Minimise the Insignificant.

One reason we may not have enough money to do or pursue something we really want is that we spend too much on daily gratification. The really fulfiling things may actually be lumpy or sneak up on us.

For example: • Time out to learn how to commercialise your passion or to write your next book • A sabbatical or study tour to deepen your expertise • Your wedding or that of your children • Volunteering in an less privileged community for two months a year while you’re still healthy enough

“Bring far away important things into focus so you can be prepared.”

Divide your life into meaningful time chunks Now What is really important to you to have achieved or experienced in each chunk?

If you choose not to save for these significant events: • You may end up funding them with costly personal debt.

Inevitably this impacts your lifestyle and may lead to you needing to work for the rest of your life.

• Or you may end up not doing them because you can’t afford to Now that’s a preventable tragedy.

One of the most important and highest impact actions you can take is to save for the important things. For example those things that are most aligned to your values, are meaningful and which fulfil you.

Implement a clear plan to manage your money so that you achieve and experience what is really important to you. Then you can happily spend the rest on whatever you want, guilt free.  © MattHern.com.au

Enough Money to Pursue Your Passions

Page 5

High Impact Low Effort Actions

(2) First do the High Impact Low Effort Actions You will have more time to pursue your passions if you spend less time getting the same financial outcome . When saving for those significant things in life find the quicker and easier ways and do them first. Don’t overlook such actions just because they perhaps aren’t as glamorous .

This is especially important if money talk makes your eyes glaze over and you are not interested in handling it. Get more joy into your life by spending less time on your money without compromising how much you have.

“It’s like Pareto’s 80/20 rule of thumb applied to managing your money.”

Reward

($ and Joy)

High Impact Low Effort

Learning

Cumulative Energy

“Include energy and effort in your measure of return on investment (ROI).”

For example, with about one hour of effort per year you may be easily and quickly able to receive a 4% per annum average return on your investment. It’d be nice to average 5% or 6% per annum. But what if to do so takes 100 hours of effort per year? Is it worth it?

It similar to thought leaders targeting income of $10,000 per month in one mode such as speaking, coaching or training. Then to earn more you add a second mode rather than first aiming for mastery in the single mode.

To have more time to pursue your passions always ask “is there a more efficient way to get a similar financial outcome?” © MattHern.com.au

Enough Money to Pursue Your Passions

SOME ACTIONS Plug Leaks Do What You Understand Both of these are explained in more detail in coming pages.

Page 7

Plug Leaks

(3) Plug Leaks “Many people are busy scooping money into their money pot but if they had a look they would see they are leaking money all over the floor.”

Wasting less money is one of the easiest ways to have more money for what is most important to you. I don’t mean the obvious waste of spending money on frivolous things (that comes later.) There are many less obvious ways that eat away at your nest egg. For example:  Leaving money on the table by not getting a high enough return  Letting money slip through the cracks by paying unnecessary fees Too High Cost/Fees • High tax from owning assets or operating your practice in the ‘wrong’ name • Multiple & expensive superannuation accounts • Loan interest to buy personal & household items

“Plugging these leaks can make you thousands of dollars a year in easy money.”

Not Enough Return (or low value for money & effort) Underperforming assets – do your investments beat the market benchmark/average? (Most don’t.)

• Cash savings in a low interest account • Superannuation portfolio • Investment properties • Direct shares The benefit of plugging leaks builds on itself (compounds) every year so it is one of the high impact low effort ways to build your wealth. © MattHern.com.au

Enough Money to Pursue Your Passions

SOME ACTIONS Repay personal debts fast Get advice on how to own your assets (incl. your business) Sort out your superannuation Crack the whip over underperforming assets Page 9

Protect What You Have Achieved

(4) Protect What You Have Achieved You’ve worked hard to create the lifestyle you currently enjoy. If something happens to knock you off the tight rope of life ensure that you don’t go ‘splat’ on the floor.

“The best protection is to be wildly wealthy.

Until then take cover.”

It is much more likely than you think. For example your income could drop to zero as a result of: • Global events that reduce demand for your services • Injury • Illness • Exasperation (“I need a break/change”) You’ve probably considered how a loss of your physical assets such as your house or car could affect you . And perhaps you’ve even insured for such a consequence.

The impact of the above events on your ability to pursue your passions and feel fulfiled is significant. Irrespective of how likely you may think the event is the consequence is large enough that you should take action to protect yourself. (And in my experience you’ve probably underestimated both the likelihood and consequence.)

Range of financial outcomes

time

You already know that the life you have today is the sum of your choices to date – same with money.

Creating a safety net is about keeping the lower range of possible outcomes above zero (shifting the red line up to the blue line).

Some tools to support you: • Liquid savings you can access at short notice • Personal insurance such as income protection and total & permanent disablement (TPD) • A pool of investment assets you can use to give you choices to ride out a downturn or take a sabbatical. © MattHern.com.au

Desired outcome

Enough Money to Pursue Your Passions

SOME ACTIONS Know your monthly ‘cost to run’ Build 3+ months of liquid savings Speak to your financial planner about the level of insurance cover you need right now Always understand the potential downsides of your investments (see points 6 and 7) Page 11

Do What You Love. Outsource The Rest.

(5) Do What You Love. Outsource the Rest.

There is a trend, mostly driven by fear, that the best way to create wealth is to do it yourself. The problem is that since most people don’t actually enjoy the financial side it is easily postponed. This actually creates a worse financial outcome than outsourcing to a professional because delay is the greatest cost in wealth creation.

To have more time and energy to pursue your passions outsource what you don’t enjoy and therefore don’t prioritise learning about.

Then hire professionals you trust to deliver the results you need.

“Outsource or Do It Yourself (DIY) is not an either/or, it is actually a continuum. You can also partially outsource some of your activities.”

The three key elements you need to effectively manage a specific area of your finances are: • Knowledge – do you know enough to do it right and well?

• Energy – are you interested enough to learn and do the work well?

• Time – will you allocate the necessary time to do the job properly?

If you only have one or no elements then you should fully outsource.

• If you only have Time &Energy, spend it acquiring knowledge perhaps by hiring a mentor.

• If you have Energy & Knowledge but no time then hire a personal assistant to do the legwork that you direct.

• If you have Time & Knowledge but have lost your energy for this part of your finances then get inspired, perhaps with a coach. © MattHern.com.au

Enough Money to Pursue Your Passions

Knowledge Inspire

Hire Active

Time

Acquire

Energy

“Outsourcing is not abdication of control or responsibility.

It’s building a supportive team.”

To have more time and energy to pursue your passions do what you love. Then partially or fully outsource the rest to professionals.

This will also create more money to pursue your passions and spread your thought leadership message. By effectively outsourcing and building a trusted team you will get a better financial outcome then by doing it yourself (or not getting around to it at all.)

Page 13

Do What You Understand

(6) Do What You Understand Universe of possible strategies and products

Societal, environmental and psychological factors all collide and get us into financial strategies and products that seem to lose us more money than they make and/or create more stress than joy.

To me wealth creation is about lifestyle not money, so you need to ensure that the way you create wealth does not negatively impact on your lifestyle. You miss out on very little money for your lifestyle if you follow and repeat this process: 1.

2.

3.

Start simple Operate within your zone of understanding Learn more

Competence and Confidence zone

“Avoid the blinding headline of glamour investments.

They can be fast reverse rather than fast forward.”

It’s like my pre-schooler schooler daughter, Sophie and her quest for speed: you’ve got to learn to zoom. From an early age “faster” and “higher” were part of her vocabulary. Now she can handle her two-wheel scooter. But before that she had to learn how to peddle her three-wheel bike. And before that she had to learn to run.

Since thought leaders are smart people it can be tempting to be drawn to the more complicated investments because you know you have the ability to understand them. But, if you are too busy to spend that time to acquire the required knowledge (point 5 earlier) then you may end up creating more stress than wealth. © MattHern.com.au

When outsourcing stay stress free by starting with what you understand even if it seems “simple”. Each stage of action will provide incremental steps forward in understanding and confidence. Avoid the temptation of doing something “faster” that you don’t understand as you will end up with less energy to pursue your passions.

“When you outsource, hire a mentor who ensures you understand whilst also teaching you how to incrementally grow your competence and confidence.”

Enough Money to Pursue Your Passions

Page 15

Demand Information “My Way”

(7) Demand information “My Way” “Teach your team how you like to receive information and learn.”

In the 1980s musician Billy Joel was defrauded of an alleged $90million by his manager, Frank Weber. As this quote from Joel shows, he made it too easy to rip him off (in my opinion).

“When Frank has tried to take me through the books, my eyes start to glaze over.” Billy Joel

Me

Like this?

Expenses Core lifestyle Debt repayments on land loan Debt repayments on woodlots  Tax (estimate) Total Expenses p.a.

For many people numbers are difficult and don’t come naturally.

This doesn’t seem to be an obstacle to spending but it can be an obstacle to managing your money and investing. It can also be an obstacle to you trusting the advice you receive from your team to which you have outsourced.

Professional educators like thought leaders are accustomed to considering the diverse learning styles of our audiences. Sadly most other professions do not appear to even be aware of the diversity.

© MattHern.com.au

My Partner

115,000 8,000 8,000 929 7,232  16,000 2,250 $106,447

8,000 929 13,000 16,000 2,250 $127,679

31,154

6,352 39,965

Net Income (per year)

75,000 75,000

Combined 190,000 75,000 8,000 16,000

32,000 4,500 $234,126

60,000 16,000 6,352 71,119 $153,471 $80,655

$95,000 $5,000

Or like this?

So when you add a financial planner, accountant and lawyer to your team they will naturally deliver information in their style, which is probably not your style. That doesn’t mean you have to accept it.

It is critical that you understand and are confident about the financial actions you take so you can have more energy to pursue your passions. Teach your team how you like to receive information and learn. Request information “My Way” so your eyes don’t glaze over and instead you stay engaged and inspired.

Income Salary Commission Bonus Rental income Share income  Less salary sacrifice to super Less investment loan interest  Less rental expenses Total Gross Income p.a.

$30,000

$50,000 $10,000

$10,000

Or perhaps like this?

Enough Money to Pursue Your Passions

This Year $26,500

$636,000

$1,275,000 12 ½ years to go

Page 17

What You Should Do Right Now Everyone

 Decide – with my money is the do it yourself (DIY) approach right for me?

If “no” then find a professional partner to help you with the rest of these actions. For thought leaders a boutique financial planner who acts as a “Family “ Chief Financial Officer” may be best.

You’re not looking for an investment adviser. You need a true planner who partners with you to manage your financial choices to achieve your desired lifestyle outcomes.  Review your existing financial strategies and products to ensure you are confident and understand them (especially the potential downsides.)

Ask your financial planner to teach you about them and request education “My Way”.  Protect what you’ve achieved  Crack the whip over your existing investment assets to ensure you are getting value for money  Plug your cash flow leaks

If your practice generates surplus income

 Identify and save for the significant experiences that give your life true meaning  Invest for financial freedom

Special Offer Complimentary Coaching session © MattHern.com.au

Need some help to prioritise your actions?

Got something you really want to do but can’t afford to?

Call me and mention this e-book e to book a free 30 minute phone coaching session (normally $165).

Enough Money to Pursue Your Passions

Page 18

About Matt Hern CFP® Have you ever said “I’d love to do that but I just can’t afford it”?

It breaks my heart to hear from people that money has become an obstacle to them living their dreams when I know there are quick and easy things they could do to remove that obstacle.

So I’m passionate about showing people how to manage their money so they have enough to pursue those things that are really meaningful to them. You see to me financial planning is not about money or investments; it’s about the lifestyle that money facilitates.

There are several key things that differentiate me from about ninety percent of all financial advisers: • I care more about you than your money • Like you I am a professional educator and infopreneur, so I understand your business • I charge transparent, fixed fees based on the service we agree • I rebate product commissions to you • I am not aligned to any product providers • I provide strategic planning before considering any products • I partner with you for your journey in the role of your “Family Chief Financial Officer”

Yes, I take clients from all around Australia and would love to hear from you

You may also like to know that I am qualified as a Certified Financial PlannerTM and have three times been awarded as one of Australia’s Top 50 Financial Planners by The Australian Financial Review Smart Investor.

Contact Matt

www.MattHern.com.au always has my full current contact details.

T: 1300 669 101 F: 08 9463 7848 E: matt@matthern.com.au I am based in beautiful Perth, Western Australia.

© MattHern.com.au

Enough Money to Pursue Your Passions

Page 19

Important Legal Notes

This is General Information Only

All information in this document is general information for your education.

Please consider your personal circumstances before acting and when necessary consult a qualified and licensed financial planner.

You are responsible for your actions and outcomes, but you knew that already.

Share it freely, in full and with acknowledgement

This document is copyright. The information is the intellectual property of the author, Matt Hern.

You are welcome and encouraged to send the document to everyone you know who may benefit from it. You can even post it on your blog or website.

If you do so please send/post it in its entirety without modification and with acknowledgement to the author. I’d also really appreciate a hyperlink back to my website www.MattHern.com.au. Thanks.

Licensing

Š MattHern.com.au

As at the time of publication Matt Hern is an authorised representative (238821) of Sentry Financial Services Pty Ltd (AFSL 286786). You may obtain a copy of my full Financial Services Guide (FSG) on my website at www.MattHern.com.au www.MattHern.com.au.

Enough Money to Pursue Your Passions

Page 20