“It really makes no sense to apply a mindset around money from two generations ago, three generations ago, to a generation today,” Glen James says. “It’s a different world.”

James is a finance podcaster and former financial planner. He knows better than most that good advice isn’t necessarily good advice forever.

“The mindset of generations past was, ‘Leave school, get a job for life, buy a house, live forevermore, amen.’ The mindset of this generation now is, ‘Leave school, do whatever you want, add value to society.’”

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But with the intergenerational economic gap widening, and examples from the past becoming less relevant, it’s valuable to know what to listen to and what you should ignore.

“Rent money is dead money”
You hear this all the time, but according to James it’s not worth losing sleep over.

“We all need to live somewhere and we’ve all got accommodation costs,” he says. “It’s okay to rent, but it’s more important to have a long-term strategy in your life.”

This means that, while owning a home can be a sound investment strategy, it doesn’t have to be the only one. It’s more important to have some sort of plan for retirement, even if that means not owning a home in the short term. Keeping rent at less than 30 per cent of your income is a good place to start, while using any extra earnings on future financial stability.

“It could be a strategy of living on less than I earn, not putting all my money towards rent, and having an investment portfolio,” James says.

Regardless, while we don’t need to own a house today, it does become important later in life. “Whatever you do with your strategy, you want to get to the point where when you stop generating an income, your accommodation expenses are fixed.”

It’s okay to avo on toast
It’s become a soft target, but James says lifestyle changes – such as brunch – are just part of living today.

“It is a different economy and it is a different world,” he says.

Like with renting, we should ignore the bluster and look at the big picture.

“We’ve got to focus on the big rocks in our life – our career, our education, our strategy, what we want to do long term,” James says. “Then, realistically, if I spend some money on avocado and toast … I’ve budgeted for it.”

Other lifestyle changes – Netflix subscriptions, internet costs – should also factor in. It’s not wrong to live the modern lifestyle, says James – we just have to take these things into account when planning for our financial future.

Where to start
However you think about finance, the most important thing is having a strategy in place. Look at your life in the short, medium and long term, and think about what you want it to look like.

“In the financial planning world, it’s called ‘goals-based advice’,” James says. “We have a look at the goals, we distil the goals, really understand what we want our life to look like, and then we work backwards.”

With those landmarks in place, it’s easier to start thinking in real terms about what you need to save, and how to do it. For James, investment in 2021 is an accessible way to think about future wealth.

“Twenty or 30 years ago, investing was for the rich,” James says. Now, we have the technology and low barriers to entry that make investing easy. “You can start with $5.”

Accessibility comes with risk, of course, and James recommends educating yourself with the many freely available online resources.

“The best way to get started with investing is actually to get started in knowing and understanding the landscape,” he says. “That’s the easiest part and there’s no cost to that.”

This article is produced by Broadsheet in partnership with Bankwest. See Bankwest’s online money management guides for more ideas to get the most out of your money. The information in this article is of a general and educational nature only. You should consider your own financial position and requirements before making a financial decision.