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How To Create Your Investment Strategy · She's On The Money

0:00
Speaker 1: Hello, my name's Santasha Nabananga Bamblet. I'm a proud yr
0:04
Speaker 1: the Order Kerni Whoalbury and a waddery woman. And before
0:08
Speaker 1: we get started on She's on the Money podcast, I
0:11
Speaker 1: would like to acknowledge the traditional custodians of the land
0:14
Speaker 1: of which this podcast is recorded on a wondery country,
0:18
Speaker 1: acknowledging the elders, the ancestors and the next generation coming
0:22
Speaker 1: through as this podcast is about connecting, empowering, knowledge sharing
0:27
Speaker 1: and the storytelling of you to make a difference for
0:30
Speaker 1: today and lasting impact for tomorrow.
0:33
Speaker 2: Let's get into it.
0:34
Speaker 3: She's on the Money, She's on the Money.
0:58
Speaker 4: Hello, and welcome to She's on the Money, the podcast
1:00
Speaker 4: for people who want financial freedom. We're still in the
1:03
Speaker 4: first quarter of twenty twenty four, and if it was
1:06
Speaker 4: your year to start investing and you haven't gone around
1:09
Speaker 4: to thinking about it yet, then that's quite a right.
1:11
Speaker 2: Well, it has to be, because that's the boat you're
1:12
Speaker 2: in right now.
1:13
Speaker 4: Reality. Whatever we're going to get through relatable.
1:17
Speaker 2: That's why we're doing this today.
1:18
Speaker 4: We are going to give you a gentle nudge to
1:20
Speaker 4: help with the first steps, because the first step is
1:22
Speaker 4: often the hardest. Isn't that right?
1:23
Speaker 2: I feel like it is the hardest.
1:25
Speaker 4: That's the hardest.
1:25
Speaker 2: I mean you downloaded investing platform though, yeah, And does
1:29
Speaker 2: it feel as scary now you've downloaded it, You're like, oh,
1:31
Speaker 2: this doesn't feel as intimidating.
1:32
Speaker 4: Yeah, totally. And we did do that episode recently where
1:35
Speaker 4: you kind of broke it down for me, and I'm.
1:38
Speaker 2: Going to do it again because that's exactly what we're
1:40
Speaker 2: talking about today. We're talking about how to create an
1:42
Speaker 2: investment strategy. We've obviously done so many episodes on She's
1:47
Speaker 2: on the Money about investing. So as we go through
1:50
Speaker 2: this episode and if previous topics that I have already
1:53
Speaker 2: covered come up, I'll actually point you to those episodes
1:56
Speaker 2: we've gone through and basically timestamped it. Beckt. The links
1:59
Speaker 2: are also going to be in our show notes for today,
2:01
Speaker 2: so don't worry, you don't have to write them all down.
2:03
Speaker 2: But I'm a bit biased. I think we've got a
2:06
Speaker 2: few good ones, and I've highlighted four that I think
2:09
Speaker 2: everyone needs to listen to for the first time. If
2:12
Speaker 2: you haven't, and if you have listened to these episodes,
2:15
Speaker 2: given one of them from twenty twenty one. Probably time
2:18
Speaker 2: for you to go back and have a re listen, right,
2:19
Speaker 2: So from the tenth of March twenty twenty one, listen
2:24
Speaker 2: at your own risk profile.
2:26
Speaker 4: Cord DO one. That's a good one.
2:28
Speaker 2: I do think I'm kind of funny though.
2:29
Speaker 4: That's pretty funny.
2:30
Speaker 2: I think that's a good one to talk about because
2:31
Speaker 2: we're going to be talking about risk profiles a little
2:33
Speaker 2: bit later on h We've got the fourth of May
2:36
Speaker 2: twenty twenty two. Different kinds of investing platforms. So this
2:40
Speaker 2: episode I really break down what types of platforms are
2:44
Speaker 2: out there, why you might use one over the other,
2:46
Speaker 2: and what they look like, because I feel like so
2:48
Speaker 2: many times people get analysis paralysis over what type of
2:52
Speaker 2: investing platform they should choose, and they might go, oh, Beck,
2:54
Speaker 2: what did you choose? And you go shares these and
2:56
Speaker 2: they go, oh my gosh, like my friend uses that,
2:58
Speaker 2: but then my other friend uses this other platform, Like
3:00
Speaker 2: what's the best? The best thing is working it out
3:03
Speaker 2: for yourself. From the first of March twenty twenty three,
3:07
Speaker 2: so this is like going back nearly twelve months, we
3:10
Speaker 2: did an episode back to Basics of Investing, which I
3:13
Speaker 2: think is a good one for everybody to listen to.
3:15
Speaker 2: Won't explain that one because it's actually pretty self explanatory
3:19
Speaker 2: what we actually go through in that episode. And then
3:22
Speaker 2: from the fifth of April twenty twenty three, we did
3:25
Speaker 2: an episode called Investing on a Low Income and that
3:29
Speaker 2: one I have slid in there because I think it's
3:31
Speaker 2: really important to I guess preface that you don't need
3:34
Speaker 2: to have a lot of money to start your investing journey.
3:37
Speaker 2: In fact, there are investing platforms now let you invest
3:40
Speaker 2: with as little as one cent. Love it, and I
3:44
Speaker 2: don't think investing can get more accessible than that, especially
3:47
Speaker 2: so right now I'm talking about Chares's as a platform,
3:50
Speaker 2: not a paid mention. Obviously I work with them. I
3:53
Speaker 2: just like talking about them. But if you use the
3:55
Speaker 2: code SotM Beck get free ten dollars that is, so
3:59
Speaker 2: that's money, and then you can invest with as little
4:01
Speaker 2: as one cent, you could buy so many shares and
4:03
Speaker 2: have a double and it didn't even cost you a thing.
4:05
Speaker 4: I love it.
4:06
Speaker 2: Money win.
4:06
Speaker 4: I did notice you dropped the pun after your first
4:08
Speaker 4: investing episode, which I appreciate. I hope that this episode
4:11
Speaker 4: goes out with.
4:12
Speaker 2: The pun just got really boring.
4:14
Speaker 4: Yeah, that's okay. She got boring.
4:16
Speaker 2: Do you want to know why?
4:17
Speaker 1: Why?
4:18
Speaker 2: I need to also make these episodes findable for the
4:20
Speaker 2: people that are that. Like so many times I'd be
4:25
Speaker 2: like sitting down really trying to think about, like how
4:28
Speaker 2: to paraphrase another one of Beyonce's songs to make it
4:33
Speaker 2: fit into my title, And I was like, yeah, I
4:35
Speaker 2: guess it's like important. But if you want to look
4:38
Speaker 2: at that punny one, listen to your risk profile works
4:40
Speaker 2: because you might type in risk profile She's on the money,
4:42
Speaker 2: because that's what you want to learn. But if I've
4:44
Speaker 2: gone too rogue, you're not going to find the content.
4:48
Speaker 2: I went a little bit more basic. I promised I
4:50
Speaker 2: didn't lose my spark. I actually just thought it might
4:53
Speaker 2: be more helpful for listeners totally.
4:54
Speaker 4: All if you're looking for a Beyonce song, you might
4:56
Speaker 4: stumble across this and it will change your life. But anyway,
4:59
Speaker 4: exactly after the break, we are going to give you
5:01
Speaker 4: six steps to take to create your investment strategy. But
5:04
Speaker 4: first let's talk mindset, because that really is often the
5:07
Speaker 4: biggest hurdle.
5:08
Speaker 2: Yeah, and like you've probably heard me talk about it before.
5:11
Speaker 2: Before I was a financial advisor. I worked in psychology.
5:15
Speaker 2: I have two psychology degrees. When I got out of school,
5:18
Speaker 2: I didn't want to not go to university, started something
5:20
Speaker 2: that I obviously ended up not loving as much but
5:23
Speaker 2: now adore because at the end of the day, to me,
5:26
Speaker 2: money is inherently emotional. It is inherently about your psychology
5:32
Speaker 2: and not actually that much about maths. Right Like, at
5:35
Speaker 2: the end of the day, it's your thoughts, your feelings,
5:37
Speaker 2: your beliefs, and your behaviors around money. It's actually not
5:40
Speaker 2: got a lot to do with how well you can
5:42
Speaker 2: add up the numbers or how hard you work, because
5:46
Speaker 2: some of the hardest workers we know back free to
5:49
Speaker 2: array all of their money. And then some people that
5:51
Speaker 2: we know on really low incomes are the best investors
5:54
Speaker 2: that I've ever met. Right, So, especially got not a
5:57
Speaker 2: lot to do with your finance literacy when it comes
6:00
Speaker 2: to the numbers, but more around your literacy when it
6:02
Speaker 2: comes to understanding you and why and when and where
6:05
Speaker 2: and how. So I would say mindset is truly the
6:08
Speaker 2: cornerstone when it comes to creating an investment strategy, and
6:11
Speaker 2: it's often the biggest hurdle for us to face because
6:14
Speaker 2: it's hard. The challenge lies in the psychological barriers that
6:18
Speaker 2: we actually build around money, whether we know we're doing
6:21
Speaker 2: it or not. So fear of the unknown, the anxiety
6:24
Speaker 2: of potential losses, and the overwhelming feeling that investing is
6:28
Speaker 2: reserved for the financially elite. Beck. We've grown up in
6:32
Speaker 2: a culture that doesn't always encourage open conversations about money,
6:36
Speaker 2: and as a result, many of us approach investing with
6:39
Speaker 2: a sense of trepidation. Additionally, the fear of making the
6:42
Speaker 2: wrong choice can be absolutely paralyzing. However, it's crucial to
6:48
Speaker 2: reframe our mindset and vie investing as a tool for
6:51
Speaker 2: financial empowerment and long term growth. Beck. If we're addressing
6:54
Speaker 2: these mental roadblocks, we can actually open ourselves up to
6:57
Speaker 2: a world of investment possibilities as lay that sounds, and
7:01
Speaker 2: we can take really confident strides towards our financial goals.
7:04
Speaker 2: And at the end of the day, I think every
7:07
Speaker 2: single person in our community and even sitting at this table,
7:10
Speaker 2: is going to be like, yeah, well that's kind of
7:12
Speaker 2: what I want. Like, I do want to be confident
7:14
Speaker 2: with money. I do want to be like empowered for
7:16
Speaker 2: the future and have long term growth and you know,
7:19
Speaker 2: not be absolutely screwed. When it comes to money in
7:21
Speaker 2: my older age, right, like, that's inherently what we want.
7:25
Speaker 2: But remember, it's not actually about where you start. It's
7:28
Speaker 2: about taking the first step with intention and purpose because
7:31
Speaker 2: we're all going to start at different places. You are
7:34
Speaker 2: starting at a different place than I am. And if
7:36
Speaker 2: you start comparing yourself to me, where do we get,
7:40
Speaker 2: You're then comparing yourself to an ex financial advisor. And
7:43
Speaker 2: obviously I would love to think that I've got it
7:46
Speaker 2: pretty sorted out, Beck, whereas you've not done that. And
7:49
Speaker 2: that's okay, But we need to kind of put our
7:51
Speaker 2: blinkers on, as I say all the time, and just
7:53
Speaker 2: look at our journey and our pathway and celebrate our successes.
7:57
Speaker 4: Well, that is powerful. Would be a motivational speaker, Oh,
8:00
Speaker 4: I try on, very good last, Ye've.
8:03
Speaker 2: Got it, I've got I actually want to talk about
8:05
Speaker 2: financial literacy, not just motivating people.
8:08
Speaker 4: Well, you're doing very very good both.
8:09
Speaker 2: I'm glad you're feeling motivated.
8:12
Speaker 4: Okay, So V, I'm going to make some statements and
8:13
Speaker 4: I'd love you to respond to them. Is that okay?
8:16
Speaker 4: Of course a game, It's a game. Okay, So how
8:18
Speaker 4: about this one? I'm too broke to invest, Laz.
8:22
Speaker 2: It's a very common misconception that you need a super
8:25
Speaker 2: substantial amount of money to start investing. As I said, before,
8:29
Speaker 2: investing was often seen as reserved for the financially elite,
8:32
Speaker 2: and that's a joke. Absolutely, it is not. It's all
8:36
Speaker 2: fair in love and war. Nowadays totally anyone can get
8:39
Speaker 2: in on it. You don't need to be rolling in
8:41
Speaker 2: cash to start your investment journey. The beauty of investing
8:45
Speaker 2: is that it's adaptable to various financial situations, even if
8:48
Speaker 2: you feel like your budget is really tight. They are
8:50
Speaker 2: actually ways to start small. With as little as literally
8:53
Speaker 2: one cent, you can make your initial move in the
8:56
Speaker 2: investing game. Platforms like micro investing platforms make it also
9:00
Speaker 2: really easy to dip your toes into the market without
9:02
Speaker 2: breaking your bank, but also without doing too much analysis paralysis.
9:07
Speaker 2: Often micro investing platforms and the two that are most
9:10
Speaker 2: common in our community or most popular, Spaceship and Raise.
9:14
Speaker 2: Both of those are different platforms. Go and listen to
9:16
Speaker 2: that episode on different kinds of investing Platforms from the
9:21
Speaker 2: fourth of May twenty twenty two, and I talk about
9:24
Speaker 2: those in detail. But it's honestly not about the size
9:27
Speaker 2: of your initial investment. I know that you might want
9:30
Speaker 2: to go like, if I start, I really want to
9:33
Speaker 2: start strong, totally like, I totally get that. But the
9:36
Speaker 2: longer you put it off, the less strong your position
9:39
Speaker 2: is to start. Like I would say, a stronger position
9:42
Speaker 2: is starting today with five dollars and going I'm going
9:45
Speaker 2: to save my first five hundred and then make a move.
9:47
Speaker 4: True, while you're saving, you could be.
9:49
Speaker 2: Exactly growing and growing out and giving yourself a financial
9:52
Speaker 2: education on investing, right like, you could be learning over
9:56
Speaker 2: this entire time. It's about cultivating a habit to me
9:59
Speaker 2: of consistently investing over time instead of going, i'll investment.
10:03
Speaker 2: I have more money and it's so easy to put
10:05
Speaker 2: it off by saying that, right, So, regardless of your
10:08
Speaker 2: current financial status, there's honestly always room to kick start
10:12
Speaker 2: your investment journey and work towards your financial goals.
10:15
Speaker 4: I love that. That's so true.
10:17
Speaker 2: So deciphered. Are you too broke to invest?
10:20
Speaker 3: No?
10:20
Speaker 2: Okay, never, you didn't sound so confident. Maybe we need
10:24
Speaker 2: thinking of to keep this podcast going there?
10:26
Speaker 4: Yeah, that's true. Okay, how about this one? Yep, I
10:28
Speaker 4: don't have time to invest?
10:30
Speaker 2: All right?
10:31
Speaker 4: What are you so busy is well, I'm thinking and
10:35
Speaker 4: this could be wrong, and it's something you have said
10:36
Speaker 4: in the past, but you know, a lot of people
10:38
Speaker 4: think that you have to play the market and react
10:39
Speaker 4: quickly if you're investments are doing well, and so I
10:42
Speaker 4: feel like it's kind of time consuming to be watching
10:45
Speaker 4: and waiting and predicting and thinking and all that.
10:48
Speaker 2: I mean, I'm not making you become a day trader
10:50
Speaker 2: back right. Successfully investing does not demand a significant time commitment,
10:56
Speaker 2: and as I said before, you don't need to be
10:58
Speaker 2: playing the market like day trader. In fact, research tells
11:02
Speaker 2: us that you're more likely to lose the most money
11:05
Speaker 2: doing that when it comes to investment strategy. That is
11:08
Speaker 2: the investment strategy that is going to shoot you in
11:10
Speaker 2: the foot the quickest. So developing a thoughtful and well
11:14
Speaker 2: structured investment plan, I would say's key, And it does
11:16
Speaker 2: require some time, like you're going to have to invest upfront.
11:20
Speaker 2: By setting clear goals and really choosing investments that are
11:22
Speaker 2: aligned to these goals and objectives you have, you can
11:25
Speaker 2: actually minimize the need for consistent oversight. A couple of
11:28
Speaker 2: weeks ago back, you and I were talking about the
11:29
Speaker 2: difference between an ETF and a direct share, and I
11:32
Speaker 2: was like, well, how much involvement do you want? You're
11:34
Speaker 2: like I would really like to buy an exchange traded fund.
11:37
Speaker 2: They want somebody else to kind of do the overseeing,
11:39
Speaker 2: Like I don't want to be in and out of
11:41
Speaker 2: the market all the time, Like I don't know how
11:43
Speaker 2: to make those decisions. But that's why different asset classes
11:46
Speaker 2: exist for different people. So long term investing, it often
11:49
Speaker 2: involves a strategy called buy and hold. So that's where
11:52
Speaker 2: you invest with the expectation that your investment assets are
11:57
Speaker 2: going to increase in value over time, gonna be a
12:00
Speaker 2: day trader. I feel like the movie The Wolf of
12:02
Speaker 2: Wall Street and similar movies like The Big Short has
12:06
Speaker 2: made it look like you have to be consistently.
12:08
Speaker 4: In it to win it, and like hey, they've really
12:09
Speaker 4: glamorized it.
12:10
Speaker 2: Yeah, but also made it look so confusing. Yes, that
12:13
Speaker 2: is exactly how mediocare middle aged white investment bankers want
12:17
Speaker 2: you to see it. Sure, Like that's how they want
12:19
Speaker 2: to get so hard, like, oh, you couldn't do this yourself.
12:22
Speaker 2: You're just a little girl, Yes, just a little girl.
12:25
Speaker 4: What would you know?
12:26
Speaker 2: I'm seeing some patterns sound here we are little girls
12:29
Speaker 2: who know everything. Yeah, slay, sit down, Barry. So, while
12:34
Speaker 2: it is essential to periodically review your portfolio, don't get
12:37
Speaker 2: me wrong, knee jerk reactions to short term fluctuations, I
12:40
Speaker 2: would say, are things that we need to discourage. Like
12:43
Speaker 2: if you see your portfolio go slightly down, we don't
12:46
Speaker 2: want to just sell out because it looks scary. We
12:48
Speaker 2: need to zoom out. And how many times have I
12:50
Speaker 2: said when in doubt, zoom out, look at the bigger picture.
12:53
Speaker 2: There will be a reason for that beck. So by
12:55
Speaker 2: adopting I would say, a discipline and patient approach, you're
12:59
Speaker 2: able to balance it's your investment strategy with the demands
13:02
Speaker 2: of your busy schedule, which is often drinking sparkling water
13:06
Speaker 2: at the pub. Yes, which is honestly really important.
13:09
Speaker 4: It's very important.
13:10
Speaker 2: But that's why we want to choose an investment strategy
13:12
Speaker 2: that works for your lifestyle.
13:13
Speaker 5: Right.
13:14
Speaker 2: Doesn't want to be a day trader tick. Remember, it's
13:18
Speaker 2: actually about creating a plan that aligns to your life back,
13:22
Speaker 2: not tethering you to I guess the fast paced world
13:25
Speaker 2: of day trading, which kind of looks sexy and it's
13:27
Speaker 2: actually a bit of a joke. Like, I'm not saying
13:30
Speaker 2: that day traders are jokes. You need to like back
13:33
Speaker 2: out of that a little bit because some people might
13:35
Speaker 2: come for me and that's fine, but it's not the
13:37
Speaker 2: normal way to invest for long term gains. It carries
13:41
Speaker 2: so much risk that that's why I kind of go, Well,
13:44
Speaker 2: if you're listening to this episode about how to create
13:46
Speaker 2: your investment strategy, I can almost guarantee that day trading
13:50
Speaker 2: is completely off the table because you don't have the
13:53
Speaker 2: experience yet to even consider what day trading might look like.
13:58
Speaker 2: So I guess you invest for the long term. Again,
14:01
Speaker 2: If in doubt, what are you going to do?
14:03
Speaker 4: Zoom out by Okay, what about this one?
14:07
Speaker 2: I'm ready.
14:08
Speaker 4: I'm afraid to lose money.
14:09
Speaker 2: I get it. I don't want to lose my money either.
14:11
Speaker 4: Yeah, do you really think that I.
14:13
Speaker 2: Want to lose all my money? I'm the most conservative
14:15
Speaker 2: girl you've ever met.
14:16
Speaker 4: Like, everything's in cash, not cash.
14:19
Speaker 2: I'm an investor, but I think the fear of losing
14:22
Speaker 2: money is such a common concern. But it's super critical
14:25
Speaker 2: that you understand that investing is not a guaranteed pathway
14:29
Speaker 2: to losing all your money. It's not gambling and I
14:31
Speaker 2: think that if you don't have a good level of
14:34
Speaker 2: financial literacy to understand that, you assume it's gambling, and
14:37
Speaker 2: it might be written into your money story that you
14:40
Speaker 2: think it's gambling because your parents or your guardians or
14:43
Speaker 2: people around you growing up had that mentality and go, oh,
14:46
Speaker 2: that's too risky, Beck, don't do that. You go, no, worries, no,
14:49
Speaker 2: never going to talk about it again. But like you
14:51
Speaker 2: just assume that's actually true, when in fact, historically the
14:55
Speaker 2: share market has shown a tendency to trend upwards over
14:58
Speaker 2: the long term. And if we look at the Australian
15:01
Speaker 2: share market, if you take any period that the ASEX
15:04
Speaker 2: has existed and you go, all right, I'm going to
15:07
Speaker 2: take this thirty year chunk or that thirty year chunk, Nobody,
15:10
Speaker 2: if they've been invested for more than thirty years on
15:12
Speaker 2: the ASEX, has ever lost money. Beck, that's pretty that's
15:17
Speaker 2: pretty be powerful. So if you're particularly risk averse, I
15:20
Speaker 2: get it. You can obviously opt for a more conservative
15:22
Speaker 2: portfolio that includes assets that have lower volatility. So then diversification.
15:27
Speaker 2: We've talked about spreading your investments across different asset classes.
15:31
Speaker 2: So as you said before, are you all in cash.
15:33
Speaker 2: Would Beck twelve months ago have said something like that,
15:36
Speaker 2: I really don't think you would have true.
15:39
Speaker 4: Like, oh if you got all in cash, like, how
15:41
Speaker 4: would have known? Who is she? Who is she?
15:45
Speaker 2: She's a blowed up woman. But I think it's really
15:47
Speaker 2: important to go all right, well, I've diversified, I do
15:50
Speaker 2: have some cash, I do have some shares. You know,
15:52
Speaker 2: you might have a bond. It's all going to depend
15:54
Speaker 2: on what your portfolio tolerance is. And so I think
15:58
Speaker 2: it's really important to you know, remember that. And obviously,
16:02
Speaker 2: the more diversified you are, the more you can increase
16:05
Speaker 2: the likelihood of achieving positive returns over time. I also
16:09
Speaker 2: want you to remember, before I move on from this
16:11
Speaker 2: part of the conversation, that avoiding investing altogether it doesn't
16:15
Speaker 2: stop you from, I guess, being exposed to financial risks.
16:20
Speaker 2: So you do actually need to take an informed approach
16:22
Speaker 2: that can lead to wealth accumulation and financial growth. Because
16:25
Speaker 2: if you leave your money in cash right now, Beck
16:27
Speaker 2: I wrote about this in the Age the other week,
16:29
Speaker 2: the average savings account is returning anywhere between three and
16:33
Speaker 2: a half and six percent, but our rate of inflation
16:36
Speaker 2: right now is still sitting above seven percent. So if
16:39
Speaker 2: you look at those two numbers, inflation is eating away
16:41
Speaker 2: at your cash and even if you are making some
16:44
Speaker 2: money in your savings account, over the long term, you're
16:46
Speaker 2: going backwards, right, terrifying.
16:48
Speaker 4: Yeah, that is actually very very scary.
16:50
Speaker 2: It's not good.
16:52
Speaker 4: Yeah, not good. How about this one?
16:53
Speaker 2: Oh you've got more? I do have a how many more?
16:56
Speaker 4: Well, look, I'm going to do two.
16:58
Speaker 2: Too, Okay?
16:59
Speaker 4: Is that okay with you?
17:00
Speaker 2: So fine? Because I feel like this is just an
17:02
Speaker 2: ongoing argument. You're like, here's a statement, and I'm like, yes, sit.
17:05
Speaker 4: Down, what about this. I don't know why I'm trying
17:08
Speaker 4: to prove you wrong so badly, but here we go.
17:09
Speaker 2: I like that, that's the strategy you've taken this way.
17:12
Speaker 4: Okay. So what if I say it's too late, I've
17:15
Speaker 4: already missed the boat on investing, I'll get the jet's case.
17:18
Speaker 1: So good.
17:18
Speaker 2: I always want to be right at the end of
17:19
Speaker 2: the day. The best time to invest was thirty years ago.
17:22
Speaker 2: The second best time to invest is today. It is
17:26
Speaker 2: never ever, ever too late to start your investing journey.
17:29
Speaker 2: You can feel behind like I totally get that, and
17:32
Speaker 2: we probably should acknowledge that because if I'm talking about
17:34
Speaker 2: my portfolio. You'd be like, well, you've had such good gains,
17:37
Speaker 2: I'm not going to get those ones. No, You're not
17:39
Speaker 2: get the next ones that I'm going to be in on.
17:41
Speaker 1: Then.
17:41
Speaker 2: Yeah, kind of like going surfing and you arrive at
17:44
Speaker 2: the beach and your friends are talking about these sick
17:46
Speaker 2: waves that they've caught, and you're like, oh, okay, well
17:50
Speaker 2: maybe I'll go home because I'm not going to catch
17:52
Speaker 2: those waves. There's more waves, aren't they back? Totally exactly.
17:56
Speaker 2: I don't surf, but that was I feel like a
17:57
Speaker 2: good analogy, good analogy for a non so thank you
18:01
Speaker 2: is that obvious. I feel like the notion that you've
18:04
Speaker 2: missed the boat is just one of the biggest misconceptions
18:08
Speaker 2: in investing. In reality, the investment landscape, it's really dynamic.
18:12
Speaker 2: It's always changing, and the opportunities ahead still exists regardless
18:17
Speaker 2: of where on that journey you have personally started. So
18:20
Speaker 2: time in the market is very much more important than
18:24
Speaker 2: timing the market. How many times have I said, verbatim,
18:28
Speaker 2: I'd be a really rich woman if I could turn
18:30
Speaker 2: the market back at least a billion, a billion times
18:34
Speaker 2: billion times. Ye, I'd make so much money. If people
18:36
Speaker 2: get me a dollar every time I said that, that
18:38
Speaker 2: would be a good investment if anyone wants to dm
18:41
Speaker 2: me ish. But historically, trends have shown that consistent long
18:46
Speaker 2: term investing can yield very good results, whether you're in
18:49
Speaker 2: your twenties or your thirties, or you're listening to this
18:52
Speaker 2: podcast and you're like, yeah, I've never invested and I'm
18:54
Speaker 2: in my sixties. Great, let's start. Let's go. I'm ready,
18:58
Speaker 2: you're ready. There are strategies to actually tailor your investments
19:02
Speaker 2: to your unique goals and the time horizon that you have,
19:05
Speaker 2: and the key is to actually just start as soon
19:07
Speaker 2: as possible. No such thing as missing out. We're getting
19:09
Speaker 2: on the train today. There's always another one coming, so
19:13
Speaker 2: stay committed to your plan and then let the power
19:15
Speaker 2: of compounding work in your favor. So I guess we
19:18
Speaker 2: need to just throw out the idea that you've missed
19:20
Speaker 2: out because your financial journey beck it can still set surf.
19:24
Speaker 2: I don't know catch away. I was trying to think
19:27
Speaker 2: about something that would make it ocean inspired, but there
19:30
Speaker 2: are plenty of ports along the way.
19:32
Speaker 4: Ah, you did manage it right.
19:35
Speaker 2: It's a bit of a SA reference.
19:37
Speaker 4: Right, Jo. I think that also applies to literally everything.
19:40
Speaker 4: If you feel like it's too late to start doing something,
19:42
Speaker 4: it's like, best time start was twenty years ago. Second,
19:44
Speaker 4: best time is literally right now?
19:46
Speaker 2: Yeah, get it, queen.
19:46
Speaker 4: So last one, what if I say I don't know
19:50
Speaker 4: where to start?
19:50
Speaker 2: It's a good question after I say that the best
19:52
Speaker 2: time to start is now?
19:54
Speaker 4: Haha. Yeah.
19:55
Speaker 2: So I was not actually born with an understanding of
19:57
Speaker 2: the shermket crazy right.
20:00
Speaker 4: It didn't come out of the womb.
20:01
Speaker 2: No, my dad's an accountant. I was born on the
20:03
Speaker 2: thirtieth of June. So you might assume that I did
20:05
Speaker 2: just walk out of the womb with a calculator in
20:07
Speaker 2: my hand.
20:08
Speaker 4: All the world's are up, but I didn't. That's that
20:10
Speaker 4: from So.
20:10
Speaker 2: I think it's completely normal to feel unsure because when
20:13
Speaker 2: I started studying this, this was all consuming and overwhelming
20:17
Speaker 2: for me. And now I'm like, oh, this is like
20:18
Speaker 2: a second language. I have learnt the language. You have not, Beck,
20:22
Speaker 2: So how do I expect you to speak it if
20:25
Speaker 2: you haven't started at the basics and at the fundamentals.
20:28
Speaker 2: If you don't know where to start, that is actually
20:30
Speaker 2: more normal than knowing where to start. Because if you
20:33
Speaker 2: do know where to start, what the hell why are
20:34
Speaker 2: you listening to this podcast like you might've already started
20:37
Speaker 2: and you just really like our podcast in which guesse,
20:39
Speaker 2: thank you, please stay, we love you. But you're not
20:43
Speaker 2: alone in that sentiment. The investment world, as I said,
20:47
Speaker 2: can be really overwhelming with its array of options and
20:50
Speaker 2: jargon and mediocm middle aged white men trying to make
20:52
Speaker 2: you think that this is more complicated than it is
20:55
Speaker 2: to justify their jobs. Cute from them. But the good
20:58
Speaker 2: news is that there are resources and support available to
21:02
Speaker 2: guide you through this process. Have you heard of this podcast?
21:05
Speaker 1: Right?
21:05
Speaker 2: It's called She's on the Money? So ring a bell?
21:07
Speaker 4: Heard of it?
21:08
Speaker 2: Yeah? So I would begin with their content, begin by
21:13
Speaker 2: educating yourself. You don't need to jump into a platform,
21:15
Speaker 2: you don't need to jump into putting your money where
21:17
Speaker 2: your mouth is, but understand what platforms exist. Understand that
21:22
Speaker 2: there are heaps of podcasts and articles, including obviously our
21:26
Speaker 2: episode back to Basics, which we mentioned before that break
21:30
Speaker 2: down the essentials. Take small steps and consider using micro
21:34
Speaker 2: investing platforms as like a little way to dip your
21:36
Speaker 2: toes into the water and get a hands on understanding
21:39
Speaker 2: and education that isn't going to cost you much in
21:43
Speaker 2: what investment actually looks like. I would also recommend if
21:47
Speaker 2: you really want to to see a financial professional, So
21:50
Speaker 2: whether that's a financial advisor or a mortgage broker, or
21:53
Speaker 2: even if you're just joining an online community like ow
21:56
Speaker 2: She's on the Money community, it can provide really valuable insights.
22:00
Speaker 2: But the important thing is what I've been harping on
22:02
Speaker 2: about all this episode back, and that is everyone starts somewhere,
22:05
Speaker 2: and the most important thing is to actually initiate that
22:08
Speaker 2: learning process. So don't let uncertainty hold you back, because
22:12
Speaker 2: the path towards investing clarity actually begins with you taking
22:16
Speaker 2: a step and going, what does this look like like?
22:18
Speaker 2: If you're always staring at the gate and it's shut like,
22:20
Speaker 2: it's not going to make sense. You're not all of
22:21
Speaker 2: a sudden going to be like, finally I can open
22:23
Speaker 2: the gate and see what's beyond, Like you actually just
22:26
Speaker 2: have to open the damn Gatebeck totally.
22:28
Speaker 4: We need to fight through that analysis paralysis exactly. I
22:31
Speaker 4: think this is a great time to go to a
22:32
Speaker 4: really quick break. Need a nap, Great, let's do it
22:35
Speaker 4: and we'll see you guys on the flip side.
22:37
Speaker 2: I'm ready.
22:42
Speaker 4: Welcome back everyone. So we are talking about how to
22:45
Speaker 4: create your investment strategy. I feel like it's high time
22:48
Speaker 4: we get to the You're like, give me an investment strategy.
22:52
Speaker 4: I mean I'm ready. I don't know if you're ready
22:53
Speaker 4: to feel emotionally and physically ready. I mean physically no,
22:57
Speaker 4: I have a very short breath. But I feel like
23:01
Speaker 4: investment strategy is one of my favorite things to build.
23:03
Speaker 4: And obviously I can't sit down with each and every
23:05
Speaker 4: single one of you to build you your own.
23:07
Speaker 2: I wish I could. Maybe one day there's an app maybe,
23:11
Speaker 2: although I did look into it. Apps are very expensive.
23:14
Speaker 4: Oh yeah, okay, so till then about that.
23:16
Speaker 2: You get that podcast. So I would like to teach
23:19
Speaker 2: you how to create an investment strategy. So, creating an
23:24
Speaker 2: investment strategy, it involves a lot of thoughtful steps, right,
23:27
Speaker 2: So you've got to know what you want before you
23:30
Speaker 2: come to writing down an investment strategy. It involves a
23:33
Speaker 2: whole heap of process to align your financial goals with
23:37
Speaker 2: your risk tolerance and your time horizon. So if I
23:40
Speaker 2: say risk tolerance and you go they no idea what
23:43
Speaker 2: that is? You're going to go back to the tenth
23:46
Speaker 2: of March twenty twenty one and listen to the episode
23:49
Speaker 2: Listen at your own Risk Profile, because that is going
23:52
Speaker 2: to tell you exactly what a risk profile is. It
23:56
Speaker 2: takes you through all the steps of understanding what your
23:59
Speaker 2: risk profile can be. And there are so many online
24:02
Speaker 2: that you can download and do, so you're going to
24:03
Speaker 2: go do that. I have listed out a step by
24:07
Speaker 2: step guide below. Keep listening to hopefully help you kickstart
24:12
Speaker 2: your investment journey, which I already low keyno is helpful. So
24:16
Speaker 2: let's go in. So first things first, I want you
24:18
Speaker 2: to conduct a really thorough review of your budget. We're
24:21
Speaker 2: going to look at your debts, your asset, your income,
24:23
Speaker 2: and your expenses. That's not very sexy, I know, but
24:26
Speaker 2: this is going to provide you a clear understanding of
24:29
Speaker 2: your financial position and where you're currently sitting. And we
24:32
Speaker 2: need to know that if you're going to start investing,
24:35
Speaker 2: because how on earth, Beck are we creating a plan
24:38
Speaker 2: to get to somewhere else if you don't know where
24:40
Speaker 2: you're starting from.
24:41
Speaker 4: Very good call.
24:42
Speaker 2: It's daunting, Yes, it's overwhelming, Yes nobody really wants to
24:46
Speaker 2: do it, but we're approaching this with no judgment. We're
24:48
Speaker 2: just going to look at it as what's going in
24:50
Speaker 2: and what's coming out of your bank account. It's going
24:53
Speaker 2: to tell you where your start line is and ultimately
24:55
Speaker 2: help you get as far ahead as possible. So you
24:58
Speaker 2: need to do it even if you think it's the
25:01
Speaker 2: most boring thing in the world.
25:02
Speaker 1: Mm hmm. I know.
25:03
Speaker 2: I back that it's boring.
25:04
Speaker 4: I get it.
25:05
Speaker 2: But sometimes we have to do these things called hygiene factors,
25:08
Speaker 2: and that's those things you just have to do to
25:10
Speaker 2: tick a box and go, you know what I did it.
25:12
Speaker 2: If it makes it easier, go get a nice cup
25:14
Speaker 2: of tea, a soda, water, a little cheeky wine. I
25:17
Speaker 2: don't actually care. Yeah, Cornetto, you've leveled this up.
25:21
Speaker 4: Yeah, I don't know what made me think cornetto and
25:24
Speaker 4: tax or sorry. So your telebody is hand in hand.
25:27
Speaker 2: That if I got you a Cornetto, you do your budget.
25:30
Speaker 4: I think so.
25:30
Speaker 2: Buffer calls after this sit down.
25:32
Speaker 4: Ha haha.
25:33
Speaker 2: Just wait here. The next thing we're going to do
25:35
Speaker 2: is set concrete financial goals. So I want you to
25:39
Speaker 2: divide them into short, medium, and the long term objectives.
25:43
Speaker 2: I round about this all the time because this is
25:45
Speaker 2: actually how I've broken up my money masterclass because to me,
25:49
Speaker 2: it is the best way to manage financial goals because
25:52
Speaker 2: we need to understand what needs to happen asap, like
25:55
Speaker 2: in the next two years, but also what does like
25:58
Speaker 2: ten years fifteen years look like, because we can't have
26:01
Speaker 2: one without the other, because more often than not, if
26:03
Speaker 2: we set a ten year goal, but we also have
26:05
Speaker 2: a big two year goal, that big two year goal,
26:08
Speaker 2: if it's prioritized over the ten year goal, compromises the
26:11
Speaker 2: ten year goal, and then things just get blown out
26:14
Speaker 2: and things don't happen, and then you look back and go, oh,
26:17
Speaker 2: my god, what happened? Like I didn't actually get to
26:19
Speaker 2: achieve any of the goals I set, And that's obviously disheartening,
26:23
Speaker 2: and that's not what we want. We want to make
26:25
Speaker 2: sure that we go, oh, we've taken everything into consideration.
26:27
Speaker 2: You might actually have a long term goal that you'd
26:29
Speaker 2: completely sheltered. You're like, I have no money for that
26:31
Speaker 2: right now, still a goal, but you know why you've
26:33
Speaker 2: put it to the side, right like, we know what
26:36
Speaker 2: it is. And this really helps in choosing the right
26:39
Speaker 2: investment for each goal, because if you're planning on investing
26:42
Speaker 2: and let's go back to you loving to go to Meredith.
26:45
Speaker 2: I know, Meredith is this year right, Like, it's less
26:48
Speaker 2: than twelve months away. So I'm not going to let
26:50
Speaker 2: you invest that money in the short term. But you
26:52
Speaker 2: might have a really long term goal of buying your
26:55
Speaker 2: own house, and you go, Vie, that's not going to
26:57
Speaker 2: happen in the next you know, ten plus years. Might
27:00
Speaker 2: go well, maybe we could invest that money. So we
27:03
Speaker 2: really need to understand our time frames on our goals
27:05
Speaker 2: so we know what we can do with that money.
27:08
Speaker 2: Does that make sense?
27:09
Speaker 4: Great point?
27:09
Speaker 2: All right, So the third thing we are going to
27:11
Speaker 2: do is look into the world and asset classes. And
27:15
Speaker 2: you showed me before that you knew exactly what you
27:17
Speaker 2: were talking about. Yes, so we're going to talk about
27:20
Speaker 2: shares and property and bonds and cash, and we have
27:23
Speaker 2: spoken about the different types of asset classes before on
27:26
Speaker 2: their podcast. But what I want you to do is
27:28
Speaker 2: also conduct detailed research. So what you're going to do
27:31
Speaker 2: is literally use Google and you're going to look up,
27:34
Speaker 2: you know, factors like expected returns and time frames and
27:38
Speaker 2: how quickly you can get rid of that and what
27:40
Speaker 2: tax implications exist for those asset classes. We've done so
27:44
Speaker 2: many episodes on what different asset classes exist, and you know, Beck,
27:48
Speaker 2: a couple of weeks ago, you and I were talking
27:50
Speaker 2: about the differences between ETFs and shares and managed funds
27:53
Speaker 2: and what that looks like. But back to the understanding
27:57
Speaker 2: your risk profile. That's going to be pretty cool when
28:01
Speaker 2: it comes to actually investing and getting yourself off the
28:05
Speaker 2: ground because a risk profile is going to guide what
28:08
Speaker 2: you are comfortable taking on. So if you've not heard it,
28:10
Speaker 2: please just go back and listen to that episode. Your
28:12
Speaker 2: risk profile is going to really hone down what's accessible
28:16
Speaker 2: to you as well. So if you've got that feeling
28:18
Speaker 2: of analysis paralysis, your risk profile is going to be
28:20
Speaker 2: like Beck, your real conservative, we're looking at cash or
28:23
Speaker 2: an ETF basically, and you go, oh, that's helpful because
28:27
Speaker 2: I've just wiped everything else off the table.
28:30
Speaker 4: Gotcha.
28:30
Speaker 2: A risk profile can do that for you.
28:32
Speaker 4: I'm not gonna lie. This all sounds kind of boring.
28:36
Speaker 4: Just call it out, is babe. You know, I wonder
28:38
Speaker 4: if we get to a fun part eventually.
28:40
Speaker 2: Oh you want to know how to build your football?
28:42
Speaker 1: Yeah?
28:43
Speaker 2: Can I buy some stuff yet?
28:44
Speaker 1: Or?
28:44
Speaker 2: Like, am I still just writing down my goals. Yeah, okay,
28:48
Speaker 2: So now we're at the fun beer right, which is
28:50
Speaker 2: where we actually get to build our portfolio. Because we
28:54
Speaker 2: have looked at tailoring our goals, We've looked at our
28:56
Speaker 2: time frame, we understand our risk tolerance and what asset
28:59
Speaker 2: classes we could potentially buy. We now know because we've
29:02
Speaker 2: listened to all these other episodes that diversifying across lots
29:05
Speaker 2: of different asset classes helps us to protect against potential losses.
29:10
Speaker 2: So it's actually time to do the fun thing and
29:13
Speaker 2: roll up your sleeve, assess your financial landscape, and let's
29:17
Speaker 2: set sale. She loves related puns ocean related to set
29:24
Speaker 2: sale on the path to creating your own investment strategy.
29:28
Speaker 2: So for short term goals, as I dropped before, maybe
29:31
Speaker 2: consider investments like savings accounts that are a little bit
29:35
Speaker 2: more conservative, maybe looking at a term deposit or a
29:37
Speaker 2: government bond. These investments are lower risk because they're less
29:41
Speaker 2: likely to fall in value and you can access your money.
29:43
Speaker 2: Still for the longer term goals like I gave the
29:46
Speaker 2: example of you buying a house in turn plus years,
29:49
Speaker 2: investments that have higher returns, like maybe shares or property
29:54
Speaker 2: can actually be a little bit more suitable for these
29:57
Speaker 2: goals and for that timeframe. So these vestments are higher risk,
30:01
Speaker 2: but you're investing long term, which rides out any short
30:05
Speaker 2: term falls in value, which is really sexy. So it's
30:08
Speaker 2: important to make sure that you diversify your portfolio across
30:10
Speaker 2: lots of different asset classes and with in each asset class.
30:14
Speaker 2: But obviously, Beck, you've said before, I just want ANYTF
30:18
Speaker 2: You don't have to worry too much because y's automatic diversification.
30:21
Speaker 2: But this is going to protect you against losing too much.
30:23
Speaker 2: But once you're at this point, Beck, we're going shopping.
30:27
Speaker 2: You know exactly what you want, you know the timeframe
30:31
Speaker 2: of your investment, you know how much you can afford.
30:33
Speaker 2: Because we did our budget, we did our cash flow,
30:35
Speaker 2: we looked at the different asset classes. You picked one.
30:37
Speaker 2: Now we just have to go to the supermarket and
30:41
Speaker 2: pick which one we're buying. Fun It's like their share
30:44
Speaker 2: market is kind of like coals, and you go down
30:46
Speaker 2: to coals, but there's lots and lots of different products
30:48
Speaker 2: in coals. But you just created a recipe, so you're
30:51
Speaker 2: going to go in and go all right, Well, you
30:53
Speaker 2: know I'm making dumplings at home. I need some flour.
30:57
Speaker 2: You're going to go to the flower section and look
30:59
Speaker 2: at the different floss. Flower is your ETF. So you're
31:02
Speaker 2: gonna look at the different ETFs and pick one that
31:04
Speaker 2: aligns to your budget, aligns to your goals and your values.
31:07
Speaker 2: Like if you're gluten free, you're gonna pick a gluten
31:09
Speaker 2: free flower, right, Sure, but that could be true of
31:13
Speaker 2: if you're going to the shop and going, well, I
31:15
Speaker 2: want an ETF, but it needs to be ethical. Sure,
31:17
Speaker 2: it doesn't have to be complicated.
31:19
Speaker 4: That makes so much sense and that that sounds like
31:22
Speaker 4: my kind of fun.
31:23
Speaker 2: Yeah, because you like shopping, I do. I do really
31:26
Speaker 2: like dumplings, so I felt like that would work.
31:28
Speaker 4: That's true, okay for me. Anyway, that's probably a good
31:31
Speaker 4: place to sleep.
31:32
Speaker 2: Final thoughts. We are absolutely done. The last thing I
31:35
Speaker 2: do want to say, though, is please friends, remember to
31:38
Speaker 2: start small micro investment platforms and platforms that enable you
31:42
Speaker 2: to invest with small, small amounts of money to begin
31:46
Speaker 2: with can be fantastic for learning. I also want you
31:49
Speaker 2: to be really kind to yourself because this is a
31:52
Speaker 2: journey and mistakes are just stepping stones to successes, right,
31:56
Speaker 2: Like I have failed so many times. But the thing
31:59
Speaker 2: that has meant that I can be successful. As I
32:01
Speaker 2: get up, I dust myself off and go wow, I
32:03
Speaker 2: learned from that. I'm not going to do that again.
32:04
Speaker 2: It's like touching an electric fence. You're not going to
32:07
Speaker 2: do it twice? Are you?
32:08
Speaker 4: I have done? But yes, I agree that was a choice.
32:10
Speaker 2: So wasn't it back a weird one? But we'll talk
32:13
Speaker 2: about that later. We'll talk about that off here, but
32:16
Speaker 2: most importantly, when it comes to investing, when in doubt,
32:19
Speaker 2: my friend zoom out the road to financial empowerment. Honestly,
32:23
Speaker 2: it's filled with twists and turns. It's never ever linear,
32:26
Speaker 2: but each and every single one is really important for growth.
32:30
Speaker 2: So let's just embrace the journey for what it is.
32:32
Speaker 2: It's not about the destination. We're learning along the way.
32:35
Speaker 2: Stay curious, my friends, and know that you're taking an
32:38
Speaker 2: airpeck step towards securing your financial future, which I'm so
32:41
Speaker 2: excited about. So until then, we love you. Have fun.
32:45
Speaker 2: Please let me know if you've just started investing.
32:47
Speaker 4: Absolutely, And just a reminder that the episodes that we
32:50
Speaker 4: mentioned today are in the show notes.
32:51
Speaker 2: Yeah, because we know that you didn't have a pen.
32:53
Speaker 2: You're listening to a podcast in the Car Bye Bye.
33:03
Speaker 5: The advice shared on She's on the Money is general
33:05
Speaker 5: in nature and does not consider your individual circumstances. She's
33:09
Speaker 5: on the Money exists purely for educational purposes and should
33:12
Speaker 5: not be relied upon to make an investment or financial decision.
33:16
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33:19
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