Glen James, one of Australia’s original finance podcast hosts, has built an impressive career from creating the popular “my millennial money” podcast to becoming a best-selling author.
With his recent rebrand to “money money money” and the expansion to “retire right,” Glen continues to make waves in the financial education space. In this interview, Glen shares his journey, the lessons he’s learned, and practical advice for anyone looking to take control of their financial future.
Glen, you’ve had an incredible journey from podcasting to becoming a best-selling author. What first sparked your passion for financial education, and how did you get started in this space?
I have always enjoyed personal finance topics, even from a young age in my teens. I was a licensed financial adviser for many years and I realised many people who came to my office to obtain financial advice first needed basic budgeting skills, to get out of consumer debt and to save an emergency fund.
That’s why I started the ‘money money money’ podcast. At the same time, I made ‘The Glen James Spending Plan’, which is a free online course. In fact, I offered this to clients when I was a financial adviser.
There’s so much advice out there about money management—some good, some not so much. What do you think are the biggest mistakes people make with their money, and how can they steer clear of them?
Categorically not having a basic money management system in place. If you wake up in the morning, you have income and expenses. No one is above this and a lot of people’s problems with money can be solved with a spending plan that is tailored to them.
Without a spending plan system, this can lead to overspending and that overspending will end up on credit cards or buy-now-pay-later accounts. Following these basic money management pitfalls, a big thing for many people is buying “too much car”.
It’s easier to swallow $138 per week on a car payment than it is to save up and transfer $30,000 for a car. Save up, slow down and spend less on cars if you want to have financial freedom and more options with your life sooner. Finally, a mistake people can make with their money is by listening to other people’s advice and while it’s well meaning, it could be misinformed or outright bad advice. This is why you need to develop your own money goals and plans for your life.
You often talk about the difference between being rich and truly wealthy. Can you share how trying to “live rich” can actually backfire and what mindset changes can help people build real wealth?
Acting rich will send you broke. We only need to look at celebrities or elite sports stars who have amassed great wealth in a short time. When money comes into your life in a short time it makes sense to buy stuff, right? Well, sure, however, I will share a story. I had a client once who inherited approximately $10million dollars.
Before this, they were living on well under $100,000 per year, living in suburban Adelaide. They all of a sudden started to fly first class on international flights, buy $500,000 luxury vehicles, overcapitalising on the family home and everything else. The thing is, the year before that they had a mortgage and these types of expenses were not in their life.
I encouraged them to set up an actual budget, set a target for living expenses. I said to them, “we can set your money up so you have $200,000 land into your account every year, after tax for the rest of your life and you will not have a financial worry in the world”. They didn’t think they needed such structure.
The truth is, within 7 years, they had started to run out of money. Riches can pop up overnight and be gone the next. Wealth is built by you and carries responsibility. Wealth is built over time. Wealthy people generally don’t pay for first class flights, they use points and upgrades. I have flown first class internationally (with points), and I would never pay hard cash for it!
Wealthy people evaluate and make an assessment of value compared to the cost. Wealthy people do not care about appearances. Wealthy people have a mindset of responsibility. Wealthy people respect money. The mindset we all need to remember is that you can’t command wealth if you don’t respect it.
Investing can feel like a whole new language for beginners. What are some of the key investment ratios you think everyone should know before they start putting their money into the stock market?
The main key to understand is that investing should be for the long term. The long term in the investing world is over 7 years. That is why it’s important to have a solid spending plan and lifestyle goals nailed down so once you have money to commit to investing, it can stay there and not be withdrawn to pay for car rego, a new lounge or holiday within 2 years of it being invested.
If you’re a beginner, I think a good ratio would be an amount that you’re comfortable with. If you have $200 a month left over that you’re saving and are looking to invest long term, perhaps you could start by investing half of this amount each month, setup as an automatic investment. After time, you can get used to seeing your money being invested.
I don’t believe there should be prescriptive percentage amounts to allocate to investing when you’re just getting started. If you want to still dip your toe into investing and you are still in consumer debt or have other short term financial goals you want to achieve, perhaps you could consider 1% of your income as a maximum to start.
If you earned $70,000 per year, you could allocate $700 a year to your investing account or $58 per month until you’re out of consumer debt or achieve your financial goal (such as saving for a holiday). This way it keeps you invested emotionally in learning about investing, while having real money invested.
We’ve all heard that emotions can get in the way of smart investing. What are the two biggest behavioural traps you’ve seen people fall into, and how can they keep their cool when the market gets rocky?
One of the biggest emotions is hype. Everyone is talking about an investment or opportunity and you want to get onboard. The second emotion that is closely linked to this is FOMO. The fear of missing out of ‘the best’ opportunity! When you buy into hype and apply FOMO, that is a formula for financial disaster.
Generally, you react to an opportunity that you hadn’t planned for and secondly you may put too much money into such an opportunity. When investments are hyped up they get overvalued fast and by the time you get to invest the hype may be about to end.
The main way to avoid these two behaviour traps is to set a clear strategy based on what you want to achieve, set up automatic investments that remove you from the process and block your ears to opportunities that spring up that are glowing in hype. Have a strategy for your money and investing, however small… and stick to it!
Real Estate Investment Trusts (REITs) have become quite popular, but they’re not without their ups and downs. What would you say are the biggest pros and cons of REITs, especially in today’s economic climate?
The biggest pros are access to a variety of commercial, industry and potentially residential real estate in one investment & transaction. Many REITS offer a high level of diversification. These assets have a high yield as commercial properties have a high rental income as opposed to residential property.
You also can have exposure to these types of properties without the huge capital outlay. The biggest detractor is the concentration risk, that is, while there is diversification within the REIT, you are concentrated to one sector (commercial/industrial property).
This needs to be understood as there were significant valuation drops during the COVID-19 pandemic as many people worked remotely, and there was a sense that the ‘normal office job’ may be a thing of the past. Prices are still recovering with some assets so ensure you understand the concentration risk with REITs should you invest.
Your new book, The Quick-Start Guide to Investing, has just been released, which is exciting! What can readers look forward to in this one, and what’s the main takeaway you hope to leave them with?
Readers can look forward to investing if they have never invested before and want a clear pathway to follow. The main takeaway is for people to understand that why you invest (goals), how you invest (structure) and when you invest (once your house is in order) is more important than what you invest in.
Readers who are already investing can learn more advanced strategies such as valuing individual companies or learning about trading options. This book will teach investors how to invest simpler, smarter & sooner.
