Latest / The Curve / Chat GPT, Claude; meet your FREE rival.

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Chat GPT, Claude; meet your FREE rival. · The Curve

• 0:01
  Coming up in today's episode, we speak about Kimmy K3, which is not Kim Kardashian. So if you remember, if you've listened to this podcast for a while, last year there was this big AI drama with DeepSeek, basically came out with cheaper, better chips, and all of this money was wiped off of the stock market. This is the 2.0 version, and why people are freaking out that this might be what burst the AI bubble.
• 0:27
  And given that you've got a brick hovering, Vic, at the moment, we are going to be talking about the UK economy, what's going on with politics, but also more importantly, how that politics globally impacts your personal finances, whether you're in the UK, Australia, New Zealand, America, wherever. We are going to quickly touch on oil prices and how this could have a really seriously scary impact on the cost of living globally. Well, as a question that's come in from the Curve Hotline from someone in the community who is on maternity leave and has...
• 0:54
  a specific question about how they should think about their investment strategy. This is The Curve Weekly, where we read the finance news so that you don't have to. Hi, I'm Abbey Foster. I'm covering for VEC, and I am an ACHR accountant, founder, author, finance content creator. And I'm Sophie Hallwright, XTV radio producer, who was very tired and embarrassed about not understanding the economy. So we started this podcast.
• 1:21
  This episode of The Curve Weekly is made possible thanks to Pathfinder KiwiSaver Plan, helping you invest alongside your values. We're really excited to bring you the ethical hotline where you can ask all your tricky ethical questions. Each month, Pathfinder will answer the most interesting, popular or polarizing question. To submit yours, follow the link in the podcast show notes. Pathfinder Asset Management Limited is the issuer of the Pathfinder KiwiSaver Plan. A product disclosure statement is available at pathfinder.kiwi. Abby, you won't believe it.
• 1:49
  We have been shortlisted slash we're finalists. We're a finalist in the British Podcast Awards. That's so exciting. Can you believe it? I cannot. Yesterday we were in the office and I hear this like gasp from Emily and she's like, oh my God, we've been short, we're finalists. I keep saying shortlisted. We are finalists, which is just wild. You can only get three seats to go to the actual awards night. And we were like, where is it?
• 2:16
  I don't know. Where are they? It's some big night. I mean, honestly, it's quite fun. Oh, it's at the O2. Bloody hell. Are you joking? Oh, that's fun. We have to go at the O2. So they're like the smaller part of the O2. So like the smaller stage. No way. That's so funny. Oh, I would be so nervous if we actually had to go on stage. Thank you so much, everyone who voted. Even our investors sent us notes saying like, we voted for you. It's like, thanks, guys.
• 2:45
  That's so cute. It's so fun. How's your week been? In news? Well, finance and politics news. No personal news. Before you get into it, I love that she's just like absolutely... That is my life. I want to have a different life that's not all about finance politics. I think this week, mainly, it's just... I was meant to have a really quiet week and it just didn't end up like that. I went to the cricket yesterday. I went to Lourdes, which was fun. The email that doesn't know what Lourdes is, can you explain? Yeah.
• 3:13
  So it's like in St. John's Woods, like northwest London-ish, and it's just a big cricket ground. And it's apparently one of the most prestigious in the UK. And in my own view, it was just old. Like we were in a box with Compare the Market, and it was really cool. But everything's a bit dated and old-fashioned in my personal opinion. But maybe it's because I don't understand the history and the richness of cricket. Would we say cricket is the most boring sport to watch?
• 3:41
  I would. Like, I find myself very easily just looking the other way. Because you messaged me at 1 p.m. on your way there, and then at 10 p.m. just got home. That is a huge day. Did you have a nice week? Yes. I had a lovely week. I had a wedding where I went completely sober. Remember last week we were talking about how I was going to wear the same dress again? Yes. So I wore the same dress. It's this big pink. We could actually put a photo of it on the screen. I love it. I feel like such a princess in it.
• 4:10
  And there was this couple that were there and they were probably 80 or something. And I was saying to my boyfriend, I was like, oh, I'm just, they're so cute. Like he was the best dress. He had a little bow tie on and they were just like matching. It was so sweet. They were dancing together all night. And I went up to them and I said, I just want to let you guys know you're the cutest couple in the best dress here. And she was like, oh, I was admiring your dress. I think your dress is beautiful. And I was like.
• 4:33
  oh my God, my heart's breaking. I'm obsessed with you. They'd been married for 40 years and I was like, wow, what's the secret guys? He said, make sure you pick the right one and I was like, that hurts my heart. I know and then he also said, really, forgiveness is such a big part of it and I was like,
• 4:50
  Did you cheat on it? I think that's our millennial hard knockdown brain. I was actually going to say, like, normally we start these conversations with are we in the red or the green, but we've probably rambled for far too long at this point. So maybe on Wednesday's episode, we'll do a check-in on our finances. In terms of what is happening in the world of finance, stock markets, the economy. Mm-hmm.
• 5:12
  There is so much happening right now. I feel like it is a bit of a, excuse my language, shitstorm everywhere. We've got oil prices all over the show. There is earnings season. So companies are like, you know, a lot of stocks have dropped. Yeah.
• 5:31
  There's political instability. You may or may not remember, but in 2025 in January, we spoke about DeepSeek. So there was this huge story that came out. So for a really long time, I'm going to give a quick overview here, and I'm going to do it in really basic terms. But NVIDIA...
• 5:47
  a name we don't really talk about anymore, was one of the biggest, if not the biggest, company in the world. It was the main source of reliance for AI because they create the chips that's almost like the infrastructure too that AI has run on.
• 6:05
  DeepSeek is a Chinese company that came out and essentially was like, we've created the same thing, but for way cheaper and it's way better. And there was this huge wobble in the market where everyone was panicking, like, oh God, where we thought we only needed NVIDIA or we were relying on this business. Basically what happened was in like a really short space of time, NVIDIA as sort of like the top company lost around $590 billion.
• 6:33
  in terms of its value in like a single session. The whole idea was that it just was this huge wobble for AI of like, oh, hold on, can the Chinese do it better and cheaper? That was sort of the premise. And it's kind of stabilized since then, but the whole story that's come out this week is almost like the part two of that. And I wonder if it's worth just giving context for how the U.S. runs in general in regards to private companies,
• 7:01
  And then comparatively what's happening in China with everything being regulated and state run. Because that then directly feeds into what we're about to explain with what's happened with the Kimi K3 update. That's basically making everyone question, is this the bubble pop? Like is this when everything's going to sort of tumble down? When it comes to the US, they will see very much just leave their companies to do their own thing.
• 7:25
  We've talked about the S&P 500 and then the Magnificent Seven that sits within that, which is the seven largest tech stocks in the world, which will sit within the US. We know globally just like Western culture is very much to like let business be business, whereas China is very different. China very much like brings things in-house, does a lot of its own work that's like state funded and therefore...
• 7:47
  The businesses that are running in the US have to be prospect-led. They have to be thinking about profit. They have to be thinking about share price, whereas these companies in China, not so much. So if we were to dig into that more, because I think it's a really, really important point that I didn't totally understand at first. So being state-run, it's essentially meaning that in China, all of these big companies, all of the innovation, if you're talking about entire sectors, is...
• 8:14
  They basically invest in several different companies. They give money to help them grow. So what you've seen in China is like an enormous increase in clean energy, for example, because they see that as an industry that is worth investing in. And then they'll have several companies.
• 8:32
  that are trying to be innovative, but essentially they don't have to stress so much about immediate profit because the whole point of a country being run by the state is they are able to think about the next 100 years. So they're not short-term focused in the way that they're building businesses. And I think that's just such an important point. When you then compare that to America and you look at these companies, they absolutely have to be making more short-term decisions.
• 8:59
  to make money, to be able to keep going, whereas because they're state-funded in China, they don't. And it's such a huge difference in what you're seeing in terms of innovation. And we'll get to in a second why and how this is really shaking up the AI space. But just understanding the difference between state-run, it's basically not capitalism. They're not run in the same way.
• 9:24
  And that creates a completely different dynamic when it comes to how a country and businesses make money and function. So what we're going to talk about now is this big sort of AI scandal, really. So do you want to explain what's going on, what the business is, and why everyone's kind of
• 9:43
  fumbling around, shuffling their papers, being like, shit, shit, shit. What do we do? So we know ChatGPT, we know Anthropic, Claude, we know those and we're comfortable with them. We know they've been skyrocketing, they produce AI, we're very comfortable. However, basically a Chinese startup called Moonshot AI has released Kimi K3, which is the world's largest open source AI model, which already basically is rivaling
• 10:07
  Claude and ChatGBT in ways that no one expected. It's cheaper to run and the biggest thing is obviously it's backed by the Chinese government and therefore people are worrying that actually they could just go fine here's the secret source to AI and all of these companies that are upheld on the fact that they held the secret source and that's what they could sell.
• 10:26
  if they can't sell that because someone else has sold it with under their feet what do they all stand for what are they i know we all currently pay our subscriptions to chat chp and claude but if someone makes it free why would we not do that yeah so i think this is what's so fascinating and i was trying to get my head around like i don't get it like is what have they released like what's the part of ai that they've put out that's made it easier for people and i think
• 10:52
  It was explained to me in a way that I was like, okay, that kind of makes sense. It would almost be like if you imagine that Einstein's brain is the thing that you want access to, and through ChatGPT and Claude, you're paying your subscription to get access to Einstein's brain, basically because...
• 11:09
  China isn't relying on profits. They basically can say, oh, you want access to Einstein's brain? Here you go. You can download it. And while still you're going to have to have the infrastructure to run the brain, it's the secret source that they're giving people access to, which means like, why would we then pay for it?
• 11:25
  Yeah. And also one of the other big things is that it's expensive to have like data centers and the energy that it uses based in the US. In China, they can do it a lot more efficiently. They're building data centers rapidly. They've got the space. They've got the infrastructure very quickly that the US just doesn't have. In the past four years, China has built the equivalent of the entire US power grid in terms of power capacity.
• 11:48
  So like when you think about AI as being completely reliant on energy, if they have the ability to move this fast because they're not worried about profit so much, think about what that's going to do to all industries. I'm kind of like, God, they're doing amazing things. They are, but let's not forget that it's still China. But explain to me what, because I'm feeling like I'm almost on China's side at this point.
• 12:13
  Well, I don't want to make this all about the politics, but like the political element of China is it's it's still a country that's very heavily monitored by its government. And so therefore and you know, the same way it doesn't let its people use specific platforms because it doesn't have control over them.
• 12:29
  If it generated this AI platform, it could control basically the outflow of content. Like something has to feed the AI and it could then feed the AI the things it wants the world to know. Yes. Okay. So it's almost like underneath this. Yeah. While, yes, they're not looking for profit, they're still looking for power. And AI is power, isn't it? Think about how much we all rely on it. Like it rules like my day a lot. Like I use it from the moment I wake up to the other day. The moment.
• 12:56
  minutes close down and like I've forgotten to write an email how do I write an email it's like I rely on it so much I do see a lot of people talking about that being an issue too you know like use your brain like you need to but it's so hard when it makes things so much more efficient yeah but yeah that's actually a really good point so essentially what's going on here actually I think another really good example if you're still like I don't totally get it it would be like we all know that TikTok or Instagram the main secret sauce for those businesses is the algorithm
• 13:26
  How does it know what you want to buy? How is it aware of like the things that you're searching and interested in to not only show you content, but also try and sell to you? It would, and those things like the algorithm is the secret source. If all of a sudden those companies were giving the algorithm information,
• 13:44
  to all of us and we got access to it, we could build social media platforms around that. So it's that, that's kind of the key piece. It's like businesses will still have to use this AI brain or whatever to create the infrastructure to use it, but it's essentially democratizing access to that secret source. And that I think is what...
• 14:01
  Yeah, it's why the market is reacting quite intensely. And back to what you were saying before, Abby, because so many of these top companies in the US are propped up by this huge potential of AI growth, if the way that they've factored their growth in is relying on people paying them in this way that maybe they don't even need to, this could be sort of the tumble from an AI sort of bubble perspective because the businesses that have been valued in a certain way
• 14:31
  don't really make sense anymore. I think the only way that they'll get out of this is like, because I think Chachupati and Claude have obviously been around longer. And sometimes that means that we get comfortable with what we know. And sometimes you'll find like we see it in our like financial habits. Like even though something's free over there, we pay for it over here because actually we've been with it for a long time. All of our brain is already in there. Starting something new, even though it's free, would be frustrating. So I suppose, yes, long, long term,
• 14:58
  As like the next generation of people start to use it, maybe there will be a concern. But I think in the short term, I wouldn't necessarily say it's anything to be like, right, we all need to sell our stock in AI. God, yeah, we all watch the space. If anyone has any questions about that, or if we didn't explain it in a way that made sense, could you please let us know? Because I think it's a really...
• 15:17
  If you're seeing all these headlines around like market crashing, AI bubble, but you're not understanding what's happening beneath it, that's kind of the whole point of what we're trying to do. So please let us know if that has gone over everyone's heads and we'll explain it better. Okay, next story. Should we talk about the political? Yeah. Oh, God, yeah. I can talk about that for days.
• 15:36
  Coming up after the break, the UK used to be the financial hub of the world. I mean, for all of us, the UK was this big, shiny way to make wealth. And it's had a real fall from grace. And I know you might be thinking, she's got a UK accent, this is just going to be UK-centric. It's not. I'm specifically talking about how all governments pull levers like raising taxes and borrowing and how that directly impacts your personal finances.
• 16:01
  It's one thing to invest based on returns, but what if a company just does not sit right with you? Like the CEO gives you the ick and you're wondering if you should sell your shares, or if you're weighing up the pros and cons of investing in weight loss drugs, sometimes it can just be really confusing to navigate. Epical investing isn't always that straightforward, so we've decided to bring in the experts. Pathfinder's team specializes in this kind of investing and are going to help us and you navigate this really important space. So each month, we're going to dig into the most interesting, popular, polarizing questions,
• 16:29
  If your question is picked, you're going to feature on the podcast, which is so fun. But also, if you want to remain anonymous, that's totally fine. So you can submit your question to the ethical hotline via the link in the podcast show notes. And thank you so much to Pathfinder for making this episode of The Care of Weekly possible. Pathfinder Asset Management Limited is the issuer of the Pathfinder KiwiSaver plan. A product disclosure statement is available at pathfinder.kiwi. I have the sun, like, right in my head.
• 16:51
  Oh yeah, please wear your sunglasses. I'm going to be one of those. I love it. Okay, everyone, we have a very important story and it's the interweaving of politics, money, and the stock market. So just bear with us while we explain this. Overarching, the point here is the UK used to be the financial hub of the world. I mean, I still in the back of my head think of the UK as like the center of everything. But actually...
• 17:17
  Not thriving, would we say? Not thriving at all, really. No, God no. It's not doing very well. So there's lots of stuff going on behind the scenes. One of them is that we cannot, for the life of us, can't...
• 17:31
  seem to keep someone in power for long enough to make any kind of changes. It's almost like this cursed seat. Someone comes in, they don't know what to do, off they go. So we've had seven prime ministers in a decade over here, and we're going to explain what is going on, what does it mean for investing in equities in the FTSE 100, which is the top 100 listed companies in the UK, but also just more globally, why is this political instability having such flow-on effects in terms of wealth creation?
• 18:00
  the cost of living, etc. Yes, we are in an absolute nightmare of a situation where we look less stable than Italy. And Italy got through this like really weird period where they had constant prime ministers coming in and out. The UK has now had its, well, we've now signed on to our seventh prime minister in 10 years.
• 18:18
  My first question was, do we need another unelected prime minister? Because that's what we now have. I think we need to explain this more. And I think really importantly, we need to connect it to what's going on, not only in the UK, but also globally with regards to finances. Because the idea of the UK used to be, you know, it used to honestly be this place we would come as New Zealanders. We would earn three times the amount of money and we would send back.
• 18:43
  There's many reasons why the UK has had a huge fall from grace. One of them is all of these changes in the government. Brexit 10 years ago was kind of the start of the end really, right? Like that was kind of the massive wobble. And since then, people just keep throwing and passing the baton because no one knows what to do with it and how to make the UK a strong economy again. Yeah.
• 19:05
  So before we dive into the details of what is actually happening, can we just explain what's happening with the UK stock exchange? Because we talk about the S&P 500 all the time on this podcast. The US is thought of now as the strongest economy, the best place to invest. Most people listening to this podcast probably have their money in the US, mostly. Yeah.
• 19:29
  Why is this political uncertainty such a spiral effect in terms of then how much money goes into the stock market? I mean, we never talk about the FTSE 100. Why is that? And why is it – it's just struggling so much. What does it mean and what's going on?
• 19:47
  You said a lot of it. Brexit. You know, as someone that got to vote in that 10 years ago, I was so devastated because, you know, if they'd done the votes a week later in the UK, enough old people would have died off that the vote would have swung the other way. Companies used to invest in the UK because it meant you could get to the rest of Europe quite quickly. Now, not so much. And like you said, the instability behind our politicians means that we look really risky because people, the market, love stability. They don't like uncertainty, which is why...
• 20:17
  Our stock market has been falling and why people have been coming off the London Stock Exchange and relisting on the NASDAQ, on the New York Stock Exchange. They're not seeing the London Stock Exchange as this powerhouse that it used to be. Because we've become this short-termism society where if we don't like something after a year, we're like, right, get rid, find someone new. But people don't realise that the Chancellor and the Prime Minister need time in progress.
• 20:38
  like in parliament to get things through and get the economy moving. Otherwise, you're just flip-flopping constantly. Well, it's quite interesting that we have just spoken about China in this way because it's the complete opposite. How would you, in a PC way, explain what's happening in China from a government perspective? Light touch is that they don't elect their prime ministers like we do. Yes. So basically there's someone in there and they're in there for 100 years. Well, not 100 years, but until they want to leave.
• 21:05
  So what that means comparatively, and there's obviously lots of different struggles that come with that, right, because it's not actually a democracy where people get to vote. But it then means that the person that's in power has the time to make decisions with a long-term plan. And the difference, and I guess the link back to money and investing, is the same idea of having a founder leading a business.
• 21:28
  if they are planning on having a business, hopefully, that's intergenerational or that survives for 50 years, they're making decisions with the long-term planning. The difference is, it would be like having a new CEO in. I think this is the thing, right? It's like, sometimes, businesses do need to swap out their CEO. Something happens, they need to swap out their CEO. But the UK economy, or any economy in the world, is not the same as running a business. You don't run a
• 21:54
  Problem is, is our society now is used to like fast turnarounds, fast content. And we just think, OK, well, it doesn't like today they have wound me up. So I'm cancelling them. And we can't keep doing that with our politicians because it creates such an uncertain market. The UK is just not investable anymore. We're not making it good for young entrepreneurs to invest financially.
• 22:14
  in like to build their companies in the UK because everything's so expensive, like employing people is expensive. There's no real like support for entrepreneurs. Can we just explain that interrelated link between politics and the stock market and then how maybe we could look at this as an opportunity? It could be definitely considered an opportunity. There will be undervalued companies within that market just purely because of our politicians, not because the companies have done anything wrong, but just because...
• 22:42
  People aren't investing in UK businesses as much because it is more expensive to run them here. But an example of that just in a really easy way might be like say there's a street that has really, really shit restaurants on it. And if someone was like a foodie and they went there and they just decided that all of those restaurants were actually just super shit but they actually haven't even eaten at them or looked at the menu or know what produce they're using, there might be a real winner on there.
• 23:03
  Yeah. That is overlooked because it's in a shit place. That's kind of what's happening with the UK stock market. Exactly. That's a really great way of putting that. Like, it's a really, like, it is that. And that is what the Lundstock Exchange is at the moment. And also, it's like going to a street that looks really shit and looks really unstable. But actually, behind all of the doors are some incredible ideas and some incredible people.
• 23:25
  But they're not getting a chance because the whole street itself has been given this really bad reputation. Yeah. And that's kind of what's happening in the UK. A little bit. Indian rule, yeah. Yeah, a little bit. Sometimes people are like, why does she talk so much about politics? I'm like, because it has so many...
• 23:39
  like instant reactions to our personal finances that we don't necessarily see very quickly. And so therefore we don't think it's happening. And then people forget to vote because they go, oh, it doesn't really impact me. And I'm like, yes, it really does. Because if someone is humming into power and they're saying, this is what we're going to do, you can see what their plan is.
• 23:57
  If they say, we're going to be printing money to do this, then you can know, well, inflation's going up. Whereas if you don't understand the connective pieces between what someone is saying they're going to be doing with their budget, spending, blah, blah, blah, then – and you don't know how that then is connected to the economy, which is just like a big puppet show. And if one thing's pulled here, it does this. Yeah.
• 24:17
  So can we maybe explain what those, how those three things will impact? So if you are the government, effectively, and this is very top level. But this is also for any government all over the world. So like any, while we're using the UK as this like, it is a bit of a joke at the moment. Even if it's just like, I cannot believe this is happening. It's a really good example for how all of these things then impact investments in the stock market. So let's just,
• 24:39
  say it's our government. Yeah. And let's explain the three biggest levers that they can pull that will then impact the economy. Yeah. So when you are the government, you are making decisions every day how you're going to make the economy better, how you're going to make the economy grow. When any government says, right, we want to...
• 24:58
  reduce the price of bus fares like I said right it means that that like the bus fares aren't any cheaper automatically overnight so it means someone's going to have to pay the difference if there is that difference in price between what it actually costs and what we're charging the consumer and that money's going to have to be found somewhere and the same with you know then another government saying right we're going to reduce the
• 25:21
  taxes on businesses we're going to reduce taxes from 20 to 5 on businesses okay but where's that 15 that was originally coming to them in the money like in that money pot going to be now found because the government borrow money all the time because the government the taxes that we get in and we're talking about most governments the taxes tax revenue that the governments get in doesn't pay for everything they have to spend out
• 25:44
  So it's just like if you looked at your personal finances, your revenue that's coming in or your income, whatever that looks like, you then have to divide that between the things you want to spend on, the things you need to spend on, and then ideally you're investing. So it's the same concept. It's like if all of a sudden some of your revenue or your income was taken away, like they're saying, we can make buses cheaper. But actually, if you look at your personal finances, it's like, cool, we're going to
• 26:08
  So it then means you basically you have a gap of like the money you need to find to be able to fund your financial plan. Yes. So you've got your revenue coming in and in any government, mainly that comes in through taxes. Then you've got the money you need to spend out and any government with we're talking about things like pensions, but like the state funded pensions for older people. It's paying for the medical service centers in your country.
• 26:32
  countries like for us in the UK it's the NHS it's paying even the salaries of our politicians things like that and the problem is is for most governments this the paying out is more than this and to get that fiscal headroom the difference they borrow most of the time but if you are the government and like like I said you've got these things that you want to do you can either the most dramatic and not necessarily one that's instant is the bank your central bank could print more money so they could say right
• 27:00
  we'll print you some more money so there's more money in circulation in the economy however this leads to inflation then you've got raising taxes so the government's second lever is they could effectively say right the tax revenue we've got in doesn't match what we need here and so then they raise that to bring it up
• 27:19
  But what happens, tends to happen, is it will be those big three. So the big three taxes that any country gets the most revenue from. And it's usually the one that impacts the most amount of people. So the everyday working person. In the UK, we have income tax, VAT and national insurance, which are like the big three taxes in the UK.
• 27:39
  And usually what it then means is those ones are hit because that's where the government can go, right, I know there will be millions of people overnight that will have to pay this because they can't get away from it. Whereas if they went, right, we're going to increase inheritance tax, so that death tax is...
• 27:55
  it's slightly more nuanced and people could like avoid that. Well, it's where can they bring the most money in? And in Australia, it would be like VAT goes up. In New Zealand, it would be GST goes up. It's the tax of what you pay. So for example, like that's why it's so hard for governments to put tax up as well, because no one's going to vote. If someone's going to then take more of your money out of your pay packet when it comes in to give the government more money, most people are like, no way. So that's why there's this constant push and pull between who's in government and what decisions are being made. Is there a
• 28:25
  Third? Yeah, well, third, I've touched on already, which is what they mostly do, which is they borrow. So they borrow money. So it'd be like a loan. Yeah, well, or bonds. So they're borrowing. I know, this is how it comes full circle. So basically the difference, they then borrow the money. And the problem is, is with interest rates rising over the last few years, the government borrowing has been massive. So one in every 10 pounds the government borrows has just been paying back the interest. Yeah.
• 28:50
  That's just in the UK. So if you were to then think about, like last week when we spoke about if you were using buy now, pay later, and then you get in the cycle of owing debt, the way that that accumulates and spirals out of control is huge. So in the same way that like if you have a personal credit card or buy now, pay later…
• 29:06
  and you're spending, and then you can't pay back what you owe, your interest rates rise and rise and rise. And when governments do the same thing, they're in the exact same spiral as someone is personally. And that's why it's such an issue. Exactly. Yeah. And as bonds... Yeah. Mind-blowing epiphany. Yeah. And, like, as the bonds age out, so as, like, you bought a 10-year bond 10 years ago, the government need to repay that now. And so then they've got to print more. Oh, bloody hell. It creates more. And, like...
• 29:33
  Night sphere. Yeah, and this is why I am very passionate. As much as I am obscenely passionate about personal finance and people understanding their finances, I'm so passionate about people having an eye on politics as well because of the impact that has on our personal finances across the world. Like, what US, what Donald Trump does...
• 29:51
  does impact us in the UK. And it will impact those in Australia and New Zealand as well. And like what we do in the UK can have some, not as big, but like some impacts as well. Totally does. Yeah. I feel like that was such a good overview. I really loved that. And the one last story that I would really love to touch on before we wrap up today's episode is just what's happening with oil and how that's also a really good example of like,
• 30:14
  Yeah, okay, you might be thinking oil, boring, I've heard about it forever. It's actually really problematic and it's just the never-ending saga. Can we just give an update with what is going on and why this story is really important to keep an eye on? Brank crude, which is the main barrel that people review with the pricing.
• 30:34
  has gone over $100 a barrel now. And it's due to the, I want to get this right, the Houthi attacks on the Saudi oil tankers in the Red Sea. So obviously we've known for a long time there's a lot of problems going on the Strait of Hormuz where Iran closed the borders and it meant that you couldn't get the ships through and therefore the supply of oil dropped and therefore the price of oil went up.
• 30:57
  Now there's been fresh attacks in the Red Sea, which has been directly hitting oil tankers, which obviously means that, again, the supply is dropping and the price will rise. So, yeah, Brent crude went up to over $100 per hour. It's the highest it's been since May. Obviously, it's come down from the like skyrocket times of March when the conflict started.
• 31:27
  you know, for everything that we do, transport, food, everything requires it. What I didn't realize is that most countries have a decent reserve of oil. And that's what's kind of been helping us to sort of, even though it's been really stressful and the price has been rising enormously, the US had a crazy amount of reserves and they're down to like a third of that now.
• 31:49
  What actually happens if we get to a point where most countries don't have those reserves anymore, the conflict's still happening? Like, how is that going to flow on and impact the whole world? Wild inflation. We're already, like... Oh, my God. Cost of living. Yeah. Cost of living, inflation. Like, long term, obviously, these countries will have to basically look elsewhere, like wind and nuclear and things like that. But short term, the direct impact on the everyday person is inflation. Everything will become more expensive. Everything. Like...
• 32:16
  In the UK, our inflation figure came out this week at 2.6%. And our government was like, oh, brilliant, it's down from 2.8% in May. No, no, no. The government had nothing to do with that. And actually, yes, it's slightly down. But like you said, it's because all of these governments around the world have had these huge oil reserves to sort of manage the impact of inflation. They can almost in the background be manipulating it. So it's like, oh, we can see that this is happening. So like we'll call on our reserves. It's almost like having an emergency fund, but for your oil supply.
• 32:43
  Exactly. And so they've been like feeding that in slowly. So the impact hasn't been as great. But at some point, we are going to feel this impact. So scary. I mean, like, I feel like we sort of stopped talking about inflation and, you know, the cost of living and like, yes, it's expensive. I just don't think there's any way that we could have the cost of living go up.
• 33:01
  People, it's actually so scary. I do think it's just really worth everyone keeping an eye on what of your fixed expenses can you keep the same and what are you noticing go up? Because for me, I was looking at my personal finances and I was figuring out how much I needed to spend on groceries. I'm spending over £300 a month on groceries. And that's not going out. That is a huge...
• 33:26
  huge amount of money on just going to get food to make. I mean, like, and I'm one person, I can't imagine how scary that would be if you had a family of four and you were seeing these things that you had to pay for just get more and more and then your revenue or your income staying the same. It's just scary. Yeah, agreed.
• 33:44
  Abby, we have the Curve Hotline where people leave voice notes, where they have questions, thoughts, anything they want to share. Would you be open to answering one? I feel like this is – we haven't done one in a while. It would be quite fun to play. Yeah, I'd love to. Okay, let's – wait. Oh, my God. Must answer the phone. Obviously, it's come through. Excuse me. Right.
• 34:04
  Hi Soph and Vic, I just wanted to say thank you so much for everything you share on The Curve. I've learned so much from you both and I've even started an investment account for my two-year-old daughter's future, which is something I wouldn't have done without listening to the podcast, so thank you for that. My question is about automating investments and diversification. At the moment I own a mix of ETFs, a handful of individual companies and a little bit of bitcoin. Now I'm on maternity leave again
• 34:32
  I've cut my investing back to $50 a week and I'd love to automate it. But with 10 plus investments, it feels a bit ridiculous to set up lots of tiny automatic investments, especially with fees involved. Is there a strategy for this? Should I simplify things and focus on one core ETF and maybe one individual company while my
• 34:53
  contribution amount is smaller or is there a better way to stay diversified without spreading such a small amount across lots of investments? I'd love to hear how you'd approach it. Thanks again for everything you do.
• 35:07
  I love the hotline. Anyone that wants to leave a message, obsessed with it. It feels like we're on a radio show. Yeah. Okay. I love that note. It's a really good question as well. Firstly, can your partner top up your investing while you have to pull back on the amount you're investing? First question. And also your pension.
• 35:25
  Yeah. Please be really aware when you're a mum on maternity, things like your investment portfolio, your pension, putting into your savings all get hit. And, you know, it takes two to tango. That also means sharing the load of your investment responsibilities. I agree. Like look at why you're having to pull back your investments and can that be topped up by potentially a partner that's still working?
• 35:47
  Maybe she's talking about the family investments. I'm not sure, but definitely agree. I actually think we should do something on socials on that. I cannot believe the amount of people who are opting to be see-at-home moms. Firstly, that's not what I have an issue with. It's more the idea that if you don't have either prenup or financial conversations in place, you taking time out to be home and not having money come in and pulling back on your investments is...
• 36:11
  Whether it's your direct investments, your pensions, your wherever, whatever you're investing in, that compounding over time is the main reason that so many of us end up in dire financial states if relationships fall apart. So really, really important to make sure that you're not the only one that's taking an investment pause or pullback because of having kids. Yeah.
• 36:32
  In terms of the diversification, do you have any thoughts on that? What would you do? Without going into a lot of financial advice, because it's a great high-tech advice, financial education, I would say what you're already doing, obviously looking at ETFs, so exchange-traded funds, really importantly looking at something that's like –
• 36:49
  Not too necessarily heavily weighted to the US if you're trying to like think about super diversified. But FTSE All World, although that is quite heavily US based or like looking at like emerging markets, ETFs could be really interesting. But yeah, picking specific stocks automatically would probably not be worth your time if you're reducing down to 50 pounds. I agree. I would say for me, if I had say 50 and I was...
• 37:10
  trying to make it super simple. I would probably pick one or two ETFs and maybe I would even do one that was, um, you know, well, all worlds and one that was minus the U S or something. Cause I do feel like it might not be the, I don't want to not be in the U S personally. I really think that even though there may be a crash, I long-term investing, I want to be investing in the U S. Uh, but maybe that's a way to still feel like you're sort of diversified, but
• 37:39
  Yeah, definitely if you don't have a lot that you're investing, choosing companies is really risky. Yeah. You definitely want to be, I think, leaving that to a professional. If you've got a small amount, I'd be going diversify, diversify, diversify. But of course, we can't actually tell you what to do or give advice, but hopefully the idea of what does diversified mean –
• 38:00
  Really, all you want to be doing is automating as much as possible and being diversified as much as possible. So it's like amazing that you've already got all those other investments. They're not going anywhere, but maybe if you're not putting as much in, being diversified would be quite clever.
• 38:16
  That's all we've got time for today, Abby. But I loved this episode. It's so fun having you in here. Thank you so much. I'm going to wear sunglasses next week. I know. Sorry, I just took off. It's so good. I feel like it's going to look great on socials. But, yeah, thank you so much for keeping an eye on the news and updating us while Vic is focusing on our –
• 38:35
  Very exciting project, which, by the way, we're announcing this week. So for anyone who is like, what's going on? Where is Vicki Harris? She is still working on the curve. She's working on something really exciting that we will be announcing on Saturday. Normally, our episode goes out on a Friday. So just a note to say if you don't follow the podcast on wherever you are, whether it's YouTube or Spotify or Apple or whatever,
• 38:57
  If you just quickly go to the homepage and hit follow, you'll be notified when that episode drops. It's like the most exciting news that we, it's the biggest project we've ever worked on. And so we really can't wait to share it with you all. But thank you so much, Abby, for being here. Thank God we've got a UK epic. I don't know what I would do without you. But yes, we will see you on Wednesday for The Curve Weekly. Thank you so much for listening to The Curve Weekly. Make sure you hit subscribe or follow wherever you're listening so you're always up to date with the latest finance and investing news.
• 39:27
  And feel free to leave a comment to let us know what you thought about this episode, because we would love your feedback. We've got new Curve Weekly episodes for you to listen to every Monday. But until then, listen to Erasing the Curve. These are our in-depth podcast episodes where we chat about all things money. We're also around all week on socials if you're hungry for more Curve content, and all the links are in this podcast's show notes. We hope you have a great week, and we'll catch you for the next episode of The Curve Weekly on Monday.
• 39:58
  Okay, quickly, the curve was created to empower and educate you about investing, but we are not financial advisors. Our platform exists for educational purposes only, and it doesn't provide personalized investing advice for your individual needs and should not be relied upon to make an investment or financial decision. And always remember to do your own research before making any investment or financial decision. We're here for any knowledge and support you need, but the final call is always yours. And thanks for being here. You got this. Yeah, we know you got this.