Latest / The Curve / TCW27: Why Vic is popping the champagne (and Soph isn't drinking it)! The fastest growing app ever, and China the outlier.

Transcript

TCW27: Why Vic is popping the champagne (and Soph isn't drinking it)! The fastest growing app ever, and China the outlier. · The Curve

• 0:00
  Hi and welcome to the Curve Weekly. The podcast that keeps you up to date with all the money,
• 0:06
  business and stock market tea. Everyone should experience for us at least once in their lives
• 0:10
  and Annie shouldn't miss out just because she can't afford it. Help me, I'm poor.
• 0:15
  So we are in a new studio this week because Louis, our audio engineer, is like a holiday.
• 0:22
  So I just take a holiday and shouldn't let us know. So how do you hear?
• 0:25
  No, I don't know. How did he have a break in the middle of summer?
• 0:29
  We had to carry giant lights halfway across London and for anyone that spent time on the side of the
• 0:34
  world, it's not just like nipping down to the shops down the road. It's quite a journey.
• 0:39
  It is quite a journey. Yes.
• 0:41
  We made it. We're actually broadcasting out of the Soho House today, which is in Soho.
• 0:45
  It's actually, I do love the series. It's kind of like the K-road of...
• 0:49
  Don't you think? Like the K-road of all credits?
• 0:51
  More like Boogie. Yeah. Like a bit more. Yeah.
• 0:54
  So today we are talking about something that Vic thinks that I'm going to get really excited about.
• 0:59
  And I want you to pop over the champagne. I'm excited.
• 1:02
  I've got a coffee and some water. Is that going to do?
• 1:06
  Yeah. Because like how exciting is it?
• 1:07
  Well, for me, probably more exciting.
• 1:10
  But that's a lot of things in the finance world.
• 1:11
  I thought you were present for your birthday. It's something that you like.
• 1:14
  My sister's always doing that. Got me the stress. I was like, that doesn't even fit me.
• 1:18
  Or shoes that aren't even my size.
• 1:20
  Just like, oh, that sucks. I guess I'll have to wear them.
• 1:24
  No, very close idea.
• 1:26
  No, but pop open the champagne because New Zealand interest rates last week are on hold.
• 1:35
  That was not the reception. No, love it.
• 1:37
  No, I'm just saying it's all on hold essentially means they're not going up.
• 1:40
  They're not going down. They're on hold. They're staying where they are. They're staying put.
• 1:44
  And there was commentary saying that they would come down next year.
• 1:48
  Which is such good news for anyone who owns a house,
• 1:51
  anyone who has a mortgage who is thinking, oh my gosh, oh my gosh, please don't keep going up.
• 1:56
  I can't afford these mortgage repayments, which is me.
• 1:59
  Yes, it means that there is lighter than the tunnel.
• 2:02
  There is, you're at the top of the hill and you're about to come down.
• 2:06
  Whatever analogy you want to use, there is an end in sight.
• 2:10
  So we've climbed Everest. We have climbed, yes,
• 2:14
  Kilimanjaroes. We've climbed all the mountains and we're about to make our descent
• 2:19
  when it comes to interest rates. We're just pausing at the top.
• 2:22
  Oh, so it's a lunch, it's a picnic.
• 2:23
  Yeah, yeah, yeah, we'll probably get frostbite and run out of oxygen while we're in line.
• 2:28
  Sorry. So we're not on the other woods yet.
• 2:31
  Not on the woods. But it's looking positive.
• 2:32
  Yes, yeah.
• 2:33
  And if things keep going as they are, so if inflation keeps coming down,
• 2:36
  then that's really good news. That means that we will be able to reduce interest rates or
• 2:41
  have interest rates for quicker than we do.
• 2:44
  So really good news if you own a mortgage or own a house because it does mean that house prices
• 2:49
  will possibly start going back up as well.
• 2:51
  They've fallen about 23% since we started increasing interest rates.
• 2:56
  So really, really good news for people that own housing.
• 2:59
  Does that mean if it's no longer a buyers market?
• 3:02
  Because the idea of everything a buyers market is essentially when it's
• 3:05
  a lot of impressive drops.
• 3:06
  Yeah, and it is a buyers market, but the thing you've also got to think about is
• 3:10
  is the interest rates and the mortgage rates and then what you have to pay on your mortgage.
• 3:14
  So yes, it's a buyers market, but the reason house prices are fallen is because
• 3:17
  people can't afford to get mortgages.
• 3:20
  So as those interest rates come down, the mortgage rates come down,
• 3:24
  people, more people are able to borrow debts and therefore buy houses and that leads to house prices
• 3:29
  going back up.
• 3:29
  So if I had the money right now, it would be clever to be trying to buy.
• 3:34
  Yeah, yeah.
• 3:35
  Damn.
• 3:35
  Yeah, but you've also got to be able to finance that mortgage with, like,
• 3:40
  seems to be the best time if you can see the end inside in terms of the interest rates coming down.
• 3:45
  Yeah, it's also getting a mortgage.
• 3:47
  Like a lot of banks, you know, you need to hire new funds.
• 3:49
  No, I'm not lending me money.
• 3:50
  There's no way.
• 3:51
  I would.
• 3:52
  No, you wouldn't.
• 3:53
  I think too many.
• 3:54
  Because I know that the curves killing it.
• 3:58
  So I'm like,
• 4:00
  you know, you're second in your, your, your laugh turns into this like,
• 4:03
  he even cough.
• 4:04
  That's what's coming in.
• 4:05
  Sorry.
• 4:06
  Yes, but anyway, so really, really good news.
• 4:08
  We're at a 14 year high in terms of interest rates in New Zealand,
• 4:11
  which is bananas.
• 4:13
  What about the rest of the world?
• 4:14
  Like, how does that compare?
• 4:16
  Like over here, house prices have dropped.
• 4:18
  I'm going to, well, a lot of countries didn't have interest rates this high
• 4:22
  until before the GFC, which was like 2008.
• 4:25
  So that's kind of when we last had interest rates this high.
• 4:28
  And then the world turned to shit.
• 4:30
  So all countries reduced their interest rates to help fuel the economy.
• 4:34
  And then they know, yeah.
• 4:35
  So the fact that we are now possibly coming down
• 4:39
  is really, really, really good news.
• 4:40
  OK, yeah.
• 4:41
  It's not like champagne moment.
• 4:43
  I'll be honest with you.
• 4:43
  I have literally probably about a three minute window before I lose some stuff
• 4:47
  before I talk about interest rates and inflation.
• 4:49
  So three minutes done.
• 4:50
  On to the next one, we're talking about our board.
• 4:54
  One thing I want to update people on is threads.
• 4:58
  The new social media app.
• 4:59
  Yes.
• 5:00
  So interesting.
• 5:01
  Can I just tell you, I started off with the bank day one.
• 5:04
  I probably did about 10 threads.
• 5:05
  I just was like putting some thoughts out there.
• 5:08
  And now I've lost a room in term.
• 5:09
  Have you still been going?
• 5:10
  Oh, not as much as I was.
• 5:11
  Yeah, there was a lot of hype in hysteria.
• 5:13
  I'm like, oh my gosh, I'm going to be in trouble.
• 5:15
  I want to be into it.
• 5:16
  Just don't think my chat's that interesting.
• 5:18
  Like, who wants to hear all my internal thoughts?
• 5:21
  I feel like people don't care.
• 5:22
  No, I don't.
• 5:23
  Yeah, please don't.
• 5:24
  No, just going for it.
• 5:26
  It's just some numbers, which was staggering for me
• 5:29
  when I was doing this research, was just how quickly threads
• 5:33
  took off.
• 5:34
  So there's this 100 million user, like milestone, right?
• 5:38
  And so Twitter took five years and six months
• 5:41
  to get 100 million users.
• 5:43
  Facebook took four years and seven months.
• 5:45
  Instagram took two years and five months.
• 5:48
  Chat GPT, which previously held the record
• 5:51
  for the fastest download web, or the most people,
• 5:54
  that took less than three months for Chat GPT
• 5:56
  to reach a million users.
• 5:58
  Everyone were all talking about it when it came out.
• 6:00
  And threads, it took four days to reach 100 million users,
• 6:05
  which is just like, do you think that's because if we think
• 6:08
  about when Facebook first came out,
• 6:10
  people didn't jump on the bandwagon for a while.
• 6:12
  And over time, we've become much more
• 6:14
  of a technology-based society.
• 6:16
  Yep.
• 6:16
  And so it's easier and makes more sense
• 6:18
  for people to jump on the.
• 6:19
  And I think the ease of just linking your Instagram,
• 6:23
  so it's through to your threads.
• 6:24
  You just tapped a few buttons in you with your.
• 6:26
  And also, so many more people have smartphones now
• 6:30
  that then they did back in the day when Facebook
• 6:33
  was first around.
• 6:34
  But it just shows that that is crazy.
• 6:37
  And yeah, I think it's quite,
• 6:40
  it's going to be quite interesting how this plays out
• 6:42
  with Twitter and what goes on there.
• 6:44
  I mean, I'm intrigued.
• 6:46
  I think threads is going to be around for a while.
• 6:47
  I feel like it will probably be integrated
• 6:49
  more into Instagram.
• 6:50
  The threads, there might be some way of linking what's in your,
• 6:53
  because I do feel a little bit like
• 6:56
  when we put conversations out on Instagram,
• 6:58
  whether it's who pays for an engagement ring,
• 7:00
  or I don't know, how much should you pay
• 7:03
  for a wedding present, or whatever it is.
• 7:05
  There doesn't feel like there is a platform
• 7:07
  for people to just share their thoughts,
• 7:08
  unless it's a reply to stories or whatever.
• 7:10
  And I think that's annoying because it means
• 7:12
  that we're the only ones that see everyone's replies.
• 7:14
  Like, if I was to share 300 replies that come in,
• 7:16
  can you imagine everyone would unfollow us?
• 7:19
  Also, wow, that would be a lot of work for you.
• 7:22
  Yeah.
• 7:22
  So I think it's quite cool to have a public forum
• 7:24
  where people couldn't just converse openly and see
• 7:27
  that it's almost like Reddit or something.
• 7:29
  Yeah, yeah, true.
• 7:30
  Yeah, I just also feel that like,
• 7:32
  Twitter's so old school.
• 7:35
  Do you know what I mean?
• 7:35
  Yeah, like Twitter's absolutely dead.
• 7:38
  And threads, this won't be what threads is.
• 7:40
  I don't reckon in like a couple years' time.
• 7:42
  They'll adapt it and everything
• 7:42
  like they did with Instagram and move at the times.
• 7:45
  And it feels like a safe place already.
• 7:46
  Like, you know, and I don't know if that's going to change.
• 7:48
  But Twitter and a lot of other platforms,
• 7:52
  there's a lot of canceling, a lot of negative stuff.
• 7:55
  Yeah.
• 7:55
  But that's kind of why you have to censor it
• 7:57
  because you get people in there that like posting
• 8:00
  live streaming murders and stuff.
• 8:02
  You know, like it's quite hectic.
• 8:04
  And so you have to censor it.
• 8:07
  It's like the Christchurch mosque
• 8:09
  masquer was live streamed.
• 8:10
  Was it?
• 8:10
  Yeah.
• 8:11
  I forgot about that.
• 8:13
  And then there was this big campaign of like
• 8:14
  why the hell did that?
• 8:16
  And so you still got all these algorithms to prevent it.
• 8:18
  But that's kind of why you have to have censoring it.
• 8:21
  And so also so people don't bully others and like all that.
• 8:23
  But so there is a middle ground between
• 8:25
  free to respect and censoring.
• 8:27
  The cable memorial thing is just so bizarre to me.
• 8:30
  Like I don't.
• 8:30
  I mean, what was that message?
• 8:32
  Someone sent something through.
• 8:33
  It was so funny.
• 8:34
  That screenshot of it.
• 8:35
  It sent it to me last night.
• 8:36
  And it was like, hi, Vic.
• 8:38
  If you could just, what did they say?
• 8:39
  It was so funny.
• 8:40
  And I'm even conscious of it now.
• 8:42
  And I actually, so I hardly ever go through
• 8:46
  and listen to our podcast because I record them with you.
• 8:48
  And so you know, there's no need to go back and listen.
• 8:52
  And yesterday I was on the tube and I was listening
• 8:55
  to so many episodes.
• 8:56
  And I was like, oh my god, I do.
• 8:57
  And I go, what is it?
• 9:01
  That's what I like.
• 9:01
  I'll say something.
• 9:02
  I'm going to go, do you?
• 9:04
  I haven't even noticed.
• 9:05
  And yeah, this lady was like, Vic,
• 9:07
  can you please stop the slurping sound.
• 9:09
  It's really irritating.
• 9:10
  And I was like, oh my gosh.
• 9:12
  Oh my gosh, I said, I do.
• 9:14
  I do, yeah.
• 9:15
  Well, I noticed it.
• 9:16
  Oh my gosh.
• 9:18
  But you know when you notice something
• 9:19
  and then you just, all you want to do is do it.
• 9:21
  Yeah, yeah, yeah.
• 9:22
  And someone seems to don't say, I'm, and you're like, um.
• 9:24
  At least like she's seen it in a nice way.
• 9:26
  But some people on cable warriors status is just like,
• 9:29
  oh, but it's what, you know, get a lot of criticism.
• 9:32
  Not a lot, I'll try not to.
• 9:33
  Yeah, yeah.
• 9:34
  I'll be like, I'm like, I'm gonna slurp.
• 9:35
  Oh, I'll be like, slurping.
• 9:36
  Oh, is that it?
• 9:38
  You do that.
• 9:39
  Oh, I think it's my thinking guy.
• 9:43
  It's because I told you she can't do so many things.
• 9:45
  She's not gonna say, you know, um, like, so she's just like,
• 9:48
  what can my crutch be?
• 9:49
  I'll just suck this alive.
• 9:50
  I'm just really, really attractive.
• 9:53
  Anyway, okay, back to finance.
• 9:57
  Oh my gosh, no, I'm just so conscious of it.
• 9:59
  Okay, sorry, sorry.
• 10:00
  Yeah, so some economic news.
• 10:04
  I can't be able to run a flation again.
• 10:05
  But anyway, this is quite an interesting one and it's in China.
• 10:08
  And what we're seeing in China is that they might be
• 10:11
  about to experience deflation.
• 10:13
  And we haven't really talked about this before.
• 10:15
  I haven't met her that way.
• 10:16
  Yeah, so the opposite of inflation is deflation.
• 10:20
  So if we're in an inflationary environment,
• 10:23
  that means prices are going up.
• 10:24
  They're increasing year and year and year.
• 10:26
  And deflation is the opposite of that.
• 10:29
  So it's when prices decrease year and year and year.
• 10:32
  And that's really bad.
• 10:33
  So the sweet spot is that two to three percent.
• 10:36
  Because it encourages people to spend, but not too much.
• 10:38
  So it helps fuel an economy, but not too much.
• 10:42
  Deflation is really bad because it's a stifled spending.
• 10:47
  There's no point in buying something today.
• 10:48
  It's going to be cheaper tomorrow.
• 10:49
  It's like a boxing day sale.
• 10:50
  Yeah, it's like buying the East Brazil.
• 10:52
  That next tomorrow, everything's going to be on sale.
• 10:54
  And then the next day, it's going to be even cheaper.
• 10:55
  And the next day, so why would you spend it all?
• 10:58
  So it's actually a really difficult situation
• 11:02
  for the government to get a country out of
• 11:04
  because they have to reduce interest rates
• 11:07
  to encourage people to spend
• 11:09
  or do other stimulus like tax cuts.
• 11:12
  Yeah, it's a really, really difficult situation
• 11:16
  to get a country out of.
• 11:18
  So China's not there yet, but they could nearly be,
• 11:21
  because their inflation is at zero.
• 11:23
  So you want inflation to be the sweet spot
• 11:25
  of two to three percent for a healthy economy.
• 11:28
  So it's just something to watch.
• 11:30
  And yeah, it's all come about
• 11:32
  because China wasn't locked down for, gosh.
• 11:36
  17 pounds, felt like that.
• 11:38
  Yeah, so, but anyway, it's just quite interesting
• 11:41
  because they're the only country really
• 11:43
  that's dropping interest rates.
• 11:45
  All the other countries are increasing them
• 11:47
  to try and reduce their inflation.
• 11:49
  I find it kind of crazy that one of the biggest economies
• 11:51
  in the world would be doing something so different
• 11:55
  to what the, you know, the, yeah,
• 11:58
  like to think over here in the UK,
• 11:59
  Australia, New Zealand, everywhere else,
• 12:02
  the states, arising interest rates.
• 12:04
  And this is why every country is so different.
• 12:06
  Yes, we all transact with each other in some extent.
• 12:09
  Do you think so?
• 12:10
  Sorry, my hair's like, am I neck is so sweaty?
• 12:12
  No, I'm not.
• 12:13
  No, I'm continuous.
• 12:16
  Back to the regular program.
• 12:21
  Anyway, yes.
• 12:22
  And then another thing I noticed this week,
• 12:25
  which I feel like this is a whole conversation.
• 12:29
  And we've only got another five minutes.
• 12:32
  But anyway, I just think this is a whole
• 12:33
  another conversation.
• 12:34
  But I started doing some digging.
• 12:36
  So I really loved tennis.
• 12:38
  And I wanted to go to Wimbledon while I was here.
• 12:40
  And I did everything in my heart to try
• 12:42
  to find Wimbledon tickets.
• 12:43
  And we do find to the point,
• 12:45
  oh, you, they're super expensive.
• 12:47
  So you can buy them.
• 12:48
  How much are they?
• 12:49
  So this is the conversation that I'm going to get into.
• 12:53
  But depends on, you know, obviously,
• 12:54
  the finals are way more expensive than the,
• 12:57
  the games at the early part of the pre-heats.
• 13:00
  What do they call it?
• 13:01
  Yeah, he's the season.
• 13:02
  No, no, no, no, no.
• 13:02
  Not a tournament, sorry.
• 13:05
  So early on, I'm a tournament, they're way cheaper
• 13:06
  because there's everyone.
• 13:07
  And then they obviously get down to the finals
• 13:09
  and they way more expensive.
• 13:10
  But you can also camp out overnight.
• 13:13
  There's part of the one with the experience.
• 13:14
  Oh, if you bought a tent.
• 13:15
  Yeah, so you buy a tent and you camp out
• 13:17
  and then you get tickets.
• 13:18
  They issue tickets to the public.
• 13:20
  So that's kind of to try and get everyone
• 13:22
  to buy tickets.
• 13:22
  Surely you're in that desperate to go.
• 13:23
  No, we weren't going to camp out.
• 13:26
  But anyway, there was American Express pre-sales.
• 13:28
  And anyway, when I started looking,
• 13:30
  I was like, hang on a second.
• 13:33
  Why are the ticket prices for men?
• 13:36
  And for the men's finals, men's doubles, men's singles,
• 13:39
  four times more expensive than the women's?
• 13:42
  And I was like, oh my gosh, I was like, that's ridiculous.
• 13:45
  And this is on the resale side,
• 13:47
  because ticket sellout, I just went in parts.
• 13:49
  And then I did some googling and I found out
• 13:52
  that last year was the first year
• 13:55
  that Wimbledon actually sold tickets
• 13:58
  at the same price for the men's and the women's tennis.
• 14:01
  So for 30 years, that had cheaper tickets for women
• 14:04
  and more expensive tickets for men.
• 14:06
  And I was like, oh my gosh.
• 14:07
  And then I kind of opened my thoughts into this happens
• 14:10
  in every sport.
• 14:12
  It's crazy that the viewership of men's sport,
• 14:17
  the ticket prices for men's sport,
• 14:18
  everything is a lot more expensive for men
• 14:21
  than it is for women.
• 14:22
  And so, yeah, it was just real.
• 14:24
  I annoyed would you be if you were a tennis player
• 14:27
  and your prize money was less, tickets were less,
• 14:31
  audience was less, less money was pumped into coaching
• 14:34
  and every year you pay less for sponsorships
• 14:36
  and door slants, yeah.
• 14:37
  It's just wild that in 2022, that was the first year
• 14:41
  that Wimbledon was like, you know what?
• 14:43
  Maybe we shouldn't be charging cheaper tickets
• 14:46
  for women and more expensive tickets for men.
• 14:47
  Maybe they should be on par, it's like,
• 14:49
  that should have happened years ago
• 14:51
  or not even been a thing.
• 14:52
  Yeah, it's crazy.
• 14:53
  But yeah, it was just opened up.
• 14:55
  How much were a ticket to Wimbledon for a few?
• 14:59
  The final was about 15,000 pounds.
• 15:01
  You were going to go?
• 15:02
  No, absolutely not.
• 15:03
  No, the price to hate.
• 15:04
  Yeah, what would it hate be?
• 15:06
  Oh, I don't know.
• 15:07
  Like, I think they're about 30 pounds if you can.
• 15:10
  Oh, but you have to queue up from 4,000.
• 15:13
  But it just has a whole conversation of why do...
• 15:17
  And I'm guilty of this myself.
• 15:18
  You know, I'd want to go see Roger Federer
• 15:20
  and...
• 15:21
  Would you?
• 15:22
  No, but in terms of, like, if I got a choice
• 15:25
  because I know more men, male tennis players
• 15:28
  because they've been broadcast in front of me,
• 15:31
  they've got a bigger audience.
• 15:32
  You know, that's who I would prefer to go and see.
• 15:35
  See, that's so interesting in itself.
• 15:37
  Exactly, and it's like, that's where the demand is.
• 15:39
  And majority of people want to go and see probably men's rugby
• 15:43
  and, you know, men's...
• 15:45
  I don't think that's part of the problem.
• 15:47
  Yeah, I don't know, men's sports.
• 15:50
  Men's basketball, men's tennis, men's rugby
• 15:55
  versus women's sports.
• 15:57
  They're equivalent sports.
• 15:58
  And so, but why do they get a bigger audience?
• 16:00
  It's because they've got bigger advertising,
• 16:02
  bigger sponsorships, bigger budgets
• 16:03
  that they've spent on them to be spent on training them
• 16:07
  to be better.
• 16:08
  So it's like, this is conscious cycle
• 16:10
  that needs to be broken in order to get audiences,
• 16:14
  equal audiences, therefore, equal ticket prices,
• 16:16
  therefore, equal money that goes back into training.
• 16:19
  You know, it's just like, it's a whole conversation
• 16:21
  that I think we should do a podcast.
• 16:23
  I'd love to interview some sports people.
• 16:25
  So I'd love to hear, I don't know enough about it,
• 16:28
  but I'd love to hear their rationale
• 16:29
  and how they feel.
• 16:30
  And totally.
• 16:31
  I think that's so interesting.
• 16:32
  What's like, if we look, we've got the rugby world cup
• 16:34
  coming up in France in September, October.
• 16:37
  If there was as much money being put into that rugby world cup
• 16:40
  as there wasn't to the women's rugby world cup,
• 16:43
  you know, like, would you see an increase in audience numbers
• 16:47
  and increasing spend and ticket prices and all of that,
• 16:50
  but because they don't have that money spent on them,
• 16:52
  you know, what I guess, what's the factor?
• 16:54
  Oh, okay, see, that's too interesting,
• 16:56
  because it is, it's just what we see, right?
• 16:57
  Totally, yeah.
• 16:58
  Oh, yeah, that's interesting.
• 17:00
  But I don't know how you stop that cycle or...
• 17:03
  They just has to be equal marketing budget.
• 17:06
  Yeah, but then that comes from ticket sales
• 17:08
  and comes from people demanding to go to these events,
• 17:10
  to watch them.
• 17:12
  So it's like, this whole, yeah, and their businesses, you know,
• 17:14
  those people own those sports teams and their businesses,
• 17:18
  and so they're there to make money.
• 17:21
  So it's, yeah, it's quits.
• 17:22
  It's going to be just...
• 17:23
  What's the space?
• 17:25
  They're both like, cool.
• 17:26
  This is getting juicing.
• 17:27
  And because we're at a table, it's very adamant.
• 17:29
  We're like, watch the series, like,
• 17:30
  we'll get back to you on there later,
• 17:31
  and we're going to cut to an ad break.
• 17:32
  Are we going to do a question from the community?
• 17:35
  Yes.
• 17:36
  So, question from the community.
• 17:37
  Can I bring this each time?
• 17:38
  I feel like I just bring nothing to the table.
• 17:40
  Okay, do you want to read it out?
• 17:41
  Yeah, yeah, I'd love to.
• 17:43
  Just use some enthusiasm.
• 17:44
  Okay, here I go.
• 17:45
  Here I go.
• 17:46
  I just had a question about investing.
• 17:48
  Did you cut out? Was there anything about it?
• 17:49
  No, no, no.
• 17:50
  Oh, no, can I read this out?
• 17:51
  Yeah, I've been loving your podcast.
• 17:53
  Okay.
• 17:53
  How easy it is to understand and relate to you guys.
• 17:56
  And it's awesome.
• 17:57
  And she's so fantastic.
• 17:59
  I had a question about investing.
• 18:00
  I hear a lot of people saying,
• 18:02
  how compound interest is the key for increasing your wealth?
• 18:05
  And shares, but I don't 100% understand how it works,
• 18:08
  the investing, and then just put in brackets.
• 18:10
  Like, is it just keeping the money in there?
• 18:12
  Or reinvesting the little dividends that you get?
• 18:15
  I would love a podcast on this if you have done.
• 18:17
  Or if you've done one already,
• 18:18
  we'd love to know which one it is.
• 18:20
  Thanks so much.
• 18:21
  Yes, okay.
• 18:22
  And so for those who don't know, compound interest is
• 18:24
  interest on interest on interest.
• 18:25
  So it's interest compounding on itself.
• 18:27
  And interest, when we talk about interest, we mean the return.
• 18:30
  So say you invested $1,000 in Netflix, shares,
• 18:35
  and they grew 10%.
• 18:36
  You would have made $100.
• 18:38
  And so then you're starting the next year with $1,100.
• 18:44
  So say those Netflix shares grew by another 10%
• 18:48
  or even if they grew 20%,
• 18:49
  or then you're starting from that higher base.
• 18:51
  So that's how compounding works
• 18:52
  because your return or your interest is compounding
• 18:56
  on the higher base every year.
• 18:59
  But it also works in reverse.
• 19:01
  So if you lose money,
• 19:03
  then you've got a lower starting amount.
• 19:05
  But that's what we've compounded,
• 19:06
  interest is yes, the longer you leave it,
• 19:07
  the longer you allow for that interest to compound
• 19:11
  on top of each part of interest,
• 19:14
  or on top of each other.
• 19:16
  I'm going to try and say this in a slightly less
• 19:18
  financier way.
• 19:18
  But I think sorry, just to finish her question,
• 19:21
  if you're investing in shares,
• 19:22
  you can still get compound interest.
• 19:24
  If you're investing in a fund,
• 19:25
  if you're investing in anything that's growing.
• 19:27
  Yes, so every year that you leave it,
• 19:29
  your return is compounding year and year and year.
• 19:32
  So the longer you leave it,
• 19:33
  the more compounding you will have.
• 19:36
  So is she essentially,
• 19:38
  because the other question she asked is,
• 19:40
  if I'm getting dividends,
• 19:41
  should I be reinvesting those?
• 19:42
  And I guess that's just saying,
• 19:44
  you're going to have more in there for it to compound.
• 19:46
  So I mean, the more that you have,
• 19:48
  the bigger that base grows,
• 19:49
  the more interest you're going to get.
• 19:51
  Yeah, because dividends is just part of your return.
• 19:53
  So say you made the change in the share price was eight percent.
• 20:01
  So it went from $100 to $108.
• 20:04
  And you got paid out two percent is a dividend.
• 20:07
  So your overall return is 10 percent.
• 20:09
  But you've been paid out two percent is a dividend.
• 20:12
  So yes, if you keep that in there,
• 20:15
  then you'd have 110 in there.
• 20:17
  So you'd be starting from a higher base.
• 20:18
  But some people want dividends,
• 20:20
  and they want to live off those dividends,
• 20:21
  and they want to take them out.
• 20:22
  So you do have the option to reinvest.
• 20:24
  And yes, you're starting from a higher base
• 20:26
  if you reinvest your dividends.
• 20:27
  So depends what you're after, but...
• 20:30
  Yeah, that's a great question.
• 20:32
  Great question.
• 20:32
  Cinnamon.
• 20:33
  Yes, I find.
• 20:34
  Yeah.
• 20:35
  Means what I have to think of content.
• 20:38
  Oh gosh.
• 20:40
  Nice bag, I like it.
• 20:44
  Baked.
• 20:45
  Back.
• 20:46
  Oh my god, it's so gross.
• 20:47
  People's ears so sorry about it.
• 20:51
  Thank you so much for listening to The Curve Weekly.
• 20:54
  Make sure you hit the subscribe button to stay up to date
• 20:56
  with all the many business stock market news.
• 20:58
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• 21:00
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• 21:01
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• 21:02
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• 21:04
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• 21:07
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• 21:09
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• 21:13
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• 21:14
  And see you next Monday.
• 21:15
  Bye, bye.
• 21:17
  Sweet.
• 21:18
  Yeah.
• 21:19
  See you next Tuesday.
• 21:20
  Wow.
• 21:22
  See you next Tuesday.
• 21:23
  I mean, Monday.