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From Five Dollars To A Future: How Tiny Investments Build Wealth · That Home Loan Hub

• 0:20
  SPEAKER_01: Hello and listen up, how much money do you need to start investing?
• 0:25
  SPEAKER_01: Guess what?
• 0:26
  SPEAKER_01: I've got Elizabeth back in the house.
• 0:27
  SPEAKER_01: Hello, Elizabeth.
• 0:28
  SPEAKER_01: Hello, nice to be back.
• 0:30
  SPEAKER_01: Nice to see you again.
• 0:32
  SPEAKER_01: Our recordings are doing really well.
• 0:34
  SPEAKER_01: People are curious about how they can start investing.
• 0:37
  SPEAKER_01: And one of the questions that came up, how much money do I need to start investing?
• 0:41
  SPEAKER_00: Yeah, I feel like this comes up a lot because either it's in the context of, you know, cost of living crisis, people feel like I just don't have any spare money.
• 0:50
  SPEAKER_00: So I'll just put that in the next year, next whenever I've got money basket.
• 0:55
  SPEAKER_00: Or I get a lot of questions around like, should I be paying down my mortgage or investing?
• 1:00
  SPEAKER_00: Like, where should I put my money when they could be doing both because you actually don't need to start with a lot to start investing?
• 1:07
  SPEAKER_00: So I feel like that's a really interesting topic for a lot of people to just be like, you can start so small and still start to make a difference.
• 1:15
  SPEAKER_01: Absolutely.
• 1:16
  SPEAKER_01: So what is small?
• 1:18
  SPEAKER_01: Because small for you could be different to small to Elon Musk.
• 1:23
  SPEAKER_00: Yes, 100%.
• 1:24
  SPEAKER_00: So and this is something that I when I was interested in investing when I was like 21 and I got a book out of the library of like investing 101 for beginners.
• 1:34
  SPEAKER_00: I was like, oh, I can't, I can't do anything other than Kiwi Saver because you need to have like a lump sum saved up.
• 1:40
  SPEAKER_00: But actually, now we have all these platforms like Sherzies and Hatch and everything like that.
• 1:45
  SPEAKER_00: So if you want to go on something like that, it's a$5 minimum, right?
• 1:49
  SPEAKER_00: This is literally, I could be like, I got two coffees today.
• 1:53
  SPEAKER_00: Instead of buying two coffees for the price of one coffee, I could have put that in Sherzy's and just start exploring the idea, playing around with it.
• 2:02
  SPEAKER_00: I saw this really cool thing where it talked about people's mindsets of starting, you know, starting a new habit for the new year, which is really good psychologically, but you can treat December as like a testing period and just try things out in preparation for I'm gonna start properly in the new year.
• 2:19
  SPEAKER_00: So something like a l open a shazzy's account could be a way to just start and dabble.
• 2:25
  SPEAKER_00: And then for the managed funds that I look after, sorry, they they start as little as$500.
• 2:35
  SPEAKER_00: So for some people, like you said,$500 doesn't feel like a little bit of money.
• 2:39
  SPEAKER_00: But then for people who maybe thought they needed like a five grand start point,$500 is doable.
• 2:45
  SPEAKER_00: They could save that up over a couple pay periods and then they could open a managed fund and have that exposure to a real range of diversified investments and have that be as part of a real plan going forward.
• 2:57
  SPEAKER_01: That's incredible because obviously we're opening up a door to a whole new society that previously thought that they couldn't.
• 3:08
  SPEAKER_01: And they had a mindset of I need to be rich to get richer.
• 3:13
  SPEAKER_01: Exactly.
• 3:14
  SPEAKER_00: Yeah, like the the capital they needed was so big that it was put it out of like reality.
• 3:19
  SPEAKER_01: Yeah, but actually in reality is hey, to get richer, you can start now.
• 3:24
  SPEAKER_01: Yeah.
• 3:25
  SPEAKER_01: Even when you're poor.
• 3:27
  SPEAKER_01: Because that's how I feel right now, right?
• 3:29
  SPEAKER_01: Like I feel the stress of the living cost, the mortgage repayments, the insurances, the rates, like it's all coming on top of you.
• 3:36
  SPEAKER_01: And it can be so overwhelming whether you're earning$50,000 a year, whether you're earning$150,000 a year.
• 3:44
  SPEAKER_01: I see people, I see clients that are in very similar boats, regardless of how much money they're earning.
• 3:50
  SPEAKER_00: Yeah, absolutely.
• 3:50
  SPEAKER_00: Because I think their lifestyle probably has matched their earnings, right?
• 3:54
  SPEAKER_00: And then as the price of everything goes up, if you were living at capacity, you're really feeling that pinch.
• 4:00
  SPEAKER_00: But hopefully, you know, if you can spot an area where there's just a little bit of difference.
• 4:09
  SPEAKER_00: So for example, an example I often give is like if your kid turns three and they get 23 hours of childcare, or your kid goes to school at five and suddenly you don't have childcare costs, that difference that you have been paying for three or five years, can you just somehow allocate that or even part of that to an investment account?
• 4:29
  SPEAKER_00: Um, because that can actually be like hundreds of dollars a week.
• 4:32
  SPEAKER_01: Yeah.
• 4:32
  SPEAKER_01: So I'm I'm all about repurposes, repurposing and recycling.
• 4:36
  SPEAKER_01: Yeah.
• 4:37
  SPEAKER_01: And that same context can apply in money.
• 4:41
  SPEAKER_01: Because if we can repurpose that same amount of money into something else, as you say, you know, if suddenly your child turns three and you get 23 hours, that's a couple of hundred bucks a week.
• 4:52
  SPEAKER_01: Could you afford to just still continue living the life you're living without that$200 a week and just put it aside?
• 5:00
  SPEAKER_01: Yeah.
• 5:01
  SPEAKER_01: And even did you did well, I was like, did you know?
• 5:04
  SPEAKER_01: Of course you know.
• 5:06
  SPEAKER_00: Maybe I don't.
• 5:07
  SPEAKER_00: What is it?
• 5:08
  SPEAKER_01: That you can open, well, that's more for the listeners, right?
• 5:11
  SPEAKER_01: Guys, did you know that you can open shares' accounts for the kids?
• 5:16
  SPEAKER_01: Yes, yeah.
• 5:17
  SPEAKER_01: And they can't use that until they turn 18, I believe.
• 5:21
  SPEAKER_00: I think it stays in your name until they're 18.
• 5:23
  SPEAKER_00: Yeah.
• 5:23
  SPEAKER_00: Yeah.
• 5:24
  SPEAKER_00: And that's the same for managed funds and everything else.
• 5:26
  SPEAKER_01: Yeah.
• 5:27
  SPEAKER_01: So what we've been doing with my father of the children is putting money aside into the shares' accounts for the last few years.
• 5:34
  SPEAKER_01: So every time kids are getting pocket money, they're not really getting pocket money.
• 5:37
  SPEAKER_01: They're getting money into the invested.
• 5:39
  SPEAKER_01: Yeah, they're getting money invested.
• 5:40
  SPEAKER_01: And we've shown them different, you know, what you can buy, different companies, and they get excited because like, oh, I've got McDonald's, you know, I own Starbucks or you know, Auckland Airport.
• 5:50
  SPEAKER_01: So they get really excited about that.
• 5:51
  SPEAKER_01: And I think that teaches them about money skills and shows them how money can grow.
• 5:56
  SPEAKER_01: Yes.
• 5:57
  unknown: Yeah.
• 5:58
  SPEAKER_00: Yeah, because I think if you are, look, if you're saving for a goal, I think a managed fund is a much better option than direct shares.
• 6:07
  SPEAKER_00: And we can have that conversation as a whole separate conversation.
• 6:10
  SPEAKER_00: But direct shares are really good for just dipping your toe into investments for like getting your confidence up or seeing what it's like, getting exposure to volatility, talking to kids, like all of those things that then give you confidence to be like, oh, maybe I could invest a bigger amount in a more diversified fund, which has a bigger goal attached to it.
• 6:31
  SPEAKER_00: Because I've started over here and it's actually not been too scary.
• 6:35
  SPEAKER_01: Yeah.
• 6:35
  SPEAKER_01: Yeah.
• 6:36
  SPEAKER_01: Dabbled a little.
• 6:37
  SPEAKER_01: And look, I will share my guilty pleasures with Sharsies is every time I feel like I need to go and buy something online, I actually go and put money into my Sherzy's account and buy shares instead.
• 6:48
  SPEAKER_01: So that's me managing my own shopaholic addictions.
• 6:53
  SPEAKER_00: And prioritizing future you.
• 6:55
  SPEAKER_00: Yeah.
• 6:55
  SPEAKER_00: Right.
• 6:55
  SPEAKER_00: Like that's not money that you've given away.
• 6:57
  SPEAKER_00: That's money that you're investing for your future self that you will enjoy using one day in the future.
• 7:03
  SPEAKER_01: I hope so.
• 7:03
  SPEAKER_01: And it has been satisfying.
• 7:05
  SPEAKER_01: Like I'm only putting aside$200 a month at the moment into shares.
• 7:08
  SPEAKER_01: So that's what,$50 a week.
• 7:10
  SPEAKER_01: Yeah.
• 7:10
  SPEAKER_01: In my mind, as you say, you know, it's a cup of coffee a day.
• 7:13
  unknown: Yeah.
• 7:14
  SPEAKER_01: A few cups of coffees a day.
• 7:15
  SPEAKER_01: I don't buy coffees out there.
• 7:17
  SPEAKER_01: I buy I make my own coffee at home.
• 7:19
  SPEAKER_01: And coffee beans are still expensive to buy, but that's still cheaper on the grand scheme of things.
• 7:25
  SPEAKER_01: Especially I drink oat latte and oat milk is an extra dollar in a lot of places now.
• 7:30
  SPEAKER_01: Yeah.
• 7:30
  SPEAKER_01: And I like large, and that's again another extra dollar or two.
• 7:34
  SPEAKER_01: So before yeah, honestly, before you know it, my coffee's cost me like eight to ten dollars per cup.
• 7:40
  SPEAKER_01: So I thought, right, I'll repurpose that money, recycle that money into that.
• 7:45
  SPEAKER_01: The other good idea is for people when they get pay rises.
• 7:48
  SPEAKER_01: Yes.
• 7:48
  SPEAKER_01: If they got a pay rise, for instance.
• 7:50
  SPEAKER_01: And again, if they're already used to living without that money.
• 7:53
  SPEAKER_01: Just put that difference into something useful.
• 7:55
  SPEAKER_00: And I mean the one that you probably talk to people a lot about is when interest rates drop.
• 7:59
  SPEAKER_00: Yeah.
• 8:00
  SPEAKER_00: It's like, do you keep your repayment the same on your mortgage?
• 8:03
  SPEAKER_00: Or if you are going to drop to the minimum, what are you repurposing that money for?
• 8:07
  SPEAKER_00: I don't just add it to your spending account.
• 8:10
  SPEAKER_01: Yeah.
• 8:10
  SPEAKER_00: Can we put it towards a different goal?
• 8:13
  SPEAKER_01: Yeah.
• 8:13
  SPEAKER_01: Um, so and just circling back to the kids for a moment there, the other good idea of what I was thinking about and talking with my clients, obviously I'm not investment advisor, but you know, kids get so much crap these days, like for Christmas, for birthdays, you know.
• 8:27
  SPEAKER_01: Why don't you have that open conversation with the uncles and aunties and grandparents and with each other?
• 8:32
  SPEAKER_01: Is hey, instead of, you know, getting lots of crap presents, they're gonna be just lying around the house.
• 8:38
  SPEAKER_01: How about we get okay, maybe one present?
• 8:40
  SPEAKER_01: So the kid still has something to open on their birthday.
• 8:43
  SPEAKER_00: I'm not that cruel.
• 8:44
  SPEAKER_00: Yeah, otherwise it could be quite devastating on Christmas morning.
• 8:47
  SPEAKER_01: Yeah, but but the rest of the money maybe could be, you know, um, got given in cash on to bank account and repurposed into shares.
• 8:56
  SPEAKER_00: Yeah, I think that that's becoming more popular.
• 8:59
  SPEAKER_00: And I think because a lot of our generation is really conscious of how tricky it might be for the next generation, not just their kids, but like if they have nephews and nieces and stuff, and so they want to do something to help, and that's a way they can help without, like you say, one, the hassle of them trying to work out what your kid needs or wants or is into and just cluttering up the house more.
• 9:22
  SPEAKER_00: So, you know, I think that's that's a great conversation to have, and then it starts the conversation spreading throughout families as well, which we know that the more you like talk about money, the more confident you feel about it, then the better your outcomes are.
• 9:35
  SPEAKER_00: So it's kind of even if you didn't end up opening the account for the kids, having the conversation would still have a positive flow and effect.
• 9:41
  SPEAKER_01: Yeah.
• 9:42
  SPEAKER_01: Exactly.
• 9:42
  SPEAKER_01: And it removes that whole shame around money.
• 9:44
  SPEAKER_01: Yeah.
• 9:45
  SPEAKER_01: You know, that you shouldn't be talking about money because that's a shameful topic.
• 9:49
  SPEAKER_01: But this is why we're talking about it.
• 9:50
  SPEAKER_01: So people listen to it and then they go, Hey, I had this great podcast.
• 9:54
  SPEAKER_01: Yeah, exactly.
• 9:55
  SPEAKER_01: Hey guys, thank you so much for listening in.
• 9:57
  SPEAKER_01: Just a quick recap how much money do we need to start investing is anywhere from five dollars upwards, five hundred for a managed fund, and go from there.
• 10:06
  SPEAKER_01: Perfect.
• 10:07
  SPEAKER_01: Thank you so much.
• 10:08
  SPEAKER_00: See ya.