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How to Copy the Investing Strategy Behind One of the Biggest Fortunes on The Planet · She's On The Money

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Speaker 1: My name's Tasha Bamblet. I'm a proud First Nations woman
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Speaker 1: and I'm here to acknowledge country t glennyan Ganya Niana,
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Speaker 1: kaka ya ya beIN ah Waka Nian our gay In Mbina,
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Speaker 1: yakarum jar dominyaka Umagahawakawaman damon imlan bomber bang Gadabomba in
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Speaker 1: and now in wakah ghana on yak raum jar Watnadaa. Hello,
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Speaker 1: beautiful friends, we gather on the lands of the Aboriginal people.
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Speaker 1: We thank acknowledge and respect the Abiginal people's land that
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Speaker 1: we're gathering on today. Take pleasure in all the land
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Speaker 1: and respect all that you see. She's on the Money
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Speaker 1: podcast acknowledges culture, country, community and connections, bringing you the tools,
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Speaker 1: knowledge and resources for you to thrive.
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Speaker 2: She's on the Money. She's on the Money.
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Speaker 3: Hello, and welcome to She's on the Money, the podcast
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Speaker 3: that lets you in on the financial strategies billionaires swear
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Speaker 3: by without needing a billionaire bank balance.
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Speaker 2: I would like one, though, wouldn't mind it? Actually, you
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Speaker 2: know what, I.
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Speaker 4: Take all of that back. I've said publicly before, and
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Speaker 4: I don't want to be a billionaire.
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Speaker 2: You don't want to be billionaire asolutely not. I wouldn't
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Speaker 2: hate it if it was. I was like, you want
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Speaker 2: to be where you are now, you want to be
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Speaker 2: a billionaire?
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Speaker 4: Would you don't need a billion? Nobody like from if
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Speaker 4: not one person needs a billion dollars.
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Speaker 2: That's very true. VD.
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Speaker 3: Well, today we're actually looking at the investing strategy behind
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Speaker 3: one of the biggest fortunes on the planet, and of
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Speaker 3: course we're going to show you how you can use
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Speaker 3: it to whether you are starting at fifty dollars or
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Speaker 3: fifty thousand dollars.
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Speaker 2: I would like to start fifty thousand dollars.
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Speaker 3: That's not too bad. That's not billionaire status. That's just
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Speaker 3: it's modest. I'm excited and with me is retired financial
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Speaker 3: advisor and expert in all things investing, in all things
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Speaker 3: in general, Victoria Divide.
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Speaker 4: Hello, Beck, I'm so excited and I know that we're
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Speaker 4: going to talk about like a billionaire investing strategy today,
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Speaker 4: but like let's get rich, but like not that rich?
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Speaker 2: Yeah, yeah, yeah, I don't know at what point, like
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Speaker 2: what's the level?
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Speaker 4: Right, There's like people always say, like money can't buy happiness,
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Speaker 4: which I disagree with.
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Speaker 2: Because I think money.
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Speaker 4: Buys freedom, right yeah, and like if you've got freedom,
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Speaker 4: you are healthier, happier, like spiritually, mentally, all of that stuff, right,
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Speaker 4: Like I will not put up with anyone being like
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Speaker 4: money can't buy happiness, You're right, Like there's a cap
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Speaker 4: and a believe from research, it's like eighty two thousand
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Speaker 4: dollars a year is the cap at which if you
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Speaker 4: earn that much, like you're happy. And I mean this
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Speaker 4: is not to say that you're not financially stressed like
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Speaker 4: we are Casey lives right now, like we don't need
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Speaker 4: to go back and forth, but about eighty two thousand
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Speaker 4: dollars apparently is the limit at which any more money
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Speaker 4: doesn't make you any more happy, Like you just stop
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Speaker 4: having an increase in happiness because of your finances.
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Speaker 3: Right, I mean, it's at the very least still take
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Speaker 3: away the crippling anxiety of constantly being brogue or in debt.
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Speaker 2: So I think, yeah, but that's one hundred two tho.
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Speaker 4: But at the same time, on the flip side, I
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Speaker 4: am an ex financial advisor. As you mentioned, I love
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Speaker 4: talking about money, I love investing, and I love talking
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Speaker 4: about you know, this guy is one of the longest
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Speaker 4: running investors and like arguably the most successful investor the
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Speaker 4: share market has ever seen. Like and I'm not being dramatic,
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Speaker 4: here has ever seen like this. One individual has made
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Speaker 4: literally billions of dollars And I've got a lot of
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Speaker 4: conversation like not for now, but like you don't need
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Speaker 4: to continue to hold billions of dot can you imagine
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Speaker 4: the impact you could have? I know, Like, don't get
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Speaker 4: me wrong, we like I want to be rich, Like
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Speaker 4: that's no secret. I'm she's on the money, Beck, Like
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Speaker 4: I want to be financially secure. I want to you know,
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Speaker 4: be able to provide for my children all of that.
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Speaker 4: But at what point should you be giving away your money?
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Speaker 2: Yeh, yeah, I don't know.
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Speaker 4: Different conversation that just makes me very uncomfortable. But the
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Speaker 4: best investor, the not just Australian but the world wide
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Speaker 4: share market has ever seen, is Warren Buffett.
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Speaker 2: Warren Buffer, Warren Buffy but Warren.
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Speaker 4: Buffett, right, yeah, And he is known as being like
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Speaker 4: the pinnacle, Like there are people that follow this man
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Speaker 4: to a teeth. He makes an investing decision, they make
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Speaker 4: an investing decision. And I believe that there is a
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Speaker 4: lot we can learn from him, because as much as
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Speaker 4: I don't necessarily agree with being a billionaire, he's an
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Speaker 4: incredibly smart man. And there are so many people who
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Speaker 4: have been quite critical of him historically, not because he's rich,
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Speaker 4: but because they're like, oh my god, if he'd invested
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Speaker 4: in this business earlier, he would have made even more money.
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Speaker 4: But he's very calculated with his decisions. And I think
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Speaker 4: we can learn a lot from that.
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Speaker 3: Okay, And I was gonna you did kind of answer
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Speaker 3: it for me. I wouldn't to do, like why is
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Speaker 3: it beg deal? Like how do we even know?
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Speaker 2: Like did we just try?
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Speaker 3: Like It's all sounds so confusing to me, because how
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Speaker 3: like I could be a good investor, but no one.
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Speaker 4: But he's not a publicly trading company, so he shares
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Speaker 4: all of this public clear right, so he's investing decisions
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Speaker 4: are news like, So whenever he makes a trade, his
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Speaker 4: company puts out essentially a press release says, Warren's invested
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Speaker 4: in X. And this guy nowadays is not like putting
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Speaker 4: ten dollars on after pay. He's like making big, big,
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Speaker 4: multi million dollar moves. And because he's got a publicly
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Speaker 4: listed company, he legally has to disclose that as well.
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Speaker 4: So everything he does is public knowledge.
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Speaker 2: Okay, that makes sense. I guess.
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Speaker 3: Like the thing is he's kind of like using a
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Speaker 3: lot of money and so probably making a lot of money.
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Speaker 2: But did he start there? He started from scratch and okay,
5:47
Speaker 2: you know, we might get into it.
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Speaker 4: And it's actually funny if you if you want to
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Speaker 4: see humble, google his car and google his house.
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Speaker 2: So he still drives his I believe it's.
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Speaker 4: Like a Toyota Camri because I don't need that, Like
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Speaker 4: why do you need a new car? And he still
6:03
Speaker 4: lives in the family home that he and his wife
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Speaker 4: bought because he's just like, I don't need anything more
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Speaker 4: than that. So I would say relatively well balanced. But
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Speaker 4: he's literally like rich rich, Like he's not just like,
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Speaker 4: oh he's wealthy. He's one of the ten wealthiest people
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Speaker 4: on this planet. And currently, if we do a little Google,
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Speaker 4: he's worth more than one hundred and fifty billion dollars.
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Speaker 3: WHOA, that's like everything he when people say worth, is
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Speaker 3: that like everything you own?
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Speaker 4: Like it's everything he owns. All of his investments includes
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Speaker 4: his car. Yeah, that's one of his askcts.
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Speaker 2: The car. The little Twitter come includes the car. That's
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Speaker 2: so cute, young glad they included that, Yeah, but he didn't.
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Speaker 4: I think a lot of people assume that when you're
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Speaker 4: a big dog investor, you must have come from family wealth.
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Speaker 4: I've actually just finished Sirens on Netflix, which is a
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Speaker 4: fantastic series. Like I binged to the whole thing about
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Speaker 4: like people in upstate New York like doing that very
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Speaker 4: Deen's vibes. Yeah, really rich billionaires living their rich lives anyway,
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Speaker 4: very fun. But a lot of that wealth that you
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Speaker 4: see is often inherited. But he actually built all of
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Speaker 4: his wealth by investing and other businesses since the fifties.
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Speaker 4: Like this guy's old Beck Like he is old, and
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Speaker 4: people are still following this guy who way past retirement
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Speaker 4: age because he just makes such good decisions. In fact,
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Speaker 4: I told you before that he has a publicly listed company.
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Speaker 4: He runs one of the most powerful companies in the
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Speaker 4: world as the chairman and CEO of Berkshire Hathaway, which
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Speaker 4: is actually worth Get this got to be sitting down,
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Speaker 4: it's worth more than a trillion dollars.
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Speaker 2: Okay, well that's unnecessary.
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Speaker 4: That's actually like, that's more than I can actually comprehend.
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Speaker 4: And Berkshire so his company actually owns or invests in
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Speaker 4: companies that you definitely know, so.
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Speaker 2: We can do this too, but maybe not to the
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Speaker 2: extent that he does.
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Speaker 4: But he owns things like Apple and Coca Cola and
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Speaker 4: Amex and the Bank of America and Dairy Queen. He
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Speaker 4: owns Jurisicelle batteries and he also owns tins.
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Speaker 2: Oh, okay, well I have like ten dollars and Apple. Yeah,
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Speaker 2: good job, honey, I did not think about the others.
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Speaker 3: Okay, well, well I really can't wait.
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Speaker 2: Jansen and apparently means means billions. God, he see his
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Speaker 2: potential and everything, doesn't he Dairy Queen? Who would have thought?
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Speaker 3: So? Why has Warren willfour been in the headlines again recently.
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Speaker 4: Because he has come out and said, guys, I'm retiring. Wow,
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Speaker 4: I'm just I'm going to take a step back. I'm
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Speaker 4: going to create a retirement plan. He has been working
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Speaker 4: at Berkshire Hathaway for sixty years or more than six decades,
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Speaker 4: and he's finally confirmed that a guy called Greg Abel
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Speaker 4: is going to be taking over. Because you know how
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Speaker 4: I said, like, oh, he's old old Beck, our friend Warren,
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Speaker 4: he's ninety four.
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Speaker 2: Oh and he's just yeah, and he's just still willing
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Speaker 2: and deal.
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Speaker 4: Then Yeah, like my grandpa made it to ninety four
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Speaker 4: before he passed away, and like he was as sharp
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Speaker 4: as attack.
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Speaker 2: So I have no doubt that this guy is still
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Speaker 2: sharp as attack.
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Speaker 4: But he needs a little bit of like retirement time,
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Speaker 4: a little bit of down time. Maybe time to enjoy
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Speaker 4: thirty is too late, roughly.
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Speaker 2: But enjoy the billions you've made. Yeah, seriously, on a holiday,
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Speaker 2: maybe he could go on a trip to Bali with
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Speaker 2: his sam. It's never too late. It's absolutely never too late.
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Speaker 2: It's not well, it's shocked me.
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Speaker 4: It's massive news because lots of people just assumed that
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Speaker 4: he would never retire because at the end of the day,
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Speaker 4: like you know, he's eighty, and then he's eighty five
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Speaker 4: and then he's ninety, still just pushing on running this company.
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Speaker 4: But now he's ninety four and he's like, actually, probably
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Speaker 4: should put in place some retirement plans.
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Speaker 2: Greg Abel's been waiting.
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Speaker 4: He's just been in the back being like, Hey, is
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Speaker 4: this ever going to be my time to shine?
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Speaker 2: Or am I going to retire before you? What's going on?
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Speaker 4: But it's big, big news because Warren Buffett has been
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Speaker 4: I would say, the face of investing for sixty plus YUS. Yeah,
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Speaker 4: like he has been the guy everyone writes books about.
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Speaker 4: He has been the guy that everyone turns to during
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Speaker 4: economic downturn to be like, what are the big moves
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Speaker 4: Warren's making? What's going on here? If he's trusting this,
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Speaker 4: we trust that. And he's been essentially the biggest influencer
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Speaker 4: in that space, well the OG influencer exactly. And the
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Speaker 4: announcement was made recently at the twenty twenty five Berkshire
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Speaker 4: Hathaway AGM, which this is going to sound so lame.
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Speaker 4: I invest in Berkshire Hathaway because like, one day I'm
10:27
Speaker 4: hoping that as an investor I can go to their AGM.
10:30
Speaker 4: Oh isn't that the lamest thing even at all?
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Speaker 2: Is this?
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Speaker 3: Like this has happened before or you're just like we
10:37
Speaker 3: can go You'll see me.
10:38
Speaker 4: Yeah, yeah, Like imagine being able to go to the anyway,
10:41
Speaker 4: That's just what I'm like. Oh, bucket list items sair
10:45
Speaker 4: And it's actually the first major one without a guy
10:47
Speaker 4: called Charlie Munda there by his side. So this guy,
10:51
Speaker 4: which you probably haven't heard of in the same way
10:53
Speaker 4: that you've heard of Warren. He was the long term
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Speaker 4: business partner and absolutely investing icon in his own right,
11:00
Speaker 4: but he was a business partner of Warren. But unfortunately,
11:04
Speaker 4: Charlie actually passed away in late twenty twenty three, and
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Speaker 4: he and Warren had worked together for more than sixty years.
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Speaker 4: So I wouldn't be surprised if this was one of
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Speaker 4: the reasons that Warren's kind of like, well, if he's
11:14
Speaker 4: not here, you know, it's not as fun, like, you know,
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Speaker 4: two mates more than sixty years making big decisions together
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Speaker 4: is kind of like, I'm kind of out.
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Speaker 2: That's devastating, Yeah, exactly.
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Speaker 4: And people are actually calling it the end of an era,
11:28
Speaker 4: which I kind of feel in my bones as well.
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Speaker 2: I'm like, well, who are we going to follow now?
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Speaker 2: Who's the like big dog in this space?
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Speaker 4: There isn't anyone who has ever been as influential or
11:39
Speaker 4: correct about the markets as Warren Beck. There's also and
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Speaker 4: I feel like I'm just harping on about this, but
11:44
Speaker 4: like this is kind of like this is.
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Speaker 2: My real housewives? Are you in ye element? So I'm
11:49
Speaker 2: just vibing it.
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Speaker 4: There's another big thing that lots of people in the
11:52
Speaker 4: industry are kind of like whispering about. And that's because
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Speaker 4: Berkshire Hathaway. So his company is actually sitting on a
12:00
Speaker 4: lot of cash. So there is one hundred and eighty
12:03
Speaker 4: nine billion dollars worth of cash sitting in that business.
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Speaker 2: Do you mean physical physical cash? Really?
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Speaker 4: Yes, So like if you logged into their you know,
12:13
Speaker 4: online transactions, that's how much cash they're sitting.
12:16
Speaker 2: I see, I see, I see it.
12:17
Speaker 4: So it's just in their bank like probably not in notes,
12:20
Speaker 4: but like see, you know, that's what he's got in
12:23
Speaker 4: the business bank account, which is in addition to all
12:28
Speaker 4: of the investments that that business owns Okay, And essentially
12:32
Speaker 4: Warren's been stockpiling this for years, obviously because you can't
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Speaker 4: just save one hundred and eighty nine billion dollars in
12:38
Speaker 4: a year. But he's been stop piling it for years,
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Speaker 4: and he's been choosing not to make massive moves in
12:43
Speaker 4: what he has been calling.
12:44
Speaker 2: A really overpriced market.
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Speaker 4: And now that Greg is taking over greg Able, I
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Speaker 4: was telling you about him before, everyone's asking, well, what
12:53
Speaker 4: are you going to do?
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Speaker 2: Greg?
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Speaker 4: What are you going to do with all this cash?
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Speaker 4: Like is the business going to be investing more? You're
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Speaker 4: a literal investing company. And you got all this cash,
13:01
Speaker 4: like that doesn't actually make a lot of sense. So
13:03
Speaker 4: between his age and his legacy and the future of
13:07
Speaker 4: literally one of the biggest companies in the world, everyone's watching,
13:10
Speaker 4: or everyone in the investing world, including me, is watching.
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Speaker 4: You're probably like, I still don't care.
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Speaker 2: Be probably and that's cool. That's cool. One.
13:17
Speaker 4: I'll just tell you about it and you can be like, oh,
13:19
Speaker 4: I know that. So next time you're at the pub
13:22
Speaker 4: and people go, oh, do you know what Berkshire Hathaway is,
13:24
Speaker 4: you'd be like, oh my god, yeah, I can't believe
13:26
Speaker 4: he's sitting on one hundred and eighty nine billion dollars.
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Speaker 3: Will in the North and no one know what berkeshear
13:31
Speaker 3: hath the way is. But I appreciate that you've given That's.
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Speaker 2: Okay, that's all right.
13:35
Speaker 4: I will continue to try and say when you give
13:38
Speaker 4: me the information.
13:39
Speaker 2: It's actually quite engaging. I'm trying. I really like it.
13:42
Speaker 4: But essentially it's like our mate Warren Buffett's like final chapter.
13:45
Speaker 4: So literally everyone in the investing world is going to
13:48
Speaker 4: be looking and being like, well, is he going to
13:50
Speaker 4: go out with a bang? Is he going to go quietly? Like,
13:53
Speaker 4: what's he planning on doing sure, especially with so much cash,
13:56
Speaker 4: like he could do so many things.
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Speaker 3: Yeah, I guess, Like it's a shocking amount of money,
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Speaker 3: Like how did he get there? What makes him so
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Speaker 3: good at a missing Like what is he seeing that
14:05
Speaker 3: we don't see?
14:06
Speaker 2: Mate?
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Speaker 4: If I could be, like I always say, and you've
14:09
Speaker 4: heard me say this on the show before, like if
14:11
Speaker 4: I could time the markets, I'd be a very rich woman.
14:14
Speaker 4: And unfortunately nobody can time the markets except.
14:18
Speaker 2: Seemingly like Warren.
14:19
Speaker 4: Yeah, except he doesn't time the markets. Even he says
14:23
Speaker 4: that timing the markets is silly, Like he's come out
14:25
Speaker 4: before and been like that is absolutely ridiculous. But it
14:27
Speaker 4: is a very good question to ask if someone who's
14:29
Speaker 4: worth more than one hundred and fifty billion dollars individually.
14:32
Speaker 4: But because he's not like a super flashy person, he's
14:36
Speaker 4: not gambling in crypto, he's not day trading. He's quite
14:40
Speaker 4: literally the opposite, and he's exactly what she's on the
14:44
Speaker 4: money preachers, I would say that his entire investment strategy
14:49
Speaker 4: is deeply un sexy, Like there's nothing about his strategy
14:53
Speaker 4: that you go, oh, big moves, big dog, Yeah, you go,
14:57
Speaker 4: that's kind of low key really boring but okay. But essentially,
15:01
Speaker 4: even though his investing strategy is I would say, offensively boring,
15:06
Speaker 4: that's the point, Like, the entire point is to be
15:10
Speaker 4: as boring as possible when it comes to investing large
15:15
Speaker 4: amounts of money and even small amounts of money, because
15:17
Speaker 4: he started.
15:17
Speaker 2: All on his own.
15:18
Speaker 4: And I'm going to give you a little bit of
15:20
Speaker 4: a cliffhanger because we're going to go to a break,
15:22
Speaker 4: but we're going to unpack exactly how he built his
15:24
Speaker 4: fortune and exactly how you can use exactly those same
15:27
Speaker 4: strategies even if you've only got fifty bucks to start with,
15:30
Speaker 4: or like Beck, what have you got now, like three
15:31
Speaker 4: hundred dollars in chersias?
15:33
Speaker 3: Yeah, okay, this is going to sound crazy and almost
15:36
Speaker 3: unrelatable to I just don't want to be that's.
15:39
Speaker 2: Not unrelatable girl, If you can do it everyone.
15:41
Speaker 3: Yeah, literally literally, I have like six hundred and eighty
15:45
Speaker 3: sorry what four dollars or something like that.
15:46
Speaker 2: Six hundred and eighty four dollars keep going down, But
15:48
Speaker 2: that's Oksey, it's a little longing consistently investing. Yeah, I'm
15:52
Speaker 2: so proud of you.
15:53
Speaker 4: Thank you.
15:54
Speaker 2: Let's go to a break. And then we can give
15:55
Speaker 2: you all of Warren's advice after this.
16:01
Speaker 3: Okay, everyone, we are back, and Vid left us on
16:03
Speaker 3: a cliffhanger, basically like everything they should do that.
16:07
Speaker 2: You've got more than six hundred bucks in your investing.
16:09
Speaker 4: Platforms, so wild Can we go back like a year
16:12
Speaker 4: or even two years? Yeah?
16:14
Speaker 3: Fully, maybe Beck would be like, what no, no, I
16:17
Speaker 3: still don't have an emergency fund, which I know is
16:19
Speaker 3: not getting this get He wins the race exactly, which
16:24
Speaker 3: is perfect because we're talking that kind of like reminds
16:26
Speaker 3: me of tortoise in the hair, which I would think
16:29
Speaker 3: Warren Buffett is like the tortoise in this situation, like.
16:32
Speaker 2: All of his movies.
16:32
Speaker 4: At ninety four, I feel like he's giving tortoise vibes
16:35
Speaker 4: totally totally because he's.
16:37
Speaker 3: Like, you know, not doing making big moves, risky moves.
16:40
Speaker 3: It sounds like it's just all kind of like boring
16:42
Speaker 3: and whatever. But what can we learn from him.
16:46
Speaker 2: We can learn from his love of compound interest.
16:49
Speaker 3: Ha.
16:50
Speaker 4: So the money that your money makes makes money. And
16:53
Speaker 4: given his ninety four he is one of the greatest
16:56
Speaker 4: living examples of the effect of compound interest. I have
17:00
Speaker 4: spoken about compound interest time and time again. I think
17:02
Speaker 4: it is the sexiest thing in the entire world. Essentially,
17:05
Speaker 4: compound interest is the interest that your money earns making
17:10
Speaker 4: money for you. So your money is making money, and
17:13
Speaker 4: then that money is free money. And Beck, we love
17:15
Speaker 4: free money. Love free money, we love free money. So
17:17
Speaker 4: you earn money, and.
17:18
Speaker 2: Like, I'm just trying to double down, but like.
17:21
Speaker 4: You earn money on the original amount, and the next
17:24
Speaker 4: time that original amount plus the money you earned is invested,
17:27
Speaker 4: and so it just gets bigger and bigger over time.
17:29
Speaker 4: And that might not feel very powerful after one year,
17:32
Speaker 4: but after ten years, your money will have more than doubled.
17:37
Speaker 4: Like your six hundred dollars, Beck, if you did not
17:40
Speaker 4: invest another dollar based on current market returns, nine point
17:45
Speaker 4: four years is what it's going to take to be
17:46
Speaker 4: twelve hundred bucks. WHOA, that's so crazy, isn't that kind
17:49
Speaker 4: of cool?
17:50
Speaker 2: Yeah, that is really cool.
17:51
Speaker 4: So in his autobiography, which obviously I'm quite a fan of, Beck,
17:56
Speaker 4: I wouldn't recommend it, okay unless you're me, ah, I see,
18:00
Speaker 4: just feel like if I made a book recommendation for you,
18:02
Speaker 4: it wouldn't be that one. But in his autobiography, Warren
18:06
Speaker 4: actually explains it as like a snowball rolling down a hill,
18:11
Speaker 4: picking up more and more snow as it gains momentum,
18:14
Speaker 4: until it becomes a massive snowball. And I feel like
18:16
Speaker 4: we can all understand that. And we also learned in
18:19
Speaker 4: that autobiography that he actually, and this is deeply unrelatable,
18:24
Speaker 4: he started investing at eleven years old, and he also
18:28
Speaker 4: said he wished he started sooner.
18:30
Speaker 2: That is, who what where does an eleven year old?
18:33
Speaker 2: You know what? I wouldn't be surprised if he's a
18:36
Speaker 2: neurospicy friend. Yeah, that sounds about right.
18:39
Speaker 4: Some of us like trains, He likes con found interests. Yeah,
18:43
Speaker 4: and from a very young age. I think he has
18:45
Speaker 4: been hyper fixated on this. I see imagine being like, oh,
18:48
Speaker 4: I started investing at eleven.
18:50
Speaker 2: That's wish I'd done it earlier. Like I can't z
18:54
Speaker 2: can't believe I was in.
18:55
Speaker 4: Prep, can't believe I was wasting time doing finger painting.
18:59
Speaker 2: I know that's is it even legal at eleven? As
19:01
Speaker 2: like saying I started driving when I was eleven. I
19:03
Speaker 2: wish I did it earlier, but like, are you even
19:05
Speaker 2: allowed to at that point? How does he have money?
19:08
Speaker 2: Was heney?
19:08
Speaker 4: You'd have a number of questions. But I guess it
19:11
Speaker 4: doesn't mean you had to be a stock prodigy in
19:14
Speaker 4: primary school, yes, to start building wealth, because like, that's good,
19:19
Speaker 4: you're starting now and you're going to be so financially secure.
19:23
Speaker 4: It kind of just highlights the power of starting early
19:25
Speaker 4: and getting in as soon as you can, and that
19:29
Speaker 4: from small things, big things literally can grow. And the
19:33
Speaker 4: more time your money has to grow, the more of
19:34
Speaker 4: it there is going to be. So I guess it's
19:36
Speaker 4: just let's not put so much pressure on ourselves that
19:40
Speaker 4: we are expected to invest at eleven, but let's maybe
19:44
Speaker 4: remember or use it as a little reminder that starting sooner,
19:47
Speaker 4: even with small, tiny amounts, is going to give you
19:50
Speaker 4: a massive head start thanks to compound interest. Okay, I
19:55
Speaker 4: mean he started investing at eleven, beck, Yes, he had
19:59
Speaker 4: his first million dollars by thirty two. Oh okay, okay, okay,
20:04
Speaker 4: So it wasn't like a millionaire by twelve. Yeah, yeah, yeah,
20:06
Speaker 4: which I feel like a lot of people are like,
20:08
Speaker 4: this guy's a prodigy.
20:09
Speaker 2: He was probably like twenty one. No, he was thirty two.
20:12
Speaker 4: I mean that's still deeply unrelatable, especially right now. But yeah,
20:16
Speaker 4: that's like our age, very very cool, And a vast
20:19
Speaker 4: majority of his estimated like one hundred and fifty billion
20:22
Speaker 4: dollars of wealth was actually accumulated after he turned fifty.
20:27
Speaker 4: Oh compound interest though, yeah, okay, this is seventy.
20:30
Speaker 2: Five billion dollars. That's a lot of money.
20:32
Speaker 4: But if he didn't invest another dollar in, just kept
20:35
Speaker 4: letting it tick over another ten years, that becomes one
20:38
Speaker 4: hundred and fifty billion dollars. Why because like the same
20:42
Speaker 4: thing happens. It's like, you know, using your example of
20:45
Speaker 4: your six hundred and it being twelve hundred and ten years,
20:47
Speaker 4: that's so sexy, but like same amount of growth happens
20:51
Speaker 4: on a larger scale. So for him having you know,
20:54
Speaker 4: a couple of billion dollars, that's double.
20:57
Speaker 2: Yeah, isn't that kind of crazy? That is crazy.
21:00
Speaker 4: So in America, CNBC, which is like a network over there,
21:05
Speaker 4: they did a really interesting comparison between Warren Buffett and
21:08
Speaker 4: a guy called Jim Simon's and over his investing life,
21:11
Speaker 4: which started, as I said before, when he was just
21:14
Speaker 4: eleven and stretched into his literal nineties. Buffet's average returns,
21:20
Speaker 4: according to them, was twenty two percent. Well, so like
21:24
Speaker 4: literally more than doubling what we use as an expected
21:29
Speaker 4: market return every single year.
21:31
Speaker 2: Yeah, okay, that's really good.
21:34
Speaker 4: But we look at Jim Simon's, who's also often referred
21:37
Speaker 4: to as like a ridiculously successful investor, if not one
21:41
Speaker 4: of the biggest and best investors in the world as well,
21:43
Speaker 4: but lesser known. I think because he's been around for
21:46
Speaker 4: less time. Sure, Jim's investment return back every year of
21:49
Speaker 4: his life sixty six percent per year.
21:52
Speaker 2: How does he do that?
21:53
Speaker 4: Well?
21:53
Speaker 2: I know that, So do you think's worth more money?
21:57
Speaker 3: Well, because maybe it's a true question because twenty percent
22:02
Speaker 3: the sixty six percent, obviously, But then he hasn't been
22:05
Speaker 3: around very long, exactly.
22:07
Speaker 2: I still actually I'm just I'm going to say, Jim, no,
22:09
Speaker 2: it's not.
22:10
Speaker 3: Jim.
22:11
Speaker 4: Worn still runs rings around him because even though, like
22:14
Speaker 4: Simon's has had high return, he didn't start investing seriously
22:17
Speaker 4: until it was like fifty and Worn has had decades
22:21
Speaker 4: of compound interest on your side. She was kind of
22:24
Speaker 4: disposed to prove that the best asset isn't actually finding
22:28
Speaker 4: super high returns, it's giving your money time to grow time.
22:31
Speaker 2: And I find that so exciting.
22:33
Speaker 4: But at the same time, it's literally what we preach
22:36
Speaker 4: on cheese on the money, Slow and steady wins the race.
22:38
Speaker 4: You use the example before Beck of the tortoise and
22:41
Speaker 4: the hair, and like we're looking at Jim going, oh
22:44
Speaker 4: my god, what a good hair. But like slow and steady,
22:48
Speaker 4: he's just essentially hocking cash back there.
22:51
Speaker 2: Okay, Well, honestly, a part of me is quite comforted by.
22:54
Speaker 4: The fact that it's it's just slow and steady winslow
22:56
Speaker 4: and steady. So obviously, starting early, worn this massive edge.
23:01
Speaker 4: I need to like what the brick he's investing in
23:05
Speaker 4: it at eleven though, Yeah, like what are you picking?
23:07
Speaker 2: Right?
23:08
Speaker 4: So when he was eleven, he bought three shares in
23:12
Speaker 4: a natural gas company that didn't exist anymore called City Services,
23:19
Speaker 4: and he paid, according to research, thirty eight dollars per share.
23:24
Speaker 4: He watched it drop, he panicked, he sold it it
23:28
Speaker 4: forty dollars to make a profit, and then he watched
23:30
Speaker 4: it shoot up way higher than he'd sold it for.
23:33
Speaker 2: And it's the problem.
23:35
Speaker 4: Yeah, that moment really stuck with him, Like he you know,
23:38
Speaker 4: talks about it in his memoir and he's like, you know,
23:40
Speaker 4: I bought this company and then I watched it drop
23:43
Speaker 4: and I freaked out. It's like what we talk about.
23:45
Speaker 4: You know, you see the market drop and you kind
23:47
Speaker 4: of get that pit in your stomach. Yeah, that's where
23:50
Speaker 4: he started to I mean, he did do it at eleven,
23:52
Speaker 4: which is unrelatable, but it's a good story nonetheless, but
23:55
Speaker 4: that moment really stuck with him, and it taught him
23:58
Speaker 4: that trying to time the market and guessing when to
24:01
Speaker 4: jump in and when to sell was gamble and that
24:03
Speaker 4: was a terrible thing to do. He's like, I'm never
24:05
Speaker 4: doing that again. So instead of playing that game, he
24:09
Speaker 4: changed his strategy. Again, we're talking about an eleven year old.
24:13
Speaker 4: He started to focus on buying really great companies and
24:17
Speaker 4: then just holding onto them for the long term. He
24:19
Speaker 4: was like, I'm just going to be a buy and
24:20
Speaker 4: hold man. I'm just going to buy good stuff, hold
24:24
Speaker 4: it for the long term, hope it, you know, gives
24:26
Speaker 4: me good dividends and consistent capital growth. And in his
24:31
Speaker 4: nineteen eighty eight Berkshire Hathaway shareholder letter that he sends
24:34
Speaker 4: out every year, by the way, that's a letter.
24:36
Speaker 2: Wow, do you get that? Yes?
24:38
Speaker 4: I do, you do, just as a shareholder. You just
24:42
Speaker 4: get the letter. But did you know so you know,
24:44
Speaker 4: I said I wanted to go to their AGM. Yeah,
24:46
Speaker 4: you actually have to apply to go to their AGM
24:48
Speaker 4: because there's so many people like me who would be
24:50
Speaker 4: like frothing to go.
24:52
Speaker 2: But it's kind of like a ballot.
24:54
Speaker 5: You have to like Meredith, Yes I'm doing You're going
24:58
Speaker 5: to Meredith, and I'm going to Berkshire Hath the way.
25:01
Speaker 2: It's far more unlikely that I'll get in. But that's okay.
25:04
Speaker 4: But he said in that letter that our favorite holding
25:07
Speaker 4: period is forever.
25:09
Speaker 2: Good good, good good from him, right, So like.
25:12
Speaker 4: His friend was, if I'm going to invest in something,
25:16
Speaker 4: I'm going to do all of the research, all of
25:18
Speaker 4: the analysis. I'm gonna buy it, never gonna sell it.
25:21
Speaker 2: That's his strategy.
25:22
Speaker 3: Okay, okay, okay, will you ever enjoy the fruits of
25:25
Speaker 3: your labor?
25:26
Speaker 4: I mean maybe once he's ninety four and he's going
25:28
Speaker 4: to reach to ninety four. Yeah, maybe he's going to
25:30
Speaker 4: the Bahamas.
25:30
Speaker 2: We don't know. We don't know.
25:32
Speaker 3: So how does he actually like Pickle to invest in
25:34
Speaker 3: because he's you know, picking random things like I'll just
25:36
Speaker 3: hold this forever. Or is there like a secret formula
25:38
Speaker 3: or do you have like billionaire instincts.
25:41
Speaker 2: I think he has billionaire instincts actually, and that's the
25:43
Speaker 2: end of the podcast.
25:44
Speaker 5: That's it.
25:45
Speaker 2: Yeah, yeah, well that's.
25:46
Speaker 4: He actually once said never invest in businesses you can't understand,
25:50
Speaker 4: which I think is really cool. And that's why I'm
25:52
Speaker 4: always like, do your own research understand.
25:54
Speaker 2: And I know that.
25:55
Speaker 4: Do you know what I hate when people say and
25:57
Speaker 4: I say, go do your own research back?
26:00
Speaker 2: What the hell does that mean? Am I meant to
26:01
Speaker 2: google it? Am I meant to look it up?
26:03
Speaker 3: Yeah?
26:03
Speaker 2: But I want you to go, Okay, if I'm buying.
26:05
Speaker 4: Apple, yeah, you kind of know what Apple is, so
26:08
Speaker 4: you know it like sells iPhones and laptops and whatnot,
26:11
Speaker 4: but like read more information about well why are they
26:14
Speaker 4: so impressive? What is their technology? Where are they made
26:17
Speaker 4: all of that stuff? You want to deeply understand. If
26:21
Speaker 4: Warren can't understand how the business makes money in a
26:24
Speaker 4: sentence or two, he will not touch it. It doesn't
26:27
Speaker 4: matter how much hype there is, it doesn't matter what's
26:29
Speaker 4: going on in the market, it doesn't matter how much
26:31
Speaker 4: money people are making. He's like, Eh, that's not worth
26:34
Speaker 4: it to me. Like he is arguably a very simple investor.
26:39
Speaker 4: He's like, if I don't get it, I'm not investing.
26:41
Speaker 4: So instead of chasing the next big thing, like lots
26:44
Speaker 4: of verse often want to, because we're like, oh, but
26:46
Speaker 4: if I invest in that make it like sixty six
26:48
Speaker 4: percent profit. We don't want sixty six percent profit. It
26:52
Speaker 4: does sound sexy in the short term, but like that's unsustainable.
26:55
Speaker 4: Then you're chasing the next big high and you kind
26:57
Speaker 4: of become like a drug addict version of it in stuff, right,
27:01
Speaker 4: And that's not cool because we don't want to chase
27:03
Speaker 4: the next big high. So instead of you know, chasing
27:05
Speaker 4: the next big tech company or getting sucked into stuff.
27:08
Speaker 4: You know that he doesn't really fully comprehend like crypto
27:12
Speaker 4: or maybe AI, where he's like, I can't fully explain
27:16
Speaker 4: this in a sentence or too, and while it sounds impressive,
27:19
Speaker 4: like a lot of it eludes me, I'm not that
27:21
Speaker 4: into it. He actually sticks with businesses that are super boring. Okay,
27:25
Speaker 4: think the companies I was telling you about before, Coca Cola,
27:29
Speaker 4: insurance companies, railroads, banks, all of these things that you
27:34
Speaker 4: go is a bank sexy?
27:36
Speaker 2: No? No, But if you look.
27:37
Speaker 4: At you know, for example, here in Australia, I always
27:40
Speaker 4: use the example of NAB. They've never not paid their dividends. Yeah,
27:45
Speaker 4: like they are always paying their investors. That's low key,
27:48
Speaker 4: very sexy.
27:49
Speaker 2: Love, very cool.
27:50
Speaker 3: So you would say, like if you understand it, then cool,
27:54
Speaker 3: But like when is it understandable completely clear? I understand this,
28:00
Speaker 3: but it's not worth investing. How does he know it's
28:02
Speaker 3: worth investing in it?
28:03
Speaker 2: So he has a little bit of a strategy.
28:05
Speaker 4: And the next thing he looks at, and he's said
28:07
Speaker 4: publicly before, is whether it's a great business.
28:10
Speaker 2: He doesn't just want a good business.
28:11
Speaker 4: He wants a great business to invest in, not just
28:14
Speaker 4: an okay one. And for Warren that means that there's
28:18
Speaker 4: a few specific things he's looking at. So the first
28:20
Speaker 4: one is it needs to be profitable and consistent. So
28:24
Speaker 4: Buffett looks at business as with a really strong track record,
28:27
Speaker 4: so like companies that are consistently making money, and not
28:31
Speaker 4: ones that are relying on trends or hypes or like
28:33
Speaker 4: a lucky quarter or like the La Booboo company.
28:36
Speaker 2: Ah, La boo boo.
28:37
Speaker 4: Right, I don't want to talk about La Boo boos anymore,
28:40
Speaker 4: but like that company, right, worth so much money. He's
28:44
Speaker 4: made billions out of that, But that doesn't mean it's sustainable,
28:48
Speaker 4: because how long until people don't give two flying hbout
28:53
Speaker 4: a laboobo?
28:54
Speaker 2: But do you know what I mean?
28:55
Speaker 4: Yeah, like the La Boo boo is a trend. Yeah, yes,
28:58
Speaker 4: he's made billions. If you look at all of the
29:00
Speaker 4: investing information about that, that company is skyrocketing.
29:04
Speaker 2: That's crazy. Go invest in PopMart. Okay, don't don't go
29:08
Speaker 2: invest in PopMart. I do it for like a week.
29:10
Speaker 4: But like, when do you get out? How do you
29:12
Speaker 4: know when to get out? Are you're going to kick
29:14
Speaker 4: yourself if you get in? And then you know, they
29:16
Speaker 4: invent the labuobuo two point zero and it triples again?
29:19
Speaker 2: Yeah, how do you know when to leave? Never? You
29:21
Speaker 2: never leave exactly.
29:22
Speaker 4: So Warren's strategy was, like the best investing term is forever. Yeah,
29:26
Speaker 4: So are you going to own the labuboo company forever back?
29:28
Speaker 2: Yeah? True? Maybe not. Don't want that.
29:30
Speaker 4: No, I'm going to go get boring one. I'm going
29:32
Speaker 4: to invest in a railroad or a toll way or
29:35
Speaker 4: maybe or something that.
29:35
Speaker 2: Bank or something like Toyota. Yeah yeah, great, like yeah, okay.
29:40
Speaker 4: He wants it to just be profitable and consistent because
29:43
Speaker 4: The next thing, he says, it needs to be strong.
29:46
Speaker 4: So that means that the business has something really solid
29:49
Speaker 4: going for it, like a great brand like Toyota, or
29:53
Speaker 4: loyal customers, or maybe products that people have to use
29:57
Speaker 4: every single day. Yes, so it's harder to compete with
30:01
Speaker 4: businesses that already have a really strong position, like and
30:04
Speaker 4: I think of companies like I need to use deotoring
30:07
Speaker 4: every day. Back Rex owner, where's that gonna go?
30:10
Speaker 2: Yeah? That's the true, do you know what I mean?
30:12
Speaker 4: We're not talking and I'm not saying that these are
30:14
Speaker 4: like things you should invest in, but we are talking
30:16
Speaker 4: every day essentials that you know, people are going to
30:20
Speaker 4: buy it, and even if it's not the best thing
30:22
Speaker 4: on the market, like so many different things are going
30:25
Speaker 4: to come up, it's got such a big brand, people
30:27
Speaker 4: are always going to fall back to it, right, Yeah,
30:30
Speaker 4: Like you might buy it because you're like, oh, that's
30:31
Speaker 4: a good brand and it's on special this week. I'm
30:34
Speaker 4: just consistently okay with that brand.
30:37
Speaker 2: Right.
30:38
Speaker 4: And then so he said it needs to be profitable
30:40
Speaker 4: and consistent. The second thing I said, it needs to
30:42
Speaker 4: be strong. And then the third thing is it needs
30:45
Speaker 4: to be reasonably priced. We don't ever pay for things.
30:48
Speaker 2: Absolutely not.
30:49
Speaker 4: Warren would never overpay for something, even if he's obsessed
30:53
Speaker 4: with a business like he loves it, He's like this
30:55
Speaker 4: is so good. He will not overpay for it. He's
30:59
Speaker 4: known for crucking companies for ten, twenty thirty years before
31:03
Speaker 4: he will invest in it because he's like, that's not
31:05
Speaker 4: worth it, that is not worth it. Buffett actually waits
31:08
Speaker 4: for the price to come down to a level that
31:10
Speaker 4: he thinks he's getting really good value, and then he
31:12
Speaker 4: buys and then he holds it forever.
31:14
Speaker 3: That's a fantastic point because right now I'd be like,
31:17
Speaker 3: I'm going to go invest in Rex soona, I don't
31:19
Speaker 3: know what it was before.
31:20
Speaker 2: I'm not bothering to check. I'm just going to buy
31:22
Speaker 2: it right now. But if you wait, you watch he does,
31:25
Speaker 2: and he waits.
31:26
Speaker 4: Then he watches, like to a point where I would
31:29
Speaker 4: have gotten bored, like I'm not committed like he is.
31:32
Speaker 4: And that's why Warren is known as a very good
31:37
Speaker 4: value investor. So he's built his entire fortune on what
31:41
Speaker 4: people call a very boring stock strategy.
31:45
Speaker 2: Boring, boring, boring.
31:47
Speaker 4: Wow, this is like he's not chasing shiny things. But
31:51
Speaker 4: he's not jumping on whatever trends or la boo boo
31:54
Speaker 4: is going on.
31:55
Speaker 2: He is not.
31:56
Speaker 4: Trading every time the market wobbles. He's just going, all right,
31:58
Speaker 4: well we're here, going to stick it out. He's investing
32:02
Speaker 4: in companies that are stable, that are predictable, and that
32:05
Speaker 4: make money stuff like banks, railroads, food companies, insurance, Coca Cola.
32:12
Speaker 2: We're all ordering coke. Oh yeah, you know what I mean.
32:15
Speaker 2: We go out of fashion exactly like tried true test it.
32:18
Speaker 4: He's not going to sell those shares things that people,
32:21
Speaker 4: no matter what's going on in the economy, are going
32:23
Speaker 4: to continue to buy.
32:26
Speaker 3: It's very company too, that this doesn't like empty light,
32:28
Speaker 3: Like it doesn't take an excessive amount of money or
32:31
Speaker 3: an excessive amount of Like not to say that he's
32:34
Speaker 3: not intelligent, but like you don't need but like that's.
32:36
Speaker 2: The killerst thing, right.
32:37
Speaker 4: I think when you start talking about, you know, the
32:39
Speaker 4: world's best investor, you go, oh, you must be so intelligent.
32:43
Speaker 4: Like he clearly is very intelligent. I'm not downplaying that
32:46
Speaker 4: at all. But his strategy, it's not you can replicate it.
32:50
Speaker 4: The everyday person can replicate it and go okay, cool.
32:52
Speaker 4: So instead of getting caught up in trends. Maybe I'm
32:54
Speaker 4: just going to buy blue chip stocks. Maybe I'm going
32:57
Speaker 4: to go look at a bank. Maybe I'm going to
32:59
Speaker 4: go look at things like Coke Cola or Apple, like
33:01
Speaker 4: we just know they're not going anywhere. Like I'm a
33:05
Speaker 4: consistent girlie. I just want the boring, the standard. I
33:09
Speaker 4: just want to be wealthy once I retire. And I
33:12
Speaker 4: guess the idea behind value investing, which is not going
33:16
Speaker 4: to come as a surprise to you, Beack that I'm
33:18
Speaker 4: a value investor because I don't want to be trading
33:20
Speaker 4: all the time.
33:21
Speaker 2: What's value investing?
33:22
Speaker 4: So value investing is really simple. You're looking for businesses
33:25
Speaker 4: that are worth more than what they're selling for, and
33:28
Speaker 4: you're buying and you're holding forever. It's essentially what Warren's doing.
33:31
Speaker 2: Oh yes, yes, okay, I see what you're saying. You
33:33
Speaker 2: just want good value, like you've got a good deal
33:35
Speaker 2: and then you're going to use it forever.
33:37
Speaker 3: Yeah, oh okay, and kind of like put like notification
33:40
Speaker 3: on on Chazy's.
33:42
Speaker 4: You can you can you can also like track something
33:45
Speaker 4: and go, well, I'm happy to buy that share once
33:47
Speaker 4: it drops to twenty bucks and you can essentially put
33:50
Speaker 4: in a trade that says, once that share drops to
33:52
Speaker 4: twenty bucks, automatically buy it for me, so you can
33:55
Speaker 4: kind of set and forget your investment strategy.
33:57
Speaker 2: That is really good.
33:58
Speaker 4: It's kind of like you and I both love thrift,
34:00
Speaker 4: like we both love an opshop. It's kind of like
34:02
Speaker 4: spotting a five hundred dollars bag at the op shop
34:05
Speaker 4: for twenty bucks, and you know it's really high quality
34:08
Speaker 4: and you're getting it for way less than it's really worth.
34:10
Speaker 2: Yeah, and that.
34:12
Speaker 4: Exactly, but like you buy it not to resell it.
34:15
Speaker 4: You go, oh my god, Like it's such a good
34:17
Speaker 4: quality about I'm going to use this for years, Like
34:19
Speaker 4: I feel like I've won the lottery, Like I didn't
34:21
Speaker 4: have to spend five hundred bucks, which I never would
34:23
Speaker 4: have done. I'm going to spend twenty bucks on this.
34:25
Speaker 4: I'm gonna have this when I'm sixty, Like this is
34:27
Speaker 4: so good, Like it feels comfortable, but also you feel
34:31
Speaker 4: like you've gotten.
34:32
Speaker 2: A good deal.
34:32
Speaker 4: Right. He essentially does exactly the same thing. He finds
34:36
Speaker 4: really undervalued companies, buys them, holds them sometimes forever. It's
34:40
Speaker 4: massive newsback. If he sells a company like if he
34:43
Speaker 4: sells a company, the stock market goes berserk because that's crazy.
34:49
Speaker 3: It'd be so sad if you were like a random
34:51
Speaker 3: company that he's been invested.
34:52
Speaker 2: H he's just putting in the bin.
34:53
Speaker 3: And then everyone else would because I would assume you're
34:56
Speaker 3: kind of following his lead exactly. And as you said before,
34:59
Speaker 3: like I think the best part about this strategy is
35:02
Speaker 3: literally anyone can do it. Like you want to start
35:05
Speaker 3: on shares's with a dollar, you can? You got fifty bucks,
35:09
Speaker 3: you can. Like this is of you one a massive
35:12
Speaker 3: investment strategy that you know you need tens of thousands
35:15
Speaker 3: of dollars to start.
35:16
Speaker 2: So can you give me an example of when or
35:19
Speaker 2: how he knows when to buy?
35:21
Speaker 4: Yeah, good question. So let's talk about Coca Cola because
35:24
Speaker 4: we're talking about that one. Before he started buying shares
35:27
Speaker 4: in Coke in nineteen eighty eight, right after a major
35:31
Speaker 4: crash in the market, when everyone else was panicking in selling,
35:34
Speaker 4: he was like, oh, this looks like a good time
35:36
Speaker 4: to buy. And he saw Coke as kind of like
35:38
Speaker 4: a really strong global brand that wasn't going anywhere. He
35:42
Speaker 4: said what you said, He was like, everyone's going to
35:44
Speaker 4: drink Coke forever. Yeah, like what and he invested get
35:48
Speaker 4: this one point three billion dollars USD not Australian USD.
35:53
Speaker 4: Then decades later, Berkshire Hathaway still holds that investment. Guess
35:57
Speaker 4: how much it's worth. No, twenty five billion dollars and
36:03
Speaker 4: that's not even counting all the dividends that have been
36:05
Speaker 4: paid to them over that period of time.
36:07
Speaker 2: He didn't buy it to flip it. He bought it
36:10
Speaker 2: so that he could hold it.
36:11
Speaker 4: Literally forever, because he, like you and I, believe in
36:14
Speaker 4: the business. Yeah, not a buzz and we're like every
36:17
Speaker 4: pub is going to sell Coke. McDonald's sells. Coke's going nowhere.
36:22
Speaker 2: You know. Yeah, I don't know if.
36:24
Speaker 3: I would ever trusted enough to put one point three billion,
36:27
Speaker 3: but he did.
36:28
Speaker 4: They don't even have that amount, so it's not actually
36:31
Speaker 4: an option for me. But I can see where he's
36:33
Speaker 4: going with that.
36:33
Speaker 2: That's incredible.
36:34
Speaker 3: Well good on him, I actually, I mean, if you
36:36
Speaker 3: have it, I would trust that Coca Cola would be
36:39
Speaker 3: around forever. So he he kind of like, you know,
36:42
Speaker 3: he sees the reliable companies, the strong companies.
36:45
Speaker 2: What about companies that like haven't even hit the market.
36:48
Speaker 2: Yet like they're just hitting the mark for the first time.
36:49
Speaker 4: Yeah, and we've done like a whole episode on IPOs.
36:52
Speaker 4: So an IPO is an initial public offering, and that's
36:55
Speaker 4: when a company like hits the market for the very
36:58
Speaker 4: first time and there's massive hype around it, right because
37:00
Speaker 4: like you know, if it's company you and I have
37:02
Speaker 4: bought and it's always been private, now it's public, we
37:04
Speaker 4: get really excited. We're like, oh my god, like I
37:06
Speaker 4: can't believe that, you know, this brand is going to
37:09
Speaker 4: be available for us to buyers consumers.
37:11
Speaker 2: How exciting.
37:12
Speaker 4: But Buffett he's like, Nah, screw IPOs, that's silly. Oh
37:16
Speaker 4: he doesn't like them at all. Like he's famously known
37:18
Speaker 4: for being like, I am not going to do that.
37:21
Speaker 4: In fact, if it hits the market and I'm a
37:23
Speaker 4: good investor, I'll just watch how it's going. I'll invest
37:26
Speaker 4: in them later. Thanks, though, Well, like he literally doesn't care,
37:29
Speaker 4: and he literally just thinks that it's silly to do that,
37:34
Speaker 4: Like he's like, I'm not going to take a risk.
37:35
Speaker 4: That's too much of a risk. And for years he's
37:37
Speaker 4: pretty much said I avoid them completely entirely, Like I'm
37:41
Speaker 4: just not playing that game. Not because IPOs are bad,
37:44
Speaker 4: but because he thinks, and I agree with this, they
37:47
Speaker 4: are surrounded by so much hype, Like people get so excited.
37:50
Speaker 4: There's often inflated pricing and not good long term value
37:54
Speaker 4: returned because you don't even know how the company is
37:56
Speaker 4: going to do once it goes public. Right, Yeah, that
37:58
Speaker 4: is a new iteration of the business. It's been private
38:00
Speaker 4: for years, Like is that going to be a good
38:02
Speaker 4: thing for the business? Sometimes it's not. And his logic
38:05
Speaker 4: is relatively simple there. He says that when a company
38:08
Speaker 4: launches an IPO, it's often at a price that is
38:10
Speaker 4: best for them, not best for you.
38:12
Speaker 2: Oh God, he's good.
38:14
Speaker 4: But like that kind of low key makes a lot
38:16
Speaker 4: of sense when you put it. That's yeah.
38:19
Speaker 2: He's a hard man to intrigue, isn't he.
38:20
Speaker 4: Yeah, he's kind of like, Oh, if they're going to
38:23
Speaker 4: put their company on like public offering, yeah, it's going
38:26
Speaker 4: to be for their benefit.
38:27
Speaker 2: Otherwise why would they do it? Yeah? Yeah, you go,
38:30
Speaker 2: well that makes sense. Shod If he was.
38:32
Speaker 3: In my world, it would be my life's goal to
38:34
Speaker 3: make him more impressed.
38:36
Speaker 2: Yep.
38:36
Speaker 4: It's literally designed according to him, and I agree with this,
38:39
Speaker 4: but designed to make the company and its early investors
38:41
Speaker 4: the most amount of money possible, not the person jumping
38:44
Speaker 4: in on day.
38:45
Speaker 2: One and hoping to get rid of and no good.
38:48
Speaker 2: This is classic buffet.
38:49
Speaker 4: Like he has said before, on a buy when things
38:51
Speaker 4: are undervalued, not overhyped. So an IPO for him does
38:55
Speaker 4: not make sense. He said, he prefers to, you know,
38:57
Speaker 4: wait until the business has proven itself publicly before he
39:00
Speaker 4: even considers investing in them. And there's even a quote
39:04
Speaker 4: where he said, I don't participate in IPOs. The sellers
39:08
Speaker 4: have the knowledge, the buyers have the need. It is
39:11
Speaker 4: not a level playing field. He's so good, he's obviously
39:14
Speaker 4: he's worth one hundred and fifty billion dollars, so you
39:17
Speaker 4: know something about something.
39:18
Speaker 2: But while other.
39:20
Speaker 4: Investors are out there being like, oh my gosh, I'm
39:22
Speaker 4: chasing the next unicorn. I'm going to like evaluate all
39:24
Speaker 4: these IPOs, he's just sitting back with a coke and
39:27
Speaker 4: he's just like waiting, He's just vibing.
39:29
Speaker 2: He gets free cokes. Do you own that much? Surely
39:33
Speaker 2: you get sent like slabs a free coke. I'd say so.
39:36
Speaker 3: But also I feel like at a certain point, we
39:38
Speaker 3: have so much money that like a coke would feel free.
39:41
Speaker 2: It would be like, yeah, that's true. A tenth of
39:44
Speaker 2: a cent for us, that's true. You know.
39:46
Speaker 4: So he's just sitting back, he's holding his coke. He's
39:48
Speaker 4: probably in a really comfy armchair, and he's like, maah,
39:51
Speaker 4: I'm going to watch and if that company turns out
39:52
Speaker 4: to be strong, profitable and fairly priced after the buzz
39:56
Speaker 4: Philim dies down, then maybe I'll invest.
39:58
Speaker 2: But it's gonna be on my term, so chill, so nonchalant.
40:02
Speaker 4: She's like whatever, like, if it's a good company, I'll
40:05
Speaker 4: invest later.
40:06
Speaker 2: No worries.
40:06
Speaker 3: He is so smart, so he invests for a living.
40:09
Speaker 3: So he has like all this time, I would assume,
40:11
Speaker 3: I mean his career. As his career, he like spends
40:13
Speaker 3: time researching individual companies. But like the rest of us,
40:16
Speaker 3: we have to do we have to do the same thing.
40:18
Speaker 2: Well, like you.
40:19
Speaker 4: Could like copy him, yeah okay, yeah. So like even
40:22
Speaker 4: though he spends his entire life, literally ninety four years
40:25
Speaker 4: of it now, researching individual companies, he's literally the first
40:28
Speaker 4: to say that most people don't need to do that.
40:30
Speaker 4: Do you know what his advice is, Yeah, he says,
40:32
Speaker 4: go buy an index fund. Index fund, like an ETF. Yeah,
40:35
Speaker 4: go do what Beck's done.
40:37
Speaker 3: Do what I do. And he did say that as
40:39
Speaker 3: he did do Like I called him up before and
40:41
Speaker 3: he was like, oh have you do you know becksied
40:43
Speaker 3: and I was like, oh, yeah, I've heard of her,
40:44
Speaker 3: and he said, just invest like her, just copy her.
40:46
Speaker 4: But literally he believes in them so much that in
40:50
Speaker 4: his will he's left instructions for how his wife should
40:53
Speaker 4: invest her inheritance when he passes, and he literally said,
40:56
Speaker 4: put ninety percent of the money that you get from
40:59
Speaker 4: me when I'm dead into a low cost s and
41:01
Speaker 4: P five hundred index fund, and the other ten percent
41:04
Speaker 4: into government bonds, full stop.
41:05
Speaker 2: End of story.
41:06
Speaker 4: Wow, go do that WiFi, because like this is fun
41:09
Speaker 4: for me and I get it, but like it is
41:12
Speaker 4: actually just not worth spending all your time and money
41:16
Speaker 4: and energy researching.
41:17
Speaker 2: It doesn't make sense.
41:18
Speaker 4: So this guy could literally hand pick any stock on
41:21
Speaker 4: the planet and he goes, you know what, you probably
41:24
Speaker 4: should just go buy a broad market ETF.
41:27
Speaker 2: Go get ye, get a little index fund. Beck like
41:30
Speaker 2: track the market. Yeah yeah, yeah, But the man's not wrong.
41:33
Speaker 4: And one of the simplest ways to access something like
41:36
Speaker 4: that is through an ETF.
41:37
Speaker 2: And we know all about these.
41:39
Speaker 4: We've done an entire investing series on what an ETF is,
41:42
Speaker 4: what is an index fund?
41:44
Speaker 2: How do they work? Like some of them can be
41:46
Speaker 2: like the top.
41:47
Speaker 4: Two hundred companies in Australia or the top two hundred
41:49
Speaker 4: companies in the world, Like you can pick anything, but
41:52
Speaker 4: they are well diversified and honestly, they are one of
41:55
Speaker 4: the most beginner friendly ways to follow.
41:57
Speaker 2: Buffet's logic.
41:58
Speaker 4: Yes easy, and he said time and time again that
42:02
Speaker 4: most people would actually be better off completely ignoring the headlines.
42:05
Speaker 2: Do not read the.
42:06
Speaker 4: News, do not look at the stock market app on
42:08
Speaker 4: your phone, ignore the hype. Just consistently invest in low
42:13
Speaker 4: cost index funds. Just go put your money there, and
42:16
Speaker 4: don't talk about investing.
42:17
Speaker 2: Don't talk about it.
42:17
Speaker 4: Don't talk about it, because it removes all of the
42:19
Speaker 4: pressure to pick quote the right stock or the right share,
42:23
Speaker 4: and it replaces it with something that actually works, and
42:25
Speaker 4: that is time in the market.
42:27
Speaker 2: Time time, time, that's literally it. Just wait.
42:30
Speaker 4: Just imagine the biggest investor in the world being like,
42:33
Speaker 4: don't bother honestly, like, just go buy a index fund.
42:36
Speaker 2: Yeah, I mean I'm going to listen to that. Actually
42:39
Speaker 2: I actually.
42:40
Speaker 4: Do and that's why I just have I've got like
42:43
Speaker 4: my satellite investments, but majority of my investing.
42:47
Speaker 2: Wealth is just in ETFs. Yeah. Fair, so, I mean
42:50
Speaker 2: I've personally taken away from a lot of this. But
42:52
Speaker 2: let's boil it all down. What do you want everyone
42:55
Speaker 2: to take away from the episode?
42:56
Speaker 4: Okay, so if we want to be a big dog
42:58
Speaker 4: investor like Warren Buffett, we can take away a few things.
43:01
Speaker 4: So start early, Let time do the heavy lifting. No
43:05
Speaker 4: such thing as too small of a beginning. So compound
43:08
Speaker 4: interest is going to be your best friend. And Buffett's
43:11
Speaker 4: whole fortune is basically a love letter to long term
43:16
Speaker 4: investing in compound interest. The next is, don't try to
43:20
Speaker 4: time the market like he can't. You can't, we can't.
43:25
Speaker 4: After trying to do this, he tried to do it
43:26
Speaker 4: at eleven and he decided, ah, that's not really for me.
43:29
Speaker 4: He never made the same mistake again. And the goal
43:32
Speaker 4: is to stay in, not jump in and out of
43:34
Speaker 4: the market. Yeah, there's some research out there Beck that
43:37
Speaker 4: says if you miss the five best days I think
43:40
Speaker 4: it's five best days in the market because you're trying
43:42
Speaker 4: to time the market, you will have half the wealth
43:45
Speaker 4: that you intended to by retiring. Okay, I have good days.
43:49
Speaker 4: You can't time the market. The next is and I
43:52
Speaker 4: love this. Just investing what you understand. If you don't
43:55
Speaker 4: understand it, you're not buying it. If you can't explain
43:58
Speaker 4: how a business just makes money, you should not be
44:01
Speaker 4: investing in it. Simplicity is power. Then we're going to
44:03
Speaker 4: ignore the hype, he said, not worth it. IPOs absolutely not,
44:07
Speaker 4: whether it's crypto or like hot stocks that people are
44:09
Speaker 4: talking about. Buffet's not interested, and baby, neither are you.
44:13
Speaker 4: He's going to wait until the hype dies down he
44:16
Speaker 4: can see the value. He doesn't listen to headlines. And
44:19
Speaker 4: then I've got two more points. You don't have to
44:23
Speaker 4: pick stocks at all. Just go buy an index fund.
44:26
Speaker 4: Easying to him, his number one recommendation for most people
44:30
Speaker 4: is a low cost index fund. Set it, forget it,
44:34
Speaker 4: let time do the work. I think that's very sexy.
44:36
Speaker 4: And the last thing is control your emotions. So investing
44:41
Speaker 4: it's not about maths. It's kind of about like mindset
44:45
Speaker 4: and being in the right mind frame. Like he's not
44:47
Speaker 4: getting caught up in the headlines. He's not thinking about like,
44:49
Speaker 4: oh my goodness, what's that company going to do. Like
44:51
Speaker 4: if he's invested for the long term, he's in the
44:55
Speaker 4: best investors are the ones that are able to stay
44:57
Speaker 4: calm when everyone else is panicking.
44:59
Speaker 2: Okay, so I think breath work is the Oh yeah,
45:02
Speaker 2: I reckon. He does a lot of meditation. He's constantly
45:06
Speaker 2: in the moment. Yeah, exactly, get from him exactly, never
45:09
Speaker 2: thinking you know, No, he's just a vibe. Yeah, I
45:12
Speaker 2: love him. I love him. I'm really checking menia. I
45:14
Speaker 2: see what you mean.
45:14
Speaker 3: Now, I'd like to go to AGM whatever you said
45:16
Speaker 3: before the.
45:17
Speaker 4: Berkshire Hathaway ag if you could take me, Yeah, honestly,
45:19
Speaker 4: I'd do a whole log on it for you.
45:21
Speaker 2: Thank you. So guys, that is all from us today.
45:24
Speaker 4: But if you're ready to start your own investing snowball rolling,
45:28
Speaker 4: my investing masterclass is made to give you the confidence
45:31
Speaker 4: to start investing.
45:32
Speaker 2: It's beginner friendly, totally jug and free. I'm going to
45:34
Speaker 2: put all.
45:35
Speaker 4: Of the details in the show notes because we have
45:36
Speaker 4: an intake opening literally right now. And of course don't
45:40
Speaker 4: forget to like and subscribe. We've got so much more
45:42
Speaker 4: investing content coming away. That's it for today. We're going
45:45
Speaker 4: to see you on Friday Guys Bye Bye guys.
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