Money in the Vege Garden

I love fresh vegetables.  But I live 70km from the nearest town and it can sometimes be weeks between shopping trips, so I don't get to have fresh (store-bought) food in my fridge very often.  So I planted a vegetable garden to get some fresh veges more regularly, throughout the year.

Not having ever gardened before, it took me a long time to work out what can work and what can't.  For example, there are winter and summer vegetables and you don't get much success if you plant things at the wrong time.  It occurred to me about five minutes ago that the principles I operate when gardening are similar to the principles of money management and investing.  Here's a few key lessons.

Plant the right seeds for the right seasons.

Like plants, investments do actually have seasons.  At the moment Property and Shares (in Australia) are having a major low period.  If you can help it, now is really not the time to be selling a house and it hasn't been for about three years now.  But with low interest rates and low property prices, now might be a really good time to buy.  Plant the property seed.  It may take another couple of years for your investment to grow in capital, but eventually it will grow.  Shares should do the same thing.  But as with all investments, do your homework and make the right decisions for you.

Be Patient

It takes a while for plants to grow.  If you plant them from seeds as I do, you have to wait weeks to see if they will even come up at all.  Sometimes they don't.  If this is the case, then you need to cut your losses and plant again.  If you picked the wrong shares, or bought the wrong house, sometimes you need to do this with these as well.  Generally though, if you wait long enough, you will find that your investments (and your vegetables) will push through and give you some yield, even if it wasn't what you were expecting.

Plant lots of seeds, something will always come up.

Don't put all of your hopes into one thing.  Most people know that if you had all of your wealth in superannuation, in 2008 your net worth was halved.  If you put a little away in different investments, you should be able to handle losses in any one industry.  I have planted corn every year for 4 years and never got a crop out of it.  Yet, I have never starved because I still have lettuce and tomatos.

When you don't have time to tend your garden, plant things that take care of themselves.

I have two babies, born in the last two years.  Each time, I had to go away to Brisbane for more than a month to wait for them to be born.  I couldn't weed, water or plant my garden in that time.  Both times, I had pumpkin seedlings growing.  The first was from a seed that came up randomly in the front yard.  After I got back from baby delivery, the pumpkins had taken over the entire garden.  I didn't get any other plants for a while, but I haven't had to buy a pumpkin in 2 years.

I view investing the same way.  I don't have time or ability to trade shares, or to do development projects.  So I have a buy-and-hold strategy for both my properties and shares at the moment.  I'll probably get more active in the investment garden when my kids are older.

Do the weeding (check CC statements, budget)

You can't grow veges in the place where you have weeds.  Similarly, you don't have access to money you throw away.  Check your bank statements regularly and make yourself accountable for every dollar spent.  I often find things like fees that shouldn't have been charged on my credit card statement which can easily be rectified by a phone call to the bank.  Also, I can make a decision to hold off on impulse buying if my balance reaches a certain mental limit.

Harvest at the right time

I tend to leave my lettuce too long.  It goes to seed and tastes awful.  I think its because I get such pride in seeing my plants in my vege garden that all too often, I'll put off my harvest. It also comes from a bad habit I have of saving things for later, when I might really need it.

I've done this with shares too.  The market was doing well, share prices were increasing, I had my chance to take 10% and run, I didn't and then the market fell again.  I've also gotten out of a deal that went nowhere for three months. Literally one day later, that share took off and would have given me a 30% return the following week.  It's hard to tell sometimes.

Companion plant (reduce debt and save)

I'm a mathematical person.  I like geometric patterns and straight lines.  It's nice to see my lettuce all in neat rows, but it doesn't always make for good practice.  Some plants need a little shade and others need a little sun.  If you have a tall plant next to a short plant, the lower one gets some nice shade and the taller one doesn't have to put up with weeds growing under it.

Similarly, you don't have to focus only on debt reduction before you give yourself a chance to save.  It can be far more motivating to pay off your debts if you see your savings growing in the bank.  Also if you have some money saved up, you don't have to feel guilty when you buy something, because you don't have to undo all your hard work of reducing debt to pay for it.

Maintain your perennials (have buy and hold stocks and property)

There are a few plants in my garden that have been there forever.  Well not really forever but they are there year in- year out.  They didn't even die off when the pumpkins crawled all over them.  No matter what else happens in my vege garden, I know that I can depend on these plants.  They spruce up a salad nicely and also go in my stir-frys, quiches, fritters, pizzas or whatever.  They are my all-rounders.

I also have my all-rounders with my investments.  The shares I have continue to give me dividends, whether or not they go up and down in value.  My properties continue to provide me with income from rent regardless of market conditions.  I also have my allrounders in bank accounts and loan accounts.  I can pay down debt and save interest or build on savings or whatever I need.

I can't give you much more gardening advice but if you're looking for investment ideas, check out my book,  Do I HAVE To Get A Job? available now on Amazon.

Need some good Credit Card advice?  Have a look at How To Get A Credit Card - And Get The Bank To Pay Interest To YOU!

Where will our kids find work?

I've been thinking about education lately, and today I found myself daydreaming about what I would do if I went back to work.  Back to work for me would mean back to high school teaching.  Last time, I had senior Mathematics but what if I was given to opportunity to teach Business?

I have the luxury of this daydream since I have a teaching qualification and a position waiting for me at a state school for when I decide that my children are old enough not to need me full time.

It occurs to me, though, that many people do not have this option.  People are not only asking, "Where can I get a job", but, "Do I HAVE To Get A Job?"  It seems that news of companies doing massive lay-offs and downsizing is occurring more frequently.  Also, many women are finding that their careers do not suit them anymore after having raised one or more children.  Australian companies are moving offshore to take advantage of lower employee wages and less "red tape". Even jobs that used to be safe, (ie the public service) are being axed as the Queensland government slashes its spending in a bid to pull the budget into surplus.

All of these things indicate to me that our children are in trouble!

Where are they going to find work?

Schools and the education system seem to me to be sending the wrong messages to our kids.  They condition them to believe that if they work hard, they can get a good job and will be well set up financially.  This is simply not true.

Schools value further education (different from self-education) and push kids to get into university.  If this does not suit, the only other option you are lead to believe that you have, is to get a job.  Many of our kids, whilst being aware that businesses exist, would not even consider that running a business is even an option to them straight out of high school.  Most would not be able to tell you what investing means, let alone different ways of achieving this.

I believe that the only way many of our young people are going to get employment and indeed financial security is to create it for themselves.  This means developing their own businesses and income streams.  Schools need to catch up on this idea and teach this as a legitimate option to our students.

So what would I do if I went back to work and had the opportunity to teach business? I'd start with the end goal in mind.  My end goal and final assessment would be to have each child making money from their own business.  I'd set up milestones for the students to achieve throughout the year, and only after that would I look at the curriculum.  I'm sure the Business curriculum has a lot of information about what students need to know about business, so I'm sure it would work in well.

For now and until that time (if it ever occurs) I am going to set up as many income streams as I can so that I can teach from personal experience.  Whether or not I get back into a high-school classroom does not matter.  I will learn, apply and pass on my knowledge in the simplest possible way.

I have already begun with a book which outlines the different types of businesses and investments.  If you agree that our teenagers need to be aware of these options, get to Amazon and download "Do I HAVE To Get A Job? - Business And Investment Options You Can Begin At Any Age" while it is still at the low price of $2.99

School's done - what next?

The Jacaranda's are in full bloom.  All our senior students are finishing their exams, waiting for results and gearing up for Schoolies week.  It's a brand new chapter in their lives and as with any life-changing moment, some look to it with excitement whilst others are scared stiff.  Do you remember how you felt?

But what will they do when all the excitement settles down?  Well, that's a no-brainer isn't it?  They'll either go to uni or they'll get a job right?  That's what I did.  I'm betting that's what you did.  But are there other options?  "Do I HAVE To Get A Job?" How many people do you know who started a business straight out of school?  Anyone?  No?  Why not do you think?  Why can't we build a business straight out of school?  Or begin an investment portfolio which returns us better than 10%?

Truth is, we can.  They can.  Anyone can but the problem is that nobody realises that this is an option.  And if they did realise it was, they would probably feel that school did not prepare them for this option. School prepares people for further education.  If you don't want further education, you may find that school has prepared you for the workforce in the sense that you can fill in a resume and application form for a job.  Schools barely teach interview skills.

So what are the options for our school-leavers? There's heaps.  And you may find on reflection, no matter your age, that there are better options out there for you too.  I challenge you to think about what you really want to do with each day (finances notwithstanding).  Are you doing it? Why not?  Where would you rather be? Forget about why you aren't there.... figure out how you can get there in 12 months.

Want some more information about the types of businesses and investments you can start straight away with no money down?  Have a look at my new ebook published on Amazon.  Called "Do I HAVE To Get A Job?" 

How to use your credit card properly

Most of us have got a credit card.  It is a useful tool for accessing large sums of money quickly. This, unfortunately is also the worst thing about it.  And since nobody is teaching us how to use a credit card properly, many people end up paying interest bills on their credit card every month.  They do this without getting the full benefits of the use of the card as it is usually at its maximum limit.

So for those of you contemplating getting a credit card for the first time, this is for you.

1. Your credit card is used to make purchases not to finance things.

That means, don't use your card to buy equipment for a business.
Don't use your card to pay University tuition fees.
Don't use your card to buy anything that will take many months to pay off.
Don't use your card to purchase shares or other investments.

Why not?

Because the interest rate is too high.  If you need large sums of money to finance your business, studies or investments, there are better loans out there.  Go and talk to your bank manager about getting a start-up loan and what these involve.  If they won't lend you the money, then that's probably as good an indicator as any that you shouldn't be spending it.

Do use your card for daily purchases like groceries.
Do use your card for anything you would otherwise pay cash for.
Do use your card for paying for haircuts and movies and clothes and restaurants.

Why?

Because it makes it so much easier to keep track of your spending.  At the end of each month you can look through your credit card bill and see exactly where your money has gone.  If you have spent $500 on take-away food in one month, you can assess this and decide if you should perhaps cut back on take-aways.  Also you can check your balance throughout the month.  I have a mental limit (not my credit card limit) not to spend more than $2000 each month (Total).  This includes groceries, bills, treats, everything.  If my balance on my card is $1850 on the 23rd of the month, I might decide not to bother grocery shopping at all until the first of the next month.  I'd use up all the rest of the food in the pantry first, even if it means going without bread or drinking powdered milk for a week.

2.  Pay your card off IN FULL each month.

Your card is used to make your life easier, not to buy things with money you don't have.  Your card should have an interest-free period.  This way, the first purchase you make on the card does not get charged interest until the following bill is due.  If you pay the balance of your bill (not the minimum payment) on or before the day that it is due, you will not be charged interest.

Why is this important?

Because otherwise you could end up paying $100 for that $50 shirt you just bought on special for $30. It's all well and good buying products on sale, but what's the point if you then go and put it on your card and pay interest on it?  $30 at 21% means that if you never pay your card off in full, by the end of the year you have paid $36.30 for that shirt.  Let's say you've maxed your card out at $2000.  At 21% you'll be paying $420 each year for NOTHING!!!  I can think of much better things than NOTHING to spend $420 on can't you?

3. Set yourself a limit.

Your credit card limit as directed by the bank should not be the limit you set for yourself.

Why?

Because life happens and you may still need money in an emergency.
Because the bank wants you to overspend so that they get the interest payment.
Because the bank will always give you a greater limit than you should set for yourself.

Decide on how much you can reasonably pay off each month.  Factor in the cost per year for car services, roadside assistance, electricity, insurance etc. Don't go over the limit.  Check your progress via internet banking each week to see how you are going.  If you are overspending, you can cut back.  If you get a particularly large bill in, your savings should be able to cover this.

Lets look at an example.

Say you are earning $4000 per month.  You are putting money into savings, rent and paying off a car so you decide that you can reasonably afford $2000 on the rest.  Your irregular bills (insurance etc.) come to around $5000 for the year.  So set yourself a limit on your credit card of ($2000x12-$5000)/12 = $1583 per month.  Round that down to make it easier.  Your credit card mental limit should be $1500 per month.  Don't spend any more than this except if you get one of those bills in.  Still put it on your card though, that's what it's there for.  When your credit card bill comes in, transfer the whole balance from your usual account onto your credit card.

4.  Don't get cash out on your card.

Why not?

Because it does not come with an interest free period.
You'll be paying interest on it from the second you have the cash in your hand.

What to do instead.

Let's face it, there are always things that are easier to pay cash for.  You don't want to have to spend $10 just so that you can put that $3 coffee on the card.  Instead, factor in some cash each month to your regular spending and get that out from your usual account.  Using our previous example, we have a $1500 mental limit.  Get out maybe $100 each month for cash transactions and reduce your mental credit card limit to $1400.  Once the $100 is gone, don't get any more out.  Or alternatively, if you have a night out planned with drinking and merriment, check your credit card balance, make a mental note to reduce your limit, get out what you think you'll need and don't go back to the ATM.

Any Questions?

Teaching children a positive attitude regarding money

We all want the best for our children.  We try to make sure they are safe, are going to a good school and are getting enough love and attention at home.  But how often do we stop to think about what they are learning with regards to money in their daily lives.  After all, they will have to handle money eventually.  Should their financial education begin when they get their first job or earlier when they are at school, or should we be conscious of their financial education from an even younger age?

I'm here to argue that regardless of when we begin a formal education strategy about money, our children will form their own opinions at a very young age.  By the time our children are school age, they usually know what a book is and have some idea about letters, words, numbers, shapes and colours.  It makes sense that they also know what money is and have an opinion about how to use it.  They have seen us shop innumerable times in their lives.

Our children have also heard us discussing money.   We probably haven't even been aware of the messages they have been receiving.  But if we want to give our children an advantage in the world financially, perhaps we should be thinking about what we say.  Is the subject of money in your house associated with arguments and negativity or does it bring about a positive feeling?  Is it a taboo subject to which each member of the family acknowledges the unspoken rule not to speak of it?

Have a think about what type of feeling you get when you think about money.  Chances are, your children feel the same way.  What beliefs do you have?  That money is scarce, evil, abundant, fluid, powerful, useful, easy to get, difficult to keep, never enough, not important? If you haven't really thought about it here's a quick exercise.  Have a think about the phrases you use in respect to money.  Or when your child asks for something what do you say?

"Money doesn't grow on trees"
"Money is the root of all evil"
"I don't get paid enough for that"

or is it something like

"Money provides opportunities"
"Money is easy to come by"
"You can have anything you like, with careful planning and budgeting"
"If you can save up half for that, I'll put in the other half"

To give our children a head start in their financial education, it is important that they can speak freely with you about money.  It is also important that they develop a positive attitude towards money.  But here's the trick:  If you have negative beliefs about money it will be difficult for you to teach your kids a positive attitude.  So here's an exercise that you can do.

Get the whole family together.  Turn off the TV, phones and computers and sit around the dinner table with some paper and coloured pencils.  Get everyone to write down some beliefs that they have about money.  Decide as a group whether these are positive or negative. Discuss how these beliefs affect how you handle money.  If your catchcry is something to the effect of, "We can't afford it" then you probably don't allow yourself to want anything because there is no possibility of ever being able to get it.  For your children's sake and your own, entertain the idea of turning this around at least to "How can we afford it?" if not to, "We can have this if we really want it" and do some brainstorming about how you as a whole family can earn more money for your purchase or at least save up for it from existing income.

Now write a new list together which contains only positive comments about money. These should be new beliefs that you'd like to have.  You don't have to believe them straight away.  Once you have a list of between five and ten new beliefs, put them up on the fridge for everyone to see and read daily.  Get used to saying these words instead of the negative ones.  Your children, creative beings that they are, should develop a positive outlook with regards to money and be on their way to learning to negotiate ways to get what they want, even if it seems impossible to you.  Try not to stifle this creativity by being a "realist".  Instead, foster their excitement and give them the responsibility for saving and budgeting.  They should quickly learn what purchases are important to them and temper their need for instant gratification.

Who's responsible?

I was having a conversation with my husband’s aunt about schools.  She was telling me about how people in her district were suggesting that the school provide breakfast for the students.  The school in which I used to work had a breakfast program while I was there.  The students would have to run around the oval a couple of times and then got some cereal for their effort. On the one hand this is a good idea.  It promotes healthy eating and exercise and it give’s the kids a chance at a good brekky who would otherwise have not gotten anything at home.  My issue is: why aren’t they getting a good breakfast at home?  Is it really the school’s responsibility to promote healthy eating?  When I was teaching in town I would see students walking to school with a can of coke and a bag of lollies.  This disturbs me.  One of the subjects I was teaching at the time was Health, but clearly explaining the benefits of healthy eating and the effects different foods had on the human body was not enough.  The message was lost.

Another gripe I regularly hear is parents complaining that their children are not being taught manners in school.  Is that really the job of the teachers?  If so, what role do the parents play in their children’s education?  It appears to me that parents are giving over their power as parents to the state and expecting schools to teach their children everything they need to know…. About everything.  At the same time, they are telling their kids, “The teachers can’t make you do anything, so you just do what you want.”  There are mixed signals here.  And it is no wonder that our kids are slipping through the cracks.

As a new parent and a former teacher, I have a unique perspective about what I can expect from schools and education for my child.  I know that schools have no power to discipline kids and no real ability to tailor programs to suit my child’s needs if they differ significantly from mainstream education.  Teachers only get the children for a short period each day and for the rest of the time they are in their parents’ care.  Can parents really expect teachers to have more influence over their children than they do themselves?  And for that matter, why do they want them to? 

For my part I’d like to urge parents to take back responsibility for their children’s education…all aspects of it.  If you want your child to grow up with a certain set of values, then model these for them and encourage your children to learn them.  If you don’t think that the school is doing a good enough job at teaching your child reading or mathematics, then don’t complain and threaten, pick up the slack and read with your children and encourage mathematical calculations at home.

If we, as parents, take back our power and realise that it is our responsibility alone to provide an education for our children, then the schools can resume their place.  By this I mean the school is merely a resource that you can use to assist you in the education of your children.  It is a good resource but not a complete one and certainly not the only one you have. Once you realise this fact, a whole new freedom opens up for you and your kids.  Take an interest.  Take back your power and your responsibility.  I’m sure that the education process will be far more rewarding when you do.

Education's next important step.

I worked as a teacher aide in a city state school for two years and as a teacher in a country state school for two and a half years.  In my time at these schools I observed many children who our system deems "at risk".  These kids were not just slipping through the cracks, they had gone.  There was little left that the current education system could do for them.  They were practically illiterate, innumerate, had no self-worth and no motivation to try to do anything to improve their own education.

I also saw kids who were highly motivated, had a fabulous outlook on life and were getting exceptional grades.  It distressed me that these students had no real skills which would benefit them out in the world.  What I mean is, that they could use a formula, write a story, read a book and pass a test.  What concerns me is that they had no idea how to manage money and it didn't occur to them that there was an alternative to getting a job or going to university for further study to get a different type of job.  Even then, they don't have the interview skills to be able to get a job, let alone negotiate wages.

Within Queensland's Educational curriculum I was unable to help either of these groups of children.  The new Australian curriculum also does not allow for students to gain the necessary assistance.  Here's why:

1.   Students are assigned a grade based on their age.  This does not allow for gifted students or those requiring extra support to get the help they need to progress at their own level.  Teachers are unable to help students because they have to teach a certain level to this group as a whole.  Even if the entire class is  at a level lower than they should be, the teacher still has to teach the work at which they should be, because they have to report on that higher level.  For example, I might have a class of fifteen year old students.  They are in grade ten.  The grade ten curriculum requires that they learn algebra to a certain difficulty level.  The parents are expecting a report on their child's progress at this level from A to E.  To give them this report, I must assess the students at this difficulty level, to assess them, I must therefore teach this work.  No problem so far, I'm all for giving kids the opportunity to excel.  But if I teach everything on the year ten maths curriculum, I don't have time to catch these kids up on things that they don't understand that they should have mastered by grade 5.  And tell me, what is the point of standing up in front of a class and explaining pythagoras' theorem when the entire class of kids themselves think that 4.12 is bigger than 4.4?  They don't get it, they don't care and they're not going to do the work anyway so why not just teach place value instead?  Because I have to give them a test so that their parents know that their kid is an E standard in year 10 maths?

2.  The work the students are expected to do, conditions them for a world in which we no longer live.  Before computers, it would have been an advantage to be able to recall vast amounts of information.  A person who was good at learning facts could have gone far in a company.  Now there is no need to be able to recall huge amounts of data.  Science has shown that within days after learning something, we recall barely ten percent of what we have learned.  Even if we memorise something, unless we use the information regularly, we will forget it soon enough anyway.  So what is the point of the current forms of testing in schools?  Would it not be better to give students the skills to find the information they need rather than learn complex formulas and historical facts.  There is nothing in the world resembling the current form of "tests".  Even if people are given the data, and a time frame in which to extrapolate some meaning from it, they are given days or weeks, not mere hours and they have access to other research tools, other people's skill sets and opinions on which they can draw to gain an answer.  Instead of "Testing" our kids individually, should we not be encouraging and teaching teamwork, communication, negotiation, research and critical analysis of sources?

3.  The subject matter which is compulsory in schools barely gives students any skills which they will require on completion of their studies.  By all means, teach the kids to read and write and do basic mathematics, but beyond year eight, the conditioning process begins and students are only being prepared for a life of further study.  Think about what every person does when they leave school.  They have to earn an income in some way.  They have to drive a car.  They have to vote in government elections.  They are likely to enter a romantic relationship.  None of these things are addressed in school.  English, Maths, Science and History should take a back seat to new subjects which teach our kids something useful.  If they want to read Shakespeare down the track, or learn calculus, by all means, let them at it. But how about we teach our kids how to find work, both with an employer, and on their own merit.  How about we give them communication, negotiation and teamwork skills to be able to run a committee or speak to an employer in an interview.  What if we have an entire subject on responsible driving and get them all a car, bus, motorbike, heavy vehicle and powerboat licence before they leave school.  What if the majority of Australians were taught about our current political systems and were encouraged to speculate on its merits.  What if relationships and parenting were subjects taught over five years during high school?  Would our divorce rate drop?  What would the next generation of kids benefit from that?  Let's teach financial management as a subject instead of a brief unit in one strand of a Maths option (a perceived lesser option that the "Smart" kids don't take).  How would our country fare if everyone knew how to maintain a surplus monetary fund?  Our "A" students are not tomorrows leaders, they are tomorrow's followers.  They are fully conditioned to work hard, get a good job, not challenge authority, vote for the party representing the working class, and pass on these values to their kids.  How often do we hear that our leaders (I'm not talking political leaders) and wealthy people were school dropouts.

4. The school terms are not conducive to learning.  Let's argue for a minute that what students are taught in school is actually worth learning, and for primary school, I do believe that it is.   Our current school year is made up of four, ten-week terms with a fortnights break between them.   The first four weeks of each term is filled with productive learning.  The teachers are motivated and organised, the students are refreshed from their break and everyone is on top of their game.  Then we get mid-term testing and everyone breaths a sigh of relief that the unit is over.  After about week six, it's a hard slog for everyone.  Teachers are burned out and students are tired.  Lessons drag, and everyone is counting the days until the final week of term.  More testing takes place and student attendance starts to drop off during the last two weeks of term.  Whilst schools maintain a policy of teaching right up to the last minute, no real learning takes place in that last week.  Ten weeks is just too long... for everybody.  My suggestion is that we shorten the terms to six weeks.  You can fit six units of six weeks into the calendar year with two weeks break in between each one and a six week break at Christmas (our summer holiday).  You lose four weeks from our current model, but if the last week of term is just filling in time at the moment, what is the difference?  Spend the first five weeks teaching and learning and the last week completing assignments (not tests).  Have a break and begin again refreshed and revived.

I will be home-schooling my children through their primary years because I live in a rural/remote area.  I'd like them to be able to attend a high school for social reasons as well as resources that I do not have at home.  I'd like my children to be able to stand in front of a room of people and speak confidently.  I can't teach them that when there are no other students here.  But I will not accept that they be conditioned in the manner in which the Australian public is currently schooled.  I have twelve years, I guess, to write a new curriculum and start a new type of school.  I would appreciate any and all help in this crusade.  Please contact me by email if you have anything to contribute.