She's On The Money - How to invest part two: Now we know micro investing is legit

Episode Date: October 20, 2020

Today we answer the burning micro-investing questions we know you’re dying to hear. Is it better to start with a large deposit and add to it from there? Which is better - Raiz or Spaceship? Today Victoria answers it all. This episode is part two of our two-parter on micro-investing, so we recommend starting with the other episode for a more overarching understanding of what the practice can do for you and then hopping back here for a deep dive into our micro-investing Q+A. Love the podcast sick and want more SOTM? We had a feeling that was the case. 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 absolutely subscribe to our newsletter, the written recap of the pod’s key takeaways, including some bonus bits you won’t want to miss. RAIZ - Back by popular demand to SOTM - Use this website to get $5 in your Raiz investment account when you sign up:https://www.raizreferralcode.com.au/Finally, if you’re in a money mess and need help untangling the muddle - we’ve got you sorted – simply record your question and send it through to us at [e-mail] and you may just end up on the podcast!Your hosts are Georgia King and Victoria Devine.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 and should not be relied upon to make an investment or financial decision. Victoria Devine is an Authorised Representative of Australia Pacific Funds Management Proprietary Limited ABN 34 132 463 257 - AFSL 339151.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. My name is Georgia King. I'm a copywriter and journalism student. And every Wednesday, I sit down for a fun finance chat with millennial money expert, Victoria Devine. Victoria, hello. Georgia, hello. Hello. Now, we have a monster show lined up for you today, guys. It's part two of our deep dive

into micro-investing, where we will be answering 10 of our favorite questions from our Facebook group, including everything from how to get started to how much you should be investing to see a worthwhile return. Now, if you haven't listened to part one of the micro-investing chat, which we recorded last week, then we recommend you go back and listen to that one first so you have a bit of context if you are just learning about micro-investing for the first time. Today on the show, we will also be hearing from a money diarist who has had a money makeover this year, and we will be answering a listener question on when is the right time to graduate from micro-investing and move on to investing on a larger scale.

Goodness, a lot there, Victoria, to find, a lot to get through. Not enough, maybe part three. Oh, maybe, we'll see, we'll see how today goes. Before we do get into today's show though, money wins and confessions, what happened this week? Georgia King once again I have a money win slash confession for you this week I decided to buy myself a couple of new tops online now don't get too excited they are isolation tops so think soft long sleeves t-shirt material like we're not we're not too bougie but the website that I was

purchasing them on I'd put it all into my cart and then left it because I got a bit lazy to shut my laptop and went back to order them this morning actually and now they have 40% off on top of their already 15% discount so I'm winning and I think my tops are like $12 each if that's not a money win I don't know what is don't ask whether I need more tops or not though that's a classic money win I love that classic I'm spending money to save money so I'm pretty much making money yeah well that's what it's that's how that's exactly how it works right but like let's move on from that because my money wins and money confessions are getting a little bit dire have you got a dire money win on confession for us this week Georgia I actually feel like my money

win this week is like quintessential she's on the money poster girl vibe I sounded like a dingus when I said that can I guess yeah you can guess is it about cheese no it's about like insurance yes how did you know because we spoke about it because I feel like all we do all we do in this group is eat cheese and go and hustle insurance but it's true so this week um it is actually true did I get that you did get that but winner winner so this week the dreaded car insurance was due and instead of just you know paying it mindlessly I was like what would she's on the money listeners do they would challenge the fee they would look around compare the pair um so I had a look at heaps of different companies and found one for $100 less than what I was going

to pay so hey that's pretty good was it with the same company or was it with a different company I feel like everybody's been doing that in the Facebook group. So if you've been thinking about it and you have your car insurance coming up, definitely try and save yourself a couple of hundred bucks. Why not? That's an absolute money win that I think we can all try and make. Yeah, do it. I loved it.

Post of the week. What have you got for me? Okay. So this week I have one from Jess and Jess posted, and these are my favorite posts just for the record. I'm not biased. She posted, oh my gosh, you guys, I am finally debt free. She said, thanks to this podcast.

i pulled my head out of the sand i feel like that's such a victoria that's very serious yeah like i pulled my head out of the sand like it's at the end of the day written all over it yeah but she went through her statement for her loans and she essentially snowballed it all got out of debt and now after a few months she's completely debt free and these are the stories that i adore hearing in our group like they are so inspiring for those of us who are in debt and are slowly working our ways out of it because there's a light at the end of the tunnel and then for those of us who aren't in debt like i just feel like we're so proud of our little community being debt free and like the weight that's lifted off her shoulders like i know what that feels like and i just feel

like that's such a win like a genuine win yeah absolutely anyway that was my favorite one from the week please try try and hustle me that okay this one is what's that mean victoria hold on please try and top that georgia king i don't know if i can top that i can almost actually it's fine just tap out now i can i can mushroom top it because this there's not mushroom in our script for your money win okay just for everyone listening this um i knew what her money win was gonna be as well it's about mushrooms about it yeah exactly so this one is from the lovely fiona who in march this year decided to make a conscious decision decision to move towards a more plant-based diet which would make you proud victoria um it definitely does the qualm was so

that she began smashing through mushrooms um because you can't eat soy and was spending about 12 a week on shrooms which is you know it's a lot of dollars fortunately she found a grow your own mushroom kit last month on facebook marketplace for 20 sounds sus but the results here are amazing after three weeks of basically hiding it in her laundry cupboard and occasionally spritzing it with water she harvested some yesterday about 500 grams worth and that was only a quarter of what had sprouted she said they tasted amazing and the kit yields about every six to ten weeks depending on how well you care for it and I just think that is the most like unique money win that we've ever seen on the show Victoria I'm not gonna lie it's a pretty good money win but I just feel like it is

a very sus money win as well like hey I've been growing some stuff in my laundry and it's uh yeah link saving me money um no I really love it and Fiona is great she's actually been a part of our Facebook community because I swear I have seen her name since the very beginning in our community she posts all the time she always talks about our stuff online and she's just a delightful human to be honest so when I saw that you were posting about Fiona's mushrooms I was stoked and to be honest I'm probably gonna copy her and try and grow my own do it I dare you let us know how you go i just think it'd be a bit of fun yeah if nothing else if i mess it up like it was a fun time just shrooms in the cupboard love it um shroom chat aside victoria we can move on to the

main topic of today's show so today is really all about addressing your most burning micro investing questions now when you posted in the group about this subject v it got a lot of traction we had like 500 uh comments questions yeah look i'm not gonna lie i didn't expect it to be that wild and we obviously can't answer 500 questions. It will go for too long. But you've gone through and picked 10 of the best or 10 of the most pointed questions. Correct. And I agree with a lot of them being in this list. So what do you reckon about just jumping straight in? Let's do it. All right. So our first question here, V, which I think is pretty apt, is when it comes to micro-investing, how do you even start? So first things first, you need to understand your goals and values,

which is probably going to be the most basic thing. It's like saying sticking your head in the sand or fake rich, real poor. I just feel like I'm a broken record and you guys are probably gonna get really sick of me really soon. But at the end of the day, it's all about your values and your goals.

If you're trying to understand when to start micro-investing but you have other financial goals, well, maybe now's not the right time if you just don't have the cashflow for it. In saying that, you don't need massive amounts of money to start investing on micro-investing platforms, you can literally start with as little as $5. And if you use a referral code,

you can often get that five bucks for free, which is honestly a big money win. That's like 100% return on your non-existent investment. So that's pretty good. But essentially all you need to do is download one of the apps, app of your choice, and enter all your information. It's secure, of course,

on the platforms that we talk about and we've reviewed. And basically you're set to go within five minutes. So it's not hard to start. It's more around making sure that these things actually align to your goals and values and that you understand why you want to invest, not just, oh, I listened to the She's on the Money podcast, so therefore I guess I have to micro-invest. That's not the point of this at all. This is just about educating you so that you can make a decision that might help you achieve

your goals in line with your values. Perfect. All right. So our next question here, V, is when starting to use a micro-investing app, is it better to start with a large deposit and add to it in small or large increments or does it not matter how much slash when you add it so all of those are correct I think that this is a really interesting one because everyone seems to think that you need to save heaps and heaps to start investing when that's simply not the case for me the most important thing is having cash flow so that

you're able to afford it there's genuinely like not no point but it's far better for you to invest on a regular basis, as opposed to just putting $50 in there and just wishing for the best. It's not something I would recommend by any stretch of the imagination. So when you're starting with a micro-investing app, to be honest, I'd want you to start small and just be consistent. Like I don't need you to tip your life savings in or even consider that. To be honest, that's a terrible idea. We want to just dip our toes in the water with micro-investing apps, see what's going on with it and then start to increase it in line with what we want to achieve. So obviously, if you are putting $50 in, you can't expect to have a $5,000 return. So it's going to quantify depending on how

much you invest over how long a period. But at the end of the day, I've said this on the podcast so many times, from little things, big things really do grow. And if you can afford $50 a week, that's fantastic. And you know what? Even if it's $5 or $10 a week, just getting in the habit of beginning to invest is going to set you up for financial success in the long term. Love that. Well said, Bea. Off the back of that question, would you say that it would be better to do $50 a week every week instead of like $500 one time here and then in five months doing a grand or something

like that? Yes, yes, yes. And the reason I would say that is because of dollar cost averaging. Now, that is not the sexiest term, but like, you know what? She's on the money. We're not about sexy anything. I mean, we use terms like stick your head in the sand. Dollar cost averaging is a really effective way of managing your risk. So say you invest that, you know, you said before $500. Say you

invested that today in the share market. You don't know if the share market's going to crash tomorrow or if it's going to grow exponentially. Like we can't predict the future. I've said a million times that if I could, I'd be really rich and it's just not going to happen because I'm no Warren Buffett, and even he isn't always 100% on the money. But essentially, dollar cost averaging is a really great alternative to investing in a lump sum. Instead of investing all your capital at one time, the idea is you invest smaller fixed amounts on a really regular basis over an extended period of time. So for example, instead of investing $500 in one transaction, you could just invest $50 each month for the foreseeable future. The price of the asset you're buying

might go up and down in that time period though, but you are always investing the same amount. What happens is you end up buying more of the asset when the price falls in any given month and fewer if that price is higher. So dollar cost averaging is in some cases kind of like taking away the timing risk of the market of trying to pick the bottom of the market, which as I've said before, no one can actually do and can possibly offer other benefits in volatility or like hard to predict markets where investing a lump sum can actually just be really nerve-wracking like at the end of the day it can be really scary to invest a lump sum into the market so for example let's just really simplify this back if I invested one dollar like let's just be as simple as possible

if I invested one dollar in the share market today and that gave me 100 shares I wish that was like that but this is going to make a lot of sense right one dollar into the market and for that I got 100 shares in return and then next week the share market drops by half so every share is worth half of what it was previously but I'm still investing one dollar well I got double the shares that I got last time because now for a dollar I can buy 200 shares instead of 100 shares so you're always investing the same amount but the same thing is going to be true if you then invest that same $1 and the share market is up. So you'll get less shares, but you'll still be investing the same amount of money. And what happens over time is this on average brings down

the average cost of each individual share. So say if you go back to that example before of the $1 being invested, invest $1 one month and $1 the next month, one month it's up or it's down 50%. that would mean that your average share price goes to 75 cents instead of $1 for 100 shares. Does that make sense? So we're just like trying to bring it down, but we're always making use of the fact that we cannot time the market. So for me, it's better to be consistent than it is for having lump massive amounts going in. Now that's not to say Georgia, and I feel like we're getting off track here a little bit, but that's okay. Cause this is just more investment chat. And I feel like if you guys, the more, you know, the more empowered you're going to be. That's not

to say you shouldn't have a lump sum in there to begin with to justify the fees and justify how much it's going to cost you to invest so it's always nice to kind of like start with a certain amount like you know if you can afford it putting a couple of hundred dollars in there like whether that's 200 or 300 just to make sure the monthly fee of whatever platform you choose is definitely worth it because you don't want to just be investing five dollars a month and then half of that you know $2.50 is your monthly fee like that's not smart finance in saying that I said on last week's podcast and you guys can go back to that to me $2.50 a month is actually very very cheap for a financial education in the share market what you just said V leads in perfectly

to our third question so this might be a really quick answer because you pretty much said it there but is there a minimum amount we should be investing to cover the cost of any fees involved in using the platform? Yes and no. So I think it's important to just work out what your goals and values are. And remember that, you know, investing to begin with is going to be more expensive than investing hundreds of thousands of dollars. So the more you invest, the cheaper investment usually becomes because obviously you get scale and you're able to, you know, do things like wholesale investing. And that's the ultimate goal. But do be prepared for an investment to cost some money upfront. And I think that's something that is a little bit shocking to a lot of people when they

go, oh, but investing, it's just not worth it. And it's like, well, actually it is in the long term, but they're, you know, no pain, no gain kind of thing. So like, if you're starting with a micro investing platform, usually it will be the monthly fee or on some platforms, there are no monthly fees, which is fantastic. But once you start to step into the realm of investing properly, and I say properly because micro-investing is proper investment, but it's not your own share portfolio. It's kind of on a different platform and it will always be there. But for me, it would be about taking into consideration at what point is it worth paying a financial advisor? I personally wouldn't want to charge you a couple of thousand dollars for

financial advice if you're only investing a thousand dollars. That's not financially responsible of me but for you as an investor I think you should be looking for interim options where you can you know build up your amount and then once you reach a certain point where you say this is worth it for me at that point you get proper financial advice so no there's not a minimum amount obviously the minimum will be required on each different platform and I'm pretty sure for most micro investing platforms it's about five dollars but if you really want to make sure that the fees are really reasonable I would be making sure that they are at least below one percent of your platform's invested amount but in saying that if I was just starting I wouldn't be too

concerned I'd just be more concerned about making sure that I can be consistent and actually you know grow a portfolio in the first place okay beautiful and again that leads into the next question so how long roughly should we be expecting to keep money in there for it to be worthwhile Can I say forever? Because forever. Yeah. And a story next question. No. Guys, I always, always, always say this. Investing is not for the short term. Don't go into micro investing with the attitude that you can just chuck $50 in a month and you're going to become a millionaire. It's really the same as investing in any other way. It's just on a smaller scale. So the return is going to be smaller if you're investing small amounts. And if you're investing

larger amounts in the stock market, your returns would be higher. So it's not going to happen overnight but I would leave it in honestly for as long as you possibly can but in line with your goals and values to me I would never want a client investing in an asset for anything under 10 years in saying that I've got friends who use raise I even use raise and I pull it out after a year when it hits a certain amount I pull mine out so I know and I'm always really transparent about this in the Facebook group but once my raise hits about a thousand dollars I pull that out and I put it into my bigger share platform just because I look at it and I go okay no problems like I'd much prefer it to be in my other you know portfolio it's not because raise is bad it's not because

the platforms are bad it's just my personal preference and I can't really justify why except I like all of my stuff in one place I also have friends who use it to buy golf clubs like they have their spare change round up and they're really happy to watch it be invested and get a little bit of return and they will only take it out when the market is up and they've made something and they go you know what that didn't sting me I'll go buy some golf clubs and you're like okay no problems like you do you the same could go for anything I've got friends who also use these platforms to help them save for holidays I don't think that there's any right or wrong way to use these platforms but to me it's about making sure that you understand the platforms

because at the end of the day, if you are just getting one of these platforms to save, you need to know that it's not a savings account, it's an investment account. And if you aren't willing to take on that risk, then it's probably the wrong choice for you. So I feel like there could be a perception because micro-investing platforms are apps, they appeal to millennials, you know, they're easy to use, whatever, that's kind of their USP. Would you say that like you can't just go into it with like a two-month outlook like it yeah no way longer yeah no way and we've seen this on our Facebook group before where people have posted and they're like oh my gosh well I deleted my raise account because the returns were dismal and you're like what

I like personally I've had great returns from raise right now I've got you know not so great returns in all of my portfolios because it turns out Georgia we're going through a global pandemic and that is quite well reflected in the share market but in saying that I just feel like potentially these people aren't educated enough in investment to know that if you're going to you know and this happened recently if you're going to start investing on a micro investing platform and you picked that micro investing platform in March this year and then by June you were really upset with the response that is happening on your platform like of course it was going to go down. That's market returns. That's market volatility. That is how it works. You are

always going to lose money or lose value in your portfolio because Georgia, as we always say, you do not lose money on the share market unless you actually cash that money out. Yes, it was going to go down, but that is actually an okay thing. And what I would want to see people have the mind frame of is when they start investing and the share market drops, and maybe if they've got a little bit extra cash, that might be a really good time to put it into the share market to get a better return. In saying that, that's obviously not advice. It's just, you know, how I run my portfolios. Let's move on to our next question here. Micro-investing seems good for diversity in a short period of time, but is it really worth it over the long run in terms of

fees, etc.? Is it more beneficial to consistently invest in single company shares? Okay, Georgia. So when we talk about diversity, micro-investing platforms are usually really well diversified because they have what's called a fund manager running them. So a fund manager sounds complicated, but it is one dude or one woman who runs the fund and that's their job. They pick the stocks, they come in, they come out, they run it and make the decisions on behalf of the entire community that are investing in that platform. And they're kind of like the boss in charge of it.

So, like, they've obviously got teams behind them, but they will make the decision to go, okay, cool, we're going to sell Apple shares today and pick up some more, you know, Microsoft shares. Like, these are the people making the big decisions on behalf of you in relation to the market. and that's something that a micro-investing platform brings to the table because otherwise if you're just investing in individual company shares on your own how do you know what the market's doing are you a financial advisor can you make these decisions at what point do you know it's a good time to sell something or buy something should you be buying it in the first place is it actually aligned to your value proposition and your values as a whole it depends but also you've got to remember that the reason we want diversity is to lower risk like we

are young or most people that are listening to this podcast are relatively young haven't started their investment journey yet because they simply just don't have the income for it yet so we want diversification in our portfolios to lower risk and what I mean by that is you know if real estate is off and you have some shares in some commercial real estate companies well maybe healthcare is performing so you know that'll hold your portfolio up and maybe healthcare is performing at like 10 but real estate's performing at like negative two for some reason and these are all hypotheticals it would bring it back down to an average return whereas if you're investing in individual company stocks and now i'm not saying this about people who have invested in you know a diversified

portfolio of individual stocks that's a different thing but if you just go out and buy a bank because you say, well, banks are good. They're a good asset. They're pretty stable. You know, Australian banks, that's a thing that people invest in. Maybe I'll just go on my ComSec app and just buy that consistently. Well, what if that bank has a bad day? What if it just completely nosedives by 10%? You are going to feel that entire 10% drop in your portfolio as opposed to it having been weighed up by something else. So if you're investing in, you know, Spaceship, for example they give you exposure companies like apple and microsoft and adobe and they have a whole heap of different areas that they invest so that when one thing's off usually something else is

performing and we're looking for an average return when you invest just in a direct company stock you're feeling the full brunt of that one individual shares return and therefore that is just the return there's no averaging it out it is what it is so for me it's more about just making sure that we are safe and we are secure and instead of being on super rough seas where we feel every single drop and every single high we kind of just sit on calm water that trickles and you know ebbs and flows ebbs and flows it's very nice the edge of the lake beautiful day you know what i mean like yeah one of those things where diversification is not complicated to understand when you understand that it's about just having one pie with lots of little slices in it that

make up the big slice so if one little slice is you know taken away it doesn't really impact the big pie whereas if you invest in one share that big pie if someone takes a slice they take the entire thing yeah so i think it's really important to just understand the importance of having diversification in any platform and in any type of share investment strategy so we want lots of different slices i could talk about this for ages we need to do more investing podcasts georgia king oh my gosh it's my favorite topic i couldn't even you can tell you're glowing over there on the on the zoom screen it's actually concerning like honestly it is so concerning how excited i get about this stuff it's good you're passionate thank you shall we go to our

next question of course we should okay so how much should you aim to be putting away into these accounts a certain percentage of your income question mark i like how you say that georgia because you know, that grinds my gears. Okay. So I dislike, strongly dislike. I grew up with a very beautiful mother who used to tell me, Victoria, you don't hate anything. You only ever strongly dislike things. Hate is not a word we use in this family. So I don't hate things, friends. I strongly dislike basing your income on percentages because I think it's wildly unrealistic and it is just not a fair way of going about things so if I say to you Georgia like let's just live in hypothetical land again because I feel like that's a really great place to be for

examples if we earn forty thousand dollars a year for example if I then said Georgia you need to save and invest 15% of your income you might go but Victoria I have rent and bills and I've got a kid and you know I've got all these other financial goals and things that I've got to pay off and I've got this loan over here of five grand like Victoria I can't reasonably pay 15% of my income into a savings or investment portfolio each month and I go well that makes sense but then Georgia maybe in a couple of years you come to me and you say Victoria I'm earning four hundred thousand dollars and I go gee you clearly don't work for she's on the money um and you then say so I'm investing and saving 15% of my income well Georgia King that's just not enough for your

income yeah like you are not investing enough whereas on the flip side if you were earning an income of forty thousand dollars that might just be too much and be too ridiculous and put too much unnecessary pressure on yourself to achieve something so if we could just drop having a certain percentage of your income going into something and actually working out what our budget is what our cash flow is and working out what we can afford in line with our goals and values we're going to be far better off because there is not one thing wrong with not being able to afford to invest right now and I don't want people to be listening along going but Victoria I can't afford $500 a month like girl I know and it's really hard that you're in that position at

the moment and hopefully one day you will be in that position but I think we need to just drop the unnecessary pressure that we're putting on ourselves to do what other people are doing especially if we're just doing the best that we can and like if you're here listening to this podcast like you are five million steps ahead of everybody else who quote Victoria Devine is sticking their head in the sand yeah yeah well said okay so you kind of already answered the next question but it is from a New Zealand listener which um I'm here for so yeah New Zealand's my favorite place on it I've never been clean honestly it is the most delightful place in the entire world and that's coming from a Tasmanian who has come from a beautiful state in the

beginning so honestly it's stunning if you've not been to New Zealand get on over there they've also We've got kind people and they're always so nice in our group. So obviously that's a thing. Well, I mean, we've got the travel bubble now. So, you know, maybe we can do a little travel bonus episode. Actually, that's not a bad idea. Not yet, guys. Money loss, actually, just to add in here, like bonus money loss from Victoria.

I had a holiday booked to New Zealand and I had to cancel it, which is absolutely fine. And I lost the flights. Okay, that sucks. But I also have accommodation. So I guess I've got to justify a holiday to New Zealand at some point in the near future to make up for that. Oh, so your accommodation is still booked sort of thing. We got given holiday credits.

Yeah, right. So that we can still go over and still, you know, stay in the hotel that we're going to stay in. Love that. And we're meant to go in like July. So clearly that didn't happen, guys. Well, hopefully next year. Hopefully next year.

Yeah. Honestly, next year would be a stellar. This is such an earnest chat from us. I'm loving it. Are you? I am. Victoria didn't get to go skiing. Most first world problem ever.

You privileged bitch. I mean, we'll cut that out obviously. That's true. I am incredibly lucky. But back to your question, New Zealand listener. Yes. So I have just started with shares in New Zealand, but I'm only able to do a small amount per week.

I then wonder if it's even worth only doing a small amount, like $10 a week small amount. is is the reality that you need larger amounts or is it just a case of having to start somewhere ten dollars a week is an incredible amount to start with yeah like that's five hundred and twenty dollars a year or five thousand two hundred dollars over ten years that you may not have invested otherwise so I definitely wouldn't be dismissing that small number at all I say it all the time from little things big things grow and you know it starts at ten dollars and then you might have a spare $5 to add to that. And then it's 15 and then you creep up and you get, you

know, a salary increase. So you can afford $30 a week. And honestly, it's about setting the habit up and saying to yourself, this, this is a priority for me. This is something that I really want to continue and grow. So do not look at five or $10 a week as being too small. There is no such thing. It's just about kind of like putting your, you know, putting your hand up and putting your, like do I want to say dice on the board like you're just putting yourself out there to actually already be in the ring you're already in the game it is about scaling that game as opposed to just not being in it at all yeah if you weren't investing that ten dollars a week either like you are stuck in the mind frame of going one day I want to be investing like how empowering is it

to be like no I'm an investor like you're 20 fantastic like how good would it have been Georgia if someone had told us when we were 19 or 20 hey start investing I mean I probably wouldn't have listened, but that is not the point. All right. Next question here, V, which was one of my favorites. In terms of how much time you have to build, is micro-investing really worth it for a 40-year-old or am I better off going a different way? I don't think there's such thing as starting too late. And if you are, you know, investing in your 40, fantastic. Like you are starting your journey, same thing goes. You're just starting your financial education or your investment education in saying that if you are 40 and you are you know 25 years away from retirement you

have so much power still like you have you know two entire rounds of compounding to go which is crazy good like it's not a bad thing at all like you are in such a powerful position so I would recommend seeing a financial advisor if you're at that age and you know you're like not investing already or you just want some clarity because now is kind of the time when things do start to become and I don't want to be too dramatic but things do start to become critical because at 40 you've got so much power at 50 you have 50 less power than you had and at 60 you've got five years and you won't even go through a full round of compounding so it's more about going okay well I probably should see someone and financial advisors will often do a consultation like their first fact

find meeting complimentary and even if you just want to call someone and be like hey this is my situation should I be seeing you for advice is this something I should do pick up the phone have that conversation. I just think that too many people think about getting financial advice when they're that age, then don't do it, then regret it. Yeah. All right. Next question. This one came up a lot. It's probably going to be the most popular question you will answer. Can you please compare the pros and cons between Raise and Spaceship? Slash, is there any merit in having both? They are both very different platforms. And I think that it is important to understand it's not one or the other. Raise is a platform where you're able to invest in one of six different

diversified portfolios, each having varying levels of risk so that you can have a conservative, a moderately conservative, a moderate, a moderately aggressive and an aggressive portfolio. And they also have an emerald portfolio for those of you who want to invest ethically, which I saw came up a lot in the thread for today's show. What is important to understand there though, and we, Georgia are going to be doing an entire episode soon on ethical investment because it means very different things to very different people and we need to all get on the same page about it but the Emerald portfolio does cost slightly more so it is important to understand that that exists but then also a lot of people that I've had deep conversation with about this the Emerald

portfolios had things that they didn't expect to be in there like banks so I'm not saying that banks are bad i'm just saying that a lot of people assumed that an ethical portfolio wouldn't hold banks but more often than not ethical doesn't actually refer to what they invest in but rather their business practices so banks are ethical because they pay their staff well they do the right job they are you know putting their money to good causes they're donating to charity that sometimes is enough to be ethical and it's also important to understand this is me on my high horse again I feel like all I do is well I get so excited and worked up about this but in Australia it is really important to understand that quote ethical investment isn't a regulated term for

example if you go to the supermarket and you're like I would like some organic pears you know that there's a set of requirements associated with being able to use that sticker that says organic that does not exist for ethical investments and ethical and green and emerald and all of these words make us feel like things are ethical when maybe they don't actually align to our values so make sure that you're looking into that if that is something that is really important to you that's not a reflection on raise by any stretch of the imagination it's just a point that's come up that I think you guys should understand the other moving on the other distinguishing features of raise are that they do have that roundup feature. So we've spoken about this before on

the show, but it's where you invest your spare change from your coffee and you pop that towards your investments. So if you buy a $4.50 oat latte, one you're winning because actually lattes are a little bit more expensive than that, it'll round up to $5 and put that 50 cents towards your investment without you having to lift a finger. It might not sound like a lot, but if you do this every day for an entire year, which I could potentially be very guilty of because I'm very good at spending money on coffee then that's $182.50 straight into your investment without you lifting a finger. You can also invest larger sums on a regular basis too because they have the ability to you know just contribute weekly or monthly or yearly based on what you would like

to do and you can withdraw your money at any time which is quite cool. Personally I do use this platform and I use it just because I like the platform. I'm not gonna lie it's not because I you know invest massive amounts of money on it it is purely because I like playing with the platform I like using it for work and to be honest the amount of times in client meetings I whack my own raised portfolio out and put it on the table because I know it's not like it's not me going oh look how much money I have there's usually only 180 bucks or so in there but I go this is how a micro investing platform works this is how a share portfolio works on these platforms and it's just a good tool for me as a financial advisor to have access to to take you through so it doesn't feel

so overwhelming. And what's the go with fees on raise fee? So at the moment and this is what October 2020 the fees are $2.50 a month for accounts that are under $10,000 or 0.275 for balances of accounts with more than $10,000 in them. So do keep an eye on that though because if you're listening to this well into the future which I hope you are it's one of those things where these things can fluctuate over time. So again, please read your PDSs. Love it. Okay. Now, Spaceship. Talk to me about that. Look, we've seen lots of people in our community jumping over from Race to Spaceship this year, which has been quite interesting and not something I expected, but it kind of makes sense because the

main difference with Spaceship is that there aren't actually any fees until you hit $5,000, which is pretty appealing to a lot of people. But the other difference is Spaceship doesn't offer those six different portfolios that raise offers spaceship offers two different managed funds so they have the spaceship index portfolio or the spaceship universe portfolio so the spaceship spaceship is such a mouthful when you're trying to talk and be clear about it georgia king but the spaceship index portfolio is a low-cost market index fund that contains 200 of australia's biggest companies plus a handful of major companies from around the world as i said before if you stay under five grand in there there are no fees but when you surpass that fee they are 0.05 percent

per year in comparison to that the spaceship universe portfolio is personally managed by spaceship and it invests in to quote their website georgia the hundred companies of tomorrow which sounds quite promising which means it is more risky but has the potential of greater return 50 of its current portfolio currently consists of us-based companies which is quite interesting as well which one of those do you use v out of curiosity can we play a game and make you guess like guess victoria's risk profile dun dun dun you can have like the come on down music from hey hey it's saturday fun retro reference but i love it i reckon you would go with the riskier one i would i don't know why you're a thrill seeker i'm a thrill seeker i just love the

share market georgia king no um i am a spaceship universe portfolio user and the reason for that is just because I am more attuned to taking on more risk I do fully understand the risks I never invest more than I can afford and to be honest I much prefer returns like that like I'm investing because I want to see good returns and I want to create financial future for myself but I also have time on my side so as you guys know I am 29 which is nearly 30 which is quite scary but that's okay but it means that I've got 30 plus years before I even consider retiring so for me to ride that risk for a long period of time I'm actually really okay with that so that's just personally that's not you know what everybody should do it's just how it works but on that

spaceship offers a lot of information about the companies that you're investing in on its interface so you have a lot of transparency there which is really good and it also tends to invest in like tech companies which mean that you're more likely to see a higher return than you would in other apps or funds but it also means the risk is higher so please remember that when picking something don't just go with it because you're like oh that's shiny that's cool like understand what aligns with your values my friends so to make it really clear v can you rattle off the key differences between the two yeah i could i mean if you were listening i wouldn't have to do this but that's okay georgia see you with your coffee it's all good but when it comes to the minimum

investment amount spaceship requires a total of one dollar my friends while raise requires five dollars or more and then fees for spaceship don't exist until you hit five grand in your account and then fees are still quite small in my opinion and raise charges two dollars fifty a month on accounts that hold five grand or less and 0.275 on an account that has more than five grand in it so that's on fees but then to compare that the level of risk on spaceship is arguably higher because they don't have a conservative profile and raise does offer greater diversity which means that you're able to choose from the several options I mentioned before so you can tailor it if you want low or high risk or you know it it just makes more sense in terms of diversification

whereas with Spaceship you just have one of two options which to be honest if you're like me Georgia I hate going to a restaurant having six million things on the menu that I can eat it just feels overwhelming so I'm not gonna lie I do really like Spaceship it's like left or right and I'm like oh uh right I guess um so for me I I like it for that reason but in terms of investment strategy, Spaceship goes with the personal money management approach, whereas Raise puts your money into ETFs. So in terms of investment strategy, that means that Raise goes with more of a personal money management approach, whereas Raise goes into putting all of your money straight into ETFs. In terms of withdrawal, which is something that I get a lot of questions about,

like when can I pull my money out? How does that work? Both Raise and Spaceship let you sell your investment whenever. They don't charge an expert fee, which I think is really important. And with any type of investment, that is usually back in your account in three to five business days. So it's not because they're dragging their feet. It's literally because if you choose to sell your investment, they actually have to do a number of things to get it back into your account. It's not just a quick bank transfer from their bank to yours. It's they will take the shares that you own. They will sell those shares down. That money will go into their account. And then once they have that, they can transfer it to you. So it does take a little bit longer than just like transferring

money that you have from another bank. But I do want you guys to understand that that is pretty quick. Like in comparison to other asset classes, like say you've got a house, Georgia, like how do you get money from that? You've got to put it online. It probably will be up for marketing and open for home inspections. Then you'll have maybe a 90 day settlement and it'll be literally three months before that money's back in your account. That's why I quite like having shares because I know that if I ever run into trouble and I really need my money back, I can just sell down my portfolio and in about a week, I'll have all of it back in my account. It's not something we should rely on. It is just an important fact to understand about investment. And Georgia, on that final point

that I'm going to make, Raise has a roundup feature, whereas Spaceship does not. You have to set up automatic transfers in Spaceship, whereas Raise does the thing with your coffees, which is quite attractive. So I don't prefer one over the other. I think it's really important to note that like I've said before, I use both. The reason that I haven't, you know, included a whole heap of other platforms in this is purely because I just think that we need to understand it on a base level. Like if I started bringing in all of these other micro investing platforms, which you know what, they might be great. They might be exactly the same. But I think with this level of knowledge, everyone can go away and make their own decision. If you find another micro

investing platform you're interested in. I would hope that you would just go read the PDS and understand if it's a good idea for you. In saying that, I think it's really important as well to point out here that we are not sponsored by Raise or Spaceship. This is purely my opinion and Georgia's opinion. I don't want you guys to think for any stretch of the imagination that Raise or Spaceship have asked us for this. I have never even talked to either of those brands. So I think that's important there because a few of you might go oh why are you such an advocate of it no friends I'm an advocate of investing and you guys understanding what's going on and these are really really topical conversations going on in our community at the moment okay well that leads

us to our last question here Vy I actually loved this one as well and it is the perfect one to end on I think so she's written in I feel like I can regurgitate so much information about investing because of this podcast. Yes, queen. My friends and family are genuinely shocked by how much I can tell them. But even in doing so, I still don't feel confident enough about opening an account. No. How do I get the confidence to take that first step? From little things, big things grow, my friends. I think it's about not going so hard. Like don't go put your life savings in an account that makes you feel unstable. At the end of the day, you need to sleep really well at night. And I think that potentially a micro-investing platform could be a good option for you to consider

if you're looking at taking a first step without really carrying a lot of the risk. Now, I'm not saying risk in terms of, you know, oh, they're a really safe way to do it. Like they have exactly the same amount of risk as any other platform. They're an investment platform. But at the end of the day, would you be willing to lose $10? Potentially. I mean, not everyone's in that situation. But, you know, if you've gone ahead and saved up 10 grand and you're really, really passionate about investing and you really want to start, I wouldn't be putting that $10,000 straight into the share market if you genuinely wouldn't sleep well at night doing that. Start with $10 a month. See how you go. Grow it slowly. Become confident. I think it's just about taking the

first step. The first step is honestly always the hardest one. And you'll look back on this moment 12 months from now and be like, geez, why didn't I just invest more at the beginning? And I'd prefer you to be in that position than feeling overwhelmed and pulling all your money out of it two months later and then never considering investing again. Perfectly said there, V. Hopefully that helps that listener as well. But now it's over to our listener question. Hey, girls. I've been using Raise for the last year and I've loved it for the most part. Obviously, this year things took a bit of a dip, but I feel like it's really helped me gain a better understanding of how investing works. My question for you is when do you think it's time

to move from a micro-investing platform into more serious investing. I feel like I might be ready, but I'm not really sure. Thanks. Victoria, this is one that came up a lot in that Facebook thread as well. So how would you answer this? This is actually such a good question. And I feel like given you guys listened to my answers on all of the other questions, or I hope you were listening, maybe you weren't concentrating. I wouldn't. But consistent cash flow is what I would say. So if you're in a situation where you've been using your Raise platform or your Spaceship platform for the last 12 months and you're consistently investing each and every single month and you see that continuing for the foreseeable future, I would consider changing your platform because we don't want to be on micro-investing platforms forever. We do want to create, you know, long-term wealth. So I think it is really important to work out what your consistent cash flow situation looks like.

and if you've been able to commit to investing each and every single month in that case I'd probably go maybe I will start to see a financial advisor or you know start some conversations around that because at the end of the day that's the most important part because to be honest like if you're on spaceship and you've got four thousand dollars invested and you know you're not investing anything every week or every month you're just adding a ten dollars here or there I think potentially staying on that platform might be a good idea for you purely because there's no fees associated with it and once you step up to another platform you will have brokerage fees to get in and out of the market you will have platform investment fees and other fees and

costs associated with it potentially even a financial advisor cost that if you're not investing consistently don't make sense for you to engage in all right well said there V so consistent cash flow is the key, really. Hopefully that helps answer today's listener question. Yay! Hey guys, I'm 24 and in 2020, I had a money makeover and this is my money diary. Now it's time for a sneak peek into the financial lives of perfect strangers. It's time for money diaries. I started the year about 5k in debt and my friends kind of inspired me. My boyfriend was my biggest inspiration to kind of get that out of the way and so I worked really hard at snowballing the debt out and within eight months I was debt free and I just about doubled that in savings for

my car that I wanted. You may have actually seen it on the Facebook page and I just want to thank everyone for your kind comments and encouragement. It really helped me along the way. So what does she do for work? How much does she earn and how much does she have in her account? I work as a disability support worker for two different organizations just supporting people in the community and I really love it it's kind of my dream job and I earn around $39,000 a year because I'm just working casually for the two companies what I have in my bank account if you had have asked me a few months ago it would have been a lot more because I was actually saving it was my goal to save a large chunk for a new car. So right now it's gone down a fair bit but I have

the goal to now build up my savings into my accounts again. What happens to her money once it arrives in her account? When the money reaches my accounts being casual for two different companies that can fluctuate a fair bit but generally I've got a bit of a normal amount that I receive for my work. So when that reaches my account I actually have three separate banks that I'm with I have my normal comm bank where my pays arrive and then I have direct debit automatically transfer money to up bank and from up bank I then have all my normal expenses my electricity rent that kind of stuff and then I also have another account with westpac I've kind of tried to take advantage of both the bonus rates that can be generated so I do that and it's quite

easy because because I've got all my expenses coming automatically out of these accounts I hit the bonus rate and I'm sitting pretty well there. And I pretty much, my Westpac is there for my savings so that I can get that 3% interest rate. It's a bit of a mess if you think about it, but I've kind of sat down and just had everything automatically set up so I can kind of just sit back and let it do its thing. What are her investment plans? What are her attitudes towards investing? I don't currently invest, but we have been, me and my boyfriend have been talking about that someday we might look into doing it together. It was kind of funny because this week we're actually talking about micro-investing because I'm telling him all about the podcast. I'm like,

you need to listen. It's like for everybody. I was like, they talk about investing and he's like, oh, cool. And then literally the next day micro-investing was the episode. And I was like, I'm telling you. Yeah. So I think eventually we'll look into doing that together. Does she have any debts? I don't currently have any personal loans for any banks or credit cards with my car. I was a little bit under what I was required to pay, but I actually had a family member offered to loan me some money for that amount. So I'm actually just paying back them the money because that kind of meant I didn't have to worry about like account keeping fees, penalties, those kinds of

things. But I have the goal to pay that off in about 12 months. What is her best money habit? I guess my best money habit would be being aware of where my money is and where it's going. So I kind of I have like this big spreadsheet I created and I know exactly what amount goes into which account every fortnight. A couple months ago I probably had no good money habits but I really sat down and fine-tuned and like sacrificed and worked really hard to kind of get better and make myself more knowledgeable so I knew what was happening with my money. What's her worst money habit in the past it probably was trying to avoid looking at my money my bank account like I used to not even be aware when things were leaving my account I guess that's changed but my probably

worst money habit now is I find I get a bit of anxiety actually spending money now that I'm in such a habit of saving I kind of get to a point where I'm like I do have this money to spend like I've put it aside it's there but I almost feel guilty spending it and so I kind of have to work through like no like you can treat yourself you can do this I do like a good hot chocolate so that's probably where my money goes to that I don't worry too much but everything else I'm like I don't need to spend that what is her big money goal my biggest goal would be to firstly pay back this money to my family that they've loaned me which I'm super grateful for like that's put me into a really good position moving forward I guess growing my savings account some more to like a

decent buffer amount that I can lean on if I need to. Biggest goal would be like someday my partner he's got a house that he's paying off and I guess someday the big goal would be that we would get married and pay it off together kind of thing. Yeah so that would be probably the biggest goal maybe get into property a bit more together. And what grade would our 24 year old money makeover give herself? I would have said beginning of the year probably a D maybe maybe a little bit higher because it was not good but now I want to say that I'm probably a B plus maybe an A. Alrighty Victoria Devine what did you make of our 24 year old money makeover? I want to be her friend she sounded so kind and like she's a disability support worker that takes such a special person

to do that job and doing it for two different organizations I just feel like these people need to be paid more like there's just such a lapse in what they get but like please don't get me wrong this is not what this segment is about but you can just tell when people work in these industries start talking and just tell they're like glowy really nice humans that I want to be a part of so no I really liked it and I really liked that she's kind of like done an entire financial makeover there's nothing sexier than that let's be honest having gone from being in debt to like being in a situation where she feels empowered by her finances, even though she's not completely out of debt yet. That's amazing. And I'm really, really proud of her. And I just

think that that's, yeah, just so special and so nice. And I just, I really like it. What did you think, Georgia? Well, I had a couple of questions for you, but I agree with you. Like I definitely think people in those industries should be paid more and that she clearly has an amazing energy. It was lovely to listen to. But my questions for you. So she mentioned that she has three separate bank accounts it was up westpact and westpact westpac and one other one didn't catch it um is that a good idea if that's how she wants to manage her money and it makes sense i think it is a good idea some people actually need to have their money in different banks to make it hard to access it so that if you have your up bank card that you are tapping every day having maybe your

savings that you are consistently dipping into in a different bank might be you know kind of another hurdle for you to jump that makes sense in saying that um ryan john and i did give her the online course that we have done so that she can do that because we felt like maybe it wasn't a system that was working as seamlessly as it could and we spoke about cash flow and just made sure she understood how all that worked so that essentially she can make her cash flow work for her so there were some tweaks that she could do so for me it would be about making sure that she understood her weekly spend so on discretionary things like you know is she going out you know grabbing coffees like what does that add up to in comparison to like debt repayments and is she

making every single dollar that comes into her account work for her so for me that was what I guess the next steps for her were going to be and I think that the budgeting and cash flow tool that we have is actually going to be really powerful for her once she does the course obviously but in saying that I just feel like her tenacity and you know how committed she is to making her life financially powerful like I loved it and I just felt like she's got a lot to bring to the table and I cannot wait to see what she does in the next five or ten years 100% um was there anything you wanted to add about um well she mentioned that her worst is feeling anxiety about spending now that she's a bit of a savings queen was there any message that you

wanted to share there or any advice words of wisdom yeah and I think that that's actually a really important thing that you've picked up because that was why we recommended the online course and I know that that sounds really promotional but at the end of the day sometimes we just go too hard like it's all or nothing with a lot of us like we're either spenders or we're savers we can't seem to find the happy medium and I think she needed to give herself a bit of permission to go all right you know what at the end of the day like debt is debt draw a line in the sand don't judge yourself for it I'm getting out of it but that doesn't mean that you have to sacrifice everything in your life. Like I'm a very big believer in, you know, you don't have

to completely sacrifice everything to get out of debt. Like sometimes you do have to sacrifice a fair bit, but at the end of the day, I think she needs to have a little bit more leeway when it comes to spending because we don't want money to be something that invokes anxiety. Like at the end of the day, money is a tool that we use to live our lives. That is it. We should just see it as the tool that it is and deal with it effectively. If it means that we allocate some of that tool towards our self-care and ourselves to be happy, like I'm here for that. And I just think that sometimes, especially around debt, we just feel too nervy to do that or give ourselves permission to do. So this is your little reminder, if you're listening, that you need to give yourself

permission to look after yourself. And that is often just as important as getting rid of the debt if it means a couple more months being in debt but those months are really happy months probably not the best best financial advice you've ever gotten but I promise for your mental health and well-being it will absolutely be worth it yeah enjoy those hot chocolates as well all right 100% how good's a hot choccy Georgia King have you had a hot choccy with oat milk I reckon that'd be gorge I think we need to try that yeah let's look into it um all right a mocha oat milk I've tried that this is the end of the episode and i knew you'd weasel oat milk somewhere in here i just knew it just before the end of the show oat milk aside just before we head off we'd really

like to acknowledge and pay respects to australia's aboriginal and torres strait islander peoples the traditional custodians of the lands the waterways and the skies across australia we thank you for sharing and caring for the land on which we are able to learn we pay our respects to elders past and present and share our friendship and our kindness now it's time for the old boring but important stuff the advice shared on shoes on the money is general in nature and does not consider your individual circumstances shoes on the money exists purely for educational purposes and should not be relied upon to make an investment or financial decision and relax max we promise victoria divine is an authorized representative of australia pacific funds management

Propriety Limited, ABN 34132463257, AFSL 339151. I love how my voice, like, faltered halfway through that. It's beautiful. As always, big old thank you to Ryan John, who I nearly called RZA, but that is lit, so we'll cut that out. Don't cut it out. Don't cut it out. If people have made it this far into their pod,

they deserve this type of value. They deserve it. That's very true. The point is, thanks, Ryan. And if you still haven't joined our Facebook group, What are you actually doing with your life? Our community shares money tips and tricks every single day free of judgment. Search She's On The Money on Facebook and join us.

If Facebook's not your thing or you just want to hang out with us on the gram, you can find us at She's On The Money AUS. And to subtly plug it, not so subtly, I'm now on TikTok as well, at Victoria underscore Divine. Join me for my sick, sick money tips. She's gone full influencer, guys. I think we'll see you next week. Bye, friends.

Thank you for watching.