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068: Managing investments
725 Plays2 years ago
In this ep, Mia and Dinah talk to an expert about the life admin side of investing - it's a great way to build your wealth but also comes with paperwork and passwords. While anyone of working age has investments through their superannuation, in the last two years there’s been a surge of first-time share investors.
About Sophie Dicker
Sophie Dicker is an M&A consultant by day and the co-host of You're in Good Company (YIGC), a podcast that aims to make investing accessible to anyone, by night. Although working in finance, she had no idea about investing until her partner encouraged her to start. Her investing goal is to build the freedom to do things that she's passionate about - whether it be starting a business, donating to causes close to her, or taking time out of the workforce to start a family. The ultimate goal of YIGC is to build a community of like-minded people right alongside.
In this episode we talk about:
- the challenges of getting into the property market in Australia and other factors leading to an influx of younger investors in the share market
- developing an investment strategy and the importance of understanding your money type and risk tolerance
- why you might want to engage a financial adviser and how to find one
- where to find information from experts to guide you on your investment journey
- micro-investing: investing small amounts regularly through apps like Spaceship and Raiz
- ETFs: a bundle of shares that provide exposure to a range of companies listed on the stock market, allowing you to diversify your investments more easily
- finding an online trading platform that works for you and testing out the apps
- managing the paperwork that comes with investing by adopting a folder structure to keep all the paperwork for purchases and dividends
- the importance of your HIN on CHESS statements and making sure you keep these in a secure place like your password manager
- managing your account and password with the share registry
- the process of setting up an online share trading account
- the benefits of developing a consistent investment routine
- setting up investment goals (short, medium and long term)
- considering auto investing - a regular direct debit into an ETF
- using your Hours of Power to do the initial research and education into investing so that ongoing investing can become a Ten Minute Timekiller task in the long run.
- YIGC podcast
- YIGC Instagram
- YIGC Investing Podcast Discussion Group on Facebook
- Invest Like The Best podcast
- How I build this with Guy Raz - podcast
- Livewire Markets
- Spaceship app
- Raiz app
- Stockspot
Please head to the Life Admin Life Hacks Facebook, Insta or Linked In pages to connect with listeners and share your thoughts, questions or suggestions.
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Transcript
Revamping Produce Delivery
00:00:00
Speaker
At Kroger, we know the minute a tomato is picked off the vine, the fresh timer starts. The sooner we get our produce to you, the fresher it is. That's why we've completely overhauled our process to shorten the time from harvest to home for our tomatoes, strawberries, and salads. Because we know how much you love fresh produce, we give you more time to enjoy your tasty fruits and veggies at home.
00:00:21
Speaker
So whether you're shopping in-store, picking up, or prefer delivery, we're committed to bringing you the freshest produce possible.
Podcast Introduction
00:00:28
Speaker
Kroger, fresh for everyone. This is Life Admin Life Hacks, a podcast that gives you techniques, tips, and tools to tackle your life admin more efficiently, to save your time, your money, and improve your household harmony. I'm Dinah Roberts, an Operations and Finance Manager, and I've been working in and around investments since I turned 18.
00:00:50
Speaker
Oh, so like five years done. I'm Mia Northrock, a researcher and writer who dusted off her neglected investments last year and now has accounts for four different online share trading platforms. In this episode, we interview Sophie Dicker, co-host of the You're In Good Company investment podcast. Hello and welcome to Life Admin, Life Hacks. Half of Australians now own shares. So we thought it was about time that we covered this aspect of personal finance on the show.
Managing Finances: Tips and Cautions
00:01:20
Speaker
So managing your personal finances includes organizing your tax, your will and estate planning, your superannuation, budgeting or money monitoring, insurances, loan savings and investing. And all of this squarely falls into life admin. And while anyone of working age has investments through their superannuation, in the last two years has been a surge of first time share investors.
00:01:45
Speaker
during the pandemic, there was a roller coaster ride for stock markets, and the media was full of news about the heavily discounted share prices of some household name companies.
00:01:56
Speaker
but you can invest in more than just shares. And in this episode, we wanted to talk to an expert about the life admin side of investing. What we talk about here, it's not financial advice and none of us are on this episode of financial advisors. So you should definitely seek independent financial advice as what we cover is general information only.
Investment Landscape and Personal Experiences
00:02:15
Speaker
So in this episode, we chat to Sophie and she reveals what's changed in the investment landscape in recent times, how to get started with online investing,
00:02:25
Speaker
and how to set up your environment to make your investing habits seamless. If you're keen to up your investment game, this app is for you. Sophie Dicker is the co-host of the You're a Good Company podcast and a mergers and acquisitions consultant by day. Although working in finance, she had no idea about investing until her partner encouraged her to start.
00:02:47
Speaker
Her investing goal is to build the freedom to do things that she's passionate about, whether it be start a business, donate to causes close to her, or to take time out of the workforce to start a family. And the ultimate goal of Your In Good Company is to build a community of like-minded people right alongside. Sophie, thanks so much for coming on the show today. Thank you so much for having me, guys. I'm really excited to be here.
00:03:12
Speaker
We're thrilled that you're here with us today. I think, you know, Diana and I were talking earlier about how shares have had so much attention over the last two years. We've seen all these positive performances in share prices and a rise in all these new share.
00:03:29
Speaker
trading apps like Superhero and Trade4Good, and you can't move around Melbourne without seeing outdoor advertising for some shared trading platform. Every single train has one. Yeah, it's not Superhero, it's ComSec or Sharesies or Spaceship. Anyway, all these crazy names. There's so much perennial talk about the property market and investing in property and the seamless, endless growth of house prices. Will they fall? Won't they fall?
00:03:57
Speaker
So obviously you can invest in more than just shares in property.
Organizing Finances and Generational Challenges
00:04:01
Speaker
And that's what we wanted to discuss tonight is how Australians are investing and how we can organize ourselves so that this part of life admin and personal finances doesn't feel out of control. We can sort of approach it in a methodical way.
00:04:15
Speaker
Yeah. And we've had so many episodes about all sorts of areas of life admin. And we have had an episode on superannuation, but we've never talked about investing before. So I'm sure our listeners are going to live to hear from you today, Sophie. Well, I wouldn't say I'm an expert, but I'd say that I've spoken to many an expert. So I will try and, you know, give off what I know.
00:04:35
Speaker
But I guess I would start by saying that you know property is definitely one of the biggest investments that Australians do make. I think it's kind of that great Australian dream to own a property and it's a bit of an older statistic but about 39% of Australian wealth is actually tied up in housing and another 12% is in investment property. So it really does hold that big kind of share of Australian wealth but I think it is getting a lot harder for you know the younger generation to kind of ascertain that investment because
00:05:05
Speaker
of things like rising property prices, rising inflation, rising interest rates, slowing wage growth. So it kind of is like a great Australian dream that's getting a little bit harder to get there. I know personally from experience, I'm going to struggle. But I think on the other hand, because of that, we've really seen this kind of huge influx of younger investors during 2020 and 2021.
00:05:30
Speaker
into the share market investing in shares. I think it was in 2020, we saw a jump of 66.6% of new investors in Australia. And I think this was really because of a myriad of factors. We were at home, had a lot more time.
00:05:46
Speaker
There was stimulus pumping into the economy. There was so much buzz around the stock market. There was such a big bull run. And I think people really took the time to think, OK, well, how can I be a part of this? And I think these days investing in shares is so accessible and it's so easy to do and you don't need a lot of money to do it that we just saw this younger generation say, OK, cool. Well, this is how I'm going to start building my wealth.
00:06:09
Speaker
Yeah, definitely. When we were younger, it was much harder to access, particularly the share market. And I think you really felt like you needed your own broker and you needed at least $10,000, which I guess really wasn't accessible for me when I was your age. So I do think that things have changed a lot.
00:06:29
Speaker
And I think your generation,
Financial Advisors and Money Personalities
00:06:31
Speaker
your younger generation have really sort of taken, you know, taken it on. And I think sometimes it's us slightly older ones who probably need to catch up a bit and make sure that we're making the most of it. Well, I think as well, we kind of have time on our side in the sense that, you know, investing in the stock market, you do it for a long time. So it's like, it's kind of the mix of FOMO wanting to be a part of it, willing to take the risk because we've got the time and like, I mean, who doesn't want to join the conversation about investing? That's a cool thing to do.
00:07:00
Speaker
There's apps for it all. I think my first exposure to investing was I worked at a startup and we had an IPO and so staff were able to buy into it that way and that was sort of, apart from studying at university where it was all very theoretical, that was the first time I actually bought shares.
00:07:16
Speaker
Yeah. Well, I mean, I studied finance at uni and I never got taught how to invest. You know, it's completely different, but it is funny how it's not a part of the curriculum at all, but it really is a way that, you know, Australians do build up their wealth. I mean, I mean, look at our superannuation system. It's all backed off investing. So, so maybe like, let's get started by talking about how we, how you might develop an investment strategy and, you know,
00:07:43
Speaker
whether you should get a financial advisor or do it yourself, what's kind of your thoughts on that area? Yeah, so I think when you're kind of developing an investment strategy and you're wanting to take the leap into investing, you really need to kind of understand, you know, your money type and your risk tolerance, because I think this is gonna guide your decision in how you invest. On the one side, there's that type of person, and I know many of them who are like, I wanna invest, I'm so keen, I wanna understand, but
00:08:11
Speaker
I don't want to do it on a day to day basis or a month to month basis. I'd prefer to give my money over to someone else and for them to do it for me. And that's totally fine. So if you want to be doing that, you can engage with a financial advisor. I personally have never engaged with one myself, but I think from speaking with a lot of my community, it's word of mouth that will really help you find someone.
00:08:32
Speaker
And I think in the situation where someone's managing your money, you really do want to find someone that you trust, you know, aligns with your values, that understands your goals, because all of those things are going to be really important for what you invest in, because they're going to be looking at your time horizons.
00:08:47
Speaker
What kind of investments you want to make? Are there investments you want to exclude because of some of your values? So definitely, I think we have a bit of a thread in our Facebook community of people recommending financial advisors of their good experiences. Yeah, they're like a hen's teeth. And especially if you can find someone who, you know, has a bit of that money coach, you know, gets the money personality kind of
00:09:10
Speaker
of baggage that people come with or, you know, the way they're wired around money and their relationships with money, as opposed to just, you know, talking through your options and risk profile. Because it is, you know, it's one of those subjects that people get very emotional about and very irrational. They can make really irrational decisions. So if you have someone who you can kind of coach you through the process, as well as just, you know, tell you what you might be investing in, it's incredibly helpful. So I'm not surprised that those names get passed around.
00:09:39
Speaker
Yeah, I think it's like finding a good GP. Like it's, you know, really hard to find someone who you really like their communication style. And I think, you know, it's, you know, investment's so full of jargon. And so you really need someone who you can kind of speak to, you know, you can understand and then they can help you manage that language. The life equivalent of the financial bedside manner, there's got to be like a financial head. It does come down to that. You don't want someone who's
00:10:06
Speaker
you know, being condescending or talking over your head or, you know, you can just be very triggering. Yeah. And I think like, you know, I don't want to make too much of a generalization, but you know, for females, and if you have been excluded from money conversations in the past, it's one of those things where you want to feel comfortable to ask any question.
00:10:25
Speaker
And you just don't want to be developing a relationship with someone who's saying, you know, I know what to be done. Like money is this holistic thing, right? You know, you build up the rapport around it and the conversation and the trust. So yeah, I think word of mouth is definitely a good one. And so for those people who are like, you know what, this is something I'm actually curious about. I want to raise my own awareness and make my own decisions. Where do you send them? Where are those great sources of investment information?
00:10:53
Speaker
Can I, can I do a plug? I mean, you know, we started You're a Good Company, the podcast, Maddie, my co-host and I, because, you know, that's what we wanted for people. Finance does seem really scary and it seems like there's a lot of jargon or maths and like it's not accessible,
Simplifying Investing and Platform Choices
00:11:11
Speaker
but
00:11:11
Speaker
When you get down to the crux of it, investing is actually quite simple. And so I think, you know, a couple of different resources is what I would say is find your medium. Because you want to, if you want to get investing and you know you want to kind of make that jump, it's good to get good information, but you need to enjoy the information that you're kind of listening to or watching.
00:11:32
Speaker
I'm definitely an audio person, so I'm a podcast person. One of the best pieces of advice we got when learning how to invest is go to the experts, because there's people out there who do this for their day jobs. They do it all day, every day. They've been doing it for many years, and we are so lucky to have access to all this information. So find podcasts where experts are telling you about strategies, about not what you can invest in, but certain thematics or themes that are happening at the moment,
00:12:00
Speaker
YouTube videos if you like to watch. But yeah, a couple of the podcasts that I really love is there's a US one called invest like the best. And he speaks to Patrick speaks to, you know, incredible experts. And there's little insights in every episode that you slowly pick up. It's a journey or one like how I built this by Guy Raz because he speaks to CEOs of companies. And I think that's a great way to get an insight to investing, but there's so many out there.
00:12:27
Speaker
I've loved yours. I've learned so much through yours and I really did go back to the start and just listen through the archives because it was following your own journey as you were getting more familiar with different asset classes and trying different things that it was perfect for where I was. I was literally dusting off pieces of paper going, I think this is my login to my trading platform. I was using like a password
00:12:54
Speaker
and login combo that they had, like, got decommissioned five years ago. That's how I want to be. I love, like, the Live Wire markets. They have email newsletters. Like, I like to sit down and read it as well as listen to podcasts.
00:13:09
Speaker
Well, that's good. That's your medium. I'm a reader of a book, but articles and, you know, it's not me. So I'm just a podcaster. And there's lots of these magazines out there, like just, yeah, find the thing that's speaking the language to you and makes it easy to consume. 100%. Okay. So when it comes to investing, we've already sort of talked a little bit earlier about, you know, that things have changed, technologies moved on.
00:13:32
Speaker
So what are the sort of main ways to invest, you know, other than, you know, I guess direct investment was sort of briefly talked about, but, you know, how else might we invest these days? Yeah. So there's a couple of different ways you can invest. I think the first place we could start is with micro investing. So micro investing is kind of in the name. You're investing very small amounts and usually apps like spaceship or raise, they do this by kind of rounding up your purchases.
00:14:00
Speaker
and then collating those cents and then eventually putting them into an investment and that investment you get to choose kind of a profile whether it be conservative or moderate or aggressive and over time your little investing nest egg starts to build up and that's the way I started and I think it was a great way to kind of understand what investing is, get an understanding of what markets are,
00:14:25
Speaker
But then you can kind of move more once you're comfortable with that and you feel like you can take a bit of a leap, you can move into that kind of direct investing, which is, you know, using those online platforms. And there's so many online platforms that you can use today, which are so user friendly. And that's where you can kind of move into investing in things like shares or ETFs by yourself. Also, do you want to just tell us a little bit more about what ETFs are? Sure.
00:14:53
Speaker
So ETF stands for Exchange Traded Funds, and pretty much it's just a bundle of an asset class, all neatly wrapped together, I guess, and put into one ticker on the stock exchange. So a ticker is kind of like an identifier, it's three or four letters, and you type that in on your online app and you can find it.
00:15:14
Speaker
So, a good example is maybe the A200, and if you buy the A200, you're buying into Australia's top 200 companies rather than, you know, maybe just picking one of them like BHP or Woolworths or CSL. Instead of just investing in one company, you kind of get exposure to a broad range.
00:15:34
Speaker
And I guess people like to do this because you're diversifying. So, you know, if I don't know what's happening right now, the interest rates are going up. So bank stocks might be going up a bit because they're getting more revenue, but your oil and gas might be going down. That's not quite right because oil and gas prices are a big thing at the moment. But you're kind of just blending your exposure across a range of industries so that it kind of balances it out a little bit more rather than just investing in one thing and hoping for the, I guess, the best in that industry.
00:16:05
Speaker
Given that there are so many online investing platforms out there, and I know this is the thread that comes up in the discussion in the Facebook group a lot, it's like, which one do I use? How do you answer that question when people say, which one should I use? It's so funny, we did a live event a couple of weeks ago and we did a couple of different sessions with different people and that was the number one question.
00:16:29
Speaker
And every time I, I always think like it's, it's so funny that people get so caught up on using a certain app because at the end of the day, they're all quite similar and you've just got to use the one that honestly feels good for you. Like.
00:16:44
Speaker
They all kind of have slightly different interfaces and slightly different, I guess, conditions. I think some important things to look out for is where you can invest. So for example, I invest in Australia and the US. So I need to have an app that kind of covers both of those. Another thing to look at is fees.
00:17:03
Speaker
and understand that you're you know because there is a lot of competition out there find an app that doesn't have the crazy high fees I think usually you know the banks are a bit high with their trading fees so every time you make a trade or purchase a share or ETF you have to pay something called a brokerage fee
00:17:21
Speaker
And that brokerage fee can, you know, range between three to maybe $20 in Australia thereabouts. So just looking out for that kind of stuff. But honestly, I have used four different apps before I have worked out which one I like the best. And then I just, you just consolidate everything over. It's so simple. I think in my intro, I talked about the fact that I have now four accounts because I
00:17:43
Speaker
wanted to buy into a New Zealand fund and I realised my main trading platform didn't allow me to buy New Zealand so I started another one and then I decided I was going to buy some funds, some shares that were from European countries and I wanted to try and find something that didn't charge huge brokerage fees so I went to a third and
00:18:01
Speaker
Yeah. But that's okay, because you know what, you still own them all. If you're tracking them somewhere, if you feel comfortable not tracking them, like it doesn't matter, you just got to work out what works for you. Yeah. And this is also where the documentation gets interesting. So you know, the life admin, hardcore part of the life admin side of this is like suddenly, you know, you buy shares, you get given paperwork, there's you might be part of dividend reinvestment plans, there's other paperwork, come tax time, like what do I need to keep? Where do I put it?
Managing Shareholding Paperwork
00:18:30
Speaker
So do you want to talk us through the kind of paperwork that comes your way when you start to order and buy shares? Yeah, so there is a lot of paperwork associated with being a shareholder. I was shocked when I first started buying shares how much these people wanted to contact me. But it isn't overwhelming, as overwhelming as I thought it was, because you can now actually elect to get a lot of this paperwork via your email as well.
00:18:59
Speaker
but the kind of main paperwork that you get when you first buy a share, you'll get a, and if you're doing it through the chess system, you'll get a chess statement. And this will pretty much just outline your details, what you've bought, purchase price, and it will give you a little hint number, which is a holder identification number. And this is really important because it's kind of identifies that you, that's who owns the shares, that you own the shares.
00:19:25
Speaker
And when you buy shares in different companies, so it might be company X, company Y and company Z, all of those will fall under this one HIN number. And I think it's important because when you go to kind of look at your information online, you use this HIN number as, I guess, an identifier to log in to have a look at the paperwork. So this is definitely something that you will put in your password manager along with all of your other special numbers like your tax file number and your Medicare number and essentially number.
00:19:54
Speaker
one of those things that's going to follow you around for a long time. Yes. Yeah. And you definitely need to keep a track of all those dividends. So if you do get payments in from the companies, that's information that you want to keep a track of for tax reasons. Although the ATO do a pretty good job now of pre-filling most of that information, but I guess it's always good to check. And I think
00:20:16
Speaker
the thing that I guess I have struggled to keep on top of. So my kids were both given shares when they were born. And you know, my daughter's now 15. She's been doing dividend reinvestment plans since she was, you know, for the last 15 years and just keeping a track of every single little purchase of two and three shares that have happened over those 15 years. Because if one day she wants to sell those shares, making sure you keep that information is really important for a capital gains tax reasons.
00:20:42
Speaker
Yeah, 100%. And I was going to say when you do set up on an investing app, it will ask for your TFN as well as some other identifying kind of numbers, maybe your Medicare or your license. And that's because it all is really linked now with your MyGov and the ATO because they obviously want to track if you're making any gains that it'll be taxed. So
00:21:06
Speaker
All the information does come in letters or it comes online, but as you said, the ATO is so good now with understanding what you bought and sold. Yeah, definitely. They try and keep you honest, I guess, in terms of putting that information in there. What do you do with all of those order confirmations and buyer confirmations? Are you keeping all of those PDFs that get emailed to you?
00:21:33
Speaker
Yeah. I mean, personally for me, it's, you know, this is one of the things that you've just got to work out a system that does work for you. Initially I was receiving paperwork and I would scan it and put it into a folder. Um, and now, you know, getting emails again, just putting it into either an investing folder or a tax folder.
00:21:53
Speaker
I think, as we've said, you know, the ATO is really good at tracking things, but you never really know when you are going to need something. I think the HIN number and those chess statements are really important because, you know, although it's kind of recorded somewhere in the internet that you do own these, it's good to have that piece of paper to say, look, I bought this on this
Tracking Investments and Setting Goals
00:22:12
Speaker
day.
00:22:12
Speaker
These are my shares. So for me, I just store it in a folder. And I also store a lot of my purchases on a Google sheets because, and that's, you know, just me, not everyone's into the Excel or recording.
00:22:28
Speaker
You like it as well. I've got a spreadsheet too, so I've got a spreadsheet with a tab for each investment and one, you know, for each of my kids and I keep a track of it and then check in every few months, see how we're going. I actually have a spreadsheet for this. I do actually have a spreadsheet for. A spreadsheet for me, who knew? It's like the ultimate use of the spreadsheet, right? It's going to get spreadsheet-y, it's this.
00:22:54
Speaker
Yeah, I have all I have a Google in our Google Drive folders with all the other life admin stuff. I have a little spot for all the order confirmations. And I'm also trying to think what else they sent you, I guess then the share registry will contact you and they'll ask you to set up an account so that they can communicate, you know, how you want your annual report, whether you want an annual report. And you know, what do you want to be participating in the dividend reinvestment plan and all that kind of stuff. So that
00:23:23
Speaker
that is where that kind of volume of contact starts to come. And again, you'll need a password manager so you can manage all of your logging in to those accounts.
00:23:32
Speaker
Yeah, and I guess for anyone that doesn't know what a share registry is, it pretty much just handles all of the administration for companies. So when companies list on the ASX, the Australian Stock Exchange, or overseas, they'll nominate a share registry, and the common ones in Australia are like computer share or linked, and these will just manage all of your kind of share holdings. So as I said before, your HIN number knows that you've invested in all those different companies.
00:23:59
Speaker
when you put your hidden number into your share registry, it'll come up with all your investments as well. Yeah, so those online share registries are a great source of if you accidentally have misplaced something or whatever you want to check something. I must admit that's been a huge revelation compared to 10, 15 years ago when those sorts of things didn't exist. So if you've got your password manager sorted out and you can easily log in, you can easily track down missing bits and pieces.
00:24:27
Speaker
I used to, I was laughing once because we had a guest on who was saying that, you know, they used to invest using whiteboards and they'd mark things on the whiteboards. And that was how many shares there was. I don't really understand the story too well, but I was like, how did people keep track of ownership? Like, how could you be like, yeah, I own a share if it's just on a whiteboard? Like, how did they do that? Yeah. Like he's feeling footage of like, you know,
00:24:53
Speaker
the actual share markets when they used to run around pieces of paper. I'm like, how did anyone know what was going on? How did that actually facilitate global trade? Just crazy. Very, very much easier today, for sure. Absolutely. And how long do you need to keep all this paperwork? Like, you know, when we talk about tax and it's like, oh, you have to keep take hold of the tax records for what is it, seven years, six years?
00:25:19
Speaker
I think it's five years now, but I think that the trick is if you're a long term investor, and so say if you're buying, you know, that's why I gave the example of my daughter, you know, she's been effectively investing in these shares over time for 15 years, she might not sell those shares until maybe she'll sell them to buy her first house or something when she's 30. So we need to keep a record of everything she's kind of purchased unless they change capital gains tax.
00:25:44
Speaker
She really needs to know how much she's paid for them so that she only has to pay a tax on the profit. Otherwise, I think it could get a bit tricky. So I think technically, you need to keep anything to do with purchases until you sell the shares and then for another five years afterwards. Sophie, is that what your understanding is?
00:26:02
Speaker
Yeah, definitely. And, you know, as I said before, I put things in a tax folder. I think it's something like a Google Drive is if you're holding it for the long time is a great idea because it doesn't matter if you swap email addresses or if you swap computers and whatever else it's going to be online. So just, you know, a bit of a set and forget every time you get a piece of paperwork, you either scan it and chuck it in there or you save down the PDF from your email and put it in there. And you don't have to worry about it too much. But when it does come to selling, there's obviously tax implications. So you need to be aware of what you hold.
00:26:32
Speaker
So Sophie, tell us a little bit about, you know, for people who want to get started in this and establish a habit, tell us about the documentation you actually need to set up an account on an investing app and how you kind of, you know, put the strategy into play and embed that habit.
00:26:49
Speaker
I mean, setting up the app is the easy part. Anyone can set up the app. You know, I think you need your TFN and your two personal identification documentation. It could be your passport, Medicare number, license, and you put in some, you know, pretty preliminary details and set up. It might take a couple of days.
00:27:14
Speaker
to be verified, sometimes it's straight away. It'll just depend on the app that you're using. And I'd implore you, if you are worried about which app to use, just download a couple of them and have a look at them all. Because the user interface will help you decide. But really from there, it's about setting up a routine that you can be consistent with. The best investors have consistency in their routines. And I think a lot of the historical data has shown that if you are consistent, you're going to have better long-term gains, not that
00:27:43
Speaker
future performance. I mean, past performance is indicative of future performance. But I think a really great place to start is setting up some goals. I think one of the best pieces of advice we got was to set up a three month goal. So, you know, it's kind of long enough that you can actually achieve something, but short enough that you can reflect on it, you know, and it's not a year down the track and you're going, Oh, yeah, I'll do that in November and never really think about it. You know, one of my short term goals at the moment is to invest
00:28:08
Speaker
at least $300 into the market every month because it's a little bit less than my normal amount because I'm going traveling so I know that holistically I might need some more cash on the side for my travels but
00:28:20
Speaker
I need to stay consistent with my investing, otherwise the routine will go out the window. Also setting up some medium term goals as well, which kind of give you that little bit of, you know, five to 10 years. Where do I really want to be sitting with my money? You know, we spoke at the beginning about property, how it's quite hard to get into the market. So for me, I'm like, I need to start thinking about buying a house now.
00:28:40
Speaker
and I wanna use my investments to get there. So kind of having that longer term vision is also quite handy. And then as I said, you know, setting up the consistency once you work out what your portfolio is gonna look like, your asset classes, I'd recommend doing a risk tolerance kind of test, working out what you should be investing in. There's some great robo-advisors that do good tests like stock spot and understanding what your portfolio is gonna look like and then kind of being really consistent once you have that kind of allocated.
Consistent Investment Strategies
00:29:10
Speaker
A really common strategy that we speak about a lot is called dollar cost averaging. And it's when you put certain amounts into the market at very consistent intervals. So for someone like me, I put it in the day that my paycheck comes in because I'm an emotional person.
00:29:29
Speaker
I'm an emotional investor. So I really struggle sometimes with going, okay, the market's doing this or that today, and when should I put my money in? But I have found it really works for me if I have a date. So my paycheck comes in on the 14th every month, and the next day I put it into
00:29:47
Speaker
you know, my ETF for that month or my stock that I want to put in for that month. And it kind of keeps you really consistent, but you've got to make sure that that routine really works for you. You know, we spoke to someone, for example, who's a freelancer and her paychecks weren't consistent every month, but she was, you know, really getting excited about investing, wanting to do it.
00:30:06
Speaker
more and more. So her routine was putting aside a little bit of her paycheck and then investing every three months because you might engage a bit of a longer term of how much cash she had, you know, to play with over that longer term rather than putting some money in one month, but then the second month not getting a paycheck. So working out what's going to make it easy for you. Yeah. And it sounds like so many other aspects of life admin where you really need to
00:30:32
Speaker
have those foundational habits as part of your routine. So you know, as you said, on the day that your paycheck comes in, that's the day that I do this or that it's factored in somehow. Another thing that people talk about a lot and what a lot of apps do now is the auto invest option. So you go in and you pretty much set up an amount and a couple of ETFs or shares that you're going to invest into. And it just takes the money out of your bank account
00:31:00
Speaker
And it, you know, keeps you consistent because there's, you know, it's like depositing, I don't know, your rent or a bill for the gym or something like that. It kind of is just taken out. And once it's gone, it's like, well, I've invested for the month. There we go. Yeah. So that's definitely the approach I take.
00:31:15
Speaker
got a set amount that gets invested every month and I don't even really think about it and then I just check in every couple of months on how everything's tracking but I don't really worry too much day to day because it just happens in the background and I sort of almost feel like because the money gets taken out like the same day my pay goes in I sort of never had it so it's sort of that's all so good because you know it's it's gone and
00:31:40
Speaker
Yeah. Well, you never do the physical transfer either. It doesn't really feel like, cause it is, it honestly can be hard, you know, the paycheck comes in and there's so many sales on at the moment. And I'm like, well, do I buy a really nice dress that's half price or do I transfer into my trading app? But I can't implore enough, like how being consistent can make you such a good investor. Well, the future Sophie, thanks to current Sophie.
00:32:05
Speaker
Yeah, you know how we go. I'm trying to buy a property. Very happy. It's kind of like, you know, we talk a lot about having life admin tasks that are either sort of an hour of power task,
00:32:20
Speaker
something where you have to sit down and concentrate and analyze things. And then you have these 10 minute time killer tasks, which are obviously sort of medium sized tasks that you can get out and kind of squeeze out in 10 minutes. And once you become confident in this, and you have some of those, you know, you have your environment set up, so you know how much money you want to invest on a regular basis, you have the app set up that you're comfortable with, then it can actually become one of those sort of 10 minute activities that you just do doesn't have to be
00:32:49
Speaker
a massive production. That might sound crazy to some people who are like, oh my God, how can investing get to that point? But like so many other things, once you have empowered yourself and educated yourself about it, you can get to that point.
Concluding Thoughts and Community Invitation
00:33:03
Speaker
Yeah, and investing is such a journey and there is no way that you're not going to make a mistake. And I've been investing now for three years. And when I started, you know, the investment decisions were way more than an hour. It would be sitting on something for a couple of months, researching, you know, maybe it was the little short time frames of doing an hour at a time and researching.
00:33:25
Speaker
But over time, that knowledge really does build up and you join more conversations, you feel more comfortable talking about it. And once you do get into that routine, then it can be that 10 minute task. But yeah, I would definitely say when I first started, it was, you know, I would take so long before I would try and work out where to put my money. And that's so fine. You know, Maddie and I sometimes say that I'll sit on an investment decision for three to six months.
00:33:50
Speaker
and I'll watch that stock and I'll watch how it goes up and how it goes down and how it goes up and how it goes down and then eventually I'll put my money in and that's you know totally fun as well. Yeah that's a lovely place to finish it is a journey it is and you know share investing is a long-term strategy it's not the kind of thing that you necessarily want to be doing for the short term unless you
00:34:11
Speaker
having an entire career change, you're going to become a day trader. And that's a whole other podcast episode. Which I wouldn't be good at talking about because I'm a very long-term investor, so I might have to find someone else for that one. Sophie, thanks so much for coming on the show. It's been such a pleasure. Now you mentioned your podcast, but you want to just give it one last plug and maybe your social handles if our listeners want to hear more from you guys.
00:34:34
Speaker
Yeah, of course, we would absolutely love anyone to come join our community as well. It's your in good company and you can find it on Spotify, Apple, or wherever you listen to your podcasts. Our Instagram is YIGCPodcast. Yeah, we absolutely love our Instagram community. If you have any questions, DM us and our Facebook group as well, which is incredible. You know, so many women talking about investing, asking their questions, getting incredible answers is
00:35:04
Speaker
YIGC investing podcast discussion group on Facebook. So feel free to jump into any of those communities, chat to us. Yeah. We love interacting. So it would be more than, more than happy to have you there. I'm in there. Come join me in there. We'll link to all those things in the show notes. Thanks again, Sophie. Thank you for having me guys. Thanks for listening. Show notes for this episode are available at lifeandminlifehacks.com.
00:35:33
Speaker
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