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What Is Passive Investing? · She's On The Money

0:00
Speaker 1: Hello, my name's Santasha Nabananga Bamblet. I'm a proud yr
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Speaker 1: the Order Kernie Whoalbury and a waddery woman. And before
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Speaker 1: we get started on She's on the Money podcast, I
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Speaker 1: would like to acknowledge the traditional custodians of the land
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Speaker 1: of which this podcast is recorded on a wondery country,
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Speaker 1: acknowledging the elders, the ancestors and the next generation coming
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Speaker 1: through as this podcast is about connecting, empowering, knowledge sharing
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Speaker 1: and the storytelling of you to make a difference for
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Speaker 1: today and lasting impact for tomorrow.
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Speaker 2: Let's get into it.
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Speaker 3: She's on the Money, She's on the Money.
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Speaker 4: Hello, and welcome to She's on the Mune, the podcast
1:00
Speaker 4: for millennials who want financial freedom. Today, we're chatting all
1:04
Speaker 4: about passive investing, an extremely popular investing method which is
1:09
Speaker 4: famous for its laid back approach and gradual returns over
1:12
Speaker 4: the long term. But what do we need to be
1:14
Speaker 4: mindful of and how exactly does it compare to its
1:16
Speaker 4: exact opposite method of active investing. My name is Georgia
1:21
Speaker 4: King and joining me is Victoria devine Phi. We spoke
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Speaker 4: about passive and active investing fairly recently a few monpular
1:30
Speaker 4: very popular topic for anyone who did miss that episode
1:34
Speaker 4: or who can't remember who might be a little bit
1:36
Speaker 4: like me. Can you please remind us exactly what passive
1:40
Speaker 4: investing looks like?
1:41
Speaker 2: Do you reckon you were a goldfish in a past life?
1:43
Speaker 4: I think maybe? Yeah?
1:45
Speaker 5: No, no, like in the most endearing way. I don't
1:49
Speaker 5: know goldfish was really mean. I'm sorry, but it's kind
1:51
Speaker 5: of true. Sometimes I'm like, yeah, so this is a
1:54
Speaker 5: good idea, and you're like, never heard of it, and
1:55
Speaker 5: I'm literally told you yesterday. But okay, so let's recap this.
1:59
Speaker 5: But I all, so, I think it's really important to
2:01
Speaker 5: always start an episode on exactly the same page, because
2:03
Speaker 5: if you haven't listened to it, like, you'll be on
2:05
Speaker 5: the back foot.
2:06
Speaker 2: I'm on that.
2:07
Speaker 5: So passive investing in a nutshell is a buy and
2:10
Speaker 5: hold investment strategy. So we buy our shares and then
2:13
Speaker 5: we hold onto them for a long time, with very
2:16
Speaker 5: little trading along the way. It's, from my perspective, a
2:20
Speaker 5: very slow and steady approach to investing. And because we
2:22
Speaker 5: are buying and holding, there are fewer fees involved. Money
2:25
Speaker 5: win because you aren't selling and trading and being really
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Speaker 5: active all the time. It's the opposite of active investing, George,
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Speaker 5: which is far more involved and is ultimately over the
2:34
Speaker 5: long term. It is great for people who have time
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Speaker 5: on their side, so not time when it comes to trading.
2:39
Speaker 5: But we're talking about time in the market, because that's
2:41
Speaker 5: way better than timing the market, Georgia King.
2:45
Speaker 2: So if you're looking to invest over a.
2:47
Speaker 5: Long period of time instead of just a few short years,
2:50
Speaker 5: the aim isn't actually, when it comes to passive investing,
2:53
Speaker 5: to beat the market, but actually just to ride the
2:55
Speaker 5: ebbs and the flows of the market and experience consistent
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Speaker 5: gains along that investment journey. People who invest passively also
3:03
Speaker 5: generally have a lower risk tolerance, especially when you compare
3:06
Speaker 5: them to active investors who tend to take bigger swings
3:09
Speaker 5: along the way.
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Speaker 4: Yep, okay, you mentioned it just their VD active investing.
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Speaker 4: It's the opposite of passive investing, and we did speak
3:17
Speaker 4: about it on that episode. But just so I have
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Speaker 4: it really clear in my head, what actually is active investing.
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Speaker 2: So active investors, as you said, the opposite.
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Speaker 5: Well, passive investors adopted buy and hold strategy and they
3:29
Speaker 5: don't trade often. Active investors they're there to try and
3:32
Speaker 5: beat the market. They're chasing shorter term gains. They're selling
3:36
Speaker 5: things when they're up, buying things when they're down, and
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Speaker 5: trying to be really good traders, which in theory sounds
3:42
Speaker 5: like a good method. Yes, but the performance doesn't vary
3:46
Speaker 5: over the long term that much. Surprisingly, Okay, Active investors
3:51
Speaker 5: are far more hands on and therefore usually need to
3:54
Speaker 5: be a little bit more experienced, and it is a
3:57
Speaker 5: bit more of an expensive method, especially if you have
3:59
Speaker 5: a fund manager helping you, because they are additional fees
4:02
Speaker 5: and charges involved. But it honestly it can yield higher
4:05
Speaker 5: short term returns. So it's up to you what you
4:08
Speaker 5: find best for your situation.
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Speaker 4: Ryan, Okay, so active sounds exhausting, passive a little more relaxing.
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Speaker 5: I would agree with the more agree more Georgia King Vie.
4:18
Speaker 4: When I was reading ahead of today's episode, because we
4:20
Speaker 4: like to be prepared, we're reading my new book I
4:23
Speaker 4: actually want it's good. Guys can confirm.
4:26
Speaker 5: I'm like, this feels familiar these words you've put in
4:28
Speaker 5: this doum.
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Speaker 4: So. Index investing was something that came up time and
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Speaker 4: time again as the most common form of passive investing
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Speaker 4: once again. I'm sure we've spoken about it before, but
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Speaker 4: what does index investing mean and why is that the
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Speaker 4: best way to invest passively?
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Speaker 5: So we've explained index investing before that from my perspective,
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Speaker 5: it's the average of the average, like you're just chasing
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Speaker 5: the average of the average. Index investing is all about
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Speaker 5: emulating the returns of the benchmark financial index, which sounds
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Speaker 5: really complicated, but but I promise it is not. It's
5:01
Speaker 5: basically just going, all right, we're going to take these
5:03
Speaker 5: top two hundred shares and then we are going to
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Speaker 5: put them all in one basket, and then you're going
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Speaker 5: to get the average returns of those top two hundred shares.
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Speaker 5: So say one is up ten percent, one's down ten percent,
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Speaker 5: and one's up two percent and one's down one percent.
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Speaker 5: You end up with an average, so you don't feel
5:20
Speaker 5: the super highs and you don't feel the super lows.
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Speaker 5: You end up with an average return across the market.
5:26
Speaker 5: And that's why I say it's the average of the average,
5:29
Speaker 5: because you're not looking for like, oh my gosh, I
5:32
Speaker 5: just want these, you know, specific shares, and the top
5:35
Speaker 5: ten in this area. You're usually taking a bigger basket
5:38
Speaker 5: so that you can track the index, and the index
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Speaker 5: is basically the average.
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Speaker 2: Does that make sense?
5:43
Speaker 4: Makes sense?
5:44
Speaker 2: I hope it makes sense.
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Speaker 5: It can be achieved by using so many different investment funds,
5:49
Speaker 5: including managed funds, super funds, sometimes ETFs or exchange traded
5:53
Speaker 5: funds as they're very commonly known in our community. Index
5:56
Speaker 5: funds are comprised of. As I mentioned before, various stocks
6:00
Speaker 5: make up an index. So another example of this, you
6:02
Speaker 5: know how I said before, you might take the top
6:04
Speaker 5: two hundred stocks. There's literally the ASX three hundred, which
6:08
Speaker 5: is Australia's top three hundred companies. Or you might have
6:12
Speaker 5: heard of the all odds. I feel like they talk
6:14
Speaker 5: about that on the news basically every night at six pm.
6:16
Speaker 5: They're like, and the all Lords. That's just a white
6:18
Speaker 5: male being like, oh my gosh, look at this. If
6:20
Speaker 5: we just go all odds, people would think it's really fancy,
6:22
Speaker 5: but it's actually.
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Speaker 4: Just the top five hundred in Australia.
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Speaker 2: Yeah, there's nothing that complicated about it.
6:28
Speaker 4: No, that's good to know. I feel like when I
6:30
Speaker 4: hear all odds, I think of like the national rugby
6:32
Speaker 4: team or something I do. All Lords.
6:34
Speaker 2: I don't know, oh, I don't.
6:36
Speaker 5: Remember when I was younger, and I would watch the
6:39
Speaker 5: news and be really confused and basically zone out when
6:42
Speaker 5: they're like, oh, the stock market today, and then they'd
6:44
Speaker 5: like put this chart up and they'd have like the
6:47
Speaker 5: green arrow up and something like the red arrow down
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Speaker 5: and then be like, the all Lords is trending xyzer,
6:52
Speaker 5: and you'd just be like, what are you talking about?
6:55
Speaker 5: But if you hear it on the news, the all
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Speaker 5: Odds just means the top five hundred companies in Australia
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Speaker 5: and it's the average, and the all Oords is seen
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Speaker 5: as a pretty good indicator of the health of our country,
7:06
Speaker 5: right because five hundred companies in Australia is a lot
7:09
Speaker 5: of companies, right, like the top five hundred. We're not
7:11
Speaker 5: a massive country at the end.
7:13
Speaker 2: Of the day.
7:14
Speaker 5: So if the all Odds is down, that means the
7:17
Speaker 5: economy is a little bit down. It's an indicator of
7:19
Speaker 5: how we're doing as a society, right, So if the
7:22
Speaker 5: all Odds is up, the economy must be doing pretty well.
7:25
Speaker 5: If things are happening in Australia in their negative like COVID,
7:29
Speaker 5: it would be expected that the all ords might be down.
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Speaker 5: So it's an indicator of the economy, and how it's
7:35
Speaker 5: performing today is basically what I would see it as.
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Speaker 4: Okay, that's quite hot.
7:38
Speaker 2: You can also buy it.
7:39
Speaker 4: So how do you buy it? Though? So is that
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Speaker 4: when we're buying into an index fund, are we buying
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Speaker 4: a small portion of five hundred companies?
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Speaker 1: Yes? And no.
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Speaker 5: So in ETF, I mean sidetrack, we've done a whole
7:51
Speaker 5: investment series. Please go back and listen to that. I
7:53
Speaker 5: mean you were on it, so can. I hope you
7:55
Speaker 5: remember it. But when it comes to an ETF, that
7:58
Speaker 5: is actually bought and sold in exactly the same way
8:00
Speaker 5: as share was. So say you want to buy a
8:02
Speaker 5: Wooly's share and you go on to your platform. You
8:05
Speaker 5: might pick as shares is or a superhero, or you
8:07
Speaker 5: might be going to a self well, because it doesn't matter.
8:09
Speaker 5: You're on a trading platform and you've decided to buy
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Speaker 5: a share. You go and you go to that profile
8:14
Speaker 5: you pick I would like to buy one share of Woolies, right,
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Speaker 5: So you've done that. Transaction to buy an ETF is
8:21
Speaker 5: exactly the same because ETFs actually listed in exactly the
8:25
Speaker 5: same way as share is on the share market. However,
8:28
Speaker 5: an exchange traded fund is basically just this big bucket
8:32
Speaker 5: of shares. So instead of purchasing a Wooly's share directly,
8:36
Speaker 5: you would be like, all right, well, a ETF is
8:39
Speaker 5: more in line with my goals and values at this
8:41
Speaker 5: point in time, and I would like some more diversification
8:44
Speaker 5: because if you bought that one Wooly's share, you're just
8:47
Speaker 5: buying into that one company. And you know how we're
8:49
Speaker 5: talking about ebbs and flows of the market. If Woolies
8:51
Speaker 5: goes down five percent, you're going to feel that entire
8:54
Speaker 5: five percent. If it goes up ten percent, you're going
8:56
Speaker 5: to feel that. But you also don't have any exposure
8:59
Speaker 5: to any area of the market, right, So an ETF
9:03
Speaker 5: is a good way of getting instant diversification. And when
9:07
Speaker 5: we say diversification, women not putting our eggs in one basket.
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Speaker 5: So you're getting instantly a range of different share options.
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Speaker 5: So you'd be getting maybe some Woolies, but you'd also
9:16
Speaker 5: be getting some other areas. So you might be getting
9:19
Speaker 5: some mining depending on what you're up to. You might
9:21
Speaker 5: be getting some infrastructure, you might be getting some clothing businesses,
9:24
Speaker 5: so you're not just picking one.
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Speaker 2: Area of the market.
9:27
Speaker 5: But when you buy an ETF, you're actually putting your
9:29
Speaker 5: money into a big bucket, and then that bucket buys
9:33
Speaker 5: shares because obviously a share can be quite expensive, like
9:37
Speaker 5: some shares and more than one hundred dollars, some are
9:39
Speaker 5: less than a dollar, and across the market, these are
9:42
Speaker 5: ebbed and flowed. And if you've got five bucks and
9:45
Speaker 5: you're putting it into an ETF, that doesn't necessarily mean
9:48
Speaker 5: that you'd be able to buy the shares directly. So
9:51
Speaker 5: it's basically, in a way, fractional investing, but you're just
9:55
Speaker 5: getting bits of the entire market, and it gives you
9:58
Speaker 5: one better diversify. But it also means that you don't
10:02
Speaker 5: have to be as active in your strategy, and they are,
10:05
Speaker 5: in our shees on the money community a very popular
10:08
Speaker 5: way of getting into the market and picking an asset
10:11
Speaker 5: that you go. I'm really comfortable with this because I'm
10:14
Speaker 5: not the one always calling the shots.
10:16
Speaker 2: Now, does that make sense?
10:17
Speaker 6: Yeah?
10:17
Speaker 5: Yeah, a bit of a side track because I know
10:20
Speaker 5: that none of that was in our script for today.
10:22
Speaker 5: I feel like it's important to talk about this stuff,
10:24
Speaker 5: and I know we've talked about it before, but to
10:26
Speaker 5: be honest, you guys need to hear it over and
10:28
Speaker 5: over again, so it really reiterates and you become really
10:31
Speaker 5: comfortable with it, and it kind of just becomes second nature.
10:34
Speaker 4: And that's the point of what we do, right. Yeah,
10:36
Speaker 4: I couldn't agree more so. Beyond that, though, are all
10:39
Speaker 4: index funds ETFs or not?
10:42
Speaker 1: Not?
10:42
Speaker 4: Necessarily tell me, mom.
10:43
Speaker 5: So no, at the end of the day, but I
10:45
Speaker 5: feel like people in our community are often using them interchangeably.
10:49
Speaker 5: But not all ETF funds and not all index funds
10:52
Speaker 5: are ETF, but most of them.
10:54
Speaker 2: Are in Australia.
10:55
Speaker 4: Okay.
10:56
Speaker 5: The key difference between the two is that in ETF,
10:59
Speaker 5: as I mentioned before, can be traded on the share
11:01
Speaker 5: market like a stock, but an index fund can only
11:04
Speaker 5: be bought or sold at the end of a trading day,
11:08
Speaker 5: so it can only be bought or sold once a day.
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Speaker 5: So not all indfs are index funds, but most index
11:14
Speaker 5: funds are ETFs.
11:16
Speaker 2: Does that make sense?
11:16
Speaker 4: It does?
11:17
Speaker 2: It doesn't? It does, it doesn't.
11:19
Speaker 5: So basically, an ETF could be a plethora of things,
11:22
Speaker 5: and ETF is an exchange traded fund, as I said before,
11:25
Speaker 5: a bucket. In that bucket, it could be an index
11:28
Speaker 5: of just the top five hundred, or the ETF might
11:32
Speaker 5: be a bit more active and it could actually have
11:35
Speaker 5: you know, a different sector of the market in it,
11:37
Speaker 5: where it just has ten stocks of you know, tech
11:40
Speaker 5: companies that you want to invest in, and they might
11:42
Speaker 5: not just be the top there might be a certain
11:44
Speaker 5: select few that you want to purchase. I've mentioned it
11:47
Speaker 5: before on the podcast. There's also an ETF you can buy.
11:50
Speaker 5: I just think it's really cool because the world is wild,
11:53
Speaker 5: or I think the world is wild, and I obviously
11:55
Speaker 5: love investing, but there's literally an ETF George that you
11:58
Speaker 5: can buy that only has women on the board of
12:00
Speaker 5: the companies that you're investing in.
12:02
Speaker 2: Really, isn't it cool?
12:04
Speaker 5: So even if you are a passive investor, I feel
12:07
Speaker 5: like in twenty twenty two, you can still find ETFs
12:11
Speaker 5: and passive investments that align to your personal values, Whereas
12:15
Speaker 5: historically and when I started in the industry, like these
12:18
Speaker 5: things weren't as accessible. I remember sitting down with clients
12:21
Speaker 5: and being like, well, if you want your values upheld,
12:23
Speaker 5: we actually need an erect investment portfolio and that small
12:26
Speaker 5: time energy effort money like it's much harder to do,
12:29
Speaker 5: whereas nowadays it's like, all right, well, G and I've
12:32
Speaker 5: explained this on the podcast before about doing your values
12:35
Speaker 5: first and then working out what type of strategy works
12:38
Speaker 5: for you and whittling it down kind of like an
12:41
Speaker 5: upside down pyramid so that you actually end up at
12:44
Speaker 5: one solution. And my new book, not to promote it
12:46
Speaker 5: too much, but my new book literally takes you down
12:48
Speaker 5: the garden path of doing that because I'm like, all right, well,
12:50
Speaker 5: what's your risk tolerance?
12:52
Speaker 2: What are your values? How does this work?
12:54
Speaker 5: Because I think that especially as women, we get really
12:57
Speaker 5: overwhelmed and we get analysis paralysis, and I know you
13:00
Speaker 5: get this in particular where I'm like, gee, like start
13:03
Speaker 5: investing you like I don't know what.
13:04
Speaker 2: To pick, Like I don't know how to do it.
13:07
Speaker 5: And to be honest, we need to be reverse engineering
13:11
Speaker 5: it in a way where it's not like, gee, don't
13:13
Speaker 5: tell me you don't know what to pick, because if
13:15
Speaker 5: you've done your process, it will actually tell you what
13:18
Speaker 5: to pick. Like you'll go through the process and you'll
13:21
Speaker 5: answer questions like, g do you want to be really involved?
13:23
Speaker 5: And you'll be like, no, all right, well maybe a
13:25
Speaker 5: passive portfolio is better for you. Let's look at passive options,
13:29
Speaker 5: Whereas if I put them all on the table, you're
13:31
Speaker 5: gonna be like, oh my gosh, I'm so overwhelmed. Do
13:32
Speaker 5: I go direct or do I not? Whereas if your
13:35
Speaker 5: friend is saying, oh, I'm actually a passive investor, you know,
13:38
Speaker 5: really low risk tolerance. If they're then saying, oh, I
13:41
Speaker 5: went and bought all these direct shares, you'd be like, wait,
13:44
Speaker 5: what that doesn't actually align to what your strategy should
13:47
Speaker 5: be based on your personal values. Right, anyway, let's not
13:50
Speaker 5: go on and on. This is all about passive investment. Yeah,
13:52
Speaker 5: not how to shut together an investment portfolio in general.
13:56
Speaker 5: That's covered in my.
13:56
Speaker 4: Book exactly right, which you could pick up at dimmis
13:59
Speaker 4: nineteen ninety and I don't know how much it is,
14:01
Speaker 4: but thank you, you know what I think. On Amazon
14:04
Speaker 4: it goes down to nineteen dollars.
14:05
Speaker 5: Get it onside it whin What would you say.
14:09
Speaker 4: The main goal of passive investing is? Is it just
14:12
Speaker 4: to get rich?
14:14
Speaker 5: Get rich, get rich, retire? From my perspective, it's genuinely
14:18
Speaker 5: just wealth creation, like it is long term sustainable wealth creation.
14:22
Speaker 5: We know that not investing is a choice, like it's
14:25
Speaker 5: actually quite funny when people are like, oh, like, I'm
14:28
Speaker 5: not ready. I don't want to do it, but I
14:30
Speaker 5: think you need to actually take the plunge into investing
14:33
Speaker 5: if it makes sense for you, because having money in
14:36
Speaker 5: cash is actually going to put you backwards. And I
14:39
Speaker 5: did a little comparison while I was on the plane
14:42
Speaker 5: coming back from America, because this is the kind of
14:44
Speaker 5: stuff I get up to when I'm bored or just shop,
14:46
Speaker 5: and I was like, I wonder what ten grand invested
14:49
Speaker 5: ten years ago would look like compared to keeping it
14:52
Speaker 5: in a savings account, Like the current value of a dollar,
14:55
Speaker 5: so we know that a dollar today is not worth
14:59
Speaker 5: what a dollar tomorrow is worth because obviously, when it
15:02
Speaker 5: comes to inflation and CPI and the rising cost of living,
15:05
Speaker 5: what a dollar can buy me today is not what
15:08
Speaker 5: a dollar can buy me tomorrow. It's usually less. So
15:11
Speaker 5: I don't have the exact stats in front of me,
15:12
Speaker 5: which I absolutely should, But ten thousand dollars ten years
15:16
Speaker 5: ago invested, I think was worth eighteen thousand dollars, and
15:20
Speaker 5: ten thousand dollars just in a savings account was worth
15:23
Speaker 5: six and a half thousand. So you're literally losing money.
15:27
Speaker 5: And I'm not saying that you wouldn't still have that
15:29
Speaker 5: ten thousand dollars in your heads. You're probably like the
15:31
Speaker 5: if I put ten thousand dollars in an account ten
15:33
Speaker 5: years ago and didn't touch it, ten thousand dollars should
15:36
Speaker 5: still be there. Yes, but it will not buy you
15:38
Speaker 5: as much as it would have ten years ago. So
15:41
Speaker 5: ten years ago, you know you would have gone to
15:43
Speaker 5: the supermarket and filled up a grocery tolley with one
15:45
Speaker 5: hundred dollars worth of groceries. It would be far more
15:49
Speaker 5: full than it would be today. Does that make answer?
15:52
Speaker 5: It's all about inflation. It's not necessarily change. Gee, you
15:55
Speaker 5: will lose money, Like, no one's going to come and
15:57
Speaker 5: take money out of your account put in the bin
15:59
Speaker 5: because you have it in savings. It's gonna stay there.
16:01
Speaker 5: But ten thousand dollars loses value. And I'm not talking
16:05
Speaker 5: monetary value. I'm talking about the power of what it
16:07
Speaker 5: can buy you. So it's actually putting you behind by
16:11
Speaker 5: not investing. At the end of the day, it's really powerful,
16:13
Speaker 5: but it's also really sad when we, you know, come
16:16
Speaker 5: down to it, because at the end of the day,
16:19
Speaker 5: you're putting yourself behind by not putting investing.
16:21
Speaker 2: As a priority.
16:22
Speaker 4: Yeah, well that has blown my mind. It's crazy talking
16:26
Speaker 4: about that.
16:26
Speaker 5: We are talking away, you are not a podcasts, but
16:30
Speaker 5: it's crazy to think what that means. And it's also,
16:33
Speaker 5: like I've spoken about this on the podcast before. When
16:36
Speaker 5: it comes to human behavior, humans are literally wired in
16:40
Speaker 5: a linear way. So to you, one plus one equals
16:43
Speaker 5: to two plus two equals four. Right, But if I
16:46
Speaker 5: talk to you about compounding interest on paper, it looks
16:50
Speaker 5: really sexy, but your mind doesn't work that way. Your
16:53
Speaker 5: mind goes in a really straight line slowly up, whereas
16:56
Speaker 5: compounding interest it kind of goes in that really straight
16:59
Speaker 5: line going up and then it starts to peak as
17:02
Speaker 5: compounding really takes power. And that's something that it's not
17:06
Speaker 5: because we're silly. It's because of the way our brains
17:08
Speaker 5: are wired that we can't really comprehend or harness that,
17:12
Speaker 5: so it takes us a while to actually go hold
17:14
Speaker 5: on the power of that is actually wild and this
17:17
Speaker 5: is how it works, and this is how it impacts me.
17:19
Speaker 5: It's not because we're not explaining it clearly enough. It's
17:21
Speaker 5: because our brains are literally wired to not properly understand that.
17:26
Speaker 5: Because at the end of the day, we're creatures who
17:28
Speaker 5: are just trying to survive, and surviving is very different
17:31
Speaker 5: to thriving. Thriving is a choice. Thriving is something you
17:34
Speaker 5: actually have to put active energy into doing, and investing
17:38
Speaker 5: is part of that journey. Does that make sense?
17:40
Speaker 4: That does make sense. I wonder if maybe all the
17:42
Speaker 4: shees on the money listeners in one hundred years time
17:44
Speaker 4: we check back in, most of us will be dead.
17:47
Speaker 4: Our brains might have changed, though, and maybe we'll grasp
17:49
Speaker 4: it better anyway, I hope so.
17:51
Speaker 5: But get essentially summary of that question that you asked me. Yes,
17:54
Speaker 5: it is to create wealth, but it is also really
17:57
Speaker 5: important to make sure that you're on that journey because
18:01
Speaker 5: investing is a priority. And we're not saying that passive
18:03
Speaker 5: investing is the way. We're just saying here's another way
18:06
Speaker 5: to do it. Because at the end of the day,
18:08
Speaker 5: t l DA investing is really important and if you
18:11
Speaker 5: have a job and a super account, you're already an investor.
18:14
Speaker 2: Georgia King, beautiful V.
18:16
Speaker 4: I think now is probably the right time to take
18:18
Speaker 4: a little break. Let that a little break in, but
18:21
Speaker 4: on the other side to give me be chatting about
18:24
Speaker 4: the best parts of passive investing, what the returns really
18:27
Speaker 4: look like, and how you can actually set yourself up
18:30
Speaker 4: with one. So please don't go anywhere. What a time,
18:38
Speaker 4: let's dive back in V tell me what the returns
18:41
Speaker 4: actually look like when we're investing this way, because my
18:44
Speaker 4: mind would say, surely active investing, because it's so much
18:47
Speaker 4: more involved, we're trying to beat the trends of the market.
18:50
Speaker 4: Surely that is going to yield better returns. But is
18:53
Speaker 4: that the case?
18:54
Speaker 6: All right?
18:54
Speaker 5: Good question, Georgia King, because so many times it comes
18:58
Speaker 5: up in our community. Should I be active? Should be passive?
19:00
Speaker 5: Should I buy an ETA? Should I buy direct shares?
19:02
Speaker 5: What's the difference? Should it be chess sponsored? Does chess
19:04
Speaker 5: sponsorship matter? Tild I No, But it's one of those
19:07
Speaker 5: things where the debate has spawned side arguments like whether
19:11
Speaker 5: some passive funds are actually really active management in disguise,
19:14
Speaker 5: or whether they should be debated as reframing along high
19:17
Speaker 5: cost versus low cost funds. I get's a pickle of
19:19
Speaker 5: a topic because you know, the deeper you get into it,
19:22
Speaker 5: the more meaning it has. But at the end of
19:24
Speaker 5: the day, the good news is one you don't have
19:27
Speaker 5: to be active or passive. You can be active and passive.
19:29
Speaker 5: I think I've discussed before. As much as I'm not
19:32
Speaker 5: allowed to tell you what I own legally, I can
19:35
Speaker 5: tell you that I have a mainly passive approach, and
19:37
Speaker 5: then I'm active in some areas because it interests me.
19:40
Speaker 5: And you could do something similar. You could be like,
19:42
Speaker 5: all right, well, my core portfolio is passive, and then
19:45
Speaker 5: I can be a little bit active when it comes
19:47
Speaker 5: to the returns, though, which I think is people's main priority, right.
19:51
Speaker 5: They're like, well, if I'm gonna win best, I want
19:52
Speaker 5: the highest returns. Ever, with more risk comes more return.
19:56
Speaker 5: But often from my perspective, it's about making hey, while
20:00
Speaker 5: the sun is shining, and if the sun is shining
20:02
Speaker 5: and we are able to create consistent returns. From my perspective,
20:07
Speaker 5: I much prefer consistent returns over the highest returns that
20:10
Speaker 5: are maybe possible because nothing's guaranteed. Right. But according to
20:15
Speaker 5: Vanguard's matrix on active versus passive based on ten years
20:19
Speaker 5: worth of data, obviously, the more risk averse the investor is,
20:23
Speaker 5: the more difficulty they have choosing low cost options because
20:26
Speaker 5: they are far more expensive, and when it all comes
20:29
Speaker 5: out in the wash, the difference is minuscule. Like you
20:32
Speaker 5: look at some articles and some graphs, and I'm currently
20:34
Speaker 5: on Barons dot com. They have a really cute graph
20:37
Speaker 5: of active versus passive portfolios, and to be honest, the
20:40
Speaker 5: difference is less than one percent over a ten year period.
20:43
Speaker 5: And I find that really interesting because obviously we could
20:47
Speaker 5: compare so many different things, but it's not comparing apples
20:50
Speaker 5: with apples. So if I go, hey, Georgia, you've got
20:53
Speaker 5: this really high risk portfolio that is currently returning you know,
20:58
Speaker 5: fifteen percent or something along the lines, and your passive portfolio,
21:02
Speaker 5: it's one not apples with apples. But we also need
21:05
Speaker 5: to remember the different risk profiles associated and someone who
21:09
Speaker 5: has a different risk profile and is, you know, maybe
21:12
Speaker 5: more of a moderate growth than a high growth investor,
21:15
Speaker 5: they're actually chasing lower returns anyway. So it's not which
21:19
Speaker 5: is better, it's which is going to serve you better
21:22
Speaker 5: in the long term. And from my perspective, as I've
21:24
Speaker 5: said before, I am more of a passive investor. But
21:28
Speaker 5: I'm more passive because I just don't want to stress
21:31
Speaker 5: every night, Like I'm so lucky that I am so
21:35
Speaker 5: young and got to start so early and as much
21:38
Speaker 5: as I'm wildly passionate about this investing space, I'm also
21:41
Speaker 5: acutely aware that I can't time the market. So what
21:45
Speaker 5: I'm going to do is make sure I have the
21:47
Speaker 5: most time in the market so that I am just
21:50
Speaker 5: investing consistently over the long term. Because even if you
21:53
Speaker 5: look at it right, like in the investment world, you
21:55
Speaker 5: know people obviously chasing sick returns and we want like
21:58
Speaker 5: the highest ever and all all of this other stuff.
22:00
Speaker 5: And we know that the Australian share market over I
22:03
Speaker 5: think it's the last twenty two years or something, has
22:05
Speaker 5: returned eleven percent.
22:07
Speaker 2: That's pretty sexy, I reckon.
22:08
Speaker 5: But when I do my calculations with my clients and
22:12
Speaker 5: I sit down and I say, all right, Georgia, like,
22:14
Speaker 5: what what returns you looking for? You're going to go,
22:17
Speaker 5: all right, well, I just want to average return. I
22:19
Speaker 5: just want to make sure I'm okay. I usually either
22:22
Speaker 5: use five percent as a guide or seven and a
22:25
Speaker 5: half percent. I'm never looking at that eleven even though
22:27
Speaker 5: it's the average, because I would rather underpromise, over deliver
22:32
Speaker 5: and make sure that we achieve our financial goals instead
22:35
Speaker 5: of putting you in a position where we're expecting the world,
22:39
Speaker 5: and then I can't put it on the platter for you.
22:42
Speaker 5: So I think it's all about under calculating performance and
22:46
Speaker 5: then being impressed later down the track. It means that
22:49
Speaker 5: you're not as disappointed when there are dips in the
22:51
Speaker 5: market because you can obviously go, all right, well, last
22:54
Speaker 5: year my performance was eleven percent. Like I remember, back
22:56
Speaker 5: in twenty nineteen before covid G, we were talking about
23:00
Speaker 5: my investment portfolio, you know, privately, and I can say
23:03
Speaker 5: this now because it's not current, and my investment portfolio
23:06
Speaker 5: that year returns seventeen percent woofed and it was doing
23:10
Speaker 5: really well, and I was really stoked. I was like this,
23:13
Speaker 5: you know, obviously isn't what was planned, but the assets
23:16
Speaker 5: that I'm holding are doing really well. And that's just
23:18
Speaker 5: one year in isolation, Like that doesn't mean that that's perfect.
23:21
Speaker 5: My clients were stoked, George, because I had seventeen percent.
23:25
Speaker 5: I had some of my clients where their entire portfolio
23:28
Speaker 5: had returned twenty two to twenty five percent.
23:30
Speaker 2: Holy, like what, that's amazing.
23:32
Speaker 5: And every time I had a conversation with a client,
23:34
Speaker 5: as much as I was super excited about it, I
23:36
Speaker 5: was also like, all right, but take this with a
23:38
Speaker 5: grain of salt. I know it's looking really sexy. This
23:41
Speaker 5: is going to make up for the years in the
23:43
Speaker 5: future that we might have a little bit of an
23:44
Speaker 5: air but or the market might be a bit down,
23:46
Speaker 5: and they'd always be like, yeah, yeah, bab we get it.
23:48
Speaker 5: Don't worry, don't worry. Obviously, I had no idea that
23:50
Speaker 5: COVID would then come. Yeah, COVID then came, and some
23:53
Speaker 5: of my clients had underperforming portfolios or stocks, and I
23:58
Speaker 5: was as a financial advisor, who you know. I graduated
24:01
Speaker 5: in two thousand and nine, and obviously the Global Financial
24:03
Speaker 5: Crisis was the last big financial crisis that financial advisors
24:07
Speaker 5: had to go through, so I didn't experience that, but
24:10
Speaker 5: I heard all about it, and I was like, oh
24:11
Speaker 5: my gosh, this is the first time I'm really going
24:13
Speaker 5: to have to sit down a client and be like,
24:14
Speaker 5: Georgia King, I am so sorry because your performance isn't
24:18
Speaker 5: where it should be. And I was so anxious, and
24:21
Speaker 5: I did way more research than I usually would like.
24:23
Speaker 2: If a client had a.
24:24
Speaker 5: Direct portfolio, I was going through obviously I do this anyway,
24:28
Speaker 5: but I was going through annual reports. If they're holding
24:31
Speaker 5: with a far finer tooth than I was before, trying
24:33
Speaker 5: to find every reason why this had happened. So if
24:36
Speaker 5: my clients mentioned anything, I'd be like, all right, well, Georgia,
24:39
Speaker 5: this is what this means.
24:40
Speaker 2: Don't worry.
24:40
Speaker 5: I'm completely on top of it. I wanted my clients
24:42
Speaker 5: to feel safe. Every meeting I went to with clients,
24:46
Speaker 5: they're like, yeah, no worries.
24:47
Speaker 2: I was like, what.
24:48
Speaker 5: They're like, you said this would happen, Like you set
24:50
Speaker 5: our expectations that market would at some point go down.
24:53
Speaker 5: We had a really good couple of years, but like,
24:55
Speaker 5: we're just gonna write it out, and I.
24:56
Speaker 2: Was like, I've wasted so much time research.
24:58
Speaker 5: I mean, I don't regret it, but I think it's
25:01
Speaker 5: really important to talk about this stuff as well, so
25:03
Speaker 5: that you guys understand that, you know, over the last
25:05
Speaker 5: few years my portfolio has been doing really badly. Makes
25:08
Speaker 5: me feel really sick. I actually hate logging in and
25:11
Speaker 5: seeing it. But at the same time, I always tell
25:13
Speaker 5: you guys, it's about looking at it as if the
25:16
Speaker 5: shares are on sale and going all right, well, the
25:18
Speaker 5: shares are on sale. If I buy more now, I'm
25:20
Speaker 5: getting better value, which is a money win, right, So
25:22
Speaker 5: I think when it comes to passive investing, it's not
25:25
Speaker 5: really about the performance. Like, if you're chasing performance and
25:29
Speaker 5: you're really wanting the highest of the higher, then yeah,
25:32
Speaker 5: you're probably more of an active investor. Passive investment strategies
25:36
Speaker 5: are the slow and steady steed that are arguably going
25:38
Speaker 5: to win the race, and you might not end up
25:41
Speaker 5: with millions upon millions of dollars, but like that was
25:44
Speaker 5: always going to be a risk.
25:45
Speaker 2: Does that make sense?
25:46
Speaker 4: Yeah?
25:47
Speaker 5: And when I use that example which I've used on
25:49
Speaker 5: the podcast a million times that we've talked about five
25:52
Speaker 5: hundred dollars each and every single month from the age
25:54
Speaker 5: of twenty one up until retirement. If you had saved
25:57
Speaker 5: that money, it would be two hundred and forty thousand dollars.
26:00
Speaker 5: If you had invested that money, it would be one
26:02
Speaker 5: point two million ECHE dollars in an investment portfolio. Money win.
26:07
Speaker 5: That generates a passive income stream of about sixty thousand dollars.
26:11
Speaker 5: But gee, that's calculated as seven and a half percent return,
26:15
Speaker 5: and we know that the market has performed higher than
26:18
Speaker 5: that over the last few years. Does that make sense?
26:21
Speaker 5: So when we give examples. I'm always trying to under
26:24
Speaker 5: promise over deliver, and I think you should do that
26:26
Speaker 5: for yourself as well. So when you're looking at is
26:29
Speaker 5: an active portfolio better returning or is a passive portfolio
26:33
Speaker 5: better returning, I don't think it's about that. I actually
26:35
Speaker 5: think it's about picking something that will get you to
26:38
Speaker 5: your goal safely.
26:39
Speaker 2: Yeah, does that make sense?
26:41
Speaker 4: It does make sense. Sorry, Ranch, No, No, I loved
26:44
Speaker 4: I absorbed at all just on that v The one
26:46
Speaker 4: thing you didn't touch on there was the difference in
26:49
Speaker 4: expense between servicing a passive folio versus an active folio.
26:53
Speaker 4: I'm assuming active will be more expensive, especially if you're
26:56
Speaker 4: paying for a fund manager, because it's more hands on.
26:58
Speaker 4: Can you talk through that different as well.
27:00
Speaker 5: Absolutely, So when it comes to active, there's usually more
27:04
Speaker 5: hands involved, there's usually more people in the mix, and
27:07
Speaker 5: usually when it comes to investing, those people are very expensive.
27:09
Speaker 5: So that could be a financial advisor, it could be
27:11
Speaker 5: a fund manager if you're picking an active fund, it
27:14
Speaker 5: could be anybody. But essentially, an ETF just baskets everything
27:18
Speaker 5: into a fund. Yeah, there'll be a manager that looks
27:20
Speaker 5: after that ETF or an ETF manager, but they won't
27:23
Speaker 5: be as actively trying to chase returns as a fund manager.
27:27
Speaker 5: In an active portfolio, you do pay for it. But
27:30
Speaker 5: that's why I said it's hard to compare apples with apples,
27:33
Speaker 5: because funds have different prices in different returns, and then
27:37
Speaker 5: things that are more active sometimes come out in the
27:39
Speaker 5: wash exactly the same.
27:41
Speaker 2: So, to be honest, it really boils down to what
27:44
Speaker 2: are your values.
27:45
Speaker 5: G what's gonna you know, spark joy in you? And
27:48
Speaker 5: I know that sounds so lame sometimes, but if you're like, yeah,
27:52
Speaker 5: I just want to invest to put myself in the
27:54
Speaker 5: best possible financial position in the future, then maybe passive
27:58
Speaker 5: is for you. But if you're like, oh my gosh,
28:00
Speaker 5: I'm so excited. I love investing. I want to be
28:02
Speaker 5: a part of it. I want to be trading. Oh
28:04
Speaker 5: my gosh, I've been doing this research on this fund
28:06
Speaker 5: manager and I'd really like to follow their portfolio, then great,
28:09
Speaker 5: maybe that is for you, But different strategies can also
28:13
Speaker 5: be chopped and changed. As I've said before, I mix
28:15
Speaker 5: strategies for me personally because I am really passionate, but
28:18
Speaker 5: I'm also really passionate about that. You know, tried and true,
28:22
Speaker 5: steady Steed who's going to hopefully win the race for me.
28:25
Speaker 5: And so that's where passive comes into it. So it
28:28
Speaker 5: really really depends on what your values are as a person.
28:31
Speaker 5: But yes, active is more expensive in general because usually
28:35
Speaker 5: you're paying for a fund manager across the board. In
28:39
Speaker 5: the financial advice industry, I find that financial advisors scoff
28:43
Speaker 5: a little bit when you say that an ETF costs
28:46
Speaker 5: more than one percent of your funds under management. I
28:50
Speaker 5: might use terms like basis points, but basis points can
28:52
Speaker 5: basically be you know, converted straight into a percentage. So
28:57
Speaker 5: less than one percent I think is fair for an
29:00
Speaker 5: ETF that doesn't have an active fund manager. But you
29:03
Speaker 5: can pay way more than that when it comes to
29:05
Speaker 5: having an active person on your portfolio, because they need
29:08
Speaker 5: to pay the bills.
29:09
Speaker 4: Yeah, okay, perfect. They talk me through the very best
29:14
Speaker 4: parts of passive investing, apart from like the hands off approach,
29:17
Speaker 4: which I'm very drawn to personally.
29:18
Speaker 5: I haven't sold you on it yet, You're like, I
29:20
Speaker 5: want more more, is there, Victoria?
29:22
Speaker 2: You need to pitch this harder, all right. So obviously very.
29:26
Speaker 5: Low maintenance, more of a hands off approach, less responsibility
29:30
Speaker 5: on you, which to be honest, I find real sexy.
29:32
Speaker 5: But passive investing is really just like as I said before,
29:35
Speaker 5: setting and forgetting and not having the constant angst or
29:38
Speaker 5: exhaustion of monitoring the market, and can be quite freeing.
29:41
Speaker 2: From my understanding.
29:43
Speaker 5: It doesn't mean you don't need a financial advisor though
29:45
Speaker 5: contrary to popular belief, as much as you can absolutely
29:48
Speaker 5: go and do it yourself. It's funny because I actually
29:51
Speaker 5: have a whole heap of clients that have passive investment strategies,
29:53
Speaker 5: and I mainly work with them individually on goal setting
29:56
Speaker 5: and actually budgeting and cash flow because they're the things
29:58
Speaker 5: they struggle with, and they're the things they see value
30:00
Speaker 5: in me in and it's not actually investing. So we're like, yeap,
30:03
Speaker 5: let's set up a passive portfolio. We'll put that over
30:06
Speaker 5: to the side. It'll tick along, do its thing, and
30:08
Speaker 5: we'll focus on these things. Whereas I then have other
30:10
Speaker 5: clients and this is where I usually play a little
30:13
Speaker 5: bit more actively, where they have direct share portfolios and
30:16
Speaker 5: I'm far more active in that, and they're like V,
30:18
Speaker 5: I don't care about my budget and cash flow. They're
30:20
Speaker 5: either really reached or they're on top of it. And
30:21
Speaker 5: they don't need my help when it comes to budgeting
30:23
Speaker 5: cash flow. So each financial advice relationship is actually going
30:27
Speaker 5: to be really different based on how you frame it
30:29
Speaker 5: with your advisors. So I don't want you guys thinking, oh,
30:31
Speaker 5: if it's passive, you just do it yourself, you don't
30:33
Speaker 5: need an advisor. It will really depend on what your
30:35
Speaker 5: goals are for seeking financial advice.
30:38
Speaker 2: Everyone's is different, right. Obviously, as we.
30:41
Speaker 5: Mentioned before, it's cheaper if you've got someone investing on
30:44
Speaker 5: your behalf and looking at your portfolio, their fees obviously
30:47
Speaker 5: are likely to be higher because it's active investment, as
30:49
Speaker 5: we said before, so much more involved. So cheaper is
30:53
Speaker 5: a nice thing, a bit of a money win. Capital
30:56
Speaker 5: gains tax is also avoided sometimes because you're not selling
31:00
Speaker 5: when you hit a profit. So often with the more
31:03
Speaker 5: active investing, you're selling and buying and selling and buying,
31:07
Speaker 5: and you really need to take into consideration capital gains tax.
31:10
Speaker 5: So that's a tax you pay on the profit you
31:13
Speaker 5: make from the asset you sold. Say you had a share, George,
31:16
Speaker 5: and it was a dollar when you bought it, and
31:18
Speaker 5: then it was two dollars when you sold it. You
31:20
Speaker 5: now have to pay tax on that one dollar that
31:23
Speaker 5: you made, and if you sell it within twelve months,
31:26
Speaker 5: so in under twelve months, you're actually going to be
31:29
Speaker 5: slapped with a fifty percent capital gains tax, so that
31:32
Speaker 5: takes your profit down to just fifty cents, so it
31:35
Speaker 5: really strips it away. Otherwise, it is taxed at your
31:38
Speaker 5: marginal tax rate, which is really fair because we pay
31:41
Speaker 5: tax on money we earn, and basically, if you're earning
31:44
Speaker 5: it in the share market, you are earning that money
31:46
Speaker 5: and it needs to be taxed. Totally fair, totally understandable,
31:49
Speaker 5: but people don't seem to understand that. Whereas with a
31:52
Speaker 5: passive portfolio, you're just buying, holding, buying holding, and capital
31:56
Speaker 5: gains tax isn't something you would have to play with
31:58
Speaker 5: too often because the whole plan is to buy and hold. Yes, no,
32:03
Speaker 5: buy and sell, and you're not trading often. When it
32:06
Speaker 5: comes to passive investing, and to be honest, this is
32:07
Speaker 5: across the board, there's usually a really good level of
32:10
Speaker 5: transparency in what you're invested in because it's expected, it's
32:13
Speaker 5: twenty twenty two. There's not a lot of things you
32:16
Speaker 5: can't disclose like you have to be These are the
32:19
Speaker 5: holdings This is why we have the holdings. These are
32:21
Speaker 5: the percentages, and even ETFs nowadays are a lot more
32:25
Speaker 5: transparent than they used to be.
32:27
Speaker 4: Okay, so they're the pros, vikid, But can you talk
32:32
Speaker 4: me through any potential considerations we need to think about
32:35
Speaker 4: any negatives or downsites?
32:37
Speaker 2: Yeah, of course.
32:37
Speaker 5: So obviously with every pro there's usually a con associated
32:41
Speaker 5: in every aspect of life. Passive investing is subject to
32:45
Speaker 5: total market risk. So when the overall stock market falls
32:48
Speaker 5: or when a bond price takes a little bit of
32:50
Speaker 5: a dip and slide, so too will index funds. But
32:53
Speaker 5: that's as we said before. You know how we're talking
32:54
Speaker 5: about the odds and it's like a good indicator.
32:57
Speaker 2: Of the market. Yes, that's just going to.
32:59
Speaker 5: Happen because if the market is going down, obviously, if
33:02
Speaker 5: you're holding a really big part of the market, your
33:04
Speaker 5: shares are going to go down to So it makes
33:07
Speaker 5: sense part of the journey though, so don't stress when
33:09
Speaker 5: this happens. It's obviously not as flexible as active investing
33:13
Speaker 5: because you're not hand picking individual stocks and being completely
33:16
Speaker 5: in control of it. In saying that, that's why we
33:19
Speaker 5: want to take a little bit more time to pick
33:21
Speaker 5: the right ETF or right passive investment strategy for you,
33:24
Speaker 5: because I'm sure that there is one that comprises of
33:27
Speaker 5: things that all align to your values. Am I just
33:29
Speaker 5: take a little bit more time being like, all right,
33:31
Speaker 5: well it has to be ethinic, all, it has to
33:33
Speaker 5: be women has to be this, has to be that,
33:34
Speaker 5: and that's okay.
33:35
Speaker 2: We just need to find it. And you might not get.
33:38
Speaker 5: Above market returns because obviously with an ETF, the goal
33:42
Speaker 5: is to mimic the average of what the market in
33:44
Speaker 5: general is returning. You're not trying to pick, oh, the
33:47
Speaker 5: next up and coming text stocks or the next up
33:49
Speaker 5: and coming XYZ. You're literally going, I'm going to buy
33:52
Speaker 5: a basket of shares and I hope to get the
33:54
Speaker 5: average return from the sense.
33:57
Speaker 4: That makes sense, It makes sense. I'm on board passive
34:00
Speaker 4: investing me.
34:02
Speaker 2: Well, let's get you started.
34:04
Speaker 4: Well that leads me to my final question for today.
34:07
Speaker 4: How do we actually set ourselves up with a passive
34:09
Speaker 4: investment folio. I'm assuming we're just calling the big guns
34:13
Speaker 4: getting some help.
34:14
Speaker 5: I'll just call a big financial advisor, send all your
34:17
Speaker 5: money their way, pay an exorbitant amount of money, and
34:20
Speaker 5: you be right. No, there's heaps of waste. Honestly, that
34:23
Speaker 5: is not true. Do not take that. You can obviously
34:25
Speaker 5: do it via fund manager. You can do it via broker,
34:28
Speaker 5: you can do it via an online share trading platform.
34:30
Speaker 5: You can literally just log into an app like shares
34:33
Speaker 5: Use and buy an ETF and bam, you're a passive investor.
34:36
Speaker 2: Like what a dream. It is actually so easy.
34:39
Speaker 5: Before you do, though, there are a couple of things
34:41
Speaker 5: to keep in mind. So the first is to really
34:43
Speaker 5: ask yourself what your personal strategy is, what your values are,
34:46
Speaker 5: and what you're hoping to get out of your investment experience.
34:50
Speaker 5: If you're chasing those really high highs and you're really
34:53
Speaker 5: keen on having a hands on investing experience, well perhaps
34:56
Speaker 5: active investing is a better option for you.
34:58
Speaker 2: Understand it. Honestly.
35:00
Speaker 5: I think the other thing I would really say here
35:02
Speaker 5: is trust yourself because I think as women in particular,
35:06
Speaker 5: and I keep saying this because it's an investing piece
35:09
Speaker 5: of content, but we really doubt ourselves and our ability
35:13
Speaker 5: to make a good decision, and often we get analysis paralysis,
35:16
Speaker 5: and that stops us from even getting into the market.
35:19
Speaker 5: I'm not asking you to put every single dollar of
35:21
Speaker 5: your life savings on the line. Even if it means
35:24
Speaker 5: you go and spend ten dollars on an ETF to
35:27
Speaker 5: get in the market and start watching it plod along
35:29
Speaker 5: and feel comfortable with it. That is literally better than
35:33
Speaker 5: not getting in at all. So I think it's all
35:35
Speaker 5: about being in the market to get an experience, because
35:38
Speaker 5: how many times, Gee, and I've said this to you
35:40
Speaker 5: a million times, people like, Oh, I went to Union
35:42
Speaker 5: and I studied marketing for four years and I did
35:44
Speaker 5: my honors, and then I went to work and all
35:46
Speaker 5: of that went out the window. All my research, yeah,
35:48
Speaker 5: went out the window, and I learned on the job. Yep,
35:50
Speaker 5: same thing can happen in the investment world.
35:52
Speaker 4: That's a good way of looking at it.
35:54
Speaker 2: I think it's a good place to leave it to.
35:55
Speaker 4: Yeah, a perfect VD. Also, I'm going to throw a
35:58
Speaker 4: shameless plug out there if anyone wants to know more
36:01
Speaker 4: about investing in general or passive investing specifically. Vicki D's
36:05
Speaker 4: book is out. It's thriving, Its fabulous, So well, she
36:09
Speaker 4: looks really esthetic on your book. Pop her beside the bed.
36:13
Speaker 2: People think you're really impressive exactly.
36:15
Speaker 4: So definitely check that out, guys, But for now, VD.
36:18
Speaker 4: Can you please wrap the boring but important stuff?
36:20
Speaker 2: Of course I can.
36:22
Speaker 5: The advice shared on She's on the Money is general
36:25
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36:28
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36:32
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