Australia - we're a nation of givers

According to a report by the British-based Charities Aid Foundation, AUSTRALIA is a nation of givers, tying equal first with our cousins across the Tasman, New Zealand as the countries whose citizens are most willing to donate their time and money to charity.

The report found 70 per cent of Australians had given money to a charity, and 38 per cent had donated their time, in the month before they were surveyed. Almost two-thirds had given assistance to a stranger.

(source: Sydney Morning Herald)

Money makes you think you're happy

Does money make you happy?

It's an age-old question, and two American researchers think they have the answer: it does ... and it also doesn't.

More money may bring a life you think is better, but on an everyday basis you won't actually be any happier for it, according to Daniel Kahneman and Angus Deaton from Princeton University, who authored the study in the Proceedings of the National Academy of Sciences,

Previous studies have found the relationship between wealth and well-being to be fairly weak

Two types of happiness

Kahneman and Deaton, however, made a subtle but important distinction between two types of well-being: life evaluation, which is a person's thoughts about their life over a long period, and emotional well-being, which is a measure of their daily emotions, such as joy, affection, anger and anxiety... read more

(source: Cosmos: The science of everything)

Money doesn't buy happiness. Happiness buys money

Arun Abey of IPac says the wealthiest and most contented people he knows were happy before they became rich. He says parents are better prioritising a love of learning and pursuit of passions in their children, rather than encouraging them into career paths based on income alone.

Aurn was interviewed by Richard Aedy on ABC Radio National's "Life Matters" program. Listen to what Arun has to say here.

Are you on a Financial Treadmill?

Have you ever looked back at the last 5 years and wondered if you are in the same spot now as you were then? Are you doing the same thing with your money today that you were doing 5 years ago?

Your personality plays a huge role in the decisions you make and how you behave with money. Understanding this can play a big part in moving forward with your financial future. For couples this is especially so. The ability to know and understand each other's financial personality can offer a real leap forward in achieving your goals. Ask yourself these questions:

• What differences have you noticed in how you and your partner treat money?
• What are the strengths and struggles you see between you and your partner?
• Have you and your partner discussed your wealth creation needs?
• Have you and your partner discussed your attitudes toward money?
• Do you both understand each others prior experiences towards money?
• Have you worked out a plan that brings together your wealth creation?
  Does your strategy suit both your needs and is it something you can both comfortably commit to?
• What financial education do you and your partner have?

Debt is no laughing matter

5 year fixed rate blues

Recently we had a bit of a blue with a customer about the interest rate he was being charged. We wrote his loan shortly before the onset of the US financial crisis and, all things considered, the rate was very competitive. But he was with a non-bank lender and his rate has climbed a bit lately – about the same as other non-banks but slightly more than the standard banks. He has since been approached by another bank (a reputable and substantial bank) about fixing his interest rate. Nothing wrong with a little bit of competition between lenders.

However, this discussion took place about 8 to 10 weeks ago when (strangely) some financial analysts were still forecasting a rate rise or two. We haven’t been thinking this way for a while and urged our customer to take time and consider because what the intervening bank was proposing was a 5 year fixed rate marginally lower than that which he was currently being charged.

In view of recent economic data, some commentators have suggested the Reserve bank will need to cut the cash rate to 5 percent from the current 7.25 (see previous post). This morning Alan Kohler said “the cash rate will need to be around 5 per cent this time next year, possibly in the 4s”.

To cut to the chase, our customer was panicked and took the advice of the other bank and moved to a five year fixed rate at close to 9 per cent. I wonder how a fixed rate of nearly 9 per cent will compare to the prevailing discounted variable rate in 12 months time and how the advice of the other bank will be viewed.

Your Money Personality

By Jaeneen Cunningham

Have you ever wondered why money seems to work so well in some people’s lives and so destructively in others? Why some people control money while others allow it to control them? Or why some of us can manage it so effortlessly to fulfill life’s plans and goals, while others never stop to question how they want money to serve them?

Kathleen Miller says that its because for many of us, money is never just money. It can represent many things: love, power, happiness, security, self-esteem. As a result, we have intense feelings about money: feelings we sometimes hide from which keep us from dealing with it productively.

Just as our feelings about money can vary, so can our behaviour towards it. Some people hoard it while others spend it like a drunken sailor. Some people take great care with their financial responsibilities, while others avoid the same tasks as if avoiding some great pain. Some people make no effort to invest, some very conservatively, and others take significant risks - often at their peril. In my time as a Finance Coach it has become apparent that it is important for each of us to understand our issues surrounding money.

In business, I have had great success using the psychology of persoanlity profiling to better understand my strengths and the strengths of my co-workers. Once I understood where these strengths lay, I stopped beating myself up because I couldn't do one thing or another and focused on the things that I was good at. I also stopped beating up on my co-workers which was also a good thing. Now I use the same psychological pricples to help understand my clients needs by conducting a Money Personality Diagnostic.

"Money can enhance happiness and prosperity, or it can destroy them. No one simply drifts to the pinnacle of success—you have to climb." Kathleen Gurney

Why do I want you to understanding your 'money self'? Because it will help you gain insight into how and why you react emotionally to money - why you have those reactions and how they affect your financial successes. If you don't know your money strengths, you can't use them. If you don't know what's preventing you from getting money, you will remain a money victim. If you don't know what you want from money, you may never reach your financial goals. If you aren't willing to change your money attitudes and habits, you will stay in your financial status quo.