She's On The Money - Lights! Camera! Investing Action Plan!

Episode Date: August 6, 2024

Ready to take control of your financial future? We got you, with our step-by-step action plan to help you confidently start investing. Perfect for newbies and those looking to fine-tune their approach, tune in to learn practical tips and gain the confidence you need to start growing your wealth. Let’s get your money working for you! Acknowledgement of Country By Natarsha Bamblett aka Queen Acknowledgements. 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. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs.  Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708,  AFSL - 451289.See omnystudio.com/listener for privacy information.

Hello, my name is Natasha Nabanunga-Bamblett. I'm a proud Yorta Yorta, Kernai, Wolperi and Awadjeri woman. And before we get started on She's on the Money podcast, I would like to acknowledge the traditional custodians of the land of which this podcast is recorded on Awadjeri country, acknowledging the elders, the ancestors and the next generation coming through. As this podcast is about connecting, empowering, knowledge sharing and the storytelling of you to make a difference for today and lasting impact for tomorrow. Let's get into it. 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. We are in the new financial year and if you didn't get cracking on your investment plan in January, it is not too late. Now is the perfect time to get started. I love this episode. I am so excited to do it. We obviously adore talking investing at She's On The Money. And personally, I always think it's a good time to be talking about this topic. That's why today, Bec, you and I are going to be giving our little squad some steps to get your investment plan back on track. Because I feel like so many of us set really big goals for January, then we didn't do them, and then it was February. And I don't know where the year is going,

but I know that so many of you want to be investing. Amazing well I may not have started my journey yet but I do know that we need to be aligning. That's a lie. I kind of do I don't know if I can I guess I guess I could count it I literally have $25 in shares right now. Are you an investor? Yeah I guess so. Yes or no? So does that mean I started? You started. Well I don't need this episode then count me out. All right straight in there Finn let's go I reckon I could go a coffee instead of this episode. Let's do it. All right well actually let's do the episode. everyone else. I worked really hard on this. So what's step one? All right. So step one is defining your investment goals. Again, not very sexy. I've been trying for literal years to make

investment sexy, but sometimes it's just not. But how cool. We get to sit back and think about all the things we want to achieve. And this is where we can like brainstorm up all of the crazy things that we might want to achieve. And then we can whittle them down to things that might be actually manageable. So when we're setting goals, I like to have a good idea of like what your short, medium and long-term goals are because I'm kind of an instant gratification girly, Bec. Like I need the short-term goals to keep me motivated so that the long-term goals actually happen as well. Because if I only have long-term goals and we're only talking about like retirement, I'm just going to spend all my money now. Like I can't wait. I am impulsive if not anything else.

So when it comes to long-term goals, for me, a good example of that would be like retirement planning or planning for your larger investment portfolio to create a passive income so that you don't have to work full-time. Time frame on this would be more than seven years because we know, because of the rule of 72-BEC, that money is going to pretty much double every seven years, but also a market is going to do more than a full circle in that time. So we're minimizing our risk when we're setting long-term goals for more than seven years. When we're talking about long-term goals, this is where you can comfortably go,

all right, well, I am going to invest in a property or I am going to potentially invest in the share market because there's less risk. Obviously, when it comes to like that short-term goal, let's flip to that. These are things that you want to achieve in like one to three years. And if you said, V, I really want to buy my first property next year, I've got my home deposit sitting right here, I'd be like, one, Bec, where the heck did that come from? You've been hiding this from me. I'm excited. But two, I'd be like, please don't invest it. It's too much of a short period of time. And we don't know what the market can do in 12 months. And if the market went off, your goal of purchasing a home in 12 months, it's not going to happen. And I would hate for you to

be in that situation. And even if you were to invest for 12 months, because you go, well, be I'm willing to take a risk. And then you want to purchase then, well, are you actually going to pull all your investment out when it's worth less? That's a bad financial decision and I don't want you to be forced to make one. Like if you and your partner, who's already a homeowner, I mean, good pull with that one. But like if you and your partner wanted to purchase property together and she was super ready in 12 months, you'd be like, oh, maybe I do have to pull all my money out and cut my losses a bit so I can still achieve this goal that she's ready for. We don't want to do that. We don't want to back ourselves into a corner. So investment types for short-term goals

would be things like your high interest cash accounts, your term deposits potentially. Maybe you've got an offset account if you have a mortgage in this economy, not many of you will, or even short-term bonds. But I wouldn't be looking at investing your money or purchasing a property in the hope of selling it in 12 months. Those things just don't make a lot of sense for short-term goals. When it comes to short-term goals though, Bec, those are things like buying a car, going on a holiday. A short-term goal could be something really large if you've already been working on it, like buying a house, but not usually. For me, short-term goals are quite small things. And these are the things that often keep me motivated along the way. So like, I know

that it's not going to happen next year because Bec, while I was very willing to travel with a three-month-old, I'm not that willing to travel with a one-year-old. No. They can move. They are on the move. They're independent. Can you imagine trying to control a one-year-old on a plane? I'm not willing. Couldn't. You couldn't pay me enough. I'm not willing and not able. Do not put me in the exit row. It's just not happening. But for me, having a holiday or something to work towards or Meredith Festival tickets or something, that is, for me, motivating in the short term so that I can set and forget my bigger goals and know that they're happening. When it comes to medium-term goals, though, these are things like more education. Like you might go,

I really want to save up some more so that I can, you know, do this three-year course. Or buying a home could be a medium-term goal because it's all going to be different for every single person. Like you could be a long-term home buying girly. You could be a I'm actually ready in 12 months girly. Or you could be someone who's like in the middle and you're like, all right, well, in the next three or five years, I could probably purchase. That's fantastic. But when we're talking about the investment types there, this is where we could potentially have a bit of a mix. So we could be doing things like the cash and fixed interest options that we were talking about before. You could also maybe do some more defensive shares or some bonds, but this would be where I'm

being really cautious. I wouldn't be going and investing in an emerging industry with a medium term goal because you just you want to be in that stuff for the long haul Beck. Yeah that makes a lot of sense actually but what about like risk tolerance because we're all different with what we can stomach or even manage responsibly. See this is where education comes into it because let's go back to baby Beck and baby Beck is only a year younger when you started on the podcast would you have invested in shares? No I don't even think I knew what that was. If you knew what they were would you have thought that that's a bit risky not for me or would you have thought no or would you have thought yeah I'm straight in like where would your head have been at

I wouldn't have understood it so I wouldn't have done it because I would have been like this isn't also I'm more of exactly the same as you like short term like instant gratification exactly like that marshmallow experiment have you seen that where the kid gets a marshmallow and told if you don't eat that back I'll come back and I'll give you two more yes no I don't need the extra two. I had that one just before and it was really good. Exactly. This is why we need to have really solid plans because I need to have a plan in place so that the responsibility is taken off me. Like I know that even at 33, I cannot be that responsible with my money without a solid cashflow plan. If it's not automated, it's not happening for me. I wish it was. I wish I was

one of those girlies who was just like so inherently good at money. And you might have thought that V, she's on the money. You should be inherently good at money. I'm also really impulsive and have ADHD. You're relatable. That's probably better. I don't know if relatable, but like I'm just a little bit unhinged. So your question about risk tolerance is really important. But what we need to understand is that risk tolerance changes. And if you're listening to this podcast, you're probably already in your financial literacy era, like we're in our self-made millionaire era. We're stepping into it and we want to do better and be better and know more. So your risk tolerance over time could change. So there are about six different risk

profiles, but if you were sitting down and you were going to do your risk tolerance and you did a survey and there are lots online, so you can look up risk tolerance questionnaire and do one online, but it will go from anything from cash stable. So it'll be called capital stable all the way up to high risk. Now, high risk is sometimes also called an aggressive portfolio. And we've done whole episodes on risk and how to assess yourself. And we've even got a free risk tolerance questionnaire on our website, which is, I think, pretty slay. So you can do anyone's. I don't care. Just do it. It goes from capital stable, which is basically where all your assets are in cash and you don't like taking on any risk at all, Bec, because that's terrifying

and like no shares, no property, no bonds, no fixed interest, no high interest savings account all the way up to this, I guess, aggressive portfolio where most of your assets are actually in more risky assets. So I've spoken about this before and please go listen to our podcasts on risk tolerance and investing. But just because you have a high risk profile or an aggressive portfolio doesn't mean you're investing in riskier assets. If we look at like a conservative portfolio, which is like on that lower end. So often goes capital stable, conservative, moderately conservative, then goes growth, moderate growth and high growth. So if we look at that scale, they actually invest in all the same things. They just have different amounts

in each bucket. So a conservative person might go, I'm pretty conservative. I'm only going to put 20% of my assets into a share portfolio. Whereas someone with a high growth risk tolerance might actually have 90% of their assets in the same shares, Bec. So it's not having riskier shares. It's actually having more exposure to an asset which increases your risk. Does that make sense? Right. A little bit. So like if you had a pie chart and you cut the pie chart up, you take a small piece of the pie for the conservative person, but you take a really large piece of the pie for somebody who's high growth. But the pie is still blueberry pie. Like it's the same pie, Bec. It's not different. So like they might have the same ETF as you, they just own less

and you own more and more of their money might be in a bank account because they're a bit conservative and they want to just keep their money in a cash savings account. Whereas someone who's like high growth, they just really like pie and don't really want all of their money in a cash account. Got you. Okay. So just to whittle this down a little bit. Yeah. So short term, medium term, long term goals that could be like literally just going out for a nice dinner could be a short term yeah buying a house could be medium as as well as long term could be like retiring and then we're talking about risk tolerance here i just want to double check with you like is this more toward something that is a house or something like shares or

or is that it's anything relevant so it's anything and i think that even if you're in heaps of debt beck yeah we should be looking at our risk tolerance so that we can understand it because this is your willingness to invest. Like if you're listening to this episode, you're probably pretty interested in investing. So like, I don't know why you're here if you're not interested in investing, if I'm being honest. But if we know our risk profile, it cuts out all of the crap back. It means that if we want to invest, we know that we want to make up a portfolio to have some shares and we know we're a growth girly. We're not that aggressive. Like we don't want 100% of our assets inside shares, but we know from the pie chart that will come out of that questionnaire

that we can do for free. We know, okay, well, maybe 50% of my portfolio is going to be in ETFs. I'm going to have 25% of the cash that I have inside a savings account, and I might get a bond with the rest of the 25%. So if you've got, and just for numbers sake, not that I expect everyone to be starting with $10,000, because that is not true. It's just a good number. But if you had $10,000 and you're like, well, I've got 10 grand and I'm going to go do my risk profile and get my pie chart, $5,000 would be invested in shares, $2,500 would be into a savings account so that you've got your cash component, and then $2,500 would go into a bond. So I've now given you a formulation of how you're going to invest to make sure that you're meeting your risk tolerance,

which is really important because it means that in the future, we're not going to freak out. You are protecting yourself against the markets turning. You might have come out as a high growth girly, Bec, in which case those percentages are going to be different, but you might also want to be adding an international option into your mix because you want to take on a little bit more risk. Does that make sense? I'm kind of giving you the blueprint of, okay, here's your empty pie chart, Bec. You've got a 50%, you've got a 25 and a 25. What products are we now going to put into our pie chart to make up that pie? And to figure out what your risk tolerance is, it's best to do like this survey that's maybe on our website or you can find it anywhere. Literally do any of them,

just Google risk tolerance questionnaire and do it because it's going to help you understand where you stand. And also, even if you're in debt, even if you're not ready to start your investment journey. Education is key. The second you get out of debt, you're able to then go, all right, well, I already know my risk tolerance. I've been having a little look. I've been listening to a few podcasts. I feel quite confident. We don't want to start our financial literacy or investing journey once you have the cash for it. Yeah. Okay. To me, that's shooting yourself in the foot. And also it's really exciting and really sexy to talk about. So like stick around, please. It's fun. It's fun. It actually is. Now that I've got shares, I'm actually kind of like,

oh, I check it every single second of every day. You can do the shares risk tolerance. They have whole blogs on how to assess your own risk tolerance and what that means. And I think that I don't care where you get the information, Bec. As long as it's legitimate information from a reliable source and you are educating yourself, go ham. Have a good time. I love it. Okay. So V, before you mentioned the pie. Yeah, blueberry pie. I don't think I've ever had a blueberry pie. Have you? I don't think I've even ever had, you know, there's like American pies, Oh, my God. Have you had a pumpkin pie? I've never had a pumpkin pie. I would love a pumpkin pie.

Oh, you've had a pumpkin pie, haven't you? Yeah. Jessica Ritchie bullied me into it, and it wasn't even that. It was pretty good. But yeah, sorry, pie question. No, it is still relevant to the pumpkin pie. But you're talking about asset classes and things like that. So I do want to know what are the asset classes. I do know a little bit, but just in case anyone listening doesn't know. Yeah, so here in Australia, there are four asset classes that are recognized, right? Yes. So a lot of people might talk, and I'm going to jump straight into this and talk about

Bitcoin and cryptocurrencies, because a lot of people say, I've got that in my investment portfolio. And I mean, Slay Queen, if that's aligned to your risk tolerance and you're really willing to take that on and that's a risk that you're happy with and you're well-educated, I could not care less because you're making a decision that is best for you. However, that is not a recognized asset here in Australia. It's something that we're working towards and hopefully it will be recognized soon. And the reason, because Beck, you know that I'm not that positive about cryptocurrencies,

because I just go, they're too risky. Like for me personally, I get anxious investing in something that is far more risky than anything else on the market. It gives me anxiety to think that people are willing to invest in cryptocurrency yet not play with the Australian share market. Somehow the marketing for cryptocurrencies has been a lot more palatable than the Australian and share market, when in reality, if you take any 30-year period of time here in Australia, the share market has never not yielded a positive result for someone. Like, cryptocurrency cannot say the same. One, it's not been around long enough, but two, there's way too much up and down. The volatility in that is insane. But the reason I want cryptocurrency recognized here in

Australia is regulation, because the second it is recognized as a genuine asset class by the Australian government, it will be more highly regulated and that will lead to safer outcomes when we are purchasing it. And I like that. So, hopefully that happens soon. But right now, we only have four. The first you know and love, cash. We all understand that. Cash is things like your high interest savings accounts. It's your regular savings accounts. It's term deposits. I feel like we all know and love cash because it's the one thing we all have pretty good experience in. The next is fixed income. So, these are things like government and corporate bonds. So, government bond, Bec, I feel like is a little bit confusing, but the best way to

understand a government bond is it's kind of like an IOU. So, the government, they put their hand up and they say, Bec, we really want to build some roads. We need $1,000 to do that, obviously, at scale. And you go, mate, I've got $1,000. I want something for it. And they say, Bec, we'll give you 5% of your $1,000, plus we'll give you your money back once we're done building the roads and got the cash back.

So over five years, we're going to hold on to your $1,000. We'll give you 5% return so you get some money along the way and at the end of that five years, we'll give you your $1,000 back. And you go, that's a pretty good deal. So my favourite way of viewing government bonds or even corporate bonds is it's like an IOU note. So you give them your money and they give you an IOU note and you can then cash that IOU note in when the term is finished.

Does that make sense? It does. I guess it depends on like it's case by case, but are you able to get out of that early? Yes, you can get out of them early, but it often means you're forfeiting the interest or there's like fees and charges that might apply. So you don't want to just jump into a bond with your emergency savings that you might need. Sure.

The other thing with bonds here in Australia, we are very lucky. They are what is called a triple A rated bond, which means that in the history of Australia having issued bonds to its citizens, they've never not returned their money. You can't say the same for other countries. So there are other countries that issue bonds to their citizens and they don't return the money. Is that so? So there's a lot more risk. Whereas in Australia, government bonds are seen as being a pretty stable return and are considered relatively low risk.

Oh, great. Okay. That's scary to know that's a thing. Yeah, it is scary. But like we live in a country where financially we're relatively stable. So we are very lucky. Great. A good example of an unstable market would be like Greece.

who are not very good at finances oh well don't give greasy money for a government bond just give it to them for holidays just for holidays just for holidays yeah just their economy yeah yeah just yeah anyway you can contribute the third thing I want to talk to you about is property the great Australian dream everybody knows and loves property right and there are two ways that you could invest in property yes so you might have your primary residence and obviously I could have a fight with you right now about whether your primary residence is an investment or not because I believe that your primary residence is not an investment because, Bec, if you go and buy your first home and then you live in it, you're like, probably you're pretty motivated to pay

off your home, right? Because then you don't have to pay rent. You don't have to pay your mortgage. It's only an investment if you're willing to sell it. Are you willing to sell your family home? Yeah. Okay. Sure, sure, sure. As much as it's an asset and if the proverbial hit the fan, we could sell it and rent again. and it's a security blanket, I wouldn't want you putting that inside your investment portfolio as an asset because anything inside your investment portfolio, we should be looking at as being able to dispose of or being an asset that generates income. And your primary residence doesn't do that. It does a lot to save you money because if you've paid the whole thing off, you're not paying

rent, you're not paying a mortgage and that's pretty sexy. But on the flip side of property, you've got investment properties. And that's obviously very sexy. I mean, it must be nice if you have investment properties. But inside the property asset class, Bec, you've got investment properties. So, you could buy residential or commercial properties and lease them out. It obviously requires a lot of capital. You have to have a lot of cash all at a start. The other thing you could purchase if you're super into property, Bec, but don't have a heap of cash is what's called an REIT. So, that's a real estate investment trust. And they're actually a share that you purchase on the share market that hold property. So you get returns that

have come from property. So you're able to invest in property indirectly through the market. So if you've done your little pie and you were like, oh, I really want property in this 20%, but I don't have the cash to buy an investment property, or maybe you don't want the responsibility because being a landlord means, you know, if the water heater breaks, you've got to fix it. You've got to have all these overheads. Maybe you're talking about positive or negative gearing. Maybe you don't even want to have that conversation. You could go buy an REIT and have exposure to property in your portfolio and have returns from the property market without all the overheads. That's kind of sexy. That is really cool. I didn't know that was a thing.

That's kind of fun. And then the last thing, Bec, the fourth asset class recognized in Australia. I think it's very sexy. And it's my favorite asset class, Bec, because not only should they, over time increase in value yes most of them pay you for owning them and that is the share market so the share market is it's not a secret that it's my favorite type of way to invest yes and it's my favorite type of way because it's so accessible like you can today invest for as little as one cent beck you were saying before that you have 25 bucks in shares and then you're like have i started and i was like yes that's a legitimate investment true isn't that cool because go back 20 years, you wouldn't have had that option because we couldn't purchase

shares with $25. We had to have lots of cash to begin, which is a stereotype we are still trying to break down. So many people still believe that to be able to invest, you need to have a lump sum of cash. You don't. Even Bex doing it, she didn't even know she was doing it. Exactly. But when we're talking about shares here in Australia, we have Australian shares. So this is a share that is listed on the Australian Stock Exchange, or the ASX, as we often call it. On the ASX, you can purchase shares directly. You could purchase your bonds that we were talking about before. You can purchase ETFs and managed funds. This gives you access to all your investing options, right? So even those REITs that we're talking about,

you can purchase through the ASX. If you've got analysis paralysis and you're like, I want exposure to the Australian share market, but I didn't realize there were going to be so many options, you could go for an asset like the ASX 200 index, which actually takes back the top 200 companies listed on the ASX, puts your money in that and calls it a day. So that's kind of helpful to know that options like that exist. And then obviously, if you're a little bit more risky and you want to diversify even further, you've got the option of international shares. So there are so many different stock exchanges around the world. So you've got like the New York Stock Exchange. You've got the New Zealand Stock Exchange. You've got literally so many. I won't

give you examples because I could go on and on and on. And that really excites me. But with international markets, it gives you the option to diversify internationally. When we zoom out and we just look at the economy as a whole, like the worldwide economy, we know that when Australia is doing really well, the rest of the world might be slightly off. In Australia, we kind of exist in a bit of a bubble. And that bubble means that we are often protected from things that are going on internationally. So like Australia is, as an investment, when we're talking about the ASX, a lot more conservative than America. America, they feel the feels. They are dramatic, right? Like if there is a high, they're feeling the highest of highs. And if there is a low,

they feel the lowest of lows. That's why often we'll hear about impending recessions because America is in one, but maybe not get hit with it in Australia. Does that make sense? So we're a little bit protected, but to get diversity when Australia is not performing that well, often we see the rest of the world having better performance. So we might want to look at, you know, let's just really simplify it. You go, I want exposure to the Australian market and to international, V? And I go, well, Bec, an option is the ASX 200, which is going to give you exposure to the top 200 companies in Australia. And then you might go with a global option, which is another option. This is just one of many, like it's not a recommendation, Bec, but that's the MSCI World

Index, which gives you exposure to a heap of international assets without having to do too much of your own research. Like a sample pack. Exactly. So those are the four asset classes that would make up your pie. So, V, I don't know about you, but I need to take a quick moment to absorb everything. So let's go to a really quick break. You want a pie? I do want a pie. I'm on to you.

You really got me craving a pie. I'm going to try and make pie. Can you make a pumpkin pie? Spiced? No, but I'll buy one from Costco for you. Great. That's more than enough. You're welcome.

Thank you. All right, let's go to a break. And on the flip side, we've got some more investing hot tips for you. Don't go anywhere. Welcome back, everyone. V, I think we were just about to come to the most exciting part of the episode. Is it actually? I think so.

We've been like baiting them. We're like, this is exciting. This is sexy. And people are listening going, V, you have rocks in your head. And I'm like, yeah, please don't take them out. They're like, when's this going to be sexy? When's the exciting part? But I guess sexy is subjective, isn't it?

Sexy is very subjective. So don't judge us. No, exactly. Don't yuck our yum. So V, I know that we have spoken about this in the past, but we have not mentioned it yet, but I know you say that superannuation is the most important investment of them all, arguably. Well, I think it's maybe not the most important investment, but an incredibly important investment and arguably the biggest investment you will have in your entire lifetime,

which probably makes it the most important, right? But that's not true for everybody. But superannuation is really important to touch on here. If we're going to give you a few actionable steps to get you cracking on creating an investment plan, right? Superannuation is not actually an investment, Bec. Superannuation is a tax structure, which makes it sound even more sexy, but it's a tax structure, right? Like think of a clown car. Superannuation is the clown car, right? And you get to fill your clown car with whatever you want. Like you could go get Bonzo the clown and put him in your car. You could go get like a circus lion and put him in the car. You could get in the car yourself. You could literally, you know how in a clown car you can

basically fit anything? Yes. That's superannuation. You can literally invest in anything inside the super environment. That's really cool. Now, it's important to understand that nuance when we're talking about super because superannuation, I feel like so many of us just think it's a super fund. It's an investment. I just check it online and I don't have a lot of control. When in reality, you have so much control it's not funny in fact you could go and open a self-managed super fund and do absolutely everything yourself I would not recommend that though because it's actually incredibly regulated now and probably not for the best but that's a conversation for another day but I really like thinking of it as a clown car because you're not going to forget that for one

but two this clown car it kind of like gives you access to the circus and the circus is a very sexy 15% tax rate, right? So right now, most people are going to have a tax rate between 37 and 39%, right? Like you're not going to be able to make money and only pay 15% tax. Like it just doesn't happen. So this clown card gives us access to a 15% environment and then we can invest inside of that. So we have this asset and it's called super, and that's actually the money that goes in. And then it's up to you to choose where it's invested. Most commonly, we use investment funds. So you might have Host Plus or Hester, you might have Australian Super. We've heard of all of them, right? But it's actually up to you to choose what fund reflects your values and reflects what you

want to choose. And I think the coolest thing about Super, especially right now, because Beck, we're in the middle of a cost of living crisis. We're talking about investment. It is not beyond me that people listening to this episode might be like, V, I can't invest. At the start of the episode, Bec, you asked me like, hey, what if we didn't start investing in January and it was our plan? So many of us haven't been able to, even though it's part of our goals. And that's okay. But one way to get ahead is to look at our super, because it's not going to cost you a thing out of your bank account to now actively manage this, to go and have a look at what portfolio you're in, to make sure that you understand your risk tolerance. Go do a free risk tolerance questionnaire.

There will be one on your Superfund website. Go do that and see what your risk tolerance is and then make sure your investment is reflective of that. If it's too hard, call your Superfund. You're paying fees for your Superfund to call these people and answer the questions. It's going to help you be in a better position in the long term so that instead of feeling really stagnant and like you're not in control of your finances. Let's zoom out a bit, look at the big picture and go, well, I can't really control my budget. I have literally no free cash flow, but I can have a look at my super and make sure that future me is in the best possible position so that I feel like there is a light at the end of the tunnel. Times might be tough right now,

but this is just a season of life, Bec, because it's not always going to be like that because we're caring about our super. We know what's in there. We know what insurances are in there to potentially protect us. So superannuation is something that we need to talk about. And inside your super, Bec, are all the assets that we discussed in the first end of the show. Sure. Okay. So if you've hypothetically never even looked at your super, maybe you know how much is in there, but you've never actively invested that money anywhere, will it just be- It'll be automatically invested on your behalf. Most usually, when you got your super fund forms and they handed them over to you and said, congrats on the new job, Bec, can you return

these forms to us, you would have said, I don't know what I'm talking about. And you would have ticked balanced portfolio and been like, I don't know, balanced, that sounds good. Because often they have like in little brackets underneath the balanced, most common, or this is the most popular or whatever. And you go, well, if it's popular, I'm in. But more often than not, people between the age of 20 and 40 are not actually balanced investors. So from the research that we've done inside of She's On The Money, we know that most people in our community are growth or high growth investors. Like they should be. Not they should be. They are actually high growth or growth investors. That's what they've come back as. So if you're in that bucket of, I don't know my risk

profile, but I have a default of balanced and you're not actively changing that, that could literally cost you hundreds of thousands of dollars in returns over the long term. So by going and checking it and making sure you're dotting all your i's and crossing all your t's it's so easy i promise and like this is not condescending at all beck but superannuation funds service every single australian yeah that is employed right so it has to be understandable they have to talk in a way that makes sense and if it doesn't they're doing you a disservice so go and have a look at your super fund make sure it's reflective of your actual risk tolerance because the difference between a balanced fund and a high growth fund is often at least $200,000 by the time you retire.

So even if you're not able to invest, you know, even a dollar on shares like Beck has, you can go and have a bit of a fix up with your super and make sure that future you's in the best possible position. And I think that's really empowering. Yeah. Okay. When was the last time you looked at your super Beck? Honestly, actually not that long ago. I'm going to say January. Oh, exciting. And when you looked at it, were you like reviewing your platform? Were you just having a look at how much money was in there? Like, what were you up to in there? Yeah, I was just curious. I was like, what's going on here? And it's much lower than I thought it would be, but that's okay. I changed some things around and I think

I'm in a good, I don't know, investment. I like that. So we'll see. If you've got a bit of analysis paralysis, one of my favorite tools is the MySuperTool, which is a free Australian government run platform that compares all of the superannuation funds in Australia, apples for apples. We all know those comparison sites and don't get me wrong, I love a little cute meerkat with a vest, but those are marketing platforms that feed you products based on who's paying them the most money, right? So making sure that if you're going to look for a new super fund, you're not using a paid platform, you're using a government run platform. And Bec, if it gets too overwhelming,

and you're like, I don't really know how to use this. My favorite part of the Your Super tool is they give you the top five funds in Australia and the bottom five funds in Australia. And I would say as a basic hygiene, please make sure your super fund is not in those bottom five and you're doing not that bad. Ideally. Ideally in a perfect world. But I do know also super annuation companies tend to have like their own inbuilt financial team. They can give you advice and all that kind of thing. So yeah, take advantage of that. Exactly as you were saying, V, take advantage. V, just to recap, we've gone through investment goals, asset classes, risk tolerance. Are you talking dirty to me? I know. Yes, please. I don't know if it's so loud

on the show. I might have to bleep all of these words out. You said all of my favorite things. We've also obviously talked about super, but I guess on a more human level, what actually is holding us back? Interest rates. Interest rates and possibly not knowing enough about all this stuff which is why we're here uh also not really having the funds we totally get it there's all these things but it can be so empowering when i jumped into my superannuation account and like i this is before you this is before i knew anything i kind of just like was winging it but there's something so nice about taking this money that i didn't put in there myself but did earn and putting it in different like risk asset classes i don't really know i'm really impressed i love

that you're having these conversations now. Thank you so much. Where's the old Bec? She's going to be so impressed. No, no, keep her. I love her too. Yeah. Maybe I'll keep her. She's proud. She is proud. That's very true. But I guess now's a good time to have a conversation about like, what is holding us back? Bec, starting your investment journey, it took, I would say a year before you felt confident enough to like download an app and like even have a look at it. And I mean, you've started at a baby level, but like that is the best type, right you're dabbling your toes in the water and I'm assuming that that doesn't feel overwhelming no what was holding you back before or what's been holding you back from you know doing it

before now genuinely I think it was it was a number of things it was like not having the money to even start an emergency fund I just started one which isn't did you actually not much in there but no it's there and I think also like not knowing enough about it it's also and I think maybe a lot of people can relate to this. There's something so like mentally draining about getting myself out of a scroll hole on Instagram and going to download something and then signing up and then. I'm a victim of the algorithm. Like I live on TikTok. Seriously. Yeah, definitely. But once you get started, I've only got $25, but God, it feels good. And the motivation that I got from just that, that inspired me to start an emergency fund. That inspired me to start

different saving accounts. Who is she? I don't know what's happened to myself, but like just like starting so small she got serious yeah i really did even if you have like five dollars if you put it in a savings account it's like these are savings i've named mine savings do not spend and i'm like there's five dollars in there um real original back totally yeah exactly so i've actually cured poverty all around but oh my gosh i love this for us i know i feel like they're writing an article about me right now and making a doco but i'm sure that'll come out soon but no there's something so nice about just like starting small as small as you want to as small as you can But it's like a little bite-sized piece that doesn't feel overwhelming. I think so many of

us set goals where we're like, okay, I'm going to start investing. And the way I'm going to do that is I'm actually going to save $500 and then I'm going to invest that. $500 is so much money. You're going to feel so much responsibility making that decision when it comes time to doing that, because it is a big decision. And I mean, at the moment, we're in the middle of a cost of living crisis. And I am pretty sure a lot less of us are investing when we actually should be or want to be. And I mean, the only way to grow our capital and grow the money that we currently have is investment. Like it sounds dire, but it's literally the only way, Bec, that you are going to make money without exchanging your time for cash. And that's how wealth is created. And I guess

that's why I am so passionate about it. And I mean, cash, it's really sexy and I like seeing it in my bank account, but I also want future me to be in the best possible position. And I mean, last year, the stock market actually did really well. So if we look at the S&P 500, which is an index used in the US, it returned 24% back. Oh my- 24%. God, that's hectic. That's obviously just reflective of the economy and what's going on because

obviously we have quite high interest rates. I mean, at the moment they're plus 5% which is a lot. A lot of us are experiencing home loans of like more than 6% and there's a whole conversation in that coming very soon. Inflation is also really high. Last year it was at 7.1% and that was crippling. Everybody was anxious. So like I get why we haven't started and I can also see why so many people feel like keeping cash in the bank is the smartest thing to do but it was actually a little bit dumb wasn't it like and our community aren't silly but in hindsight the share market had a really solid return we're missing out on potentially great returns so keeping your money in a bank is actually over time going to set you behind

I mean even with inflation right like to make this even more dramatic it's not dramatic it's just fact, but like, so we know that inflation last year was 7.1%, right? Can I contextualize that for you? So if you just had your money in a bank account and it wasn't returning anything, at the moment, we've got some pretty sexy high interest savings accounts that exist. So please make sure you're considering them. But if you just had $10,000 sitting in a bank account, you had analysis paralysis, you wanted to invest it, but you didn't. Because of inflation, that $10,000 today only buys you $9,290 worth of what it could last year. That's $710 that you have lost technically, not physically. You still might have that $10,000 inside your savings account and

you might go, but V, I still have what I had last year. But the costs of goods and services last year was 7.1% less than it is this year. So life is costing you more this year, Bec. You are spending technically $710 more than you were last year. That makes sense. That's a lot of money. Yeah. That's a lot of money to be making a decision on. So I really want people to understand that there's massive risk in not taking risk. Powerful. But there's massive risk in not doing something. And something that my, I think it's my dad used to say is like, not making a choice is actually making a choice. Like you're choosing the other outcome. You might not be choosing to move, but like that is a choice. And I think that the choice not to invest, it's actually not risk

free. People think that they're not, you know, they're saving their butts, but it's not risk free. If you leave your money exposed to things like inflation over a long period of time, inflation eats away at it and then there's not much left. And even though you think you're putting future you in the best possible position you're not so we need to talk about I guess what's holding us back and sometimes that's analysis paralysis we don't know how to make a decision because we're just overwhelmed with education and there is so much of it today we might not be in a financial position to make that decision and that's okay that's where we need to zoom out look at things like our super and what we can control we need to look at our income can we

negotiate that should we be changing roles what does that look like are we in a position where we just don't have a solid cash flow plan are we just you know letting money slip through our fingers which you were very guilty of last year and it's not even me going that's a bad thing but like how much more in control do you feel today than you did six months ago definitely like i'm still spending like no we love that we love that we take every step yes the way we need to take it, but I think it's really important to maybe have a bit of a think about personally what's holding you back because motivation to start investing isn't going to come from me or you, Bec. It's going to come from internal. Like a lot of people are going to say, Bec,

how did you get the motivation to do X, Y, and Z? And I can almost guarantee your answer is never going to be, oh, I just listened to this podcast. Yes, that might have been the trigger, but the motivation came from inside you decided that enough was enough and you wanted to change and that has to come from you and to do that you need to understand you so understand all of these things that we've spoken about today but also sit down and be like well why aren't i in the position i would like to be in and how do i get there well powerful do we think we're done here i feel satisfied personally too all right well happy wednesday guys if you're not listening to this on a wednesday please insert whatever day of the week it is um and we'll see you on friday to catch

up with the team see you guys then bye 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 if you do choose to buy a financial product read the pds tmd and obtain appropriate financial advice tailored towards your needs. Victoria Devine and She's On The Money are authorised representatives of MoneySherpa PTY LTD ABN 321 649 27708 AFSL 451 289.