Investing for my circumstances

Is the Australian dream broken? With cost-of-living pressures a reality for many Australians and house prices having risen over the decade to 2023, is now the time to consider investing our money strategically?

And if we have received support from older generations, what can we do to “pay it forward” to the benefit of our dependents.

Research shows that Millennial Australians, many of whom have received parental support to secure their first home or attend private schooling, are now paying it forward and creating wealth so they can help their kids in the future.
 
Interestingly, the survey of more than 500 Australians investing via Australian Unity’s 10Invest platform has found that 74 per cent are investing to give their children a financial kick-start and 43 per cent are hoping to use returns to pay for their child’s education.

In part two of Talking Financial Wellbeing with Australian Unity, Esther Kerr, Australian Unity’s CEO of Wealth & Capital Markets, addresses the topics of job security, housing affordability and investing for your personal circumstances.

Esther challenges the notion that people “have to” enter the property market and instead encourages everyone make informed decisions as to what works for them based on their circumstances, goals and ambitions.

Investing for my circumstances

Transcript

Victoria Devine:

I'm Victoria Devine, millennial money expert and the host of the She's on the Money podcast. And this is Talking Financial Wellbeing with Australian Unity.

Today I'm talking to Esther Kerr, who is the CEO of Wealth and Capital Markets at Australian Unity.

Esther. I'm so excited to talk to you today about financial wellbeing.

Can you tell me a little bit more about what if I am not in a position yet to buy a property or I haven't got an estate plan and I haven't really thought about my will and maybe I have children or I don't have children. I haven't thought about this.

Where do we start when it comes to financial wellbeing and what do you think are the most important factors?

Esther Kerr:

Job security. I really value my independence, and if I lose everything, but I know I can go out and get a job and support myself and support my kids... That's probably what I think about first.

So first of all, education and employment, then I think you've got to live somewhere.

So you don’t have to own a house. Vast swathes of Europe, you know, owning a house is not the big dream.

Victoria Devine:

We think it is. I know we do in Australia.

Over the last 30, 40 years that has really shifted. And it's not the reality for most people. So is it okay to rent?

Esther Kerr:

It's okay to rent!

You know, more important that you have stability in your housing and you're living near your community and living near your friends for your overall wellbeing.

But then you do want to be saving, and the thing about owning a house is it's a way of forced, saving in a way.

Many people other than the compulsory super will retire and they will only have two assets, they will have whatever they've got in super and they will have whatever equity they've got in the house.

So if you can do that, that's wonderful. If you can't, you can rent and you can find other things that you can invest in that also deliver really great returns and help you participate along with the uber wealthy in the growth in the economy and get ahead.

But your options in your thirties will be a lot broader if you find the brain space to start thinking in your twenties about ‘how much am I going to spend and how much am I going to save, and if I save, where might I put it?’ It's as simple as that.

Then you get to your thirties. Then you might be partnering up, then you might be having children. And you must think about health insurance.

Victoria Devine:

When it comes to saving. You touched on that before. You said we all should be saving. We should be thinking about our investment options. Where do we start?

It's, you know, it's the new age. It's not the 1980s anymore. There aren't any limits on investment or savings amounts. Do you think that it's worth it if you don't have a lot of savings in your bank account?

Esther Kerr:

100%. Every million dollars starts unless you inherit it, starts with the first ten.

So I wasn't given a big trust fund. I graduated. I know I was completely...You’ll have to to take that out with someone after that. But I started saving, you know, very early and I just put a bit away. I just put a bit away, a bit away, and I didn't know if it was going to be enough for a deposit to start with or not.

I probably looking back, I probably could went too far. I worked, I had my head down too much in my twenties and now I'm a bit older, I wish I'd turned the dial back a little bit and saved a bit less and had a bit more fun.

But that decision about how much to save and how much to have fun, it's going to be very, very individual.

But as long as someone makes it. Proactively.

Victoria Devine:

I think there's something about it. Not making a decision is still a decision.

You absolutely juxtapose your circumstances.

I did the exact opposite when I was 22 I was $42,000 worth of personal debt and had absolutely buried myself because I was living my best life.

You're only young once, right? And I think it's interesting because I think so many people think that you can't come out of those circumstances. Or that makes you bad with money, when arguably I would say I'm pretty good with money nowadays.

But I've been in a position where I did take on a lot of personal debt and actually had nothing to do with my financial literacy. My dad was an accountant. He's one of the smartest men.

But you know what you don't do when you're a young female? Listen to your parents. You don't want that advice. You don't want to do that. And so I knew that the decision I was making wasn't amazing, but I also didn't understand the ramifications of that.

So I want to know your best and worst. What is the best financial advice you've ever been given?

Esther Kerr:

The best advice is the thing that I've now done that I wouldn't have done otherwise...and I hate to think if I hadn't, which is which is the advice I was given to go and get my powers of attorney sorted out, my medical power of attorney, my financial power of attorney, they're in place and I don't worry about that anymore.

So really good advice.

The worst advice, it's probably I mean, get too cute, you know, get too cute, get too complex, get too clever. That doesn't reflect my life, my aspirations, my risk appetite. I wish that I had had earlier on the confidence to not try and delegate all of this stuff to the smart people that know you more than me or think that it was only for the wealthy...And I just followed my intuition, been honest with myself, saved earlier and and saved regularly without overcomplicating things.

Victoria Devine:

I love that. And it's so easy to access advice and tips and tricks these days. All you have to do is head online. It is so easy, it's so overwhelming, but it can be so easy. There's so many different platforms.