Community: SMH Journalist Jessica Irvine | 6 Things I’ve Learnt Since Becoming a Newbie Sharemarket Investor

HOSTS Alec Renehan & Bryce Leske|14 September, 2021

Meet your hosts

  • Alec Renehan

    Alec developed an interest in investing after realising he was spending all that he was earning. Investing became his form of 'forced saving'. While his first investment, Slater and Gordon (SGH), was a resounding failure, he learnt a lot from that experience. He hopes to share those lessons amongst others through the podcast and help people realise that if he can make money investing, anyone can.
  • Bryce Leske

    Bryce has had an interest in the stock market since his parents encouraged him to save 50c a fortnight from the age of 5. Once he had saved $500 he bought his first stock - BKI - a Listed Investment Company (LIC), and since then hasn't stopped. He hopes that Equity Mates can help make investing understandable and accessible. He loves the Essendon Football Club, and lives in Sydney.

Bryce and Alec continue their conversation with our wide community of investors, and today they talk to Jessica Irvine, Senior Economics writer for the Sydney Morning Herald. Though Jessica has been covering the economics beat since 2005, she only just started investing in May 2021, and her recent article, ‘6 things I’ve learnt since becoming a newbie sharemarket investor’, really hit a nerve with our community. In this conversation, they talk about what barriers Jessica saw that made her hesitant, how she overcame these challenges, and the resources that were really helpful when she was researching those first steps.

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Bryce: [00:00:29] Welcome to get started investing in this podcast, we cover all the basics that you need to start your investing journey. Are you joining us for the very first time or is this the very start of your investing journey? Well, before you dive into this episode with us, our feed is designed to go from the very beginning. So we strongly recommend that you scroll up and started episode one. However, if you're feeling brave and just want to dive in, then of course, don't let us stop you. Here at GSI, we unpack all of the jargon in the confusing bits. We hear your investing stories with the goal of making investing less intimidating. And of course, we love to have a good time along the way. My name is Bryce and as always, I'm joined by my equity buddy Ren. How are you going? 

Alec: [00:01:07] I'm very good Bryce. I'm very excited for this episode and we love the fact that more and more people are getting into investing and and trying to figure out this this big, bad world for themselves. And we're joined today by someone who has started their investing journey earlier this year and wrote about it in the paper. And so much caused such a buzz that both of my parents separately sent the article to me. So it's very exciting that we have her on the show. 

Bryce: [00:01:39] Absolutely. It is our pleasure to welcome senior economics writer for The Sydney Morning Herald, Jessica Irvine. Jessica, welcome.

Jessica Irvine: [00:01:46] Thank you. It's good to be here. 

Bryce: [00:01:48] So today, Jess, we're going to unpack everything that you've been experiencing and thinking about over the last year as you've started your investing journey. I'm sure many of the things that you've gone through and thought about and questioned the same as what a lot of people in the Get Started Investing feed community are also going through at the moment. So before we get into the nuts and bolts, though, we've got to start with our true and false game Ren. So let's do it.

Alec: [00:02:12] Let's see. We do like to throw out a few statements and get your thoughts on whether they're true or false. I guess these are some of the common thoughts that people at the very start of their investing journey have. So if we get stuck in first one, true or false, your very first investment has been your most successful. 

Jessica Irvine: [00:02:33] That is true with the caveat that my very first investment is also my only investment. 

Bryce: [00:02:39] But I know I benchmark.

Bryce: [00:02:48] All right. Well, we'll have to ask that question in perhaps a year's time and see where we're at. True or false? You had a strategy in place before you got started. 

Jessica Irvine: [00:02:58] I would say true to the extent that strategies always evolve and change as you go along. So did I nail it 100 percent? Maybe not. But I did have a pretty good think about it and how I was going to approach it. So true.

Alec: [00:03:12] Nice, true or false investing is as hard as you thought it would be. 

Jessica Irvine: [00:03:17] I would also say true. I guess I'm supposed to say it's easier than you think. Everybody jumping

Bryce: [00:03:26] on the market,

Jessica Irvine: [00:03:28] given a thought, you will be confronted by myriad possibilities and choices that will do your head in on an ongoing basis. You will make your tax infinitely more complicated. You will lay awake at night wondering whether you should be paying seven point fifty for brokerage or nine. So I think it it is it's hard work, but it is rewarding. 

Bryce: [00:03:55] Well, I guess the good part to answering true to that is that whilst a lot of people probably think about all those things that you did, it hasn't stopped you from starting at least, which is, you know, you're figuring out all those questions along the way because a lot of people will not even start because they're figuring out should I be paying 750 or nine dollars in brokerage. So, yeah. And to close it out, true or false investing is like gambling false. 

Jessica Irvine: [00:04:21] Although I guess it depends how you do it. It's very possible to approach it in a gambling type manner and go to the moon on the latest cryptocurrency.

Bryce: [00:04:29] So whatever. 

Jessica Irvine: [00:04:31] But it doesn't have to be nice. 

Alec: [00:04:33] Well, just as I as I said in the intro, you've been writing about your journey to get into the the world of finance and investing. You've been an economics journalist since 2005. So I guess you've been in the world of money for a while, but you didn't start investing until this year. So I guess let's start there. Why why didn't you start investing before this year?

Jessica Irvine: [00:05:00] Look, it's a question I get a lot and I almost sort of bristle at it and think, oh, gosh, it's exposed me as such a financial novice that I didn't think to invest in shares until this point. But it also makes me feel really old, because you're right, I did start as a journalist in 2005 at the Sydney Morning Herald in The Age. And my very first start in that was like writing the daily Dollars column. So I would get the GDP figures, figure out that the dollar went up or down. Bring a bunch of economists and put a story together to try and explain why. So I did learn that a lot of the ins and outs of the economy. But so I do just want to remind younger listeners that back in 2005, when I got started, there was this magical thing where you could put your money in deposits on the bank and the bank would pay you like nothing if you didn't have to do 

Jessica Irvine: [00:05:55] anything. So, you know, for previous generations, it wasn't necessary to be investing. I looked up the figures on the RBA website for what was what you could earn on an online savings account with ten thousand dollars sitting in there just before the GFC, you could stash ten thousand dollars in an online savings account and for one month or so you could earn seven point three percent risk free. Wow. And the figure today is zero point zero five per cent. So, you know, I don't I don't feel too bad that I didn't start investing until recently because it's only a very recent phenomenon that younger people, if they want to protect their savings from inflation, can't do that in a bank account anymore. You know, you're looking at investing that money to try and protect the value of it. So it's a very new thing. So I'm only recently getting onto it like lots of people. 

Bryce: [00:06:58] I mean, we can only dream of what it would have been like to have seven percent in a bank account, but nonetheless suggest what was one of the I guess, the biggest barriers you decided or the bank accounts not giving me what I need. I need to start putting some money elsewhere. What was one of the biggest barriers, I guess, that you first had to work through? And what was that experience? 

Jessica Irvine: [00:07:19] Yeah, I mean, at least for me, one of the barriers is not understanding these concepts because I've been writing about them for 15 years or so. So I know what inflation is. I know about compounding interest. I know interest rates. And I watched stock markets are and how they work. So for me, it's an attitude thing and it's an emotion thing and it's a confidence thing. Let this be a lesson to you all that you can know a lot about this stuff, but still find it really intimidating to get into it. And for me, I almost know too much. I sit there and I worry about interest rates and long term global bond yields and what that will mean for sharemarket returns and if we've entered a new period of stagflation. And so I am actually a little bit more cautious than many people might be going into the share market going, you know what, it's going up 20 percent this year, but it sure is. Are we allowed to swear on whatever? I sure as hell so that.

Bryce: [00:08:18] Yeah, that's fine.

Bryce: [00:08:20] That's fabulous.

Jessica Irvine: [00:08:21] I'm not going to do that every year, you know, in terms of the barriers. Yeah. Then it was just literally I remember thinking, okay, I'm going to buy shares. And the first thing I did this is embarrassing. I went to the ASX website was like how I'm going to buy some shares through the ASX. You know, you can't go to make it's not a direct retail thing that you have to go through a broker. So I've not come from a family where we sat and chatted about shares and we were taught how to do that. So even just to realise now you have to have a broker and then it's like, well, how do you find a broker? There are. You know, also if you go to the ASX website, there's tens, tens and hundreds of them. So a lot of the time was just spent as a site trying to figure out how much I should be paying for brokerage, how to open an account, just that nitty gritty. I think that is a massive barrier for people. I don't know how we make that easier.

Alec: [00:09:27] Yeah, I couldn't agree more. I mean, one of the most common questions we get in our Instagram dams or over email is is around that know, how do I actually buy shares? How do I choose what is right for me? And what are all that what are all the different things mean? What's a hand? What's chest sponsored? There's there's a lot of jargon and a lot of confusing bits right at the front end of your investing journey. And I think a lot of people will probably be reassured that someone who's been writing about the economy for so long faces similar challenges that everyone does. 

Jessica Irvine: [00:10:00] Yeah. And then there's also this problem we encounter that the giving financial advice is illegal if you're not qualified to do it. So people want the information, but we're sort of inhibited from saying, well, this is actually the best broker or this is the cheapest one, or this is what you should be investing in because then you're into into financial advice territory, which is a minefield must be for you guys as much as for me in writing. 

Alec: [00:10:25] Yeah. And for us and honestly, we could have a whole conversation about this. So Bryce might need to rein me in. But the the structure of the industry is that when people most need advice, like when they don't know anything and that they don't know what they're doing is exactly the point where they can't get advice because they can't afford it. You know, a statement of advice is a few thousand dollars at the very least. And for someone who's trying to invest the first five hundred dollars or a thousand dollars, it's out of reach for them. And it just feels like the the structure of the industry is is kind of backwards in some way. The more money you have, the better advice you can afford. But you need it less. 

Jessica Irvine: [00:11:04] I mean, it should be reassuring for people that it is it is intimidating. It is complex. It's not you. You're not the problem. What you're facing is a complex choice. Yeah. 

Bryce: [00:11:15] So so what was some of the key resources that you found helpful in figuring out what broker to use? Should you be paying five seven fifty nine nineteen ninety five in brokerage? How did you actually work through that?

Jessica Irvine: [00:11:28] Yes, I'm in a very fortunate position that I'm actually paid to

Bryce: [00:11:33] at least think about it and 

Jessica Irvine: [00:11:35] I can bring up, you know, like I literally just got on the phone on ringing Morningstar and ringing Shane Oliver AMP Capital, and I'm ringing all the people and I can ring up and have the weight of the Sydney Morning Herald behind me and talk to me, tell me all about this. And like I literally had an analyst on the phone with me or via text when I executed my fair share trade and I was like, what supplies did? My voice is just don't really know what to tell you about the panic I was feeling at the time. What the buy, sell, spread, you know, like literally, what, zero point zero zero should I be putting up. Yeah. And they will talk me through it. So yeah. I mean things like I have found Morningstar really good. You can get a four week free subscription to sort of look at their website and their resources. I'm on Instagram and I follow a lot of people on Instagram. I listen to your podcast. I listened to a lot of finance podcasts. But yeah, for me, I could actually just go around and interview everyone. 

Bryce: [00:12:36] I don't know.

Alec: [00:12:38] The the big takeaway from that is if you're really unsure, pretend to be a journalist and just say if you can get someone to talk to you 

Jessica Irvine: [00:12:45] or actually like I remember literally talking to one of the sort of deputy governors of the Reserve Bank, I was like, yeah, but by the way, I fixed my mortgage at one point eight four. Is that pretty good? You know, so I get a little bit inside, help my finances, which I then generously share with everyone. 

Alec: [00:13:02] Yeah. And we should say, as well as writing your articles in the Sydney Morning Herald, you also are on Instagram and I think you have a podcast out or coming out. So you're sharing your knowledge that you're getting from these people in a lot of 

Jessica Irvine: [00:13:18] I money with Jess on Instagram, you can find me and I've got links in there to how you can subscribe to my weekly newsletter as well. And yes, I've taken over the reins for the Please Explain podcast for the Sydney Morning Herald and The Age newsrooms on Wednesdays. I'm going to be doing like we did house prices yesterday so you can find me there on Wednesdays. Thanks for the opportunity to just getting food.

Alec: [00:13:43] That's all right. That's all. The more people trying to help educate everyone, the better. So it's great. It's great what you're doing. We don't quite have the weight of the Sydney Morning Herald behind us, but now that we know you will, we'll get you to throw your weight around when we need it. You mentioned your mortgage and we want to, I guess, take a step back from investing specifically and just talk more generally about, I guess, personal finance budgeting, because a lot of people listening Bryce and I you know, we're all trying to figure out money more generally, not just investing. You recently wrote an article, Forty Things I Wish I Knew About Money Before Turning 40. Now, we're not going to ask you to list all forty. But what were some of. The key things that you wish you knew when you were sort of Bryce in my age or when you were an 18 year old fresh out of school trying to figure out what what the hell to do with your money. 

Jessica Irvine: [00:14:36] Yeah, I mean, I remember no one was just boring and it was just track your spending. And that's been my biggest thing in the last two years, just literally writing down every dollar that I spend. I've got a monthly budget tracker. It seems so elementary, but so boring that it just never occurred to me that other people were out there doing this. And yes, if you want to get a handle on your finances, you need to know where your money's going. You need to know how much is coming in. And ultimately, that determines what sort of a surplus you've got to invest, if that is right for you. So just literally going back to primary school and like, can you add up everything that you're spending and everything that you're earning and figure out how much money you've got? That has been a revelation to me. And I do look back and think if I have been doing that for the last 20 years that I've been in the workforce, how much more money could I have saved? So just like getting people to put pen to paper and look at look at your spending, it's the first piece of financial advice you get anywhere on money. Smart from any personal finance writer, but it's actually doing that and implementing it, which I think people have a bit of a hurdle with trying to think what else was on the list. I sort of moved through all the major things like super and your mortgage with mortgages are sort of the main thing is you don't need a 20 percent deposit. That was the major revelation for me. You know, it's ideal. But in an environment where house prices went up eighteen point four percent over the last year, you know you know, if you are interested in homeownership, if you want to own your home, there are ways to get into the market without having to wait until you've got 20 percent. So I sort of and I when I bought my place, didn't have a 20 percent. I had about 15 percent deposit. And I got my parents to go guarantor on the missing five percent. So I didn't have to pay lenders mortgage insurance. You know, lucky, good luck if you can do that sort of thing, if your parents can do that for you. Oh, gosh, there were 40 on the list. I can keep going. I don't think so. I think anything to do with Super. So I guess for your audience thinking about investing, guess what I mean? And congratulations, everyone. You are already investing through your super. It's just largely happening in the background and you're not you're not really thinking about it. So it is a decision for people as to whether you want to directly own shares or whether you want to get on the super bandwagon and get all the juicy tax concessions that you can get there. I'll bet you can't then access that money until you're 60. But for me, discovering that you can stash away twenty seven thousand five hundred dollars into super and only pay 15 cents tax on on that amount versus whatever your marginal rate is and mine is larger than that. So this year for the first time, I put a big lump sum extra into super rather than buying shares directly because I wanted to max out that tax concession. And I am now awaiting a really juicy tax refund that they either put into super or probably into direct shares, because I would like to retire a little bit earlier than the 60. So I'm just hoping I could sock away a little bit extra that that can maybe talk me over for a couple of years before I can access the super. So super, super, super get onto it and and make sure you're getting all the tax breaks that you can. And it's not just for high income earners. If you're on a low, a low income, there can be some of the best concessions for you because you've got co contributions from the government. It's well worth looking at your super and looking at it at young.

Bryce: [00:18:26] Yeah, I couldn't agree more. We've just done a series on Super and just really trying to encourage people to be more active in how they think about and engage with their super, because, as you said, just almost anyone is in the workforce is investing in the market whether or not they know it or not. And so the more you can understand how your super operates and the advantages that it it brings, if you treat it right and think about it, it's it's pretty, pretty life changing later on down the track. I think if you spend a bit of time figuring it out, one of the biggest personal finance questions that we get here through the community is how should I say for a home deposit or should I rent and then invest it directly in the share market? Now, as I said, we're on one side of the tracks. We don't both don't own homes. And that's because house prices keep going up 20 percent each year. Say that 20 percent deposit is just crazy. But you've written a lot about your journey to homeownership and you touched a bit on it there. How do you think about this decision between home ownership or investing in the stock market? 

Jessica Irvine: [00:19:32] I'll show my age again because when I was young, like you boys, I was very much in the Renquist camp. I was like, why can't you rent? Money is not dead money any more than all this money that you paid your bank. And interest is dead money. So, you know, just the idea that renting and investing is somehow inferior to housing in an intellectual sense, I don't buy into I think you can it is possible to be very disciplined to rent and then put aside a portion of your salary into shares or super and and enjoy the sort of investment returns on that which could make for you, depending on you know, it also depends what sort of property you're willing to buy. There's so many factors that go into it. But yes, the number one piece of personal advice is usually buy your house, then do all your investing. But I mean, given the way that things are with housing affordability, I can see alternatives because and in particular with stamp duty, you don't want to be young buying a house and then selling and moving every two years because you're going to be paying fifty thousand dollars to the state government every time that you do that. So I can see a logic in renting and investing for a while. I ultimately have chosen to buy. And again, that's a tax thing because the family home is tax free. Any gains that property prices just went up 18 percent? I just made 18 percent on my purchase amount and it's all tax free. Blows my mind. And and also when I am an old lady and I retire, I won't have any housing expenses. So if you are looking at doing a long term renting rent this thing, you have to be saving probably a little bit more because there's going to be years from 60 to 100 touchwood if you die at one hundred where you're going to still be paying rent, where everyone who's paid off the home won't be incurring that expense. And for me, I'm happy to settle down. I've got a kid now. I enjoy the stability of of not having to move. But it wasn't always that way. But maybe that's the cautionary thing that you think you want to be footloose and fancy free and then you have kids and you just never want to move again.

Bryce: [00:21:48] Feel like that's the key 

Bryce: [00:21:49] takeaway here is the kid component. Yeah. 

Bryce: [00:21:52] What that 

Alec: [00:21:55] So Jess, we're going to take a quick break to hear from our sponsor and then we're going to touch on everything that you've learnt since starting your investing journey. Suggests you've now been investing for a few months and you recently wrote an article in The Smart Six Things I've Learnt since becoming a newbie sharemarket investor. What are some of the key things that you've learnt over the past few months?

Jessica Irvine: [00:22:21] The number one was just the level of paperwork that is involved with something I thought was going to be super high tech. You know, like it's all online. And then I'm getting all this paper letters from share registries for my ETF fund issuers from the ASX. Just do you guys know why they haven't sorted that out yet? 

Bryce: [00:22:42] Oh, it's a it's a big gripe for us. One of our policies here, we've got a few policies at Equity Mates. One of them is that we hate fees. That's policy number one. And I can't even remember policy number two, but we know we shouldn't put policy number three recently introduced is that we hate paperwork because there is so much of it. And we're on a bit of a movement here to convince those share registers to get it online far out.

Alec: [00:23:11] Honestly, the only mail I get these days is online shopping purchases or letters from share registry. So I think my housemates might think I'm more popular than I am just because I get some letters. 

Jessica Irvine: [00:23:25] So that was my number one movie lesson. The second one is that it's impossible to stop checking your balance and I don't know how to stop this, but I do wake up in the morning and check my sharemarket balance on my trading account balance, and I check it in the afternoon. And I just feel like maybe that's just inevitable. Maybe that will wear off. Will that wear off?

Bryce: [00:23:47] So it has for me for sure. 

Alec: [00:23:50] Yeah, I, I think I'm quite lazy when it comes to a lot of this stuff. And I think that is one of the biggest behavioural advantages I have in the share market. Like I can go weeks without checking it and it just it just is a weight off your mind. Like I once a quarter I check everything.

Jessica Irvine: [00:24:10] Yeah, I'm hoping to get to that point. My other big journey that I've been on is with Dividend Reinvestment Plans. I signed up for the Dividend Reinvestment Plan of my ETF that I have bought into, which is my only investment so far without realising that actually the dividend I was going to receive would not be of a big enough size to actually purchase another unit to actually reinvest in the same. So I've got twenty three dollars sitting there that I've had to pay tax on. Well, I'm about to have to do it, but I don't actually have it. And it's not invested. It's just sitting there. I'm not even sure if it's sitting with the ETF issuer or the share registry, but I'm not emailing back and forth with the share registry just to try and get my money back, because I've cancelled it, because I figure I will just consolidate that into my regular savings. The dividend income that I get. I'm a regular investor. I invest monthly with whatever is my surplus from the previous month. So I will do that. But just dividend reinvestment plans, they sound so well, but just sound good luck. Of course you should reinvest your money. Don't take it all out and go frolic with it. But also, if you've got small investments, it is worth considering and somebody else raised with me. If you do a dividend, reinvest. It makes your tax more complicated because you're buying in at a different tax cost base and you have to keep a record of every thing. And so that is perhaps one of the last things that I learnt as a newbie investor is it does make your tax more complicated. So if you could take me back to two thousand five and offer me the seven, the five to seven percent without having to then also be refilling my tax with foreign source income and franked dividends, like I might prefer a simpler world, like we're being forced to navigate new things. It makes no tax more complicated, although if you're patient enough, it will autofill. But mine hasn't yet this complexity to it. 

Alec: [00:26:15] Maybe there needs to be an such an age led campaign for the government to do a lot more of that like prefilled tax stuff to make it easier for investors would would get behind you on that. Yeah, I feel like

Bryce: [00:26:27] it's the one area at the moment that hasn't quite been nailed successfully and that is record keeping for a lot of beginner investors. I know there are services out there that are working on it and they're getting better, but just understanding what records need to be kept, how to keep them in the impact that those records have later on down the track. It's so easy to just start buying and selling when you start it start out. And then in two years time, when someone says, oh, what you buy those shares for because you have a capital gain, you're like, oh my God, I have no idea. So that's an interesting one. 

Jessica Irvine: [00:27:00] Yeah, I think maybe it's the Atos responsibility to be putting out small resources. Something to make it clearer what you're supposed to do, even to like things like ETFs, make distributions which you have to declare in the financial year in which you accrued them, which the underlying investments generated that return versus dividends which are paid in the year that you declare them in a year that it was actually your bank account. Well, this is a

Bryce: [00:27:25] lot, isn't it? There is, yeah. Yeah. 

Alec: [00:27:29] I think the brokers are with some of the brokers are definitely working on tax reporting. I'm not going to name names, but one of my one of the brokers that I have used releases their tax reporting after the end of Australian tax season, like after you have to file your tax return, which was always a frustration for me. But I think I think the brokers are getting better at it. But there's just so many different players. You've got the product issuers or the companies, and then you've got the registries and you've got the brokers. And a lot of people have multiple brokers and then there's micro investing apps. It's complicated, 

Jessica Irvine: [00:28:04] which is why we shouldn't scare people too much.

Bryce: [00:28:06] But no, these are all very well. 

Jessica Irvine: [00:28:12] At some point you've just got to crash on through and just go, I've got to do it. I might lose twenty three dollars because I've lost it in my dividend reinvestment plan. You know, I might open an account and I might pay a little bit extra for my brokerage that I could have bought time in the market. You know, you you've got to weigh that against getting in. If you if you want to be in, if it's suitable for you to be in, you've got to sort of take a few deep breaths and just you will figure it out later. 

Bryce: [00:28:39] Now, just one quote that we particularly loved in a recent article you wrote is really sort of captures the essence of why Ren and I love investing and why stocks have such a so exciting, I guess. And that's you've said my confidence to invest in shares comes from an abiding belief that very clever humans will always find very clever ways to combine capital and labour to produce additional value. And for us, you know, it's so exciting to be able to invest in the Amazons, the Facebook's, the sorts of the world so easily from essentially the home couch or our bedroom and investing in these companies who are just going out and hiring the best people to create shareholder value. So off the back of this, how's it affecting or how are you thinking about actually investing and what are you thinking about investing in? 

Jessica Irvine: [00:29:27] Yes, sir. My main problem is I don't know who the specific, very clever people are that are going to create value,

Bryce: [00:29:34] but that's 

Jessica Irvine: [00:29:36] a hard thing. But I do have a belief that over time things have got better in our lives. We enjoy higher material standards of of living companies have created products that are providing immense value to consumers and they can sell them. And we keep reinventing things. So, I mean, the economics of that is solid productivity. Although productivity has not been rising that fast like lately, we do become more efficient as humans. You know, it's sort of it's evolution. We get better at things, which is a really joyful, optimistic thing. And being part of shares is like you buying a little part of the companies that are getting better at doing things. The problem is identifying the companies that are going to do that. So my my investment philosophy so far has been very much passive index based investments. I'm not willing to make the call yet as to who I think is going to do the very clever things. But I know that on average, over time, people will do well. And so I've been buying passive index ETFs. Yes. And my first one was in ASX 200 to several. And I'm pretty particular about not revealing which particular ETFs I'm purchasing, but it's an index just trading. 

Alec: [00:30:56] Well, interesting. So in an article you wrote about three ETFs that you like, but I'm assuming they're not thus they're not the ones you actually invest in based on based on that comment.

Jessica Irvine: [00:31:10] The Yeah. So it's having identified, OK, I'm chasing very clever people and then I've realised I've only invested in Australian clever people. If you've only picked an index one in Australia, do I believe they're clever people overseas? Yes. Do I believe they're clever people overseas who don't reside in America? Yes. So that was my decision tree because you can just get an index of Australia and an index in America, which I think is quite common. But then I have this abiding belief that Americans aren't the most clever people in the world,

Bryce: [00:31:41] or 

Jessica Irvine: [00:31:43] I do believe they're very entrepreneurial and they do actually have tax rules and antitrust regimes, which actually make it easy to become quite a very big, powerful company. So I'm not leaning into that. I'm leaning to just I wanted to get a little slice of the world, and I did actually ring up lots of analysts and say, I want an ETF. Which buys me a slice of the companies in every every country in the world. So that's why I have now honed in on some of the ones like I think what was at Vegas. Yeah. 

Alec: [00:32:18] So the three the three four people haven't read the article Vanguard MSCI Index, International Shares, which is Vegas SPDR, S&P World X Australia at WXYZ and iShares Global one hundred I.

Jessica Irvine: [00:32:34] Oh yeah. So they were just I mean again, this is not financial advice and they're not actually the ones I like. I don't own them yet, but I just think it would be so valuable for people facing this decision overload to just go, well, OK, if you were looking to invest in a global index fund which was exposed to lots of different countries. Here are some of the ones that meet that criteria. So that's more why I wrote that article. It's just, you know, where on earth do you start his? I'm not recommending them. That would be highly illegal for me to do. But they're the ones and I haven't actually decided which ones I want to do because I'm going to my next monthly surplus funds will go into one of these. I need international diversification. I know that, but I don't know which one yet.

Bryce: [00:33:22] It's interesting that you say this just because I've recently come off the back of a portfolio review myself and what's in my portfolio, particularly on the ETF front, because I know that there's a lot of there was a lot of overlap between ETFs, which is kind of pointless. If you're a you might as well just pick one and kind of go with it. And I'm of the same belief that I, I really want to get some international exposure x US, x Australia, because you can easily get indexes that focus in on those too. And so I have been looking at a number of these ETFs as well. But one of the challenges is that with any of the ETFs that say they're global, if you look under the hood, the exposure is still predominantly and I'm talking like seventy five percent US stocks just because of the sheer size of these companies. So you do have to find ETFs that are like specific to Europe or specific to Asia if you do want to get out of America and and Australia. And I think it's just a good call out for people who are thinking exactly like we are. And, you know, I want to I want to back the Europeans or what's going on in Asia is to just actually look underneath. It might say global, but it's seventy five percent us. 

Jessica Irvine: [00:34:35] Yeah, that's such a good point. I mean, it's buying you a weighted basket of the current share markets in the size that they are and the companies of the size that they are. I guess if you then looking at emerging markets or even for older Europeans who have been doing so well, that's you're adding a decision layer and you just need to be conscious that you're doing that. OK, I'm picking that they have underperformed and they might over perform or that there's more growth in them than they would be in America. So that's a good observation. And it just shows any decision that you make. You're going down a decision tree and just be aware that that might pay off for you or it might not, depending on how things go on.

Alec: [00:35:16] The point of Europe has underperformed as America has powered ahead. There's this book called Triumph of the Optimists that is basically just like one hundred and something years of stock market data. And I haven't read it. I'm not that into the numbers, but I hear it discussed a lot. And one of the takeaways is that it just changes like decade to decade, which regions are underperforming, which ones over perform. And we've grown up in a world where America has just produced a trillion dollar company after trillion dollar company. But the stock market history shows that, you know, Australia will have its moment in the sun and Europe will have its moment in the sun. And so I think that that core idea of there are smart people everywhere who are doing incredible things and finding a way to spread, spreading the money across the world is is the right one.

Jessica Irvine: [00:36:09] But my main question is about are smart people, but other systems that exist? Do they privilege some people over the other ones? So like this is I don't know about big stocks versus small stocks, you know, do you believe that the economy is free and everyone can flourish in an equal sense? You can be a small guy with a dream and go and you build a company. Or do we think that this agglomeration and there's superstar companies that can then Ren seek and, you know, pervert national laws to get power. And so it's the big ones that will outperform versus the little ones. And I don't know how cynical to be, but I'm a little bit weighted to well, recent history shows it's the big guys that can just really entrench in and do all the rent seeking and and get all the returns from the big networks that they've created. So I don't know whether to bet in that direction or.

Alec: [00:37:04] Instict, yeah, it's an interesting one, and I mean, you mentioned earlier America's anti-trust regime and how there's just been so much consolidation at the big end of town. And you can get very cynical when you you know, when you look at all of this stuff. But I think as investors, you have to remain hopeful that, you know, companies will continue to get better and, you know, the future will be better. And as a result, these companies will make us money. I agree.

Bryce: [00:37:33] So, yes, we are running out of time, unfortunately. So I just had to close out. You know, we always like to ask our expert investors a piece of advice that they wish they knew before they started investing. And I know you've only been in the markets for a few months, but you certainly been thinking about it and writing about it for a long period of time. So if you were to look back, is there anything you wish you knew before you took that plunge?

Jessica Irvine: [00:38:00] I wish I knew. Yeah, it's I think it's impossible to get to a stage of planning and knowledge such that you won't feel scared when you make that first investment unless I've missed something. But it's natural and it's even good to be a bit cautious. You know, it's not the same as putting your money in the bank. Your returns are going to fluctuate. You know, for all the reasons we've discussed, we're not sure where the value is going to be created, you know, so your returns are going to vary. But if you've got a long term plan, if I'm investing for sort of at least 15 to 20 years, possibly longer, you've just got to feel the fear and do it anyway at some point, which is not to endorse risky behaviour. But yeah, if I just would tell just from six months ago, feel the fear, feel the emotion of it. But just remember, you've done all your planning and do you know what you're doing. You got a strategy for what you're doing, go for it. And then, you know, there is actually there's joy in that of seeing something that seemed previously insurmountable. And doing it now might be messy. You might have paid brokerage. It was too high, but but you're in. And so it is a real confidence builder. It's a capacity builder. You're teaching yourself to do new things. And as much as I've witnessed about dividend reinvestment plans overall, I feel very positive that I've been able to do it and just to tell people that it is intimidating. But you can do it if it's appropriate for you and your financial situation. 

Bryce: [00:39:37] A great piece of advice and great disclaimer. Thank you for getting that money. But no, I think Ren and I on the show and in the book and wherever we can just try to encourage people is exactly what you've just said. And that is to get started. Understand, you're not going to get everything right from the start. It's not going to be perfect. You are going to make mistakes. But there's really no other way to do it. You know, it's impossible to try and learn everything on paper. And in theory before you start, I mean, even Warren Buffett ninety one, two days ago, and he's still learning how to do elements of investing. So it's a lifelong journey. But one way you think is is crucially important to understand and get started with. So it's been a great interview in your time.

Jessica Irvine: [00:40:20] Thank you. I loved noting out with you on all of that. 

Alec: [00:40:25] We've done four and a half years of working out on this, so come back any time you want to nerd out again. 

Jessica Irvine: [00:40:30] I would take you up on it,

Bryce: [00:40:33] Thanks, Jess. 

Jessica Irvine: [00:40:34] Thanks.

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