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Ben Kingsley Blog post by Ben Kingsley

MyWealth Portal Tutorials : Money FIT

In this tutorial I’m going to be talking to you about Money FIT, which is effectively a question that I’m asking you….

Are you Money FIT?

Well, what do you mean by that? Well, what we’re trying to do is give you an idea of how you can compare yourself against your peers.

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Money FIT is a comparison in terms of all the other tens of thousands of people who have loaded their information onto the MyWealth Portal and are using our portal free just like you are. Here we are with Daniel and Rebecca, who have been our example couple for the entire tutorial series and we want to get into Money FIT. We click over here and you can see here’s the Money FIT section. Now a couple of important things. What you can’t change is your household composition. That’s you. That’s your household. In their particular case, they’ve got two children, Rory and Amelia, and they’re husband and wife. And that means, they fit in the 31 to 35 age group category with two dependants.

Now what you can do is you can start to see a series of histograms that will basically give you an idea of where they sit on several different metrics that we’re measuring here to give them the insights. Firstly, it’s on total household income. Their total household income was $134,000 and we can see here they’re in the 31 to 35 and this is across Australia.

Now, because we’ve got so many variables here, you might be thinking that why is there only 193 households in our particular example? Well that’s growing on a weekly basis, daily and weekly basis. You know, we’re getting close to 20,000 people who have registered on the portal and loading their information in. And what that means is… It’s because it’s quite particular, right? I’ve got a Victorian couple in this small five-year age bracket and they’ve got the two dependants. If you were a couple with no dependants, then you might have a lot more people to look at.

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And so I’m going to give you an example. Let’s go to all ages across Australia. And all of a sudden now there’s over a thousand households in which they can compare themselves on income. And where did I sit? Well, there are 253 households above them and 731 households below that puts them in the 66.6% range which is basically two thirds. I think they’re doing ok. Obviously there are some high income earners who are on the platform and there are also some low income owners on the platform because the platform works for every household group and every stage of life. Money SMARTS does that for you. So that’s income.

A a lot of people always share what or “how do we compare honey”? Well now, the proof’s in the pudding when we go down into expenditure. The money out section. We can see here in this particular case, again in the 31 to 35 now this is for total expenditure.

Their total expenditure is $99,806 and so they sit in this particular bandwidth and they’re sort of in the 88.7% of all households. One would argue that they’re spending for their income is on the higher range in terms of what that looks like. Let’s look at them across all age groups and how does that materialize? Similar sort of area in regards to that. If I want to go down into their state, and also pick their own age bracket, you can then start to see exactly where they sit in terms of the analysis of the households that we’ve got on the platform in regards to Money FIT. Now this one here is quite interesting, right? This is where we start to get to the granular level. And I would be saying to everyone, don’t overthink on one expense item.

Start to build a bit of a story for yourself around the couple of expense items because some people might be really going on groceries but have very, very expensive habits on dining out and those types of things. It’s a combination of those things that you’re trying to try and to look at. Let’s have a look at another example where we might want to have a look at say groceries or something along those lines. Cause obviously groceries is a big expense item in the household. Again, across Australia we can see that there’s 168 households that were sampled and there are 84 households above and 52 households below. So that’s, that’s sort of where you want to be right in the lower quatile on the expense side, instead of being in the upper ranges here. Let’s have a look at where they sit on groceries and household right across Australia.

We can see the results here. There’s 1,014 households. There are some people who are spending an enormous amount on their expense items, which may be skewing the data a little bit. And that’s where they potentially have made a mistake in terms of saying that their $800 is on groceries, is weekly when it should have been monthly. And that would also adjust that down.

Make sure that you’ve got your expense items correctly allocated on a frequency level as well. That just gives you a good idea in the sense of how you can pay on the expense item lines. And then we want to look at the annual surplus because this is where the rubber hits the road.

This is the most important thing for all households who aren’t invested because you can still have a great return if your money is allocated for investing.

But if it’s allocated for spending, then we don’t want you to have a low surplus. We want you to have a huge surplus. But if your money’s tied up in investing and that’s where most of that surplus is allocated, well your wealth creation is going to be stronger than those people that are trapping surplus. Cause you really can’t save your way to a very comfortable retirement. So you get the juice, you can play around with this in terms of the annual surpluse. You can check around Australia, you can check down to those different levels and you can get a good sense of what’s going on. And then ultimately your net worth if you put the values of your properties in and all of your other assets in there as well, you can start to say where you compare in terms of overall wealth position. And that’s powerful.

I strongly recommend you to  have a play around with that and then kick the tyres in terms of how you compare against everyone else to get a good sense of your money management abilities. And then obviously from my point of view, the reason why we introduced Money FIT is a motivation to change behavior. So you can trap more surplus. I want you at the top of the overall surplus that you’re chasing, or I want that money deployed into investing into a wealth outcome for you. And that’s it. That is Money FIT in regards to this tutorial.

Thanks for watching.

Tutorial Videos in this Series:

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