Community Spotlight: Simon – Exploring the Pros and Cons of FIRE with Bryce

Bryce: [00:01:10] Welcome to get started investing in this podcast, we cover all the basics you need to start your investing journey. Are you joining us for the very first time? Is this the very start of your investing journey? Well, before we dive into this episode, our feed is designed to go from the very beginning, so we strongly recommend that you scroll up and start from episode one. But of course, if you're feeling brave do not let us stop you. Here at Get Started Investing feed, we unpack all the jargon and the confusing bits. We hear your investing stories with the goal of making investing less intimidating, and we want to have a great time along the way. My name is Bryce and as always, I'm joined by a guy who thinks the intro is so long. My equity buddy Ren. How are you going?

Alec: [00:01:51] I'm very good. Bryce I wasn't going to say anything about the intro. I feel like I said enough, but then you're really dragged out the ending. I'm sorry, but look, I'm excited for this episode. We're joined by an old friend of yours, a new friend of mine and a new member of the Equity Mates team. Simon. 

Bryce: [00:02:11] That's it. Simon Harvey. Welcome.

Simon: [00:02:12] Thanks, gents. Great to be here. It's quite a long intro. I realise sitting in the room

Alec: [00:02:18] Simon, you can't come in and throw shade. 

Bryce: [00:02:22] Simon has just joined the team as head of product here at Equity Mates and as is tradition. If you haven't seen Simon on our social media, we do get all of our new staff members into the studio as well. Baptism of fire to hear about their investing journey where they're currently at and to make sure that we've made the right hiring decisions. So we're going to unpack Simon's investing journey. He's a bit of a fire fanatic and yeah, just have a general chit chat. 

Alec: [00:02:50] Yeah, I'm excited about that because Bryce has definitely built a reputation as what's the opposite of a fanatic? And I had a NEG. 

Simon: [00:02:58] There's a fire fire. 

Alec: [00:02:59] I finally got a fire fighter. But Simon, we'd like to start with a bit of a true or false game. So true or false? Your very first investment was your most successful. 

Simon: [00:03:09] Absolutely false. But if I still hold, it could be up there. 

Bryce: [00:03:15] OK. 

Simon: [00:03:18] Yeah. OK, so yeah, back in the early days, you know, glory days take you back to those times, then didn't have much money. Started doing a study on Ryanair, which is a low, ultra low fares airline in Ireland. UK Europe start doing a study on a strategic analysis. Liked what I saw. And then for I got a bit of money in my student loan coming for you. This looks like a good bet. The share price is definitely going to go up. So I know I did. One of the investment sins I invested with, money I couldn't afford took out a position in Ryanair after a few months as the share price is pretty volatile and I just kind of realised I actually need this money to live, so I had to sell out my position. So yeah, that wasn't a great start to my investment journey. 

Bryce: [00:04:15] But obviously subsequently it would have been, 

Simon: [00:04:18] yes, I was just looking at the price yesterday. I haven't looked that well, so I reckon it's about four euros ish around that time is thirteen euros now. It's quite a few years ago, but yeah, yeah. And plus if I hold, which I guess is like as well as those lessons, right? If you just start about holding your positions for the long term, not trying to speculate and make those short selling well, 

Bryce: [00:04:41] a lot of lessons in there. Don't invest with money that you need and then don't sell your position if you've done the work just because the stock is going a bit lower and don't dwell on the past. 

Simon: [00:04:57] Are you guys familiar with the CEO Michael O'Leary? No, no. OK, so he's a bit of a character like he's got some amazing quotes. I've got a couple here you want to hear. Yeah, yeah, yeah. So he comes out with things like if you remember the days when we didn't have boarding passes on our phones, use to charge people 60 euros if you forgot your boarding pass. No, turns out. And he said his response to that was we think they should pay 60 euros for being so stupid. So forget it. Forget it. He says things like if drink sales are falling off, we get a pilot engineer, a bit of turbulence that usually spikes the sales. And and this one's really my favourite one because this is diet relevant to me, says MBA students. Come on, my staff is my most important asset. I say bullshit staff. This is your biggest cost. We employ some lazy bastards. You need a kick up the backside. No one knows egos can bring themselves to admit it. So that's what I was investing in as well, which I probably didn't appreciate your time. You might see when you've got a guy like that, what it does to the market, when he's coming out some of this stuff. 

Alec: [00:06:04] Maybe he's the Elon Musk of the alliance. Yeah.

Bryce: [00:06:08] Next one. Simon True or false.. You had a strategy in place before you started investing. 

Simon: [00:06:13] No. No strategy at all.

Bryce: [00:06:14] Yeah, yeah. 

Simon: [00:06:16] Nice. You know. 

Alec: [00:06:17] Well, we'll put a pin in. Do you have a strategy now? But next question investing is as hard as you thought it would be true or false. 

Simon: [00:06:28] I think practically is super, super simple, and I think it's pretty easy now with index funds to like, get diversified easily and understand it fit the bill. I hard actually is. Probably there's just so many good companies out there, especially like funnelling where I want to put my money. But practically, yeah, it's super simple. 

Alec: [00:06:47] It is a common lament of mine here at Equity Mates. How do I get more money to invest? 

Bryce: [00:06:52] Yeah, it's just it's it's crazy. Everybody's every day anyway to close out, Simon. True or false, investing is like gambling. 

Simon: [00:07:02] Look, I think you can be if you want it to be, I think it comes down to time, friends again. Like if you're looking to make money quickly, there's definitely a lot more risk involved in speculating. But I think if you spread your investments, different stocks, assets think a long time. There's quite a lot of research out there now, which sets out the risk and reward is relatively predictable over long term. So nice. Not like gambling. 

Bryce: [00:07:25] Nice. Good enough to pass the test.

Alec: [00:07:30] Well, Simon, you told us the story of your first investment, Ryanair, but we'd love to hear the story of how you got started investing more generally. You know what resources helped you and all of that stuff? So take us back to, I guess, your uni days. How did you get started in investing? 

Simon: [00:07:47] Yes, I think after that it kind of spooked me a bit. Probably stepped away for a while. Didn't have the cash either, really. I left uni, got my first proper job and suddenly had loads of cash coming in. Not loads of cash, but compared to Bryce compared to where I was before. The change was not dramatic. You're living off nothing today, actually getting a decent enough salary to keep it going. So but like I had my philosophy the whole completely wrong way round there is like a force spend now. I learnt more in the future when I'm older, so it'll be easier to save. So that was where my head was at and I kind of did a thing. I guess what a lot of people do, and I actually ended up having debt. I like credit cards spending too much. I come off the back of quite a long relationship at the time, so it's kind of like going out, enjoy myself spending on clothes holidays. But then it comes a point. I was actually doing a lot of commutes at the time to go into the podcasts, and Tim Ferriss is Tim Ferriss and a guy on his podcast called Mr. Money Moustache. Oh yeah, yeah, it's like he's quite direct, brash. He's a big cult figure in the fire movement. Massive? Yeah, yeah. And he basically he came out in his offer of retired. Yeah, yeah. And it's like, I've got enough money now invested that I can actually fund my lifestyle. And I was like, Hang on. Yeah. Well, I've never heard anyone talk about this. It's always been. You work hard. 65 You retire, you have your pension, you crack on. So that was like a paradigm shift for me in my head, and then I started digging deeper and getting involved. He's got really he's got like, quite a good blog which breaks it down. His writing style is very easy to read, and I just start discovering financial independence. And a big part of that which we can get into is around index funds like and I started understanding index funds and then actually just started tracking my net worth, which was eye opening. And I'm shy today, ladies, you're in good company because I had a really good episode this week about network with Alex from Broke Our Wealth and it's worth listen to if you want to find out more about net wealth start tracking. And that's really where my journey began from that point. 

Alec: [00:10:01] Nice. Bryce is a big proponent of the spreadsheet is is that how you track your net wealth? 

Simon: [00:10:06] Absolutely everything Bryce that spreadsheets weigh. And so you get to know me a bit more like my best man did a joke about spreadsheets and as well in my of where I know I'm big on the spreadsheet.

Alec: [00:10:19] Well, completely unrelated to investing. But Bryce has also told me that you're the king of PowerPoint, the best slides in the game. So I'm looking forward to saying that as well setting expectations 

Bryce: [00:10:31] up for failure. Sorry, sorry. Sorry, Simon. So you started tracking your wealth using spreadsheets. Then how did that kind of translate into actual investment decisions and building a bit of a investing style? 

Simon: [00:10:44] The form like we're getting to, but the index funds, which is where I started and just started getting regular payments into using Vanguard in the UK automated payments into like a broad fit c one hundred and like a US index fund and was just watching that kind of everyone know Aussie was finding awesome if you can even get exposure. To the Aussie and the Vatican at a time you probably can. It was a few years ago, but yeah, to start getting into that, one of the things that I recommend actually to anyone listening is if you can speak to like a finance manager at work and get, I found I did. And just like, get your head around profit and loss and balance sheets and like, if you can start understanding revenue, cost profit balance sheets like it goes a long way of like actually a lot of the jargon you see in financial reports and announcements, you can kind of start to understand. So I guess I went in like low risk index funds, but in the meantime, I was increasing my knowledge of markets and businesses and now share prices change, et cetera.

Alec: [00:11:49] Mm-Hmm. Yeah, I think that's a great resource and one that I haven't heard suggested before, but makes so much sense. Yeah, because all of those outputs that we say in stock market announcements like these finance managers are using as like inputs for their job. Yeah, exactly. So Mr. Money Moustaches podcast with Tim Ferriss, his blog Finance Managers at work with any other resources, books, podcast people to speak through that you found really helpful in getting set up and started. 

Simon: [00:12:18] Yeah, I think there's a there's a couple of books, one I reckon Bryce is going to ask the Hey, 

Alec: [00:12:26] but I'm loving this tension that we're building up in the episode between you and 

Simon: [00:12:32] the others know who's going to hate for the for me is bad philosophy, and I can kind of justify that. 19 Written in 1926, Okay. Sold over two million copies. Collection of parables set 4000 years ago. 

Alec: [00:12:50] Is it richest man in Babylon? 

Simon: [00:12:54] You know, it's just I think, though, I think it's like basically ring in like ancient biblical language and a little stories, but basically like the concepts of basic like pace of just like. One of the things you guys don't trust a bricklayer to buy jewels. So don't get caught up in other people's excitement. Currency experts? Yeah, don't worry. Eggs in one basket. Diversify. Control expenses. Even the richest man is the constraint on their life. Do what you enjoy, but don't overdo it and increase your ability to earn a salary like his feelings. But it's very like it's like they line in a flat flowery language, parables ancient times. It's probably not like me and enough Bryce Afterpay. 

Alec: [00:13:43] You use a rhetorical flourish. I hate to write about stuff 

Bryce: [00:13:49] and literally just give me the spark notes. That's all I need. I'm never going to read it back. I knew all those things. Exactly. 

Alec: [00:13:56] Oh, well, Mr. Smug, why don't you retire at 30? 

Bryce: [00:14:01] Then I have to tell you the joy. I'm not working a day in my life. 

Simon: [00:14:09] No, not the other book I had, which probably bore. Anyway, it was a random walk down Wall Street. And if you guys have read that one, I haven't read it.

Bryce: [00:14:17] No.

Simon: [00:14:18] Yeah. I think there's like it's I think if you like him probably started to go into maybe like, you know, you know, the ropes and you want to learn a bit more about kind of how the markets work and cut to the cap and model and that kind of stuff like it kind of takes it to the next level. It's pretty easy to digest and also some good stuff in there about depending on where you and your life suggestions on how you should split your portfolio across different asset classes and stuff. So that was really helpful when I read that. 

Bryce: [00:14:48] Not nice. So you've put this philosophy in place where you have an idea of, I guess, money management and that sort of stuff. So what is your investment goal at the moment? You have passed through so late and you're not retired working for us? 

Simon: [00:15:03] Not I'm still going. Yeah, that is, you know, I feel like a retired working here, Bryce.

Alec: [00:15:08] So that's know that's a good answer. 

Bryce: [00:15:11] But over many conversations with our time working together at woollies and whatnot, you're certainly embodying that spirit of wanting to get to a point where you can put the feet up earlier than most other people, I guess, or wanting to have some sort of financial security. So what's the what's the goal?

Simon: [00:15:29] I kind of for me, it's just about freedom and choice where you kind of not wedded to needing to work or earn a certain amount of money to live the life you want to live. So it's not about retirement. It's more about getting to the point where you've got the confidence, the freedom to spend your time doing stuff you want to do. Yeah, we've that's kind of what I'm aiming to do. The goal really would be to have enough assets where the revenue coming from those assets would cover your annual costs. And there's a few kind of metrics they use and the fire community to try and work out what your kind of financial freedom number is, which we can explore. I'd love to hear Bryce, though, if we get if we're getting to fire, like, what are your issues with it? 

Alec: [00:16:11] Well, hold on, hold on, hold on. This is the perfect cliff-hanger to get an ad break in. So we're going to take a quick break to hear from our sponsors. Bryce is going to take a deep breath. And then on the other side of this ad break, we're 

Bryce: [00:16:24] going to be mute from this point on. 

Alec: [00:16:26] We'll let Simon ask this question and we'll let the games begin. All right, Equity Mates, before the break, Simon left us with a cliff-hanger. He was asking Bryce why he has issues with the fire movement. This is the perfect opportunity to get into fire because as we've spoken about, Simon has sort of really focussed a lot of his investing goals and strategy around the principles of fire. So Bryce, I guess, over the years. 

Bryce: [00:16:58] What do you want me to say? 

Alec: [00:17:00] Well, that's a science question. 

Bryce: [00:17:02] What would I have? Why do I have an issue with fire? 

Simon: [00:17:05] Are you anti fire? 

Bryce: [00:17:07] Am I anti financial independence? No. Am I anti retire early? No. I love the outcome that fire tries to achieve. I think that for 95 per cent of people doing it great and probably do. And like, I am doing it myself in some form, I'm trying to get financial independence so that I can. Exactly what you said. Have some ability to feel like. I've got more control over what I want to do and have choice and freedom. However, I think that there are elements of the fire movement that get caught up early in conversation around fire, which you sacrifice a lot early in life. I think to 

Alec: [00:17:49] get there, if I can throw a quote that Bryce or used to use, you don't use it so much now, but you would often say, I don't want to eat beans and rice in my 20s so I can retire at 40. 

Bryce: [00:18:00] Yeah, yeah. And I think that's what I felt at that point in time when and when the fire conversation was happening. A lot of the rhetoric was around, you know, a lot of the news articles that came out of, you know, a couple in their early thirties who are living in a caravan. 

Alec: [00:18:16] Yeah, cutting expenses to the barn. 

Bryce: [00:18:18] Yeah. And like literally like all living in a forest under it, under a tent. 

Simon: [00:18:24] But it's also like in the tent. 

Alec: [00:18:26] Simon lives in a forest today. What are you talking about? 

Bryce: [00:18:28] But what I'm really interested in as well, which I don't think is captured in the fire conversation or in the calculators I don't know is like life planning and then coming back to the no when someone goes and say, says, OK, I'm 20 and I'm currently, I reckon I can live off $40000 a year. So I need a million bucks in the bank account or in a share portfolio and to live. And all I need is a four percent return on that and I'm going to be sweet. Where do you factor in having a kid? Where do you factor in medical emergencies? Where do you factor in? And so those are the things that I think missed that conversation. 

Alec: [00:19:08] Well, can we ask Simon that question? 

Bryce: [00:19:09] Yeah, yeah. So like, how do you? And I think a lot of it comes down to earning more as well over a period of time so 

Simon: [00:19:17] often had to really get. I've been into really good points like this. The first part, I think, yeah, with any philosophy or kind of like people take it to extremes, and that's probably stuff which makes the news and gets out and is extreme. I'd like to sound much more like in the moderate fi side of things, and for me, I guess, is just like a realisation that I was spending money on stuff I didn't need. It wasn't adding value to my life. Or actually, I could use that money, save it, invest it and buy freedom later on. So there's like extremes you can take it to right in this. I love that you guys in Fight Club. Yeah. Tyler Dad Court. You know, we buy things. We don't need money. We don't have to impress people we don't like.

Alec: [00:20:01] That is good.

Simon: [00:20:02] And that was like, yeah, like I was doing the complete opposite most start of my journey. And I kind of like is like, Yeah, I need to. That's why I move towards. But anyway, like in certain life events is true. Like this absolutely true. And I'm thinking about starting a family at the moment and stuff. So how do you factor that in? I mean, one thing I do is if I think I need 50k now, I'll build inflation forecasts into that. That's not the point. Low voice inflation at the moment. That's the that's a challenge. But then you don't factor in things like, you know, not everyone will get it and you know, you don't want to suffer and things like inheritances or like, you know, other stuff which happens in life, which you might get. And once you hit that fire, it doesn't mean you don't have any income like you might still go and want to work part time or work on your passions and get ten years, 25 years in the year. So that's like, I think there's a lot of variables, but just as a kind of a goal and it's something you should review regularly and it needs to change. It's a good aspiration to have, but yeah, definitely in three years time, my I know if number may change my life, my endpoint might change, but 

Alec: [00:21:08] I'm surprised there's not in an fi calculator one. Surely they, they say, put an inflation rate in, but two it's like, give us some life. Things like, how many kids do you want a high school? What contrary? Well, I think if you're doing fire, you're not factoring in $40000 a year to send your kids to Cranbrook or something. 

Bryce: [00:21:26] Well, I don't know. Are you? Do you factor 

Alec: [00:21:28] question do get Typekit? 

Bryce: [00:21:31] I mean, like, it's not and I'm not saying thousand. I'm not saying $40000 private schools, but mind you, like, that's fricking expensive. 

Alec: [00:21:39] But like honestly, the only thing that's going faster than inflation at the moment is private schools. 

Bryce: [00:21:43] Yeah, but just like all of that stuff, like mortgage payments, you'd be at the current house prices in capital cities you're paying off for the rest of your life in some instances. So like all of that stuff is. Yeah. Do you factor all of that into it? I find no. 

Simon: [00:21:58] Yeah. Well, you can. Definitely can. It's going to make that number a lot bigger. I think to me, a smaller actually, when I hear that I no, I don't think it's going to go from a, you know, I'm working full time to zero. Yeah, there's like that transition. And I guess it's I guess it's like when you get satisfied if you want to do something or even before you hit the five because you're on that journey, take a pay cut to do a different job. Do something. Follow your passions. Go part time if you want, spend more time with your family. So for me, it's more like I'm not trying to get it perfect. The model to try and build in everything. Just trying to get to a place where that confidence is growing that actually, you know, it's going to be all right. I'm getting near that independence. No, if that makes sense. Yeah. 

Alec: [00:22:40] So I mean, you should know that Bryce is only trying to inflate the number because he doesn't want you to leave us and go and retire early. He wants you to stick around here 

Bryce: [00:22:48] for up to two quick questions. Is your wife on board with it? And also, how many years till your current truck? 

Simon: [00:23:01] Yeah, that's true. Yeah, my wife is working at Equity Mates wife, Stephanie, on board, and I think it's good because we kind of balance each other because like, we still want to enjoy our lives, right? So it's not like, and you know those questions you've asked just then she's asked me before and like, if she gets it, she's on board like she. The kind of general message that you just work or your life, you get to 65 and you enjoy it like she's not buy into that. She wants to think differently as well. So she's definitely on board in terms of how far I think. Like for me, I've always said like, I'd like to get to about 40 and be like, Well, you know, in that if I no. And currently, you know, you don't know what's around the corner, but currently, like tracking. Well, probably like I probably say, like, I'm seven, six, seven years in Bryce. And isn't there some really cool stuff you can actually look online? And these are just numbers. But depending on how much percentage of your salary you're saving, the predicted number of years before you could get to five, because the money you save influences ESPO reflect your spending, right? Yeah, and what you're saving, if that makes sense. So if you save makes 50 percent, that means you're spending 50 percent of your money. Yeah. So there's actually some calculators you can work out. If I'm only if I'm saving 20 percent, how many years will I have to save for from stock from zero nine? Yeah. So some cool resources out there and yeah, probably say like if people want to find more, Mr. Money Moustache is probably the best place to start. Yeah. 

Bryce: [00:24:28] He took pretty extreme at the start as well from memory. He was Bryce. Yeah, he did. 

Simon: [00:24:33] Yeah, he's like on the extreme end in 

Bryce: [00:24:34] a log cabin. Hmm. 

Simon: [00:24:36] I think it's kind of a good day because it kind of shows you sometimes need that extreme to like, get yourself out of, you know, your traditional way of thinking. It doesn't mean you're going to be like him, but he shows you where you can take it. 

Alec: [00:24:47] Yeah, yeah. Yeah, there's I think, you know, the takeaway that I've definitely taken from doing this for four years. Speaking to a number of people who love fire, Ozzy Firebug is is a big one in Australia is that we agree with so many of the principles when we talk about why we invest and when Simon talks about why he invests. It's basically the same thing. We want flexibility, we want choice. We want to be able to take a low paying job. We want to be able to drop out of the workforce and come back. All of that stuff, it's just like the endpoint is different. Like the endpoint is not to leave the workforce permanently and sit on a beach. We want to keep working. 

Simon: [00:25:26] That's the whole plan. Yeah. Yeah, yes. Fun for a few weeks, a few months, maybe go every year. But that's not exactly 

Alec: [00:25:32] I would get. I'm a workaholic. I'd get so bored. Yeah, yeah, yeah. So Simon, you're obviously from the UK. If people hadn't picked that up from your accent and we've spoken to a couple of UK experts over the journey, and our biggest reflection is that in the UK, fire is, I guess, much more embraced then than in Australia. It's a lot more, I guess, mainstream in financial press and in financial podcasts and stuff like that. Have you noticed a difference coming to Australia in how fire is spoken about and how it's thought about? Yeah, I don't. 

Simon: [00:26:06] Is something I've heard. It's my fifth year, so it's been a few years. So have been so close to it recently. But yeah, I don't f I've noticed I was thinking about this slightly. Differences between a and, you know, are people more into in the UK, while that might be? I think like there's one thing, there's a few things probably is like in 2008, the GFC, like we got hit in the UK by a bad recession. And I think a lot of people like living frugally or realising you can't kind of, you know, guarantee what's around the corner did probably influence the mentality on how people spend their money. So I think that's pretty one thing. And also like there's no mandated super in the UK like there is here. Like, do you I think you automatically go in and around five percent of your salary, but you can actually opt out, right? And and that's only come in the last few years. So before that, you could just now not putting anything in a pension like you do get everyone gets a state pension in the UK of those very small and you have to be like 60. I think now is a man, so you can't rely too much on that. But I think people are starting to wake up to like, Oh shit, if I don't do something like, I'm going to be in trouble later on and then probably people are realising, Oh, actually, if I do more now, it doesn't have to be 65, it can be earlier on. Yeah. So I think those things to play, and I think there's probably lasting just generally like generally on average, salaries are higher in Australia than the UK. So I think people probably don't start mentality to get around like, you know, I've got more money, I'm going to have more money coming. Do I really need to invest my money now? 

Alec: [00:27:50] I'm not going to say we should cut people's salaries, but I think more Australians should take on that UK that you had attitude. Yeah, yeah. 

Bryce: [00:27:58] Who's the guy we spoke to on the show? 

Alec: [00:28:00] Andy Hart and then paid 

Bryce: [00:28:03] Matthew hate Matthew. Yeah, he was right into it as well. Do you know 

Simon: [00:28:06] him? No, I don't. 

Bryce: [00:28:07] Massive finance guy over that. He both of them are. Yeah, Matthew does meaningful money. So two things. Check out those episodes on Equity Mates investing podcast, but and read 

Alec: [00:28:16] a book because both of them feature in the fire section about both. True. True. 

Bryce: [00:28:21] Let's. Close out the episode with just some, I mean, broad based questions for us, if you have any, we often often like chatting in the office about stocks and investing, but it's great to try and capture it on audio as well, if we can. So do you have any questions? 

Simon: [00:28:37] I do have some questions. 

Alec: [00:28:39] Good. If you have 

Simon: [00:28:40] how much time? If we got four questions. Just five minutes or so free. 

Alec: [00:28:45] Yeah. 

Simon: [00:28:46] And I've read you guys book. I know where you sit roughly on property, but I just like, what's your thoughts at the moment? Sort of data. Average loan size in New South Wales is like nine times average annual earnings, which is just insane. I think it showed. The thing is like if it was on the global scale, Switzerland or something, it's only country ahead. Wow, is this perfect storm of inflation that we all know about is surely interest rates are going to go up? Like, What do you what do you see happening in the property market? Do you have a view on housing is going to play out over the next six, 12, 24 months? 

Bryce: [00:29:25] Look, I'm not going to pretend I know exactly what's going on in the property market, but I could deduce some sort of outcome. I guess my feeling would be that a lot of people have taken out a lot of debt to buy in an incredibly expensive market. Mind you, I want to caveat this by saying I have nothing against property. I want a property. I'm sure Alex is the same like we want to get in the property market, but it's incredibly difficult, particularly if you are going out it solo. But if you've taken out mortgage with rates at less than two per cent amazing, you know, credit is cheap. But let's assume that over the next number of years, three years, inflation does continue and the RBA has to increase interest rates. We're already saying that rates between banks is rising. So that is then going to have a flow on effect to the rate at which we can borrow it. But it's also going to have effect on people who have taken out debt. The variable rates are likely to rise. How that impacts their ability to pay off their debt. I'm not so sure, but you could sense that it might get to a point in a few years where people might find it more difficult to pay off their rent that their mortgages, or it just becomes incredibly expensive to borrow money. And so less people are likely to be getting mortgages because the one of the reasons that it's become so hot is because money so cheap at the moment. I don't think there's going to be a massive housing crisis or anything like that. I'm not saying there's going to be defaults, but I feel like that if you've taken out a loan nine times your income, firstly, that's insane. You might not have a lot of wiggle room. And when rates go from two per cent to four or five percent, that might really hurt your pocket. And then macroeconomics, the flow on effects of that to the broader economy, less spending, less demand. We might then start seeing a slowdown. That's my thoughts anyway.

Alec: [00:31:25] Yeah, I mean, look, I have thoughts as well. I think the first thing is we are not anti property like as Bryce said, we would love to own a place. The only thing the reason we don't make a lot of content about it is one. It's not an experience that we have and to heaps of other people make content about it. So yeah, I think the right investment strategy is to diversify and diversify across within an asset class like in the stock market, across different assets, but then also diversify across different assets. That being said, so I we've spoken to a couple of mortgage brokers over the journey on Mike or maybe not on Mike, but definitely off Mike. One thing I was speaking to on recently, and he was saying that in Sydney, a bunch of people that bought in 2016 there was like a big apartment boom in 2016 are actually underwater, even though the property market's been so hot and interest rates have been so low for the past six years. So I think, you know, as much as we all talk about, on average, the housing market just grinds upward and every political incentive is for the government to keep pushing it upwards and all of that. It still matters what asset you buy. For me, it's about getting the right asset, and for me, I just don't have the money to get the right asset this time, so I would love to get property. But in terms of what is going to happen, I think interest rates are going to rise. I think it's going to hurt people that have mortgages. I don't know if it will necessarily lead to lower house prices. All right. 

Simon: [00:32:55] I just had a question about thematic ETFs. So many out there. Yeah, so many. There's there's a few like I really like I a grey, though. Is there any where you feel like there's still quite early on certain themes in the economy, what you are looking in or you're interested in? At the moment, 

Bryce: [00:33:16] it feels like you can get overwhelmed with thematic ETFs and then you just get overwhelmed with all the companies that are out there. To individually buy as well, but one thing that I like about the thematic ETFs is that if you are overwhelmed by it, oh my God, I need to buy all these amazing companies out there that you can wrap a lot of them up into ETFs. So you know, when the I think recently we had one that came out with the Avi electric vehicles. We've had semi come out, we've had hydrogen come out automatics that we've love speaking about on the show and I'm sort of really into 

Alec: [00:33:49] I think for me, the idea about being early is something that I've thought a lot about recently because I when I started investing, it was like, You know, what's next? Like, What is the new thing that I can get in on the ground floor of and then ride it like, that's an intuitive way to think about the market. One thing that I've really reflected on recently and I'm really trying to internalise in my investing is these things run like trends don't happen overnight. And you know, these are like these megatrends that we're talking about a multi-decade things and the idea of if I miss the start I'm to life is is probably the wrong way to think about it. The better way to think about it is, is my analysis about this trend actually right? And like a couple of examples to illustrate that some of the trends that we've lived through in our lifetime we could have invested in 10 years ago, 20 years ago or, you know, five years ago and done really well, China. I remember when I was in high school, my economics teacher was telling me about the rise of China and all through the last 15 years, like, that's been an investable trend that's only been going in one direction. The idea of cutting the cord and, you know, moving from old school media of print journalism of, you know, over the top of TV and radio and towards streaming and digital has been a mega trend of our lifetime. And there were so many like you could have invested in that 20 years ago or 10 years ago, like you weren't too late if you missed the first 10 years of that move. And so for me, that's something I'm really trying to internalise that like, it doesn't matter what's next, it matters what's big. And on the other side, there are trends which people felt like they were early on, which they were just wrong about. The one that really comes to mind is marijuana. Perhaps they're not wrong long term, but there was so much hype about marijuana. Like, there's going to be a wave of legalisation this this is going to be a mega trend. These companies are going to be the next Coca-Cola or, you know, kierans or societies, you know, like that's that's what these guys are going to be. And the first part of the analysis was right. We have seen a sweeping wave of legalisation across, you know, North America and slowly going out to the rest of the world. But the second part of that analysis was wrong. The Tilray's and all of those marijuana companies that were so celebrated haven't been great stock market performers. So that trend was one that it didn't matter how well a lot of people made a lot of money, but like it didn't play out in the way that people have expected. And so that was or it's that the unit economics of those of that industry doesn't lend itself to these giant mega corporations and great stock market returns. But we'll say, though, for me, it's like the idea of being early on a trend is something that I really thought about a lot. And now I'm trying not to think about as much. And it's more like, how big is this trend and where are we on that journey? 

Simon: [00:36:46] Yeah, that's a great way to frame it. I think I've still been in that mindset of, I need to be early. Like, have I? Now people talk about this. Have I missed the boat? Is this trend staying long term? Yeah. So it doesn't matter if you know we might not have 15, 20 years for this to run citizens. If you missed the first two or three years, but if it's only, you know, if this is actually a hype, yeah, it's going to fade out and you need to look into that. So, yeah, I totally get that. Yeah, thanks. 

Bryce: [00:37:13] So. So, Simon, great to have you on. Thank you so much and welcome to the team. One thing that we would often discuss when we're working together always, though, was the difference between UK and Australian investing. And I think there are some interesting differences that I would like to say here in Australia in some instances. So to close out, what are some of the differences between the UK and Australia when it comes to investing? 

Simon: [00:37:33] Yeah, there's probably there's two things there's there's a beautiful product in the UK, which I really miss. I don't know if you guys have heard of it. It's called an ISA. 

Alec: [00:37:43] Oh yeah. 

Simon: [00:37:44] Stands for individual savings account. In essence, it's just a tax wrapper, so you could go to your bank equivalent. You know, CommSec come back equivalent in the UK or Vanguard or heavies. You can buy shares for an offer, you a stocks and shares ISA, and it allows you to pay up to £20000. So thousand Aussie every year. Well, and you'll never pay tax on any gains on that money. Yeah. So for the everyday investor is super, you know? Yeah, encouraging and there's benefits there. So that's one thing like I really. 

Alec: [00:38:21] Does everyone in the UK take advantage of this, like is it just like. Yeah. 

Simon: [00:38:25] I mean, a lot of people use it used to use it when interest rates are good for cash savings because you could use it for cash savings as well. More recently, you know, when people get into stocks and shares, you have ever more. You'd be you'd be crazy, not crazy. If you're a UK listener and you're not really advised to go out and look into ISAs, you are regretting what I think. 

Alec: [00:38:46] Well, I mean, we can't give advice in Australia. I don't know what the UK regulations are, but I have no idea. Yeah. Have a look at. 

Simon: [00:38:56] The second thing is something which the government should allow companies to do so few companies listed on a stock exchange. There's actually schemes called the Share Save Scheme. And I think this is how a lot of people get into shares for the first time. Like my dad, for example, did one of his work. And basically what it is is they'll give you you can. You can save up to £500 a month under the scheme and they give you an option price. So and it'd be free or five years. So let's say on July 1st, okay, the BP share price is £5. At the moment, we're going to give you 20 percent off at £4 and you can pay for. You can buy these shares at £4 for the next three or five years, depending on what you sign up to. Up to 500 pounds a month. And then at the end of the three or five years, you can exercise that option. So if the share price hasn't moved, you're going to gain 20 percent. Obviously, if you feel like the company's gone up or you can have your cash back, you don't have to exercise your option. So I think a lot of people lost their entry point, but that does that comes with like pros and cons, right? Because you exposed a lot of people just heavily exposed to one company where they worked? Yeah, if that goes well, they might get overconfident and think, Oh, I'm going to go buy this other share and that's going to do well or if it does terrible, they might get burned. And fake investing is not a good thing. So it is like. But I think a lot of people that is like their entry into stocks and in the UK, for my experience, 

Bryce: [00:40:26] awesome two great initiatives. I guess that would be. I like the one that I saw. 

Alec: [00:40:32] I saw that we do. We create a lobbying here at Equity Mates and put make like, let's adopt those in Australia. Sure. I don't know how you start a lobby group. 

Bryce: [00:40:41] We, I do. You just get a group and stand in a lobby. 

Alec: [00:40:45] So anyway, great comedic. No, I don't think we're going to top that in this episode. So that might be where we end it. Simon, thanks for joining us.

Simon: [00:40:55] Thanks so much, guys. Yeah. 

Bryce: [00:40:56] Pleasure, fun. A lot of fun and Ren will pick it up next week. Sounds good.