0:00

Hello and welcome to It All Adds Up

0:02

the podcast where we chat about money, how

0:04

to get it, how to spend it, and how to invest

0:06

it. I'm senior economics writer Jess

0:09

Irvine, and you're listening to our summer

0:11

series, where we're replaying some of our

0:13

hottest hits to help you get in shipshape

0:15

financial form for 2023.

0:18

It all adds Up will resume normal programming

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in February with a brand new season

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full of money saving tips and insights.

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So until then, sit back, relax

0:27

and enjoy. Hello

0:38

and welcome to It All Adds Up the podcast

0:40

where we chat about money, how to get it, how

0:42

to spend it, and how to invest it. I'm

0:45

senior economics writer Jess Irvine.

0:47

And I'm money editor, Dumb Pal. And so far in the pod,

0:50

we've covered a few things like how to get your pay

0:52

rise and giving you some savings tips.

0:54

But Jess, I think it's about time

0:56

we moved on to the fun stuff.

0:58

Investing so fun. I'm

1:00

so excited to talk about investing

1:02

because I think it's a topic that interests

1:05

but scares a lot of people. But

1:07

there has been a real revolution in the world of

1:09

investing, and people talk about a democratization

1:13

of sort of access to being able to directly

1:16

invest in the share market. And

1:18

it's really something that everyone should get up

1:20

to speed with, at least. So,

1:22

Dom, over the next few episodes, we've decided

1:25

to tackle the big, scary world of share investing

1:27

in three parts. And today we're going

1:29

to start with the absolute basics.

1:31

So what are shares? Why

1:34

would you buy them and how can

1:36

you buy them at all their various forms?

1:38

Yeah. And by the end, we want to turn you

1:40

into a bit of an investing whiz. And

1:42

we're just going to rip through a lot of information this

1:45

episode, just to give you a bit of a taste of what's

1:47

out there. But if you'd like us to do

1:49

a deeper dive into anything that we

1:51

do, raise then as an email

1:53

add, it all adds up at 9:00 to

1:55

you and we'll consider it for a future episode. And

1:58

you can also still submit listener questions.

2:00

We'll be taking those on. We'll be reading one out at the end

2:02

of the episode, so please keep sending those through.

2:04

Yeah, we love hearing from you. And

2:07

as always, please do remember that

2:09

the information we're about to discuss is

2:11

general in nature and does not take

2:13

into account your personal goals, objectives

2:16

or circumstances. And you should always

2:18

seek some professional advice before

2:20

making any major financial decisions.

2:22

So Dom Yeah, let's have

2:24

a quick chat about where we're at personally

2:27

in terms of share market investing. I've

2:29

written copious amounts of columns

2:31

about the fact that I became a direct share

2:33

market investor just over a year

2:35

ago. Now, where are you at? Have

2:37

you ever bought any shares?

2:39

I dabbled very briefly,

2:41

I would say pre-COVID with

2:44

some some ETFs, but

2:47

in sort of a meaningful way. I've never

2:49

really invested in the share market. I've

2:52

never really, like thought about it, which

2:54

is bad for for me being the money

2:56

at it. I feel like there's a really sort

2:58

of terrible thing to admit, but at the

3:00

same time, it's also an opportunity for me to learn

3:03

as we go. So I'm going to sort of

3:05

be a bit of a learner

3:08

as well through this whole process.

3:09

Exactly. And I'm excited. We've had the idea that

3:11

we could actually buy shares during

3:13

a podcast episode so people could hear, you

3:15

know, what that process is actually like. Because I remember

3:18

just I actually just started

3:20

by like going to the ASX website

3:22

and going like, how do you buy shares? And

3:24

I thought maybe I could buy them through the ASX

3:26

website.

3:27

I'm stuff that you can't. I mean, I thought

3:30

exactly the same thing. I was like, surely we can just go onto

3:32

this, this website, you know, and buy

3:34

them there. But no, alas, yeah.

3:35

No, you have to, you must have a broker

3:37

and there's all sorts of different brokers, so we'll get

3:40

into that in a later episode. But

3:42

first, you know, just to let people know

3:44

that there has been this massive, you know,

3:46

explosion in the number of Aussies. It's something

3:49

like the ASX did an investor

3:51

study and it's something like more than a million Australians

3:54

bought shares for the first

3:56

time during the sort of COVID pandemic

3:59

era, which is just kind of incredible, isn't

4:01

it?

4:01

Yeah, it's really shocking. And it's not just

4:03

like shares. People just got into investing in a huge way.

4:05

Like, you know, we saw something last

4:08

week or last month from ASIC's talking

4:10

about the number of people who bought things like crypto during

4:12

COVID. Like people just went

4:14

bananas for, for investing. And

4:17

there's a lot of like reasons behind that. Like

4:19

I suppose like the broad reason

4:21

why people did it during COVID is that people had a lot

4:23

more time on their hands. It was a lot of stimulus

4:26

in the economy. People

4:28

weren't spending money on many other things. So

4:30

all those sort of things combined meant people were

4:32

more sort of keen, I guess, to

4:34

get involved with shares of, especially

4:36

if they had never done it before. But, you know, we

4:39

do have a lot of new tech and other things in

4:41

the market as well. That helps.

4:42

Yeah. So you can do sort of micro investing

4:45

apps where you can invest for as little as a

4:47

dollar or $10. You know, there's sites

4:49

like just to name a few shares

4:51

is Pearler, CommSec Pocket Raiz

4:54

Invest Spaceship Voyager. So there's all these sort

4:56

of micro investing apps where you

4:58

can get a foot in the door without

5:00

sort of necessarily needing the big lump of cash

5:02

that you would take to a broker as

5:05

you did in the olden days. And it's so easy.

5:07

It's it's in your pocket. I'm going to make

5:09

a confession, which is to say that I have bought

5:11

shares while literally sitting on the toilet.

5:15

Which is.

5:16

Unhygienic. But, you know, we all do it.

5:18

Yeah, exactly. And I decided to do it

5:20

for the sake of it to just be like I

5:23

bought shares. I'll Citigo Yeah,

5:25

I mean, that's and.

5:26

That's that is, I think, the perfect

5:29

example of how far we've come in terms

5:31

of buying shares. Because if you look back, you know,

5:34

20 years ago. Right. Yeah, you literally

5:36

would have had to go into your broker or like, go

5:38

walk into the CBD and talk to your broker

5:40

and hand the big bag of cash, I assume.

5:43

I assume all transactions were done with big bags of cash.

5:45

20 years ago. So yeah, things

5:48

are modernized a lot. And also during COVID, you know, we didn't

5:50

have any like a lot of great

5:52

investment options and interest rates were at record

5:55

lows. Like if you had money in cash, it was

5:57

almost you almost losing money. It was

5:59

such a bad investment. So people were people

6:01

were out there looking for other ways

6:03

to get a better return on on

6:05

their cash. So all these sort of things,

6:08

a big confluence of reasons sort

6:10

of produced this, this massive investing boom.

6:12

So people are more interested in it than they ever

6:14

have been before.

6:15

Yeah, and it has turned out to be a

6:17

bit of a rocky ride over the last year

6:19

if, you know, the share market has been all

6:22

over the shop and mostly down since

6:24

I've been buying it. And so it

6:27

is a bumpy ride and I think we want to sort of

6:29

talk people through that and let people

6:31

know it's not there's no guaranteed returns.

6:33

You know, historical performance is not is

6:35

no guarantee. And, you know, if you're someone

6:37

who's saving up for a home and you're parking

6:39

your money in shares and I want to have a really good talk to you.

6:43

So I thought we could just start with some

6:45

super basics, which is like so I

6:47

mean, basically the first thing you need to do if you want invested

6:50

shares is you need to have some cash to invest.

6:52

So you need to spend less than you earn. Pretty

6:55

essential and you got some savings. And then I want

6:57

to remind people of the there

6:59

are lots of different ways that you can save

7:01

and buy assets and invest of

7:03

which shares is one. But we thought we would

7:05

just talk through the sort of the risk spectrum,

7:08

starting with like what is the lowest risk

7:10

thing to do with your money?

7:11

Well, it's cash. You know, as I mentioned before,

7:14

you know, we've seen historically

7:16

over the past few years very, very low returns

7:18

for cash because your interest rate is

7:20

not only what you pay

7:22

on your mortgage and affects your mortgage repayments,

7:25

but it also affects the money you get

7:27

back from the bank if you have cash in your

7:29

bank account. So when that was 8.1%,

7:31

you were getting virtually nothing back.

7:34

We've you had money sitting in your bank account

7:36

or sitting in a term deposit. So cash

7:38

is super safe, but very

7:40

low returns, though they are slowly

7:42

increasing as interest rates are increasing.

7:45

Yeah. And the next thing sort of moving

7:48

slightly up, but not too far is sort

7:50

of fixed interest type products.

7:52

And we're talking here about bonds.

7:54

And bonds can be issued by the governments

7:57

or corporates. And so government

7:59

bonds, you know, you give the government

8:01

your cash and they say, Alright, we'll pay

8:03

you this fixed amount of interest every year and

8:06

at the end we'll give you your money back too

8:08

and they can be traded in secondary markets

8:10

etc. and the price can go up and down.

8:12

But if you just want to give your money to the to

8:14

the government, you know, you get that fixed

8:16

return and the same corporates, you know, companies

8:19

can also issue bonds and

8:21

same sort of arrangement, although you've got a little

8:23

bit more risk of course that the company,

8:25

you know, things go pear shaped and well is

8:27

your money is safe, will it come back in the same

8:30

way that you could be guaranteed with the government? So

8:32

bonds are an option?

8:34

Yep, you can again. Bonds. The first

8:36

time I ever heard about bonds was in the Alvin

8:38

and the Chipmunks movie. For any Alvin and the Chipmunks fans

8:41

out there, that's the first time I ever heard the phrase bonds

8:43

and wonder what they were. So anyway, moving on.

8:45

I just I need.

8:47

To know, did they invest.

8:48

In both of them?

8:48

So there's like a scene, I think in like the early

8:51

in the movie where like the dad of

8:53

the Chipmunks, like, gives them a gift for Christmas

8:55

and he buys them bonds and they really disappoint

8:57

because obviously they'd like kids and they want to toys.

8:59

Anyway, this is we're going way off the rails

9:01

here anyway. Next thing up,

9:03

the sort of the risk scale would be things

9:05

like shares. So these are sort of income

9:07

producing assets they can appreciate in

9:09

value. They can also drop in value. Property

9:12

is also included in this. In this bracket, though,

9:15

we'll probably leave talking about investing in property

9:17

for another podcast's another

9:19

day.

9:19

I mean, the thing with shares is that people always

9:22

focus on the share market going up,

9:24

but actually a lot of the return that you get from

9:26

shares is dividends. So that's

9:28

another component and that's sort of like,

9:30

you know, you have an investment property, you get paid

9:32

rent, you have shares, you

9:34

get paid dividends, and then also, you

9:37

know, the asset valuation can fluctuate

9:39

as well in a way that gets you return. So we'll

9:41

get into a bit more of that. And then so I mean,

9:43

finally up the chain of things like assets

9:45

that you can hold which don't necessarily pay

9:47

you the income like dividends or rent, you

9:50

know, could be commodities and could

9:52

be crypto. And then within that, there's

9:54

a risk spectrum of, you know, like maybe gold

9:56

is perhaps something that's going to be a bit more stable

9:59

in value or that to fluctuate too. But

10:01

you're sort of taking a punt on supply

10:03

and demand, sort of driving demand for that and

10:05

whether you would get a capital appreciation. So

10:08

crypto probably being on the

10:10

out there and scale.

10:12

Absolutely, especially at the moment. One

10:15

other thing to note is that through superannuation,

10:18

we are all shareholders in,

10:20

you know, many, many and

10:22

broad companies and that has

10:24

has various tax benefits in terms of being

10:27

another way to invest in shares indirectly.

10:29

But we'll discuss that in a sort of

10:32

another episode when we talk about what you should think about before

10:34

you invest in shares. But for now,

10:36

I mean, what is it? What

10:38

do you do when you own a share? What does that mean?

10:41

What happens when I when I buy, buy

10:43

my share? What does that represent for me as a person?

10:46

You become a capitalist. You

10:48

become an owner of capital. And

10:51

this is something that I tell myself and I've told

10:53

myself several times, the share market prices

10:55

go up and down, Bring it back to.

10:57

What does it mean when you have purchased a

10:59

share? What does it mean to own a share?

11:01

It means that you are the part owner of

11:04

the company in which you've bought the share.

11:07

So you're in there. Congratulations.

11:09

And so if that company makes some money

11:11

and it decides not to reinvest the money

11:14

in the business and it decides instead to distribute

11:16

some of the profit to its shareholders,

11:19

of which you are now, one, you'll

11:21

get something called a dividend. And

11:23

then if the you know, the value of the shares

11:25

go up over time, because the company is

11:27

performing very well, you can

11:29

sort of sell out your shares perhaps

11:32

for a capital gain versus what you bought

11:34

them for. So there's two elements to returns

11:37

on shares is the dividends and then there's any

11:39

capital appreciation. And

11:41

what we economists have observed

11:44

historically, at least, is that there

11:46

is this something called an equity premium

11:49

puzzle, which is to say that over the last

11:51

century or so, it is true

11:53

that the value of shares have gone up

11:55

by more than what returns would be on

11:58

those safe, secure assets like

12:00

government bonds have. So,

12:02

you know, does it always happen that

12:04

shares go up in value by the 8%

12:07

every year? Absolutely not.

12:10

But over the last century, if you

12:12

averaged it out, you know, we're talking

12:14

about a return that is

12:16

higher because of that element of

12:18

risk as well. But gosh, there's a lot of volatility.

12:21

Yes. And as we're speaking today, I think the market

12:24

has fallen 2.5% this

12:26

morning. So that is an indication of the sort

12:29

of volatility that you kind of experience.

12:31

And like putting my my former retail

12:33

reporter hat on like a bit of an example of this. If we

12:35

look at something like Woolies, which is a household

12:37

name, if we look over the past year, Woolworths,

12:40

the price of its shares have fallen 8%,

12:42

but it's been very volatile during

12:44

that time. And then if you look over the past

12:46

five years, it's actually up 68%

12:49

and then if you look over the past 20 years it's grown

12:51

600 over 600%,

12:54

so that gives you a bit of an idea of like the short term. It's been

12:56

volatile, it's been down, but then if you stretch it out over

12:58

a longer term, it's actually gone up quite a lot. But

13:01

then obviously there's companies that like the opposite of that,

13:03

which like again, putting my retail

13:05

hat on Myer. Much loved department

13:07

store had some struggles it's seen

13:09

some short term gains in its shed share

13:11

price but if you look since it's listed,

13:13

it's actually down very significantly.

13:16

So these are the sort of trials and tribulations

13:18

you've got to deal with if

13:20

you do buy a share and if you do become

13:23

an owner, a part owner of of a company.

13:25

Yeah. And we could talk to perhaps

13:28

the importance of diversification there

13:31

because, you know, owning one single stock, that's

13:33

a risky business. But there are ways that you

13:35

can buy into shares where you're sort

13:37

of purchasing a big bundle

13:39

of lots of different shares, which just spreads

13:42

some of the risk. So let's run through

13:44

some of the ways that you can buy shares, because

13:46

I think people go, Oh, buy shares are better,

13:48

just go buy some, you know, BHP

13:50

or some CBA shares. And

13:52

that's what I'll do. But I mean, that is legitimately

13:55

something you can do. You could get a brokerage

13:57

account and just buy one individual

14:00

share and watch it in

14:02

a very scared fashion.

14:03

You're not going to make much money, but you

14:05

could do it. You could just own the single.

14:07

Share, if.

14:08

You like, want to troll through a lot of company

14:10

reports and if you have a lot of inside information.

14:13

About.

14:13

That particular company, it would be illegal

14:15

to trade on that. But I

14:18

guess the advantage of individual

14:20

shares is this You don't pay management

14:22

fees. You're not paying somebody else to make decisions

14:25

about what to buy. So you don't pay, you

14:27

know, an annual management fee. But

14:29

gosh, it's a lot of risk. So individual

14:31

shares are one option. Another way is

14:34

sort of pooled investment vehicles

14:36

and there's a lots of different types

14:38

of them. But basically you go

14:40

in with other people and you put your

14:42

money altogether and then

14:44

instead of just, you know, having a small amount of money and

14:46

only buying one share, the fund

14:48

can buy a little slice of

14:50

a lot of different shares and or other

14:53

asset classes. So if

14:55

you're looking at the Australian share market,

14:57

the sort of things you're looking at, things

14:59

like listed investment companies

15:01

or even exchange traded management

15:04

funds, and those funds

15:06

will own a little slice of

15:08

a lot of different assets and you can

15:10

purchase a unit in that

15:12

fund and you get instant. Diversification

15:15

and access to all the underlying assets

15:17

in that fund. Now, one of the ones that has

15:19

become really popular in recent years

15:21

are things called exchange traded

15:24

funds or ETFs,

15:26

and not to be confused with EFT.

15:29

I see a lot of novice nifty.

15:31

I've got to get into the different fees.

15:33

Yeah. ETF so exchange

15:35

traded funds. Dom Do you want to have a go

15:37

at explaining what an exchange

15:40

traded fund is?

15:42

Yeah. So it's very, it's sort of

15:44

quite similar.

15:44

Like basically you are

15:47

buying rather

15:49

than an individual share. They are Woolies

15:51

or BHP. You're buying effectively

15:53

a basket of

15:55

shares like a shopping basket full of

15:58

different things. And these

16:00

various ETFs exist that will intentionally

16:03

invest in different shares

16:05

and different sort of things on the market.

16:07

So very popular. There's

16:09

ETFs for Australian shares, there's ETFs

16:12

for international shares. There's specifically

16:14

ETFs for like American tech stocks.

16:17

They've been very popular. There's a lot of

16:19

ethical ETFs which only invest in companies

16:21

that fit into certain parameters or environment,

16:25

social and governance sort of aspects.

16:28

And these like shares,

16:31

like like individual shares, these can be bought

16:33

and sold on the share

16:36

market. So hence why they are called Exchange-traded.

16:39

And they're great because you get immediate diversification.

16:42

So like and you can also then tailor

16:44

them to exactly what you want.

16:47

Again, if you're super into sustainability

16:49

and all that sort of stuff, you can buy some ethical, ethical

16:51

ETFs or if you really want exposure

16:54

to, you know, water

16:56

rights in Texas, I'm sure there's

16:58

an ETF there for that. So, you

17:00

know, there's there's hundreds of thousands of different

17:02

of ETFs. You can you can buy and

17:04

they're very popular and they've got very

17:06

low fees, I believe.

17:08

Yeah. I mean, back in the old days when

17:10

you were doing sort of managed funds, you could be paying

17:13

2 to 3% a

17:15

year of your, you know, view

17:17

of money to the investment

17:20

manager. And. Whereas some

17:22

ETFs, you can pay as low

17:24

a management fee of 0.07%,

17:27

so you're still paying a management fee to the ETF

17:30

creator, the, the company that

17:32

sort of bundles all the assets together

17:34

and manages them and make sure they don't deviate

17:36

too much in value from from

17:38

the underlying assets. So there's still a fee

17:40

payable, but it can be super,

17:42

super small, which

17:44

is great.

17:45

Yeah, because they're not they're not doing they're not making any

17:47

hard decisions about their investments. They're just buying

17:50

these exact stocks that they've told you that they're going to

17:52

buy and that's it. Yeah. So it's very

17:54

simple. But some

17:56

like there's not the ETFs aren't the

17:58

sort of the be all end all for for diversified

18:02

investment opportunities. They do have some

18:04

cons like some aren't located

18:07

in Australia. So you have to think about the tax

18:09

implications of those and

18:12

not all of them are indexed.

18:14

So some of them have sort of riskier

18:17

underlying assets that you also have been directly into

18:19

investing your money in.

18:20

Yeah, the early days ETFs were

18:23

by and large index ETFs,

18:25

so that you were sort of buying, you know,

18:27

a bundle of shares that tracked the

18:29

broad value of like the ASX 200

18:32

or the S&P 500. But

18:34

it has been the case in more recent years

18:36

we've seen this proliferation of more exotic

18:38

things. You know, as you say, you

18:40

know, investing and lots of weird

18:42

things. So an ETF, you know, it had

18:44

that reputation of, oh, it's a very solid

18:47

sort of index strategy, passive investing.

18:49

They're actually actively managed, you know,

18:51

ETFs now where you

18:53

where the underlying assets are going

18:55

up and down depending on how the active investment

18:58

manager. So you have to be a little

19:00

bit bit careful. And one thing to

19:02

look out for is, you know, the big reputable

19:05

sort of names in ETFs

19:07

these days are like Vanguard, iShares

19:10

Betashares. Not to endorse any

19:12

of those companies, but it can.

19:14

Before you do invest in something like an ETF,

19:16

you do need to have a look at, you know, their funds

19:19

under management. Is there a significant amount

19:21

of other people with their money in the fund

19:23

because you don't want, you know, a small upstart that

19:25

might, you know, close in a few years and you have

19:28

to sell your assets when they decide to close

19:30

the fund, you know, so just checking,

19:32

checking the qualifications or, you know,

19:34

who's the money manager who you're really

19:37

entrusting to and making sure that they've got enough size

19:39

and history to be able to

19:41

nail it.

19:42

Hmm.

19:43

So that's just sort of a broad wrap

19:45

up of the world of why

19:47

you buy, invest in shares and some

19:49

various ways to go about it, which I hope

19:51

sort of just brings down to earth

19:53

some of the language involved, particularly

19:56

the know the acronyms evolved of

19:58

ETFs. There's a lot to wrap your head around

20:00

and yet can't end a podcast about

20:03

investing without quoting Warren Buffett.

20:06

Of course you have to so.

20:07

It legally be done.

20:09

It's interesting to note that he was

20:11

sort of asked, Oh, well, he's. Had

20:13

to instruct the trustee of his own estate.

20:15

You know, Warren Buffett is famous for picking

20:17

stocks and value stocks and getting that

20:20

alpha return. But even he

20:22

has said that, you know, for when he's leaving his money

20:24

to his wife, he just wants to whack it

20:26

all in an S&P 500 index

20:28

fund. And and that is,

20:30

you know, a good, solid way to protect

20:32

the value of the money and, you know,

20:35

versus any more active strategy.

20:37

So that's the advice

20:39

of Warren Buffett. Of course,

20:41

everyone needs to do what's right for them.

20:43

Dump. But ETFs are

20:45

definitely something to keep in mind if you

20:48

are really new to share market investing and you

20:50

want to just be able to get that instant diversification

20:52

as you dip your toe in.

20:55

Yeah, ETFs are a good way to sort of

20:57

get a bit of a sense of how sort of

20:59

easy diversification works. And, you

21:01

know, if you're feeling confused and you feel like

21:03

you still don't know everything, don't worry. This

21:06

is the first episode. We've got more coming up.

21:08

We'll talking about all the things you should ask

21:10

yourself before you take the plunge, all the

21:12

things you should know before you actually put

21:14

that money into the share market. And then

21:16

the one after that will be how

21:18

to actually do it. And we'll. We'll do

21:20

it. We'll do it on the podcast with you. Well, not with you, but

21:22

you know, I.

21:23

Won't be on the toilet, I promise.

21:25

Yeah. No.

21:26

Absolutely not. And that'll only

21:28

be about how to find a broker to execute a trade,

21:30

all that sort of stuff. So. So we can really fill

21:33

you in and make you that in investing ways. But

21:35

we've come to the to the twilight hours

21:37

of the podcast. So it's time for

21:40

our listener question, which has come from Arjun

21:42

this week. And he has

21:45

said that he recently refinanced his

21:47

home onto a 30 year variable

21:49

rate loan. And from that

21:51

he makes an additional $500 repayment

21:54

alongside his monthly mortgage repayments. And

21:56

he's been doing that for a couple of years and

21:58

he wants to know if it makes more sense to

22:00

change the terms of his loan so he can match

22:03

what he actually can actually afford to pay

22:05

each month, or if he should just keep

22:07

making his extra repayments.

22:10

And at first glance, I think that he's

22:12

probably fine just making his actually payments.

22:14

I think that's that's a good move. The wisdom

22:16

imparted to me when I got my home loan is that you

22:19

set it at 30 years and you don't fiddle with it too

22:21

much and just sort of just let it let it roll

22:23

out. But what do you think, Jess?

22:24

Yeah, I mean, some people suggest as a savings

22:26

strategy, you know, to pay your home off sooner

22:28

when you refinance, you should, you know, not just

22:31

reset to the 30 year, you should go to the

22:33

27 or 26 or whatever

22:35

you're up to. But I don't think it makes

22:37

too much of a difference. If I just

22:39

wanted to, you know, that would involve refinancing

22:42

to a different loan term, which could be quite

22:44

complicated. You can just as is

22:46

doing, pay it off quicker and then when

22:48

you pay it back, it's done. The the

22:51

30 year term just means that he'll be have

22:53

a lower minimum repayment

22:55

that is required. But he's already

22:57

making excess repayments, in

22:59

which case congratulations. And I would just

23:02

keep going with that strategy.

23:04

Yeah, absolutely. And then you've got a bit of, you know,

23:06

money for those sort of rainy days.

23:08

And, you know, especially if interest rates increase,

23:11

that sort of $500 is a good little buffer for

23:14

for any sort of things that may happen. And

23:16

just to bring us home just once, the money tip

23:18

of the week.

23:19

Yes. So power bills. Ouch. Bottom

23:21

line there. Now, both wanted

23:24

to just remind everyone of my most

23:26

favorite websites in the

23:28

world. Check my browser history. It's true.

23:30

W w w dot energy made

23:32

easy dot gov dot aew. Being

23:35

the government making your life easier

23:37

for everyone except for Victoria because it's a separate

23:39

site. Energy made easy dot

23:41

gov today you go in there, whack a

23:43

few details about your power bill and it spits

23:46

you out a list of the cheapest provider.

23:48

It changes a bit and we're seeing a lot of

23:50

companies coming in and out of the market. So

23:52

you have to be on top of this and you have to be on top

23:54

of your energy provider because we've seen

23:56

some ridiculously high price hikes and

23:58

you don't want to be caught on some of those ridiculously

24:01

high plans. So check that out today. For

24:03

Victorians, there has never been a better time

24:05

to be a Victorian go to compare

24:08

dot energy dot Victoria

24:10

because you get all the same benefits. You got a government

24:12

website and the Victorian Government is paying

24:15

you a $250 energy

24:17

bonus just for going to the site and

24:19

lodging an application for for the

24:21

bonus. So you just get 250 bucks,

24:23

you know, that's been open since one July, you've got

24:25

until June 30 next year to do it, but

24:28

get onto it today. Dom, have you done it?

24:30

Oh, I've done it. I did it as soon as it opened. And

24:32

I tell you what, there's I don't bring

24:34

up the Sydney-melbourne rivalry too much.

24:36

I try to keep things civil on the podcast, but

24:39

I don't see New South Wales getting any any

24:41

free 250 bucks from the government just for

24:43

go in and check out our energy bills. So I'm just going

24:45

to I'm going to put that there as a look a

24:48

little sort of a marker as to why Melbourne

24:50

may be the superior city.

24:51

I feel like you're coming off a period in.

24:52

Which there was never a worst time to be a Victorian.

24:55

Given.

24:55

You know, we won't talk about that. We want to mention.

24:58

The relevant for if you

25:01

can't remember. Okay, so we're talking about a veil

25:03

argument, I think.

25:04

But thanks to everyone for tuning in this week.

25:07

Again, join us next week. We will be continuing this

25:09

theme of share market investing and we'll be talking about everything

25:11

you need to know and think about before. You actually

25:13

do buy a share. So come back, Gina.

25:15

Next week. We'll still be here.

25:17

See you next week.

25:30

Hello and welcome to It All ends up the podcast

25:32

where we chat about money, how to get it, how to spend

25:34

it and how to invest it. I'm money editor

25:36

Dom Powell.

25:37

And I'm senior economics writer Jess Irvine.

25:39

And today we're continuing with the second

25:42

episode of our special three part

25:44

series on share market Investing for

25:46

Beginners. So if you haven't already, we

25:48

do suggest going back and listening to the episode

25:50

before this, which will be labeled episode

25:52

four in your podcast player and

25:55

get up to speed with some of the basics of

25:57

what buying shares really is and

25:59

different ways to go about it to get yourself a diversified

26:02

portfolio.

26:03

Yeah, the Images episode is to give you a checklist

26:05

of things to consider before jumping on the share

26:07

market bandwagon and investing your hard

26:09

earned money in shares directly. It's not an

26:12

exhaustive list, but there certainly

26:14

are some good questions in there to hopefully get you thinking

26:16

like a long term investor.

26:18

Yeah, and we want to make it really clear

26:20

that the information we're about to discuss is

26:22

general in nature, and it doesn't take

26:24

into account your personal financial goals

26:26

and objectives. And you should always do your own

26:28

research and seek some professional advice

26:30

before making any major financial decisions.

26:33

So in our third episode in this series

26:35

were actually both of us going to purchase

26:38

some shares and you'll actually be able to hear on

26:40

that episode what that process involves.

26:42

But we really wanted to spend some time stressing

26:45

that there are things that you need to ask

26:47

yourself and considerations you need

26:49

to take into account before you even decide

26:51

that investing directly is the

26:54

right thing for you, because it's definitely

26:56

not the right thing for everyone. Is it dumb?

26:58

No. And I'm pretty excited because like as

27:00

I mentioned in the prior episode,

27:02

I have actually never properly invested in shares.

27:04

I have been a

27:06

crypto investor for my sins. It

27:08

feels dirty to say, but I used to invest

27:11

in crypto quite seriously. So you know that

27:13

I'm familiar with the markets in that sense,

27:15

but I've never actually sort of sat down

27:18

and thought about building a portfolio. So

27:20

I think this is like, this is a great

27:22

opportunity because you get to see me

27:24

and all my incompetence and just can

27:26

lead me through it with the like the grizzled investor

27:28

she is. So I think the first

27:30

thing that I especially thought about when, when I

27:32

was sort of contemplating this whole process is

27:35

the sort of it's a it seems like a very early, like basic

27:38

and sort of almost silly thing to think about,

27:40

but why do you want

27:42

to invest Like don't just do it because you

27:44

think that you should do it with a goal

27:47

in mind. And we've sort of mentioned this

27:49

a bit about having sort of money goals

27:51

and sort of not not

27:53

explicitly long term, but at least, you

27:55

know, future of planning or

27:58

your investments and all that sort of stuff. So

28:00

there is a little bit of a broad sort

28:02

of question you have to ask yourself about why the

28:05

the inherent why of why you want to actually put

28:07

money into the share market. So, you know, having

28:10

a at least a little rough plan is is probably

28:12

a good thing to to get before

28:14

you actually take the plunge.

28:16

Yeah. My why is that I'm hoping

28:18

that I can amass some assets outside

28:20

of super which I might be able

28:22

to grow such to be big enough before

28:25

the age of 60 that I could retire a little

28:27

bit early and live off not just, you

28:29

know, the earnings from that, but actually sell down some

28:31

of the capital. So I'm 41, so

28:33

I've I've actually only got a sort of 19

28:35

years left in the market there in 50.

28:37

And if I want to actually do the early retirement,

28:40

I'd say so that's my

28:42

sort of a goal at least. What's your

28:45

thoughts with investing in shares?

28:48

It seems like fun and I haven't done it before.

28:50

But I

28:52

mean.

28:53

I'm 26, so I'm just like, Yeah,

28:55

cool. That sounds like something to do. So.

28:58

You know, Well, that's good.

28:59

I think we've got some more questions.

29:01

But looking through different ends of the spectrum here.

29:04

So, you know, we could we're really covering

29:06

all bases.

29:07

Well, I'm.

29:07

Glad we're doing this episode to maybe force

29:09

you to think through some more elements of.

29:11

Your strategy.

29:12

And then possibly give.

29:13

Us that.

29:14

Number two question to ask yourself

29:16

is this is just sort of a knock out one

29:19

before you put money buying directly in

29:21

shares. Do you have any high interest

29:23

debts, like high interest credit cards or

29:25

personal loans? So do you have either of

29:27

those things?

29:29

I mean, does a mortgage account.

29:31

A mortgage does not count in

29:33

my mind, but it's really like a

29:35

credit card. You're paying an average interest

29:37

rate of about 20% or something.

29:39

You're going to be hard pressed to find, you

29:41

know, a share that you can buy that's going to guarantee

29:44

you 20% return, which is what

29:46

you will get if you park your dollar instead

29:48

in paying off that credit card balance. So that's

29:51

really the one that I want people

29:53

to think about is the credit cards and Hick's

29:55

I mean is another issue. People

29:58

have different opinions on that, but again, that it's

30:00

a relatively low interest rate that you're talking

30:02

about compared to those really punitive

30:04

10% plus interest rates that I really would

30:06

want anyone to clear before they

30:08

thought about purchasing shares.

30:10

All right. Well, that's great because I don't have any headaches.

30:13

I've only got a mortgage. So tick. Check

30:15

this. Second question. Number

30:17

three is thinking about the

30:20

amount of cash that you've got to

30:22

spend on things that, like might be unexpected.

30:24

So imagine. Sees upcoming

30:27

bills like all of these things have to take

30:29

priority before investing in things like

30:31

shares because, you know, obviously you need to

30:33

be able to pay rent or pay

30:35

your water bill or eat or, you know,

30:38

pay for an unexpected hospital visit or something like that.

30:40

So that another sort of almost

30:43

obvious sort of thing. But it really must take precedence

30:45

over any of this sort of stuff. Yeah.

30:47

And I just caution people to think through

30:49

the myriad of things like needing new

30:51

tires for your car or, you know, these

30:53

sort of little, you know, this sort of unexpected

30:56

but expected things. So you don't want to have put

30:58

your money into your shares and then you have

31:00

to pull it out again because you've got to buy

31:02

a new tyres like you should not be running your

31:04

self that close to the wind. People

31:06

talk about having an emergency fund of maybe

31:08

3 to 6 months of living expenses

31:11

so that if you do have, you know, one of those larger events

31:13

like you lose your job, can you feed

31:15

yourself for long enough because you don't want to lose your

31:17

job At the same time the share market

31:19

has crashed and then you're sort of selling

31:22

out your shares at a loss. You know that a really

31:24

bad situation to be in. So do

31:26

you have an emergency fund?

31:28

I do.

31:29

You do?

31:30

There we go.

31:30

Excellent. And I guess, you know, it's

31:33

important, whatever it is that lets

31:35

you sleep at night. So I have

31:37

about six months of basic

31:40

living expenses in there, which

31:42

is it's about $36,000 in cash

31:44

that I have sitting there. Yeah.

31:45

And I don't have anything new.

31:47

Yeah.

31:47

So, I mean, I like to run it pretty conservative,

31:50

you know? And, you know, there's no back up for

31:52

me. Really. I need to have that money

31:55

in place so I don't invest anything

31:58

that eats into that for me.

32:00

I have a few thousand dollars. So again,

32:03

different different ends of the.

32:04

Spectrum, I guess.

32:05

I mean, you don't have any dependents. I've got a son.

32:07

So maybe there's a few more sort of things

32:10

that I have to to consider.

32:12

Yeah, I think. I think so. Now,

32:14

number four is Jess's

32:17

favourite topic, which is putting

32:19

extra money into your super. So, Jess, why

32:21

would someone want to do that instead of possibly buying

32:23

it?

32:23

Because you're going to be old one day. We

32:27

will all be over. We will not all be

32:29

over 60, but we hope to be. And

32:31

the government has a system in place

32:33

where you pay ultra low tax

32:36

on putting your money into super. You're only going to pay

32:38

$0.15 on the dollar compared to

32:40

your marginal income tax rate, which might

32:42

be as high as $0.47 in the dollar

32:44

if you're on the higher tax thresholds.

32:46

And you know, so there is a great way the best

32:49

one of the best ways to make money is to avoid paying

32:51

tax. And if you are happy to

32:53

park your money away for that

32:55

sort of longer term horizon, you're

32:57

going to have a bigger cost base. You know, you're going

33:00

to have more money up front because you pay less tax

33:02

on it to invest, and that will grow

33:04

over time. So people forget that we are all

33:06

shareholders basically through our superannuation

33:08

accounts. And you

33:10

can, as an alternative to parking money

33:12

in a brokerage and buying, you know, shares

33:15

directly, you can just be paying money into

33:17

your super account. And for people

33:19

to know that you can contribute

33:22

up to $27,500

33:25

each year into your super and get all those

33:27

great low tax rates that includes

33:29

your employer's contributions. But

33:31

you know that that is some headroom to play

33:34

in. It can be a good tax dodge if you don't

33:36

want the money back. And also just to flag

33:38

for people that you can also use previous

33:40

year's unused caps so that you might

33:42

have some extra headway there

33:45

for previous years that can be rolled over. And that's

33:47

new. And not everyone knows that. But

33:49

yes, super. I mean, it is it is

33:51

a way of buying shares. You just can't and

33:53

you lock the way, the money, you can't access it until

33:56

you're old.

33:56

I feel like we need a podcast episode where justice

33:59

talks about how great it is to just put extra money

34:01

into super. And you just you just told the whole time

34:03

and I'm just like.

34:04

You do it. Do it. But having said that, you

34:06

know, it's your money. And people, particularly

34:08

at the younger end of the spectrum and if you want

34:10

to retire early, you know, you're entitled

34:12

to hold some money outside of super. The tax breaks

34:15

won't be as great. But yeah, you might

34:17

just prefer to live your life, you know,

34:19

having some of that money before you are 60. So that's,

34:22

you know, something to consider if you if you are going down

34:24

the path of direct share ownership, which, you know, we're

34:26

both doing so. Hmm. Also

34:28

Poké Nola's DOS, which is my favorite

34:31

financial. Why not both?

34:33

You can do a bit of both, you know, put half in half

34:36

somewhere else. You know, it doesn't have to all go in the share

34:38

market. So speaking of

34:40

getting old, question number five

34:42

to ask yourself is what

34:44

is your investment time horizon?

34:47

So, you know, you've got

34:49

a bit longer on the clock.

34:50

Dom That's

34:52

more than just a little bit.

34:55

But people, you know, you know, how long

34:57

should you be thinking? Do you think

35:00

a minimum that you'd want to be parking your money away

35:03

in the share market before you'd want to get it back

35:05

to your.

35:06

I would say five years? Like

35:08

that's probably when I'm thinking about investing shares.

35:10

I'm thinking, Well, I'm just going to put it here and like leave

35:13

it for five years and see what happens.

35:15

Right? Like again,

35:17

for my sins, I was a crypto investor and

35:19

that is such a different mindset. You would buy

35:21

something one day and then the next day you probably

35:24

sell it because over that. Course of time,

35:26

it would have doubled in value. So like

35:28

me getting into this, into the traditional

35:30

traditional share share market is

35:33

like a complete change in sort of perspective

35:35

for me because like it's thinking about, well, I'm not

35:37

going to touch this for like five,

35:39

maybe ten years. So I

35:41

think a really longer term sort

35:43

of investment time horizon is really

35:45

needed for this because, you know, share markets

35:48

can underperform for quite a long time. And look

35:50

at the ASX at the moment. We've

35:52

had 12 months, is it nearly 12 months

35:54

of of decline? So, you know, that's

35:56

and that's just a little taste of it really.

35:58

Yeah. And there can be periods for

36:00

as long as a decade where, you know,

36:02

you're getting below average returns. And I,

36:04

I'm a worrier. So I listen to a

36:06

lot of negative naysayers

36:08

and there's any number of people who will tell

36:11

you that we've now come off a period

36:13

where shares have been historically highly

36:15

valued and we're in a super bubble

36:17

which could unwind for years to come.

36:19

So I like to be conservative

36:22

and think I'm kissing goodbye to my money

36:24

for at least ten years, because I think that's

36:26

but in my mind, I'm comfortable with

36:28

believing that, you know, over a ten

36:31

year horizon should generate a positive

36:33

return. But I want to know that I've got a lot

36:35

of leeway to play with. If we are sort

36:37

of in a situation where it's going to take longer

36:39

for the share market to recover.

36:42

Number six on the list of things to think about is

36:44

plans for your home ownership,

36:47

because securing getting

36:49

yourself a place to live in without having to pay rent

36:51

is one of the best ways you can

36:54

sort of minimize your costs and set yourself

36:56

up for the future. So

36:58

I think if you're sitting on, you know,

37:01

let's say a home deposit

37:03

ish size of amount of money, it's

37:05

probably better to think about that rather than

37:07

putting that money into the share market.

37:10

But, you know, that obviously depends

37:12

on your circumstances. Maybe you really think you're

37:14

not going to buy a home for the next five years and maybe

37:16

putting money into shares isn't such a bad option.

37:18

But of course it varies on

37:20

where you are in your life.

37:21

Yeah, there's a bit of a debate about should you invest

37:23

your your home deposit

37:25

in shares if you're maybe not looking to

37:28

buy for the 5 to 10 year horizon. But

37:30

if you're looking to buy in

37:32

the next sort of five years, I really

37:34

question whether that's where you should have

37:36

your money and if you should have your money in

37:38

more conservative cash options

37:41

that you can, you know, act. If you see something,

37:43

you can act on the property market as

37:45

needs be. And one thing to flag

37:47

for people is, again, super.

37:50

No, just if you want to leave it alone,

37:52

if you want a little.

37:53

Bit of both, you want to own a home, you

37:55

can look at the government's first home super

37:58

saver scheme where you can park, you can make

38:00

sort of voluntary contributions into the super

38:02

account, get the tax breaks and then put

38:04

out when it comes time to purchase

38:06

your property. And in that way you

38:09

are getting yourself a little bit of access to

38:11

share market returns because the super is ultimately

38:13

invested in some proportion in shares.

38:15

So that's worth thinking. But yes, I

38:17

also agree that, you know, people

38:19

get really mean. Younger people are understandably

38:22

so frustrated with the housing market

38:25

and so worried or,

38:27

you know, just throwing up your hands and saying, I

38:29

will never be able to afford a property, I'll

38:31

just put my money in shares. I can

38:33

understand that feeling, but really have

38:35

a hard think about saving

38:38

for for that first home deposit,

38:41

making some sacrifices. Go back and listen

38:43

to our episode, number one, because

38:46

as a way of securing your financial future,

38:48

it's it's really something. Don't just dismiss

38:50

it. See what compromises you could make

38:52

to to get yourself that debt shelter that you're

38:54

going to need when you're old.

38:56

Absolutely.

38:58

So question number seven is to

39:00

think whether you have any other short

39:02

to medium term savings goals. So maybe

39:04

it's not your first home deposit, but

39:06

you might have other things you kind

39:08

of want to do in the next couple of years, which

39:10

again, would fall short of that sort of 5 to 10

39:12

year investment horizon. Are

39:15

you going to need to replace your car?

39:17

Are you going to get married soon?

39:20

Is there a big overseas trip you want

39:22

to do? Is there maybe some home

39:24

renovations? So thinking about your sort of short

39:26

to medium term consumption, things

39:29

that you might want to do just

39:31

thinking through that so that you don't go, Oh, well,

39:33

one day I will sell out the shares a

39:35

little bit earlier or at a time. You know,

39:37

it's about planning ahead and thinking it's

39:39

it's okay to spend some money now and

39:42

you don't want to be locking away the money

39:44

for the short term in having

39:46

bought your shares again and

39:48

selling out if it's a bad time.

39:50

So just thinking, you know, what are some other goals

39:52

aside from home ownership that you might want

39:54

to just put the cash, you know, and savings

39:57

accounts are coming back up? I did notice

39:59

there's like a Bank of Queensland

40:03

at Cole, you know, online

40:05

saving. It's now paying 4%

40:07

if you are aged between 15

40:09

and 34 years old. So you

40:11

know there is now money to be made

40:13

from putting your money in the bank, which

40:15

wasn't the case for a couple of years. But

40:18

that is something to consider.

40:20

Well, look, I'm not planning on getting married

40:22

anytime soon.

40:24

You never know.

40:25

Whenever I'll, I'll look. It'll be it would surprise

40:27

us both, Jess, if I got married in the next

40:29

12 months. Right. But

40:32

don't need a new car. I do

40:34

have a couple of overseas trips planned, so I think

40:36

this is a tick as well. I think I'm alright. I don't have anything

40:39

massive to do to save up for the

40:42

the eighth sort of thing is, is another sort of quite

40:44

a broad sort of concept that you do not really need

40:47

to think about when investing in shares, which is your

40:49

appetite for risk, because as we've

40:51

sort of said a couple of times now, the

40:53

share markets do not always go up,

40:55

and especially individual

40:58

shares. If you go down the path of buying

41:00

individual shares in individual companies

41:02

don't always go up either. You can

41:04

see 20 to 40%

41:06

drops in value. And if that

41:08

happens, you've got to think about how you're

41:10

going to react to that, because if you're going

41:12

to go, Oh, no, time

41:14

to sell, you know, it's dropped 40%,

41:17

it'll never recover sort of thing. Maybe

41:20

investing in shares or maybe investing

41:22

in specific companies is not really for

41:24

you. Maybe you should think about some other sort of investment options. So

41:27

and also think about how compulsively you're going

41:30

to check the balance of

41:32

your portfolio. It's like

41:34

it can get very addictive to open up your

41:36

share trading app and go, you know, shares are down

41:38

3% today. Oh, it's up 5% today.

41:40

Like, you know, that's. Almost useless

41:43

unless you want to day trade, which you

41:45

probably shouldn't do.

41:46

Yeah, there's. I mean, there's two costs to consider.

41:48

There's the cost of actually, you might make a panicky

41:50

decision and lose some money because you've sold out

41:52

at at inopportune time. But there's

41:55

also just like a mental cost of,

41:57

you know, I think it's only human

41:59

to sort of look at those balances, see

42:01

the red ticks, the red numbers,

42:04

you know, with the negative side. I mean,

42:06

I have experienced this having started

42:08

investing over the last year. You know, prices

42:11

have come off. I am in

42:13

the red on paper and I

42:15

am a long term investor and I want to hold that for the long

42:17

term. But I still have to admit there's a psychic

42:19

cost there. You

42:22

know, we're humans. We are loss averse.

42:24

We fear losses more than we value gains.

42:26

You know, Can you stomach that? Is

42:28

it just going to make your life unpleasant

42:30

to see those red numbers?

42:33

And that will depend, you know, on who you are,

42:35

what other stresses you've got in your life. So

42:38

number nine is about really what

42:40

are you going to actually invest in?

42:42

Do you have an investment strategy

42:44

and particularly one that will give you

42:46

diversification. So in

42:50

the next episode, we are both going to

42:52

be purchasing shares that we've decided.

42:54

So I'm so excited to.

42:55

Look at and we can reveal that they're

42:58

not going to be single stock investments. So

43:00

both of us, you know, we see the value in

43:02

diversification and instant diversification.

43:05

You know, we've talked a lot in the last episode

43:07

as well about exchange traded funds

43:09

and in particular ETFs, which track

43:12

a broader index. So like the ASX

43:14

200 or the S&P 500,

43:17

you can sort of from day dot be purchasing

43:19

something which gives you access to

43:22

a range of different companies,

43:24

not just one. And you know

43:26

that this is a classic lesson for

43:28

investors. Be diversified

43:30

across asset classes and also within

43:33

shares across geographies

43:35

and across industries so

43:38

that something we can't give financial

43:40

advice. But I'm more than happy to let people

43:43

know that diversification is a good thing and

43:45

there are ways to buy shares, you know, through those index

43:47

ETFs, which which do give you that instant

43:49

diversification, which, if you're a

43:51

beginner investor, would probably

43:54

help smooth your way into the market.

43:56

Absolutely. I think it's I don't think it's particularly controversial

43:59

to say that diversification is good. Like it's

44:01

just you know, it is in many

44:03

aspects of life, you know, not just shares. And

44:06

the last question to ask yourself is how much

44:08

you'll be investing and how regularly

44:11

this is sort of getting down to the real nuts and bolts of

44:13

it. But like, you've got to think about, you

44:16

know, your total pool of money that you wish, willing

44:18

to invest. How you going to

44:20

split that up or if you're going to split it up amongst different

44:22

sort of assets and think

44:24

about, you know, if you're going to be buying

44:27

and selling over a period of time like

44:29

dollar cost averaging, which is quite a common strategy

44:31

when it comes to investing in in shares,

44:33

or if you're just going to go all in one

44:35

day, get it done, leave it sort of thing. So

44:38

these are all sort of things you have to sort of ask yourself before you

44:40

actually press the button and buy the shares. And

44:42

especially when it comes to things like fees,

44:45

certain assets and certain investment offerings

44:47

will have different fees that are higher

44:49

or lower. And that is something

44:51

really important to think about alongside

44:54

your brokerage fees, which, you know, can range

44:56

from being as low as $3 I think.

44:58

We get to these days just.

44:59

Yes, as a 3.1. Yep.

45:01

Wow. Cheapest chips. So,

45:04

you know, these are all these sort

45:06

of like really practical things you need to think about

45:08

before you actually purchase a share or

45:11

multiple. Yeah.

45:12

And we'll get into this more in the next episode.

45:14

But, you know, there traditionally is a sort of a $500

45:17

minimum investment with a lot

45:19

of brokers. So if you haven't got the $500,

45:22

you're looking at micro investing sites, which

45:24

we will talk about, and they've got ongoing

45:26

fees rather than, you know, upfront

45:28

fees. So there's a bit to think about, which I

45:30

think we should flesh out further in episode

45:33

number three when we actually get around to

45:36

to making the decisions about how to

45:38

actually put our money in the market.

45:40

Yep. And look, this is not an exhaustive

45:43

list. You know, there's just sort of some prompts

45:45

to help you think about this once

45:47

once you decide to go down

45:50

the path of buying shares. But yeah,

45:52

as as just as mentioned, we next week, we

45:54

will be buying shares on the podcast

45:56

live. Not that I think you can really

45:58

do a live podcast, but it will be

46:00

live to us, which is enough. And

46:03

we'll do talking about the whole thing. Like

46:05

literally what buttons do you press?

46:08

What is a market order versus like a limit order?

46:11

What brokers should you choose? So many questions

46:13

and we'll answer most

46:15

of them, probably.

46:16

Some of them, some of them.

46:18

Pertinent good ones. Yeah.

46:20

And speaking of questions, we'll

46:23

listen to question.

46:23

Excellent. We love listener questions. Please

46:25

do keep emailing them to us at

46:27

it all adds up at Nine.com.au

46:30

today. And this week's question

46:32

is from Belinda. She says that

46:34

she and her husband are new to Australia

46:36

and looking for some tips on how to build

46:38

up a good credit score rating.

46:42

She wants to know what kind of purchases

46:44

would help build a good credit score. And

46:46

what do banks look at when someone

46:48

wants to buy a home in terms of the credit score?

46:51

So what what do you think?

46:53

It's interesting because I was

46:56

worried about this when I before I bought my home, too.

46:58

And I thought the credit scores of these huge

47:00

deals, you really have to worry about them, like, oh,

47:02

God, like I got no credit score and we've borrowed anything.

47:05

And the bank did not ask me once

47:07

about it. It was never even mentioned.

47:09

And for all my friends who have

47:12

also bought property, it has never been mentioned for them,

47:14

ever. Like the credit score just never comes up. So

47:16

I think there is this perception that

47:18

credit scores are really big and important things,

47:20

but I think that might have been a bit of an American

47:22

import where it is actually quite

47:24

a big deal over there. And it does change how you

47:26

what and how you can borrow from a bank where

47:28

here it doesn't really matter that much. So.

47:32

I think whilst building a credit score is a good thing to

47:34

do, it's probably

47:36

not that much of a big

47:38

deal, especially if you're looking to borrow. But Jess, I'm

47:40

not sure if you have any other thoughts on this.

47:42

Yeah, and I mean people sort of think us

47:44

in an American context. Should I go out

47:46

and get a credit card just so that I can

47:48

where, you know, I've got I can demonstrate

47:50

that I could pay a credit card, but actually that can work

47:52

against you in an Australian context, because

47:55

if you've got a credit card with a $10,000

47:57

limit on it, say they

47:59

assume that you have that maxed out and

48:01

you're paying that off. So it actually reduces how much

48:03

you can borrow. So that

48:06

is another little twist. If you're looking at buying property

48:08

in Australia, you know, the credit score,

48:10

I think they do do a credit check on

48:13

you, but it's it's not sort of as important

48:15

as it is in some other jurisdictions.

48:18

And just take us home with your budget tip

48:20

of the week, which I believe this

48:22

week involves picking up trash from the side of the road.

48:25

It does. It's it's the wonderful

48:27

world of street bounty. And

48:29

I just want everyone to know that I furnished

48:32

most of my house with stuff

48:34

off the street. And I want a Nobel Prize

48:36

that for everyone. When I first bought

48:38

my my house I was addicted

48:40

to. I would literally look up

48:43

the website for the local council areas

48:45

covering some of Sydney's most salubrious

48:47

suburbs. I would figure out which

48:49

local areas were having their sort of

48:51

regular household clean up day. That's when you could

48:54

put all your rubbish out on the streets, you know,

48:56

furniture. And I would get in my car

48:58

and I would go pick up that good stuff and put

49:00

it in my car and put it in my home because rich

49:02

people throw out some good stuff.

49:04

So this is.

49:05

True. So that's just it. I just and

49:07

I mean, if it if it's not off the street Facebook

49:09

marketplace, you can pick up secondhand

49:12

furniture for free. So

49:14

that that's just my top tip. Get get

49:16

rubbish off the streets and finish your home with.

49:18

Well, look.

49:18

To be fair. One of my favourite things in my home, which I get

49:20

complimented on every time someone comes over, is

49:23

these very two very large giraffe

49:25

wooden giraffe statues, which I found outside

49:28

my apartment block one day during

49:30

lockdown. And I bought them because I thought they were funny.

49:32

And I just haven't been able to get rid of them because I can't bring

49:35

myself to to get rid of them. So stray

49:37

batty.

49:38

It's also it's recycling.

49:40

It's saving stuff from landfill. And

49:42

I'll also confess, my couch is

49:44

from a neighbour who was walking it out to the

49:46

street on hard rubbish collection day. And I said,

49:48

Just put that in my house, please. And

49:51

then I sold my other

49:53

couch on Facebook. Marketplace.

49:54

Money, money, money. Alright, well everyone, thanks

49:56

for listening in this week and joining us.

49:59

Tune in this time next week for our final

50:01

episode in Share Market Investing, where we will

50:03

be buying shares on podcast though.

50:05

What fun it is going to be fun. Is it a

50:07

first? I think it will probably be a first for podcasting.

50:09

Let's say.

50:10

It is. See you next.

50:11

Week, then. Next week.

50:25

Hello and welcome to It All Adds

50:27

Up the podcast where we chat about money, how

50:30

to get it, how to spend it and how to invest

50:32

it. I'm senior economics writer Jess

50:35

Irvine.

50:35

And I'm money an added on PAL. And this is the grand

50:38

finale, not the one that was last weekend.

50:40

But of our three part series

50:42

on investing in shares for beginners. And if you haven't

50:45

before already listening to this episode, I would highly recommend

50:47

going back and listening to episodes four and

50:49

five in your podcast player, where

50:51

we cover sort of the basics of share investing

50:54

and some really important questions. So ask yourself before

50:56

you actually decide to invest in

50:58

shares.

50:59

Yes, because I think this has got to be fun. We're going to

51:01

buy shares live on air, although

51:03

we're not sure if you can be live on and.

51:05

It's live in spirit.

51:08

But yes, so which is going to be

51:11

fun. But everybody know that we have done

51:13

our due diligence on that and made some

51:15

really important questions and answered them

51:17

on, you know, whether we should be investing at all.

51:19

But I think there is value for people

51:22

in just being able to hear what it's

51:24

like or what steps you

51:26

have to actually go through to execute share

51:29

trade, you know, like which I remember

51:31

when I did it for the first time, I was, you know,

51:33

in conniptions because I'm black. Which button

51:35

do I press? Do I do a limit

51:37

order or a market order? And the amount

51:39

of time I spent sort of in analysis paralysis

51:42

and trying to choose, you know, which is the best broker,

51:44

etc.. So I'm hoping we can

51:46

talk you through some of that and just sort of hold

51:48

your hand if you have decided that it's

51:50

right for you that you want to buy shares directly,

51:52

you know, you can hear what it's like when someone does it.

51:55

And look, we're not going to tell you which says specifically,

51:57

of course, because you should always do

52:00

your own research and we don't want to get arrested

52:02

by ask. I don't want Joe Longo busting in the door

52:04

behind me with a pair of handcuffs. We

52:06

are not qualified financial advisors. We

52:09

are just financial journalists, which are very

52:11

different things. But we are sort of happy

52:13

to share that we're both buying into exchange

52:16

traded funds, which sort of investing

52:18

in a bundle of shares. So we're

52:20

not going to give you any hot stock tips. So don't

52:23

try and copycat us, please.

52:25

Yeah, definitely don't copycat us. And this

52:27

is a really good time to stress that the information

52:29

we're about to discuss is general in nature

52:31

and doesn't take into account your personal financial

52:34

goals and objectives. And you should always do your own research

52:36

and seek professional advice before making any

52:39

major financial decisions.

52:41

Yeah, I just we are both very well educated

52:43

and experienced. Financial journalist.

52:45

Yes, we are. Congratulations to.

52:47

Us. I didn't realize we.

52:48

Were, but apparently we are. Really.

52:49

I wrote it in the script, so it must be.

52:51

It must be true. But

52:53

even so, we've

52:55

both sort of found the process of buying shares

52:58

a bit tricky to navigate. There is a lot of things to consider.

53:00

Yeah, and we're going to walk through the sort of

53:02

basic steps. We've got about

53:05

six steps of how you actually go

53:08

move through the process. And I remember when I did

53:10

it for the first time, I actually had a

53:12

morningstar, an analyst who's

53:14

like way overqualified to be doing this, but

53:16

I was just like texting him or on the phone

53:18

guy.

53:18

I don't know what a market order is.

53:20

And it was very kind to talk me

53:22

through the step. Number one is

53:24

you have to choose a broker.

53:26

If you want to buy shares, you

53:29

have to get in touch with a broker.

53:31

And how do you choose one?

53:33

Well, there are so many different ones, and I think like a lot of the

53:35

ones that people will be familiar with are things like

53:38

the ones that provided by the big banks. So things like

53:40

CommSec, which is very popular like these, you

53:42

know, linked to the big four

53:44

banks, they give you a pathway into

53:46

the share market. Often you can use the bank

53:49

balance, all that sort of stuff. But you know,

53:51

we're in the OR in the 21st century, you know,

53:53

you can do anything on your phone these days and there are

53:55

a myriad of various different online

53:57

share trading apps which allow you

53:59

to buy and sell shares. So they're

54:02

sort of, I guess, what would you call them,

54:04

micro.

54:05

Investing sort of sites.

54:07

Well, I consider the micro investing sites

54:10

are more the ones where you're buying in with this

54:12

sort of $50 or so. And

54:14

I think we can namedrop a few, but we're

54:16

not recommending any of them. So like

54:19

your you're micro investing sites

54:21

of things like Rays, CommSec, Pocket

54:23

Spaceship Voyager shares these acorns.

54:26

And so they're actually the micro investing

54:28

in my mind is you sort of paying that

54:30

you know the smaller amounts and paying

54:33

like a monthly fee too to

54:35

be participating on that platform rather

54:37

than paying the brokerage fee

54:40

all the time. So if you've got

54:42

smaller sums, you may be looking at those

54:44

sorts of sites. If you've got sort of over

54:47

the traditional $500 that you need

54:49

to purchase, you know, into a share

54:52

for the first time, you're talking about the sort

54:54

of bigger brokers. And if we want

54:56

to namedrop a few of those, You've mentioned

54:58

CommSec, there's NAB trade, you know, the major

55:00

banks mostly all have a platform

55:02

and you're thinking stake superhero

55:05

Pearler self Well CMC

55:07

markets think markets eToro. If

55:09

I say the first off I'm not endorsing any of them but

55:13

definitely you have to have a bit

55:15

of research. And one thing to note about those

55:18

type of brokers is some of them operate on

55:20

a custodial model, which means

55:22

you're sort of they will own the shares

55:24

for you. You're definitely

55:27

still the beneficial owner of it, but they're

55:29

sort of pooled. And other brokers will be what's

55:31

called chess sponsored. So you'll be issued

55:33

what's also known as a hidden number

55:35

from the ASX and those shares

55:37

will be held sort of identifiable directly

55:40

to you. So that's something to have a

55:42

little think about when you're choosing a broker.

55:44

Yeah, and I think it's good to not get too

55:46

bogged down in that sort of stuff. You know,

55:48

just have a Google look at some of the lists

55:50

of the cheapest ones, because obviously

55:52

that is a factor when you're buying shares,

55:55

you don't want to pay massive amounts of money in brokerage

55:57

fees and other sort of fees. So you

56:00

can get as low as $3 for brokerage fees in the market

56:02

at the moment, which is pretty cheap. And

56:05

some places often do like free

56:07

brokerage to you buying us shares or free

56:09

brokerage if it's, you know, Sunday afternoon

56:11

or something like that. Like, you know, there's different sort of

56:13

times that they'll give you like deals and all that sort

56:15

of stuff. So these are things to keep

56:17

in mind when you are buying

56:19

shares. And then once you've sort of picked

56:22

your your broker, your second

56:24

step is to set up an account, which

56:26

is kind of like setting up an account on on any sort

56:28

of online platform, really, except involves a little more paperwork.

56:31

Yeah.

56:31

And in the olden days, you used to have to like

56:33

faxing a copy of your driver's licence and

56:35

all the rest, and that would take days. Now,

56:38

there are some brokers where you can set up pretty much

56:40

in an instant. There are some brokers

56:42

where it takes maybe a day or so because

56:45

they do want you to scan your license and send

56:47

it in. You know, there is a bit of email back

56:49

and forth to set up the account. So yeah,

56:52

you have to you have to set up an account with a broker

56:54

to be able to buy.

56:55

Shares and.

56:56

You'll need a few things on hand, like a tax

56:58

file number and all that sort of stuff

57:00

like that. You will need a little bit of documentation.

57:02

But you know, I think it only took me maybe

57:05

a day or two to set up my account. So

57:08

really, it's not that hard any

57:10

more.

57:10

Yep. And step number three, once

57:13

you've got the account all set up is you have to

57:15

put money into your account. So you have to

57:17

transfer money across

57:19

from your savings account to actually

57:21

be in your share brokerage

57:24

account ready to deploy. I mean,

57:26

and that's just a matter of doing a BPAY. But

57:28

it can sort of, you know, you have to allow time

57:30

for that money to get across. So as you can

57:32

see, it's not as easy as just sort of pressing by,

57:35

although that is the next step.

57:36

That is the next step. But just on that, I actually

57:39

my platform, which I use, allows me to pay

57:41

ID money, which is,

57:43

you know, sort of very new age.

57:45

But it came across almost instantly

57:48

like, you know. So there are ways

57:50

that you can get money in very quickly.

57:52

But I don't think I don't think all services offer

57:54

that.

57:54

Yeah, mine is like an Osco transfer,

57:57

which is pretty, pretty quick. So but I

57:59

have used other brokerage accounts where

58:01

it did take a little bit longer than that.

58:03

And then step number four is

58:05

opening up the app and placing

58:07

a buy order. And just I believe we're

58:09

going to do that right now.

58:11

So we've just run through a few of the steps

58:14

that we're about to do to give people

58:16

sort of some lay of the land, do you think?

58:17

Yes, I think that's probably that probably makes the most

58:20

sense. The number one thing to think about is

58:22

when the market opens, the market does not run at

58:24

all times. You cannot buy,

58:27

you know, shares on

58:29

the toilet at 8 p.m. at night. You

58:31

have to think about when the market is actually

58:33

running.

58:34

You have to wait until 10:00

58:36

in the morning and then you can buy on the toilet. Although

58:39

I do sort of say to people, sometimes the

58:42

market pricing can be a little bit, you know, more

58:45

erratic just as the market opens

58:47

or closes. So the hours a 10

58:49

a.m. to 4 p.m. and I sort of like

58:51

to leave a little bit of leeway. So you're sort of more avoiding

58:54

those open and closed times. When

58:57

you first go in and you check the the

58:59

app and you press buy, it's

59:01

going to show you something called

59:04

a buy, sell spread or the bid ask

59:06

spread and that. Is the gap between

59:08

the sort of the highest price that

59:11

buyers are wanting to pay and the lowest

59:14

price that sellers are willing to accept

59:16

and is usually a bit of a gap there. You know,

59:18

of a couple of cents or whatever, and

59:20

that's called the buy sell spread. And it pays

59:23

to make sure that that spread isn't too

59:25

big like so there isn't something weird. The

59:28

market isn't particularly liquid for that particular

59:30

asset or something because you

59:32

know that that's just something to check.

59:35

You'll also be presented with a number of different options

59:37

when it comes to how you actually want to

59:39

buy the shares. And commonly you'll

59:41

see an option for a limit

59:43

order or a market order.

59:45

And a market order

59:47

is where you just tell

59:50

the platform to buy the shares at

59:52

the whatever the best market price they can get for

59:54

you at that moment. Then when you press buy a

59:56

limit order lets you set a sort

59:58

of a maximum that you're willing to pay for the shares.

1:00:00

So, you know, say you, you know, you refuse

1:00:02

to buy these shares unless they're $8.

1:00:05

You can put in an order to say once they hit $8,

1:00:07

I will buy them then.

1:00:09

Yeah. And I need to confess at this point that

1:00:11

I did use to put limit orders in and I became

1:00:13

incredibly obsessed with not paying

1:00:16

like $0.01 above the buy

1:00:18

sell spread. So I was always putting

1:00:20

in offers which were sort of outside

1:00:22

of the spread and sort of below and sort of

1:00:24

just hoping that the market would move that that

1:00:27

such that there would be a seller that would accept my low

1:00:29

offer and sometimes I would put in

1:00:31

an order and it wouldn't clear

1:00:33

because I, you know, the market had moved the

1:00:35

other way and I was just torturing

1:00:37

myself for a couple of cents.

1:00:40

And I have I now tend to I'll just

1:00:42

pop in and do a market order. As long as

1:00:44

I've checked that the market is nice and liquid and that

1:00:46

buy, sell spread isn't isn't to

1:00:48

it, something weird isn't happening. I

1:00:50

just pop in a market order because I was absolutely

1:00:53

sending myself crazy over a few cents.

1:00:54

Yeah. And you know, it's no no

1:00:56

sense crying over

1:00:59

a few cents.

1:01:01

A little bit of comedy for you, but.

1:01:03

You also need to think about how many shares you're going to actually buy.

1:01:06

So divide the amount of money

1:01:08

you going to spend by the current share price and

1:01:10

also factor in a few things like brokerage cost

1:01:12

and any other fees.

1:01:14

Yep. And if you are doing a limit order, it

1:01:16

will. One of the last steps is it usually asks you

1:01:18

to set an expiration date for your order so you're not

1:01:20

waiting around all day for that share to execute.

1:01:23

Or you can say at the end of the day, just don't worry

1:01:25

about it if it if it doesn't clear.

1:01:28

So those are the steps. So I'm now opening

1:01:30

my phone and I am putting in my password

1:01:33

for my shared trading app. I'm going to go buy

1:01:35

some shares. And I'm just

1:01:37

doing a quick search for the ETF,

1:01:39

which I'm looking to buy, and I've found

1:01:41

it, so I've opened it up having

1:01:44

a look at the the current trading

1:01:46

price and its volume and

1:01:49

its performance over the past month. Always a good thing to

1:01:51

have a quick look at just to make sure that you know, you're not buying

1:01:53

at a real peak or a real trough or

1:01:55

anything like that. And there's

1:01:57

a big green buy button down the bottom.

1:02:01

I'm going to hit that big green buy button.

1:02:04

I know. They make it so easy.

1:02:06

So I'm going to put in the amount I'm going to invest. I'm not going wild

1:02:08

today. I'm only going to invest $100.

1:02:11

So put that in it.

1:02:13

Asked me to review it. I'm doing a market

1:02:15

order. So it's just whatever the best

1:02:17

price is, it's available. And

1:02:20

then there you go. It's done.

1:02:23

And it processes and and easy, easy, done.

1:02:25

You are.

1:02:25

So quick. Dave. Okay, I'm going to alter

1:02:28

my style, which is to get really nervous.

1:02:31

I'm worried about all the money I'm about

1:02:33

to, you know, transform into ownership

1:02:36

of a a share, which is fantastic,

1:02:38

but it's also my cash going in. Okay, so what?

1:02:40

Okay, I'm going to open my share

1:02:42

app. Here we go.

1:02:45

And it's presenting me with information about my

1:02:47

full balance. I know what I'm going to

1:02:49

buy. It's an index ETF

1:02:51

that I've bought before, so I'm just going to click

1:02:54

on that.

1:02:56

Where we go.

1:02:58

Okay. And it's saying again

1:03:01

it green button by okay.

1:03:04

So I'm rolling in cash and I've got

1:03:06

$1,000 I'm going to invest.

1:03:09

So I now need to just have a look at what's

1:03:12

the bid and the ask price. And

1:03:14

I'll just just I've got my calculator

1:03:17

out to divide 1000

1:03:19

divided by that

1:03:22

price to know how many shares

1:03:24

I can get. Okay,

1:03:27

So it's telling me I can buy about

1:03:30

ten units. I'm

1:03:32

so I'm really close. Other amount to maybe

1:03:35

it's 11, but it would depend what price

1:03:37

that goes through. So I'm gonna I'm going to go for gold to try

1:03:39

and buy 11 units in it. So I punch

1:03:41

in shares. Number 11.

1:03:46

And then I'm changing it from

1:03:48

a limit order to a market

1:03:50

order. And

1:03:52

I'm saying so 11 shares at market,

1:03:55

it's giving me an estimate of how much

1:03:57

that would cost, which is above. So I'm gonna have to knock it down

1:03:59

to 1010

1:04:03

at market. Max

1:04:06

amount would be that amount. Yes. It expires

1:04:09

saying end of the day it doesn't matter. It's a market order. And

1:04:11

then I just take some deep breaths. Done.

1:04:13

You can purchase. I believe in you.

1:04:18

And it says review. Okay, review the buy.

1:04:21

And that buy sell spreads nice and tight.

1:04:24

I there's my brokerage cost. Okay.

1:04:26

So I go and I've got a submit button. And

1:04:29

I'm going to press that now. Sending

1:04:34

done. Order placed.

1:04:35

And then you.

1:04:36

Go to go.

1:04:37

And that's that's it's is easy Is that.

1:04:39

Did we make that sound like.

1:04:40

Fun. Yeah it is fun.

1:04:43

As I still find it, I

1:04:45

get a bit nerve wracking, although I'm down with it.

1:04:47

I know what I'm doing, you know?

1:04:48

You cool with it?

1:04:50

Yeah. And then, I mean, now what I love to do,

1:04:52

I don't know if you would need to do this for, but I like

1:04:54

to review my contract notes, so I actually

1:04:57

get the PDF report of, of

1:04:59

my contract note, which is my purchase

1:05:01

order and I printed out and I have a binder

1:05:03

at home where I have a whole bunch and I keep every

1:05:06

contract. Note that for everything I've ever bought.

1:05:08

Yeah, I mean, I was not going to do any of that. I'm

1:05:11

just going to probably just leave it and and think

1:05:13

about it another time. But, you know,

1:05:15

if you want to be as as diligent

1:05:18

as Jess is, you can do that too.

1:05:20

Another thing I do like those. I use

1:05:22

a website called Share Site, which offers

1:05:24

a free sort of share tracking and you can enter your

1:05:27

holdings and if you have under ten different

1:05:29

holdings, you can access

1:05:31

that for free. So I do immediately

1:05:33

I printed out and then I go enter it

1:05:35

as a trade on my share site account,

1:05:38

and then it sort of gives me a record. So

1:05:40

if you do make purchases across multiple

1:05:43

brokerage apps, you know, you can get a complete

1:05:45

picture of your holdings.

1:05:47

And then the last step is to close your

1:05:49

app and then never think about it again. Well,

1:05:51

not never again, but just trying

1:05:53

to try to put it out of your mind. Ignore the fact

1:05:55

that you just you just spent $1,000 on some shares

1:05:58

and just, you know, go and go

1:06:00

and make a cup of tea and think about anything

1:06:03

else because don't need to obsessively

1:06:05

check it because it's not going to be healthy

1:06:07

to do that.

1:06:08

Yes. Take it for me as someone who has obsessively

1:06:10

checked it for for way too long. But

1:06:12

I'm I'm getting better. And I just know up

1:06:15

or down, you know, what I've done is I've

1:06:17

got myself a toehold, a foothold in

1:06:19

an asset that, you know, may increase

1:06:21

in value over time. I hope it does.

1:06:23

It will probably pay me distributions or dividends,

1:06:26

you know, and I can look forward to that. And I you

1:06:28

know, just keeping an eye on the bigger picture

1:06:30

of what you're doing. You know, I think with the

1:06:32

apps, it can sort of make it feel like a game

1:06:34

or a bit like not real as

1:06:37

real money we've just said goodbye to and

1:06:39

hopefully we'll leave it there for enough

1:06:42

time that it will prove to be

1:06:44

a good investment for us. Still, I wish you

1:06:46

well.

1:06:47

And I wish you well too. Just and you go over on

1:06:49

that. There it is. There's at the end of our sort

1:06:51

of three part episode on how to buy

1:06:54

shares and how to get involved in the share market. I hope

1:06:56

you found them interesting. You know, it was

1:06:58

interesting for us to talk about it and interesting to

1:07:00

buy shares live again.

1:07:02

Live Not really live. We think it's live. And

1:07:06

as always, you know, we're rounding off

1:07:08

the end of this episode with a listener

1:07:10

question, I believe.

1:07:11

Yes. So our listener question is from

1:07:14

Lloyd, who knew we were going to be

1:07:16

talking about shares and he was wondering

1:07:18

if we're going to talk about international

1:07:20

investments in the podcast. So

1:07:22

maybe we could just talk quickly about international

1:07:25

having an international element to your portfolio.

1:07:28

Yeah, I mean, as we mentioned a couple of times, diversification

1:07:30

is really important and if you only

1:07:32

invest in Australian shares, you're going to get a bit of a limited

1:07:34

exposure to different things. Like Australia

1:07:38

is really sort of overweight as an economy

1:07:40

to things like mining and resources

1:07:42

and all that sort of stuff, because obviously that's what we make a lot of

1:07:45

our money out of. So I

1:07:47

think international shares can be really good to give you that little

1:07:49

bit of extra edge on sort of thing, especially like

1:07:51

tech stocks and stuff like that, because we don't have a huge number

1:07:53

of tech stocks on the local

1:07:55

market. So yeah, things like that. International

1:07:58

shares are really important.

1:07:59

Yeah, and it's really easy these days to

1:08:02

get yourself access to that. There's any number

1:08:04

of sort of international shares, ETFs.

1:08:06

You know, if you want to pick a particular market, you

1:08:08

can do that or you can get ones that sort of buy you

1:08:10

a slice of everything across lots of

1:08:12

different countries as well.

1:08:15

And just your budget tip of the week, I believe, is

1:08:17

style related.

1:08:19

It is. You look amazing, Don. Thank

1:08:22

you. I'm

1:08:24

not sure about myself. This is one

1:08:26

thing I feel like I'm kind of talking to my

1:08:28

lady friends here, which is that we do

1:08:30

spend quite a lot of money on hair treatments

1:08:32

and haircuts and, you know, power

1:08:35

to you if you value that. But one thing

1:08:37

that I have really saved and I've got more money

1:08:39

to invest in shares is because I don't pay a

1:08:41

hairdresser anymore. I just well,

1:08:43

I did once try to cut my own hair

1:08:45

and I don't actually recommend that. But I now

1:08:47

have a friend who I've equipped with a pair of $10

1:08:50

scissors and she comes over and she gives

1:08:52

me a hair trim for

1:08:54

free every couple of weeks

1:08:57

and it's totally free. And I just like to have

1:08:59

a word. Yes. As I say to my

1:09:01

lady friends, you know, don't

1:09:04

get caught up in the beauty gap,

1:09:07

which or the beauty penalty where

1:09:09

you're paying a lot of money to sort of

1:09:12

shore up your appearances and try to boost your self-esteem.

1:09:14

You're beautiful as you are. You look amazing.

1:09:16

Get a friend to cut your hair. And if you if you haven't

1:09:19

got any friends with steady hands, you can

1:09:21

look out for tough training

1:09:23

days. You know, there's always people needing to experiment

1:09:26

on you or even search Facebook for

1:09:28

hair model groups in your local area,

1:09:30

which where you can connect with sort of trainee hairdressers

1:09:33

so you can save a lot of cash that way.

1:09:35

Yeah, I I've been told multiple

1:09:37

times by barbers, which I view as an insult, to be

1:09:40

quite honest, that I have a very difficult head of hair to

1:09:42

cut. Something to do with having a double

1:09:44

crown makes it really like hard to style

1:09:46

anyway. So as much as I

1:09:48

really like that idea, I think I'm probably going to stick with my

1:09:51

with my local hairdresser.

1:09:52

Okay. You might have special needs.

1:09:54

I do have a specialty and a customer ahead.

1:09:55

Of had a pound.

1:09:57

But that does bring us to the end of the episode

1:09:59

for another week. Keep sending in those listener

1:10:01

questions. We love to read and we love to read them out. We

1:10:03

love to answer them via email address.

1:10:05

Is it all adds up At 9:00

1:10:08

today, you and next week will

1:10:10

be returning to normal programming with our regular

1:10:12

run of episodes.

1:10:13

Excellent. See you next week, Dom. That was fun.

1:10:15

Thanks, Jess. This

1:10:20

episode of It All Adds Up was produced by Chee

1:10:22

Wong. The information discussed

1:10:24

is general in nature and does not take into account

1:10:26

your personal financial situation, goals

1:10:28

or objectives. You should always do your own

1:10:30

research or get professional advice before making

1:10:32

any major financial decisions. If

1:10:35

you like today's episode, hit follow a new podcast

1:10:37

app. Leave a review and recommend it to all your

1:10:39

friends. You can also submit your listener questions

1:10:41

in text or audio form at.

1:10:44

It all adds up at 9:00 PM today.

1:10:47

Thanks for listening.