Latest / The Curve / RTC74: My Grandma left behind a million dollar portfolio

Transcript

RTC74: My Grandma left behind a million dollar portfolio · The Curve

0:00
Welcome to Raising the Curve, a podcast designed to teach you everything you need to know
0:05
to be better with your money.
0:07
And the wise words of Amy Schumer were slipping carrots into the brownie recipe.
0:12
I don't really get the saying.
0:14
It's kind of like eating vegetables that actually taste good.
0:17
You know, I'm like, still not wearing it.
0:19
Still not wearing it.
0:20
Are you on the script?
0:21
It's basically like saying, investing in finance can be boring, but it totally doesn't
0:26
need to be here.
0:27
OK, OK, so we're making it fun by putting the carrot.
0:31
OK, the vegetables are just good for you.
0:33
It's the brownie recipe.
0:35
OK, we got there, we got there.
0:36
OK, OK.
0:37
Well, you've really got a finance mate.
0:39
Yeah, one of us has to.
0:40
This is a joke.
0:41
OK, come and learn alongside me from Vick Harris, ex-fun manager.
0:45
Well, I'm going to ask all the questions that you wish you could.
0:48
And I'm going to be eating all the brownie you wish you could.
0:51
It's so not the joke, Vick.
0:54
OK, just come and talk and learn and laugh with us.
0:56
Because together, we really can raise the curve.
1:01
Not only have we recorded this entire episode before, and then lost the files,
1:06
or they were shared, I can't even remember what happened.
1:08
But now, this is the fourth time that we've tried to introduce this podcast,
1:12
because it keeps not having a microphone right now.
1:15
I'm not the most technical person, but it's fine.
1:18
Anyway, I think this is a sign.
1:20
We just shouldn't do this episode.
1:21
But it's really good.
1:23
I've been wanting to do this episode fat.
1:25
I know.
1:26
I know.
1:27
You definitely have.
1:28
And I've been dragging my feet.
1:29
But now, actually, looking at the content, I'm like, OK, this is a good one.
1:34
I'll give it to you.
1:35
So, Vick normally comes up with all the content for raising the curve.
1:37
She does all the research.
1:39
All the prayer comes with like, you know, all the jokes.
1:43
She comes and I literally just sit in, I mean, she teaches me.
1:48
And I think it works well that way, because it means the audience
1:51
are learning at the same time as me.
1:52
Yes.
1:53
And that's what most people normally say.
1:54
So nice to have someone ask the questions that I'm thinking.
1:57
Whereas if I knew what we were talking about, I probably would have already asked
2:00
you all the questions that we do live.
2:02
And also, what is it?
2:03
You don't have time to come up with questions before it's episode.
2:06
No, no.
2:07
I love that I just get to sit down and ask, you know, does self-come
2:10
prepared with the questions that she asks?
2:12
And I was like, no, no, that's completely natural.
2:14
She has no idea pretty much what we're talking about.
2:16
And she just freebles it.
2:18
People also like to she pretend to not know what your job email is like, no, no.
2:22
I actually, and next we feel a key, the idea of not being totally authentic.
2:26
Like, we're very, very honest with the things that we talk about.
2:29
We were always like, oh, no, this is the case.
2:31
Or this is the case.
2:31
And it's definitely never planned or rehearsed.
2:35
However, this is the second time of record as long as episode.
2:39
But anyway, so the reason that this idea came about was because I was talking
2:43
to my dad.
2:44
So dad has bless his heart.
2:46
Come to a few of our events.
2:48
He will ask questions.
2:49
Oh my.
2:50
He's actually getting into investing himself, which is so cool.
2:53
But the whole reason this kind of episode, I guess, came about is because my grandma,
3:00
she died when she was about 90.
3:02
So I would have been, I think I was about 14 at the time.
3:04
No, 18.
3:05
Sorry, I was my last year of school.
3:07
And it was, it was, it was, gosh, it feels like so long ago now.
3:12
But what I recently learned, because dad has gone down the rabbit hole of investing.
3:17
But also more recently, my granddad died two years ago.
3:20
And I was super close with both of them.
3:23
Like very, very, anyone close to me knows that I, yes, yes, loved them very much.
3:30
Love all my grandparents.
3:31
I think there's something so special about your relationship you have with.
3:34
Grandparents, because you can talk to them about things that, well,
3:37
and parents are there to, I guess, bring you up in a certain way.
3:41
And so they have to have certain rules and restrictions.
3:43
And you know, they're, they're the ones that are in your day-to-day life.
3:46
And then your grandparents get to be the fun ones.
3:49
They don't have to bring you up in a certain way.
3:51
You know, like I remember my parents became grandparents.
3:54
And they were like, you know, you get all the fun part of parenting now with the grandkids.
3:58
But yeah.
3:58
And I think that's kind of what it was like with, I called them Debbie and Ganger.
4:03
Because they couldn't say Patricia or William or Granny or Granddad.
4:06
So I don't know, Debbie and Ganger kind of just stuck from when I was really young.
4:11
Anyway, so my granddad died two years ago now.
4:16
Two years ago.
4:17
Is it been?
4:18
Wow.
4:19
You counted as funeral.
4:20
Yeah.
4:21
It was quite cute, actually.
4:22
He looks a lot like your dad.
4:23
Yeah.
4:24
Just like your friends.
4:25
I looked like my dad.
4:26
So I've been taking that as a compliment.
4:27
Yeah.
4:28
But it was actually really cute.
4:29
I only had a couple of friends come just because it was like, I don't know.
4:32
I was speaking and I was an absolute mess.
4:34
I mean, I could barely get through there.
4:36
You were great.
4:37
Oh, I wrote a poem as well.
4:38
Anyway, the whole thing was like very overwhelming.
4:40
But what we wanted to talk about today was my grandma.
4:44
She was very amazing.
4:45
And I feel like it's only really since she died that I've started to learn more about
4:51
her and the more that I've learned, the more I've been impressed with the stuff that she
4:55
did throughout her life.
4:56
When we were clearing out my granddad's house, obviously we didn't do this when she died
5:00
because he was still around.
5:01
Yes.
5:02
So we were going through all her beautiful antique clothing and we found her knitting needles
5:07
and we found her Spanish cassettes because she was learning Spanish.
5:09
We did.
5:10
She passed away.
5:12
And it was like, well, I was 18, 19, 20.
5:15
Yes, so it was 14 years ago.
5:17
Yeah.
5:18
Quite a while.
5:19
But we found things like, yes, so she used to learn Spanish in her spare time.
5:22
I mean, just even doing that is quite incredible.
5:25
And she, I mean, she worked in the MI5 or MI6, I can't remember which one.
5:30
Which is like the spy unit of like the UK or something.
5:33
Yeah.
5:34
So cool.
5:35
So, yes.
5:36
Anyway, they met when they were over here in the UK.
5:38
They worked in as a secretary in the MI5 where MI6 really needed to get that right.
5:43
That just reminds me of like some movie like a section or like a bodyguard.
5:47
Oh, yeah, yeah.
5:48
It's so cool.
5:49
And then my granddad was worked as a doctor during the war.
5:53
So this is second world war.
5:54
Anyway, they migrated to New Zealand and then she started having kids.
5:59
So they would have been early 30s and that's super late to be getting kids when you're back in the day.
6:04
Because this was like, you know, 80 years ago, anywhere.
6:08
So one of the things that she did throughout her life was invest.
6:12
So she invested for, gosh, I think it was about 50 years in the end.
6:17
And I've only just sort of recently come to know this because my dad, when my granddad died,
6:22
my dad inherited the investment portfolio.
6:25
Yeah.
6:26
And so this was something that was when Debbie died, the investment portfolio moved to be under his name.
6:32
And then when he died, it's been moved to be under my dad and my uncle's name.
6:36
And you like dad?
6:37
Can you leave it to me, please?
6:38
It's generation to generation.
6:40
I mean, less dad.
6:41
He's like, no, I'm leaving in there, of course.
6:43
But I'm going to take it out.
6:44
And I'm like, oh, you're such a genius.
6:45
But I don't know.
6:47
I feel this weird serendipity, like connection to her.
6:51
Now that I know that she was this massive pioneer when it comes to investing.
6:55
So she had an investing club with her female friends.
6:59
But even that back in the day is like, while the fact that she could even find some friends
7:04
that were interested in investing and doing it, like she had that initiative
7:08
and then did it on a regular basis is just like, so cool.
7:11
So she, they met, I think once a month.
7:14
And there was a bunch of women and they'd sit down and have tea and scones
7:17
and talk about companies they wanted to invest in.
7:19
Yeah.
7:20
So cool.
7:21
They invested every, I don't know, I actually know how much.
7:24
I've been a lump sum of money from her family.
7:27
And with that, she was allowed to do with it, what she wanted.
7:31
So rather than buying stockings and make up and all the things that going on holiday, whatever,
7:37
she decided to invest.
7:39
Go her.
7:40
Go Debbie.
7:41
And so my granddad.
7:43
And just for context, this is a time in the stock market is pretty bloody scary.
7:47
Like, you've had the great depression, like the 1929 stock market crash,
7:53
cause the great depression, but like scared a lot of people out of investing.
7:57
You know, this is the time when there's a lot of shit going on.
8:00
It's post-war.
8:01
You know, it's not the most stable economic time to be investing.
8:05
But yeah.
8:06
Yeah.
8:07
No, so cool getting context in that, because you kind of forget.
8:10
Run had life before you.
8:11
I find it actually so interesting learning about history in that way.
8:14
But anyway, so she, my granddad, he would pay for the house.
8:18
He would pay for food.
8:19
He would do all the basics and necessities.
8:22
And then she was loved to do what she wanted, but that money.
8:25
So.
8:26
So this is money that she earned.
8:27
So she kind of invested the money.
8:28
Well, I don't know if it wasn't just the money she earned,
8:30
because she wasn't working when she came to New Zealand.
8:32
That's right.
8:33
Yeah.
8:34
But it was, yes, I guess what she had accumulated from working at MI6, MI5.
8:38
And also the amount that she was given from her parents is kind of like not a dowry,
8:43
but here's some money to help you in New Zealand.
8:46
Yeah, yeah.
8:47
And luckily my granddad was, cause he was a doctor and a surgeon.
8:50
He was able to pay for the necessities.
8:52
Yeah.
8:53
So she had the opportunity to do what she wanted with that money.
8:55
Yeah.
8:56
But rather than just splashing it on things,
8:58
the fact that she was researching companies going to an invest in club and then actually invested.
9:03
Oh, totally.
9:04
Blows my mind.
9:05
Keeps it in there for 50 years.
9:06
So that's nuts.
9:07
Yeah.
9:08
That's crazy.
9:09
So she didn't pull that money out.
9:10
So she basically has invested and that money has grown now to be a million dollars.
9:15
Yeah.
9:16
And she's passed that on.
9:17
And it's like a...
9:18
And what, it started at about $12,000, wasn't it?
9:20
Oh, it's just like...
9:21
Which is...
9:22
Which is 50 years ago would have been a lot of money anyway.
9:24
Totally.
9:25
But like nowadays it doesn't seem like a lot to start with.
9:28
Well, sorry, it seems like going from 12,000 to a million, like that's wild.
9:33
Yeah.
9:34
But over 50 years, so doable.
9:36
But it's just a lot of us do not keep our money in for that long.
9:39
You know, we get...
9:40
We grow a little bit, maybe 10 years.
9:42
We're like, ooh!
9:43
Okay, take it out now.
9:44
I'm going to go spend it because it's growing.
9:45
So, yeah, quite amazing.
9:47
It's just so cool.
9:48
I feel very proud and grateful.
9:52
Because that's going to change my dad's retirement.
9:54
That's going to change...
9:55
Oh, totally.
9:56
My uncle's...
9:57
Sorry, I...
9:58
We've got to start calling it the 20th.
9:59
Oh, yeah.
10:00
We rebranding retirement.
10:01
We rebranding retirement.
10:02
But that's going to make such a difference for them.
10:05
You know what I mean?
10:06
The amount of financial pressure that's going to take off of them is huge.
10:10
And I love that your dad's like, I don't...
10:12
I want to try my hardest to not touch it so that he can pass that on.
10:14
You know, like, I would love to be able to pass on money.
10:17
Yes, I'm saving for my own retirement.
10:19
But, you know, if I get to a point where there's money in there that I don't spend,
10:22
I would love to leave it for my children, my children's children.
10:25
You know, like it's kind of like a legacy.
10:27
And how cool would it be if my grandkids were sitting on a couch,
10:31
talking about my investment portfolio?
10:33
I'd be stoked.
10:34
So, I had a look at the portfolio, so I've seen it to me.
10:38
And I've got a few takeaways.
10:40
Yeah, we were going to go through it.
10:42
We just thought, we owe it to her to give her a bit of air time.
10:45
For what she invested in, learn from how she did it.
10:48
She obviously had some that didn't go particularly well.
10:52
Yeah.
10:53
And some that went really well.
10:54
But we just want to look at it as inspiration because I think, yeah,
10:58
just firstly, the fact that she was investing at a time we had to look at stocks
11:02
in the newspaper, right?
11:03
And this was a time when there wasn't pretty much like any woman in the finance industry.
11:08
The first lady on the New York Stock Exchange was 50 years ago.
11:12
So, like, if you think there's very few women now,
11:15
imagine what it was like 50 years ago.
11:18
I can't even.
11:19
I really want to.
11:20
I imagine like the criticism she would have got when she's like,
11:22
I'm doing an investing club.
11:23
I'm investing that money.
11:24
Like, you know, I can just imagine not a stigma,
11:27
but be the judgment or, you know, what do you mean you're investing?
11:31
You know, that kind of thing would have been so fascinating back then.
11:34
I wonder if people she spoke to her about it.
11:37
I wonder if she was quite open and talked to everyone or if she kind of kept it.
11:41
Or the number of people that were like, oh, you should take it out now.
11:43
You should take it out now.
11:44
You know, the market's going to fall.
11:45
You know, there would have been so many people in her ear.
11:47
She would be like, nope, nope.
11:49
I'm going to keep it in there.
11:50
I'm going to keep it in there for my very good.
11:51
I'm so proud.
11:52
I'm so proud.
11:53
Anyway, I want to talk about how well it's done.
11:58
Because it's all well and good investing for the long term.
12:00
But I want to kind of tell people why.
12:03
And so she started with about $12,000.
12:06
50 years ago.
12:08
And now it's at a million dollars.
12:10
So if we broke that down kind of the average return per year,
12:14
it's just over 9% return per year, which is amazing.
12:18
Like to get that average, considering all the market corrections and falls
12:23
that we've had over that time, you know,
12:25
we've had the global financial crisis.
12:27
We've had the dot com, which was in 20, which was in 2000,
12:30
which was when all the internet companies blew up.
12:33
There's been so many blow-ups in the stock market.
12:37
Yes.
12:38
She's still managed to deliver over 9% return.
12:41
It's amazing.
12:42
And the stock market, I calculated versus what the stock market's done,
12:45
the US stock market.
12:46
And that's only done 8%.
12:47
It was just under 8%.
12:48
So she bit the market.
12:50
Oh my gosh.
12:51
Yeah, she's so cool.
12:52
Which is quite amazing.
12:54
Yeah.
12:55
And I remember speaking to her dad and he was like,
12:57
she definitely had some blobs in there as well herself.
13:00
Yeah.
13:01
So to think that, you know, this is a return considering
13:05
she's had some pretty bad investments in there,
13:08
which is kind of comes to my first point,
13:11
which is one of the four takeaways that I have is that
13:14
I think the reason it's done so well over the long term
13:18
is because it is so diversified.
13:20
You know, those few bad investments that she had in those
13:23
finance companies in New Zealand didn't make a huge impact
13:26
because...
13:27
What are the finance companies?
13:29
So back in the global financial crisis,
13:32
there was like companies that you would invest in
13:35
that within lending your money out to projects and things
13:40
that they had self interest in, if that makes sense.
13:43
So a real simple example, it's like, hey,
13:46
I've got this company invest in my company
13:48
and I invest in this property, for example.
13:50
But really, I'm the investor and I'm also the owner
13:54
of the property, so I've been a fit.
13:56
So it was just like all this kind of intertwined,
13:59
muddied kind of conflicts of interest
14:01
and it was borderline illegal,
14:03
but that's kind of in there all unravelled and blew up
14:05
and then that...
14:06
So she had invested in a few of those.
14:08
Yes, so there was...
14:09
Because I do remember my dad saying,
14:11
I don't remember what the companies were called,
14:13
but I remember my dad saying that she did make a few bad investments
14:15
and lost quite a lot of money.
14:16
Yeah, and that was a New Zealand.
14:17
And then in the US, there was all the companies,
14:19
the banks and finance companies,
14:20
they were giving out dodgy mortgages.
14:22
And so then people couldn't pay their mortgage
14:24
and then that led to kind of the downfall of Lehman Brothers
14:27
and stuff which you may have heard of.
14:29
Big investment banks over there,
14:30
which kind of filtered through the finance industry
14:34
and the economy.
14:35
So she made some bad decisions,
14:37
but she also made some good ones.
14:38
And are we basically saying that,
14:40
because the reality of investing is that you...
14:42
You're going to have a bad investment.
14:43
There's going to be stuff you're investing in.
14:45
I have bad ones.
14:46
I'm still going to have bad ones.
14:47
But this is why,
14:49
if you can spread your risk by investing
14:52
in a lot of different companies,
14:54
when one does blow up,
14:56
that's not your life savings.
14:57
You know that's 10% or 1%
15:00
or whatever of your money.
15:02
So you're like,
15:03
you know what?
15:04
That's fine.
15:05
Move on and invest in something else
15:06
because there will be...
15:07
You never know what's going to happen in the world.
15:09
So yes, she invested in 25 different companies.
15:12
So quite so far.
15:13
Yeah, yeah.
15:15
So it sounds like a lot,
15:17
but I mean, I'm impressed by the numbers.
15:19
Yeah.
15:20
That's what I mean.
15:21
Because the amount of research you would have had to do
15:23
with no access to Google.
15:24
Totally.
15:25
She would have been reading the paper
15:26
to find out the end of the day share prices.
15:28
Like, that's back in the day.
15:29
I can just imagine with like a highlighter and a pen
15:32
and a glasses writing down all these notes
15:34
and showing it with a friend.
15:35
I had a boss bless his heart
15:37
who would check the newspaper
15:39
for the share prices at the end of that.
15:40
And I'm like,
15:41
you realize we have it on the computer minute by minute.
15:43
But it was just...
15:44
He was just such an old-school mentality
15:46
way of investing.
15:47
So it was quite funny.
15:48
But yes, the way that you even used to trade,
15:51
you didn't have as she is.
15:52
You know, you couldn't just type in,
15:54
I want to buy this company and it automatically happens.
15:57
Back then, you literally had to write out a letter,
16:00
post it,
16:01
but would take days to get to the broker
16:04
or whoever was doing the transaction.
16:06
Oh my God.
16:07
And then they post it back.
16:08
Yeah, it was wild.
16:09
And then it moved to...
16:10
How cool.
16:11
...to email when you'd email your order
16:13
and then now you can just do it instantaneously.
16:15
But I wondered she was doing it.
16:16
I don't think she would have ever got to email stage.
16:18
Oh no, she wouldn't maybe.
16:19
Because she would have been...
16:21
I don't know if she kept...
16:22
Did she keep investing as like in her lady?
16:24
It depends if she didn't invest it in the lady years.
16:26
But I doubt...
16:27
I mean, she probably would have now...
16:30
You know, if your dad wanted to,
16:31
he'd definitely be doing it over...
16:33
with the digital means.
16:34
But anyway, she...
16:35
Those 25 companies...
16:37
It wasn't just investing in 25 different companies.
16:39
They were in different countries.
16:40
So she'd invested in the UK,
16:42
Australia and New Zealand and the US.
16:44
She'd invested in different sectors.
16:46
So she's diversifying across different sectors.
16:48
So banks, resources like, you know,
16:52
oil and gas companies, for example,
16:54
media companies, utility companies,
16:57
which is like power and electricity.
16:59
Oh my God.
17:00
Retail companies.
17:01
So, you know, supermarket, shopping malls,
17:05
and telecommunications companies,
17:07
which is like, yeah, you voted phones and those kind of things.
17:10
So she did everything that you tell us to do.
17:13
Yeah.
17:14
And she invested in different sized companies as well.
17:16
Gold debate.
17:17
Yeah.
17:18
So she liked to invest in Disney,
17:19
which is, you know, $160 billion.
17:21
That's crazy to me that she could invest in Disney that long ago.
17:24
Yeah.
17:25
Yeah.
17:26
Walt Disney has been around for a while,
17:27
but we know it is Disney Pass,
17:28
but Walt Disney is actually been around for years.
17:30
So her shares with Ben Disney Plus now?
17:32
No, no, no, it's the same company.
17:33
But we view it as Disney Pass,
17:35
but it's Walt Disney has been around forever.
17:38
Anyway, and she also had different investing strategies,
17:41
which was quite interesting.
17:42
So she had some active investments and some pass-in,
17:45
but that I mean, you know, she had literally stockpicked,
17:48
which company she wants to invest in.
17:50
So Disney and Telstra and Woolworths and Australia, etc.
17:54
But then she also had some pass-in investments,
17:56
which means that she was investing in an ETF.
17:58
So she was just investing in the stock market.
18:00
So she's kind of like, look, I want the market return,
18:03
but I also want to invest in some companies that I like,
18:06
or that I think are doing well, which is a fun,
18:08
which is fine.
18:09
You don't have to be exclusively one or the other.
18:11
I do that.
18:12
I do that.
18:13
Sometimes you're like, oh, you know what,
18:15
I can't be bothered researching company.
18:16
I just want to invest in the stock market.
18:17
And it's like, you know, what?
18:18
I'd rather that you just invested in something in the index
18:21
and or an ETF and did it that way,
18:23
than sitting there worried about what you're going to invest in
18:26
and not actually doing it.
18:27
So she had great diversification from that investment.
18:30
It's crazy to think she, a, you know,
18:33
like did the active in terms of found stocks
18:35
and companies that she wanted to invest in specifically,
18:38
and that she did passive, like using ETFs.
18:41
I'm just.
18:42
Yeah.
18:43
I mean, well, it has there always been ETFs,
18:45
like, is that, or is that a reasonably new phenomenon?
18:48
Good question.
18:49
No, I, it's not, that's not that new.
18:52
Yeah.
18:53
But this one, the NZX50 is what she invested in.
18:56
So, which is the top 50 companies in New Zealand.
18:59
Yes.
19:00
So, I mean, the gosh, New Zealand stock market
19:02
hasn't been around for that long.
19:04
But yeah, I think ETFs have been around for a while.
19:06
I can't not believe how good her portfolio is.
19:10
It's like, when dad sent it to me, I was like,
19:11
I'm going to fall this straight to that.
19:13
Yes.
19:14
Look at this.
19:15
What does it mean?
19:16
What are these numbers?
19:17
Yes.
19:18
So anyway, and the second thing is that she invested
19:21
in a lot of boring companies.
19:23
But this is good.
19:24
Like if you're investing 50 years, you know,
19:27
you want to be investing in the boring ones.
19:29
You want to be investing in the tortoises, not the hairs.
19:32
You know, you want to be investing in those slow, steady,
19:34
sustainable growers, because that's what's going to deliver
19:37
over the long term.
19:38
You don't want to invest in those ones that are up 100%,
19:40
down 100%, you know, those really, really spicy ones.
19:45
But this is also a favorite strategy of one of Buffett's.
19:48
He invests in the most boring companies.
19:51
Like, honestly, like insurance companies.
19:54
If MCG, like fast-moving consumer goods, you know,
19:57
like food companies, banks.
19:59
So he invests similarly to your grammar.
20:02
Ooh.
20:03
Yeah.
20:04
Are you calling my grammar war in Buffett?
20:05
Yeah.
20:06
I'm like, I feel kind of emotional.
20:08
Yeah.
20:09
So.
20:10
How cool is this?
20:11
It's boring companies are good because they're the companies
20:13
that we use on a regular basis.
20:14
And they're the companies that we're going to continue to use,
20:16
no matter what.
20:17
The economic environment.
20:19
You know, they're the ones that we use.
20:21
No, you change my mind.
20:22
Yeah.
20:23
The fact that she invested like that makes me think,
20:25
I'm...
20:26
I've been up until this point pretty,
20:28
but she about the tortoises companies.
20:31
The slower-moving companies.
20:32
Because they're not exciting.
20:33
Yeah.
20:34
When you go to dinner party, you don't want to be like,
20:35
yeah, invest in this bank.
20:36
You know, you want to be talking about,
20:38
yes, I invested in Meta.
20:39
There's a few.
20:40
Up behind it.
20:41
Up behind it.
20:42
That did a...
20:43
No, I know.
20:44
But that's what I mean.
20:45
That's the whole annoying thing about investing
20:46
and investing in stock markets.
20:47
Everyone likes to talk up these amazing, fascinating companies
20:49
that have found trust.
20:50
Just like most normal people are not doing that.
20:52
I would rather sit in the corner and be like, you know what?
20:55
I'm investing in the slow and steady ones
20:57
and I'm just accumulating my wealth
20:59
and I don't need to tune my own trumpet about it.
21:01
Yeah.
21:02
Anyway, that's what I...
21:03
You want the Dibby's approach.
21:04
Yes, you want the Dibby's approach.
21:05
So anyway, boring companies have usually
21:08
pretty strong balance sheets,
21:10
so they can survive through 50 years of economic turbulence.
21:15
They've got really good profits.
21:18
They've been around for ages,
21:19
so they pay good dividends.
21:20
So she was reinvesting those dividends as well,
21:22
which is really, really good.
21:24
Yeah.
21:25
Is she not the coolest person either?
21:27
Do you not look at that and think, you are so clever.
21:30
Because right, who would have told her
21:32
to put the dividends back in?
21:33
Most people would be like, I got dividends.
21:35
I want to take some of that out.
21:36
Yes.
21:37
So she was in...
21:38
So a lot of those companies,
21:39
the more boring standard ones,
21:41
do give dividends, right?
21:43
Yeah.
21:44
Because they can afford to,
21:45
they can see what they're earning.
21:46
If you're angry about that,
21:47
you know, the...
21:48
Yes, even you and their profits are going up and down.
21:51
You know, they've...
21:52
Yeah.
21:53
And so with that,
21:54
because she chose some of those companies,
21:56
they pay out part of the return each year.
21:58
And she was putting that straight back in turn.
22:00
Yes.
22:01
Yeah.
22:02
So, which is quite wild.
22:05
And so, yeah, a lot of these companies,
22:08
like contact energy,
22:09
which a lot of New Zealanders will know,
22:11
mercury energy,
22:12
fissure and pico health care,
22:15
talstra, chorus,
22:17
you know, this is really, really diversified portfolio.
22:20
So there's a lot of
22:22
spread amongst different sectors,
22:24
but they're all pretty boring companies.
22:26
They're companies kind of behind the scenes.
22:28
You know, you use them all the time,
22:30
but they're not the big,
22:32
flashy ones that you see up on billboards
22:34
or all that kind of stuff.
22:35
And she also did a lot of investing
22:37
in what you know,
22:38
which is something we've hopped on about at the curve,
22:40
is that, you know,
22:42
she invests in woolworths.
22:43
We all know what woolworths is.
22:44
You know,
22:45
and we're just a supermarket chain.
22:46
Talstra,
22:47
CBA, which is like the one
22:50
that if you're in Australia,
22:51
you know what that is.
22:52
What is that?
22:53
The biggest banks in Australia
22:54
that call mouth bank.
22:55
Oh, that's CBA.
22:56
Yeah.
22:57
Sorry.
22:58
I just threw in the ticker there.
22:59
The ticker coat.
23:00
I'm following.
23:02
In contact energy,
23:03
if you're New Zealand,
23:04
you know, that's coming.
23:05
It's been around forever.
23:06
A lot of us have our power
23:07
and electricity with corn.
23:08
So these companies that you know
23:09
and you see,
23:10
you'll see all the time.
23:11
She was also a housewife
23:12
as in today.
23:13
So she put the power
23:14
while she probably did the groceries.
23:16
She invested in things
23:17
that were existing within her world
23:19
and that she understood
23:20
what you always talk about.
23:21
Totally.
23:22
Yeah.
23:23
And that's exactly what Warren Buffett does.
23:25
He, I remember he came out
23:26
and he was like,
23:27
I'm not going to invest in tick companies
23:28
because I don't understand them.
23:29
I'm going to stick to what I know
23:30
and invest in.
23:31
And then that's why we invested
23:32
in Apple.
23:33
It was like,
23:34
well, you said you weren't going to invest
23:35
in tick companies.
23:36
He was like,
23:37
it's a consumer company.
23:38
I used their products.
23:39
I understand it.
23:40
So getting that mentality,
23:41
you can get so stressed and worked up
23:43
about trying to invest in something
23:45
that's like a cryptocurrency company
23:47
or something that's like,
23:49
it's so hard to understand.
23:50
It's like,
23:51
just don't even bother.
23:52
Yeah.
23:53
Put it to the side.
23:54
Move on.
23:55
There's so many other things
23:56
you need to invest in.
23:57
Yes.
23:58
But she reinvested to dividends,
23:59
which is great.
24:00
And this can actually lead
24:01
to a really significant portion
24:03
of your returns.
24:04
So we've spoken before
24:05
about compound interest.
24:06
Dividends is just like
24:08
the interest effectively.
24:09
So if you're reinvesting that back in,
24:11
you're starting from a higher base every year.
24:13
You know,
24:14
you're not taking out that money
24:15
that you've made
24:16
and spending it.
24:17
You're keeping it in there
24:18
to accumulate and grow over time,
24:20
which just adds to more and more returns.
24:24
It's actually a really fun stat here
24:26
that I found.
24:27
So I was like,
24:28
I'd be, it's not fun.
24:29
I'd just stop saying that
24:31
because I was like,
24:32
I don't know the number of funds.
24:33
So if you didn't invest $10,000
24:35
in the S&P 500 index,
24:37
so that's the top 500 companies in the US
24:40
in 1960.
24:41
So kind of when you were in
24:43
Grandma's Museum,
24:44
it would be worth 641,000
24:46
dollars now based just on the movements in the share price.
24:51
600 or 10,000 to 600.
24:53
Yeah.
24:54
If you had,
24:55
so that's assuming you've taken all those dividends out
24:57
and it's just the share price movement.
24:59
Oh, so not even not reinvesting.
25:00
Not reinvesting.
25:01
If you had kept those dividends in there
25:03
and reinvested,
25:04
which means you're then starting from a higher base every year.
25:06
Remember what that compounding?
25:08
It would be worth four,
25:10
over four million dollars.
25:12
So that's how much difference reinvesting
25:14
your dividends versus taking them out.
25:16
Hold on.
25:17
That's $10,000.
25:18
Yeah.
25:19
And it's grown to four million.
25:20
Yeah.
25:21
Yeah.
25:22
Which is wild.
25:23
We could change the future of our entire family's wealth
25:27
by investing intergenerationaly.
25:30
Like if I was to,
25:31
if that portfolio that's now worth a million,
25:33
if Dad continued to invest it in the same way,
25:35
passed on to me, my sister, my brother,
25:37
and we did the same thing.
25:39
And then it's done for their kids and their kids.
25:41
Totally.
25:42
Can you imagine?
25:43
Well, it just goes to show though.
25:44
Like when you're,
25:45
it's even like,
25:46
if you invest in yourself in your shearsies
25:48
and your money grew,
25:50
grew a bit,
25:51
grew a little bit one year,
25:52
and then you're like,
25:53
I'm going to take some of that money out.
25:54
That's effectively a dividend
25:55
that you're paying yourself, you know?
25:57
So if you were like,
25:58
look, cool.
25:59
I've made $1,000.
26:00
I'm going to take that out.
26:01
You're then starting from a lower base every year.
26:03
Well, and I've done that recently.
26:04
Yeah.
26:05
That I've done it because of head to.
26:06
Yes.
26:07
No, but I'm meaning like,
26:08
this is kind of,
26:09
essentially if you take money out
26:10
or you take dividends,
26:11
it's kind of the same concept.
26:13
You're still taking money out of your investments.
26:15
So you're not,
26:16
you're not keeping it in there.
26:17
So it's not growing by as much.
26:19
It's kind of like every time you said,
26:21
I don't know why this is what I think,
26:23
but I'm thinking of a big pyramid.
26:25
A big sandwich pyramid.
26:27
And we're scooping the top off, you know?
26:29
Yeah.
26:30
That's what it feels like.
26:31
Yeah.
26:32
Like the dust storm is coming.
26:33
Yeah.
26:34
It will keep going.
26:35
And then the dust comes back and builds that up.
26:36
And then you're pulling off.
26:37
But if you didn't,
26:38
if you didn't take it off,
26:39
it would be a bigger pyramid.
26:40
Yeah.
26:41
Exactly.
26:42
Yeah.
26:43
That's kind of, I guess,
26:44
an interesting way to look at it with my brain as well.
26:45
And then the last takeaway.
26:47
So she was very diversified.
26:49
She invested in really boring companies that she knew,
26:52
invested in dividend-paying companies.
26:54
And she invested for the long term,
26:56
which we've kind of really touched on.
26:57
And, you know,
26:58
she kept in there for 50 years,
26:59
which is absolutely bananas.
27:01
And yeah,
27:04
I think it just goes to show the longer that you can invest for,
27:08
the bigger your gains,
27:09
because the stock market goes up over the long term.
27:12
Yeah.
27:13
So what about in the situation,
27:14
because I've been talking today about this,
27:16
because I know that he's,
27:17
because the money,
27:18
I think now,
27:19
he can move to a managed fund or something.
27:22
I'm not really sure.
27:23
Yeah.
27:24
He's looking at the options of moving it
27:26
into maybe some different investments.
27:28
Yeah.
27:29
Do you,
27:30
I know this is an advice.
27:31
However,
27:32
in that situation,
27:34
you know,
27:35
you're saying leave it in there.
27:37
If it was to be moved to different investments,
27:39
because it looked like maybe more worse was just like,
27:42
I don't know,
27:43
not the best investment of whatever.
27:44
And it was moved somewhere else.
27:46
Is that still the same concept as leaving it in?
27:49
Yeah, I think it's,
27:50
you still keep me in investors.
27:51
Yes, you're selling out of one thing and putting it another,
27:53
but as long as you keep it in investors,
27:55
the only thing with managed funds,
27:57
they have additional fees on them, but.
27:59
But just,
28:00
I just more met the idea of moving the money into different investments.
28:04
It's still this,
28:05
it's a good idea if you think that other investments
28:07
are going to be better than what they think.
28:09
Totally.
28:10
You think whatever you've got.
28:11
Yeah.
28:12
That's the whole point of,
28:13
when you're looking at what to invest in,
28:14
it's like the trade off of,
28:15
okay,
28:16
do I keep the money in this company,
28:17
or fund,
28:18
or do I invest,
28:19
or do I transfer it
28:20
or invest and put the money in something else
28:22
that I might,
28:23
that might do better.
28:24
And that's what I was doing every day,
28:26
when I was managing money,
28:27
it's like, okay,
28:28
this is the portfolio,
28:29
but can I find something better?
28:30
And if so,
28:31
then of course,
28:32
do that.
28:33
Yeah.
28:34
Okay, and then you mark the market
28:35
more than timing the market.
28:36
So,
28:37
whatever you do,
28:38
don't take the money out
28:39
and wait around until you find something else to invest in.
28:42
You know,
28:43
you keep the money and invest in it,
28:44
and keep it growing
28:45
over the time.
28:46
It's probably the most important thing.
28:48
And if you don't know,
28:50
invest inial to invest inлен ups.
28:52
Please do that,
28:54
yeah.
28:55
Like we said,
28:56
it's delivered eight percent return,
28:57
over the long term.
28:58
So,
28:59
which is amazing.
29:00
Yeah.
29:01
Wearing it in the bank.
29:02
So,
29:03
Good night. Is it good? Something something just like you should. Yes. My bag. My pussy.
29:10
Is that a song? Huh? Wow. It totally is.
29:16
It was just such a classy portfolio. I mean, I know. It was supposed to be rolling in a row.
29:25
Sorry to be sorry, but you keep it. But I think this is a really cool way as well
29:31
to get you, your dad, your family interested in investing, you know? How cool would it be if I
29:38
could leave a portfolio to my grandkids and get them interested in investing and show them how
29:43
easy it is to grow wealth of generations and create this kind of family legacy. It's quite
29:49
awesome. It's amazing. I think maybe I need to haul a family meeting. Just be like, guys,
29:56
this is the situation. How amazing is she? Yeah. Let's not eff it up.
30:01
And also, let's not get some rogue uncle or auntie that's like, let's sell it all.
30:07
That would be the worst. It's like you build up this legacy and this like wealth.
30:10
And then you just get someone that makes a really shitty decision. Yeah.
30:14
But I also think from this, one another thing is you don't have to pick all the best stocks. Do you
30:19
know what I mean? Like I think I definitely get decision paralysis sometimes. Yeah.
30:25
I want to choose the best one. Exactly. And you kind of farting around trying to find a really,
30:29
really good one. And it's like just pick one. Just invest. If you invest in 50 years,
30:35
you know, like you'll be fine. So it's just just invest. Stop pissing about trying to find the
30:41
best stocks. Well, it's into auntie works. Yeah. Yes. So yes. I loved that episode.
30:48
And I just think it was meant to be in the start of the curve. Yeah. And should we post her portfolio?
30:54
Yeah. Yeah. Oh my god. Let's do it. Yeah. That's such a good idea. There'll be a lot of companies
31:00
in there that people recognize from New Zealand, Australia, the UK. Yeah. Yeah. That's interesting.
31:04
Where could the title could be? My grandma's million dollar portfolio. Yes. And if you may,
31:10
please don't ask us. No, no, no, no, no. This is she's she's she's dead. We love her and we just proud.
31:15
Yeah. We're not trying to tell people to go and do what she did. Please don't invest in what she's
31:19
invested in. No, no, no, no, caveat, caveat, caveat, caveat. It's a really, really good example
31:24
to look to look at how much that $12,000 grossed one million. I'm sorry. That's crazy. Yeah.
31:30
If you're not going to invest stuff to knowing that, then you may as well just not listen to this
31:33
podcast anymore. Yeah. And the key takeaways. Have a diversified portfolio. Invest in those
31:38
boring companies or companies you know. Invest in companies with dividends because they're
31:43
pretty financially sound and invest for the long term. Yep. Do it. Do it. Do it now.
31:55
Thank you so much for listening to Raising the Curve. These conversations are designed to
31:59
teach you everything that you need to know to be better with your money, from saving to investing,
32:04
to talking to your friends about your salaries. And if you liked what you heard,
32:08
we would love it. If you could hit subscribe button, please. Or better yet. Leave a review.
32:13
It'll only take five seconds and it would really make our week. Oh yeah. Our month. Okay. Lots of
32:18
love. See you soon. Bye.