Latest / The Curve / RTC64: How a money diary can change your life with Frances Cook

Transcript

RTC64: How a money diary can change your life with Frances Cook · The Curve

0:00
I don't know about you, but I like to mix my coffee order up.
0:03
Sometimes I'll get decaf, sometimes it's not flat white, sometimes I actually even go
0:07
for a nice latte.
0:08
No, you're really over the show.
0:09
But buying them out is getting way too expensive for me, so I'm very excited about the new
0:13
Virturopop from Nespresso.
0:15
The machines are only $260.
0:18
The Virturopop delivers a full range of coffee styles, which means if you like so and you
0:22
like to mix it up, you can explore different coffee styles to suit any coffee moment.
0:26
Head to nespresso.com or at nespresso.nz on Instagram for inspiration.
0:33
Welcome to Raising the Curth, a podcast designed to teach you everything you need to know to
0:37
be better with your money.
0:38
And the wise words of Amy Schumer were slipping carrots into the brownie recipe.
0:43
I don't really get the saying.
0:45
It's kind of like eating vegetables that actually taste good.
0:48
You know, I'm like, still not wearing it.
0:50
Are you on the script?
0:52
It's basically like saying investing in finance can be boring, but it totally doesn't
0:57
need to be.
0:58
OK, OK.
0:59
So we're making it fun by putting the carrot, OK, the vegetables, which good for you, it's
1:05
the brownie recipe.
1:06
OK, we got there.
1:07
OK, OK.
1:08
Well, you've really got a finance mate.
1:10
Yeah, one of us has to.
1:12
This is true.
1:13
OK, come and learn alongside me from Vick Harris, ex-fun manager where I'm going to ask
1:18
all the questions that you wish you could.
1:20
And I'm going to be eating all the brownie you wish you could.
1:22
It's so not the joke, Vick.
1:25
OK, just come and talk and learn and laugh with us, because together we really can raise
1:30
the curve.
1:33
We have got Frances Cook in studio who, embarrassingly, we've already had in front of you, and we
1:40
had technicals and the actual recording blew up.
1:43
So we're very grateful to have you back in, especially this morning saying you were on
1:47
like breakfast TV and all these things, and now you're making your way to the
1:50
course studio.
1:51
So thank you so much for being here.
1:52
I just wanted to hang out with you guys.
1:53
I actually sabotaged your equipment, but I just wanted to hang out again.
1:58
It was you.
1:59
Honestly, any time.
2:00
Now, for anyone who doesn't know, Cook the Books is an amazing podcast that Frances
2:05
hosts.
2:06
So award-winning.
2:07
Yeah, award-winning.
2:08
In fact, I remember when the podcast awards came out, and we got a couple of bronze
2:12
awards, and we were just beside ourselves.
2:14
And then, because you weren't so good, right?
2:15
Was it Am I right?
2:16
Yeah, for the business.
2:17
We got just piped to the post by Liam Dan, and I've already told him I'm coming from
2:22
next year to watch his kneecaps, because I'm coming for them.
2:26
Yeah, fantastic.
2:27
Lovely.
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Just, yeah, accidentally gets sick and misses a whole lot of his podcast recordings.
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Excellent.
2:32
Oh, no.
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Oh, no.
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That's why we got bronze.
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You should never have let me in your studio.
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I'm taking out the competition.
2:38
Oh.
2:39
But Frances has written two books.
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Is that right?
2:42
Yes.
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Many of your future, which is last year's book, and tales from an financial hot mess.
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When was that?
2:50
When did that one come out?
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Oh, I should know that.
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2000 Monday.
2:53
2000?
2:54
Yes.
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Someone's done their research.
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And that's what I'm adding for the podcast.
3:00
No, we love talking to you because your approach to money and finances is quite different
3:06
to VIX.
3:07
So for me, it's over, super helpful.
3:09
There's a real personal finance lens.
3:12
We would love to start now if I can have heard this story, but we would love to start
3:15
with your background and your sort of journey into the personal finance realm.
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What kind of made you passionate about it and care and start to learn?
3:26
How did you end up with you out today?
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And I'm really keen to hear your first memory of money or like dealing with money and
3:33
like, yeah.
3:34
Oh, that's a good one.
3:35
I think, okay, so my first ever memory of dealing with money is probably when I was
3:40
a kid.
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And this is going back so far.
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We moved to New Zealand when I was eight.
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And this memory, I remember it happened in England, so I was quite young.
3:48
And it was, my parents would take me to the bank on the weekend and give me two pounds
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to put into a savings account.
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And that was their version of teaching me money management.
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And you should be saving.
4:00
And here's some of your pocket money.
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It goes into a savings account, extremely cute, but it's very similar to how a lot of
4:06
people experience money.
4:07
We get told to save money or whatever.
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And I'm sure as hopefully all of your listeners already know, as saving only gets you so far,
4:16
you have to learn a bit more to it with money if you really want to get ahead.
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So that was really the first experience of money.
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And beyond that, we didn't really talk about money so much in my household.
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And then I hit sort of, you know, you get sold this idea of go to university, get a
4:34
degree, you'll get a really high-paying job, everything will be fine and you're going
4:40
to be rich.
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And so you graduate you and you get the first job and you're like, oh, well, it's just
4:43
the first job, you know, and then I'll get a pay rise and then you get a pay rise and
4:47
you hopefully get a couple more.
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And then you're like, why am I still not getting ahead?
4:51
Why is life still so hard?
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Why do I feel like I'm constantly on this hamster wheel and I'm never getting ahead?
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And I hit probably 26, 27 and was starting to get really frustrated and was like, I just
5:03
don't know what I'm doing wrong.
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I'm working really hard and I'm never getting ahead.
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And so I started listening to podcasts, yay, and at that stage, podcasts were, this
5:14
is going to make me sound so old, still a bit new and we didn't have any New Zealand
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personal finance podcasts at that time.
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And so I was listening to all these American podcasts and they were really helpful in
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terms of talking about needing to invest and save and how you strategize.
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But some key things were different, obviously like KiwiSaver or whatever, not in that.
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And so as I was listening and I was getting more educated and I started to realise some
5:37
of the things weren't quite right for New Zealand.
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I was like, hmm, this is a great start.
5:42
Now I know where I'm going wrong, but I'm still not totally sure on where I could be going
5:46
right.
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And I was a political journalist at that time, but was sort of going to the point where
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I was like, eh, there's a stage in political journalism where you either become a lifer,
5:58
or you do something else.
6:00
And I was starting to realise that doing politics was turning me into a bit of a dickhead
6:04
because you're getting people lying to your face all the time, all day, every day,
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that you get to a point where you're like, if someone says, and then I signed it in pen,
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you'd be like, oh, was it pencil?
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Because you're just getting lied to all the time that you're questioning everything
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and it can turn you into a dick in other areas of your life.
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So I was like, kind of looking for something new anyway,
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because I was noticing myself turning into a bit of a dickhead.
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And right, self-awareness, I was like, yeah, yeah, yeah, yeah, I bet you weren't bad, yeah.
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Go back and talk to Francis then and you might turn your mind.
6:33
Yeah.
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And so I was like, you know what?
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I'm a journalist.
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This job is basically go and find stuff you didn't know before and figure it out.
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And I was like, personal finance.
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Let's do this and pitch for my boss as a personal finance podcast.
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Started doing personal finance reporting.
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Got more and more into it, less of history.
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Love about this.
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I love that you recognized this as an area you wanted to learn about and educate yourself
7:00
on and then put yourself in a position to do that as a job.
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Because I actually think in a weird way that was my fascination with the curve too when
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we first started.
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Because I thought, well, you know what, no one listens to this podcast.
7:12
At least I've technically got a personal teacher.
7:14
Yeah, yeah.
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So sitting down with me everywhere.
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You're learning as well as you're building.
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Totally.
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And you're helping yourself at the same time as helping other people.
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And I think that there's something in that, just your personal fascination with wanting
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to be better.
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And also to be age 27 and realise, oh, how am I not getting ahead?
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I reckon it took me to get to 30 before I was like, how is this still happening?
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Like, how am I still getting to the end of my paycheck every week?
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I'm just, I just adjust my lifestyle depending on how much I earn.
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Which I never really sat down and was like, sort it out.
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You know, it's so cool that you had that realisation.
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And it's so funny that that's just like the natural journey of life is to like, go to
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school, get a job, grind it out, die.
7:59
You know?
8:00
Well, you know, it's like, where is the sitting down going?
8:03
Okay, what do you enjoy?
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What do you really passionate about?
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What do you want, you know, and then like, okay, how do you mold your life and, you know,
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building wealth into that?
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And like, just, that would be such a better conversation to have with a career's counsellor
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at school rather than like, what do you want to be?
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You know, a lawyer, a doctor, or an accountant, you know, nothing against those professions.
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But like, you know, there just wasn't the broad thinking and so, yeah, gosh, I think
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yeah, commend you for kind of realising that there was a gap in the market in New Zealand
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as well.
8:33
So there's a podcast spent around for nearly 10 years.
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It's been around now for, I'm not bad at all.
8:38
Shit, so you're 75.
8:42
So you're looking great.
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The eye cream is really working on.
8:49
It's been, it's more than five years.
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I'm not sure if it's five or six years coming up.
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Amazing.
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Coming up to six years now.
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And sometimes people would message me and be like, oh, I've gone back and I'm listening
8:59
from the beginning.
9:00
I'm listening to the very first episodes and I'm like, please don't, because grown a lot
9:06
in that time, it's a very different podcast and I certainly hope it's better than those
9:10
first few episodes.
9:11
It's like it, Instagram, like you, I think I'm all the kids who have social media now and
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I'm like, thank goodness, I didn't have it when I was seven, because it would be traumatising
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to look back at the early posts, wasn't it?
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I used to post everything.
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I went back the other day and deep and also my captions.
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I was like, what are you, what are you fucking talking about?
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What is this nonsense?
9:30
Yeah.
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And I'm like, okay, why did you post it?
9:32
You don't need to post a picture of a garden or something real, it's super boring.
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It was.
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When you'd like have a random night out and you've got 30 pictures uploaded the next morning
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like a whole album of nonsense, you're like, nobody cared.
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Why was I post it quite nice?
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You just posted about them where it's now so, it's so created and so like filtered
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and everything.
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It'd be real bad.
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That's where I'm going.
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My dad's so uploads like entire albums, he's like, my darling daughter and then there's
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like 45 photos of him.
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Yeah, my dad.
10:00
Come on on, kids.
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Cute, though.
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Hide from profile.
10:04
Can we talk about that?
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There's a lot of people who, as I mean, I don't mean to sound like a broken record,
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but life is expensive.
10:15
People are struggling to breathe at the moment.
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What would be some top tips, tracks, and I know this is a super open-ended question because
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there's many things that people could do, but if there's someone who's sort of feeling
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a bit like you were when you were like, can you just set up a podcast because I need
10:30
to learn more?
10:31
What would be some really good basic starting things to put in place to try and become a little
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bit more financially, well, fit financially, helping you.
10:42
Thank you.
10:43
I always reckon start with the money diary because that just helps you figure out what's
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important to you, right?
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And it's the old thing that people get so sick of, you know, finances, pension, you know,
10:53
except it is.
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That's why everyone says it.
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It's really annoying.
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I know.
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We always get asked, oh, how much should I save?
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And I'm like, I can't give, you know, when I, how much should I be, it's like, I wish
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I could give you $1,000.
11:03
What's your budget?
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$1,000,000,000.
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Even on sort of different.
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That's like, yeah, sorry.
11:07
Yeah.
11:08
No, 100%.
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I see a bit of a gripe.
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Or it's like, sorry, I can't tell you because of the rules and regulations.
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It's like, oh my gosh, they just like, help me and you know, I can't.
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I want to.
11:17
Yeah.
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But there's a reason why they say we can't.
11:20
Yeah.
11:21
So yeah, money diary, where at least a week, right?
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If you can do it for longer, you'll figure out even more about yourself, but at least
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a week because some people find it confronting to watch their money.
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So just write down everything, everything, everything you spend for that week.
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And also it's not just about cutting things, but how much you needed to spend that and
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also how happy it made you, because all of this is only about building a life that
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you enjoy, right?
11:45
The point of money is not to be good or like the most deprived or the most right.
11:50
It's about building a life that you enjoy.
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So how happy it made you is a really important thing.
11:55
So an example of that could be going out for brunches every Sunday if that is like
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the highlight of your week, even though you spent $100.
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And you can afford it.
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Important caveat.
12:04
Then maybe that's something you choose to keep in there.
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Is that a good example?
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100%.
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I'm not showing.
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Makes me feel great.
12:11
There you go.
12:12
Are you serious?
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Would that be something you'd keep in there?
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Maybe I'd just scale it back a bit, but...
12:17
We adjusted a break for as many series about the dopamine relays of buying a life.
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I love it so much, because if you get double dopamine, you get it when you buy something
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and then when it arrives.
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There you go.
12:28
For anyone wanting to relisten to that episode, Victoria, Dr Victoria Thompson gave some really
12:33
interesting insights around your relationship with finances and money and how they affect
12:38
your mental health.
12:39
So if you know what I would like to go ahead and listen to that, you can.
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But I think I could scale it back.
12:44
I did actually read some research recently that window shopping or like going through
12:49
shops and looking at stuff gives the same dopamine hit.
12:52
FYI, sometimes a little walk through a shop can be enough.
12:56
Good luck out there.
12:57
There's no way that this window can bring a look.
12:59
Can you go walk it out?
13:01
Sorry, back to the money diary.
13:02
So we start by potentially a week or two riding down everything you spend money on and
13:07
also how does it make you feel?
13:09
Yeah.
13:10
And from that, you're going to know a, where's your biggest spending areas?
13:14
You're going to find there's always at least one thing that you didn't need and it actually
13:18
didn't make you happy either.
13:19
So that's easy.
13:20
Biffett, who cares?
13:21
But you're going to know your priorities.
13:23
You're going to know what's adding to your life.
13:25
You're going to know where your big spending areas are.
13:27
And then from there, I always think, attack your big expenses first.
13:32
People love to go on about, take away coffees or have a cat on a test and it's really
13:37
annoying.
13:38
Shut up, boomers.
13:39
But we love you if you're listening.
13:43
If you're listening, then we will exclude you from the boomer category, and be technically
13:47
a boomer without having a boomer mentality, I'm just saying.
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It's attacking those big expenses, things like your rent or your power or whatever.
13:56
If you can look at those and be like, how can I be smarter about this?
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And just shopping around for your power, going to power, switch up, or go to NZ.
14:04
And it's not going to be any different on when your lights turn on, as long as you still
14:08
paint the bell.
14:10
It's just, you know, you're going to get the best plan for you and your lifestyle, you
14:13
know?
14:14
And any of those sort of regular costs, any of those big costs, those are the ones you
14:17
want to attack first.
14:19
But what about rent, you know, that's a really good example because I did see one of your
14:23
podcast episodes, where something about, you know, is rent dead money.
14:28
And I mean, I guess my question would be, say you realise you're paying way more than
14:34
you should be in rent.
14:35
What would you, what would you action from that, like, what would be a, what do you
14:39
do?
14:40
I'm like, you can call your landlord and be like, ham of it, could you please just like
14:43
reduce my rent?
14:44
And the landlord's like, sure, why not?
14:46
Yeah.
14:47
Is it like move house?
14:49
It's probably move house and way up, okay, the cost of transport to work or the commute
14:54
and then if I'm paying less rent, you know, like doing, doing a bit of a spreadsheet
14:58
or, you know, 100%.
15:00
I knew so I said that word, as I've lost it.
15:03
She's gone, but yeah, weighing up those, yeah, like all the costs and if it ends up being
15:09
cheaper living, maybe a bit further out, or if not, if ends up being the same.
15:13
But yeah, rent is a hard one because it is, it was like it's a fixed cost that you
15:16
can't avoid.
15:17
And if you're in a house, moving house is expensive in itself.
15:20
So it's like, you think you're going to spend another two grand moving when you could
15:24
have just spent that on the rent.
15:25
You know, I'm just curious if there's any way someone could get around those big
15:30
ticket items because it's easy to cut out a coffee or car like you had a car that
15:34
was toast, but then when it comes to massive stuff, how do you avoid or reduce?
15:39
Well, it's easy to cut out coffee unless you're already not buying it, right?
15:42
Unless your money is already going to only the big ticket things in life and you've
15:46
got nothing left, which can happen to a lot of us really easily.
15:49
And I think the thing is, as you just mentioned there, is you look at those big
15:54
costs together.
15:56
So the biggest costs for most New Zealanders are housing, transport and food.
16:01
And you can kind of play around with those categories together.
16:04
So you might live more centrally.
16:05
It might cost you a bit more money, but from that, you can sell your car and you
16:09
don't need it anymore because you can walk to work and you can take trains because
16:13
you might be living in bread and butter and you can get everywhere.
16:15
You know, or you might live further out and it's worth the extra transport
16:19
costs because you're saving so much on rent.
16:22
And it's those sorts of things like have a little way up of what works for your
16:27
lifestyle.
16:28
And you know, rent might be a lot.
16:29
Do you have a spare room that you could bring in?
16:32
Could you rent one of the rooms to a couple so you can charge them a bit more?
16:35
You know, you start thinking about all of these things and getting a little bit
16:39
strategic.
16:40
You mentioned the is renting.
16:42
I'm going to eat up with four people in my bedroom and I'm just feeling so
16:45
tall and tailing or just get a boyfriend and then you can split the rent.
16:48
Spent the bank and go, well, I reckon it's just going to be, I'm going to have
16:53
bunks in my room.
16:54
It's going to be three of us in the bed.
16:55
There's going to be two people in bunk beds.
16:57
I'm going to be like, stunning.
16:58
This is cheap and I have no personal space.
17:01
I'm going crazy.
17:02
But it's fine.
17:02
I'm wealthy with no personal space.
17:05
Stacking that gap.
17:06
But these are all good ideas.
17:08
You know, it's being creative with what is your situation and is there anything you
17:12
can do to mix it up or save and then what is the big stuff that's actually going to move
17:16
the needle rather than buying a different type of oat milk because it's saving you 50 cents.
17:20
Which I'm not saying you shouldn't do, but it's just, I don't think it's that inspiring
17:24
when you're already stressed about money to be like, amazing.
17:27
I'm saving $2.75 a week.
17:28
Oh my God.
17:29
I literally saw a thing the other day being like, make sure you only boil the amount of
17:33
water that you need in your kettle.
17:35
You can save $26 a year doing this.
17:37
I'm like, what, so 50 cents a week if I'm constantly monitoring my kettle usage, that's
17:42
not my brain power is worth more than 50 cents a week.
17:46
Are you joking?
17:47
And then I go get a parking ticket and that $26 a year.
17:49
That's gone.
17:50
I'm even joking out.
17:51
I'm like, dammit.
17:52
All that used with the kettle, gone out when I was one parking ticket.
17:58
I reckon the other thing as well is it's like, that is just sucking the fun out of life.
18:02
I'm not saying I enjoy filling up a kettle and that's like this big kick for me, but it's
18:06
more just, I think budgeting with that idea of it is so much resistance because it's
18:12
boring, it's stressful, it's like, amazing, everything's just now not fun.
18:17
And I do think there needs to be this balance of like, how can we inject a bit of a different
18:22
attitude towards budgeting?
18:23
And that's why I think the money dough is so good because it's like, okay, I feel great
18:27
when I spend money on this before I place a lot of value on this.
18:30
So I'm not, that's going to be one of the last things I cut back on because I also don't
18:35
want to walk around, you know, feeling sad and unhappy, you know.
18:39
You mentioned about, you know, other ways that you can keep an eye on these big expenses.
18:43
I think the big thing is as well.
18:45
We often talk about cutting back because it's something you can control immediately.
18:49
But if you're looking at rent, right?
18:51
You might be living somewhere, say you're in your 20s and you're living somewhere that's
18:55
expensive.
18:56
It's because you're currently investing into your career or your lifestyle or making friends
19:01
meeting new people.
19:02
Totally.
19:03
I'm not sure we can find someone in Pinehurth, you know, like how many single guys are there?
19:11
Pine, exactly, you know, I tried moving to them out.
19:14
There was no lot of single people.
19:15
Hey, well, Grayland doesn't have a lot of single people either.
19:17
So I think we're kind of, we had the most, sorry, just as a side dog, funny DM coming
19:22
today.
19:23
It was like, what was that?
19:24
It was like, we haven't even been able to talk to our others, but I got a screen shot
19:27
from a victim like, do you know this guy?
19:29
And I was like, no.
19:30
He keeps commenting.
19:31
Don't you share my comments and be like, when we're sharing other people's comments and
19:33
I was like, keep liking his post just to be nice.
19:37
Anyway, they sent a video last night.
19:38
I was like, oh, I don't even know if I want to open this.
19:41
And in this morning, I kind of forgot and I like, we turned and opened up and I was like,
19:43
oh, fuck, what was it?
19:45
He was like, top law.
19:47
He's probably, I don't know, they didn't know.
19:49
He was in a hot tub.
19:52
And he was going, what?
19:54
And he said hi, so if he were the love heart and I sent it to soft, I was like, do you
19:58
know this guy?
19:59
And I was like, oh, god, okay, sorry, sorry, I'll try.
20:03
What were you saying, sorry, Francis?
20:05
When we went real low rowing.
20:08
Invested in your career.
20:10
And boyfriends, that's where we all are.
20:12
That's kind of the thing about good debt and bad debt as well, like student loans and
20:15
mortgages like there, effectively investments into, yeah, investment being a staff or
20:21
your property.
20:22
And so, you know, I used to get really consumed when I had a lot of student loan, my student
20:27
loan was that massive.
20:28
And I was like, oh, my god, oh, my gosh.
20:29
And then I was like, but you know what, like now having paid it off and seeing it as
20:35
a worthwhile investment, you know, it's kind of, it's the same with a mortgage.
20:37
I'm like, freaking out, but I have a mortgage, but it's like, you know what, that's going
20:41
to help me in the future.
20:42
And it's just kind of like changing that mindset.
20:43
I would love to talk about that.
20:45
Good debt, bad debt.
20:46
Yeah.
20:47
What's the difference?
20:48
How do you know if something is good or bad?
20:50
Basically, it's just said.
20:52
Yeah.
20:53
So we don't even need to go back to that question.
20:56
If you're investing into yourself and your future, right?
20:59
So it's, you know, your education, your earning power, something at an asset, like a house.
21:05
Yeah.
21:06
That is all stuff that's building for your future, right?
21:10
Something like a holiday where it's here and then it's gone or even buying clothes, I
21:14
know, a lot of people can rack up debt on clothes.
21:17
I mean, that's all stuff that's not going to be building for your future.
21:20
Why are you doing that?
21:22
Well, look, if we were to take a tour on Vex Wardrobe, it would be like, you know, the
21:26
walking, you know, she said rack up debt on clothes, so yeah, thank you.
21:30
She buys it out, right?
21:31
Yeah.
21:32
And just put other stuff on the credit card.
21:34
So, okay.
21:35
So I think also an interesting thing to circle back to would be your money diary suggestion
21:40
because say buying clothes brings you a huge amount of joy or a holiday is really what
21:46
you need for your mental health to feel good again, then that is money, wealth spent,
21:50
right?
21:51
Yeah.
21:52
And you can still, when you look at that, you might be like, okay, what's the smartest
21:56
way that I can get joy from that?
21:58
So I am also someone I love shopping, I love wearing what I feel like is nice clothes
22:03
at least.
22:05
But I, you know, three years ago decided I'm only going to do secondhand shopping for
22:09
a year.
22:10
And I enjoyed it so much I'm still going.
22:13
Everything I have now basically is secondhand.
22:14
I love vintage shopping.
22:15
It's so good.
22:16
So much joy from that.
22:17
The idea that not everyone in Auckland is going to have the same thing.
22:20
It's me I love totally and I find it really fun and I feel like it's going on a little
22:25
treasure hunt and I get to indulge my desire to have a wardrobe that my poor husband has
22:30
kicked out of.
22:31
He gets like two things in there literally and the rest of it is all mine.
22:36
And, you know, and I still haven't spent masses on it.
22:40
So it works for me.
22:41
So that was my way of being smarter about something that brings me joy.
22:44
So it might be a holiday you're going to have.
22:47
Still rather than your B&B.
22:48
But actually like that, I mean, maybe it's not that, but maybe it's going to have
22:52
no problem.
22:53
It might go in for a holiday.
22:54
A staycation rather than going to the city.
22:57
Yeah.
22:58
Because a combination when you're traveling is so expensive.
23:00
It's nuts.
23:01
Okay.
23:02
I saw a few podcasts that you've put it up that I really wanted to just get some top
23:08
line bullet points from which might be difficult considering each podcast was probably
23:11
20 minutes long.
23:13
I would love to talk about the housing market, the crash that everyone's talking about.
23:18
But what does that actually mean?
23:19
And in your, from your perspective, is it a better time to be investing in shares or
23:24
other assets?
23:25
What's kind of going on?
23:26
Because I'm not in the housing market, I don't own property.
23:29
So I feel like I don't 100% understand what is going on and how that is affecting the
23:36
people at own property, people who are wanting to buy into property.
23:39
Yeah.
23:40
So I always think in terms of buying assets, whether it's slightly different for the
23:45
housing market, if you're buying it as your home versus as an investment, but I still
23:50
feel like the decision is usually based on your finances rather than whatever is happening
23:55
in the market.
23:56
I'm very much a long-term investor.
23:58
And so when you're looking at that stuff, it's more to do with how are your finances
24:02
as the affordability working out for you?
24:04
What are your goals?
24:06
And then what's happening in the market is just way down the list of priorities.
24:09
I mean, you do want to keep an eye on it.
24:12
Say if you're wanting to flip a house.
24:14
Then right now, that buy an in-sell straightaway company, buy makes some sort of improvement
24:19
hopefully sell for a profit, right?
24:22
So at this point when the market is falling, that's probably not going to work out for
24:25
you, right?
24:26
But that's still a very short-term strategy and it's still a very risky strategy.
24:28
I don't think I'd recommend that any time anyway.
24:31
So how much headman would that be?
24:33
Like it's so much so stressful to renovate or change your house.
24:37
Imagine doing that.
24:38
I mean, you would obviously would make a decent whack, but is it worth it?
24:42
Well, not always.
24:43
Some people lose money on it.
24:45
I mean, it can go really wrong.
24:46
It's more worth it when the property market keeps going up and up
24:49
because you've got that natural support.
24:52
But then it turns and then you're left with these houses and yeah, it's kind of it.
24:55
But it has a risk.
24:57
Any short-term investment is risky or more risky than taking a long time.
25:02
But it's funny to say that because I remember when I bought this house and so many people were like,
25:07
oh, you're buying at the top of the market.
25:09
And this is like seven, eight years ago now.
25:12
And I was like, you know what?
25:13
I don't, I'm not trying to time the market.
25:15
I have decided I'm going to live in Auckland and I have enough money to purchase a house
25:23
and not rent.
25:24
So why, like, it's always a lifestyle thing.
25:26
I was like, I want my own home.
25:27
I want to be able to live here.
25:30
I'm not trying to, you know.
25:31
And it's a five-year, 10-year, possibly 20-year decision.
25:33
Totally. I'm not trying to time the market.
25:35
And I'm not a property investor.
25:36
I'm literally a property owner.
25:38
So it was kind of, yeah, but it was just so funny, the number of people that see that
25:41
and the property market went up for the next six months.
25:45
The things I talked to very smart economists all the time and I do it.
25:49
I say, where do you think things are going?
25:51
What do you think's happening next?
25:52
What do people need to know?
25:53
And nine times out of 10, they're right.
25:55
Yeah.
25:56
But also these very, very smart people whose job it is to look at way more data than
26:01
has ever put out in the news.
26:02
They're looking at the stuff on a really deep level.
26:04
They get it wrong too.
26:06
And it's just impossible to predict what's going to happen.
26:08
So you have to decide based on your finances, based on your goals,
26:12
because the future is unknowable.
26:13
And also, okay, you might be buying, quote unquote, at the top of the market.
26:18
In 10 years' time, unless the entire financial situation, as we know it, totally changes.
26:24
In 10 years' time, the house is worth more anyway.
26:26
It's just what will happen in those intermediate years.
26:28
So it's kind of like what you think you say about the stock market in terms of
26:31
if you're looking at a longer time horizon, generally it's going to be up to the right.
26:35
So don't worry about what happens in a three-year dip when the market's technically
26:40
a little bit lower than maybe when you bought it.
26:42
Yeah.
26:43
Yeah.
26:44
When things go down, just hold on tight.
26:45
Because I had, I've got a friend, actually, one of your friends, Tuvek,
26:48
who has just bought a hay-border house, and he's selling it after a year.
26:53
And he said to me the other day, oh, no, I'm missing out on hundreds of thousands.
26:57
And I was like, why would you do that?
26:58
It seemed like such a stupid thing.
27:00
I just hold on to it, rent it out of someone else.
27:03
I did have that moment, and I was like, what are you doing?
27:06
Like some people have to sell in the current environment.
27:10
But a lot of them have had their houses for a while now.
27:13
And they're like, oh, if I sold six months ago,
27:16
a year ago, I would've got to get better price.
27:18
I'm like, yeah, but how much have you made since you bought it?
27:20
It's kind of, but there's always that psyche of like, I could have got more.
27:24
I could have done a bit of job where I could have done, you know,
27:26
it's like hindsight's great, but you always want more and more and more.
27:30
Yeah, we're human.
27:32
Can I ask you about bonds?
27:34
Because I saw a cute little video that you put on Instagram.
27:37
And it was saying essentially that you think it's a really brilliant investment
27:42
for people to look at at the moment.
27:44
Could you explain why that is?
27:46
And because I was sort of under the impression that bonds are quite low
27:49
returning and maybe not so far as.
27:52
Yeah.
27:52
So what's happened now?
27:53
Why are they more valuable?
27:56
So when you hear everyone being upset about mortgage rates and interest rates,
28:02
basically all forms of debt right now are more expensive.
28:05
Now bonds as an investment, you basically become the credit card.
28:09
You are the one lending out money to a business or a government.
28:13
They're a different type of bonds, but you are the one lending out money.
28:16
They agree and interest rate and they pay you back at that.
28:20
And so because interest rates have gone up so much, we've seen this really
28:23
unusual situation.
28:24
And again, it depends a little bit on if you're getting government bonds or commercial
28:28
bonds, but you can be getting a 7% return right now on some of these bonds,
28:33
which is unheard of.
28:36
And it's bond market has, we've all seen asset prices go down, right?
28:43
Property shares bonds as well because the price of buying bonds now is so low,
28:49
they're giving quite a high return.
28:51
It's actually by some calculations, a one and a hundred year investment
28:56
opportunity on bonds, which is not.
28:59
So I was like, back, why have you not told me that exactly what was going for a
29:03
leg is like, excuse me.
29:06
Where was that information for me?
29:08
Now it's still like other assets like it's basically if you do have spare cash
29:13
right now and you're a long-term investor, it's a great buying opportunity across
29:17
a lot of assets right now.
29:19
So bonds, they're sort of a more medium risk, medium return when you're looking
29:24
at your different investments.
29:25
So when say I look at someone like myself who has 30 years for a time and I'm
29:30
still putting the majority of my money into shares, but I'm putting a bit
29:33
extra into bonds.
29:34
They're a very good sort of balancing asset and I'm putting a bit more in
29:39
because I think with the way the economy is going, with the way interest rates
29:43
going the next six months, it's an unusually good time to be buying into bonds.
29:47
It's not usually that because you get the price, price growth or the price
29:52
appreciation and then you also get the percentage return as well.
29:58
So that's kind of why it's kind of the best, best time.
30:01
Well, not following that.
30:02
Can you explain that in a different way?
30:03
So it's kind of like if you're invested in a dividend stock and you get the
30:07
dividend, the percentage, which might be four, five, six percent dividend,
30:10
but you also get the change in the price of the stock as well.
30:13
So if the price goes from $10 to $12, you get the price difference.
30:18
That's your gain or your return, but you also get the percentage return
30:22
that the dividend stock pays out.
30:24
God, I just hate numbers so much.
30:26
And the same.
30:27
Yeah, the same as the property where you get the capital gain on the entire
30:31
property as well as maybe rent.
30:32
Yeah, exactly, yeah.
30:34
God, it's going to be here, guys.
30:36
But that's so I've never heard of bonds being explained like that,
30:40
being like, you are the credit card.
30:41
Now I was just like, oh my gosh, yes.
30:44
Like I always talk about how it's like you lending money and you're
30:47
lending money to a company or to a government or and but, yeah,
30:50
I think pretending to be a credit card is kind of like, yeah,
30:53
credit card.
30:54
Yeah, yeah, yeah, interesting.
30:56
Yeah.
30:57
What would you say has been the best investment you've ever made?
31:02
It's not going to be a bit twey, but it's going to be the investment
31:05
into my own knowledge.
31:06
I honestly.
31:07
You should be the same.
31:08
Yeah.
31:09
Yeah.
31:10
I hate so much for you or my child, the investment into me.
31:13
I should have said that.
31:15
Yeah.
31:16
Nobody let my child be the same.
31:18
Of course it's you, babe.
31:20
Yeah, no, seriously, the, the figuring things out, I mean,
31:25
because now I am also qualified, I've got my level five financial
31:29
advisors to forget and I just did that because now I get so many more
31:33
questions.
31:34
I wanted to make sure I'd like cross my teeth, dot my eyes, yada yada.
31:36
But just making sure that I'm across things and I'm talking to experts all
31:41
the time and I've done my homework and then having that knowledge behind you
31:48
means that when you do go to make a decision and sometimes things get a bit
31:52
hairy, it's a little hairy in the share market out there.
31:54
It's hairy in the property market.
31:57
You have that confidence in what you're doing because you understand the mechanics
32:02
of what's going on behind the scenes and you understand how things have gone
32:05
before, how it's likely to go this time, even if it takes months or years and it
32:10
gives you that confidence to ride things out and not make emotional decisions.
32:14
Emotions of money do not mix.
32:16
So much easier said than done, right?
32:18
So when you are making those decisions and you might be making a few thousand dollars
32:22
into the share market and that feels like a big investment, depending on where
32:25
you're at, it's still that knowledge that's behind you that's letting you make those
32:30
moves.
32:31
I've only recently started investing, like it took me probably a year and a half of
32:35
podcasting and learning with it for me to say I'm so proud of myself, but you know,
32:40
I've invested now, I think almost 50 grand into the stock market, which is huge for me.
32:47
And a lot of people have said that, kind of not fair mungering, but they're like, oh,
32:50
well, you're not worried because it's going down and I really hand on heart and say, oh,
32:54
I'm actually really confident in what I've been doing, but I don't feel worried by my
33:00
money being there at all.
33:01
And it's taken a while to get there.
33:03
But I do know what you mean.
33:04
I think there's that piece of mind that you're looking after yourself, looking after your
33:09
future and you understand what you're doing, opposed to just...
33:12
Or this has happened before and it's probably going to happen again.
33:15
And it's fine.
33:16
This is just all part of it.
33:17
And once you know that, it's so much less scary.
33:18
You know, we were talking about how the stock market in New Zealand is only finished down
33:22
four times in the last 20 years.
33:24
So you know, last year was a was a pretty bad year globally.
33:27
It's like, okay, well, I want to take advantage of this.
33:29
I don't want to be sitting here in four years' time.
33:31
We're like, no, damn it, I wish I'd invest it then and like...
33:34
In hindsight, it always looks like an opportunity.
33:36
Yeah.
33:37
In the moment, that's when it's really easy to get scared.
33:39
Totally.
33:40
And you've got headlines.
33:41
You've got media headlines that are like, we were talking about the sale the day about,
33:44
you know, Apple has it's slower sales growth in four years and it's like, that's their
33:49
job.
33:50
Their job is to sell newspapers again, but it's like, as a budding investor or like a beginner
33:55
and research, that stuff freaks you out, so yeah.
33:59
What about your worst investment?
34:00
Have you ever put money somewhere and been like, that was dumb?
34:03
Probably shouldn't have done that.
34:04
Yes, actually, okay, so I don't invest into crypto myself, you two are going to be best
34:11
friends.
34:12
I think I was sickly forced to invest in crypto in there.
34:14
Hey, we did recently and it's up, it's gone bananas.
34:18
Hey, there you go.
34:19
Happy about it.
34:21
Not having a market at all.
34:23
But, okay, so I wanted a little bit of exposure to the crypto market.
34:30
And so I invested into companies that service the crypto economy.
34:34
Iftex?
34:35
No, thankfully.
34:36
Oh, Lord.
34:37
Those types of companies that were listed, it's currently negative 60%, but because I looked
34:49
at it and was like, this is a massive punt and I don't know how it's going, I think
34:53
it was like $500 that went in there.
34:55
You didn't read mortgage to the house.
34:56
I did not read mortgage to the house.
34:58
And so I look at it and it's negative 60 and I'm just like, this is why I don't invest
35:03
in crypto.
35:04
But at the same time, I knew it was risky.
35:08
I knew it was just a little dabble in a play, so it was only a few hundred bucks.
35:11
Now, a few hundred bucks that I would still like to not lose.
35:13
So I'm just leaving it there and hoping that maybe one day it'll come back, we'll see.
35:18
But yeah, that was, that was not a great one.
35:20
That's all right.
35:21
Yeah.
35:22
I think because you've diversified and you've also, you didn't go and put 5,000 or 10,000
35:26
in it.
35:27
It's not such a scary, you know, a lot.
35:29
I like the core satellite idea where you have your core of 70, 80% of your investments
35:36
just goes into the standard index funds.
35:39
You know that stuff is always performed well over time.
35:41
That's your wealth building strategy.
35:42
And it would be what?
35:43
Like the S&P, 500, the, you know, the main merit of deals, the, yeah.
35:48
Australian index, ASX, 500, 200, yeah, yeah.
35:51
Okay.
35:52
So it's those main big indexes that, you know, really diversified, yeah, got about seven
35:57
types in a year.
35:58
Yeah.
35:59
If those collapse, that means your entire economy is collapsed and you're not worried
36:01
about your share portfolio, you're, you're getting out the bow and arrow and going ahead.
36:05
Yeah.
36:06
You know, it's, it's not good.
36:07
Oh, my God.
36:08
I love that.
36:09
That, you know, then you're 20%.
36:12
If you are someone who likes to stockpick, if you are someone who you just must have some
36:18
sort of picking things out and having a little plane, a little dabble, then keep that to
36:23
just 20%.
36:24
Those are your little satellites.
36:26
Now, I'm such a boring investor that it's not even 20% of my portfolio, but I do like
36:31
to have a little plane now and then.
36:33
So that's how I frame it in my head as the core satellite.
36:36
Make sure you've got your core sorted first.
36:38
Hmm.
36:39
I think I do that.
36:40
Yeah.
36:41
Quite boring.
36:42
But then I still want the element of like stockpick, like looking Netflix and things like
36:47
it's down to 70%.
36:48
That business is not broken.
36:49
I'm going to put a couple of, you know, a couple of hundred dollars in there and, you
36:52
know, see what happens.
36:53
Yeah.
36:54
See what happens.
36:55
And it's like, if it goes down another 70% it's all well lost.
36:57
But yeah, I think there is something about like also just kind of owning a little bit
37:01
of a company and like following it and like learning about, you know, what, what makes
37:06
the sheer price move and that kind of stuff is actually really good.
37:09
But if you're not that confident, you know, don't, don't really mortgage the house and
37:14
put it all in Netflix or anything.
37:15
No.
37:16
I'd love to just finish by asking one question.
37:19
What would be your favourite saving tip?
37:22
Huh.
37:23
Is there any fun little silly ones that are like, buy this instead of this or, um, I don't
37:30
know, put toothpaste on your toothbrush every night because you use less or like, I
37:33
don't know.
37:34
That's a terrible example.
37:35
I don't know what that was.
37:36
But you know, just, is there anything we are like, this is fun, weird.
37:39
Like, I kind of like it.
37:40
Do you know what's funny is I'm less on the savings tip bandwagon and more on the earn
37:44
more bandwagon, um, especially for women.
37:48
I feel like we often get targeted with coupon clipping and cut back and restrict and that's
37:56
really important, right?
37:57
Like, I don't want to say it's not important.
37:59
And I still say on a budget and actually, we just had a conversation at a household where
38:03
we were like, oh, we need to stop spending so much on food.
38:06
This is ridiculous.
38:07
Um, so all of that stuff is really important.
38:09
But there is also only so much you can cut back, whereas there's no ceiling on how much
38:13
you can earn, right?
38:14
I mean, I'm so about this.
38:17
And so I often think is what can you do to level up your career?
38:22
What can you do to level up side projects if you have the time and energy for those?
38:28
Um, that's probably my thing is how can you invest into yourself and your future earning
38:32
potential so that you don't have to worry so much about saving and cutting back?
38:36
It might take a while to pay off.
38:38
The good thing about savings is that they pay off pretty much immediately if you can find
38:42
them.
38:43
But if you can put that longer term investment into your earning, I just think that's more
38:48
fun for people and you'll get more options in life.
38:51
I love that.
38:52
I feel really inspired.
38:53
Mine was wild.
38:54
That was wild.
38:55
My savings took us.
38:56
Yeah.
38:57
What was it going to be?
38:58
The truth pace one?
38:59
Because that was sure.
39:00
Okay.
39:01
I was just going to say, I pretend that you forget your wallet all the time and get your
39:03
friends to pay.
39:05
If it works.
39:06
Oh my gosh.
39:07
That happened to me the other day.
39:08
I went for a coffee with somebody and I walked out.
39:10
Sorry.
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I had breakfast.
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She didn't.
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So I had majority of the bill.
39:14
And I was like, bye, babe.
39:15
Nice to see you and walked out.
39:16
And then I was like, oh my god.
39:17
And I had to run back and throw debts.
39:19
And I was like, I'm so sorry that it wasn't a money saving tip.
39:23
I promise.
39:24
I promise.
39:25
They're like, this is the tenth time Sophie.
39:27
I never do this.
39:30
Thank you so much for spending your morning with us, fans.
39:34
That's like, it's always so lovely to talk to you.
39:36
I know.
39:37
I promised this is recording.
39:38
It's also so checking that throughout the whole episode, like just like checking everything.
39:42
Yeah.
39:43
Okay.
39:44
Yeah.
39:45
I hate being the technical producer.
39:46
It's really not much.
39:47
Yeah.
39:48
If anyone out there wants to be the technical producer for the curve.
39:49
Please go to Sophie at thecurve.co.nz and just flick me an email because you are higher.
39:56
Thank you so much for listening to Raising the Curve.
39:58
These conversations are designed to teach you everything that you need to know to be
40:02
better with your money.
40:03
From saving, to investing, to talking to your friends about your salaries.
40:07
And if you liked what you heard, we would love it.
40:09
If you could hit the subscribe button, please, or leave a review at our own text five seconds
40:15
and it would really make our week, our year, our month.
40:18
Okay.
40:19
Lots of love.
40:20
See you soon.
40:21
Bye.
40:22
Sophie and I both love having a coffee in hand while we're recording the podcast.
40:26
But we definitely aren't going to be getting takeaways every morning on the company card.
40:30
That's for sure.
40:31
Which is why we're very, very, very excited about the new Virtua pop range from Nespresso.
40:35
It's available in a range of six vibrant colors.
40:38
So there is a Virtua pop suit or personal aesthetics.
40:41
We love the white ones.
40:42
I copied Vic, but they're so cute.
40:44
And they're affordably priced at $269.
40:47
paired with a milk device, your Virtua pop gives you access to endless cafe quality
40:51
styles from home.
40:52
So hit to nespresso.com or at nespresso.nz on Instagram for inspiration.