Here at Forehand Financial, every month we will find a new financial blogger to provide his/her knowledge to a series of important and meaningful questions/statements regarding in the financial space. At this time, they primarily include written commentaries, but this will continue to evolve through podcasts and videos as we expand our offering. Please Enjoy!
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Paul: In your journey through finance, what is a common misconception you initially had when it came to money?
Eirin: To be honest, I can’t remember having any misconceptions about money. I started working on my wealth-building journey quite early. I was 18 years old and knew I didn’t want to depend on one salary and trade my time for money to live my life. What I do remember hearing growing up at home is that you have to work hard in life to earn money and live well. I didn’t fully agree with it though as I had influence from other people in my life who had built their wealth outside of a traditional job. They had started their own businesses and invested in the stock market and in property. When I look back at my life now I realise how important the saying “You are the average of the 5 people you surround yourself with” truly is. I think having a positive influence from others and seeing what’s possible for you is key. Then it’s up to you to plan and make it happen!
Paul: What practices do you try and implement in your life to achieve your (financial or non-financial) goals faster?
Eirin: One of the most profound practices that I created and implemented in my life is a daily morning routine. I love waking up really early before the rest of the world wakes up and noticing the peace and quiet. I do my workout first thing in the morning. I follow this with journaling and mindset work. Our mindset is at the core of everything we do. I work on my mindset so that it always matches my aspirations in life. I also write at least 5 things I'm grateful for every day. Then I set my top priorities for the day and write out what would make my day a success. My morning routine is a practice where I dedicate time for myself. I don’t put a time limit. I just let myself flow. I have no stress to get to a job or to be somewhere else. This is something that I’m constantly so grateful for. I’ve created a life where I choose what to do with my time. I'm usually ready to work between 9:00 and 9:30 am feeling motivated and with so much positive energy.
I also recognise that sometimes life gets in the way and it’s not about doing everything perfectly. If I miss a day or two, it’s not the end of the world. The most important thing is to be consistent with your habits and come back to it quickly if you fall out of it.
Other practices I implement to achieve my goals is to hold myself accountable. No one will care more about your success than you. I like to think of it as a game and I make it fun to work towards my desires. I track and review how I’m doing consistently and at a minimum once a month. Lastly, I think celebrating your progress is part of what makes the process and journey enjoyable. I like to recognise the efforts I am making by celebrating my small and big wins.
Paul: After a long day of work, what do you like to do to destress, wind the day down and reach a relaxed mood to be fresh to take on the next day?
Eirin: I prioritise self-care as much as work. I believe that in order to be productive it’s just as important to rest and slow down. I like to switch off completely when I’m finished with work although it’s hard to always follow through with this, especially since I have my own wealth coaching business. When I do switch off I like to spend quality time with my fiance, friends, or family. I enjoy slow evenings with a good glass of wine and good food. I really enjoy cooking, baking, or any kind of creating in the kitchen. It feels like meditation for me. I also like to spend time reading a good book or watching a show or movie with my fiance. Finally, I love going for walks in nature but the only thing I’m missing is having a dog that I can bring with me.
Paul: If you were to recommend one movie, show or book that has changed you for the better what would it be and why?
Eirin: I always find it so hard to just mention one so I’m going to share two books and one documentary that have impacted me.
1) One of the first books I ever read on personal finance was Rich Dad, Poor Dad by Robert Kiyosaki. My parents knew I had an interest in business and learning how money works in the world so they gifted it to me when I was 18. This is also around the time I started working on my building my wealth and it definitely shaped my financial independence journey. The biggest takeaway I took from this book was about the difference your mindset makes in your life.
2) Your money or your life by Vicki Robin: This book is different from other personal finance books because it guides you through the inner work needed to transform your relationship with money. To achieve true change in your life you must first change your beliefs about money and bring consciousness to the way you spend and earn your money. It’s not really about money but about what you are trading your life energy for. I love it because it truly highlights the difference between making a living and making a life.
3) Minimalism: A Documentary About The Important Things. I am not a minimalist although I am closer to practicing some form of minimalism than the consumerist lifestyle of modern society. I really resonate with the idea of finding freedom by living with less. Through my own wealth-building journey I have learned to live life more intentionally, aligned with my values, and following what truly matters to me. I really enjoyed seeing how other people in the documentary have made changes in their lives to prioritize happiness over external and superficial measures. It focuses on the virtues of downsizing your life and understanding the true meaning of “enough” which also Vicki Robin writes about in her book Your Money or Your Life. The documentary really inspired me to embrace minimalism even more although I can’t say I am even close to the authors Joshua and Ryan’s way of living.
Paul: Ten years ago, have you expected to be where you are now? What financial advice would you tell your younger self or someone in their teens or twenties?
Eirin: Yes, I had no doubt that I would be well on my way to financial independence. I also think that this strong self-belief that I had in myself is what made it possible for me. I started working on my wealth-building journey when I was 18 (over 13 years ago now) and I set myself savings goals and investing goals every year to get closer to my ultimate goal of financial independence. I think the best financial advice I can give to someone else is to get financially educated. The biggest risk in life is not to understand how money works and how you can use it as a tool to build your dream life or create a safe future for yourself. I would also recommend women to start talking more openly about money between each other. It’s definitely something I would tell my younger self to do. I felt quite alone in my wealth-building journey and would have loved to have a community of other women to speak to about this. That’s also one of the main reasons why I decided to build one myself through my business.
Paul: What advice would you give to someone who has trouble sticking to a budget? Any strategies to help them stay the path?
Eirin: Budgeting has such a bad reputation and often makes people think and feel that they have to restrict or deprive themselves. Nobody enjoys this so I would start by changing the perspective. A budget is supposed to feel expansive. It gives you the freedom to spend on the things that matter to you. Start with your why and set yourself a goal. Why do you want to create a budget? Is it to get out of debt? To break the paycheck to paycheck cycle? To start saving more money? To invest for your long-term goals? One of the reasons that budgeting may be difficult is because there are so many emotions tied to the way that you spend your money. It is important to address your emotions when it comes to your budget. I always advise my clients to start tracking their money first, before they create a budget. Tracking your inflow and outflow of money is a great way to become aware of your money habits and the emotions tied to your spending. When you’ve been tracking your money for a few months you can really start to analyse your spending. You will probably notice certain trends and patterns. From here you can start to be forward-thinking and make decisions about what you want to allow yourself to spend in each category and how much you allocate to your savings. This is the perfect time to make a budget! Make sure you set aside fun money each month that you can spend guilt-free.
For additional strategies to set yourself up for success: Schedule a review with yourself at the end of the month (or as often as you like) to check-in, see how you did, learn from your results, and make adjustments as needed. Make it a fun experience. What do you enjoy doing? Make it a special occasion and something you look forward to doing. For the biggest chances of success, find yourself an accountability partner or invest in a wealth coach that can support you and hold you to your highest potential.
Paul: If you were to give advice specifically to women on things, they can do to maintain their lifestyle, while concurrently achieving their financial goals what would they be? Is there anything that you or other women may have experienced when it came to money?
Eirin: I think my biggest advice to women is to get financially educated. It is especially important for women to take control of their finances and to build their own financial independence.
We are aware of the gender pay gap, that women take more career breaks to care for children/elderly, we pay a premium on most products our entire financial lives, and we live on average 5 years longer than men. Research shows that women end up with around 70% less money than men in their retirement!! The huge wealth gender gap that women experience is a result of systemic issues and a lifetime of income and workplace inequality which is why it’s so important for women to start building their own wealth.
I would advise women to start by understanding themselves and their own relationship with money so they can choose to live authentically and maximize the time they spend working towards their desires. I always advise my clients to identify their “why” for wanting to achieve their financial goals. You will constantly be challenged and there will be things tempting you every day. That means that you have a choice presented to you in every single situation. Coming back to your “why” will help you when you need to make a choice between something now or your goal later. Additionally, learning to identify what you value and what you love spending money on will help you maintain your lifestyle and make it easier to say no to things that don’t matter so much to you.
Paul: If someone were in bad debt, what advice would you give to them regarding getting out of it?
Eirin: It can be tough to face up to your financial situation but it is such an important first step.
I think the most important thing to remember is to look at it with no judgment. Remember that your debt does not define you and it does not determine your worth. It can also feel like a lonely journey but there are so many others who are experiencing the same. Speak to someone you trust who can support you. Start by creating a list of all your debts (credit cards, overdrafts, loan and mortgage, personal loans, etc.). Then check how much you owe on each one, the interest rate on each debt, the minimum payment on each debt, and the payment due date on each debt. After you’ve listed it all out, prioritise what you want to pay off first. Look at your budget to see how much you have left after your expenses are covered. How much can you afford to put down toward your debt payment each month? The most important is to not overpay as you need to make sure you have enough for your monthly expenses so you don’t end up taking on more debt. Once you start eliminating expensive debt and can afford to pay down more, you can start adjusting the amount. Eliminating debt can end up taking a long time so celebrate your progress along the way. Create a reward system and be specific about how you will celebrate each small win.
Paul: What investments have you found the most rewarding both from an impact perspective (ESG or supporting other local causes), but also a strong rate of return?
Eirin: I’ve always been conscious of our impact on the environment and I try to look for ways where I can live my life more sustainably. I started looking into this with my investments and specifically how we can use renewable energy to combat climate change. In 2015, in my stock picking research, I came across a company in the green hydrogen industry. I started reading more about how excess solar and wind power can create operability challenges. I learned about how the excess wind and solar power could be converted to hydrogen and used elsewhere or even to produce electricity which made me realise that hydrogen would play a key role in transitioning towards green energy. I opened a long position in a growth stock in this industry in 2015. It’s definitely been my best investment to date as well as one that is in full alignment with my values too. I got in early and I have a 620% return so far. The best part is that this stock is just in the early stages of its growth journey. I’m planning to hold it for many years.
Paul: What traits do you see in most successful people financially? Can these be learned, and if so, how would you recommend adopting them into one’s life?
Eirin: I believe successful people have common traits which come from a desire or purpose to achieve a bigger vision for themselves in life. They have a long-term mindset and a strong belief in themselves. They also have a strong commitment to follow their dreams. They use this for direction and implement consistent daily habits and discipline to work towards their goals. However, I think it’s also important not to put successful people on a pedestal. They also have their own insecurities and moments of self-doubt. They can also have bad habits and have gaps in their knowledge too. The difference is, they know, that all of these things are perfectly normal. The goal is not perfection, it’s to take imperfect action towards your desires. Lastly, and maybe most importantly, successful people have a genuine desire and willingness to learn. So yes, I believe anything can be learned. Start by identifying one new habit that you want to implement in your life. Set yourself up for success by doing it first thing in the morning or at a time you know you are most likely to follow through. If you have too many things that you are trying to change at the same time you will probably get distracted and not be fully focused on them. By just focusing on one at a time you can place all your energy on implementing it and you will have a higher chance of success.
Thanks everyone for reading this thoughtful and actionable content! To stay and touch with Eirin, please be sure to follow and support @eirin.holmeide on Instagram!