She's On The Money - Investing 101: The stock market? Please share

Episode Date: February 16, 2021

Today we tackle the sharemarket and Victoria is here for it like you wouldn’t believe. If you’re apprehensive about investing and can’t figure out if shares are the right move for you, then today’s episode is a must listen. Join us as we talk through the basics, debunk the myths and list off all the things you need to be mindful of. Plus, do pigeons lay eggs?Also, as promised by Victoria, here is the link to the brilliant! Money Smart website at https://moneysmart.gov.au/ so calculate away!Joining you this week you’ve got millennial wizard Victoria Devine and everybody’s favourite human, Georgia King.Do you love the podcast SICK and want more SOTM? Course ya 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 https://www.shesonthemoney.com.au/newsletter the written recap of the pod's key takeaways, including some bonus bits you won't want to miss.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!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. Part three of our investment series is here and today we're chatting all things shares, including how they work, what you need to be mindful of, and of course, how to get started. My name is Georgia King, and joining me, as always, is a very excited Melbourne-based financial advisor, Victoria Devine. Hello, Victoria.

I like that you know I'm excited already. I can see it. Yeah, it's just beaming, honestly. I'm so excited about this episode. Now, it's pretty safe to say, V, that you're probably not the only one that's excited for this episode. It is a highly anticipated one. shares are pretty much the most discussed topic in our facebook community and it's still a space

that many of us do find confusing cough george um so with this in mind can you give our listeners a little taste of what they'll take away from today's episode look g there's absolutely no surprises here this is an episode that i am i could say wildly passionate about i feel like that is like one of my taglines i didn't realize yeah i didn't realize i had them but we do you're going to walk away from this episode with an overarching understanding of one, how a share works, obvious, two, how to get started and we'll also cover all the things that you need to be wary of. If you're freaking out because investing in shares is still a pretty foreign concept to you then we've absolutely got you. This is the very stripped back, very easy to understand chat but

there is a lot to get to G. So lay your questions on me, let's go friend. Yeah, let's get straight into it. First up here V, I want you to take it back to basics, strip it back, how do shares and the share market work and can you confirm that it is not in fact like gambling? I can indeed confirm that it is nothing like gambling. So the share market is just that. It's a market and that is a place where you are able to buy and sell shares. A share is a small stake in a company so you are buying into that company as a shareholder. The prices in the market are determined by supply and demand and you would have seen that recently with things like Bitcoin absolutely surging. It's not increasing in value because it's more valuable it's increasing because more people are purchasing it so it's kind

of like a stacks on mentality sometimes but the reason supply and demand fluctuates so much is sometimes companies do better and you want in or sometimes you want to sell a company because they might have had a really good year and you just think that that's the right time so in the last 12 months we've seen companies like zoom and hand sanitizer companies absolutely yeah exactly absolutely fly up the share market and that's because their stock has gained value because its price has increased because it is in more demand and they are selling more product and they are therefore a more attractive company to purchase so the question here is why do companies sell shares the reason companies sell shares is growth essentially requires financial investment

and to do that it needs to come from somewhere so they need to find money to grow to invest in other things and they'll need a significant amount of capital which then is going to allow them to grow as a team, you know, hire, build factories, whatever they require. So at the end of the day, the more money they have invested into their company, i.e. you purchasing it, the further they can go. It's kind of cool when you start to think that by purchasing a company, like you're helping them create a better company and that's why you're purchasing, right? Like you go and purchase Zoom shares because you decide that they're a good company that will have good growth and really good outcomes for you as a shareholder so you want to get on board give them some money

at the start to put towards that growth so that you can be a part of the better outcome when you bought for a cheaper price yeah and then you get a little bit of that cash back because you're a part of that company exactly you're a mini business owner yeah i mean you don't have any yeah very mini but you don't have any rights i'm sorry you don't get to vote on the board or anything like that because you definitely don't have enough of it but at the end of the day that that's pretty much what you are you've bought into this company therefore you're a tiny owner of that asset I like that yeah I own so many businesses guys so wild I'm an entrepreneur investing is a long-term game and hikes and dips are all a part of that journey so keep that in

mind most of the super rich let's be honest generally have a majority of their wealth invested in stocks and I think that that is also worthy of consideration because wealth creates wealth is something that always is said but like where did that start how does that work and that is where our magic friend compound interest comes to play we'll talk about them a little bit later it's definitely not like gambling going back to your question but investing comes with risks and we are going to cover these later on in the pod generally speaking though the higher the risk of the asset that you're purchasing i.e bitcoin the higher the reward obvious given the current markets but also that risk can absolutely be flipped we could wake up tomorrow and bitcoin could be

through the floor instead i woke up the other day and i was looking at shares and i don't invest in this just fyi i do keep a keen eye on it though because i am very interested in it i just don't want to put my money there because i just don't feel comfortable doing so let's be honest um and i was looking at the share price and it went crazy the other day i think i had like a 30 increase in one day insane like obviously we're talking about it now retrospectively and going and purchasing it now would not help you in the slightest have any level of your face sorry it's gone up to sixty thousand dollars per bitcoin yes yeah but when we did our bitcoin episode which was like two weeks ago it was like 43 yeah yeah 42 what the devil yeah exactly exactly but it's one of

those things where this the exact opposite could have happened and the reason that has actually happened georgia i like to just touch on bitcoin for a little bit because i think you guys are really interested in it is because tesla purchased bitcoin tesla bought 1.5 billion dollars worth of bitcoin jeez louise so everybody in the market saw that and they were like oh my gosh well if tesla is buying it it must be really good but also because tesla put 1.5 billion dollars into that that's obviously a very significant amount of money so that shot the share price up in itself but now everybody else is seeing it because tesla have also come out and said in the near future we'll be accepting bitcoin as a as a payment for our cars wow cool right that is cool like as in

just interesting to follow like i'm so pervy on this stuff because i want to know what's happening i'm not saying it's a good asset to buy but let's open these conversations up and start having more conversations about the intricacies of investing and well why did that happen and how did that happen and that goes back to what we're talking about before on supply and demand george we have seen demand increase because tesla has purchased it and they've clearly decreased the supply because they've taken out 1.5 billion dollars worth of that asset and therefore other people are saying it and going wow i want to be on this train but the important thing to understand there is this is the emotional journey of investment like what's changed about bitcoin not one thing except for the

fact other people are showing an interest in it it's like back in high school when the cool girl cut out holes in her t-shirt like on me girls and everybody else started doing it yeah like there was no reason for that it's like stacks on like we just gotta be really careful because it's an emotional journey and when you get too invested in an emotional journey you kind of have blinkers on you don't see the bigger picture of what else is going on you're too involved with it yeah exactly and that's where you know people actually get into trouble with the share market and that's where things do start to feel a little bit like emily okay so bitcoin aside regular shares less bitcoiny cryptocurrency yeah no crazy returns here we are about consistency at she's on the money

what does the usual return on investing in the share market look like then it's pretty sexy too Georgia. I'm not going to lie but really important to note here as a qualified and registered financial advisor past performance is not an accurate indication of future performance but historically over the last 100 years we've seen an average return of about 10% George. That's crazy and it's also worthy of just nutting out exactly what this looks like over the last 30 years. So the most recent index chart by Vanguard which I really like and I'm actually going to link into the Facebook group when this episode drops because it's actually such a great resource that really breaks down the returns and shows you not only the returns but what happened in politics and

like it's really it's really detailed and if you sit down and stare at it for long enough it actually starts to make sense but it's a really good overview but over the last 30 years Georgia us shares have performed at 10.3 percent per annum australian shares have returned at 8.9 percent per annum listed property so that is where you buy property or real estate on the asx like as a share not we're not talking going and buying your investment property 7.8 percent so still pretty good not bad australian bonds 7.7 percent so quite good i think that's pretty interesting given we always talk about how that's a more conservative asset definitely pretty good return my friends like and this is absolutely no promises it's just about you understanding what that is and

obviously when I talk about assets I would never base my assumptions on these numbers the reason is because I'd never want you to have an expectation that ultimately doesn't get met I'd always prefer to like under assume and over perform yes and put ourselves in a position where we were trying to meet this expectation that might not happen just based on timing or the share market or what's going on politically so for me i actually always use the number five percent as a share market return and now you can see well actually victoria like it performs better than that like yeah that's the sexy part but back to my chart international shares performed at 7.3 percent and our friend cash performed at 5.1 percent good on you kind of kind of cool right

an average cpi which is like inflation is 2.4 percent per annum over the last 30 years pretty cool right really interesting numbers so i'm not gonna keep going on about that because like stats girl over here might get a little bit mad at me because i'm taking her job but at the end of the day if i do my whiz bang maths and we have a bit of a think about this because one of my favorite things about being able to talk to you guys about money is to give you tangible examples of what that could actually look like and I'll use an example from a DM I got the other day of someone saying hey I am using micro investing platforms looking to make the next step but not really sure what's going on got five grand in my micro investing platform and I've got myself to a

point where I'm investing a thousand dollars a month obviously that's not achievable for everyone because we're just talking about an example and I want to just show you how compound interest works so if we chuck that into a compound interest calculator which we will link in the show notes as well because the moneysmart.gov website I've said this before I adore it is government run it is all legit it is not a financial advisor you know overlaying their opinions on you it's just a compound interest calculator and we like that but if you initially had your five grand and you're like okay I want to go in the to the next steps I want to go from investing in a micro investing platform to having my own share portfolio which my friends is not as hard as you might think

it is and you're doing that thousand dollars a month till retirement you'll end up with a very sexy 1.5 million dollars oh so your initial deposit five grand you're depositing a thousand dollars a month obviously that's pretty big over that entire period of time so till retirement which i've assumed is 40 years away given current market you would have saved 480 000 like if you just put that into a savings account obviously we need to take into account cpi or indexation because the cost of goods and services increases over time so therefore that's going backwards at 2.4 percent on average over the last 30 years based on the conversation we're just having so it's not actually going to be worth that so we need to understand that as well and overlay

that assumption but we're just talking basic numbers we're not taking into consideration tax here either which you will have to pay if you get to that point but you'll make a million dollars essentially from investing over the long term that's a million dollars of I want to call it free money but it's like free money that you're getting because you have put in the long yards and actually invested and stuck with it it's a million dollars you didn't have 40 years prior how cool is that well you've doubled what you would have if you just saved it and then and then some exactly and the sexy part about this and i keep saying sexy on this episode is sorry not me because we're talking about investing i know i'm just so excited about it it is my jam but

five percent of 1.5 million dollars invested because that's the cool part right you don't get to the end game of investing and say oh my gosh well now i have 1.5 million dollars i can start spending it like friends we don't start spending that money at all it will stay invested and those dividends that you are paid and the returns that you get each and every single year that was compound interest building your portfolio, you're now taking as your salary. So you now take that money as your income

and 5% of $1.5 million, obviously we're being super conservative with those numbers, Georgia, that's $75,000 a year. Ballin'. Ballin'. Ballin'. Absolutely ballin'. Obviously you're going to have to pay tax on that,

that marginal tax rate, all of that fun stuff and it's definitely not something that I would say okay no problems don't don't worry about tax or anything like that it's also probably really worthy of pointing out the superannuation needs to be taken into consideration love super you're already investing check out what's in your super already because it has the same power that this investing has god every time we talk about investing I'm just like oh sounds like it's the best why aren't you doing it is I'm so excited about it can you tell but that's it and I just wanted to put that into your your mind you're going to retire at what 65 going to live for hopefully 20 30 years that's not enough money

I think people get really hung up on and this is going to be a really long episode I do apologize friends because I'm just like so on top of this stuff but a thousand dollars a month not achievable for you but what does that look like holistically including your superannuation your savings your future family home like you might not be in a position where you actually need a $75,000 income like let's work out what you actually need to survive because a lot of people the Australian dream to buy property so at some point most of us will go all right well I really want to buy property definitely not something that we have to do I feel like I'm seeing a change of people saying well actually I don't want to own property I just want to invest in shares and have the

freedom yes queens I love that for us but I want you to have the option but if you have put together a little financial strategy for yourself you've purchased a home and by the time that you retire that's completely paid off you don't need to factor in mortgage repayments or rent like so your income could be less and you could be really comfortable on that so that's the end of my rant can you ask me another question that was good keep on absolutely so this is a little bit of a side step but i was looking at a couple of studies in prep for today's episode we know i love a stat you are on the stat scale here uh unsurprisingly it was found that australian women on the whole are investing less than men what is your take on why this is and do you see that changing yeah look

i know the stat that you're referring to george that was an article from a company called first links that we were talking about earlier this week and their research found and i'm gonna outline this because i'm not sure how accurate this is just because i like to think about the stats and doesn't make sense to me so they found that women only make up 18 of the 750 000 people who are active online investors in australia so i'm not sure what that looks like because australia has a population of around 25 million people and from what i understand that doesn't sound like nearly enough people investing given we all technically are investors in our superannuation so i don't know what that means maybe active online investors actually means people trading on the asx or

something that may be buying direct shares whereas it might not be taking into consideration people using micro investing platforms or etfs or whatever that is okay does that make sense so like just disclaimer but at the same time if and this is me being a little bit optimistic guys if 18 percent of 750 000 people are women that is a total of 135 people georgia that's the entire number of our facebook group can you imagine if we then got everybody on our facebook group investing we could double the amount of female investors in australia okay that's me being that's why i wanted this stat to kind of be true but at the same time i i don't know how skeptical but yeah you're right women are less likely to invest in shares because we are more conservative we don't

take the leap we don't have the education that we require and more often than not we feel like we need to know a subject back to front before we even even entertain the idea of doing it whereas guys are yeah i'll give that a crack don't really know but my mate's doing it so must be good we don't do that and i see that in you georgia because you are still not ready to take that leap and that is totally okay and i think that that's something that we also need to disclaim if you're not investing in shares we're not here to tell you that you're doing the wrong thing by not we're just saying, hey, let's keep the conversation going, keep you educated, keep you on the right journey, because the right time for you to invest personally is not right now. It's when you are

comfortable and ready. Gee, I also do think that the tide is kind of turning because of how many women in our community are talking about shares and investing. And, you know, there's so many other communities online as well talking about it. And I feel like it's 2021. We have access to so much research we have the ability to do so many things ourselves 30 years ago we would not have had access to so hopefully that stat is going to change dramatically in the next couple of years and we are going to track it yeah for sure moving on to the next question what have you got for me okay so how do we actually get started you mentioned before micro investing and we do talk about that a lot as a great place to start if you are still a bit hesitant but also if you just have

some money you want to tuck away and do a little bit more with it than it just being in your savings what would you recommend beyond that as a good way to start yeah and i think that this is such a good question because we can educate ourselves but uh where do you start and when you start researching you get a bit of analysis paralysis like there are so many options and so many times people message us and say okay well what etf should i buy i can't legally give you that advice and even if i could i would have to take into consideration your risk profile your personal situation your goals like what you want to achieve over the long term what the final outcome is before even considering that maybe you've got personal values and want to ethically

invest so i think it's really important for you to understand that it is not necessarily about which etf you pick or which asset you pick it's about well what are your values then start looking for an asset that aligns to your values not the opposite because go out there there's literally thousands of assets in australia that you can pick from but you can make it easier for yourself by going okay cool what criteria do i want my future assets to meet before i even start looking at them so that you can knock heaps off before even starting the search yeah so for me that's what i would do micro investing in my humble opinion is actually a really great place to start and i say this because it gives you the ability to dip your toes in the water. You're not going and buying

a share, you're not going and you know putting all your money and all your hard-earned savings into a well-diversified portfolio that can genuinely feel really overwhelming. With micro-investing you can literally start with a dollar. We did a double episode on micro-investing back in season three Georgia so if you want to know more about that space and you're ready to move on to the share market at that scale definitely go have a look at them but if you want to grow from a micro investing platform we get so many messages Georgia and you would absolutely be privy to these Victoria I've been investing and I've been doing something with a micro investing platform for a while now what is the next step that's probably our number one question I would say yep the next

step is obviously to get some advice but catch 22 financial advice is really expensive and this really upsets me so the next step would obviously be to work out where you're at with your finances go see a financial advisor have a chat about that but i'm not meant to be sharing this yet and i can see you looking at me being like b what are you doing um i am actually working on a solution that would sit in the middle so you don't have to pay for a financial advisor but you can go and actually get advice that is aligned to your risk profile that has a really good portfolio aligned to your values aligned to what you want to do that will be automatically rebalanced do you know what that means it means that there would be a fund manager in the background making decisions about your

portfolio so that you know if something's performing really good they might take some off the table and they're like making decisions about your portfolio so that you can be empowered and actually always say well my portfolio is always well diversified because i have somebody working on yeah working with me to do that and it didn't cost you five grand to do that yeah anyway you've teased us though so when are we talking when's that going to be released ish march april oh yeah it's coming soon 2021 good lord all right it will be a very beautiful platform and I promise you'll be able to see all your investments in one place. Fabulous.

The dream Georgia King. So in the meantime, what are the other steps we're taking? The other steps we are taking is looking at our finances, seeing where we are at. I want you to write down what you own, what you owe, what you earn and what you spend. I want you to understand all of that. You need to understand your income and your expenses

so you can really clearly see your financial position and how much you actually want to invest monthly. The key to investing is consistency. we will create wealth if we invest consistently and always spend less than we are earning like that should just be one podcast 30 seconds of me saying spend less than you earn invest all the time full stop end of story wealth creation stunning no i guess that's the end of the podcast guys but also once we know what we're working with understand your risk profile i cannot tell you this more times than i have but understanding what a risk profile is and being

able to gauge where to place your money within the market how much risk you want to take on not because you're a low income earner or edging close to retirement but it's actually one of those things that your risk profile is a reflection of your values and what you're going to be comfortable with and when it comes to investing if you cannot sleep at night because of the assets you've chosen my friend you've chosen the wrong assets I think it's about really understanding the risk profile which is essentially your ability to take on risk but I'm doing an entire episode on how to understand your risk profile soon what that actually means and how we do it but then it's also goal setting how long you're investing for what are your other goals are you

saving for a home are you you know do you have other personal expenses coming up in the next three to five years that we need to take into consideration you know if you're a uni student and you're listening to this or you are a low income earner that just goes victoria this sounds so great but I can't afford it my friend I understand fully I get it I really do it is not about having to invest if you are a uni student and you are just scraping by you are living week to week that's okay like just knowing that this is something you want to do in the future is absolutely putting you at an advantage and putting you ahead of the rest sometimes you just need to get by sometimes you have two kids and a $45,000 income and you literally feel like

everything is a pinch and things like this put extra pressure on you because you go oh my gosh I listened to she's on the money and I left feeling not empowered because I can't invest in shares what about my future like my friend you will be okay there will be a plan that works for you you do not have to be investing if it doesn't work for your personal situation no but that doesn't mean it's not worth understanding 100% understanding and education is our key to future success 100 all right so moving on v how do we choose where to invest our money is it a matter of like pulling up the annual report of the businesses that we're thinking of investing in or do we go off uncle john's recommendation and just that he told you at christmas after a few too many

baby teenies yeah he sounds like a really good person yeah he's good yeah there's a reason that his advice is absolutely flawless i'm actually hiring him next week um if you are me you do read the annual reports of companies and deep dive into what people online are saying about them and how they are performing and the latest ceo that they i get into rabbit warrens yeah but you can go and buy shares and you can look at things like well diversified etfs where somebody else is making that decision for you you can go into a managed fund where you literally have a fund manager which is a little bit more expensive than an ETF because of how much more active it is than an ETF but there are so many great places to start but a really safe option when you're

starting out is to look at what we call blue chip companies. So blue chip companies are stable reputable companies who have proven themselves to be very consistently historically and therefore carry a lower risk. So you can find these just by googling S&P ASX 50 or S&P 200 which is going to give you a list of either the top 50 blue chip companies or the top 200 companies just so that you can understand who they are what's the next can you give me an example would it be like woolworths or something it would be uh nab a and z it would be telstra so just like those really reliable really reliable companies that have good track records in australia that you can go and look at their past performance as much as past performance is absolutely not a reliable predictor

of future performance i sound like a television reel i hate that you know like the yeah when they speed it up at the end they speed it up at the end their past performance is not a reliable predictor of future performance um for me past performance isn't but like i want to see that they've proven themselves and i want to see that as a business they're growing and they are building year on year the important thing here is to understand your values because you might not want to invest in mining companies and an etf might have that in that so you've got to then go find something that doesn't include that asset that you might not want to invest in. It's also not a bad idea to invest in industries that you know really well. So for me, that's going to help

you feel safer at night. It's going to help you sleep better because it might be easier to stay on companies that are thriving because you're already interested in that industry. Have a look at the ASX. That is a really good resource. That's the Australian Stock Exchange, which you can just Google and they have an outline of all the sectors you could invest in and jot down some companies that stand out to you and then you could comb through them see how they're tracking etc but this is all if you want to be a little bit more active very hands-on very hands-on and to be honest it is really hard so at the start I find that people are really motivated they're like I'm going to put together a really well diversified portfolio I'm going to research what percentages

I need in my portfolio great that's fantastic how are you maintaining that it's like you might put it together today the stock market changes every single day yeah how often are you going to be keeping an eye on it are you going to be are you going to be like a financial advisor and going and looking at each and every single day and actually making decisions on your portfolio about when to sell some shares to rebalance your portfolio are you going to be on top of it for the rest of your life like you are meant to be maybe not then maybe have a look at something that helps you diversify a little bit better or get some advice yeah at the end of the day I obviously am a financial advisor and if you have a large sum of money like we know that people who do not have

financial advisors and just do it themselves yeah so it's worth that investment even though it may be a little bit of a it is like it's an investment so yes at the end of the day you are putting your money into something and you are paying someone to make those decisions because you are anticipating better returns than you could get on your own like we're not just saying oh go pay a financial advisor because I'm trying to help the industry get more money that is absolutely not it financial advisors work really hard to make sure that your portfolio is performing really well is aligned to your goals your values is well diversified and going to help you get to retirement which at the end of the day that's what we're all trying to do if you distill it down we're all getting older

we all need to make sure that we're looking after future you and the whole goal of financial advice is to get you to a safe and comfortable retirement as unsexy as that sounds so how regularly should we be topping up our investment folio if you like is that something is that advice that would come from our advisor if we did go down that line yeah what are we doing consistency is key here so to be more specific I would say that monthly contributions if you can afford them are great but lots of people do tend to contribute just when they get paid so it goes straight into their share portfolio rather than their savings and it's all automated often that's a better way to do it as well because you don't feel the hit as much but the term that I want you to understand here is called dollar cost

averaging so many sexy terms in finance right and that is a simple strategy of making regular incremental investments over a long period of time as opposed to lump sum investment now the reason we would want to do that is because turns out we are not psychic georgia and we can't predict the market if we could i would have invested in bitcoin because i would have been able to know when to get in and when to get out but turns out we don't know how to do that so our next best option is dollar cost averaging and that means putting our money into the market regularly so that we get exposure to the ups and downs consistently instead of putting all our money in at the start of January and then watching the market for the rest of the year go up and down

and we don't get exposure to those market fluctuations so a good example is we might have one dollar I always bring it down to like really low levels because I feel like it's better it's easier to understand right so you invest one dollar today and you get 10 shares and you go great fantastic but then tomorrow you also invest a dollar but the market's down so shares are actually worth more so you might get 15 shares and I feel like that example helps you understand that you might on some days get more for your money and some days it might be up might you know things might be more expensive so you might get seven shares but by doing that you are actually averaging your portfolio and what you're putting into the market in line with the market so that you're

getting those fluctuations reflected in your portfolio so on average you'll end up in a better position than having just purchased everything on the one day and as a financial advisor even when clients come to me so georgia as you would know i do deal with large sum investment in my financial advice business seller a lot of clients have either really large sums of money or inheritance and it's essentially my specialist area i would say but i've never taken a client's you know lump some investment of a hundred thousand dollars or three hundred thousand dollars and put it into the market on one day okay that's crazy talk like even if you've got the money you don't do that you drip it in so that you make sure that you're making use of dollar cost averaging

see i didn't know that until right now so it's literally the most effective when markets on a downward trend so that kind of makes sense because you're always making use of getting more for your money but in a rising market which by the way we call a bull market bull bull market like cow cow like bull market because it's aggressive going up and that's why the bull have you seen that statue which one you wouldn't have hang on am i the only one that googles like what wall street looks like oh no i feel like i've seen it on the wolf of wall street yeah right the bull yeah yeah because bull market right anyway a dollar cost averaging in a rising market so or what what we're talking amount a bull market a dollar cost averaging strategy is not as effective but at the same

time if we are investing over the long term it'll all average out and it won't matter that much so at the end of the day dollar cost averaging really important to understand because that's why we want to invest consistently it's not me going oh yeah just invest consistently it's a good idea like there's actual strategy and logic behind it wonderful okay i feel like we've touched on this next question recently but i'm going to ask you again anyway how do we stay on top of our shares there are a number of different ways to a spreadsheet you could have a spreadsheet that requires a lot of manual implementation of copying and pasting on a daily basis or you could get a really fancy one that you link up that just does it automatically cannot recommend though because

they break often oh there are apps out there that make life much easier like invest smart stocklight and share site reader which can help you keep an eye and on everything and track it if you are with a financial advisor they will have their own industry platform that is usually wholesale like as i was saying the other week i have one but you can't access it unless you have a financial advisor i am sorry but you can also track how your investments are going by subscribing to asic and you'll get regular updates on what companies are doing if you're invested in them or if they lodge new information which I think is really important but most platforms will give you a login so that you can see what you're investing in you don't just put your money into something

and then have no visibility like whatever platform you purchase your asset on you will be able to see your asset on but you won't be able to see every single asset you have like there isn't one place that is going to pull your micro investing platforms together and then your you know your ETF if you've purchased it directly and then you know a couple of shares like that's not going to happen unless you have a financial advisor who has a wholesale platform but in the future turns out i'm working on yes a little something coming something something for my friends okay now we have gone through so much already i am learning lots i feel like this is such a long it is it's a mighty long ep i'm sorry i'm sorry but the good news is we're only halfway through no no we'll

have to speed it up maybe we break this into another episode because this is wild yeah it is wild uh before we move on to the second part of today's show though guys here's a quick little word from the partners of today's show now if you guys are loving this chat as much as victoria divine is and you need a little more it is a lot uh and you're feeling like you do need a little more shoes on the money in your life then please don't forget to join our glorious facebook group it's an incredibly inclusive and open-minded community packed full with insightful money conversations that we're having literally every day we're also on instagram tiktok youtube we are newsletter just plug plug plug you say the newsletter really flippantly but like that's

arguably one of my favorite pieces of content that she's on the money puts out each and every single week like it is wild i never know what to expect with it if you aren't on the newsletter yet i would absolutely subscribe i'll actually put the link in our show notes this week so that you can join it because i feel like we've dropped that off recently but at the end of the day george writes an epic friday rap of what's happened in our community what's happened on the pods what is going on with us and it's always incredibly sassy and satirical so jump on that yeah they're pretty loose guys now let's get back into the show so v what if we're in debt or don't have an emergency fund should we be investing yeah really bad idea to be investing if you're in debt i'm gonna be

really blunt about that and say if you're in debt obviously we're not talking about hex debt or your mortgage here if you are in personal debt have a credit card have after pay like your priority is not buying shares, my friend, because you need to pay down your debt first. That is the most important thing because the longer that you leave your debt unpaid, the more interest you're accruing, the more you need to pay off and the more backwards you're going financially. So I'm just being blunt, pay off your debt, my friend, if you've got personal debt before you even consider starting to invest, which is a question I get all the time, but I want it to become a no-brainer for you guys. You've got personal debt, you are not investing. Additionally, if you do not have

an emergency fund set aside for any things that pop up. I want that to be your priority before you invest as well because at the end of the day if something does pop up and you are forced into selling an investment that is a terrible thing to happen to you. Obviously we're really grateful that we can sell that investment but I don't want you to be forced into that. So work out what your emergency fund needs to be to set aside to make you feel safe and comfortable and cover anything then go from there then you can start investing so what i want you to do is start building up an emergency fund even if you have some personal debt put that to the side so that you can feel financial freedom even though you've got debt yeah great advice yeah that was good

all righty v diversification is a big part of what we talk about at cheese on the money how do we actually make sure our share folio is diversified diversification is a massive part of what we talk about at She's On The Money because it is a tool that we use. So it is a tool because it helps us lower our risk and lowering our risk when investing is obviously a very good idea because the less risk that we carry the more consistent we can be in creating wealth for the long term. So if we have a diverse share portfolio with shares from lots of different industries rather than just one company or in one sector the risk of essentially losing a lot of money in one day because the value of our portfolio would decrease is greatly reduced and that happens

because we're not putting all our eggs in one basket and i say that all the time but it's the best way to visualize it makes the most sense like if you had a basket and it was full of eggs and you dropped it all your eggs would break but if you had lots of baskets with lots of different eggs in it maybe you got duck eggs maybe you got you know some chicken eggs maybe you have pigeon eggs i don't know do they they would have it i'm sure they do that of course oh my god did i just say that you did you did you're keeping it but you've got lots of different eggs in lots of different baskets and you drop one well it's all good you've got a whole heap of baskets and uh maybe that egg will be fixed soon and there'll be two eggs in there when you pick it up again

stunning from you it's not a good example but i hope you get it it's a good analogy it'll do it's loose yeah i feel like this episode is really starting to dwindle it's been going for too long uh now ashlyn in our facebook group asked a question about investing while you have a mortgage which funnily enough victoria divine i know you're doing at the moment i am i'm fresh to this so well what do you how do you balance it is it mortgage first and then it's both so for me because interest rates are so low at the moment and uh i have a number two in front of my mortgage kind of cool like what do you mean as in i have a i have like an interest rate that starts with two oh so like i'm paying oh gotcha three percent yeah okay so like i'm

paying less than three percent on my mortgage right now and because i'm anticipating higher returns in my share market i'm paying down debt but i'm also prioritizing investment and the way i've worked that out is just like okay making sure that i'm obviously paying off my mortgage in a reasonable period of time but i'm also putting additional funds into a share portfolio instead of smashing down my mortgage which a lot of people are planning to do and the reason i'm doing that is because I did the numbers and worked out that I'll be in in 30 years when my mortgage ends which is a really long time away when my mortgage ends I'll be in a better financial position having spent that entire 30 years to pay off my mortgage and invest in shares than had I

you know broken it down and paid it off earlier because the interest rates are so good at the moment now if the interest rates change I need to redo the numbers because the only reason this is going to work for me right now is because my money that i have borrowed in my mortgage is so cheap in comparison to the returns i'll get in the share market whereas if you know they were like for like i would then be making a more conservative decision but that is personal that is the way i am doing it and that is why i'm answering it that way because i cannot tell you personally what to do but i would definitely check out what your plan is in the future so go back to that money smart calculator which I obviously adore and put in what you might be putting as additional payments

towards your mortgage as an investment and see what that would look like over the life of your loan do you end up in a better financial position by investing it or do you end up in a better financial position by paying down your mortgage only you can make that decision for you love well said uh okay V we're getting to the tail end but before we wrap for today can you please round us out with a word of warning because we've heard all of the marvelous things about investing but what are the biggest mistakes you see people making i think one of the biggest mistakes is people being really scared of investing and saying that they'll just start later but more seriously people not diversifying their portfolio buying shares or buying assets that they see as trendy

or feel are safe because well everybody's doing it yes but everybody is buying bitcoin everybody is getting into crypto like it must be okay right that does not mean it is okay that just means that stacks on mentality has happened and that's how bullying happens and we don't like that so at the end of the day I think it's about making a decision that is in line with your risk profile that is in line with your values and your goals I feel like a broken record when I say that but I'm going to keep saying it and I'm not sorry about it but I also think something that people do wrong and this really grinds my gears because I feel like I try so hard to tell you that investment is a long-term game is they expect too much too soon and they pull out their money because they're like well

I started investing in my micro investing platform in June last year and then it went down so I pulled it out in September and I'm like well of course it did because you're just feeling the market fluctuations and you haven't written it out for the minimum five years that I'm telling you to invest for so therefore you've never seen the benefits whereas on the opposite some people can start investing and just by chance they started investing at a really good time in the share market and they saw really great returns really quickly and then they come to expect those returns over the life of their investment when that's just not true either so I think you really need to understand the market before investing because you'll see it and go hold on I put $50 in there

and now it's worth 30. It's gone. What? Why is it gone? And you go, well, that's because you don't understand what's going on. Yeah, that's natural. At the end of the day, you are only ever losing money in the share market if you sell your shares at a lesser value.

What is written on paper, what is showing up in your app, is the valuation, not what you own. You do not own less shares because they're valued at less. You still own the same amount of shares. They're just valued at less today. And hopefully, because you've picked well, have really good diversification over time, they will be worth more and they will increase in value my goodness well there has been so much to

take in from today's episode it might be worth listening to it a couple of times if you can handle listening to vng sorry sorry but in a nutshell my jokes don't get funnier nor do mine uh in a nutshell investing in shares yields a pretty solid return about five percent is what we're saying is a safe assumption but you know let's base our lives off that because then we won't find ourselves disappointed exactly right we also need to be establishing our risk profiles before we get started and figuring out those goals and of course diversification is king and also the time to start is pretty much today if you are if you're ready and if you're ready and if we look at the statistics because stats girl across the table from me she loves this no one has ever lost

in the share market when they have invested for 30 years or more not one person nobody look at the stats you've like if you are able to commit to the long term historically no one has ever lost and i think that's really important to take away yeah that's a great step to our end today's show v before we head off we'd 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 all across australia we thank you for sharing and for caring on the land which we are able to learn we pay our respects to elders past and present and we share our friendship and our kindness and please remember everyone that the advice shared on she is on the money

is general in nature and does not consider your individual circumstances she is on the money exists purely for educational purposes and should not be relied upon to make an investment or a financial decision did you know that we don't say entertainment purposes yeah i was actually going to throw that in there but i was like do we we need to read this we're not funny don't we funny out you you can read it however you want with it just let people know i'm legit she's legit and that is what i'm about to tell you now we promise victoria divine is an authorized representative of australia pacific funds management propriety limited abn 34 132 463 257 afsl 339 151 and a big thank you to ryan and beck the producer magicians for putting it all together and a big thank you

to jessica richie uh for just keeping our lives together i guess are you sick of saying the numbers do people actually even listen this far into our pod do you reckon if you do let us know if you do let us know but if you do and you think you could do a better job of wrapping the show than georgia king i'm gonna drop the exact script in our show bio so our listeners can read the numbers and do a sassier job than we do and we're just gonna add that to the pod each week see you next week guys see you guys Thank you.