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This girl is on FIRE... · She's On The Money

0:00
Speaker 1: She's on the Money.
0:02
Speaker 2: She's on the Money.
0:12
Speaker 3: Hello, and welcome to She's on the Money, the podcast
0:15
Speaker 3: for millennials who want financial freedom. My name is Georgia King.
0:19
Speaker 3: I'm a copywriter and journalism student, and each week I
0:22
Speaker 3: sit down to chat all things money. Is my favorite
0:25
Speaker 3: financial advisor, Victoria Devine. Hello, FA and friend Georgia King,
0:28
Speaker 3: Come on and best friend now on the show. Today
0:32
Speaker 3: we are going to be chatting through the pros and
0:34
Speaker 3: cons of fire, also known as financial independence, retire early now.
0:39
Speaker 3: This is the frugal money movement many millennials swear by.
0:43
Speaker 3: But is this method of money management actually as simple
0:46
Speaker 3: as it sounds? Today we unpack it all. Plus later
0:50
Speaker 3: on in the show, we'll be tackling a money question
0:52
Speaker 3: about investing for the very first time, and we'll be
0:55
Speaker 3: hearing from a money diarist who had a hard start
0:57
Speaker 3: to twenty twenty but has finally found her feet. So
1:01
Speaker 3: a bit of a stellar show lined up today, guys,
1:04
Speaker 3: if we do say so ourselves. But Victoria, before we
1:07
Speaker 3: get into it, money wins and confessions from the week,
1:10
Speaker 3: that was what have you got for me?
1:11
Speaker 1: I am so here for this. This is my favorite
1:13
Speaker 1: segment until I have a money confession, and then I
1:16
Speaker 1: feel guilty and I wish this segment wasn't in the podcast,
1:19
Speaker 1: but in true She's on the Money style, I have
1:22
Speaker 1: a confession for you today, give it to me. So
1:24
Speaker 1: this week I purchased some new runners, which I probably
1:29
Speaker 1: didn't need, but it made me feel really good about
1:32
Speaker 1: myself and the fact that I have recently started running again.
1:36
Speaker 1: I felt validated the fact that I needed new runners
1:39
Speaker 1: new these wasn't the case at all. I have a
1:41
Speaker 1: perfectly good pair of runners, but these ones are super white,
1:44
Speaker 1: super shiny, and I just felt like I could justify
1:48
Speaker 1: them this week. So that's my confession. I bought a
1:50
Speaker 1: pair of juice I probably didn't need, but for my
1:52
Speaker 1: mental health they were absolutely money well spent. So I'm
1:55
Speaker 1: not that sad about it, nor am I sorry.
1:57
Speaker 3: So for Surete, I feel like you can treat yourself
2:01
Speaker 3: for you know, getting back on the pavement and pound
2:04
Speaker 3: in the no I think that's good.
2:05
Speaker 1: Who am I again? I used to be a runner Georgia,
2:09
Speaker 1: but now I am definitely not a runner, and that
2:11
Speaker 1: has been made abundantly clear given my lack of fitness.
2:15
Speaker 1: So maybe I'll give some updates on that in another pod,
2:18
Speaker 1: but b yeah, share your journey with us. Yeah, look,
2:20
Speaker 1: let's move on. What's your money win or confession? Because
2:23
Speaker 1: it turns out I cannot run and I want to
2:25
Speaker 1: stop talking about that.
2:26
Speaker 3: So mine is a money win. Yay, George, Georgia has
2:30
Speaker 3: the money win. What a legend. So it's hay fever season, guys.
2:34
Speaker 3: Spring has sprung in saying that it's thirteen degrees and
2:37
Speaker 3: raining in Melbourne today. But Georgia, this isn't a money no, no, no,
2:40
Speaker 3: it's getting there. It's getting there, So hay fever season.
2:43
Speaker 3: I'm sneezing, my eyes are itchy, mouth, the roof of
2:46
Speaker 3: my mouth gets really itchy, which is fun as well.
2:49
Speaker 1: I've never had that.
2:50
Speaker 3: It's feral.
2:51
Speaker 1: Thank you for sharing with the family and trusting us
2:53
Speaker 1: with that informat.
2:54
Speaker 3: Yes, sorry, sorry, guys. So the moral of the story
2:57
Speaker 3: here is that I usually drop heaps money on clarantine. Clarantine, clarity, Yeah, clarentine.
3:04
Speaker 3: I'm going to spring goers for three months, so by
3:06
Speaker 3: the time spring is done, I've dropped hundreds of dollars
3:09
Speaker 3: on clarantine. But when I went to grab the clarantine
3:12
Speaker 3: this week, I asked the pharmacist for the generic version.
3:15
Speaker 1: Oh, I didn't even know there was a generic version.
3:17
Speaker 2: Yeah.
3:18
Speaker 3: Yeah, it's called latine laretardine.
3:22
Speaker 1: Obviously this isn't medical. Please ask your pharmacist, but I'm
3:26
Speaker 1: definitely going to look into that.
3:28
Speaker 3: Let's move on V and look at something maybe slightly
3:31
Speaker 3: more interesting exciting. Our Facebook group. It's been busy, it's
3:34
Speaker 3: always busy. Did any posts stand out to you this?
3:37
Speaker 1: Oh my gosh, yes, Emily sang to my heart, Emily,
3:41
Speaker 1: I want to be your friend, mainly because you make
3:45
Speaker 1: delicious looking food, but also you are a budgeting queen.
3:48
Speaker 1: So Emily posted this week and she said to all
3:51
Speaker 1: the preserve making souls, which I didn't know was the thing,
3:54
Speaker 1: but it turns out it is. She said, don't forget
3:56
Speaker 1: that it's coming into strawbery and tomato season. She recently
4:00
Speaker 1: up nine punnets of strawberries for a dollar forty each,
4:03
Speaker 1: which came to a grand total of fifteen dollars. I
4:06
Speaker 1: can see Georgia doing a chef kiss, and I think
4:08
Speaker 1: that that's really appropriate. And for all her strawberry jam
4:12
Speaker 1: ingredients total of fifteen dollars amazing. And she's been saving
4:15
Speaker 1: jars across the year to make preserves and she's going
4:18
Speaker 1: to get seven or eight jars out of it and
4:20
Speaker 1: then use it for Christmas presents, which I think is incredible.
4:24
Speaker 1: Like if someone gave me a homemade jam for Christmas,
4:27
Speaker 1: I think I would love that more than a store
4:29
Speaker 1: book gift. Like that is so thoughtful and also a
4:32
Speaker 1: very nice reminder. The guy sits twelve weeks to Christmas,
4:35
Speaker 1: so let's get our skates on and start planning in
4:38
Speaker 1: saying that I'm going to put some Christmas budgeting tips
4:40
Speaker 1: in the Facebook group this week, and probably a little
4:43
Speaker 1: downloadable Christmas budgeting tool if I can get it done
4:47
Speaker 1: in between everything. And yeah, I'm doing this week. But
4:50
Speaker 1: moving on, Emily, I think you are fantastic and I
4:53
Speaker 1: think we should all give jam making a crack. Georgia King,
4:56
Speaker 1: did you have something from the group that was good
4:57
Speaker 1: as Emily's.
4:58
Speaker 3: Jam Mine's from our who has written in unique money
5:02
Speaker 3: in question Mark, Hey, ladies, i always have a million weddings,
5:06
Speaker 3: often the same friend group, and I've been able to
5:08
Speaker 3: save so much money because I sow my own outfits.
5:11
Speaker 3: I always wear something new that fits perfectly that no
5:13
Speaker 3: one else is wearing. And I love this one from Friday,
5:17
Speaker 3: which has got in the picture cost her twenty five
5:19
Speaker 3: dollars to make, and that she said that that's one
5:21
Speaker 3: of the more expensive ones. She highly recommends learning to
5:25
Speaker 3: sew because it is a great investment. Now, this post
5:27
Speaker 3: got about five hundred likes in like two minutes.
5:31
Speaker 1: Which is more than you get.
5:32
Speaker 3: Well that's I've posted a couple times in the group, guys,
5:34
Speaker 3: and I'm ranking. I feel like my average is about
5:36
Speaker 3: two hundred. So let's all give georgea some more love.
5:38
Speaker 1: I mean, post in our group more bring the value
5:40
Speaker 1: to the group. Like Ellie has come on now, no pressure, right,
5:44
Speaker 1: all right, I'll hop to it. But also Ellie's dress
5:47
Speaker 1: looks incredible, Like it is so well styled. And I
5:50
Speaker 1: don't know how to explain this, but like there's a
5:52
Speaker 1: lot of different panels on there that come together really nicely.
5:55
Speaker 1: Like if you told me that that dress was from
5:57
Speaker 1: Scanlon Theodore, I would not I wouldn't blink, honestly, because
6:01
Speaker 1: it's very similar to like one that I've seen that
6:03
Speaker 1: is Navy that has like a similar bust. I love it.
6:06
Speaker 3: Yeah, it's gorgeous.
6:07
Speaker 1: Maybe Early should start selling her creations.
6:09
Speaker 3: You're a good sewer. But I'm not a good sewer,
6:12
Speaker 3: so I feel like if I try to sow address,
6:13
Speaker 3: it would just be like a smock set up.
6:16
Speaker 1: Oh, that's pretty good, that's in. The smocks are in.
6:18
Speaker 3: Maybe I'll give it a go.
6:19
Speaker 1: You know what, We're not need to talk about smocks,
6:21
Speaker 1: be here to talk about fire. So let's get straight
6:23
Speaker 1: into the main chat of the show, Georgia King.
6:26
Speaker 3: So let us chat financial independence. Retire early now. The
6:30
Speaker 3: fire movement is centered on the premise that if you
6:32
Speaker 3: save and invest as much as you can when you're young,
6:35
Speaker 3: then you'll be able to retire in your thirties or
6:37
Speaker 3: forties by living off the passive income of your investments. Now.
6:41
Speaker 3: The movement started in America in the nineties and now
6:44
Speaker 3: has an almost cult like following in Australia, with many
6:47
Speaker 3: fire Chasers, as they call themselves, detailing their experiences on
6:51
Speaker 3: blogs and in Reddit forums. The fire movement does sound
6:56
Speaker 3: like the dream to me, as you know, who wouldn't
6:58
Speaker 3: want to retire early? Get to the golf course, start
7:00
Speaker 3: hitting those balls, you know, head out on a couple
7:03
Speaker 3: of cruisers.
7:04
Speaker 1: Yeah, that's exactly a line to your value.
7:06
Speaker 3: One hundred percent. But it's Obviously it's not without controversy,
7:10
Speaker 3: So can you please chat to me a little more
7:12
Speaker 3: about how it actually works and why it seems so
7:14
Speaker 3: many millennials are turning to the fire structure.
7:16
Speaker 1: Of course I can. Georgia, and I think it's really
7:18
Speaker 1: important to preface this episode as well before we jump
7:21
Speaker 1: straight in and just say, look, fire is such a
7:23
Speaker 1: populist strategy at the moment. It is all over the Internet.
7:26
Speaker 1: It is in the debt free community in Instagram, it's
7:29
Speaker 1: all over Reddit. I've had a number of questions in
7:32
Speaker 1: our Facebook group, and I really wanted to talk about
7:34
Speaker 1: it because I think it's really important that each and
7:36
Speaker 1: every single one of us is educated about what's going
7:38
Speaker 1: on out there. Financially. However, it doesn't mean it's attainable
7:41
Speaker 1: for every single one of us. Like Georgia, we were
7:44
Speaker 1: talking about this theory or this concept before we started
7:48
Speaker 1: the podcast, and both of us kind of looked at
7:50
Speaker 1: each other over a zoom socially distanced don't worry guys
7:53
Speaker 1: kind of looked at each other and said, like, this
7:55
Speaker 1: wouldn't be possible for either of us, Like, my lifestyle
7:57
Speaker 1: does not mean I could achieve this, And Georgia you
8:00
Speaker 1: were saying something similar, and I just think it's really
8:02
Speaker 1: important to point this out, like we are not talking
8:04
Speaker 1: about this because we passionately believe that everybody should be
8:08
Speaker 1: doing fire. We want to talk about this because it
8:11
Speaker 1: is awesome to talk about It is awesome to know
8:13
Speaker 1: about this. I want you to all be financially educated
8:16
Speaker 1: and able to talk about these concepts and maybe if
8:19
Speaker 1: this does work for you, jump right in and take
8:22
Speaker 1: it all and run with it and do more research
8:24
Speaker 1: and really understand it. But I'm not here saying, oh
8:27
Speaker 1: my gosh, we did an episode on fire. You guys
8:29
Speaker 1: need to be doing this. It's not the case at all.
8:31
Speaker 1: So to get off my little disclaimer, high horse fire
8:35
Speaker 1: has received so much press over the years and is
8:37
Speaker 1: starting to take off in Australia because it does sound
8:40
Speaker 1: like the dream come true, right, Like it's a bit
8:42
Speaker 1: of a short term pain for a really long term game.
8:44
Speaker 1: And who wouldn't want to leave comfortably without working as
8:47
Speaker 1: soon as possible. I know I would. That's actually a lie, Georgia.
8:50
Speaker 1: I don't think I'll ever stop working. But that's beside
8:53
Speaker 1: the point. So the logic for most people who follow
8:56
Speaker 1: the fire strategy is that you spend less than you
8:58
Speaker 1: earn and invest that surplus into low risk shares. Once
9:02
Speaker 1: you've reached the point where your investment income is equal
9:05
Speaker 1: to or more than what you can comfortably live on,
9:08
Speaker 1: then you can did your day job and you can
9:09
Speaker 1: live off that passive income for the foreseeable future. The
9:12
Speaker 1: general idea here is actually that you'll have nailed financial
9:15
Speaker 1: independence and be able to retire early when your net
9:18
Speaker 1: worth is twenty five times your yearly income and living expenses.
9:22
Speaker 1: I know everyone's asking why twenty five. Well, the whole
9:25
Speaker 1: movement is underscored by the four percent theory, which is
9:28
Speaker 1: a rule that assumes that the money you've saved is
9:31
Speaker 1: invested smartly and safely, and it'll increase in value by
9:34
Speaker 1: about seven percent each year. Then you add standard inflation
9:37
Speaker 1: rates of about three percent to that, and you're left
9:40
Speaker 1: with a rate of return of around four percent a year.
9:43
Speaker 1: So the crux of the idea is that you'll have
9:45
Speaker 1: enough saved and invested to live off just four percent
9:47
Speaker 1: each year, and then subsequently your initial investment will last forever.
9:51
Speaker 1: So it sounds like a dream, right yeah. To help
9:53
Speaker 1: visualize this, even though this is a podcast, I've pulled
9:56
Speaker 1: together an example, so like, bear with me, I'll explain it,
9:59
Speaker 1: but you know what will also do it. We'll post
10:00
Speaker 1: this example in the Facebook page with a pretty graphic
10:03
Speaker 1: so that it makes a lot more sense. So, say
10:05
Speaker 1: you've established that you need about twenty thousand dollars a
10:08
Speaker 1: year to live on. Now, I know that that is
10:10
Speaker 1: not what everybody will live on. I know my living
10:12
Speaker 1: costs are a bit more than that, and everybody else's
10:15
Speaker 1: is as well. But this is an example, and I've
10:16
Speaker 1: simplified it as much as possible so that we can
10:19
Speaker 1: understand it. And then twenty thousand dollars must be around
10:22
Speaker 1: four percent of the total value of your savings before
10:25
Speaker 1: you can retire. So using this example, you need at
10:28
Speaker 1: least five hundred thousand dollars invested in order to live
10:31
Speaker 1: off your passive investment income of twenty thousand dollars a year.
10:34
Speaker 1: This is because four percent of five hundred thousand dollars
10:37
Speaker 1: is twenty thousand dollars, and you could double that as well.
10:39
Speaker 1: So say if you wanted to live off forty thousand dollars,
10:42
Speaker 1: you'd need a million dollars saved and invested before you
10:45
Speaker 1: can retire to have a passive income of forty thousand dollars.
10:48
Speaker 1: So like it's scalable and it makes a lot of
10:50
Speaker 1: sense in this way. These figures change according to how
10:53
Speaker 1: much of your annual income you can actually live off
10:55
Speaker 1: each year. So, say you're earning maybe eighty thousand dollars
10:59
Speaker 1: a year, instead stead of living off twenty five percent
11:01
Speaker 1: of it, you live off fifty percent. Your annual living
11:04
Speaker 1: expenses would be forty thousand dollars instead of twenty thousand dollars.
11:07
Speaker 1: And back to my example, before using the four percent rule,
11:10
Speaker 1: you now need to have to save and invest at
11:12
Speaker 1: least a million dollars before you could retire and live
11:14
Speaker 1: off your investment earnings.
11:16
Speaker 3: That's like a brain explosion.
11:17
Speaker 1: Yeah, I'm sorry. I'm trying really hard to make it
11:19
Speaker 1: really simple, but at the end of the day, money
11:21
Speaker 1: can be a really foreign concept for most of us,
11:24
Speaker 1: and I think that's really important to mention here as well.
11:26
Speaker 1: Like in our brains, our brains work logically, which is
11:30
Speaker 1: why it is so hard for us to understand compound
11:33
Speaker 1: interest because we go one plus one equals two, right,
11:37
Speaker 1: But when compound interest comes into play, one plus one
11:40
Speaker 1: doesn't necessarily equal to if you've got an interest rate
11:43
Speaker 1: being applied to a one plus one good equal two
11:45
Speaker 1: point twenty five like, and that just doesn't make sense
11:48
Speaker 1: to our brains. It is not because we are not smart,
11:50
Speaker 1: is not because we don't understand it. It's because literally,
11:53
Speaker 1: our brains are not wired to understand compound interest easily,
11:58
Speaker 1: which is why we have to work, Georgia extra hard
12:00
Speaker 1: to understand it and wrap our hens around it. And
12:02
Speaker 1: why when people start talking about investment, so many of
12:06
Speaker 1: us feel like these things just go straight over our
12:08
Speaker 1: head because genuinely, they are hard to grasp. It's not
12:12
Speaker 1: a simple concept. I really think that millennials are drawn
12:15
Speaker 1: to fire though, back onto this topic, Georgia, it's because
12:18
Speaker 1: it fits with our reputation of being leisure loving people
12:21
Speaker 1: who have a zest for life and travel and consumerism
12:24
Speaker 1: and all of that other stuff.
12:26
Speaker 3: We know.
12:26
Speaker 1: Millennials are an incredibly hard working generation, and we're also
12:29
Speaker 1: really entrepreneurial, and a lot of us are seeking an
12:32
Speaker 1: alternative route to the traditional path to success of working
12:35
Speaker 1: a nine to five Monday to Friday job in a
12:38
Speaker 1: big company and staying loyal there until retirement. Like we
12:41
Speaker 1: know that it has changed Historically, people would get one
12:45
Speaker 1: job and stay there and retire there, and they'd have
12:47
Speaker 1: their thirty year ten years, whereas the average tenure of
12:50
Speaker 1: millennials now is like eighteen months. It is so much different.
12:54
Speaker 1: But nowadays many of us are drawn to creating side
12:57
Speaker 1: hustles or small businesses, and we're really rejecting the premise
13:00
Speaker 1: that there is only one way, an old fashioned way
13:02
Speaker 1: to becoming financially free. We are taking our future into
13:05
Speaker 1: our own hands. And I think that the fire strategy
13:07
Speaker 1: really appeals to that entrepreneurial spirit that many of us
13:10
Speaker 1: innately have, or many of us are now being surrounded
13:13
Speaker 1: by with social media. So I think it is really
13:16
Speaker 1: cool to see and such an interesting concept to kind
13:19
Speaker 1: of study and understand and go, hey, what does this
13:21
Speaker 1: actually mean? Like what are these people doing and how
13:24
Speaker 1: does this work?
13:26
Speaker 3: Which leads me perfectly to my next question. V Like,
13:28
Speaker 3: it obviously has a lot going for it, and it
13:31
Speaker 3: does sound really appealing, but I think it would be
13:34
Speaker 3: helpful for our listeners if we could kind of rattle
13:36
Speaker 3: off the pros and the cons of fire so that
13:40
Speaker 3: they know if this is the right option.
13:42
Speaker 1: For them one hundred percent. And I think that this
13:44
Speaker 1: is really important to do as well, because we also
13:47
Speaker 1: need to touch on and on going a little bit
13:49
Speaker 1: left field, because this is more into like understanding investments,
13:53
Speaker 1: but why we invest. And so many people in our
13:56
Speaker 1: community keep saying to me like, oh, Victoria, I really
13:58
Speaker 1: want to start investing, and I say, great, fantastic, I'm
14:01
Speaker 1: so glad you are here. Why do you want to invest?
14:03
Speaker 1: And they go because it's good. And everyone's been telling
14:06
Speaker 1: me it's good. It's like okay, but like, what do
14:08
Speaker 1: you want to get out of it? And even last week,
14:10
Speaker 1: I had this meeting with such a beautiful new client
14:12
Speaker 1: of mine and I'm so excited that she's joining my
14:14
Speaker 1: little family. But I was speaking to her and she's like,
14:17
Speaker 1: you know, I really want to invest, and she has
14:18
Speaker 1: a fair bit to invest in, you know, save, and
14:21
Speaker 1: I was like, okay, let's get to the crux of it.
14:22
Speaker 1: Why do you want to invest? And she was like, oh,
14:24
Speaker 1: so you know, maybe when I retire, I can sell
14:27
Speaker 1: down my investment portfolio and I can use that money
14:30
Speaker 1: to live my life. I'm like, no, no, no, no,
14:32
Speaker 1: that's not what we want. Investment creates passive income, and
14:37
Speaker 1: I think that we need to understand what passive income
14:39
Speaker 1: is so that we can understand why we are investing.
14:42
Speaker 1: Passive income is something that I talk about all the time,
14:45
Speaker 1: and it is a very smart way of making your
14:47
Speaker 1: money work for you. If you do the work now,
14:50
Speaker 1: then that compounding interest is going to look after you
14:52
Speaker 1: in the long run forever. It's not just until you
14:55
Speaker 1: retire and you sell your investment portfolio. It's not why
14:59
Speaker 1: we're putting money in to supberranuation so we can sell
15:01
Speaker 1: it down and then have you know, five hundred grand
15:03
Speaker 1: sitting in our account. It's so that five hundred thousand
15:06
Speaker 1: dollars makes dividends and returns that we get in cash
15:10
Speaker 1: each and every single year, and compounding interest works by
15:14
Speaker 1: every single year. Maybe if you've got a dollar invested,
15:16
Speaker 1: and let's just say cleanly you're making a ten percent return,
15:20
Speaker 1: you would then the year after you'd then have a
15:22
Speaker 1: dollar and ten cents to invest. So the money that
15:25
Speaker 1: your money is making so that ten cents is then
15:28
Speaker 1: invested the year after and you might get ten percent
15:30
Speaker 1: on that. So it makes money while you're not working
15:33
Speaker 1: for it, and over time, that makes a very very
15:36
Speaker 1: significant difference. And I know that this is you know,
15:39
Speaker 1: a little bit off track, but it's so important for
15:40
Speaker 1: you to understand that when you get to retirement, your
15:44
Speaker 1: investment is still making money for you, and that is
15:48
Speaker 1: the money you live off. So the money you've been
15:50
Speaker 1: saving and investing all these years, you don't actually sell down,
15:54
Speaker 1: you don't spend that that in theory is meant to
15:57
Speaker 1: last forever, like that'll go to your children, or that'll
16:01
Speaker 1: go to you know, a cause that you really believe in.
16:03
Speaker 1: And that's why will's in a state planning, and you know,
16:06
Speaker 1: planning your future is so important because we are going
16:09
Speaker 1: to create assets for ourselves that pay us forever. And
16:13
Speaker 1: that goes back to that example I gave you guys before,
16:16
Speaker 1: which essentially says that if you save and invest and
16:20
Speaker 1: you want to get you know, five hundred thousand dollars
16:22
Speaker 1: in your savings account and it returns at seven percent,
16:26
Speaker 1: and then you have inflation, et cetera, you will get
16:29
Speaker 1: a passive income each and every single year on average
16:32
Speaker 1: from your investment portfolio of twenty thousand dollars. And then
16:36
Speaker 1: you know, if you've got a million dollars invested, you'll
16:39
Speaker 1: get forty thousand dollars a year. So on and so forth.
16:42
Speaker 1: So say, if you are in a situation where currently Georgia,
16:45
Speaker 1: maybe you earn't eighty thousand dollars a year, and you go, hey,
16:49
Speaker 1: if I still had eighty thousand dollars a year coming
16:51
Speaker 1: in each and every single year, I could retire, like
16:55
Speaker 1: I'd be happy. I could pay off my house, or
16:57
Speaker 1: I could pay rent, or I could you know, go
16:59
Speaker 1: on holidays. Maybe it's a really comfortable income for you
17:01
Speaker 1: and you want to achieve it. Fantastic. If you can
17:04
Speaker 1: create a two million dollar portfolio, you will have an
17:08
Speaker 1: eighty thousand dollars amount of money coming in each and
17:11
Speaker 1: every single year for the entire time that you have
17:13
Speaker 1: two million dollars invested. Does that make sense?
17:16
Speaker 4: Yeah?
17:16
Speaker 1: I think so.
17:17
Speaker 3: I think that's a pretty good description of how it
17:20
Speaker 3: all works.
17:21
Speaker 1: Yes, but let's get back on track. I'm sorry that
17:23
Speaker 1: I'm just jumping around.
17:24
Speaker 3: No, no, no, I think that's very, very valuable. But we
17:27
Speaker 3: were talking about the pros. So that was the passive
17:30
Speaker 3: income point, I guess, But what else can our listeners
17:32
Speaker 3: be getting excited about with this method?
17:35
Speaker 1: Obviously all that because I've just spent the entire episode
17:37
Speaker 1: just talking about why we invest but also investing in
17:41
Speaker 1: low risk generally pays off and there's not a lot
17:44
Speaker 1: of risk here if you invest really well. So if
17:46
Speaker 1: you're trying to achieve an early retirement by taking a part,
17:49
Speaker 1: it is definitely not advisable. But if you really know
17:52
Speaker 1: what you are doing with those investments, then the risk
17:54
Speaker 1: is really reduced. So from my rating, it seems like
17:57
Speaker 1: a lot of fire chases are choosing to invest in
18:00
Speaker 1: ETFs or LICs, which we know are very reliable choices
18:03
Speaker 1: when it comes to the stock market. I won't get
18:06
Speaker 1: into those. You can absolutely google them or go back
18:07
Speaker 1: and listen to our investing podcasts from season one just
18:10
Speaker 1: to get a bit of a recap. But in general,
18:13
Speaker 1: the fire method has really been designed, as I've pointed
18:15
Speaker 1: out before, to let you live your life the way
18:17
Speaker 1: you want to live it, and it provides an alternative
18:19
Speaker 1: option to the nine to five grind, and honestly, that's
18:22
Speaker 1: probably the biggest benefit. That you get to have more
18:24
Speaker 1: say in what your life looks like, and that is
18:26
Speaker 1: probably why so many people are drawn to it. But
18:28
Speaker 1: in saying that, with all positives, there are often a
18:31
Speaker 1: number of negatives, and I think it's really important to
18:34
Speaker 1: point out those as well. Look, one of the biggest
18:36
Speaker 1: issues for me Georgia is that fire is impossible for
18:38
Speaker 1: a lot of people who already have been in harder
18:41
Speaker 1: financial situations or don't earn big six, bigger salaries that
18:44
Speaker 1: might have multiple debts, etc. So forth. So it's almost
18:48
Speaker 1: like to make fire happen, you kind of need to
18:50
Speaker 1: be in a privileged position from the outset to make
18:53
Speaker 1: that occur. And you know, for you really break it down,
18:56
Speaker 1: to make fire work, you have to really really aggressively
19:00
Speaker 1: save like we're talking fifty to seventy five percent of
19:03
Speaker 1: your income, and for most of us geor Ja, that's
19:05
Speaker 1: literally not plausible. Like it sounds good in theory when
19:08
Speaker 1: you're like, oh my gosh, this strategy could work, like
19:11
Speaker 1: it's all about being frugal. I can be frugal, but like,
19:13
Speaker 1: can you save seventy five percent of your income to
19:15
Speaker 1: create this? Like it might not be something that is
19:18
Speaker 1: actually able to be achieved. And I would hate to
19:21
Speaker 1: think that people look at it and then get really
19:22
Speaker 1: disheartened because it doesn't fit them. A lot of people
19:25
Speaker 1: who actually follow fire have had success. Forget to mention
19:28
Speaker 1: their position of privilege and insist that it's the way
19:31
Speaker 1: to get rich and live your best life, when in reality,
19:33
Speaker 1: for a lot of us, it's just not that easy.
19:36
Speaker 1: Like for lots of families and individuals, putting that surplus
19:38
Speaker 1: money aside isn't possible because there isn't actually a surplus
19:41
Speaker 1: in their income. Life. At the end of the day,
19:44
Speaker 1: Georgia is expensive, and I think that this outlook can
19:47
Speaker 1: be a little bit limited and exclusive.
19:49
Speaker 3: Yet in a way, yeah, I feel.
19:50
Speaker 1: That obviously a massive part of getting this right is
19:53
Speaker 1: living very frugally and restricting yourself to maybe not treating
19:56
Speaker 1: yourself to lavish dinners or going out or holidays here
19:59
Speaker 1: and there, which, honestly, Georgia for a lot of us,
20:01
Speaker 1: is a really important part of our twenties, right, Like,
20:04
Speaker 1: that's something that I really value and I'm not willing
20:07
Speaker 1: to give up. And of course it's very privileged to
20:09
Speaker 1: say things like this, but I think a lot of
20:11
Speaker 1: millennial Australians have grown up and grown used to the
20:14
Speaker 1: idea that you can go or own overseas trip every
20:17
Speaker 1: few years, and you can go out for dinners and
20:19
Speaker 1: drinks pretty regularly each month. And I think that for
20:22
Speaker 1: so many of us weighing up whether you're willing to
20:24
Speaker 1: sacrifice these luxuries in life and the things that you
20:27
Speaker 1: really love doing in your twenties and thirties so that
20:29
Speaker 1: you can live comfortably without salaries in your forties might
20:33
Speaker 1: not be something that you're doing. And being honest, like,
20:36
Speaker 1: I don't think this is something that I would be
20:38
Speaker 1: comfortable doing. And Jorjo, I've said before to you that
20:40
Speaker 1: I think that old age is a privilege denied to
20:43
Speaker 1: many people. And I really want to live my life,
20:45
Speaker 1: you know, responsibly. I do want to save, I do
20:47
Speaker 1: want to invest, I do want to really provide for
20:49
Speaker 1: future me. But future me is just as important as
20:52
Speaker 1: current me, and I need to look after both of
20:55
Speaker 1: those versions. So I think it's important to talk about that.
20:58
Speaker 1: Not saying that people in their forties are old by
21:00
Speaker 1: any stretch of the imagination, but I just think that,
21:03
Speaker 1: you know, you see so many things happen in life,
21:05
Speaker 1: like we should be enjoying it and making the most
21:07
Speaker 1: of it, always while still setting ourselves up for success.
21:10
Speaker 1: And to me, if that means that I am working
21:13
Speaker 1: for twenty more years, I'm I'm pretty okay with that.
21:16
Speaker 3: It's worth it.
21:17
Speaker 1: It's worth it.
21:18
Speaker 3: I feel like this year has also really crystallized how
21:21
Speaker 3: important the color in our worlds is. Like we can't
21:25
Speaker 3: go on holidays, we can't go out for dinner. Yes,
21:27
Speaker 3: it sounds privileged, but a lot of that stuff really
21:30
Speaker 3: makes life worth living. And this method means that you
21:33
Speaker 3: do have to forego all of that and you know,
21:35
Speaker 3: have beans on toast for dinner most nights a week.
21:37
Speaker 3: You can't go out with your friends and spend money,
21:40
Speaker 3: like you really do have to make a pretty big
21:42
Speaker 3: sacrifice to make this work.
21:45
Speaker 1: I think it's really inspirational. There are people who are
21:48
Speaker 1: doing it, and I absolutely love it, and I would,
21:50
Speaker 1: you know, love to talk to more people who are
21:52
Speaker 1: doing it, and I've met lots of them, like I
21:54
Speaker 1: have clients who are doing this, so I'm not actually
21:56
Speaker 1: that distanced from this concept. But for me, I also
22:00
Speaker 1: think it's one of those things that if you're passionate
22:03
Speaker 1: about it and you really commit to this, this isn't like, oh,
22:06
Speaker 1: I'm saving for my house and you know, you kind
22:08
Speaker 1: of do it for twelve months or two years or
22:11
Speaker 1: however long that happens for You're actually doing it for life,
22:15
Speaker 1: and I think that that's a massive you know, strain
22:18
Speaker 1: on relationships and strain on your personal relationships. Like I know,
22:22
Speaker 1: it would make it really hard if I had a
22:23
Speaker 1: girlfriend who was doing that, because the way I socialize
22:27
Speaker 1: is often, you know, going out and going for walks
22:29
Speaker 1: and grabbing coffees and doing things that maybe she might
22:32
Speaker 1: not want to do. And I just think that it's
22:34
Speaker 1: worthy of taking that into consideration too. But it could
22:37
Speaker 1: also be easier if you end all your friends want
22:39
Speaker 1: to achieve that. Maybe you're all on the same page
22:41
Speaker 1: and you're just like, yep, sick, this is awesome. This
22:43
Speaker 1: is our plan. We're all going to retire early, and
22:45
Speaker 1: we're going to do it together, like awesome. But I
22:48
Speaker 1: think that there is a lot of social pressure that
22:50
Speaker 1: might come along with this theory or this way of
22:53
Speaker 1: living and then moving on a bit more. I think
22:55
Speaker 1: that it's also another negative. Sorry guys, Via doesn't really
22:59
Speaker 1: consider that life occurrences pop up like ill health or
23:02
Speaker 1: death or divorce, or you know, your car breaking down
23:05
Speaker 1: on the side of the road and you're needing to
23:06
Speaker 1: grant to fix it. And I think that these things
23:09
Speaker 1: can swoop in unexpectedly and muck up our plans. So
23:11
Speaker 1: it's not always as straightforward as it would have been
23:14
Speaker 1: in an ideal world. And while it's great on paper,
23:17
Speaker 1: there are always unforeseen things that pop up. And if
23:20
Speaker 1: you've been unemployed for like thirteen years retired and then
23:23
Speaker 1: you need to get back into one of your income
23:26
Speaker 1: streams because it's been unexpectedly compromised, then I think you
23:30
Speaker 1: might find it harder to get back into the workforce
23:32
Speaker 1: and get back on track. So I think that something
23:34
Speaker 1: that goes along with this would be making sure that
23:36
Speaker 1: you're really well insured and you're really well looked after.
23:40
Speaker 1: But it's also really important to note that income protection
23:43
Speaker 1: isn't paid out in most cases if you don't have
23:47
Speaker 1: a job, because it's protecting your income, not your investments.
23:50
Speaker 1: So for me, I think it's just about working out
23:53
Speaker 1: what is actually going to work in the real world.
23:55
Speaker 1: And you know, if this is something you really want
23:56
Speaker 1: to do, see a financial advisor because it will pay
24:00
Speaker 1: off for you, like get set up, start investing really aggressively,
24:04
Speaker 1: like you need someone on your team. And then one
24:08
Speaker 1: more negative before I finished. Sorry, Georgia, I know that
24:12
Speaker 1: I said that low risk investing can be very safe,
24:15
Speaker 1: but there are still no guarantees on return here So
24:18
Speaker 1: the four percent theory, as I mentioned before and of HISS,
24:21
Speaker 1: this whole thing is based on past performance of local
24:24
Speaker 1: and global stock markets. COVID nineteen has absolutely sent our
24:27
Speaker 1: share market plummeting. And I know that this has happened
24:30
Speaker 1: heaps of times. But we also have to be in
24:33
Speaker 1: financial positions where we can ride out the bad years
24:35
Speaker 1: as well as the good because you know, if we
24:38
Speaker 1: talk about it, since nineteen hundred, I think it is
24:41
Speaker 1: the average return of the share market, or the Australian
24:44
Speaker 1: share market specifically, has been thirteen point two one percent,
24:47
Speaker 1: And that sounds quite high, especially when they're working off
24:49
Speaker 1: four percent, because obviously they'll be in a situation where
24:52
Speaker 1: more often than not they'll be in positive But what
24:55
Speaker 1: if really bad things happen? What if a global pandemic
24:57
Speaker 1: hits and their share portfolio isn't performed in the way
25:00
Speaker 1: that it is. Could they survive for those couple of
25:02
Speaker 1: years where their share portfolio isn't returning as much as
25:05
Speaker 1: they had anticipated. So, yes, it's lower than average, Yes,
25:09
Speaker 1: I think it's a really conservative number. But what happens
25:12
Speaker 1: when you don't have that income for a couple of years?
25:15
Speaker 3: Yeah, really good point.
25:16
Speaker 1: There'd be.
25:17
Speaker 3: On a slightly different note, I think it's probably worth
25:20
Speaker 3: mentioning the impact that fire could potentially have on your
25:24
Speaker 3: mental health. Like I joked before about retiring early and
25:27
Speaker 3: like how good that would be for the golf and
25:30
Speaker 3: you know, cruises and stuff, all of the retiring stereotypes
25:34
Speaker 3: because you.
25:35
Speaker 1: Just got your go on so many golf cruises. Is
25:38
Speaker 1: that a thing? A golf cruise?
25:39
Speaker 3: I'm actually pretty good at golf guys. Anyway, I digress
25:43
Speaker 3: golf chats. But the mental health aspect of this is
25:49
Speaker 3: that you retire at forty and then it's like, great,
25:52
Speaker 3: I've got you know, maybe forty to sixty years of
25:56
Speaker 3: doing sweet nothing like that sounds maybe good theory, but
26:00
Speaker 3: you still have to live brutally, and it's like, what
26:02
Speaker 3: are you going to do for that whole time? I know,
26:04
Speaker 3: like you have very much an ATYPEV I do to
26:08
Speaker 3: an extent. Oh, I think so. But can you imagine
26:11
Speaker 3: if you were to no longer work or have anything
26:14
Speaker 3: to fill your days? Like, what would your purpose be?
26:16
Speaker 3: What would your drive be?
26:18
Speaker 1: I mean, I know exactly what mine is, and mine
26:20
Speaker 1: is so closely tied to work, Like my mental health
26:24
Speaker 1: honestly during COVID has been hit for six because I
26:28
Speaker 1: thrive on working. I thrive on human interaction and being
26:32
Speaker 1: able to go to work and create things, and feeling
26:35
Speaker 1: like I'm not able to do that and feeling a
26:37
Speaker 1: little bit helpless sucks. And I know that, you know,
26:39
Speaker 1: the whole purpose of this isn't to go through a
26:41
Speaker 1: global pandemic. But not having something that helps me with
26:45
Speaker 1: my drive and gives me a channel and a creative outlet,
26:49
Speaker 1: I'd really struggle with personally. But in saying that I
26:52
Speaker 1: would love to be in a position where, by the
26:54
Speaker 1: age of forty, I'm financially free so that I can
26:57
Speaker 1: actually choose what to do. So I think it's important
27:00
Speaker 1: go okay, like, are we striving for financial freedom or
27:02
Speaker 1: are we striving for retirement? Because for me, financial freedom
27:06
Speaker 1: is the thing that I would ideally love to achieve
27:08
Speaker 1: sooner rather than later, And for me, that means knowing
27:11
Speaker 1: that I have a passive income if I need it,
27:13
Speaker 1: but I also will probably work. But for a lot
27:16
Speaker 1: of people it's like, Okay, well, maybe retiring isn't what
27:19
Speaker 1: you want. Maybe you just want the freedom to work
27:21
Speaker 1: part time. Yeah, it take six months off and travel
27:24
Speaker 1: Australia and do whatever you want to do. But I
27:27
Speaker 1: think it's really worth thinking about what happens after, Like
27:31
Speaker 1: what happens once you achieve this, what is your lifestyle?
27:34
Speaker 1: What are you doing? How does that work for you?
27:36
Speaker 1: And I think it's important to talk about the mental
27:38
Speaker 1: health impacts of that, like will your friendships change? Will
27:42
Speaker 1: your social interactions change? Like so many of us have
27:46
Speaker 1: really great relationships with the people that we work with,
27:49
Speaker 1: Like does that change or we meant to change that?
27:51
Speaker 1: I'm not sure.
27:52
Speaker 3: Yeah, I think your world kind of becomes smaller. And
27:55
Speaker 3: I think this theory also kind of assumes that everyone
27:58
Speaker 3: hates their job and hate working and hates that I'm
28:01
Speaker 3: to five grind, when that's simply not true for a
28:04
Speaker 3: lot of people. I love working. I would not enjoy
28:08
Speaker 3: retiring at forty even if I could go hit golf
28:11
Speaker 3: every day, you know, I just I just don't think
28:13
Speaker 3: it is necessarily as fabulous an idea as a lot
28:17
Speaker 3: of the fire chases make it out to be.
28:19
Speaker 1: Yeah, And I think that that's where, you know, it's
28:21
Speaker 1: actually a really nice topic for us to talk about
28:25
Speaker 1: because this isn't in line with my values. But that's Okay,
28:29
Speaker 1: and that's like, that's perfectly fine for something to not
28:33
Speaker 1: be in line with my values, but I can see
28:35
Speaker 1: that it's in line with other people's values. And I'm
28:37
Speaker 1: really grateful that I really understand what that means, and
28:40
Speaker 1: I've had the opportunity to think about whether it's an
28:43
Speaker 1: option for me. And I think that that's a really
28:45
Speaker 1: beautiful position to be in, where you can say, wow,
28:48
Speaker 1: that works for me, but it might not work for
28:49
Speaker 1: someone else. Yeah, And it's just like me choosing not
28:52
Speaker 1: to eat meat, Like, I know why I choose not
28:55
Speaker 1: to eat meat. Does it mean it works for everybody else? No?
28:58
Speaker 1: Does it mean that I judge people who do eat me?
29:00
Speaker 3: No?
29:00
Speaker 1: Like, I don't mind what you do with your time
29:03
Speaker 1: and energy and choices. It's not my place to have
29:06
Speaker 1: an opinion on that. But does it mean that I
29:08
Speaker 1: should consider whether I should do what you're doing? Yeah,
29:11
Speaker 1: I'd love to know what you're up to and why
29:13
Speaker 1: you're doing it so I can see if it fits
29:15
Speaker 1: with my values and my beliefs.
29:16
Speaker 2: Yeah.
29:17
Speaker 1: Like, how awesome is that that we live in a
29:19
Speaker 1: world where we have that opportunity?
29:21
Speaker 3: One hundred percent? Well said there V Before we do
29:24
Speaker 3: wrap this main part of the show and head to
29:26
Speaker 3: today's listener question as a bit of an overarching response,
29:30
Speaker 3: be do you think fire is something our shoes on
29:33
Speaker 3: the money listeners should actually consider pursuing.
29:35
Speaker 1: Look, I think saving money is amazing, and investing is amazing,
29:39
Speaker 1: and investing smartly are definitely things that we all should
29:42
Speaker 1: be doing and celebrating and implementing in our own lives.
29:45
Speaker 1: But I'd probably advise a more sustainable approach to money
29:48
Speaker 1: so that we can enjoy our lives right now instead
29:51
Speaker 1: of just later on. But if you are following Fire
29:53
Speaker 1: or you've listened to this and you're like, wow, FIA
29:55
Speaker 1: is incredible, because at the end of the day, it
29:57
Speaker 1: is like, how great is this concept we can create
30:01
Speaker 1: financial freedom for ourselves earlier, Like you might want to
30:04
Speaker 1: create financial freedom and then go work in a charity
30:07
Speaker 1: for the next thirty years so you can have an
30:08
Speaker 1: epic impact on the world. Like I am so here
30:11
Speaker 1: for all of that. It just isn't something that I
30:14
Speaker 1: am going to personally adopt. But if you're doing Fire,
30:17
Speaker 1: can you please post in the Facebook group this week
30:19
Speaker 1: about how you're achieving that, because I want to hear it.
30:22
Speaker 1: I want to be here for it, and I just
30:24
Speaker 1: I'm so interested because it is such a cool concept that,
30:27
Speaker 1: you know, I just go to work out how I'd
30:29
Speaker 1: adopt into my life.
30:30
Speaker 3: Yeah, me, Hi them, you've breached the Ses on the
30:37
Speaker 3: Money mailbox. Do you have a money problem you want
30:39
Speaker 3: help solving? Do you have the money dilemma you just
30:42
Speaker 3: want to chat about? Victoria is here to help. Each week,
30:45
Speaker 3: we'll be playing your questions to help make sense of
30:47
Speaker 3: a money mess you may have found yourself in. Make
30:49
Speaker 3: a quick recording on your phone and send it through
30:52
Speaker 3: to podcast at chesothemoney dot com dot au and you
30:54
Speaker 3: might even find yourself on the show. But for now,
30:57
Speaker 3: here's today's listener question.
30:59
Speaker 5: Hey girls, I've both listened to She's on the Money
31:02
Speaker 5: over the past couple of weeks, and I love the show,
31:05
Speaker 5: so thank you. My question is that because of you guys,
31:09
Speaker 5: I'm actually thinking about investing in shares instead of property,
31:12
Speaker 5: which I always thought i'd do. But I was wondering
31:15
Speaker 5: if you could maybe expand a bit more on where
31:17
Speaker 5: we should start as first time investors.
31:20
Speaker 3: Victoria, obviously I am not the person to be answering
31:23
Speaker 3: this question.
31:24
Speaker 1: By not, well, I mean you could take.
31:26
Speaker 3: My advice, but I'm not sure it would be that useful.
31:28
Speaker 3: Before we do get into it, I know that you've
31:31
Speaker 3: recently been talking about property and you're kind of known
31:35
Speaker 3: as the shares guru, Like that's your way of creating wealth.
31:39
Speaker 3: Can you talk to me a little bit about what
31:40
Speaker 3: you're doing at the moment?
31:41
Speaker 1: I feel attacked here, Georgia King, But I am currently
31:45
Speaker 1: looking at purchasing my first property, which you know, I'd
31:49
Speaker 1: love to share more information about when I have more
31:51
Speaker 1: information with it. But obviously I am wildly passionate about
31:55
Speaker 1: shares and will continue to be so. But purchasing a
31:58
Speaker 1: property is in line with my partners values and now
32:01
Speaker 1: is something that I'm like, yep, cool, I would absolutely
32:03
Speaker 1: love to do that, But it doesn't mean we aren't
32:05
Speaker 1: investing in shares as well. I do think, you know,
32:09
Speaker 1: looking at it from a more holistic point of view,
32:12
Speaker 1: like one or the other is often something that we
32:15
Speaker 1: are choosing at the very start of our journey because
32:17
Speaker 1: we can't afford to do it all and we can't.
32:19
Speaker 1: Like our listener, she's like, yep, cool, I'm thinking about
32:22
Speaker 1: investing in shares instead of property, because you know, maybe
32:25
Speaker 1: she can't afford to do both. At the end of
32:27
Speaker 1: the day, home deposits are incredibly expensive, like it takes
32:30
Speaker 1: ages to save up for them. But I think it's
32:33
Speaker 1: also really important to note that whilst property is really
32:36
Speaker 1: expensive to get in the door with, it's also an
32:39
Speaker 1: ongoing financial commitment. So you are committing to usually thirty
32:44
Speaker 1: years worth of home loan repayments, and that's something that
32:47
Speaker 1: you can't just skip one month because you want to
32:49
Speaker 1: go on a holiday, or skip one month because your
32:51
Speaker 1: car broke down and you need that money to you know,
32:54
Speaker 1: go towards new tires or whatever it is. So I
32:57
Speaker 1: think it's really important to actually point out that, yes,
33:00
Speaker 1: investing in shares is something I'm passionate about, but I'm
33:03
Speaker 1: passionate about it because it's in line with my values,
33:05
Speaker 1: and that is having flexibility around creating my future wealth.
33:09
Speaker 1: I know that, you know, if one month I can't
33:11
Speaker 1: afford to invest in the share market, I just don't,
33:14
Speaker 1: and there's no bank coming for me because I didn't
33:16
Speaker 1: pay my mortgage or payment, and there's no ongoing commitment
33:20
Speaker 1: for me. So, yes, property is something that I'm looking into,
33:23
Speaker 1: but it is definitely something that I don't want a
33:25
Speaker 1: majority of my wealth going into because I just feel
33:28
Speaker 1: like I don't want such a big commitment. But if
33:30
Speaker 1: you are a first timer, right, if you're someone who's
33:33
Speaker 1: getting into the market for the first time and you're
33:36
Speaker 1: not even sure where to start, one, listen to our
33:39
Speaker 1: podcasts in season one about investing get a good understanding
33:43
Speaker 1: of why you want to invest. Like earlier in this episode,
33:45
Speaker 1: Georgia I explained that I have a client and she's
33:48
Speaker 1: a brand new client, and we really had to deep
33:51
Speaker 1: dive into why she wants to invest in, Like what
33:54
Speaker 1: are we trying to create and understand that? Like are
33:56
Speaker 1: you investing so that you can retire? Are you in
34:00
Speaker 1: because you want your money to work for you while
34:03
Speaker 1: you aren't buying property. Maybe your ultimate dream is to
34:06
Speaker 1: buy property, but you want to do that in ten
34:08
Speaker 1: or fifteen years because it's not something aligned to your
34:10
Speaker 1: values right now. Maybe you're waiting for that, but you
34:14
Speaker 1: want your money to be working hard while you're getting
34:17
Speaker 1: to that point in your life. Like, all of these
34:19
Speaker 1: things are really good options, and all of these things
34:22
Speaker 1: are really valid reasons for investing, but it's important that
34:25
Speaker 1: we understand why we are investing in the first place,
34:28
Speaker 1: so that we can then pick assets that are in
34:30
Speaker 1: line with those goals. Obviously, we're going to be taking
34:35
Speaker 1: low levels of risk because I would never recommend that
34:38
Speaker 1: someone just take a punt on a share, even though
34:40
Speaker 1: you know, we hear really great stories like Georgia. A
34:43
Speaker 1: couple of months ago, we saw a really great post
34:45
Speaker 1: in our Facebook group of someone being like, oh my gosh,
34:47
Speaker 1: I bought after pay it like four dollars fifty and
34:49
Speaker 1: I've made this massive return and that's great, But that
34:52
Speaker 1: doesn't mean that that is something that is sustainable nor
34:56
Speaker 1: a good idea because it's so volatile, like that has
34:59
Speaker 1: gone again, and you know, is that something that we
35:02
Speaker 1: can sustain? Like we can't time the market. So obviously
35:05
Speaker 1: we can't tell you what to invest in because we
35:08
Speaker 1: don't actually understand you your financial goals, what you're actually
35:12
Speaker 1: looking to achieve. And that's something that's so hard about
35:14
Speaker 1: this podcast, right. I would adore it if I could
35:17
Speaker 1: get on here and be like, all right, guys, so
35:18
Speaker 1: this is how you set up a share portfolio. This
35:20
Speaker 1: is exactly what shares you're going to buy, This is
35:22
Speaker 1: how it is, Like I would love that, but there's
35:25
Speaker 1: so many different components of investing, like how long are
35:28
Speaker 1: you going to invest, how old are you, how much
35:31
Speaker 1: do you have to invest, what types of assets do
35:33
Speaker 1: you want in your portfolio? Are you an ethical investor?
35:35
Speaker 1: Are you not an ethical investor? What type of risk
35:38
Speaker 1: are you able to take on? How long for? What
35:41
Speaker 1: does risk look like to you? What other assets do
35:44
Speaker 1: you have? What does your future look like like? How
35:46
Speaker 1: much do you earn? All of these things come into consideration,
35:50
Speaker 1: and I think that you know it's far more complex,
35:52
Speaker 1: but working out your own financial situation than picking an
35:55
Speaker 1: asset class that works for you is really important. So
35:58
Speaker 1: if you're picking shares and you realize that that is
36:00
Speaker 1: aligned to you, first things first, I would either look
36:04
Speaker 1: into different investing platforms, get a love for our Facebook group,
36:08
Speaker 1: understand what is going on and you know, what are
36:10
Speaker 1: other people doing, learning from their journeys, and then potentially
36:14
Speaker 1: seeing a financial advisor. Because if you are choosing shares
36:18
Speaker 1: instead of property, I'm assuming we're not talking about you know,
36:21
Speaker 1: I've got a thousand dollars to invest. I'm assuming that
36:25
Speaker 1: you have potentially enough cash flow to create an asset
36:29
Speaker 1: would potentially be worth a property. And if you're talking
36:31
Speaker 1: to me about that get financial advice. It will be
36:34
Speaker 1: worth its wait in gold.
36:36
Speaker 3: Love that micro investing platforms beak get a lot of
36:40
Speaker 3: love in our group they do. Are they a good
36:44
Speaker 3: option for this listener? Or is that a different game completely?
36:48
Speaker 1: So you're right, Georgia. Micro investing platforms are a bit
36:50
Speaker 1: of a different game because they aren't meant to hold
36:53
Speaker 1: your entire wealth like they are micro investing platforms for
36:57
Speaker 1: a reason, and the whole point is to invest either
36:59
Speaker 1: your all change or you know, additional amounts of money.
37:02
Speaker 1: But at the same time, I love micro investing platforms.
37:06
Speaker 1: I use them myself. Obviously I can't recommend specific ones
37:10
Speaker 1: because I am a financial advisor, but I just think
37:13
Speaker 1: that they are a fantastic place for first time investors
37:16
Speaker 1: to start having a bit of a play around and
37:19
Speaker 1: seeing what is the investment market, like, like what assets
37:22
Speaker 1: do these investing platforms invest in? What does this mean?
37:25
Speaker 1: And like you guys know that I use personally Rais
37:29
Speaker 1: and Spaceship, and I don't use them for my actual
37:32
Speaker 1: share portfolio. I use Spaceship as like a small amount
37:35
Speaker 1: just so I can have a bit of a play
37:36
Speaker 1: with it because I am a bit of an investing nerd,
37:38
Speaker 1: and I also use rays as my roundups on my purchases,
37:43
Speaker 1: and then, as you guys know already, I usually take
37:46
Speaker 1: that amount of money when it has reached a certain sum,
37:48
Speaker 1: and I invest it in my bigger portfolio. But I
37:52
Speaker 1: find them really great at getting your head around first
37:54
Speaker 1: time investing, like what does a share portfolio look like?
37:57
Speaker 1: On Raise, you're able to choose your investment platform, You're
38:01
Speaker 1: able to choose which portfolio is in line with your values,
38:04
Speaker 1: and you're able to actually go in and learn a
38:06
Speaker 1: bit more about it. And I think that you know,
38:08
Speaker 1: that's probably why they're so loved in our group, because
38:11
Speaker 1: they're accessible because you can start investing with as little
38:14
Speaker 1: as five dollars. But then also you're able to kind
38:16
Speaker 1: of follow the market and see how your portfolio goes
38:19
Speaker 1: up and down. So when you do start investing larger
38:21
Speaker 1: amounts of money, you're not feeling overwhelmed by the concepts
38:25
Speaker 1: because you're already quite familiar with them.
38:27
Speaker 3: Really well said, they're VSE. So yeah, I guess have
38:31
Speaker 3: a go with the micro investing platforms and it's exciting.
38:35
Speaker 3: I guess that she's going to start looking at shares.
38:38
Speaker 1: I think it's exciting, but that's me and I'm obsessed,
38:40
Speaker 1: so you are. Let's move on, jodge your king.
38:47
Speaker 3: Now let's take a sneak peek into the financial lives
38:50
Speaker 3: of perfect strangers. It's time for money diaries.
38:54
Speaker 2: Hi, I'm the twenty four year old come back kid
38:56
Speaker 2: and this is my money diary.
38:58
Speaker 4: So six months ago of as.
39:01
Speaker 2: This COVID situation was beginning to pop off, I was
39:05
Speaker 2: in an abusive relationship and crashing at that person's house
39:11
Speaker 2: and so sort of, as we were all dealing with
39:15
Speaker 2: this worldwide pandemic, I also became unemployed.
39:18
Speaker 4: And yeah, in the space of sort of between the two.
39:22
Speaker 2: Lockdowns in Melbourne, I moved into my first rental with
39:26
Speaker 2: two of my wonderful friends, and I also got my
39:31
Speaker 2: driver's license.
39:32
Speaker 4: I met a new wonderful.
39:34
Speaker 2: Partner, and I got a job pretty much my dream
39:38
Speaker 2: job as well. After what was almost yes, seven months
39:42
Speaker 2: of unemployment, I landed a job That's all I could
39:46
Speaker 2: have ever wanted. So now I'm feeling financially secure and
39:51
Speaker 2: I guess quite positive about the outlook of the rest
39:54
Speaker 2: of the year and how life is looking compared to
39:57
Speaker 2: what it was many months ago.
40:00
Speaker 4: Yeah, it's really great.
40:01
Speaker 3: So to get started, we asked what she does for
40:04
Speaker 3: work now and how much she is earning.
40:06
Speaker 2: So I work in human resources, but only got this
40:11
Speaker 2: job within the last month. Prior to that, I've been
40:14
Speaker 2: unemployed for the last seven months, and I'm earning fifty
40:18
Speaker 2: five thousand a year plus super and I have about
40:23
Speaker 2: twenty four thousand in various savings accounts plus and money
40:28
Speaker 2: in chairs.
40:29
Speaker 3: And what happens to that money once it hits her account?
40:32
Speaker 2: I transfer money to my house account for rent and bills,
40:37
Speaker 2: and all the house bills they get direct debited from
40:40
Speaker 2: the house account. And then at the moment, actually I
40:44
Speaker 2: transfer each week, my partner and I have been transferring
40:49
Speaker 2: like twenty to thirty dollars or whatever we've sort of
40:52
Speaker 2: got leftover to a separate, like fun account that we're
40:56
Speaker 2: going to use to spend when we can eventually like
40:58
Speaker 2: go out for dinner and do e normal things. So
41:01
Speaker 2: put a little bit of money in there, and then
41:04
Speaker 2: my tactic at the moment is kind of just whatever's
41:06
Speaker 2: left at the end of the month, I transfer to savings.
41:09
Speaker 3: How does she feel about investing? Does she invest? And
41:11
Speaker 3: if so, how I have some money in shares.
41:15
Speaker 2: So I put money in a comsext share portfolio about
41:20
Speaker 2: three years ago, I think, and before covid times it
41:24
Speaker 2: was up to about eleven and a half grand, but
41:27
Speaker 2: now it's gone down a significant amount as everyone's so
41:32
Speaker 2: that's awesome. But I think I probably put my money
41:34
Speaker 2: into those shares when I wasn't one hundred percent informed
41:38
Speaker 2: about the ins and outs of the process, and also
41:42
Speaker 2: I guess what the individual companies were within that share portfolio.
41:46
Speaker 4: I kind of just was like, Yep.
41:48
Speaker 2: This is a steady, conservative growth kind of portfolio.
41:52
Speaker 4: Sounds good put my money in, rather than.
41:54
Speaker 2: Sort of investigating the individual companies and how much they
41:58
Speaker 2: aligned to my particular roles and things like that. So
42:02
Speaker 2: I think I do want to invest more when I'm
42:04
Speaker 2: a bit more settled financially, but when I do be
42:08
Speaker 2: a lot more informed and I guess particular about which specific.
42:13
Speaker 4: Companies I want to be putting my money towards.
42:15
Speaker 3: I guess, does the comeback Kid have any debts?
42:18
Speaker 2: I only have a hex step from my psychology Bachelor,
42:23
Speaker 2: which was I think it's about thirty five grand or so,
42:27
Speaker 2: but no other debts, and I don't plan on having
42:30
Speaker 2: any other debts until I get a mortgage or something.
42:34
Speaker 3: What is her worst money habit?
42:36
Speaker 2: My worst money habit would be that I definitely get
42:40
Speaker 2: caught up, not this year, let's say normal social existences,
42:45
Speaker 2: getting caught up in social sort of situations. And I
42:48
Speaker 2: find it hard saying no to things. I definitely get
42:51
Speaker 2: the fomo feelings. And I don't like saying no to
42:55
Speaker 2: events or dinners out or things like that.
42:58
Speaker 4: And I like everyone around me to be having a.
43:01
Speaker 2: Good time, so I'm willing to spend the money to
43:04
Speaker 2: make sure that people are having a good time.
43:06
Speaker 4: And also, I would say I have pretty expensive.
43:10
Speaker 2: Tastes in food that would be my guilty pleasure and
43:14
Speaker 2: I'm not quite willingked to negotiate on.
43:18
Speaker 3: And what is her best money habit?
43:20
Speaker 2: I would say I've always been a very thoughtful saver
43:24
Speaker 2: and spender. I'm never spontaneous with my spending, and I
43:29
Speaker 2: do you know, I apply the rule of wait a
43:33
Speaker 2: day or two days if you're thinking about buying, particularly
43:36
Speaker 2: like clothes and items and things like that that I
43:38
Speaker 2: wouldn't have an inherent need for. Perhaps I like to
43:43
Speaker 2: really ponder and think about things like that. And yeah,
43:46
Speaker 2: I just have always I hate the feeling of regret
43:50
Speaker 2: more than any other feeling in the world, and that
43:53
Speaker 2: translates to money regrets. So I don't ever like spending
43:56
Speaker 2: money and then the next day going, oh my god,
44:00
Speaker 2: why did I do that? So that truth to me
44:02
Speaker 2: just being really careful before I before I spend anything big.
44:06
Speaker 3: What is the comeback big money goal?
44:09
Speaker 2: I guess after the year that it's been and has
44:12
Speaker 2: been such a financially stressful year, my goal at the
44:15
Speaker 2: moment is just sort of to save so that I
44:17
Speaker 2: have some money to enjoy, if that makes sense, Like
44:21
Speaker 2: I just want to sort of build up a savings
44:24
Speaker 2: account that I can then yeah, spend on the things
44:28
Speaker 2: that bring me joy and eventually where we can you know,
44:31
Speaker 2: do these nice things again and go out and do
44:33
Speaker 2: all the normal bits and pieces to be able to
44:36
Speaker 2: just spend that money and not feel stressed or guilty
44:41
Speaker 2: about it. So it's not particularly saving for one, you know,
44:46
Speaker 2: one big purchase or anything like that, but just sort
44:48
Speaker 2: of like saving to be able to enjoy it again,
44:51
Speaker 2: because I would say, this whole year, I haven't enjoyed
44:55
Speaker 2: spending money and whatsoever.
44:57
Speaker 4: It's just been a stress.
44:58
Speaker 2: It hasn't been anything that's brought me sort of you know,
45:01
Speaker 2: any freedom or joy or anything.
45:04
Speaker 3: And finally, what grade would a comeback kid give her
45:07
Speaker 3: money habits?
45:08
Speaker 2: I would rate my money habits I think as a
45:11
Speaker 2: b pluff because my saving sort of plans are just
45:15
Speaker 2: very ad hoc and just save as much as you can.
45:19
Speaker 4: I definitely could be budgeting things more and.
45:22
Speaker 2: Being a bit more aware of what's coming in and
45:26
Speaker 2: where I can put it. I don't think I would
45:28
Speaker 2: recognize the situation that I'm in now. It's like I
45:31
Speaker 2: transformed my world from being dependent on other people and
45:36
Speaker 2: dependent on other things and just not free or safe
45:41
Speaker 2: in any sense of the word, to complete.
45:44
Speaker 4: I'm completely independent.
45:45
Speaker 2: My life is run for me by me the way
45:49
Speaker 2: I want it to be, and I also just feel
45:52
Speaker 2: like I'm capable of looking after myself and making making
45:57
Speaker 2: the rest of my life the way that I want
45:59
Speaker 2: it to look. I don't think if you had have
46:00
Speaker 2: told me in March of this year that I would
46:03
Speaker 2: be in the position that I am now, I don't
46:05
Speaker 2: think I would have believed you. I thought for a
46:07
Speaker 2: very long time that I was stuck in that situation
46:10
Speaker 2: that I was in, and that one of the reasons
46:13
Speaker 2: that I found it quite hard to leave that relationship
46:16
Speaker 2: was because I didn't have an income and I didn't
46:19
Speaker 2: know where I was going to live, So that was
46:21
Speaker 2: something that kept me there.
46:23
Speaker 4: And if you had told me, Yeah, if you had
46:27
Speaker 4: told me that it.
46:27
Speaker 2: Would have been possible and worked so wonderfully and so
46:32
Speaker 2: well and the way that it has, I would have
46:35
Speaker 2: felt so secure in leaving earlier, because yeah, God, I've
46:40
Speaker 2: just made the life of myself that I never really
46:42
Speaker 2: would have imagined.
46:43
Speaker 4: So it's amazing.
46:45
Speaker 3: It's awesome, Victoria, what a money diarist? Where do we begin?
46:50
Speaker 3: What did you think? Oh?
46:51
Speaker 1: My gosh, I loved her. What a journey though, Yeah,
46:54
Speaker 1: I loved hearing all of that. I honestly am so
46:57
Speaker 1: in awe of people who changed their situations and you know,
47:01
Speaker 1: actually go through stuff like that. To have been in
47:04
Speaker 1: an abusive relationship to now six months later being in
47:07
Speaker 1: a completely different situation, like, it's inspiring, Like, and I
47:10
Speaker 1: think that it's inspiring for someone like me who's not
47:12
Speaker 1: in that position. But then also hopefully if people are
47:15
Speaker 1: listening and they are in similar positions like hearing other
47:18
Speaker 1: people who have gone through situations like that and are
47:21
Speaker 1: now in bigger, better positions, Like she has her dream job,
47:24
Speaker 1: she's got savings, she said she was investing, Like you know,
47:27
Speaker 1: she said, I've got thirty five grand of hextet, Like
47:29
Speaker 1: I never want to be in this position again, Like
47:31
Speaker 1: what a queen. I can't I can't love her more
47:34
Speaker 1: like and you know how confident she was, like her voice,
47:37
Speaker 1: like you could just hear that she was a happy
47:39
Speaker 1: person like I want.
47:40
Speaker 3: And that she'd come a long way.
47:42
Speaker 1: Yeah, she'd comes so far. And I think that, you know,
47:44
Speaker 1: it's so easy to judge people because you look at
47:48
Speaker 1: her situation and you break it down, you're like, wow,
47:50
Speaker 1: Like she's got a lot of savings. Why didn't she
47:53
Speaker 1: just leave her relationship? You don't know their relationship, you
47:56
Speaker 1: don't know their situation, you don't know what's going on.
47:59
Speaker 1: And I think something that really grinds my gears is
48:02
Speaker 1: when people say, well, why didn't you leave earlier? Like
48:05
Speaker 1: that's a really privileged position to be in, regardless of finance,
48:08
Speaker 1: regardless of anything. Just saying oh, well, why didn't you
48:12
Speaker 1: leave is ridiculous. But the fact that she found a
48:14
Speaker 1: time that she could leave, that she you know, had
48:17
Speaker 1: a place to fall and she had some ducks in
48:19
Speaker 1: a row and she moved in with her sister and
48:21
Speaker 1: you know them was looking for a place. Like none
48:23
Speaker 1: of that is easy. All of that is really hard.
48:27
Speaker 1: And to have gone through that and be coming out
48:29
Speaker 1: on the other side and be this happy, and I'm
48:31
Speaker 1: sure there are still things that she's sorting through, but
48:34
Speaker 1: you know, to come out in that position, like I'm
48:36
Speaker 1: so proud of her. That honestly would have required so
48:39
Speaker 1: so much work, like mentally, physically, like everything like that
48:43
Speaker 1: is so hard to.
48:44
Speaker 3: Go through, and even to share it on the podcast
48:47
Speaker 3: with our listeners, I think is a beautiful thing to do.
48:49
Speaker 1: So, oh my gosh, I cannot tell you how grateful
48:52
Speaker 1: I am for our money diarists. And that's why they're anonymous, right,
48:55
Speaker 1: Like I don't need to know what your name is,
48:57
Speaker 1: or you know where you come from or where you leave.
49:00
Speaker 1: Obviously she's not living in Melbourne though you're king given
49:03
Speaker 1: us she's going out and we are not allowed to
49:06
Speaker 1: do that, so give you a clue. But yeah, I
49:11
Speaker 1: just I'm always in awe of the money diarists and
49:13
Speaker 1: their willingness to share information with us to learn from,
49:16
Speaker 1: Like we are so lucky these stories are so beautiful
49:19
Speaker 1: and like hearing them in their own voices. Yeah ah,
49:23
Speaker 1: I love it.
49:24
Speaker 3: Yeah, warm and fuzzies. From the financial perspective, V, so
49:29
Speaker 3: she does have twenty four thousand dollars in savings as
49:31
Speaker 3: a twenty four year old. She started investing at twenty one,
49:35
Speaker 3: so she's doing a lot of things right there as well.
49:37
Speaker 1: Guys, twenty four grand in savings at the age of
49:40
Speaker 1: twenty four is incredible. She should be so proud of herself.
49:44
Speaker 1: That is something that so many people listening are not
49:47
Speaker 1: going to be able to resonate with and I definitely
49:50
Speaker 1: didn't have that, so yeah.
49:52
Speaker 3: And also no debts, just a hextep like she's killing it.
49:55
Speaker 3: So yeah, a big well done on so many levels
49:59
Speaker 3: for this money to Unfortunately V. I think it's time
50:02
Speaker 3: to wrap the show though it is.
50:04
Speaker 1: But just before we head off, we'd like to acknowledge
50:06
Speaker 1: and pay respects to Australia's Aboriginal and torrest right islander peoples,
50:10
Speaker 1: the traditional custodians at the lands, badways and skies across Australia.
50:14
Speaker 1: We thank you for sharing and the caring for the
50:16
Speaker 1: land on which we are able to learn. We pay
50:19
Speaker 1: our respects to elders past and present and share our
50:21
Speaker 1: friendship and kindness.
50:22
Speaker 3: Now it's time for the boring but important stuff. The
50:25
Speaker 3: advice shed on she is on the Money is general
50:28
Speaker 3: in nature and does not consider your individual circumstances. She
50:32
Speaker 3: is on the Money exists purely for educational purposes and
50:35
Speaker 3: should not be relied upon to make an investment or
50:37
Speaker 3: a financial decision. And stress less, we promise. Victoria Divine
50:41
Speaker 3: is an authorized representative of Australia Pacific Funds Management. Prior
50:45
Speaker 3: she limited Abian three four one three two four six
50:48
Speaker 3: three two five seven AFOSL three three nine one five
50:50
Speaker 3: one A bit of a sing song there and as
50:53
Speaker 3: a loser.
50:54
Speaker 1: I want you to start rapping it next week. I
50:56
Speaker 1: think you can do an entire wrap of our rap
50:58
Speaker 1: watch this Spain. Oh I brought us thrill.
51:01
Speaker 3: As always, a big old thank you to Ryan John
51:04
Speaker 3: for putting together today's podcast.
51:06
Speaker 1: We would absolutely love it as well if you joined
51:09
Speaker 1: our Facebook group, where our community shares money tips and
51:12
Speaker 1: tricks every single day, free of judgment. So She's on
51:15
Speaker 1: the Money on Facebook and join us. If Facebook's not
51:18
Speaker 1: your thing, find us on Instagram. We're at She's on
51:21
Speaker 1: the money Aus and don't forget guys. A couple of
51:24
Speaker 1: weeks ago, we launched our online master Class, which Georgia
51:28
Speaker 1: King has been getting surprisingly glowing reviews. It's true, I
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Speaker 1: made it. I am actually shocked that people are loving
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Speaker 1: it as much as they are, So head to our
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Speaker 1: website and hit master Class to check that one out.
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Speaker 3: Yeah, some other things here at the end, guys, if
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Speaker 3: you want some fun on your Friday, we've got a
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Speaker 3: newsletter that pops off. That one goes out every Friday
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Speaker 3: about midday, so you just so very good newsletter.
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Speaker 1: Last week Georgia King edited a party hat onto herself
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Speaker 1: staring at Michael Google. And this week she edited herself
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Speaker 1: staring at a tub of philly Chilly Philly, sweetly chilli
51:59
Speaker 1: sweet SCP.
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Speaker 4: As I call it.
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Speaker 3: So there's a lot of fun in there, a lot
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Speaker 3: of value as well, sort of that's you know, debatable.
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Speaker 3: So sign up to that. And if you guys love
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Speaker 3: the show, feel through to rate, review and subscribe. It
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Speaker 3: helps us out, gets us hire in the charts, and
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Speaker 3: you know we love to find those charts, don't we
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Speaker 3: beat It's good time.
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Speaker 1: We do because we find more friends and that's more fun,
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Speaker 1: more friends, more fun, more money.
52:21
Speaker 4: Diary.
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Speaker 1: But that is all we have time for today. We
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Speaker 1: will see you next week. Bye guys.