The Swan Effect - Creating and Sustaining Your Financial Wellbeing
The Swan Effect - Creating and Sustaining Your Financial Wellbeing
S2E6 2020-Free and 2020-Me
The New Year heralds in episode 6 of Season 2 of the Swan Effect Podcast with Arthi and Malika, where they introduce the idea of '2020-FREE and 2020-ME'.
Simply explained it is about taking back control of our lives, particularly from a financial aspect, and making financial decisions that are truly aligned with our core values. Sounds daunting? Possibly exciting? Co-hosts Arthi and Malika hope its both!
In this latest episode Malika and Arthi discuss:
- Taking back control of our lives by prioritising our values around family and personal well-being.
- The 'mental retreat' trend that was amplified in 2022 (commonly now known as quiet quitting), why it's actually happened and how to deal with this.
- Tips on relieving financial stress even if you don't have all the extra money
- The Moneyverse and how can you create one with different asset types and 'positive liabilities'.
- Aligning your Vision, Values and Goals.
- Closing the gap between savings and goals by understanding your reality and your options available.
- The Pay Yourself First strategy.
- Dealing with multiple goals that intersect,
And so much more!
Remember: “if the plan isn't working, adjust the plan not the goal.”
Take a listen to the episode to hear more of these nuggets of simple, practical advice.
We would love to hear your views based on the concepts covered in this episode.
Do rate, write a review, and share with others.
This episode is proudly sponsored by Old Mutual Wealth.
Malika Petersen 0:00
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Arthi Rabikrisson 1:15
Hi, there, I'm Arthi Rabikrisson .
Malika Petersen 1:18
Hello, I'm Malika Peterson.
Arthi Rabikrisson 1:20
Welcome to
Malika Petersen 1:21
The swan effect podcast!
Arthi Rabikrisson 1:23
Money makes the world go round, yet it's not so easy to understand its complexities, particularly when it comes to investing.
Malika Petersen 1:32
That's why Arthi and I are using this platform to educate, inspire and help you gain confidence in your relationship with money
Arthi Rabikrisson 1:41
So that you can better manage your finances and investments.
Malika Petersen 1:46
We are two women in finance.
Arthi Rabikrisson 1:48
That's pretty cool, isn't it?
Malika Petersen 1:50
It certainly is. You've been in stock broking private wealth management, asset management, and now an award winning business woman who is coaching and assisting businesses with capital and strategic advice
Arthi Rabikrisson 2:04
And Malika you have a wealth of experience in well, excuse the plan in financial planning, investments and relationship management. So you're also at the coalface when it comes to where and how people are investing, or getting it right and getting it wrong
Malika Petersen 2:22
And stuck in the gray areas. To indeed, I've seen the many phases and moods of financial cycle and how our decisions that those times impact us. So listeners and subscribers if you are looking to get unstuck, feel empowered and make some strides in how you tackle your money. We are here to help you.
Arthi Rabikrisson 2:44
And it all starts with listening to this upcoming episode. Enjoy.
Welcome back and a very happy 2023 to all our listeners. I've had a great rest and I'm ready to tackle 2023 With Viggo Welcome back Malika. It's so good to have you back. I hope you had a good summer holiday.
Malika Petersen 3:07
Thank you it and a very happy new year to you and the listeners 2020-Free, as I like to call it.
Arthi Rabikrisson 3:16
Hey, 2020 free. Well, that's interesting, Malika. What made you think of that?
Malika Petersen 3:22
Well, on Year's Day, I've started thinking about how this day felt different this year somehow. It was the first year that we haven't been in some level or stage of COVID locked down in South Africa. And while most things have returned to normal , I get the sense that most human beings are not ready to lose some of those fundamental lessons that we learned in the worst part of the pandemic, right. I think we've all just taking more control of our lives. And I think we take decisions that are truly aligned with our core values. And that makes us happy and able to be right if you're more free to be who we truly are, and enjoy what we truly love to do.
Arthi Rabikrisson 4:09
Hmm. You know, Malika, I think it's so interesting that you saying that because there was actually a study released by the University of Alabama, released recently, actually, and in many ways, it referred to the ways in which the pandemic has changed society. And one of the big trends that has been witnessed globally has been the great resignation, right? We've heard about this. Now, in case you weren't sure what it means was that workers have been resigning in pursuit of something a bit more fulfilling, more meaningful to their lives. And it's an indication that people's priorities have changed and this such a greater emphasis on family and other facets of your life.
These are important things. There was another trend as well and a term that was coined for it was settled, quiet quitting. So this is where people in employment actually started to take the foot off the accelerator a little bit. So they would no longer motivated to go above and beyond what is expected of them. Malika I must say personally, I actually don't like that term for a number of reasons. And one of the key things is it actually places an emphasis of what is happening to people at the moment in a sort of a wrong context. And I'm talking very high level around this, we could go into more detail. But it almost places a sense of judgment on people who are behaving this way. And instead, I like to call this phenomenon. I call it a mental retreat instead.
Malika Petersen 5:49
I hear you Arthi and I think the mental retreat is far scarier, because someone or far scarier than someone who resigns and moves on because these unhappiness theory right, or lack of morale, which results in people reducing their productivity, through no choice of their, right? I mean, that's just naturally what's gonna happen. Ultimately, that's potentially going to impact the long term financial situation as a result. And I think that's what's really scary for me.
Arthi Rabikrisson 6:20
Oh, absolutely. Absolutely, Malika. And we must also not forget that, you know, many of us have not actually taken time out to recover from the 2020 to 2022, tumultuous period that we go through. So actually, if you think about it, burnout levels are probably at an all time high, even entering into 2023. And it's causing this mental retreat as we're calling it to be amplified. I mean, let's be honest, Malika, this phenomenon has actually been there for a while, right? We kind of know that it's been happening. But as I said, it's become amplified. This really relevant post that psychologist, Naomi Holt placed on LinkedIn in December 2022. And it was such a beautiful post, it was actually gently reminding all of us about the need for us to recover from this exhaustion. Okay. And in fact, I'm going to share a little bit just a last bit of what she wrote on her post, and it goes as follows. Most of the world's citizens are in need of a little extra TLC at the moment, most are donning invisible in inverted commas, Handle With Care posters around their necks, and also, again, in inverted commas, fragile tattoos on their bodies, instead of racing to the finish line for this year. Tread gently, go slowly, amidst the chaos, find small pockets of silence, find compassion, allow the healing, and most of all, be kind. There's no human being on Earth, who couldn't use just a little bit more of that healing salve of kindness. Wow. Really powerful words, don't you think those
Malika Petersen 8:07
Those are truly truly powerful words about compassion, loving kindness, and just going slow, right. And I think that's really resonating with me. And it's reminding me of our discussion with Sandra a few episodes ago by Neuroscience and our behavior.
Arthi Rabikrisson 8:23
Oh, yes, yes, absolutely. You know, so this mental retreat is the behavior of potentially some of our key values not being met. So, you know, Malika if we think about our listeners, even about ourselves coming into this year with this baggage, along with possibly a low bank balance becuase of the festive season that we just had, plus also school expenses that have come on board as well, as you said, we have added to our already burdened shoulders with now a whole financial implication to this, right
Malika Petersen 9:00
Absolutely. And I think many of us ask, how do I do the things that I need to do to relieve stress if I don't have the financial ability to do so. And I think it's important that we need to remember that often the things that bring us stress relief don't cost us that much. We become stuck on the fact that I don't have money that we almost miss the opportunities to relieve stress without spending money and I'm talking about things like walks on the beach, a hike, time with our children in the park. These all help to reduce the stress that we feel and kind of allow us to be able to see things the bigger, the bigger picture even unconventional activities like volunteering at an orphanage or feeding the poor. This really goes a long way to help us relieve stress. So I think if our listeners are feeling weighed down, particularly with the financial concerns they need to kind of take listen to our previous episodes from 2020. So really about how uplift your spirit listeners, we share many savvy tips that make you feel empowered to begin the process of being more savvy and confident in your money management.
Arthi Rabikrisson 10:22
Yes, I love that you reiterating that? Because, you know, Malike, you and I have decided that 2020 Free, I love this term, is going to be about 2020-Me. That means you,me, everyone, right? And building on the idea of the superpowers that we spoke about in episode one of season two , 2020-Me is also going to include everyone growing your money verse, hmm, money verse. Yeah, what do you think of that?
Malika Petersen 10:55
Arthi, that sounds phenomenal and exactly right. I mean a moneyverse, I just love it. And we going to support you to stretch, challenge and fight for your money verse to be diversified and resilient
Arthi Rabikrisson 11:10
Ooo Yes. Now that is sounding like a serious vision there for the for the money verse Malika. I mean, I can already visualize this, you know, these different assets, these positive liabilities, and people are gonna say, what is Arthi talking about positive liabilities, different lengths of terms different types of interesting habits, as well as how to manage them, I am liking this vision.
Malika Petersen 11:34
The vision is the first step Yes, and we spoke about it in the last couple of episodes. Visualization is a key technique to help us know, what we want to achieve, know where we are at present, recognize those gaps, and then take some steps to close the gap. Now, even those steps that we refer to there are essentially goals in themselves sometimes. And in order to get to those goals, action has to be taken. So let's assume for the moment that I have a goal to enjoy a fully paid week long holiday for my family in three years. That's a really nice goal, right?
Arthi Rabikrisson 12:13
That's a beautiful goal. And it's the kind of financial goal that would require a plan to achieve it. So how would we go about achieving that for you?
Malika Petersen 12:23
Okay, so the first step it, as we discussed, is to ask ourselves why the goal is important. Now, making the link between the goal and the core value that it aligns to, is essentially because that allows us to prioritize the goal when sacrifices are required.
Arthi Rabikrisson 12:44
So this is quite a key point. And, you know, perhaps it's useful or helpful for us to think about it in this way, Mallika. So values are like a compass, it helps steer us in a particular direction, right? And particularly the one that is right for you, us as individuals. Goals, on the other hand, are the specific ways we can execute our values. So if we actually think about it that way, isn't that quite a simple yet powerful way to actually know the difference between the two. So let's use an example. Let's say a person's vision is financial freedom. As we said in our previous episodes, that financial freedom can look and feel different for each of us. Okay, now, let's say one of this person's values is security and taking care. Then some of the goals that would connect to these values while still being aligned to the vision could for example, be let's say, the first one could be find a financial planner that would make you feel comfortable, you can have somebody that you can talk to somebody who can strategize a little bit with that could be one. Th second goal could be to create a portfolio of low and moderate risk plus also other diversifying assets that offer stability. And potentially a third example of a goal could be creating a savings pot of let's say, an amount of R15,000 . So can you see how each of these examples of goals execute on the value of security and care while also working towards the vision of financial freedom?
So the science behind this everyone is that the greater the the level at which these three are in alignment, so that being your vision, your values and your goals, the smoother your ability to maximize success will become because it sits well with you very simply. And when you are feeling comfortable and fulfilled, right? It's releasing all of these hormones, which I'm gonna very colloquially call happy hormones. Which which literally makes you want to go more and achieve more and do it and get it done. And certainly when we are in a happy space, when we are fulfilled, we are willing to go and do more and be willing to take action.
Malika Petersen 15:12
And I think this link is so important establish Arthi, you put it in a manner that we can all understand and relate to, with a simple yet effective example. So now that we understand that, that kind of alignment, let's use that final example of your goal, the one that you mentioned, right, and I want to illustrate some further points using that. The savings pot is a goal. And it's, it could be a priority for many of us right whether its towards a long term vision, like financial freedom, or shorter term, self care from burnout, like we mentioned earlier, right in the form of a holiday. The next step would then be to identify the gap between where we currently are in terms of our savings levels, and that goal. So I'm really couraging people to be realistic as possible, right? Google the holiday that you'd like to go on, or that you have in mind, understand what the real cost of that holiday is, right? This allows you to visualize the holiday, and to know what it's going to cost. And then I'd say about 6% per annum to account for inflation.
Arthi Rabikrisson 16:28
Hmm, you're raising such a valid point here Malika. You know, we often underestimate the cost of our goals such as this holiday. And then we overestimate how much we're going to be enjoying ourselves, right? So we can paint this picture of, you know, maybe it's a beautiful beach holiday. And then all of a sudden, when you do the numbers reality sets in. So for example, I'm, and I'm sure many of us are thinking about these little holiday breaks that we can take away during this year. And I must say, already, Malika, as I said, that dose of reality about what it's going to cost my little family to get away for a few nights is actually quite sobering. So you know, the point of this everyone is that without undertaking the sort of exercise of understanding what the current costs are, as Malika is saying, we could potentially be disappointed because either we under saved or, you know, we can't afford the goal at the time that we want to have it happen. Or we could realize that the goal could have been achieved a lot sooner if and we could be working on some other goals as well, right. So there's so many, like different scenarios that could be in play. So in my case, you know, with this holiday and these little breaks, I'm thinking about even deferring my spending on travel, I was initially thinking of February, but now I'm probably going to look at something in the second half of the year instead, because what that would then allow me to do is compound on my savings, travel would probably be a lot cheaper, because it's now later in the year, and maybe I can even squeeze in some sort of diversity in my savings, maybe a new type of an investment, something that could maybe earn me a slightly higher growth rate above inflation over these next few months. So every little bit helps. So just a decision point, yeah, of deferring has given me options.
Malika Petersen 18:24
Absolutely. You have hit the nail on the head, right. And that's when we start to build up our moneyverse. Okay, do you I don't think people realize how many different options there are to build out our moneyverse right. There are a variety of assets that we can use. So I think it's important to firstly understand what an asset is. An asset is anything that a person owns, or has a claim to, which holds economic value, right? And I can provide you the owner, some benefit in the future, right. So in other words, it can help you to reduce your expenses, it can help you to increase your income, essentially, you could use it as collateral to secure some kind of debt. And you know, there's good debt and bad debt. We'll we'll talk about that in future episodes. But a personal asset can be many different things. So most people think about it in the form of property or investments or savings, right ,a cheque account, even the money market, those are kind of the most the main ones most people know about. But there's so much more to the moneyverse. And I think often people underestimate the so that excluded from the achievement of the goals because they don't know about it, things like jewelry, fine art, you know, furniture, books, wines, vehicles, pension funds, you know, policies, etc. And those are the tangible assets right? Which people often overlook. There's also intangible things like patents and copyrights, and residual income businesses that all add to our moneyverse. But I bet our listeners didn't realize it. But the key to understanding what makes people valuable, or what makes assets valuable, right? Is because it's about being selective about your assets. It's about understanding what you have. Now, here is another big surprise for everyone? Your moneyverse will also include liability. It will be a surprise, but it's a really big word for different forms of debt. And some forms of debt can actually be beneficial if handled correctly, price alone to buy property. It needs to be handled as a responsibility, but it does allow you to purchase an asset it does allow you to purchase an asset that you may not have been able to purchase if you have not gone into debt. Right,So we must always remember that all forms of debt need to be paid off. Never forget that. Some forms of debt can help us to gain assets.
Arthi Rabikrisson 21:14
I like that. I like the way you've sketched that out for us, you know, I'm, I'm actually just blown away right now, by the scope of the moneyverse that you've outlined Malika. And, you know, it's getting me excited to think about the I can have multiple assets worthy assets that can benefit me into the future when I need it. And, you know, I like also how you very specifically framed for us the responsible debt, right? So it's exciting to hear these, and I'm gonna call it a smorgasbord of opportunities that can actually help me to build my net worth over time. And I actually can't wait for us to explore these in forthcoming episodes, because I know we're going to do that.
Malika Petersen 21:54
Absolutely. And it's going to be great. So listeners, please make sure that you subscribe to the Swan Effect podcast to catch up on how to expand your moneyverse. That's right. So now we have our vision, we've spoken about our vision, we have our values and our goals clarified. Now that leads to the next step, which is defining the plan. I almost want to say that this is the most important step. Because the plan should include how much you can save towards the goal, how regularly you can save towards the goal, and how long you need to save towards the goal. And I think it's important that we all understand that those are the only three levers that you have that you can pull in order to achieve your goal. I saw a beautiful quote that said, if the plan isn't working, adjust the plan of the goal. And I think this is really key because the minute we start to compromise on our goal, we may be sacrificing the alignment of the goal to our value.
Arthi Rabikrisson 22:54
Malika, what happens, let's say when I've done my spending plan or my budget, and I've considered my money pot or my various income sources, and I realized that I don't have enough to save towards my goal. What can I practically do to address this? And I'm saying this because I'm also mindful that in our episode four on the PTP, everyone, we and even in Episode Five, I think we mentioned this, we spoke about paying yourself first
Malika Petersen 23:27
Yes, exactly Arthi to so they have strategy called pay yourself first. And the philosophy is that you essentially spend what is left after saving, instead of saving what is left after spending. Now it's the action of automating your saving or investing before spending it through debit orders. This means that you prioritize the goal and saving towards it and then you structure your budget in such a way that you can only spend what you have left. Now what this may mean is that you can have to get cheaper Wi-Fi package, okay? You need to save on fuel by driving less or you cook more often and eat at home more often in save on takeaways, right? There's all the saving tips that we've shared before. Right? Alternatively, you as we discussed in previous episodes, you sell something that you no longer use, or you start an additional income stream, all of these to be achievement of your goal. And I think it's important that when your goals are correctly aligned to your vision, you prioritize them. So these sacrifices for want of a better word will all be worth it.
Arthi Rabikrisson 24:41
Malika this is sounding more and more like a blueprint towards achieving our goals, which I really, really like. Because it means not only are we going to be building confidence in doing this, but the recurring practice of doing this creates that habit, which is very prouductive, makes us happy and ultimately gets us to reach our vision. Okay, so here's another question that's come into my mind, Malika. So what happens when we have multiple recurring goals even towards our vision, which is most often the case, right? Because, you know, achieving something like financial freedom, or even cross generational wealth that requires more than one goal to be worked on
Malika Petersen 25:26
Thats for sure Arthi and after all these are the highest level of achievement, right? To obtain that vision. Now, I would say that the plan that we've just discussed, is a blueprint for a simple goal. And this is a simple goal with a defined date. So it'll work in that scenario. But the minute you have multiple goals coming into play, I would strongly urge listeners to seek professional financial advice is the key to achieving financial success. Now, I know that many listeners are scared to take that step, because they may not necessarily know how to articulate their goals and need. Again, listeners, these are the things we'll be covering in upcoming episodes, especially how to own your financial plan. With the help of your financial advisor,
Arthi Rabikrisson 26:18
You know, I have so many thoughts going on in my head right now, like about values, goals, leading up to my own vision, I'also brimming with excitement about the potential of the multiverse, to make 2020 Free all about 2020 Me, in more ways than one. And, you know, because there's more that I can do, it means there's more that I can give to those that I love and admire. So you know, we must always fill up our cup or, or put on the oxygen mask, as they say on the aeroplane on yourself before you can help anyone else. So put it in that context listeners and listeners, I'm sure you're just feeling in a slightly similar state to me as well excited enthused about some of these new ideas we're talking about to really make your year incredible. So Malika, thank you so much for together sit setting this context for us nicely. We've covered a lot already. And as we've been sort of letting everyone know, we're going to be unveiling a lot more on all of these things we've touched on as the year unfolds, to listeners and subscribers all across the world, because I know you're listening in from every corner. Malika what would be your parting shot, then, for our episode today,
Malika Petersen 27:35
I often feel overwhelmed when it comes to my own financial goals, to be very honest with you, with all the knowledge that I have around economics, investments, savings, financial instruments, you know, my personal goals still overwhelm me. And that's because I'm so close to them, right. And I sometimes avoid doing anything about them. Okay, the more I do that, the more time I lose. So burying my head in the sand is just not an option. I need to remind myself that I need to objectively set a plan in place to achieve my goal or to make the actions as far as possible and then stick to the plan. My financial advisor helps me to do so anyhow holds me accountable on the journey. But once that's done, I have the ability not to worry about it anymore, right. I'm free by my plan. And I think that's my commitment for 2020-Free no matter feeling I'll set my goals. I plan on achieving I mean, stick to that. What about you it? What are some of your parting thoughts?
Arthi Rabikrisson 28:43
Well, firstly, gosh, I have to say thank you for being so open and vulnerable with us Malika about your personal concerns and your thoughts. And she loved that you've put that stake in the ground, talking about goals, plan, achieving and sticking to it. So that's brilliant. My parting shot is you know, everyone thinks only seem impossible, because you choose not to be curious. Think about that, right? The more curious you become particularly about your financial matters, and your planning and your future, the highly even more possible, your vision becomes that it's attainable, that it's reachable that you can get there. So I encourage you to think about being very curious with us and the Swan effect podcast, because I think we can help.
Malika Petersen 29:31
Be curious everyone, connect and share with us what is concerning you about the year ahead, engage and let's see how we can support your journey. Here's to free me and you in 2023 Till next time everyone
Arthi Rabikrisson 29:47
Till next time.
Malika Petersen 29:53
Sharing is caring
Arthi Rabikrisson 29:55
and knowledge is power.
Malika Petersen 29:57
Time for you to be daring
Arthi Rabikrisson 29:59
and let your Money confidence bloom like a sunflower.
