Make your money work for you

Money magazine editor Effie Zahos (Bachelor of Economics '90) reveals her top tips for growing your personal wealth and making your money work for you. 

Effie Zahos’ Top Tips:

1. It’s not what you earn that counts, it’s what you spend.

Paul Clitheroe, Money’s chairman and chief commentator, taught me this little gem when he offered me a job to move from banking into TV on virtually half my salary. Risk equals return.
Sure, it’s safe to do nothing, but you’re also going to get nothing. And that’s what you’ve got to accept. If you do nothing, you know where you’re going to be: you’re going to be right where you are.
 

2. Small steps make big gains.

When I got my first job, there was another graduate trainee named Darren, who I’ve written about before in the magazine. I remember they had a financial planner come to see us and they wanted us to salary sacrifice some of our money into super. I remember thinking ‘are you kidding me?’ So, I didn’t. Darren did. I did some sums and worked out how much better off Darren is than me and it’s just crazy because at the time, what you’re sacrificing is just small change. When you’re young, you’re flexible, it’s easy to live on 2-minute noodles and drink cask wine. When you’re 60 though it’s not as fun. So if there was ever a time to sacrifice, its when you’re young. The one thing I really wish I’d understood is that small things really do add up.
 

3. Buy now, pay later? Don’t.

This is a behavioural economics thing. You go online and you see something and you can’t afford it. But then they break it down into four easy payments. So what was $200, is now just $50! And you don’t even have to pay that for two weeks! You almost certainly wouldn’t have bought it if you had to pay that $200 today, but when it becomes $50, suddenly you can part with $50. This option has changed your behaviour.
 

4. Automate your situation.

Don’t hesitate to automate a savings plan as soon as possible. Ask yourself some questions: where do I want to be next year, or the year after; how am I going to get there? Maybe you want to buy a property or rent-vest. Maybe you’re saving for a holiday. Just automate it. Once its done, you won’t even notice it. But if you don’t do it, before you know it you’ll be thinking, ‘if only I’d automated a savings plan’!

For alumnus and Money magazine editor, Effie Zahos, a dramatic childhood event was an early catalyst for her career in finance and economics.

As the daughter of hard-working Greek migrants, Zahos learned early that making your money work for you – and not the other way around – was the key to financial freedom.

“They worked very hard, very long hours and had little return on that,” Zahos said of her parents and their restaurant and take-away businesses.

“We moved around a lot and usually lived above the shops which meant they worked very hard seven days a week.”
It was during one of those stints living above their restaurant in Goulborn that an electrical fault caused the entire shop to go up in flames during the night.

All of her family members survived thanks to Zahos’ quick-thinking mother who threw Zahos and her two siblings out of a window onto the canopy of a semi-trailer.

However, the fire engulfed the top level of the building as well. 

“My parents didn’t understand insurance or anything like that, so we lost everything that night,” Zahos said.

“We were given clothes by a charity group.

“We had nothing, we had nothing.”

Knowing her family had lost everything simply because of a lack of understanding of financial products and services gave Zahos a determined motivation to forge a different path to her parents.

“I guess the best drive comes from a personal place and for me, it was my background,” Zahos said.

Believing a career in economics and finance would arm her with the knowledge and expertise to make her own way.

She completed a Bachelor of Economics at UQ in 1990 and was immediately hired into Westpac’s graduate program – a role that offered a seemingly guaranteed and well-worn career trajectory into senior-level banking.

“The graduate program really took you from the ground up and I think you really need to know the ground to work your way up,” Zahos said.

“I was there for a good six –seven years, tracking very well, and on a great income with a work space overlooking Sydney Harbour. 

“And then for some reason I responded to a job advertisement in the paper (yes I know jobs were in papers back then!) for a finance expert on a TV show that I didn’t know.”

Despite her comfortable position at Westpac, Zahos joined the team on Paul Clitheroe’s Money Show in 1997.

“I agonised over the decision: I went to uni, I got a degree, I got into a graduate program at a bank, I’m working my way up the corporate ladder,” she said.

“That’s what I thought my life was.

“But I took it and it was the best risk I’ve taken that’s paid off.”

In 1999, Money magazine was launched to complement the TV show - but quickly became the flagship offering for the brand - and gave Zahos the opportunity to put her knowledge into words.

“It has been an opportunity to not just sit in a bank, but really open my mind from a consumer point of view, and really improve on and share my financial literacy,” she said.

After 21 years with the Money franchise, Zahos is considered one of Australia’s foremost commentators on the finance industry and the economy: she has written books, appeared on countless television programs, fronted some of her own, and contributes regularly to national radio shows Her achievements are a world away from even the wildest dreams of a young girl being handed donated clothing by an aid worker.

“My passion has always been financial literacy.”

“I get paid to read fine print in mortgage contracts and research investment products so I feel obligated to share that.

“If that helps someone make a financial decision then great!”

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