DAVE GOW | Strong Money Australia

· Podcast Episodes
Dealing with the fear of not having enough dosh even when you do. Dave Gow from Strong Money Australia

Property or shares. It's a perennial Australian investing debate. We love our property, but we also love our franking credits. Generating passive income is one of the most effective ways to build wealth over time. In this episode I'm joined by Dave Gow of Strong Money Australia.

Dave started with property investments. Rental yield is the annual rent received as a percentage of the property's value. For example, if you buy a rental property for $500,000 and receive $20,000 in annual rent, your rental yield would be 4%. However, owning a rental property is not as straightforward as it may seem. There are several expenses that need to be taken into account, such as property management fees, maintenance costs, insurance, and property taxes. After all of these expenses are deducted, your net rental yield may be closer to 2-2.5%.

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On the other hand, investing in shares that pay dividends can also generate passive income but without the extra costs. Dividend-paying shares may also come with franking credits, which can increase your overall return. Franking credits are a tax credit given to shareholders for the tax paid by the company on the profits distributed as dividends.

Dave now mainly invests in plain vanilla, index ETFs. An index fund is a type of mutual fund or exchange-traded fund (ETF) that tracks a specific market index, such as the S&P 500 or the ASX 200. By investing in an index fund, you can gain exposure to a wide range of companies and industries, which can help diversify your portfolio and maybe reduce risk. He's not a fan of thematic ETFs.

Dave also answers many questions from readers and contributes to the blog at Pearler. I asked about the main newbie questions he deals with:

That would be questions like how many ETFs or how many, how many funds or how many shares should I have in my portfolio? You know, how much is too much or how much is too little? Which is almost impossible to answer because some people might like to have a lot of things in their portfolio, other people might want to deal with as little as possible. So they might be better off just with one fund or two funds. So you, you almost can't answer that question because there isn't a right answer. And that's actually a theme across a lot of the newbie questions that there isn't a right answer to a lot of these questions.

The number of ETFs, funds, or shares you should have is a personal decision. Some investors prefer a large, diversified portfolio, while others prefer a smaller, more focused one. There is no right or wrong answer, and it ultimately depends on your investment goals, risk tolerance, and personal preferences.


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Chloe (1s):

Shares for beginners. Phil Muscatello and Fin Pods are authorized reps of Money Sherpa. The information in this podcast is general in nature and doesn't take into account your personal situation.

Dave (12s):

Don't feel like you need to learn everything in two weeks. It's just not gonna happen. It, you're just putting too much pressure on yourself. You're gonna end up with analysis paralysis and you're gonna, the whole experience is gonna be much less enjoyable because you're just putting too much pressure on yourself to have it all figured out. But it, it doesn't work like that. We all learn as we go and even after investing for many years, you still learn new things.

Phil (37s):

Good day and welcome back to Shares for Beginners. I'm Phil Muscatello Property or shares. It's a perennial debate in the Australian collective unconscious. We love our property, but we also love our Franking credits. Joining me today is Dave Gow from Strong Money Australia, Goodday, Dave

Dave (53s):

Goodday. Phil, how are you?

Phil (55s):

Good, good, thanks. Thanks for coming on. So I wanted to start talking about different pathways to financial independence. Many people believe you need to strive for a high powered job in the corporate sector and that wasn't your path. What was your path?

Dave (1m 9s):

So, no, that definitely wasn't my path. It is one of many paths I guess you could take. So my path was a little bit different in that sense that I didn't finish school and I didn't go to university. So I came into the workforce without a qualification, I suppose you could say, or a long list of skills as such. So I started out in just normal factory type work, factory hand, just laboring. From there I got a forklift ticket. So I suppose that became a qualification of mine. And then I got into warehousing, which paid a bit better. So I did that for quite a few years and I was able to turn a, I suppose an average paying job doing forklift work into quite a decent paying job or even approaching, approaching six figures, almost a high paying job just by doing shift work and by working additional hours.

Dave (2m 3s):

That actually made quite a big difference. So that helped me earn a fair bit of extra income, which was obviously helpful in, in building up investments and saving and all the rest of it.

Phil (2m 12s):

So at what point did you, when you were working, did you start thinking about, well, maybe I don't have to do this for the rest of my life?

Dave (2m 20s):

That's a good question. It was probably very early, to be honest. I think I was 19 or so I'd been in the workforce, the, the full-time workforce that is for approximately a year pa, perhaps a year and a bit. And I started to see some of the negative aspects of, of full-time employment, you could say. And especially looking at people who were, I would say 30 years, 40 years older than I was like approaching retirement age. Some of them were even past traditional retirement age and they were just kind of plotting along in this less than thrilling job. I'd say this, this factory that we were working in at the time. And I just had this vision of the future and, and figured that the, that just can't, I can't do that.

Dave (3m 5s):

That just, that's not for me. I have to figure out some other way. There has to be some other option out there that doesn't involve me giving up all of my week, every week forever, basically just to pay bills and make it to the next week to do the same thing all over again. So I started researching how wealth works and how wealthy people became that way and from there realized that wow, there's this whole world called investing that you can just own assets and they can pay you an income stream and so you won't have to work anymore. So from there, just learning a lot about how to build wealth, obviously saving and acquiring investments and kind of getting that compound interest and that snowball working for you till eventually you can reach the point where you, you no longer have to work and those assets can do the work for you.

Phil (3m 54s):

Well it was a great bug to get in your ass, wasn't it?

Dave (3m 57s):

Yes. Yeah. So that's the thing. Sometimes

Phil (3m 59s):

When it

Dave (3m 60s):

Worked out exactly, sometimes negatives can turn into positives in that, in that aspect.

Phil (4m 5s):

That's funny because I, having talked to a few people in the financial services industry now, and these are people with university degrees who've gone to good schools and have gotten great jobs and they work in investing and their personal financial situation can be as bad as someone who's working on a factory floor as well. They just have a bigger cash flow, which subsidizes much more of a high-end lifestyle, but still they end up with the same problems.

Dave (4m 32s):

Well, I was thinking about this a little bit earlier. It's almost like a fancier version of just being broke, isn't it?

Phil (4m 40s):

I love that fancier, ver version of being broke.

Dave (4m 42s):

Well, I mean the outcome is the same, right? You've, you end up with no savings, no investments, no real control over how you spend your time. So no freedom. So you're as good as the person on on minimum wage who needs all that income just to pay their basic expenses. I mean, the lifestyle's a little bit fancier, but the, the outcome is the same. You ha you don't really have control over your life in that sense cuz you become accustomed to the higher spending and the higher expenses. And so you're even more reluctant to bring it down a notch to take, you know, they're reluctant to take one step back to take two steps forward cuz you become accustomed to that way of life.

Phil (5m 16s):

So Dave, you started with property. Tell us about property and getting into that property ladder and Well, it seemed good at the time, a lot of Australians make a lot of wealth through property.

Dave (5m 25s):

Absolutely. They definitely do. So property's obviously one of the most easy assets to understand for the average person because we see it every day. Everyone lives in a property, I would assume we feel much more naturally attracted to it because we are so familiar with it. So it, it tends to be the asset of choice when you're looking to start investing of course. So that's what I did, like most people, and you can be make a lot of money through property. Like that's, that's not up for debate. I suppose how I approached it was how most people approach it, just buying property in, in and around capital cities of Australia and be I suppose, betting on the long term growth of that asset.

Dave (6m 8s):

And obviously if you use leverage, which most people are doing with property, especially if you're just starting out, then that, that return can be magnified. So that's, that's quite appealing as well.

Phil (6m 19s):

That's, that's important to understand because we'd hear about leverage in the share market, but it's just like a mortgage on a property really, isn't it?

Dave (6m 26s):

Yeah, absolutely. I suppose the difference is that the, the leverage with property tends to be a lot higher and there's no margin call I suppose. So that's quite useful. So the downsides with property, I suppose the biggest one that comes to mind and it, it's almost hard to understand the gravity of it when you're just starting out, but the, the biggest downside is expenses and it's, it sounds almost like a non-issue. Like yeah, okay, if you, you could be making a lot of money so don't worry about the expenses and I get

Phil (7m 1s):

That you can, you can negative gear at, you know, it's all that kind.

Dave (7m 3s):

Yeah, yeah, yeah, yeah, yeah, I get that. But the expenses just tend to add up more than anyone would ever assume, I think. So you've, you know, you've got council rates, water rates, insurances, you've got landlord insurance, vacancies, repairs, strata fees. If it's a unit you've just, just, it mounts up so much and you've obviously got purchasing costs like stamp duty and selling costs if you need to get out. Even by myself investing in property for many years, it's still surprising if I go to audit a property or, you know, go through the numbers of that property, just how much the fees add up and, and how much the expenses pile up. It's, it's almost mind blowing.

Phil (7m 41s):

And there's a saying that you don't have to paint chairs. Is that the kind of leap that you, you made in your mind?

Dave (7m 48s):

After a period of, of investing in property for quite a few years, we started realizing, okay, there is some wealth here. We've been saving for so many years, the properties have grown a bit in value, so there's some wealth here, but we realize we're not actually getting any positive income cuz these investments, after the expenses are taken out, they're still costing us money so we can't actually retire on these assets even if there's wealth sitting in them. So it became a question of, well what can we do? Like maybe that wealth, if it was in a different place, could be more productive at producing income. So even running the numbers, if the properties are paid off, it's still not gonna, the income is still not gonna cut it because of the expenses.

Dave (8m 31s):

You might have a say a 4% rental yield, but that ends up being two to two and a half percent after all say two and a half percent after all the expenses are taken out. So that's much, much lower than you would hope for. But if you have say a 4% dividend yield from shares, that might even end up being more than 4% because you've got franking credits. So that might end up being 5% or more. So one, they look the same on the surface, 4% rental yield and 4% dividend yield. But when you net out the expenses on the property and the franking credits on the shares, the income from shares ends up being double the income from property with the same level of wealth inside that asset. So once I realized that and got over my discomfort and my fear of the share market, which everybody kind of has at the start not understanding how it works, then I started realizing, wow, this, this is gonna be a much more efficient use of, of our money, a much more efficient place to park it to actually produce income to live on.

Dave (9m 28s):

So at that point it became a, a no-brainer to my mind to, to start selling off our properties, then put some of that equity into, into shares after we'd started investing smaller amounts each month and gotten used to how it works and all the rest of it. So then we kind of began this transition phase from property to shares based on creating income stream.

Phil (9m 50s):

So was that a part of the transition was becoming comfortable with shares and going in small? Because I think the major difference between property and shares is that there's no flashing light on the top of a property saying this is how much it's worth right this second.

Dave (10m 5s):

That's, that's a big issue isn't it? Having that visible volatility? I mean if someone has said before

Phil (10m 11s):

Down, yeah,

Dave (10m 12s):

Yeah, if you tried to sell your house every week you'd have a different price every week and so you would have volatility, but obviously that's not, people aren't seeing that number change so it's much more comforting to know, oh it's probably worth x amount. But they don't really know until they try and sell it. Well, with shares it's kind of slapped in your face every day, isn't it?

Phil (10m 30s):

Yeah. And you can't, and you can't help but keep your eyes on the screen, you know, it's, that's the hardest part, isn't it? Just going, oh, how much is it worth? Well it's worth more than 10 minutes ago. Oh no, it's dropped.

Dave (10m 41s):

It's, it's, I think it's almost like this sixth sense of curiosity that we have. We just kind of want to know, we just can't help ourselves like, oh I wonder, I wonder what it's doing. Yeah, yeah.

Phil (10m 51s):

So you started with shares really to start with, didn't you, rather than directly investing in the share market, what were the kind of shares that you started looking at and why did you choose those particular kind of shares?

Dave (11m 1s):

Yeah, so I did start in individual shares. So I just started looking for companies that I understood, I understood what the business model was and it, it made sense to me how they made money in. And then I would just look at the valuations and do pretty simple stuff that a monkey could do to be honest and, and have a look at the, the different metrics on those companies and then just kind of make a rough expectation or a rough vision of the future of where do I think this company would be in in 10 or 15 years time. And so I started doing simple stuff like that and also obviously looking at the income generation from those companies and whether that looked appealing as well.

Dave (11m 43s):

Cause obviously I was focused on an income stream. So that was basically how I started out in shares had mixed success, I would say. Some did, well, some didn't do well and then I stumbled upon a simplified version of doing what I was trying to do, which is listed investment companies. So obviously I was trying to create this portfolio to get an income stream from and then I realized okay, that's what these guys do over here, so how about I just use them and I then I don't have to do it right, so I'll let someone else do the work, take out a little fee and then I can just relax. So I started looking at them and then stopped doing individual shares myself, invested more in listed investment companies and then I, after that I found ETFs as well, which were almost a simpler version again to, to be honest, because instead of owning say 50 or a hundred companies, you are basically owning the whole market and collecting the income stream from all of the companies and not necessarily betting on a sector or betting on individual stocks.

Dave (12m 48s):

So I suppose I went from a journey of trying to do it all myself and then slightly realizing that okay, it's simpler if I kind of outsource or if I get other people to manage the portfolio and I can just sit back and, and own the companies inside these rappers, these these funds and can get a similar income stream and not really have to worry about picking them too much myself. So that I found that quite appealing as well.

Phil (13m 13s):

Are you still in LICs or, or is it all ETFs now?

Dave (13m 17s):

No, I still own LICs and a couple of real estate trusts as well.

Phil (13m 21s):

So what LICs did you first start looking at? I mean because most people think about ETFs first, but LICs are, you know, without making any re recommendations, they are very interesting product for investors. What are the kind of LICs you looked at?

Dave (13m 35s):

Yeah, so I looked at the ones that were quite diversified. So they'd have to have at least 50 companies, ideally more like 70 or or a hundred even. So I was looking for just like a big basket that I could invest in and then not really have to think about it. It wasn't sector specific, it wasn't hyper-focused like that. It was more like a diversified basket. I found that more appealing cuz obviously the long-term certainty of that is much more than if you go for something that's hyper-focused that the strategy might not work or whatever. So I was looking at things that were quite diversified, low fee, paid decent dividends, had a good history, been around for a long time

Phil (14m 16s):

Passed on franking credits,

Dave (14m 19s):

Franking credits, things that I didn't have to worry about too much where the long-term certainty looked pretty good.

Phil (14m 24s):

Do the LICs that you're invest in, do they have reinvestment plans as well?

Dave (14m 29s):

Most of them do, yep. Yep, they do dividend reinvestment plans. Yeah.

Phil (14m 33s):

Do you like dividend reinvestment plans? Is that a big part of your investing?

Dave (14m 37s):

It's not. So I like them as an idea but in practice I don't actually use them myself. So I can see the usefulness of them because you can just turn on this switch and not have to do anything with your investment ever again. But in practice I don't use it because I like to see, well number one, I like to see the cash coming in and hitting the bank account. That's, I find that quite enjoyable. And then I can decide what to invest in at the time. So I might not actually want to buy more shares of that particular investment I want, might want to build up another part of my portfolio instead. So I like to have the control over where the money goes with each investment I make as well.

Phil (15m 16s):

What about the real estate investment trusts that you mentioned? Why did you look at REITs, the re REITs? Are they that you've been looking Yeah, which can be bought and sold on the market as well. Yeah,

Dave (15m 26s):

So they're just like a portfolio of real estate that you can buy and sell. So instead of a portfolio of shares, it's almost like a portfolio of real estate that's managed by an underlying fund manager. So it's a, I suppose it's a little bit like a listed investment company, just that the underlying assets of commercial properties rather than shares. So the appeal for that was that deciding that I was gonna move all of my assets into shares as opposed to property, which we're still not there yet. We're still in the transition phase. I was keen to own some property but obviously I didn't want to do that myself. So I was interested in these commercial real estate trusts and so the ones that I found appealing were ones that had similar attributes, again, like a kind of reasonable size diversified portfolio of all these different assets produced a pretty decent income stream cuz that's one of the benefits of commercial real estate is the yields are quite high on those assets typically.

Dave (16m 20s):

So that was gonna be quite useful in generating income from my portfolio. And obviously like the, the strategy was the same. So I'm more of like a buy and hold long term, you know, sit back and collect the income, not have to do much. That's kind of more my philosophy. So they lined up with my investment strategy itself. So

Phil (16m 37s):

And is that part of the idea of diversifying so that you hopefully not correlating your volatility at different times of the cycle?

Dave (16m 47s):

A li a little bit you could say. So not in terms of volatility because when shares go down, these real estate trusts will also go down cuz they're listed vehicles. I suppose if I chose the unlisted real estate trust, that would have more of a correlation benefit because pricing not being live and so that the assets are not being continually assessed, kind of like a home or an investment property is not constantly being thrown in your face. The, the main reason was just to own different assets, different income producing assets. That was the main reason for looking at those

Chloe (17m 21s):

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Phil (17m 37s):

And then ETFs, what do you like about ETFs?

Dave (17m 41s):

So et when I speak about ETFs, I'm, I'm basically just speaking about index funds,

Phil (17m 48s):

No thematics and

Dave (17m 49s):

Nah, I don't, I don't, I don't, I just don't play that game. I get the appeal but it's just not for me. I like the, the boring stuff, I guess the vanilla stuff where it's big diversified, low cost pays me income, I don't have to think about anything. I know I kind of know what's gonna happen over the next 50 years unless society crumbles, which, who knows. But if that happens, your investments will be the last thing that you're worried about. Yeah, so yeah, yeah, yeah, that's, that's my strategy. So they, they fit into that because obviously they own an index fund is, is a replication of every company or every major company in that particular market or in a group of markets if it's say an international fund.

Dave (18m 29s):

So the simplicity, the low cost, the passiveness, that's what really appealed to me.

Phil (18m 35s):

So Dave, I'm really enjoying your thoughts and your writings and especially on Pearler because you're a very active member of the Pearle community and I'm trying to become a little bit more active there as well. What are some of the questions that you find that you need to talk about with people? What are they asking and what are some of the, the things people really need to know when they first start investing?

Dave (18m 56s):

Some of the common questions that I come across are, you know, the typical newbie stuff which everyone goes through at the early stage of their investing journey. So that would be questions like how many ETFs or how many, how many funds or how many shares should I have in my portfolio? You know, how much is too much or how much is too little? Which is almost impossible to answer because some people might like to have a lot of things in their portfolio, other people might want to deal with as little as possible. So they might be better off just with one fund or two funds. So you, you almost can't answer that question because there isn't a right answer. And that's actually a theme across a lot of the newbie questions that there isn't a right answer to a lot of these questions.

Dave (19m 39s):

It's more like, well there are a few options, it just depends which option appeals the most to you. So it's, it's almost tricky to answer questions like that. Other stuff is obviously like why, why should I pick this fund over another fund? You know, how do they differ? So it's a lot of times in the early stages it's figuring out which option or which funds are gonna be the right one for you and which aspects and which attributes of those particular investments appeal to you the most or which are right for your portfolio based on what you've already got. So there's a big learning curve obviously, that people have to go through cuz they might buy one investment and then they're looking at another one and then realizing, oh that one actually kind of overlaps with the one I've already got, so maybe I have to look for something else.

Dave (20m 24s):

So it's, it's quite a big learning curve. So one thing I try to say to people is don't feel like you need to learn everything in two weeks. It's just not gonna happen. You're just putting too much pressure on yourself. You're gonna end up with analysis paralysis and you're gonna, the whole experience is gonna be much less enjoyable because you're just putting too much pressure on yourself to have it all figured out. But it, it, it doesn't work like that. We all learn as we go and even after investing for many years, you still learn new things, even if it's just psychological things of you might be in a certain market environment, whereas the, the market will or react a certain way and then you'll notice yourself reacting a certain way based on what the market did.

Dave (21m 5s):

So you still learn things about yourself and your approach psychologically after many years of investing. So the idea that you can figure it all out in a month and you're good to go forever, that's, that's not very realistic. So I think everyone needs to relax at the start of not freak out so much about making mistakes and doing the wrong thing and, and having it all nailed down. It's, it's

Phil (21m 28s):

And start small, which is very easy to do now you can just start small very easily.

Dave (21m 32s):

That's the best part. Start small, learn as you go. Don't be afraid to make mistakes and just, just keep going and as long as you are. I think the other thing is as long as you are saving and adding money to your portfolio, it doesn't matter if you don't have the perfect investments, you're not, there isn't any perfect investments but the most thing is adding fuel to that portfolio. Adding your savings to that portfolio is what's gonna make it grow, especially in the early stages for the first few years, adding cash to the portfolio is what's gonna really boost its the progress rather than finding some rocket ship type investment.

Phil (22m 8s):

Okay Dave, let's talk about the book and I was saying this off air but I wanna say it in front of listeners now is you're a great writer, you've really nailed it, you've got a great style and it's really clear, very simple to understand and people are obviously reacting to it. So tell us about some of the points that you cover in the book.

Dave (22m 27s):

I essentially tried to make the book like an A to Z of financial independence but Australian specific cuz obviously our environment and our tax system and our lifestyles and our incomes and whatever everything's, everything's different over here as opposed to America, which is where a lot of this stuff started and where a lot of us got our initial inspiration to, to work towards financial independence from. So I really try and lay out the Australian specifics in the book and one of the main messages I try to make clear in the book is just how big our opportunity is. We just have such a big opportunity in in modern day Australia to live a very different life than most people have, have had the opportunity to live in the past.

Dave (23m 10s):

And by that I mean our incomes have grown like little bit by little bit over a period of decades and decades and decades to the point where if we use our money wisely, we can save more than people have been a able to ever save in the past. And that helps us build wealth, it helps us create assets and investments that we can use to live on. And we were able to get to the point much earlier than people could ever imagine in the past where work becomes optional. And a lot of that is by realizing how good we already have it. Like even a relatively basic lifestyle in Australia in 2023 is essentially heaven on earth. If we don't believe that or we find that hard to believe, we could just look around the world at the so many other countries and how many global citizens around the world are not living anywhere near as good a lives as we are living now.

Dave (24m 1s):

So that's one of the main messages I try to make clear in the book cuz once we understand how big the opportunity is and look inwards a little bit towards ourselves, we start to see wow, if I do things a little bit differently, I probably could have a much better life in the future. You know, if, if I'm 25 now, if I work hard and I do the right things with my money, I could probably be retired or at least semi-retired by 40. That is insane, that's 20 to 30 years earlier than most people would expect. And it doesn't take a whole lot of effort. It just takes a lot of little smart decisions piling them on top of each other to work towards this goal with a bit of focus and a bit of tenacity and a bit of effort. And your life really can turn out a lot different

Phil (24m 42s):

Because happiness and satisfaction, there's something that you value and find really important and want to share with people as well. It's not just about the money, it's what you can find in happiness and satisfaction with.

Dave (24m 54s):

Well, well that's right. I mean, well there's no point building up a pile of money if you're gonna be miserable. I mean that just, that just seems pointless to me cuz I'm sure there, there are quite a few people out there today who are making, you know, say $500,000 a year, even a million dollars a year and they're not happy. And so what is their money really providing for them? So they're working for money but their money's not really helping them create the life that they actually want. They're probably working 60 hours a week, they're probably got high debt still, as we were talking about earlier in the podcast. They might have a lot of money but they're not necessarily free and if you don't feel free in your life, you don't have a sense of satisfaction and a sense of control over your life.

Dave (25m 34s):

So I think a lot of us, we trade away our time and we take on a lot of stress just to get more money, but then the money doesn't help reduce our stress if we're just gonna keep, you know, running in this vicious cycle and these, these stressful lifestyles. The whole point of money should be to enable you to work towards improving your life, living a better life and being able to spend time on things that are more important to you than giving up 50 hours of your week to a job that may not necessarily be all that meaningful or all that satisfying to you. So it's not to say don't work anymore. Sometimes people get that bit confused about, oh the fire movement, they just wanna sit around and do nothing and go to the beach and lay in the hammock or whatever.

Dave (26m 15s):

And it's okay to do that stuff sometimes. I mean I definitely do, but the point of it is to be able to transition yourself, I suppose, wean yourself off certain work and certain jobs that are not bringing you fulfillment. And I think there is some stats to show, I can't remember the numbers right now, but the stats are like at least half the people are not satisfied in their job, they're not happy with what they're doing, but most of us are doing it just for the money. So the whole point of building up wealth should be to wean yourself off things that you don't want to be doing, don't want to be giving up your time for so you can start focusing on things that mean something more to you than that job. And it might just be a different job, it might just be a lower paying job or it might be a working part-time and spending more time with your family or more time on your hobbies and just having an all round better balance and all round better lifestyle and just a more enjoyable and satisfying existence.

Phil (27m 10s):

So since writing the book and obviously seeing what the feedback is like and what people are talking about, what are you thinking about now? Are there any new topics or issues that you're finding to tackle?

Dave (27m 22s):

It's, it's quite interesting actually because you know, when I'm writing articles and getting feedback from people and getting emails from from readers, whether they've read the book or not getting, getting constantly getting emails, people obviously tell me things that are going well for them and other things that they might be struggling with. And one curious thing that I find people seem to be struggling with, it's not a large percentage of people, but it is more people than I would expect. And something that surprised me entirely is that even after people have enough wealth to stop work, they are very, very hesitant to leave a job. Even if the job they, even if they don't like that particular job, they are very, very hesitant to pull the plug and wean themselves off that job.

Dave (28m 9s):

And that really surprised me cuz I just thought, well once you have enough money, wouldn't you just quit your job If, I mean, if you don't like it, why would you stay there? The truth is we be become accustomed to going to that job. And the idea, once you've done something for say 20 years, which a in a lot of cases that's what the scenario is. If we've done something for that long over and over again it becomes burned in our brain. That routine, that habitual routine that we sadly we, we start to have trouble imagining our lives any other way. I, I find that to be, that's quite scary to me that people can become in such a almost robotic repetitive fashion that they struggle to see life any other way.

Dave (28m 50s):

And so I'm trying to figure out how to get people out of that fear zone because it is, it's all based on fear, it's essentially fear of the unknown on a major scale. So I'm trying to figure out how to write things in certain ways and develop certain messages around this problem to be able to kind of coach people out of that fear and to see things from a different angle. Because a lot of times it's just people need to see things from another perspective and see what they might be missing out on. So the problem with staying in that job is they feel like they're gaining something still, like they're, they can see the numbers going up cuz sometimes it's addiction to seeing the numbers go up, which is kind of a different matter.

Phil (29m 32s):

I had, I was drinking in a pub one night and we kind of got into a conversation with a woman who worked at a bank in the center of Sydney and she started talking about some of the homeless people that were in the middle of the city and she had access to their bank accounts and she realized that not everyone, of course there is a real problem with homelessness and I don't want to downgrade that problem, but some of them were actually addicted to the numbers of the money in the bank that they'd taken, they were almost like in the fire movement but had taken it to such an extreme that they didn't wanna spend anything including on their own personal wellbeing, health and even accommodation and Wow.

Phil (30m 15s):

Yeah, I know it was such a bizarre thought and you know, I guess that might be their possibly taking that idea, right to the very extreme that becomes so ex addicted to accumulating dosh.

Dave (30m 27s):

I think the main thing is one of its fear of not having enough. You know, what if, what if x, y, Z happens? You know, what if this happens? What if that happens? What if I need a job and I can't get a job? And there's the, you know, your mind. That's the thing when, when you're having these kind of mental struggles, your mind starts coming up with reasons why you should stay in your job and why, because your mind wants safety. Cuz you wanna feel secure, you wanna feel certain, you wanna feel safe. So your mind starts coming up with all these objections of why you should not go ahead with your plan, pull the plug and leave the job and maybe go and do something else. Instead, it starts coming up with all these reasons why you need to stay and keep doing exactly what you're already doing.

Dave (31m 10s):

So it's, it's really about reframing the question and trying to get yourself out of succumbing to your fear, to your mind's own fear. Cuz your mind is essentially playing tricks on you cuz you've made a plan, you've been working towards this point for 10, 15 years. You already know what the potential problems are afterwards and what you could do about them and now it's your, you're kind of shifting the goal post, oh maybe I'll, I just need a little bit more or I'll just wait until I get my extra long service leave or I'll just wait until the market goes up a bit further or, and wait until this recession ends or whatever the rest of it is. A lot of it's just made up reasons based on fear. So I'm, I'm trying to work around solutions to frame things in different ways for people.

Dave (31m 51s):

Cause a lot of the people realize, they realize that they've been taken hostage by their mind. So it's really about that, trying to get them out of that.

Phil (31m 60s):

And it's also about thinking about what else you can do with your life. I mean, yeah, some people have no problems working out exactly what they would love to do with their lives with other people. Sadly, they don't seem to have an idea.

Dave (32m 11s):

Yeah, it's, it's quite tricky I guess because if you've spent that long doing the same thing and giving up most of your life for this job, I suppose it would be intimidating to figure out what to do with that extra time. But I suppose one thing for them to consider is do they get bored on the weekends? But a lot of people say, no, I love the weekend. Oh, just imagine that, but a bit longer. It's not that complicated. Like you can have the weekend, but what if you didn't have to go to work Monday? Oh that would be amazing. What if you didn't have to go to work Tuesday? Oh, and then it starts becoming like a little bit more uncomfortable because it's a little bit less than what they're used to. So it becomes, starts to creep out of the realm of what's normal and how they see themselves spending their time.

Dave (32m 54s):

So I suppose that's, that's one thing is people need to develop, like write down a huge long list of all the things that you might be interested and you might wanna try, you might wanna look into of how you would spend your time if you didn't have to work. I mean, after all, that's why we are working towards financial independence is so you can spend your time in more enjoyable ways on doing things that you actually want to do. So write down a long list of all those things and what they might be. Even just things you're curious about. You don't have to do them, you can figure it out later and cross most of them off if you want. It doesn't matter. But the whole idea is to get your mind working about how you can spend your time in different ways so then you don't, and keep revisiting it as well. So then you don't end up in this trap of, oh no my, I can't imagine my life without my job because then you end up, you essentially just end up staying there forever because it's the most comfortable choice.

Dave (33m 42s):

It might not necessarily be the most optimal choice, the most happy choice, the most satisfying choice. Healthy,

Phil (33m 47s):

That's what Healthy choice.

Dave (33m 48s):

Yes, exactly the most healthy choice, but it's what you're comfortable with so you're probably gonna stay there. So yeah, it's, it's definitely a battle. So I plan to ride a bit about that in the future.

Phil (33m 60s):

So how can listeners find out more about Dave World?

Dave (34m 3s):

So probably the website's easiest, so that's strongmoneyaustralia.com and they can go there and get all my articles or sign up for my newsletter and have a bit of a browse around. I'm also on Facebook and Twitter if people are interested. I just share a few thoughts and share what I'm working on over there.

Phil (34m 20s):

Oh, and the Pearler community as well, if anyone's interested in joining up Pearler.

Dave (34m 23s):

Yeah, yeah, I'm always hanging out at Pearler answering investor questions and I published articles on there as well, different investing articles on various topics, so you can check that out as well.

Phil (34m 33s):

Fantastic, Dave, Gow. Thank you very much.

Dave (34m 35s):

Thanks Phil.

Chloe (34m 37s):

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