Escape Plan 2.0 | How to stress less about money

In this episode, Ryan and Terry dive into the second key money skill in the money mapping method: monitoring your economic vitals. Discover how to move from guesswork to clarity, build a financial operating system tailored to your goals, and stop stressing about money. With insights from John D. Rockefeller’s habits to modern tools that make managing money easier than ever, you'll learn how to turn data into decisions and enjoy spending guilt-free. Don't just manage money—master it.

🎙️ What you'll learn in this episode:

• The surprising habit of John D. Rockefeller that made him a financial powerhouse
• How to stop "walking in circles" with your money and start making real progress
• The one tool you need to simplify and supercharge your financial decisions
• Why most people get stuck on financial guesswork—and how to break free
• How to instantly see if you're on track for your goals (and what to adjust if you're not)

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Transcript

Terry: 0:29

Hello, beautiful listener. This is Terry Connon, your host. I'm here with Ryan. Welcome back to the Money Miner podcast. Hello, mate.

Ryan: 0:34

Mate. Good to be back with you. Yeah.

Terry: 0:36

we are jumping straight in. We're sort of like knee deep in this money mapping method series. in the last episode, we talked about future authoring, which is the first money skill. Today, We're going to be talking about the second money skill. What's this one, mate? What do you call it?

Ryan: 0:48

We call this monitoring vitals. And if we go back to the analogy you used in that first episode, the first one was future authoring, climbing to the top of the mountain, looking around, seeing what it looks like, seeing what it feels like. And then the second part to that is being able to look down and look at your vitals, your personal vitals which is essentially your health and what, resources you have at your disposal to be able to rally up that mountain. And so this one is. Just basically knowing what your numbers are using those to inform your decisions. And that requires basically having really good visibility on that at all times. And so that's what we're going to cover.

Terry: 1:21

I can hear people's eyes rolling in the back of their heads at this point because as soon as I hear her say something like, know your numbers, I think people are is this actually pretty sexy? Explain why this matters.

Ryan: 1:33

I think it's got sexier with time because of technology.

Terry: 1:36

Yeah.

Ryan: 1:36

If you had to do this 10 years ago, like what you're doing is you're scraping your bank statements and then you're writing it down on a notepad and then you're trying to organize those numbers. And it it looks like a math exam basically. But a lot of that's changed now, and even banking apps themselves have got a lot better. You can make better sense of what you're earning, what you're spending, tends to be a little bit sideload though, because it's just your bank accounts and you can't see all your financial position. But nowadays, Tech tools exist that are kind of sitting independent from your bank and all of that so you can get eyes on everything and it's not just what's coming in and what's going out and like cash flow stuff, but also like how you organize your strategy and how you keep tabs on everything you own and everything you owe as well. So I think technology has made this Sexier is what I would say to that.

Terry: 2:22

another reason to like it. Yes, it's easier, but it's also about your experience too, right? We talked about having like two different types of people that we see coming through struggling with, I'd say, stress around money, but caused by the same reason manifesting in different ways. You want to just quickly talk through those two different sets of symptoms and those experiences, because I think this is where you start to realize why knowing your numbers really does matter and how it improves your experience and your ability to hit your goals.

Ryan: 2:45

As soon as you start to guess, You start to lean on what's probably most proximal. What's the thing that you see or pay attention to most. And that's different for different people. one type of person can go down this pathway of going, I feel like I'm making no progress right now. I've just been hit with a massive bill. In fact, I've had a few big bills over the last few weeks and I just feel like I'm getting nowhere. And this story starts to develop this narrative, which is, I'm no good with money. I don't know how to get this right. I don't think I'm ever going to get this right. And. As a result, they tend to kind of live a little bit smaller. They start to hold on to the purse that little bit tighter and tend to feel a little bit guilty and unsure about spending money. And usually the reason for that is they just have no line of sight on their actuals. They're doing fine. It's just they had a bad few weeks or a bad month. But when you zoom out, and we do this all the time with members, you zoom right out, see it every year and go, you know what? Things are actually pretty good. You're moving at a really good pace. It's just that patch was bad in the context of everything else. And that's only because you had bills and a social calendar that converged all at the same time, which happens for everybody. But it's the same thing where it's like, we can't actually see and have the right vantage point to look at. Their finances and change vantage points to be able to make sense of it. And because of that, usually that person ends up hating the process becomes really avoidant when it comes to money and definitely developed this kind of learned helplessness, which is like I mentioned before, it's like, geez, I don't know if I'm ever going to figure this out. Because of that, they become even more avoidant and it sits off to the side, you know, it's just kind of this thing that they blame in the background. The other type of person, is someone that earns really good money and basically bases all their decisions off what their income is. They go, I'm earning 200 grand and because of that, I can have all of these choices. And while some of that is true, that person has little to show for it. They just have no line of sight where they go, well, this is what I'm earning, but this is how much I'm keeping at the end of the day. It's like a business makes decisions based off revenue, and then you take out taxes, and you take out expenses, you take out all these things, and at the end of the day, what are you actually able to keep and build into your foundations is a whole other thing. obviously the consequence there is, you know, you live beyond your means, and then the ultimate negative outcome is that person becomes a little bit burnt out because they're like, well, I need to sustain this level of work. To be able to sustain this lifestyle that I've now created. And that's tough because energy wanes with time and burnout does happen. And as a result, sometimes they're like, well, shit, I've just got to push through. Otherwise that house of cards falls in. Yeah.

Terry: 5:10

you're looking at. And then you're relying on how you feel about that thing that you're looking at. And that thing could be different things. the person who's probably anxious is looking at probably a savings rate, I'd suggest, or an amount that they think they need to have or something like that. And it's like, I'm not where I want to be. That number isn't where I want it to be. So The second person is looking at, I've got a great income. I feel great about that and it leads me in a completely different direction. But what I'm getting from what you're saying here is monitoring your vitals is about moving from perception to perspective and then helping you make better decisions as you go through. We're going to say that a fair bit, I think throughout this series, it is about moving from perception to perspective. And if you don't know, I guess, what to look at and how to use that information to guide your decisions along the way, can just feel like you are I guess stumbling through the dark and both people in those scenarios are stumbling through the dark. Just a different kind of anxiety and a different kind of stress that comes from it. Isn't it?

Ryan: 6:02

Yeah, 100 percent and, the perception of where that person thinks you're at, whereas me looking at across hundreds, thousands of people Is very different. And usually it's helping people gain that perspective to pull them out of the narrative that they've been telling themselves. And often that's a whole lot worse than what it actually is something worth calling out. Sometimes it's better more often than not they've trained their attention onto something that isn't really reflective of their overall position, whether or not that's a mortgage or just this one offset account, or it's just one savings account, for example, where All of their perception of how they're going is based on how that one number is moving. Again, it's too narrow. And that's why a big part of what we're going to talk about this episode is about training your attention on the right signals when it comes to your finances, so that you actually do gain that perspective and not get too locked in on something that's too narrow and doesn't tell the whole story.

Terry: 6:55

Yeah. I love that because I think it's taking it away from the idea that this is all about mathematics and you jumping in and crunching numbers. It really shouldn't be your turning into some sort of CFO accountant. It should be you as a CEO. of your household, making great decisions with good data. And we'll be talking about how to make sure that's the case later on. So let's jump into what we are actually going to cover in this episode. What the listeners are going to get.

Ryan: 7:16

Yeah, nice. So we're going to start with John D. Rockefeller's secret to financial success. He was the richest man alive for a long time, oil magnate, And I think if my memory serves me right, with inflation, he would still be the richest by quite some length, which is pretty wild.

Terry: 7:31

didn't realize that. Good on him.

Ryan: 7:32

That's obviously a big statement, his secret to financial success. second thing is the one tool you need to make your money work for you. And then lastly, we're going to look at how that tool needs to work. good for to and

Terry: 7:54

Is it doing the job it needs to do for me? So you can cross reference the thing that you're looking at now, whether it be a spreadsheet you've created or an app you might be using, whatever it is, is it doing what it needs to do to help me do that? So I think that's the big kind of outcome from this episode. You're going to be able to look at that thing and go, all right, am I guessing? And if so, where am I guessing? And what, what gaps do I need to close?

Ryan: 8:15

Yep, 100%. And just get to a point where you actually love the process of managing your money and monitoring your vitals. And because of that, you stay the course, you sustain it for long enough to make the big things happen. And I promise you if you get this right, there is no doubt in my mind, you stop stressing about money and you absolutely start to enjoy your spending a whole lot more as well.

Terry: 8:35

is a Big claim and I want to validate it and reinforce it because if you know how to do this, if you have this skill to be able to solve problems that come up as they come up. So you don't need to stress about the problems. You can actually get busy solving the problems. And also you can gather enough information to know whether it is a problem you can solve, or it's a problem that's out of your control. And if it's out of your control, then you don't need to stress about it. So, it really is, it sounds like a big thing, stop stressing about money, but he said at the start, stress and skill are inversely correlated. The more skilled you are, the less stressed you'll be and I think this, this part here is actually quite important for that because it'll help you course correct towards your goal, but it'll also help you get back on course and stay on course when life inevitably, as it always does, throws you some kind of curveball.

Ryan: 9:15

And so much of this is just combating drift. Like you get in a sense, cheese, I feel like I'm drifting off track here. I'm not being as deliberate as I possibly could be. And you go, well, I'm wasting some of my resources just aren't pushing me in the right direction. And so it's how quickly you can recalibrate, get back on track. That is a skill here.

Terry: 9:32

All right, let's jump into this, mate. So, we've kind of just talked at a high level here about what it is. We've said it's a way to improve data to get your decisions going. just want to say what it isn't, right? I think a lot of people think monitoring vitals and knowing your numbers, they think it's penny pinching. your Response to that? Because this is where we talk about Rockefeller and Rockefeller's secret. Rockefeller's the richest guy in the world. Guarantees not pinching pennies. So, what is this actually about?

Ryan: 9:52

What it is, is gathering data or intel to improve performance. So looking at how things are working and going, how can I make this better? How can I get more from my effort? What it isn't, is penny pinching, like you said, to make your life smaller. The reason why we use John D. Rockefeller for this example is because I remember reading his biography and something that he did every single day. He wrote down every single transaction that he was a part of. So if he went to the store and he bought an apple, he would write down that apple cost me 13 cents. He'd write 0. 13. And He wasn't doing that because he didn't have enough money. This guy was rich on another level. And he wasn't doing that because. He was worried about running out of money or probably even overspending. Just wanted to know and have really tight feedback loops about how is he using his money? What's going out, what's coming in, what's going out, just so that he could always find ways to optimize. Now he obviously started this at a very young age and he saw the value in it when he didn't necessarily have that level of wealth, but he then carried it through. Because he knew that as long as he could see it and had really tight feedback loops, then he could continue to optimize it even for himself. And that's true for all of us. We can all get better at seeing what's happening, seeing how much we're earning, how we're spending, how that spending aligns with the things that we value. And then learning from that and saying, you know, what is that price first value equation for ourselves with each of those things. I have yeah

Terry: 11:32

it's Eddie Murphy and he's just like big, very obese professor. And he's always trying to lose weight. He's very insecure. They try to make him out to be like a bit of a loser. And then what happens is he takes this experiential treatment, medication, whatever, and he neck minute, he's just lean fit, Eddie Murphy, just absolutely slaying. So I've got this funny meme in the presentation where I'm like. Before Apple watch and then after Apple watch. And it's a good example of when you do surface information, it's that Hawthorne effect. We've talked about this in the past, but the Hawthorne effect is you will optimize what you can see for. And if you can't see the full picture, you don't optimize for the full picture. You just optimize for that one thing. So the person who just sees the income, they just keep optimizing for income and miss everything else. And the other person's looking at something else like a savings rate. They make their life smaller. They optimize for that. They miss everything else. And so it is so important to have a fuller picture, not just the one thing that is kind of visible. Talked about one of our couples too with Ben and Bonnie with this. I think they were a really good example because I did Ben's review and he actually made a point. He said, when you guys started talking about this stuff and we started digging into these kinds of numbers and building out these systems for this sort of thing, kind of was like, This is really basic stuff. Like, why are we wasting our time on this? Let's just get to the investing. Let's get there. Okay. And once you could actually see it, that's when they lined those things up. They've done some pretty cool stuff, haven't they?

Ryan: 13:03

Mate, they've done heaps. They've got an extra 300k invested, they paid for maternity leave for Bond to go through so that she could take a good amount of time off. She actually left work eventually as well and retrained to do a new job. Saving the puppies. And then also had a really good trip to Northern Territory. And they've just moved house too. Only just recently. So they've moved

Terry: 13:25

Moving, I think.

Ryan: 13:25

Moving.

Terry: 13:26

Yeah. I was actually just talking to Ben the other day and he said that by the looks of it, when they do move they're going to be able to get to a place where they're mortgage free pretty much as soon as they buy.

Ryan: 13:34

huge,

Terry: 13:35

got some very different choices now.

Ryan: 13:37

Yep. Massive. And if, so like coming back to your point before, like that becomes possible because when you are measuring what you're doing, you master it. And like you said, when it comes to diet, if you count your calories, you'll eat better. But sometimes if you're only counting calories, you don't train better. And so it's making sure that you're counting calories. Maybe there's the steps, maybe it's the weights you're lifting,

Terry: 13:58

What are the actual macros, not just the actual calories?

Ryan: 14:01

Yep, which in most domains, that's actually quite hard to get, like, you've got to do physical writing it down. I see you taking photos of your meals all the time. A bit of work involved in that.

Terry: 14:09

There's a bit of work, yeah.

Ryan: 14:10

but we're sitting at a cafe, Terry whips out his phone, and Mike Terry. Instagram worthy, eh? He's like, nah, I've got to count my macros. And so most domains, there's a bit of work involved. The great thing about finance is most things are relatively digital or can be digitized and it's actually easier to track than those other ones, luckily. But doing that, you do train your attention on the right things. And because you're measuring those things you do a better job of it., if you count your steps, you're going to walk further. That's for sure. Know I do.

Terry: 14:37

It's interesting. You say that I hadn't really thought about this in a money sense. Is true. So if you do have a broader picture and you look, you can see all the information you can actually find the 80 20. So I can tell you from a health, from a training, from a performance perspective, what my 80 20 is. I know that if I'm in bed at nine o'clock, that is a ripple effect that goes outwards and I know that if I'm above 150 grams of protein each day, I'm less likely to eat beyond where I want to be eating and I'm less likely to be putting on weight over time, kind of maintain. Actually go, look, these are the few things here that matter. This is my 80 20 when it comes to this and it's the exact same thing with money. Everyone has an 80 20, you just don't know what it is until you start actually getting a fuller picture of things. so I just wanted to say that before we move into the next part reality here is it gets, it does get a lot easier to get this information and there's a lot more sophisticated systems. So you don't have to be going out and doing legwork and doing the old Johnny D, writing it down in a notebook. It's so much faster, so much easier now. But if you do do that. It actually gets easier to do that over time. You become more sophisticated with it. It gets so much faster to get the right information as you go. Let's jump into why this matters, mate. There's three really key concrete things that we want to touch on before we jump into how to actually do this knowing versus feeling, I think we've just touched on this, which is you're either guessing

Ryan: 15:49

Mm hmm.

Terry: 15:52

Do you want to talk about this one? Cause I think

Ryan: 15:54

Silence.

Terry: 15:54

Half the battle when it comes to staying the course. Mm.

Ryan: 15:58

get rubbed off when it comes to finance as well is seeing that they're making progress. That sense of progress, that feeling of momentum is actually the most rewarding thing, even more so than having at the end of the day. And so the. The thing we want to do with monitoring vitals more than anything else is making sure that when progress is happening, that you can see it. And you get that sense of, Oh yeah, what I'm doing is working. I'm getting close. I'm making things happen. And that is the most potent motivator that exists. It's like a fuel station. Every time you go, shit, I'm now two grand closer to that holiday, or, you know, I've now wiped up an extra 10 grand off the mortgage or. We have now hired a cleaner for our house. And it was one of our aspirations about being rich. Then those things just give you a massive dopamine hit. They can make you go, do you know what? Fuck yeah, I can do this. If I can do that, what else can I do? And it's a more sustainable form as well. Sometimes when you know, trying to pep yourself up to get going and it's more fear based as well. It's an energy source that can tap out, whereas when you can just feed on the progress that you're making. Go, yep, that's working. I'm going to keep going. See that progress again feeds into more progress It's what helps you achieve the really big things and I know you always talk about bj folk is a good example of is as someone who has really called this out He always says we don't change by feeling bad We change by feeling good and that feeling good is seeing that You're actually getting there. You're making it happen And that makes you want to do more of it. So That's the second one.

Terry: 17:29

Yeah. And we said this in the last episode around actualization versus accumulation. It's actually the actualization. It's the shifting, the evolving of your identity that makes this sustainable over time. You get addicted to becoming the version of you that you want to become. Actual having of the thing, that's pretty fleeting. is actually, what is sustainable is you looking at, like, look at what I can do now, look at the things that we've been able to make happen and look at who we've become in the process. that becomes a self fulfilling spiral. That you just want to do more of over time. It's not the pursuit of happiness. It's the happiness in the pursuit is actually the secret. Most people that hit the pinnacle and trust me, I know a lot of these folks, right? I've won an Olympic medal. What am I gonna do with the rest of my life? So if you made that the center of your universe didn't realize that it wasn't about that. about who you're becoming in the process. You actually feel super empty at the end of it. Cause you pinned all of your hopes. You thought life was going to change on the other side of this. And guess what? goes around, life's the same, the world keeps turning. Everyone keeps doing what they're doing. if you think that on the other side of whatever that fire number is. everything's Going to change. That's, that really is not going to work out well. You want to get to the point where you're sort of going, you know what? I'm on the journey. I'm enjoying the journey for the journey sake. it's not about where I end up. It's about who I become in the process. always on the journey of becoming.

Ryan: 18:44

Love Couldn't agree more. So anytime that you can, make the progress you're making in terms of goal achievement, in terms of saving, in terms of your balance sheet, when you can make that as visible as possible and see how it's progressing. There's a huge, huge part of you reinforcing that new identity, which is, you know, I can figure this out. I can make shit happen and, I can sustain that over periods of time as well. that's the second one, make progress visible. third reason why monitoring your vitals is really important is because it helps you speed up your learning. It helps you see what you can change. So you might be looking at over the last couple of months. This is how much I earned this, how much I spent on groceries is how much I spent on eating out is how much I spent on shopping and it helps you look back and go, did that serve me? Or, would I have done a couple of things different and be able to take those lessons and feed that forward and go, well, in the next month or in the next six months, this is what I want it to look like instead. And that is just all about tightening up those feedback loops of what is happening so that you can make better decisions going forward. Ends. The big part of that is recognizing when you're drifting and being able to course correct and go, you know what, that's not working for me, I need to change a couple of things. Being able to see which levers you can pull to course correct is really important.

Terry: 19:55

So knowing versus feeling we've established, making progress visible, speeding up that learning. We just keep using the word wayfinding. If you just, you need systems and structures that help you continually to wayfind. Feedback loops help you do it. Let's jump into how this works, mate. So we've been talking around this, we've been talking about why this kind of matters. We say monitoring vitals, in the actual act of doing that, like, what is the thing that we are actually doing to make that possible?

Ryan: 20:20

Yeah. So we need to build a financial operating system that's geared towards your goals and financial operating system is three big things. And the first one of that is it needs to be a scoreboard and a scoreboard exists to surface a sense of progress. So for you to be able to see When you're doing well, see how quickly you're scoring. And importantly, like I said before, be able to see the choices that you now have and how they're changing. So when you can see that these are the things I want to be able to do, like you mentioned in the last episode, I don't want to mow the lawns. One of those things that's now up on the scoreboard that you can tick off is maybe a young neighbor to come over for 20 bucks and mow the lawns.

Terry: 20:57

Yep

Ryan: 20:58

so it's just about giving you that sense of, yeah, I'm putting W's on the board and I'm able to do that at a certain pace. The second thing is a dashboard and that's about being able to make great decisions on the fly. And think of that a bit like a car dashboard. You look at the car dashboard, you can see how much petrol you've got left and see how fast you're going, you know, how many kilometers you put on the odometer. But it's all about just being able to see and monitor those vitals that are really important. You know, in personal finance, that's, you know, how much in the bank, what your assets worth, what your liabilities are worth, how much you're saving month in month out. And importantly. Being able to see when you're making decisions, you know, maybe that's around what the trade off is against the other goals that you have as well. And so that dashboard is just. helping you navigate your way forward. And then the final thing is a record. And that's basically just a collection of your achievements. It's how you look back and see here's all the meaningful things that I've done with my money, which is crucial to build self efficacy and build that self belief that you are able to make those things happen. Again, that helps feed forward into the future, your perception of what's possible for yourself and say, yep, because I did that, I can definitely do that. Yeah.

Terry: 22:20

research does show that your belief that you can accomplish something is the most important variable into whether you actually do accomplish that thing. Which I know that sounds like common sense, but where does belief come from? Evidence. And what is evidence? Evidence is the artifacts of your effort that shows you what you already have done. And so if your financial operating system doesn't help you collect those artifacts of achievement, and you can't look back on those things, then you don't look forward with optimism. You look forward with fear. Because the future is uncertain and you're like, well, how am I going to, what are we going to, are we going to be okay? And if you, in reality, if you look back and you went, Hey, look at all these things that we've done over the last five years here. How is it that we're not going to be okay? We just got to keep doing what we're doing and do it bigger, do it better. You know missed in the personal finance space. It's just like, go to the next thing, go to the next thing, go to the what's your goal? What's the number where you're out against the number way too myopic.

Ryan: 23:08

And something I love doing in Moola, obviously, we've built a personal finance app that helps with all of this is being able to scroll back on my goals and see that list of achievements. Because as soon as you see your list of achievements next to aspirations, the goals that you have out in front, it makes you go, why not, why couldn't I? Yes, they're bigger, maybe, mostly bigger than the ones before and saying that some that aren't but it definitely just puts them into perspective and makes you go. Yep. That's absolutely attainable.

Terry: 23:36

But if you go back, that you've done, they were bigger. and you didn't know how you were going to do it. And then you did it then. at that same moment that doesn't change in actual fact, if you're trying to accomplish goals and you've already accomplished number one, you're not going to be inspired to do it. Number two, you do accomplish it'll be empty, you'll be like, of course. Like, it's always you reaching for something and that is the So we've established here that a financial operating system central command center with your finances that has to do three big things for you. It has to be a scoreboard, a dashboard, and a record. want to get a little bit more tactical now. And we talked about giving the person who's listening to this a way to audit their own system, their own structure, to be able to look at it and go, is it doing the job it needs to do for me? But let's go a little bit even deeper. we talked about the kind of questions that our financial operating system should help us answer. And importantly, there's a bit of a standard here as well, isn't there? It should help you answer these questions within three clicks. It should not be a wild goose chase for you to go and get this information. It should be at your fingertips, fingertip feel. I think they call it in Germany. It should be fingertip feel at all times. I want to just quickly talk about the OODA loop here for a second, because

Ryan: 24:38

Okay.

Terry: 24:57

How do these, how should it help you observe? How should it help you orient? How should it help you decide in order to be able to act with confidence as you move towards your goals? So let's jump into the first part of that, mate.

Ryan: 25:08

For sure.

Terry: 25:08

we jump into observation, what kind of questions should we be able to answer with our financial operating system to help us observe reality effectively?

Ryan: 25:15

Got me feeling like a mad fighter pilot going into this one. Thank you, mate. And I would say the observation part, scanning your environment for Qs is basically what we're talking about here is how much have I spent and maybe being able to see that based on the week, the month, the year. How much have I earned? How much am I saving? What are my patterns of spending? And what goals have been funded. I'll put that under the first O in the OODA loop.

Terry: 25:41

Let's go to the second one. So this is the difference between observing and orienting as you making sense of. So are the questions here that your financial operating system should help you answer?

Ryan: 25:50

Yep. I'd say, where are we at in terms of what do we own and O? How's the balance sheet looking? Is my spending aligned to my values? Did I actually spend what I planned to? And that's kind of looking at, here's what my intention was. Here's how I actually spent. How do I bridge those two? When will I be able to hit my goals by? And then lastly, I'd say, am I on track or off track? And by how much I'll put them all under that category of figuring out what my next move is.

Terry: 26:15

Okay, so that's Orient. Let's talk about Decide. So what are the questions that that financial OS should help us answer?

Ryan: 26:22

Yep. So now getting to that state of, Something has to be different. I need to reorient. the questions that you should be able to answer is how can I get back on track? So being able to drill in on really specific changes how much runway do I have?

Terry: 26:35

What do you mean by runway, quickly?

Ryan: 26:37

I mean, if I was to stop working right now, how long before it runs out? And that's primarily looking at cash in the bank and then liquid assets after that.

Terry: 26:45

And That matters because your runway can help you think about risks you might want to take with your money, maybe career, those kind of things. That's the kind of decisions that would help you inform. everything was a go to zero, could I cope with it? And for how long could I cope for it? Yeah,

Ryan: 26:59

yeah. And then another one would be, do I have enough for X? X being, do I have enough to go shopping this weekend? Do I have enough to buy this car? Do I have enough to take this trip? Those kinds of questions that sometimes. We step into without actually answering and either deal with the hard realities of or turn out to be okay, but at least knowing and going in confidently. And then the last one would probably be what happens if, why happens. So like, what if I did buy that car? What if I did buy that house? What if I bought this investment property? What if I loaned this money as a house and bought those shares being able to simulate some of those decisions before you actually make them and step into them and have that based off real concrete Intel of how you have been tracking beforehand. So you make those decisions knowing that most of these things have been quite stable and you can know how much you have been earning, spending, saving, to then translate that into, if these three, four, five things changed, this is what it's likely to look like on the other side and being able to step into that new reality and try it on.

Terry: 28:08

quite quick. We want to do it as quick as possible because the action and the outcome the learning. That's how it learns. It's called Bayesian reasoning. Your brain's always updating its assumptions based on outcomes using its experience to learn. And so your financial operating system should help you move forward with confidence learn as fast as you possibly can how to course correct towards your goals. More outcomes you can collect, the faster you learn, the faster you go. So we've talked about what it does, what it needs to do, we've talked about the three different functions, scoreboard, dashboard, record, and more specifically how it should help you observe, orient, and decide in order to be able to act with conviction. Let's talk about some characteristics, some things that we've learned over time that have to be true in order for you to be able to use this because I don't know if you've heard this statement before, but a system has to be easier to use than it is to ignore or else it's a shit system and no one will use it. So let's talk about what has to be true in order for this to be something that becomes the centerpiece of how you navigate your money decisions for your life.

Ryan: 29:04

Yeah, which obviously, we've spent a lot of time thinking about lately having been building one for ourselves. That's a massive challenge to be harder to ignore and step into. I think the most prominent one is that it needs to be real time. It can't be a lag effect. You can't be making decisions based off three months ago because life's updating, evolving all the time. And so being able to have Intel getting fed back to you legit within a minute or definitely within an hour, for example, about the decisions you're making on the fly can be a really powerful way just to be nudging you. At any point in time, because that's ultimately what you're looking at, like trying to get the intel, what you're learning about what what is happening, those vitals, how they're evolving to be as instant as possible. If you're checking your heart rate, what's it good to you looking down at your watch and going, Oh, an hour ago, it was X curious about what it is right now. And so the same thing is true with money being able to see. As at today's date or even as of this hour, this is where I'm at and how that's evolving over time and be able to see the progress of that every single day. So I would say that's the most important one being real time. What would you add?

Terry: 30:11

One I'd add here is, there has to be different ways to view and use it. Like I hate those tools where you have to learn the way the person who built it is thinking. I love the tools that allow you to think the way you want to think. And so what I mean by that is, there needs to be multiple ways in. To be able to get to the answer so you can navigate this tool and kind of choose the way that works best for you. Cause I think everyone has different ways of kind of looking at things. So now it's pretty hard with tech to kind of get it completely universal, but there should be multiple ways. And it's important, I think when you're in a relationship too, and you've got another person who wants to see it a different way, and this is where. A couple's point of view, usually there's some person who built the thing and they understand every or every assumption that underpins it. So they've already done

Ryan: 30:49

Silence.

Terry: 31:03

It's easy. And you're like, well, because I didn't spend the last two months going through, trying to answer all those questions to come to that output and to make it look like that, to display it in this way. So I think it just, it's got to give you different ways to be able to view and use the information. And be configurable. Yeah.

Ryan: 31:19

And I think also just seeing it from different heights, like being in a worm's eye view, seeing at a transaction level. What's happening? How much are we spending on? How much did we spend on X versus being able to zoom out and go, how much do we earn and spend this month versus them being able to zoom out and look at it, not from a point in time, but an overtime perspective and go, well, what's likely to happen over the next 6, 12, 24 months? Like there, it's like a worm's eye view to a bird's eye view to a satellite view. And being able to choose how zoomed out or zoomed in you are completely changes the perspective you have about how you're traveling as well.

Terry: 31:53

Yeah. I love that one. What's another one, mate? So we've talked about real time and different ways of view and use.

Ryan: 31:57

Yeah, I would say it needs to be really customizable and iterative in the sense that, like, you're always changing in terms of the habits, in terms of routines, the way you're spending, you know, work's changing. Lots of things are changing. Life's really dynamic and so are your goals. So the things are actually going after, they're always updating as well. So you just need to really easily be able to change those things. And also make sense of when that changes, how does everything else change in and around it? So easy to customize, update your goals, change your spending patterns and iterate upon what's normal for you as well.

Terry: 32:33

yes this one I think is a sort of a juxtaposition. We make that contrast between prescriptions versus a practice. Prescription like the 50 30 20 rule or the barefoot bucket system, whatever, that is not an operating system. It is a prescription. It doesn't move with you. It doesn't change and evolve with you. Instead, you're trying to stick within a certain set of parameters to make it viable. And it doesn't help you way fine. That's just you staying within a certain set of parameters, keeping your life a certain way to make it quote unquote work. I think if it can move with your life like this, you don't drop it. You actually keep it. You want to hold onto it cause it's helping you do your life better over time. So I just want to add that to it. The next part. I think is really important is forward facing. There are a lot of tools out there. There's a lot of tech out there that is essentially just backwards facing data dashboards. That's what happened with your money the past. what do you want to do? Actually, I've got an application this week, someone who's just booked in and she actually wrote on there. She's like, I've been using apps for years, all they show is what happened with my money. Nothing's actually changed for me. I'm trying to find another way to make it work. And I kind of wanted to write back and go, it's cause it's backwards facing and aligned. there's there's no North star that's guiding your decisions in the moment. You're always looking back going, Oh, let's not do that again. You just feel bad all the time. I think this is where the tools have really fallen down, isn't it?

Ryan: 33:45

yeah, for sure.

Terry: 33:46

Maybe there's one more here and I think we already have talked about it. So I'll just skip it. It has to be easy. Be easy to make these decisions. You need to be able to get to the answer within three clicks. And if you can't get that answer within three clicks, then you're spending too much time trying to find the answer versus figure out how to observe, orient, decide, and be able to act. Are the things that really have to matter. If I can quickly recap, it has to be real time, it's got to be different ways of view and use it, it has to be customisable and iterative and move with your life, it must be

Ryan: 34:11

sweet. that.

Terry: 34:23

come back to why this really matters. If you don't have the right information on hand at the right time, you'll just gravitate towards one bit of information and that can often lead you astray and It'll be really hard for you to navigate if you don't have the right information. There is a bunch of research to show that when humans don't have the right information and they're out in the center of nowhere with no feedback, they just walk in circles. They just walk in circles, a perfect circle when it comes to this. So if you're lacking this information, you're only gravitating on one bit of information that's visible for you, you're going to feel a certain way. And you'll send all

Ryan: 34:59

I think

Terry: 35:20

and you'll feel like you can solve for what's coming up and also accomplish what you set out to accomplish.

Ryan: 35:25

No, I think you nailed it. Like, I just double click on that point of making progress as visible as possible. Because most of what we're solving for is a sense of progress. And so as long as it does that, a lot of the rest will take care of itself.

Terry: 35:38

Beautiful. Where we're going next with this in this series, if you're listening, is we're going to go into the third money skill. We call that one cash flow forecasting. If you want to know how to spend guilt free and find your goals, we have talked about this in the past. We're going to go into it. on a whole new level again and actually show you how this kind of fits in together to be able to move you towards your goals. So we're going to be discussing what that looks like and why that's so important. I'm going to share a story as well about a couple that use cash flow forecasting at one of the most important moments in their life and what it meant for them. I recently interviewed them and I nearly cried when they told me the story for, for real. They wrote it up in our community a few months ago. So that's where next. Quick reminder as well, if you want to assess yourself against these financial skills as we're going, jump into that financial skill score. You can see in the show notes in the description, take my financial skill score and it will show you. how you're going against these skills as we do these episodes. you want to know how you're going, monitoring your vitals, jump in there, check on that one. See how you go.

Ryan: 36:29

Nice, mate. Let's talk about cashflow forecasting up next.

Terry: 36:32

Sounds good, mate. Talk soon.

Ryan: 36:33

See ya.