She's On The Money - A rookie's guide to investing: part two

Episode Date: August 6, 2019

We're baaaaack! And it's time to delve deeper on this investing stuff: What's an ETF? Why does everyone preach that "diversification" is key? And where the hell do you even begin? We're going to cover IT ALL today. Do you love the podcast SICK and want more SOTM? Of course you do! Join our Facebook page to share your money wins and money confessions, follow us on Insta for daily inspo to keep you on track and DEFINITELY subscribe to our newsletter, the written recap of the pod's key takeaways, including some bonus bits you won't want to miss... In a money mess and need help untangling the muddle? We've got you sorted - simply record your qualm and send it through to us at [e-mail] and you may end up on the podcast! The advice shared on She's on The Money is general in nature and does not consider your individual circumstances. She's on The Money exists purely for educational purposes only and should not be relied upon to make an investment or financial decision. Victoria Devine is an Authorised Representative of Consultum Financial Advisers Proprietary Limited ABN 65 006 373 995 I AFSL 230323.See omnystudio.com/listener for privacy information.

She's on the money. She's on the money. Hello and welcome to She's on the Money, the podcast for millennials who want financial freedom. I'm one of your co-hosts, Annabelle Lee. I'm a law student and a millennial who loves learning more and more about money from my friend and money expert, Victoria Devine. Hey, Victoria.

Good morning. Welcome back from your trip to New Zealand. Ah, thank you. I feel like we need to say I'm recovering from a cold and Victoria might be catching a cold. I don't know. Maybe we're on the same wavelength. Perhaps. So many of you guys are sharing your amazing money wins in our Facebook group every day,

so let's share a couple from the last few weeks. I've got one from April. she said it's officially the last day of no buy july i challenged myself to spend zero dollars on unnecessary items during july and i've only spent a grand total of five dollars on some stickers for my three-year-old i'm so proud of this achievement my husband and i have some pretty massive money decisions to make in the near future and i can feel my attitudes and habits shifting in a more positive direction i'm really loving this whole motivational month thing i love it as well and i love that they're all sharing it in the group as well like i haven't got less excited

each time someone posts. Each time someone posts, I'm like, yes, let's do it. No Buy July, I feel like works hand in hand with Dry July. It does, but I feel- Don't drink, don't buy. Yeah, look, that's not a fun couple. So I have one as well. I was actually annoyed at you

because I really liked April's and I was going to use it. But I've got Alana's and she said, dear, she's on the money dream team. I just want to say with all my heart, thank you. Since releasing your podcast on my $53,000 salary, I have, and she has a list of things that she's done. with little ticks next to them yeah it was really cute so paid out my afterpay and zip bay she has raised the fortnightly repayments on her loan in two years it'll be gone and she's completely happy

with that timeline she has another tick and it is she somehow rearranged her budget so damn well that she now has two and a half thousand dollars in savings for a holiday to japan next year and that includes fifty dollars a week of spending money and she also said that i no longer feel ashamed or like I'm letting the team down and my partner and I have been having frequent open conversations about money and budgeting strategies and I think that's been my favorite part of all and you know what that's my favorite part as well like I absolutely love that the one thing that she loved about that wasn't just the financial side of things it was more the feeling that she no longer feels hindered by finance but maybe more empowered by it and it's so important to talk about finance

with your partner because it's like two people's different money stories coming together it's important to kind of work them out as one. Exactly. And if you can't have those conversations, like later down the track, they're going to become really big issues. They'll catch up to you. Exactly. So Victoria, today on the show, we're talking all things investing again. So we've already gone through the basics. What's an investment? What's a share? But today we're going a bit deeper than that. Before we get there though, as always, it's time to share a money win or a money confession from the week. And as per usual, you can kick us off, Victoria. I know you love going first always going first so this week as Annabelle mentioned I've just gotten back from

a holiday in New Zealand which was absolutely beautiful but my money confession is I didn't stick to budget and that's okay sometimes oh look it is okay I'm a budgeter and I like knowing what's going on you should have seen the spreadsheet I'd organized for this holiday I had it down to a tee but a few things came up and you know we saw a couple of restaurants we wanted to go to and we kind of just said well you know what we're not putting it on credit so let's just do it at least you had a spreadsheet though I'm a bit of a holiday spreadsheeter as well you've got to stick to the plan I love it I feel like it gets me really excited for the holiday to come because I know exactly what's going to happen and when people are like oh what are you doing I'm like

well let me tell you so Annabelle what is your money win or money confession I have a money confession I have the past two weeks gone to two bottomless branches which is totally not really my thing I don't drink all that much but I felt a little bit of social pressure which is never good I did have a really good time though and I love brunch but I feel like I didn't get my money's worth because alcohol is expensive and so is the ticket you get like a wristband to get into bottomless brunch oh gosh and like I calculated in my head the amount of drinks I needed to drink and what I needed to order to get value to get value and I don't think I did I literally had like one or two drinks and I was like I'm done I gotta tap out yeah I feel like morning drinking

is maybe not my thing but also it sounds like you definitely didn't do dry July. Oh no, I did not do dry July. And I'm glad brunch comes up in every single episode. I feel like we need to keep this theme going. It's an important part of my life Victoria. Absolutely it is. Before we get into this week's topic let's do a tiny recap of last week shall we? So we're on the same page. Victoria why should women begin investing more and in the simplest of terms what is a share? So a share is simply part ownership of a business. It is a very small piece of the pie that you get, which entitles you to have a piece of the growth and the profits of the business you're investing in. Why should women be investing more? We should be investing more because it puts us in a place of financial

empowerment. It provides for our future. It puts us in a position of power. So we're not relying on anybody else to make decisions for us in the future. Yes. And that's really important to me as well. The place I want to start is here. I think there are many different types of investment, right? You mentioned to me earlier that buying shares is just one asset class. Can you explain a little to me what that means? So an asset class is just a type of investment and there are four main asset classes that we refer to in the investment world and those are fixed interest, cash, property and shares. What is fixed interest? Let's start with that one. Fixed interest is things, they call them securities and they are like bonds and they

generally operate in exactly the same way that a loan operates. So you are lending money to something or someone with the expectation of a return. So you pay cash for a bond, you get the bond, they give you a certificate and in return you receive a regular interest payment from the bond issuer for an agreed period of time and then once that period of time is up you will receive your bond or the initial sum back. So you said cash was one of the asset classes, what did you mean by that? So that refers to all of the money you've got sitting in your bank account right now. So that could either be earning you no money in an interest-free account, or it could be earning you, you know, one or 2% depending on what the market is doing. But cash is an investment in

itself. Okay. Amazing. So Victoria, is it possible for me to earn money while my shares are locked up in an investment? I've heard that there's an option for me to receive payouts and another to keep it in there for the long run. Is that true? So yes, you're right. And so what you're talking about in terms of regular payouts is actually the dividend being paid to you so you can do one of two things with a dividend you can choose to take that as income because it will you know come in every quarter or every six months or however often your dividend gets paid out you will get that cash into your account and you have two options so you can either take that cash and spend it on whatever you would like to increase your monthly or weekly income or you are able to reinvest your dividends

into your share portfolio and that's what creates compounding interest so over time if you're consistently reinvesting the amount of money that your shares make for you back into the share market your share portfolio grows without you always having to contribute more and more income so compound interest is kind of like interest on your interest yeah so compound interest is the interest your interest earns over a period of time right and so compound interest is a good thing. It's a brilliant thing. Great. So we know the basics of investing. Now let's push a little deeper. In discussions of investing, I hear the word diversification thrown around a lot. What on earth is everyone talking about and why is diversifying my investments such a good thing?

So diversification, which we briefly touched on just before, is essentially what we're going to call a risk management strategy. So risk management strategy is where you're essentially not putting all your eggs in one basket um it means you're picking a variety of different investments so instead of just going and buying telstra shares and owning shares in telstra and if the performance of that company doesn't do so well your share portfolio doesn't do so well it means picking a range of different investments from different asset classes so that if one company isn't performing that should be okay because it all evens out and over time your investment portfolio will increase. Yeah. So we should all be trying to diversify. Absolutely. I wouldn't want to carry

all my eggs in one basket. It's heavy too. Yeah, look, really heavy basket. But also it just means that we are spread out in different types of investments and it means that we are less likely to have really big fluctuations in our portfolio value. Okay. So what about ETFs then? What is an ETF? I mean, I tried to Google it and every time I searched it, it made ETF sound like the most complicated thing on the planet. Is that the case? Absolutely. No, not at all. So an ETF is actually super simple. An ETF means an exchange traded fund, which I don't think means that much to anybody right now. But what you can do, you can think of an ETF as a basket of investments. So each ETF purchases a range of different assets like shares, bonds, commodities, different

currencies, and their aim is to match the performance of a particular market index or a benchmark. So for example you could have an ETF and purchase one that aims to track the top 200 stocks or shares in Australia and by investing those with an ETF it means you get a wide variety of diversification without you individually having to go and purchase a wide variety of different stocks. It also means you can get into the share market with less income because to have a well diversified portfolio where you have individual stocks you actually need to have a lot of cash to invest. Whereas an ETF means you can invest with less money, but still have that level of diversification that we would recommend you have anyway. So an ETF is your friend?

Absolutely. An ETF is your friend. Another one that I couldn't quite get a straight answer on with a Google search. What is a managed investment product? Can I go to a company like say MLC and have them decide where I should put my money? So an ETF is actually a managed investment product. so a managed investment is actually known often as a pooled investment it's where your money as an investor gets pooled together with the money of lots of other investors and it's managed by some investment experts like a fund manager and they buy and sell investments on your behalf in a big group so instead of you know you having an individual stockbroker who is quite expensive you're dividing that cost up with a really big group of people because the bigger your fund is

the more power it has and the less money you're going to have to pay. So you're essentially getting a fund manager without having to pay them directly. Victoria, I'm going to be completely honest with you. I'm still very confused. I thought you might be. I could see your face. So a managed fund, as I said, pulls all your money together with other investors and then a fund manager makes all the decisions for that investment portfolio. So an example of that is say we have a thousand investors and they decide to invest $10,000 each into a bank account together and then in return they'll get 10,000 units each and that is one dollar then would buy you one unit. So the money that's in the fund that professional fund manager makes all the decisions on which stocks there are

and how that works and invests the money and if the investments do well then the unit price that you own will increase. So who are these 1,000 people? Are they strangers? How do they group together. Yes, they're strangers. Yes, they're not your friends. They are just people who are in similar situations to you, who I would assume have the same risk profile as you. And someone picks you up and says, all right, no problems. Here's the ETF that you suit best. And that will be really similar for the other people in the fund. So they might be investors that also only have $10,000 to invest and they're, you know, popping it in all equally. And, you know, we go from there. In saying that, it doesn't have to be equal. So you could go in with $5,000 and someone

else could go in with $50,000. The amount that that changes or what that changes is just how many units in that you own. So with your $1,000, you would own a thousand shares and with their 50,000, they would own 50,000. Does that make sense? Yes, I think so. Victoria, I saw on the Facebook group that you said ETFs aren't for everybody. Why aren't they your only investment option? So I think it's really important that when we talk about ETFs, we understand the proper structure of them. So an ETF is a separately managed fund. So it is a fund that you put your money into and then you own units in that fund. You do not own those shares directly. So you might own a unit in this fund and that fund owns ANZ, but you do not own ANZ shares directly. So for me

as a financial advisor, I really want to mitigate risk, right? Like it's my job to put you in the best possible position. And whilst an ETF is a really brilliant choice for someone who doesn't have a hundred thousand dollars of capital, it's also something where I say, look, there's a bit of risk there as well, because by having a fund manager making decisions for you, you could wake up tomorrow and your shares in ANZ have been sold down and maybe that's not something that you wanted yeah so for me an ETF is a really great entry point to the investment market where you can start building a portfolio up and once you've built it up to a certain level we then start talking about buying shares directly so that you Annabelle would own that ANZ share instead of a

fund owning it on your behalf and just giving you part of the profit you would get the profit directly does that make sense yeah it does so I think that ETFs are a really great thing to start playing with. It's a bit like Raise. So Raise owns ETFs and the different portfolios will be dependent upon what your tolerance to risk is. And I think that, you know, great introduction to the market. But I also don't want people to think that ETFs are the only way you invest in the market, because if you have enough capital, you can be buying shares directly and you can be the personal owner of, you know, those Telstra shares or those ANZ shares. So it's a great way like dip your toes in but the main end goal is to own your own shares directly yes and once we're

talking about investment portfolios over a hundred thousand dollars which sounds crazy to people but because you guys are young that's going to happen at some point if you invest now once it's over a hundred thousand dollars we really need to be looking at owning things directly because one owning directly means you're not paying a fund manager to manage your funds for you but then also you don't have the risk associated with somebody selling down an asset that you might not want to lose. Yeah so you're in power. Yeah you've got the power once you own direct shares whereas an ETF carries a little bit of risk because someone else is making the decisions on your behalf. Okay so tell me if I've got this right as a bit of a recap. Compound interest is

a fabulous thing because we make more money. Diversification is great because we're mitigating risk and an ETF means we own shares but not directly and it can be a great intro into the market. I think I'm finally starting to get a handle on this. I think you are as well. Good Hi there, you've called the She's on the Money hotline Do you have a money problem you want help solving? Do you have a money dilemma you just want to chat about? Victoria is here to help Each week we'll be playing your hotline questions

to help make sense of the money mess you may have found yourself in Give us a call on 0435 293 886 and you might find yourself on the show hi there um i have a question about investing i have absolutely no idea where to start in terms of investing i've set up my super account of research that i have you know consulted people and i feel like my super is really well set up and researched however um for my long-term gain obviously but in terms of short-term gain maybe for the next five to ten years um in terms of

investing I have absolutely no idea where to start and I would really love some help um you know I'm quite scared to be honest to put money into it you know but I want to learn and I want to give it a go so any help around anything investing would be very beneficial thanks Victoria I've actually seen this a lot in the Facebook group where do you start with investing like how much money do you need do you need one lump sum or is it is it more like a series of deposits so you're right this is something that comes up all the time and it's probably the biggest question I get where do I start with investment this is a really hard question to answer because everybody is so different so investment is a really personal thing but I would love to be able to give you guys a

little bit of direction in terms of where you can actually start so there's a few places so you can start with investment platforms like raise or spaceship or you know micro investment platforms that start you off in an investment platform and you can start tracking the market and see what it does and understand risk profiles and understand what's going on they're really really great resources you can go to the asx website at the moment they've just released the asx trading game it's a bit like monopoly but it's online and you can play with the shares um with fake money and you know see how you go for a little while doing it on your own I mentioned in our last episode a number of different platforms and now I'm not saying I recommend them but a number of different

reputable platforms that you're able to buy shares directly through and then you're also able to see a financial advisor and whilst I think that that's a really intimidating response it's probably the best one to be honest and that's not because I'm a financial advisor and I want you guys all to come and see me but yeah please don't yeah shameless self-promotion but seeing a financial advisor means you're going to get a customized strategy that suits the goals you're trying to achieve and puts you in the best possible position to achieve all of those goals and create wealth long term so the listener that we were just listening to before mentioned that she wanted you know some short-term investment topics yes you did yeah i don't recommend short-term investment

if you are looking to invest money for five years, it's just simply not enough. You need to be looking at investing for the long term. She sounded really on top of her super, sounded really on top of, you know, what she'd been looking at. But investment is something that we are looking at for the long term, not for the short term. If you're looking to invest money for anything under five years, I'd honestly be really hesitant to expose it to the share market because it's just too volatile in that short period of time. However, over 20, 30 years, the volatility of the share market, which means how much it fluctuates, is far, far less. And I don't think there's been a period of time in the Australian share market history where we have had a negative return

over a 30-year period. So for me, long-term investment is where we're at. It's not about investing for five or six years. It's about creating a strategy that you can have forever. So if I had like 50 grand in savings, not that I do, sad, that's not enough. I need to be able to make it a long-term consistent lifestyle mindset kind of thing. Lifestyle mindset is absolutely correct. However, you don't need $50,000 in savings to start a share portfolio. What you need is good savings habits and you need to be able to contribute to your investment plan on a regular basis. So in the last episode, I explained that to create wealth, you needed to spend less than you earn, and you need to consistently invest over the long term. And to

be able to do that, you don't need a massive amount of capital to start. It's nice. It's a great place to begin. But if you don't have that, work out how much per month you're going to be able to invest, whether that's $300, $500. Are you able to invest $1,000 a month? Work out a way that you can you know test yourself on that so I'm not saying commit yourself to something that you can't maintain but maybe over the next three months work out if you can put that five hundred dollars a month aside and you don't miss it too much then work out how am I going to do this and that's when you need to talk to a financial advisor to create that strategy that is going to endure and make sure that you are achieving those goals right let's roll into our second

question. Hi, Victoria and Annabelle. I just have a quick question for you. What is Raise and why does everyone in the Facebook group always talk about it? Thanks. Victoria, what's Raise? Can you give us a quick summary? So, Raise is an investment product. It is something that, you know, gets a lot of exposure through the She's On The Money community because I think a lot of people in the group are already invested in it or see it as a really accessible way to begin their investment journey which it absolutely is however it is just one investment product in a sea of many so as much as it's got more exposure I don't think raise is you know necessarily the perfect tool for everybody it's great personally I have it in addition to my actual share portfolio because I really like it I

think it's a really great little roundup tool I invest a small amount per month so I can see it grow but once I reach a certain number I then sell down my portfolio and shift that money into my wider portfolio because I have lower fees in there. So we've had a lot of conversations this week in the Facebook group about the fees on raise being exorbitant. At the end of the day, yes, they are expensive if you only have $50 or $100 in the account. But the purpose of investment is to consistently invest over the long term. And if you are consistently investing, that fee becomes lower and lower and lower. So a $5 fee on a $50 investment sounds like a lot. But once you're looking at you know two or three or four thousand dollars in your raise account which is

the ultimate goal you know that fee kind of dissipates and becomes not as impactful as it would be at the very beginning of your investment journey so I think it's really important to realize that you know with every investment product there will be fees and with every investment product it might not be the right product for you you really need to be reading their product disclosure statements and understanding what that product does why it does it and how it works hi guys i'm just wondering if it's better off investing your disposable income into a hedge fund account or to set up a high interest earning saving account with a bank loving the podcast thank you so much all right so what actually is a hedge fund so a hedge fund uses more than one

type of investment strategy so it's kind of like diversifying but not just in stocks in the strategy that you use to invest in the stocks. It's a bit like a managed fund however the scope is a lot broader and they often invest in private businesses. So essentially in my experience they are for higher net wealth people who are prepared to pay a fair bit more money to invest their money in investments that other people aren't invested in. They tend to take up quite a lot of fees so they tend to take on quite a lot of risk to justify the fees that they have and generally these fees are anywhere between two and four percent of the funds that you have in that account which is actually quite a high investment fee so just to normalize that a little bit average investment

fees should be under one percent if you're paying investment fees and what are the hedge fund fees so they could be anywhere between two and four percent okay so they're a lot more than average you know your etf or your direct managed fund or you know what you're working on with your financial advisor so you said the term diversification before yes that's a good thing right diversification is really good and that's actually what hedging means so hedging means protecting against risk however a hedge fund is a lot in my experience is a lot more risky than you know an ETF or something that is quite vanilla hedge funds I probably wouldn't be playing with if they're your first investment or you know you're first getting into the market but I think that it's really important

to understand what they are how they work and you know when you might be using them so if you're a high net wealth client? Yes, but also if you've got the risk profile for it. So you could be a really conservative investor and a hedge fund might not be the right option for you. Whereas if you have the capacity and the want to take on a lot more risk, a hedge fund might be a place that you want to start investing. It's all about understanding your risk profile. Again, I probably sound like a broken record here, but understanding your risk profile is the most important part of investment because as boring as this sounds and as much as a lot of people laugh at me when I say this as a financial advisor I just want you to be able to sleep at night

and that means not stressing every minute of the day and you know when you go to bed about your investments and if you are you really need to have a look at maybe changing that strategy becoming more educated on it or talking to your financial advisor about how to diversify even further to make sure that that's not an issue for you. Now it's time for our weekly money diary my favorite part. Today's money diary is from a 24 year old PhD student who isn't able to work because of a demanding university course. I'm living off a research stipend so I kind of get paid to study which means I don't have much time to do actual work and it means I have to live about off about 30 grand a year. Okay so we know 24 and living off a scholarship spends a bunch of

time at university but let's hear the nitty-gritty stuff. How much does she earn and how much is sitting in her bank account right now? I'm doing a PhD in psychology. It's actually 28 grand and then I do a little bit of teaching. So it pushes it up to 30 and I think 30 sounds a lot more adult than 28 for some reason. That two grand makes a little bit of a difference. I have about seven grand, but that is only because I have been living at home until very recently. So most of that saving is not from what my life is like right now. Most of that saving is from when I was living at home and was working but not didn't really have any kind of expenses. So I moved out of home about eight months ago and basically paying rent on my income I've really been struggling to save anything

more than like $100 a week got to $50 a week. So we know how 24 and living off a scholarship gets paid but what exactly happens to that money after it's deposited into her account? So it comes in about every fortnight and each fortnight so it's about 1060 a fortnight and then I pay rent every month and that the scholarship that comes during that time goes all of it goes towards rent and then the pay before that kind of is what I live off so every month um I get kind of two paychecks um and they're both the same about 1060 one goes the entire one goes to rent and then the other one I live off and then in the interim when I'm teaching I try and save what I can with a little bit of extra kind of money that comes in which is probably about two three hundred a fortnight

so it's it's not a whole lot but yeah I try and put away a tiny bit if I can every month probably ranges from about gosh it can be like twenty dollars some some months where things are a bit grim but then it can also be up to like two three hundred dollars a month So she's got a pretty healthy sum in her bank account. How does she go with investing though? Oh dear. The period where Bitcoin, where everyone found out about Bitcoin, I was like, I should definitely buy some Bitcoin.

So I decided to buy some Bitcoin when everyone knew about Bitcoin and then it went down straight after that. So I absolutely do not know anything about investing and I probably should know a little bit more about it. And what about her debts? oh this is a this is a sad one um I have about 40 grand of hex debt at the moment and actually did not even think about it until I was asked to do this um little podcast segment um it's just it's something that I just pretend doesn't exist I guess because I'm probably not going to be

earning enough to pay it off for the next two three years actually didn't even know how much I had in debt until I was going until until I knew that I was going to be asked this question 40 grand sounds like a lot does 24 and living off a scholarship have any good money habits that she's especially proud of oh I think it's actually it's probably being in a probably always making sure that I can put away at least a tiny bit each month and some months that tiny bit might actually just be like $50 but I've just been in a habit I've just been in the habit of putting away what I can every month for almost as long as I remember um it used to be a lot more when I was living at home and now it actually very often than not is like 50 or 100 a month but I think just being

just knowing that I should do that is a good habit what about her worst money habit probably coffee actually I um I'm really lucky in that where I work three days a week there's a coffee machine but the other two days I work somewhere else um unfortunately they don't have a coffee machine so it means that I buy coffee about twice a week during the week and then twice on the weekend so I buy a coffee about four days a week and then I also spent a lot on uber eats um so coffee and uber eats are probably my worst worst money habits and probably also online shopping i get can be really impulsive when i like something um i think that that happens more the with the less the less money i have i think i make more impulse decisions because i get into

the mindset of i am actually earning like nothing and i'm probably going to save like almost nothing this month so i might as well just buy like the pair of pants that i want um it's Like when you can't go up much more, it's just, it's easier to go down a little, if that makes sense. So what's 24 and living off the scholarship actually saving for? What's her big money goal? I think for the next two years, I can see my goals being really aligned to just making sure that I travel as much as I can. When I start working full-time, which will probably be in about two or three years, that's when I can see my goals changing, adjusting a little bit. But I think only because I'll hopefully be able to travel at the same time as aiming for a bigger

goal. I feel like I should say buying a house because everyone wants things that you should want to buy a house. Maybe it will be that in three years time. I can also see myself not buying a house for like 10, 15 years. It's just not something that I feel, I can feel like a lot of pressure in that I should want to buy a house, but it's not something that I actually really want. How would today's money diarist rate her own relationship with money if we forced her to give herself a grade? Gosh, probably like a D minus because, but I think that D minus is mainly because what I want to spend my money on is stuff that's not going to actually make my account grow like investment properties or I actually have absolutely zero interest in investing my money

in anything. And my only goals are really about a full, I'm like splurge on dinners and I go out with friends and I don't think I think twice at the moment about doing that. I think the seven grand that I have in my savings account is purely for experiences and it's purely so that I can travel next year when for like a longer time period than this year and it is purely because I think it's almost a safety net I'm worried that like one day I'll have to one day I won't will go up or when I have to pay my car insurance stuff it's mainly for stuff like that it's not so much the seven grand is not so much to one day invest in something that's going to make my bank account grow more so i think that not having that money foresight is why probably why i wouldn't i would

give myself like a d minus so she said that the less money you have in your savings the more impulsive you are with buying and i totally relate to that i feel like that's a really true thing right yes money is really emotional so i think that if we don't have a lot of it and we're feeling quite emotional about that it's really easy to buy something to make ourselves kind of like eating your feelings when you're sad yeah which I'm really good at by the way same it's a skill so what is she doing well I think what she's doing really well is aligning her spending to her values so you know she mentioned that she spends on coffee and maybe that was her downfall but I think that if that's something she values go for it spend money on that make yourself feel good

in that aspect coffee at the end of the day is not spending seven hundred dollars a month on shopping it is you know a small win that makes you feel good about yourself and if that's her i guess money fell i think that's a pretty good thing and the traveling yeah also she said that she really likes traveling and that her money is going towards that so what she told us was her values and then she told us that her values are being met with her income and i think that that's a really good thing um in terms of negative things though d minus like i don't agree with that but i do agree with that in relation to bitcoin like that wasn't a great decision no do not bring back bitcoin i think that that was a really good example of how emotional investment works actually

and you'd think that people in this industry would be really rational and people in general would be really rational but they aren't and the emotions of an investor especially when they can see people around them jumping on something makes them i guess have a little bit of FOMO right so like you go oh my friend's got bitcoin i should have bitcoin but you don't fully understand it I have never recommended Bitcoin to anyone nor have I purchased it myself and I think that that's probably telling in terms of how great of an investment it is yes a lot of money was made in that investment but the money that was made was through people who knew about Bitcoin before we were talking about it at brunch yeah so you know if you're talking about an investment over brunch

with friends I think that that investment might have already had its time to shine and it's not time to invest in that yet but we also really need to be having a think about who we're taking investment advice from because if we're sitting at brunch with a friend who said I invested in this and you decided that an investment decision was a good one because your friend was in it are you really getting educated content are you really making decisions that are best for you over the long term that's all we have time for today unfortunately just before we head off though as always let's quickly wrap the boring but important stuff the advice shared on she's on the money is general in nature and does not consider your individual circumstances she's

on the money exists purely for educational purposes only and should not be relied upon to make an investment or financial decision and of course we promise victoria divine is an authorized representative of consultant financial advisors proprietary limited here goes join our facebook group where 12 000 women share i know right we share money tips and tricks every single day free of judgment just search she's on the money on facebook and join if facebook's not your thing you're also able to find us and follow us on instagram we're at she's on the money aus this podcast is a production of shameless media on behalf of she's on the money bye guys see you later