Financial Mistakes: Part Two


Financial Mistake #2: You Don’t Track Costs

This video explains why not having a clear view of your annual spending can hinder you from optimising your finances.

You can read the full transcript below.


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Video Transcript

Thanks to those of you that sent me your comments from the first video – it’s always incredibly helpful to me to hear your thoughts.

In the first video I talked about how most MDs and Partners I’ve worked with don’t have a documented Life and Financial Plan.

This is so important as you have an incredible opportunity: you are already earning good money so now it’s about optimising everything else to achieve the ultimate goal – and that is your desired lifestyle.  And for most people that really boils down to the freedom of time.  Freedom around how, what, who with and when you spend your time.

I’m Max Keeling and for the last 2 years I’ve been coaching senior executives and business owners around their finances, working with a number of MDs at banks or Partners at Accountancy firms.

And these videos reflect some of the mistakes I’ve seen this group making – which hopefully you can correct.

This second video covers something much less grandiose as the first which was a life plan…but still important.

Everyone I’ve worked with can tell me what they earn in any given year…but very few can tell me what they spend and therefore what they save.

Why is this an issue?

So, you are earning good money, don’t need to budget for most things in life, can buy things as and when you want them, children are going to private school or you can comfortable pay their university fees, have great holidays.

 That’s all good – but what tends to happen over time is that as your income increases so does your lifestyle cost.

And therefore, you can be earning way in excess of $1m SGD but not actually saving much, or not putting the right proportion of your income into some kind of future spending pot, like a pension.

Where this causes a major issue is – if you don’t put your head up once in a while to check your spending vs your future desired lifestyle…you simple won’t have enough to fund that future lifestyle…and unless you are prepared to massively cut back your lifestyle in ‘retirement’…you’ll have some difficult times ahead.

I say ‘retirement’ because most MDs and Partners I know don’t want to completely leave they work – they want to remain active for a long time…just maybe in a pared back way maybe as a non-exec director, small start-up, investing and mentorship, charity work etc.

I’ve seen it happen where someone decides they want to retire early…they think they can do it in the next 6-12 months…and they engage someone like me to help plan the retirement spending only to find out they will have to spend much, much less than they thought to guarantee that they’ll never run out of money in their lifetime.

And then depression sets in…that they’ll need to work longer than they thought or cut back the lifestyle.

Is this you?  Are you burying your head in the sand because life is good and you can afford everything you could possibly want to buy?

You can avoid this trap…by spending some time in Jan to assess what you roughly spent in 2018 and put it into broad categories.  And then objectively assess whether you are saving enough of what you are earning.

Now I know what you are thinking – that this is going to take you days.  So, start off small – just download 3 months of your credit card bill or bank statement to work through that.

I can also hear some of you thinking that you hate budgets and it won’t work for you.

This isn’t about cutting back on how many coffees you drink a day. It’s about assessing whether you’ve got the balance right and in my experience most of you are flying blind and have no concept of what you are spending and whether you are saving enough.  It’s not about having a budget.

Most clients I work with are very numerate – you might not be doing detailed spreadsheets on a daily basis any more but maybe it’s time to be humble, swallow your pride and get stuck into your bank statements, download them into Excel and spend a few hours assessing 2018. 

This could be the most valuable task you do in 2019 and could help set your financial course for the next decade.

In the next video we are going to address the minefield of mistake people make with their investments – and I’m sure one or 2 of the items will apply to your situation.

Let me know your thoughts on how you keep track of you day to day spending, any solutions and tools you’ve come across that might help other.  Just send me a quick email at