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Click to listen to the latest episode of The Richards Report featuring Catherine Robson.
If you’re one of the 80% of Australians who don’t get financial advice, here is an opportunity to learn from one of the best in the industry.
Catherine Robson is the founder of Affinity Private (an award-winning financial advice firm). She has studied a Masters of Law majoring in tax and also has her own podcast, ‘Success Stories’. She has won multiple awards including Money Management financial planner of the year 2010.
In this episode we chat about why taking a vested interest in your own finances now is so important to your future. Catherine has identified the ages from 50-60 as critically important, because people aged in their 50s are reaching a peak in their potential salary. Their expenses may be decreasing as their children move towards independence. Furthermore, in your 50s there’s still the potential to significantly multiply your earnings into retirement through years of compounding returns.
This is all well and good for people in their 50s, but how does Catherine’s advice differ in for people in their 20s and 30s?
Catherine says your 20s are all about establishing good habits. Even if you’re only saving $5 a week there’s discipline involved in committing to spending less than you earn and avoiding credit card debt. Money invested in your 20s is worth eight to ten times as much as money invested in your 50s and 60s.
Catherine identifies consumption and procrastination as the biggest mistakes she sees people make.
Consumption: If you have spare cash, buy income-generating assets, not a new phone or car (this type of behaviour is commonly referred to as ‘lifestyle creep’.)
Procrastination: People put off thinking about their finances or taking any action and before they know it they’ve drifted through a decade.
We also discuss one of my favourite topics: behavioural finance. Catherine says a level of awareness of behavioural finance is vital as “it is by far and away the biggest determinant of real life financial outcomes”. She adds that it’s not market returns, fees, cost or tax: “An individual’s investor behaviour moves the dial far more than anything else.”
Catherine is involved with Scale Investors, which helps investor and entrepreneurial women to connect, invest and succeed. In a previous episode of The Richards Report I spoke with the chair of Scale, Susan Oliver. Catherine discusses two businesses she’s seen in her time: one involves using technology to teach baby chicks in chicken farms how to eat, the other uses the internet to control energy (such as lights and heating) in commercial buildings. This saves businesses money and it’s a huge market to be tapped.
The Brain That Changes Itself by Norman Doidge
The Power of Habit by Charles Duhigg
Mindset by Carol Dweck
Catherine believes technology will play a significant role in helping people in the future. Delivering face-to-face advice can be a costly exercise, which means many people who need advice won’t receive it. Much of the work can be delivered by machines with humans applying the relationship skills based on data.
Six Park’s investment philosophy centres on keeping costs low, diversifying your investments, and prudent asset allocation. We offer professional financial management at a low cost by using technology to automate many of the expensive, time-consuming aspects of investing. This opens up the investing world to people who might not have been able to afford professional investment advice in the past.
Click here to listen to Catherine’s podcast success stories on iTunes
Click here to view Catherine’s articles in the Fairfax papers
Click here to view the business Catherine co-founded, Affinity Private
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