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#3 Brokers | Investing convos every millennial should have

HOSTS Maddy Guest & Sophie Dicker|4 January, 2022

Sponsored by Superhero

You’ve got some cash saved up, you know you want to invest, but now where do you go? You know there’s Mecca for beauty, Booktopia for books, Amazon for everything else… But where do you find the stock market? Maddy and Sophie talk about the different things they consider when they use brokers – Australia v Global, Fees, Chess v Custodian – and whether it even matters! Then Sophie and Maddy walk through the steps to actually *buy* some shares.

This summer, Superhero are partnering with Qantas to help you trade to the skies. 

Winner of Money Magazine’s Best of the Best award for the Cheapest Online Broker, Superhero allows you to invest in companies like Apple, Tesla and Spotify with $0 brokerage on U.S. shares and ETFs AND you can now earn Qantas points with Superhero. 

Visit superhero.com.au to learn more. Eligibility criteria, terms and conditions, and fees & charges apply. 

This episode contains sponsored content from Superhero.

Keep track of Sophie and Maddy between the episodes on Instagram, or on TikTok, and come and be part of the conversation on Facebook with our You’re In Good Company Discussion Group.

Got a question or a topic suggestion? Email us here

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In the spirit of reconciliation, Equity Mates Media and the hosts of You’re In Good Company acknowledge the Traditional Custodians of country throughout Australia and their connections to land, sea and community. We pay our respects to their elders past and present and extend that respect to all Aboriginal and Torres Strait Islander people today. 

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You’re In Good Company is a product of Equity Mates Media. 

All information in this podcast is for education and entertainment purposes only. Equity Mates gives listeners access to information and educational content provided by a range of financial services professionals. It is not intended as a substitute for professional finance, legal or tax advice. 

The hosts of You’re In Good Company are not financial professionals and are not aware of your personal financial circumstances. Equity Mates Media does not operate under an Australian financial services licence and relies on the exemption available under the Corporations Act 2001 (Cth) in respect of any information or advice given.

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Do not take financial advice from a podcast. 

For more information head to the disclaimer page on the Equity Mates website where you can find ASIC resources and find a registered financial professional near you. 

You’re In Good Company is part of the Acast Creator Network.

Maddy: [00:00:20] Hello and welcome to You're In Good Company's Summer Series. Over the six weeks of summer, we're 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 the 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 forward slash Qantas to learn more. Eligibility criteria, terms and conditions and fees and charges apply. Sophie: [00:01:04] Okay, so we've spoken about setting a goal, and then we've also spoken about how you can actually make money through investing. But when it comes down to it, you're ready to take the plunge. Where do you actually buy shares? Maddy: [00:01:14] Yeah, I mean, when I was starting out, it was very confusing because it's like, you know, the share market is where the shares are, but you don't go to a share market house,. [00:01:24] A house? Like a bank? Maddy: [00:01:28] You go to a broker. And I had to get someone to help me or basically just tell me which broker to use. Sophie: [00:01:33] Yeah. So if you take a step back really quickly, we'll give a quick definition of what the share market is, and it's pretty much just a collection of exchanges. So, you know, either the ASX, which is the Australian Securities Exchange or something like Nasdaq, which is for the US. And it's pretty much like a marketplace where you can buy and sell shares. Maddy: [00:01:51] So just like you can go on Adore Beauty to buy your make up, you can go on the share market and buy a piece of Adore Beauty company. Sophie: [00:01:59] It's so exciting, but taking a step back again, the share market is this marketplace, but we do need a third party kind of facilitator to actually help us buy and sell on the share market. And the way you access the share market to buy a piece of a company is through a broker. Maddy: [00:02:18] It's kind of like if we imagine the real estate market, you think of it like you're going to sell your house one day, you engage a real estate agent, you engage a third party to help you sell the house, and that's what your broker is. Sophie: [00:02:27] 100 percent. Now there's a lot of different brokers out there, and I remember when I started out, it was a little bit daunting, pretty overwhelming. Yeah, because there's lots and we both use different brokers as well. So what are some of the main criteria that help people select what they're going to use? Maddy: [00:02:42] So I think probably the first thing to think about is what do you want to buy and what does the broker offer? So do you want to be buying ETFs? You want to be buying shares or stocks? And I guess the other thing to think about is which countries? So a lot of brokers, especially Australian brokers, might only offer the ASX shares or the Australian listed shares. So you need to think about whether you also want to be able to buy US shares or shares on one of the European stock exchanges. Sophie: [00:03:08] Yeah, there was actually a question in our Facebook community group the other day who saying that they wanted to buy shares in Copenhagen. So not necessarily all brokerage apps offer that. Maddy: [00:03:17] Yeah, I think the next thing to think about is fees. So different brokers have different fees when you're trading. Sophie: [00:03:24] Yeah, when I first started, actually, I started out with the bank that I bank with, and I just did that because it was really familiar and easy to do. But I did find that their fees tended to be a little bit higher than maybe some of the other options out there. But I think that's one of the best things about, you know, when you do choose a broker, you can always move around depending on what's on offer. Maddy: [00:03:42] I think I've switched brokers like four or five times, so I hate getting excited by the latest one in the market, oo, I'm going to try this now, I'm going to try this. I think a good rule of thumb that we've mentioned before is that we try not to pay a fee of more than one percent of the transaction. So for example, if you're investing $1000 with a $10 fee each time, then you're sitting about that one percent mark. But if you're paying more than one percent, it starts to mean that you have to earn more and more of a return just to cover your fees. Sophie: [00:04:10] Yeah. And then the last point, which sometimes we're a little bit contentious on, is whether the platform is Chess, and I'm not talking about like The Queen's Gambit or Custodian. Maddy: [00:04:24] Yeah. So just to step back a second, chess is basically a system used on the ASX where you buy and hold shares in your own name. So I get my very own HIN, which is unique to me. It's called is a holder ID number. And basically, that means that if I buy 100 shares of Adore Beauty, then it will be recorded as Maddy owns 100 shares of Adore Beauty. Sophie: [00:04:47] Yeah. And then the other model is the custodian model, and it's used in many countries around the world. And it just means that there's this third party called the custodian who holds the shares on your behalf so they're not directly in your name. But you still do have the ownership rights to them. Maddy: [00:05:02] So the reason why this can be a little bit contentious between the two of us is that I use Chess and this is just completely personal preference. But I use chess. I know it's probably fine not to, but I'm investing a lot of my hard earned money in the stock market, and I just feel a little bit more comfortable knowing that the shares in my name and I have that extra level of security, Sophie: [00:05:27] Whereas I'm a custodian lady. And what the fear is, I think sometimes is that like the custodian or this third party could go under. But in history, it's never really happened. And I actually found a case on the internet the other day where it did happen, but eventually everyone got their shares back. You know, it just went through a different custodian, so it doesn't bother me as much. And I think the reason why I do go with that custodian model and the platform that I use Superhero, I get $0 brokerage on ETFs. So it's just like I can invest more frequently and when I want to, and I don't have to worry so much about the fees. Maddy: [00:05:59] And the point you make there is, I think often, the Chess sponsored model means that the brokerage fees can be a little bit higher. Yeah. Sophie: [00:06:08] So choosing a broker is personal preference, but there's so much information out there, and there's even things now that just compare them for you. And so you can just choose based on those comparisons in your preferences, Maddy: [00:06:19] And you can try them out, test out the user experience. And if it's not for you, you can change. Sophie: [00:06:23] I have a friend who said to me that she's chosen the brokerage app that's just the most simple in terms of visualisation. 100 percent. But don't let the analysis paralysis of, you know, choosing a broker to stop you from just starting investing. You know, at the beginning, I was paying higher fees because it was with a bank that I was super comfortable with. And then I just started downloading things and trying them out. It's again not a perfect pursuit, and you've just got to get your toe in the water. Maddy: [00:06:48] So that's the background that we need to understand. But if you're still sitting here wondering, how do I actually do it? We are going to cover that right after the break. So we understand the background of what we're looking for with different brokers, but I think we should now actually go through step by step about literally how you buy shares, yes. But I've got an idea. I think we should play a little game. OK, competition. Sophie: [00:07:14] Love a competition. Maddy: [00:07:15] I want you to go on to your brokerage app and you're going to go step by step. How to buy a shares in Airbnb. OK. Meanwhile, I'm going to go onto Airbnb and book myself a holiday. OK. And the point... Sophie: [00:07:31] Where's the point?  Maddy: [00:07:32] And the point here is that I want to show how easy and quick it is to buy shares. May going on Airbnb to try and find a place and book a holiday, I think is actually harder than buying a lot of shares on your broker job. Sophie: [00:07:43] So you've set me up to win this competition before you even started. Maddy: [00:07:46] Thank you. Yeah, we're on the same side here. Sophie: [00:07:49] OK, so I'll run through what my steps are. But let's just see who does it faster. Maddy: [00:07:54] And I need to figure out what my Airbnb password is. Sophie: [00:07:56] So I'm going to go on Superhero because this is the app that I use. But all of the apps are somewhat similar. They have similar characteristics, but they might be a little bit different. So what I'm explaining might be a little bit different per app. But if you're using Superhero, then it should be spot on. So I'm just jumping into the Superhero app. Maddy: [00:08:14] I've just realised I don't have Airbnb, so it's downloading currently. Sophie: [00:08:17] I am going to my wallet, which is down the bottom, to deposit funds and I will send for my bank account to the Superhero App through a PayID some money to invest. Maddy: [00:08:26] And I am logging into Airbnb and making sure my card is connected. Sophie: [00:08:31] I click Invest and the bottom. It's a big button that says Invest and I type in the search bar Airbnb. So I'm now on to the company and I know that it's Airbnb because of the ticker ABNB. Maddy: [00:08:44] How much is Airbnb currently? Sophie: [00:08:46] Currently, it's one hundred and ninety six dollars per share at time of recording. So I'm going to put in a thousand dollars and take away around five shares. Maddy: [00:08:56] Update for me, I'm tossing up between the Secret Garden or the funky studio in Noosa Junction. Ooh. Sophie: [00:09:05] Now, when you go to buy a share, it gives you two options. One of them is market order and one of them is limit order. Maddy: [00:09:11] Hold up, OK? You're going to have to explain to me what these mean. Sophie: [00:09:14] So the market order is when you're purchasing a share at the market's best available price, and it's usually just the price that's being advertised. So I can say currently in front of me, $196.42. Whereas a limit order is where you can put in a limit that you want to buy it at. So I might say the highest price that I want to buy Airbnb at is 190. And if it doesn't drop to that price, then the purchase won't go through. OK. Maddy: [00:09:38] Bring it back to me. I think I need to put a limit into my Airbnb app because I'm realising that these accommodation options are rather pricey. Sophie: [00:09:47] So I've put in a limit order because I'm just want to buy it for $190 per share, and now it's asked me for expiry. Maddy: [00:09:53] So what are the options for that one? Sophie: [00:09:55] So you can either choose end of day, which is in its own name. If the stock price doesn't reach that $190 by the end of the day, then the order will not go through. Maddy: [00:10:04] OK, and what's the other option? Sophie: [00:10:06] Good to expiry. So the default of this is that if the purchase price doesn't hit $190, it will expire in 20 days time, so it will just sit there until the price hits $190. Maddy: [00:10:17] And what happens if we never get to that price? Sophie: [00:10:18] It defaults after 20 days, so that never gets to that price. Then at 20 days, then your order will just be cancelled. OK. All right, Mads, where are you at with your holiday? Maddy: [00:10:27] I got overwhelmed by the options and I can't decide where I want to stay. Sophie: [00:10:30] Well, I'm clicking buy right now. So I win. Maddy: [00:10:34] So there we have it. It sounds like actually you can go and buy shares in Airbnb it quicker than it takes me to book accommodation on Airbnb. Sophie: [00:10:42] I wonder if there's like a world record or something that we can apply for, because that was fun. Maddy: [00:10:46] It was fun. I think the point that we're trying to make here, though, is that even though when you're starting out, buying shares and brokerage apps can feel like quite a foreign experience with a little bit of knowledge behind you around what some of the different options mean, it's actually extremely quick and simple. Sophie: [00:11:01] I mean, I just bought a share in the time that you tried to book a holiday. And I'm the one who has a new asset now. Maddy: [00:11:07] Holidays are investments, too, Sophie: [00:11:09] You haven't even booked it yet. Maddy: [00:11:10] Fair call. OK. And as always, we are wrapping up every episode with some content recommendations because it's summer and we all love reading, listening and catching up on stuff over the summer break. Sophie: [00:11:25] Yes, I've been loving your recommendations thus far. Maddy: [00:11:27] Right back at you. Sophie: [00:11:28] Oh, watch out. So what are you adding to the list this week? Maddy: [00:11:35] I have got a Netflix series for you this week. It is called Dirty Money. Have you seen it? Sophie: [00:11:40] I've seen ads for it, but I haven't seen the series, and the ads weren't very telling, so please sell it to me. Maddy: [00:11:47] So this one is a docu series, and each episode deep dives into a new like real life scandal or sort of corruption in business. And it exposes like what? Actually happened, and it is so interesting, it's kind of like true crime podcasts, but Netflix series.  Sophie: [00:12:08] How do they get the facts for these things? Like who are they talking to? Maddy: [00:12:12] So good. They literally interview like the management teams who are involved in the corruption. They interview the people who received the corruption *laughs* who were corrupted... Anyway. But just to give you a little bit of a sneak peek, I'm going to tell you about two of my favourite episodes. The first one is called, I think it's actually episode one, season one, called Hard Nox. I feel like I'm not saying that, right? That's for nitrogen oxide. Hard Nox, Nox. Sophie: [00:12:41] Yeah, I mean, how else would you say Nox? Maddy: [00:12:44] Nitrogen Oxide Sophie: [00:12:45] Nox perfect. Very good. Maddy: [00:12:47] Anyway, it's about Volkswagen's Nitrogen Oxide clean engines, which weren't actually clean. So the episode follows the story of a team from West Virginia University who are trying to expose Volkswagen and their results as fake and phoney. And it's so interesting because, like nobody expects a company like Volkswagen would be dodgy and would be trying to cheat. But they literally created this thing called a defeat device to give emissions readings, which passed the U.S. standards when in reality, they were like 40 times a permissible emission level. Sophie: [00:13:19] And, you know, it's crazy as well. Volkswagen owns a lot of other car companies. It's not just them. So it's like, is it happening with every car that we're driving? Maddy: [00:13:27] It was a seriously mind-blowing episode. Would highly recommend. The other one that I loved was called Confidence Man. And it's basically like Donald Trump's shady deals when he was a business man like pre president. I don't know about you, but I feel like I was sort of too young or didn't really know much about him pre presidency. But this really lays out like what he was like and what he was doing. And I guess maybe where he got his reputation a little bit as well. Sophie: [00:13:55] So you've been using Netflix to watch this. Do you invest in a company like Netflix? Maddy: [00:13:59] This is such a sore topic of conversation, because remember that I pitched Netflix and I didn't invest in it, and it's done super well. And you know what? I still haven't, but maybe I will now. I don't know. Never too late, you know? Well, it can be too late. Sophie: [00:14:15] Not if you believe in it. Maddy: [00:14:16] What are you recommending for us today? Sophie: [00:14:19] I am actually recommending an app and this app came across my eyes, my desk. They came across my desk like, I don't have a desk, it was a slide into our DMS, from one of our community members, and the app is called Finimize. And one of the community members was asking, Do you guys have any recommendations for apps that give, you know, like little brief finance news or like little daily wrap ups of what's kind of happening? And I went on a bit of a search and then I actually started using Finimize to see, like, test it out, and now I love it. So every day it gives me a little daily brief of some stories that are investing related. There's a lot of market stuff, but they're like stories that I wouldn't pull out of, like the AFR. Maddy: [00:15:02] Yeah, nice. What kind of stories are we talking? What was a recent one? Sophie: [00:15:05] So story the other day was about, Hermes, joining one of Europe's biggest stock indexes. So something you wouldn't really I hadn't really read about anywhere else. And the reason why I love the app is because it gives you the facts of the story and then it gives you a little section. It's like, what's the bigger picture? And then it also is like, Why do we care? So then like, you know, the point of this story was that beauty is really moving into that digital space. And so it kind of just gives you a lot of context. It's not just just the facts. Maddy: [00:15:31] I downloaded this the other day, but it's not a free platform. Is that right? Sophie: [00:15:36] Yeah, it isn't a free platform. I bought the subscription upfront for the whole year. Yeah, I think it was something like 100 bucks, which if you divide it over the 12 months, it's less than ten dollars a month. I understand that that might be, you know, too much for some people. But I just thought, you know, if I'm wanting to read the news every day, I love this stuff. We use it for work. It was worth the money for me. Maddy: [00:15:57] I kind of wish that I asked for this for Christmas from mum and dad. Sophie: [00:16:02] I actually love that asking for subscription. Maddy: [00:16:05] It's the gift that keeps on giving. Sophie: [00:16:06] It is. You get magazine subscriptions. It means the whole year you've got something. I love it. Maddy: [00:16:11] I feel like we used to do that when we were little. I remember getting like Dolly subscriptions for Christmas. Sophie: [00:16:17] You know, I would love someone to pay for my gym membership. When it gets taken out of your bank account every month you're like. Damn. Maddy: [00:16:23] That's a good gift.  Sophie: [00:16:24] If you have a friend who is making some money resolutions in this New Year, pass us on. You can slide into their DMs and shoot across our Instagram, which is YIGC Podcast. Maddy: [00:16:39] I would love to hear your recommendations, so jump in our Facebook group. YIGC Investing Podcast Discussion Group, and share away, we cannot wait to hear.

More About

Meet your hosts

  • Maddy Guest

    Maddy Guest

    Maddy lives in Melbourne, works in finance, but had no idea about investing until she started recently. Her favourite things to do are watching the Hawks play on weekends, reading books, and she says she's happiest, 'when eating pasta with a glass of wine'. Maddy began her investing journey when she started earning a full time income and found myself reading about the benefits of compound interest in the Barefoot Investor. Her mind was blown, and she started just before the pandemic crash in 2020. What's her investing goal? To be financially independent for the rest of her life, and make decisions without being overly stressed about money.
  • Sophie Dicker

    Sophie Dicker

    Sophie lives in Melbourne, and enjoys playing sport, and then drinking red wine immediately after finishing sport. She works in finance, but honestly had no idea about investing until her partner encouraged her to start. She says, 'my interest has only taken off from there - I find it exciting… I mean who doesn’t like watching their money grow?' Her investing goal is to build the freedom to do things that she's passionate about - whether it be start a business, donate to causes close to her, or to take time out of the workforce to start a family. Right now, there’s no specific goal, she just wants to have the freedom when she'll need it.

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