#1 Money goals | Investing convos every millennial should have

Maddy: [00:00:20] Hello and welcome to You're in good company summer series. Over the six weeks of summer, we are delving into the investing conversations every millennial should have. We still hear our close friends and family say that they don't know how to start honest conversations about money, and it makes them feel like they're not in control of their financial future. 

Sophie: [00:00:38] So this is our answer. Six conversations on topics that you wanted to hear. 

Maddy: [00:00:44] This summer series is brought to you by Superhero. Superhero allows you to buy Aussie and US shares and ETFs with no monthly account fees, and you can now earn Qantas points with Superhero. Visit Superhero dot com dot au slash Qantas to learn more. Eligibility criteria, terms and conditions and fees and charges apply.

Sophie: [00:01:05] Mads, we've always been told that setting up investing goals is so important, but why is that?

Maddy: [00:01:11] I'm going to answer your question with another question. 

Sophie: [00:01:14] Love it. Two rhetoricals in one. 

Maddy: [00:01:17] Which one do you find more motivating? Transferring money into a start my own business investing account or transferring money into account number seven six five four three two one? 

Sophie: [00:01:30] Probably the business account. 

Maddy: [00:01:31] That's okay. I'm glad we're on the same page, and I think this is one of the reasons why actually having a think about your goals and writing them down is so important it gives you direction and motivation about what you're actually saving towards and working towards.

Sophie: [00:01:45] It's true, though, when you write something down, you're actually working towards something. It's so much easier to get to that place because otherwise it's just like, Oh yeah, I'm putting a bit of money away. But if you're like, No, I need this amount of money by this time, it's like much more motivation and direction. 

Maddy: [00:01:57] Now I feel like you owe so much less likely to just borrow a little bit of money, out of an account that says, like 'Moving to New York' fund versus like seven six five four three two one. 

Sophie: [00:02:07] So we usually say like we'll write down a couple of different goals short term, medium term, long term to keep you like a little bit accountable. So I thought it'd be nice to maybe jump into some of what of our goals are. And I think starting with short term, there those ones that you like tick off the box To-Do list. Super easy and you feel like you've achieved something. What are some of your short term investing goals?

Maddy: [00:02:27] I think in the short term, my goal really is just to learn as much as possible. But I guess when I was thinking about that, I was like, It's not very tangible. Yeah. So what I have done is I've set myself a goal of once every three months. I pick a theme that I'm interested in, and I have to every three months try and read one book on that topic. So for example, my current theme is cloud companies, and the book that I've just started writing is a book called Behind the Cloud. And it's the story of how Salesforce went from being a start-up in a little rented apartment into the world's largest and fastest growing software company in less than a decade. 

Sophie: [00:03:06] And so do you get any like treats if you read the book after a few months, like what's your prize? 

Maddy: [00:03:11] Smarts. I learn and then maybe I get to invest in a really good cloud company with all the knowledge that I've learnt and make some money. 

Sophie: [00:03:19] There we go. An investment. Love it. 

Maddy: [00:03:22] What would you say your short term goals are? 

Sophie: [00:03:24] Mine's just a monthly $500 into the stock market, into one of my ETFs, one of my stocks. It's like every month my paycheque comes in and I just tick it off the box. 

Maddy: [00:03:33] I love it. It's done. Straight in, straight out, 

Sophie: [00:03:37] Straight in, and straight out. 

Maddy: [00:03:38] What about medium term? So I'm thinking more like three to five years away. How do you go about setting those kind of goals? 

Sophie: [00:03:43] Yeah, this one's like you still want it to be like attainable, because if you think of like your retirement you like, that's so far away. 

Maddy: [00:03:50] It can be hard to get motivated about. 

Sophie: [00:03:52] Yeah, it's so, so hard, you're like, that'll happen no worries. Medium term for me is definitely buy a house, maybe a bit longer than three years, probably more five to seven range. But I do have a figure that I have in my head, which I want for a deposit. And so I'm putting money into the stock market to try and achieve that figure in that, yeah, five to seven year range. 

Maddy: [00:04:13] Nice. And I guess the good thing to note about that as well. When you're using the stock market to try and save for a house, I guess you don't want to be like too particular about your time frame because we know that the stock market goes up and down. So like if you are buying a house in three years, just a question whether the stock market's right way to save for that. But if it's like, you know, a medium term goal in the future. 

Sophie: [00:04:33] Yeah, a lot of people say you shouldn't use the stock market to save for a house, but I'm like, I'm a millennial and I've never seen a recession, so. 

Maddy: [00:04:41] Oh gosh. And everyone tunes out of the podcast. 

Sophie: [00:04:45] What is some of your medium term goals?

Maddy: [00:04:47] So I have a medium term goal of moving to New York. Yeah. And I guess the way the investing comes into that is not like to, you know, fund my airfares or anything. But it's more just to have the confidence that I can kind of uproot my life in Melbourne and move overseas, but have the financial backing to do so and also have like my portfolio sitting there, ticking away, compounding over the time that I'm away. Yeah, and be able to come back and feel like I've got like, you know, a real nest egg. 

Sophie: [00:05:14] Yeah, sitting on and you might be in between jobs. You might not know that in the next three months, are you going to be doing and it's nice, just know that you're going to have some money there. I mean, you might want to travel darls. 

Maddy: [00:05:23] I know. 

Sophie: [00:05:25] And what about the long term? 

Maddy: [00:05:27] Oh, FIRE. Financial independence retire early. I'm a part of the FIRE movement. Not, not really. But I guess long term, I want the ability to be able to do whatever I want and not have to really be constrained by my finances or stressed about money.

Sophie: [00:05:45] Yeah, no. 100 percent. I'm exactly the same. It's just like, never say no to an opportunity. And I think with the long term goals like you don't have to be as like quantitative or tangible, you can just like really think about your bigger picture dreams. And so just seeing the future, like if any opportunity comes up and I have to say no because of money, like, what a shame.

Maddy: [00:06:01] Yeah, I just want to be a boss. I'll take it out. 

Sophie: [00:06:06] Do not take that out, that's staying in there. 

Maddy: [00:06:09] So obviously these are our goals, but there is absolutely no right or wrong answer when it comes to this. So we would love you to jump onto our socials, all the details in our episode notes and let us know what your short, medium and long term goals are, because I think it's really cool for like finding inspiration. 

Sophie: [00:06:24] Yeah, I was going to say, I need some new inspiration. Gotta reset those goals. So in a second, we'll be right back to chat about how we really put those goals and talk through some of the strategies we have to build up some good habits when it comes to investing. But first, let's hear from our sponsors. 

Sophie: [00:06:43] So it's all well and good saying that we have these goals. How do you come about them? What do you do with them? 

Maddy: [00:06:48] Yeah, look, I'm probably not the best example, to be fair. And this is so this is something that I really want to be better at. And to be honest, doing a bit of planning for this episode has inspired me. I'm not a write a downer, but I think I need to be. Because it will make it far more tangible if I actually have it written down. You know, it's been. I'll tell you what's been putting me off. I haven't found the perfect books to write things down in 

Sophie: [00:07:12] Ah, like a notebook. 

Maddy: [00:07:13] Like, I want to find a really nice one. And I just and I feel like I'm committed to it because then that's my book for like, ever. So if I don't find the right one anyway, I'm letting the wrong things get in the way. I know that you are pretty good at this. 

Sophie: [00:07:28] I'm like one of those people that manifests like... 

Maddy: [00:07:32] You're embarrassed to say, tell everyone about your vision board...

Sophie: [00:07:36] I have a vision board. I meditate. I'm just one of those people. 

Maddy: [00:07:40] Is this going to be embarrassing? Do you literally meditate thing like, I'm going to invest in five companies this month.... 

Sophie: [00:07:47] No no no. I just meditate. But I do write them down. I think it's like something that I can look at and be like, I'm working towards that. And when you ever feel a bit off track, you can just be like, that is what I'm looking at. I don't know. I'm one of those visual people. I need to have it somewhere. 

Maddy: [00:08:02] So I guess to delve into that a little bit more. Do you have written down that you want to invest $500 a month? 

Sophie: [00:08:07] Yes, I have written down that I want to invest $500 a month, and I also have a little alarm on my Google calendar, so it gives me an alert on payday. And it's like open up superhero and invest. 

Maddy: [00:08:20] Love it. And I think that's really good because one of the strategies that I think is so important for building good habits is this idea of dollar cost averaging. 

Sophie: [00:08:28] Oh yeah, baby, that's a good one. 

Maddy: [00:08:31] So just to take a step back a little bit. Dollar cost averaging, I guess, is entering the market at consistent intervals. Yeah. So that when you're buying your shares, you sometimes might get it at a higher price. You sometimes might get it at a lower price, depending on the market fluctuation. Yeah. And then I guess over the long term, the idea is that the price you've bought at averages out.

Sophie: [00:08:51] Yeah, and you've got to be buying into the same ETF or stock. It has to be like consistently in that one because of the prices. 

Maddy: [00:08:58] An example of this, especially well for me, is I've been investing in the Asia ETF for quite a while now. Ticker Asia. Yeah. So basically, when I started investing at the beginning of 2020, I purchased this ETF for around $7. Yeah, averaging it a little bit every month and every month. That was increasing until in Feb, when it hit $14. Yeah, it now has dropped back to around $10. Yeah. So although I have bought it at lots of different price ranges, it's really good because now that it's dropped again, it's not like I haven't missed an opportunity because I've been investing consistently. I haven't necessarily bought it too high. Yeah, because I've been investing consistently, I guess, to put some really specific numbers around that. If I bought the ETF in Fab last year, bought it for seven dollars and then bought it in Feb for 14, and now I'm buying it at 10. If I average out those three numbers, that is $10 30, so you can see the effect of the dollar cost averaging. 

Sophie: [00:09:54] And I think the difference here is that like you could have thought that you were timing the market and from $14, it was going to go up and you purchased it for $10, and that was it. And now it's gone back down. And that's kind of where the whole magic happens, the averaging compared to just buying at the high price. 

Maddy: [00:10:08] I mean, the other way to think about it is when it comes to crypto, you don't want to be that person that they write memes about who buys it at the peak and sells it at the bottom, 

Sophie: [00:10:18] Even though I'm probably going to be that person.

Maddy: [00:10:22] No! Manifest Sophie.

Sophie: [00:10:22] Come on. Another benefit from investing regularly is that compound interest, which is, you know, in the most simplest of terms, earning interest on interest. And this is like literally magic when it comes to investing.

Maddy: [00:10:35] Well, we know from our last episode that Albert Einstein called it the eighth wonder of the world. We're not going to go into what Albert Einstein did, does, who he was, we're just going to go straight past that.

Sophie: [00:10:49] *laughs* Had some troubles there did we Mads? I think with your example there, Mads with the Asia ETF, is that if you had invested consistently from, you know, that $7 mark, $14, then back down to $10, you're exposing yourself to this period where you're getting distribution payments that whole time, compared to if you'd waited for it to come back down to $10 at this point in time, then you haven't been getting that, I guess, extra form of income into your bank account. 

Maddy: [00:11:11] Yeah, I mean, if all those distributions that I've got. And that's another great benefit. Like, I got to spread my risk, I get to get dividends and then I also get dividends on my dividends. 

Sophie: [00:11:20] Yeah, I guess it's really that snowball effect. And when you look at any like graph that has compound interest, which you shouldn't talk about graphs on a podcast, 

Maddy: [00:11:27] I was just looking at you. Right, here we go. 

Sophie: [00:11:30] But you have a linear curve. When you don't have compounding, you have this exponential curve. So really building up a base like as early as you can benefits you so much for the long term. 

Maddy: [00:11:38] We have one question that comes into our YIGC Facebook Group, all the time that we can't end this episode without answering, and that is how much is too much when it comes to dollar cost averaging into your investments, how regularly should you actually be investing? Look, it really depends on the person because for me, for example, I have like a $10 brokerage fee on my platform. So if I invest every week, then every month, that means I'm spending like $40 on brokerage fees, which is too much, it means that I'm needing too much of a return on my investments just to make up the fees. So I think a good rule of thumb is your brokerage fees should be like max one percent of what you're investing. 

Sophie: [00:12:16] Yes, if you're investing a thousand bucks, then you know, $10 should be the max. But I mean, with things like, for example, Super Hero, which has $0 brokerage. So when I'm investing in my ETFs, I could be doing that weekly, if I feel like that, works for me because I'm not paying that fee. But I think it's just that one thing that you do need to look out for is the brokerage. 

Maddy: [00:12:34] And I think at the end of the day, like, you've got to make it work for you. You know, we've been talking all episode about setting goals that are going to be realistic for you. So have a think about your routine, what's actually going to be achievable for you. If investing every week is that, then amazing. But I think you need to have a real think about if this is a once a month or once a quarter thing for you and set your goals accordingly. OK, before we leave today every episode, we're going to leave you with some content recommendations because it's summer and fingers crossed, you're listening to us - on a beach relaxing. Or if you're in the northern hemisphere, then maybe you're on the ski slopes, or maybe this is what you're investing for. The vision board of your big holiday next year. 

Sophie: [00:13:13] Oh, I honestly cannot wait to plan another holiday after all this Covid nonsense. But no, seriously, over the summer, I feel like I always am able to catch up on books, podcast series, and so we're going to add some recommendations to the list for people. So Maddy what are you starting the recommendation list with? 

Maddy: [00:13:30] So I am recommending a book that I actually read or listen to. I listen to the audio book last summer called The Ride of a Lifetime by Robert Iger. So it's the story of the previous CEO of Walt Disney, and it's his 15 year journey with the company. It is such an interesting book because he started as a junior at the company, and he shares his story of how he worked his way up, and he started out quite a difficult time in, like Walt Disney history. 

Sophie: [00:13:56] To interrupt, were you a Disney kid? 

Maddy: [00:13:59] Like, Did you love this absolute Disney favourite movie? Seven a.m. Every Saturday morning? I was up, I was up watching your favourite movie. No, we didn't have Foxtel, so it was Channel seven.

Sophie: [00:14:12] Favourite movie? 

Maddy: [00:14:13] I'm going to say Hannah Montana, but like, that was a later. 

Sophie: [00:14:16] I'm talking like Aristocats... 

Maddy: [00:14:18] Yeah, I don't know. I never watched that. 

Sophie: [00:14:21] Oh, I know. OK, well, I'm now trumping your recommendation. Putting that on. The Aristocats! 

Maddy: [00:14:27] I feel like junior *laughs* junior me. I mean, litte me, watched Nemo. Happy feet? 

Sophie: [00:14:36] Nice, like it. Yeah, keep going sorry.

Maddy: [00:14:38] Anyway, he joined the company at like a weird or quite a tough time. Like he talks about how morale had really deteriorated and competition was super intense and technology was like really changing at that point. So he really kind of shares how the success of Disney came about over his time. 

Sophie: [00:14:58] Feel like they're a company that continually innovates as well at the moment. With all that Disney Plus going digital, they do good things. 

Maddy: [00:15:05] There's also some good, juicy stuff in there about. He worked quite a lot with Steve Jobs, the founder of Apple, which was super interesting. And he also at the end of the actually no. 

Sophie: [00:15:15] Yeah, don't talk about the ending! 

Maddy: [00:15:17] Soph, have you read this? 

Sophie: [00:15:18] No, I haven't. But I do love Disney, so maybe it's one I need to read this summer. Actually, I'll make it a I'll make it up to do this. I will read it. I'll come back to you. 

Maddy: [00:15:28] What are you recommending to us?

Sophie: [00:15:31] I am recommending both a podcast and a Instagram page, but by the same person people might have heard about Emma Edwards before, who is behind the broke generation. And Emma, I thought I said following on Instagram maybe last year, and she is just hilarious, relatable. It's all money content, but she makes it very easy to. Digest and understand what she's talking about. 

Maddy: [00:15:56] So for the podcast, are there any like do you have any fav episodes that people should go to to start off?

Sophie: [00:16:01] Yes, I've got two. Well, not start off, just one that I love. I think you could start with any of them, but one of them is the psychology of budgeting, and I just love her perspective on it because. Well, we even get asked by people about like percentages and in buckets and whatever else to budget. But she kind of brings in this perspective of the conversation. That's like all our personality types are different. We're all different human beings like we can't have one set way to budget, and I just really changed my perspective of it all. She actually talks about it in an anecdote of like booking a holiday, like you and I would book different holidays. Why would we have the same, you know, budgeting? 

Maddy: [00:16:35] Yeah, nice. 

Sophie: [00:16:36] And then the second one is 'How the pandemic changed everything for our generation's money mindset', which was just, yeah, a good open chat about, you know, the way that maybe we've felt about during Covid and how I felt about money and how it's changed and then coming back into real normal life. 

Maddy: [00:16:53] Yeah, I'm definitely finding that at the moment, like I'm spending money again. Yeah, I know. Kind of shocking.

Sophie: [00:16:58] I know and I just about, you know, people losing jobs and just changing your relationship with money and how you think of it. So they're both really good. And yeah, the Instagram, there's this reel that I just absolutely fell in love with her with. And she talks about like, we don't want to spend money on the things that we need, like dishwashing tablet that are like 20 bucks. And we're like, Oh my God, that is expensive. 

Maddy: [00:17:20] Yes, and the other one is washing powder. So yeah, yeah, yeah. Cheese, although that is one that I do not, that's a want, not a need. 

Sophie: [00:17:28] But then on the other side of the reel, it's like you see, like $100 blow up flamingo. And you're like, I can definitely afford that. So no, go check her out on Instagram, her podcast, as well. I think if you want to just have more general money conversations we often talk about, not often, we talk about investing more. Yeah, but it's just a good place to start, you know, more open chats about money. So that's my recommendation. 

Maddy: [00:17:52] You mentioned the $100 pink flamingo in there. What's your version of that? What's your luxury item that you have like, splurged on recently.

Sophie: [00:18:00] New runners? 

Maddy: [00:18:02] That's not luxury. 

Sophie: [00:18:03] That that's not luxury, OK? 

Maddy: [00:18:04] Unless they like fashion statement. 

Sophie: [00:18:06] No, they're just like running on clouds kind of vibe. 

Maddy: [00:18:09] Oh, OK. That's pretty nice. 

Sophie: [00:18:13] I haven't bought something yet, but I want to buy a piece of art. 

Maddy: [00:18:16] Ooh, that's a good investment. 

Sophie: [00:18:18] Yeah, it's just a print, but I'm obsessed with the artist.

Maddy: [00:18:21] So who is It? 

Sophie: [00:18:23] Jakie Pedro. 

Maddy: [00:18:24] Oh, yeah.

Sophie: [00:18:25] What about you? Do you have a luxury item that you spent on recently? Black Friday sales? 

Maddy: [00:18:28] No, I didn't. This happens to me every year around like Black Friday sales. I'm going to do all my Christmas shopping and then I get to the day and I panic and I just buy nothing. Yeah. And then I buy like stuff three days later and I could have saved a lot of money or whatever. 

Sophie: [00:18:41] So those are our recommendations, but we love recommendations. So we want to know yours jumped into our Facebook group. YIGC Investing Podcast Discussion Group and we can all share our recommendations just leading up to Chrissie. 

Maddy: [00:18:55] I think that is a wrap for today's episode, but looking forward to next week where we talk details on how you actually make money in the stock market. 

Sophie: [00:19:02] And if you're sitting there right now listening and going, I'm going to make some New Year's resolutions around investing in the stock market and make sure you pass this on to some of your friends that have New Year's resolutions, that are money focussed as well. Share this episode on socials and tag us at @YIGCpodcast. 

Maddy: [00:19:18] We would also love to hear about your investing goals. Also, jump into our Facebook group YIGC Investing Podcast Discussion Group. I think I need some inspiration, so I'm looking forward to hearing what everyone's got. 

Sophie: [00:19:28] We've got some resetting to do as well as the near future. 

Sophie: [00:19:51] Until next week

Maddy: [00:19:52] See you then!