Financial adviser and founder of AskPaul.ie Paul Merriman spoke to Brendan about financial well-being, balancing future planning with living in the moment and his new book; Money Made Easy: Simple Steps to Managing your Finances. Listen back above.
At 41, financial advisor Paul Merriman is on track to retire at 60 and he's happy to share the strategies he used to get there with just about anyone. The founder of AskPaul.ie believes in 'advice equality' and he describes his jargon-free approach to finances in his new book Money Made Easy: Simple Steps to Managing your Finances. Paul spoke to Brendan O'Connor about what motivated him to take his own financial planning seriously, his commitment to financial wellbeing and his thoughts on a range of investments from pensions to cryptocurrency.
Money management isn't just for the wealthy - everyone can benefit from it, Paul says. He explains that his financial advice practice runs on the principle of 'advice equality':
"Investing and financial planning is for absolutely everybody; no matter what your background is, no matter what we have in the bank."
Paul says he took the reins of his own financial future early on, as he was born with a chronic illness:
"I was born with a kidney complaint. I have kidney disease. So my motivation was to make sure I'd have enough cash and be financially secure for my family, but also be able to retire early."
There are limits to how much you can plan for, however, as nobody knows what the future holds or who will be around to enjoy it, Paul says. He has seen clients who saved every spare cent for retirement, only to be faced with the death of a partner shortly after giving up work. There is a balance to be struck, and while some financial advisors emphasise the long term, Paul says there's a lot to be said for enjoying the present:
"A financial plan is supposed to give you a balance in life; to make sure you can spend enough now, with one eye on the future."
Financial wellbeing is different for each individual person and household. It's worth making a list of what's really important to you, before you go and see a financial advisor, Paul says:
"Ask yourself what are your three financial goals? And then how are you going to reach those goals? And then that’s when you might need a financial planner to help you with tax relief or pensions or investment returns. You need to be happy with your own wellbeing and what your finances are."
If you can get to the point where you have a small bit of extra cash at the end of the month, you're already winning, no matter how small the amount:
"The basis of financial wellbeing is just getting to payday and having money in the bank – if you’ve got one euro or fifty euro, two grand; whatever the figure is – you’re already there. Then it’s make a decision – what do I do with the extra cash?"
Debt can hurt people emotionally as well as in the pocket, Paul says. He has seen clients struggle with massive debts and others who are losing sleep over quite small debts. For people who are overwhelmed by debts, Paul's company have developed a tool called the 'Debt Ladder’. They recommend making a list of all your debts from smallest to largest and starting by clearing the smallest one, before moving up the ladder:
"We’ve developed what’s called ‘The Debt Ladder’. The easiest thing to do is to try and clear your smallest loan first if you’re a bit overwhelmed with debt. A lot of people say clear the biggest interest, but the biggest interest could take a few years.
Paul says this method works because it gives you a psychological boost when you get a quick win:
"You just get that quick mental win that you’ve succeeded and cleared something quickly."
An early win can keep you motivated, Paul says. Once a small debt is cleared, you can work your way up to the bigger ones. You will need to go on a financial 'diet' for a while, and it will be tough for a time. Try not to be too hard on yourself for being in debt, Paul says, as there is no shame in it and many others are in the same position:
"If you are going through it, just take it on the chin. This is going to take me 2 years, 3 years, 18 months, whatever it is. It’s a phase and just double down. And there’s nothing wrong with it. There’s no shame in it. Loads of people have done it before. Loads of people will do it again."
Fear and stress around personal finance is understandable, and change takes time. Paul thinks that developing a new relationship with money is a huge part of managing it successfully:
"What I really wanted to bring out in the book was the wellbeing of money and how you should be handling all different financial situations and not to let it get on top of you. Money is supposed to enhance your life."
Paul talks about many other financial hot topics, from cash to cryptocurrencies - listen back above. And you can hear more from Brendan O'Connor here and on the RTÉ Radio app
Paul Merriman's book Money Made Easy: Simple Steps to Managing your Finances is out now, published by Hachette