Expert Investor: Sarah Riegelhuth – Get Rich Slow

Bryce: [00:01:30] Equity Mates, Episode 10. Welcome. It's a podcast made by nobodies for everybody. As always, we try and break down the world of investing to make it easier for you guys. And we're pretty happy to have made it to Episode 10. It's double digits for us. And I'm here today with my Equity Mate Ren. [00:01:46][16.9]

Alec: [00:01:49] Glad to be back. [00:01:49][0.2]

Bryce: [00:01:50] Yes, as always. So today we have another guest as part of our interview series with expert investors. We have had a great time talking with Sarah Regulus, who is the CEO of a financial advisory called Wealth Enhancers. Sarah is a serial entrepreneur and investor in start-ups having founded eight companies alongside her husband, Finn, following several successful exits. She's currently the CEO of Wealth Enhancers, which is a Gen Y financial advisory firm, and Grow My Team, which is a global recruitment company. And she also sits on the board of her other companies, We love Numbers and League of Extraordinary Women. She's personally fuelled by a passion for community gender equality and living life on one's own terms. So we had a great time talking with her. And we think you guys are going to get a lot out of this interview because we don't just specifically talk about stocks. We talk about ways in which you can get ahead with your finances and work towards sort of financial freedom and doing what you want in your life. So there's something in there for everybody. And, yeah, she was she was great to talk to. So we hope you enjoy it. But before we kick into that, I'm going to throw across to our news crew, Ren, because he has a few updates for us. [00:03:06][76.1]

Alec: [00:03:12] So, as always, we don't want to talk about the news more generally. We're going to sort of focus on what's happening in the investing world and try and make it accessible for everyone out there. So first of all, what we've seen recently, very recently is that Chinese investors are leaving the Melbourne apartment market. OK, so does that mean. Yeah. Now, Melbourne apartment market. That's a strange one to look at, you might think, but in many ways, it's a canary in the coal mine for the rest of the property market in Australia, because what we saw in Melbourne over the last couple of years was a massive build up in new apartments. And there was a lot of foreign investment in it. But now what we're seeing is a massive pullback from especially Chinese investors, and many of them are forfeiting the deposits that they've already put down on apartments that they bought off the plan. [00:04:01][48.9]

Bryce: [00:04:02] Well, there a reason for that. [00:04:03][1.2]

Alec: [00:04:03] There are a number of reasons. There's some issues with capital controls in China. So the Chinese government is cracking down on Chinese people, sending their money overseas and investing overseas. Probably the main issue is just the amount of apartments. So because so many were built, there was just, you know, a huge explosion of demand and people really tried to capitalise on that. Now there's an oversupply and the market's starting to wake up to that a little bit. [00:04:31][27.2]

Bryce: [00:04:31] So what is an oversupply necessarily mean for the market down there, then? [00:04:36][4.9]

Alec: [00:04:37] Well, it means that, you know, as supply grows and if demand doesn't grow with it, then the price will fall. So for all those people listening in Melbourne who are struggling to get into the property market, apartments may be getting cheaper in the short to medium term. Some of the developers that because they're still building apartments, because it's. Yeah, if demand falls away, it's tough to stop building the apartment, if it's already half built or, you know, the plans are already in place. So they expect 5000 new apartments to be completed in the next little while. And with the softening of demand, it'll be interesting to see what that does for property prices, whether or not to follow through to the rest of Australia. It remains to be seen, but it is something that all the aspiring first home buyers out there maybe can take solace in, but definitely can take an interest in. [00:05:31][54.1]

Bryce: [00:05:31] Yeah. So it sounds like a watch this space if people are after a bit of a bargain. Yeah, definitely. In apartments. Nice. What else have we got. [00:05:39][7.2]

Alec: [00:05:39] So the second one not really domestically focussed in Australia, but something that I'm quite interested in is that OPEC, which is basically a cartel of oil producing countries. So, you know, Saudi Arabia, Iran, Venezuela, a lot of the Arab Gulf states, what they do, they've essentially formed a group and they agree on how much oil they're going to produce each year. And what that does is it controls the price. Yeah. So, you know, students of history might have heard things like the oil shocks. They were caused by OPEC cutting production and the price being driven up. OPEC have been struggling lately. And what they've just agreed to cut production again to try and lift the price. But investors were pretty disappointed with how much they agreed to cut production. And so the price of oil fell. [00:06:31][52.0]

Bryce: [00:06:32] It's interesting to note in there as well that the reason they are trying to push up the price of the oil is because a lot of these countries rely on oil. Yeah, exactly. As a main source of income for their countries. And a lot of their forward budgets are based on the fact that, you know, they what they need or want oil to be at a certain price. And if oil is not at that price, then, you know, they're not going to be able to they're not they don't have the money that they thought they would have. [00:06:58][26.3]

Alec: [00:06:59] Yeah. So that's why I find this story particularly interesting. The really instructive country to look at is Saudi Arabia. Estimates are that they need oil prices to be above 60, Dollars a barrel for them to be able to balance their budget going forward. But at this stage, oil prices aren't hitting 60 at the moment. They're about forty nine dollars a barrel. And the reason that oil prices are falling and that all these OPEC nations are really struggling is actually because of America and an innovation that America made in producing oil. Everyone would have heard of, a lot of people would have heard of fracking. The American oil companies use that technique to extract oil domestically in America. And that supply of oil that was previously inaccessible has just done wonders for the global supply of oil and driven the price down. So definitely a watch. This space again will say what OPEC does with oil. Hopefully it means lower petrol prices for all of us. But it's also really interesting geopolitically, given the countries that are in it, what it will mean if their main sources of revenue are continually. Heightened and heightened, [00:08:12][72.4]

Bryce: [00:08:13] interesting, and it's also a good side note that they talk about oil a lot in financial news because it has a big effect on share prices in companies across a broad spectrum. So definitely the more that OPEC control and trying to influence the price that also has flow on effects to stocks, which is something we'll probably discuss later on. Yeah, cool. What's you've got a third and final. [00:08:35][22.3]

Alec: [00:08:36] Yeah. Now we always try and do a funny story the way this this one is maybe as fun as, you know, what companies will Apple buy buy. Something that I thought was a little bit ironic is there's an Australian company called Spotless. [00:08:49][13.4]

Bryce: [00:08:50] What do they do? [00:08:50][0.4]

Alec: [00:08:51] So they're a big facilities manager. They're sort of in the background of a lot of businesses. You you may not realise that you've interacted with them much, but chances are if you're in Australia, you probably have interacted with a spotless, spotless run facility at some point. Yeah. Now they're being sued. They're actually facing two class actions at the moment, one in relation to the numbers they gave the market in the 2014 15 financial year and the other for the guidance they gave in that report. So essentially, whoever reported for Spotless then allegedly lied about what had happened the previous financial year and misled the market about what was going to happen going forward. [00:09:34][43.2]

Bryce: [00:09:35] So, I mean, really, there you go. [00:09:37][2.5]

Alec: [00:09:40] But what I found interesting was one of the law firms running the class action is Slater and Gordon. Yeah, they're suing Spotless for misleading the market. But Slater and Gordon have a troubled history of their own, and they're actually potentially facing a class action from another law firm, Maurice Blackburn, for also misleading the market. [00:10:01][21.7]

Bryce: [00:10:03] So it's all a bit of a shambles, but [00:10:06][2.3]

Alec: [00:10:07] it's a bit of a mess at the moment. But Slater and Gordon, right in the middle of all this class actions that they can be [00:10:12][5.8]

Bryce: [00:10:13] so one's getting sued for lying and then the other is getting sued for lying as well. And it's all a bit all over the shop at the moment. [00:10:21][7.5]

Alec: [00:10:21] It is. It is. Slater and Gordon were the market darling for a while. Not so much anymore. Slater and Gordon, it's spotless, haven't quite reached those levels, although the share price has had a pretty rocky ride because of these class actions and because of these allegations that they may have misled the market. So that's definitely a stock that we would be staying away from at the moment. [00:10:45][23.6]

Bryce: [00:10:46] Yeah, very much so. Well, that's a wrap of the news. Thanks, Ren. The news guru. So now we've got Sara, as as I mentioned before, you know, there's a lot of stuff in here that you guys should be able to take away. And Ren and I had a great time interviewing her. So we up here enjoy it. If you have any questions. Hit us up. As always. Subscribe and follow us and check out our website, Equity Mates dot com. Enjoy what got you first. Interested in investing, Sarah? [00:11:17][31.1]

Sarah: [00:11:18] Oh, I guess I started working in the financial advice profession from a pretty young age. So my dad was a financial advisor, kind of grew up around it. And I was I think at 18 when I started working with him, I was actually studying it, but working with him in the office, doing admin. And then I started learning more financial advice, was and got really interested in it as a career and ultimately made a career switch to that. But being around financial advisers and learning about investing and building wealth was really what got me interested. So probably not the same as someone who doesn't work in the profession. But yeah, from my family and from everything I was learning through working in his business and through my studies and all of that as well. [00:12:03][44.9]

Alec: [00:12:04] So from that starting job, how did you start your personal investing journey? [00:12:09][5.3]

Sarah: [00:12:11] Yeah, well, I guess because I was working in the industry and learning all this stuff, I thought, well, you know, I want to start investing myself. And I understood pretty quickly that it was a very important part of building wealth. You can't just save your money in cash. You have to actually invest in other assets. And so I just started a little back then. We didn't have as much access to some of the great new technology products we have now that kind of make the cost of missing a lot lower. But I, I think I saved up a thousand dollars or whatever it was that I needed to open an account and then started contributing in a monthly amount. And it was just like a diversified managed fund probably had like four or five managed funds in that portfolio. And I just started just went from there, put in whatever money I could afford every single month if my pay would increase or whatever, top it up with a bit more. And that was how I started. So just a just a diversified portfolio. [00:13:09][57.8]

Bryce: [00:13:10] How did you know to choose something like that compared to an individual company? [00:13:14][4.3]

Sarah: [00:13:16] I mean, I've always been of the month that having a diversified portfolio is probably better than putting all of your eggs in one basket, whether that comes down to property or shares. And so managed funds were a great way for me to be able to access professional fund managers and a variety of investment assets so I could have Australian equities and international equities, possibly some fixed interest hot products in there as well. I can't remember exactly what that little slate of funds was, but yeah. And I mean, I was a financial adviser. I had access to all the products and I could do my research, but I still invested in the same stuff that we were advising our clients or investing. [00:14:00][44.0]

Alec: [00:14:01] So a lot of our listeners are just starting out on their investing journey or still just thinking about getting and getting started. So what were some of the hard things you found starting out your investing journey and what did you learn from those experiences? [00:14:15][14.1]

Sarah: [00:14:16] Well, back then, the hardest thing was the the products that were available. We needed more money to get started. So you needed, like an opening balance and then minimum contribution level. So that was kind of challenging. And then obviously choosing the investments. Like I said, being a financial adviser, I had a lot more info and access to information than my friends would have. So for me, that wasn't challenging, but I can see how it would be. The cool thing, I think, these days is there's so many products available where you can invest as little as actually sense into diversified ETFs and things like that. So it's really a different world now to what it was. Know I'm thirty six now. Just heard. So we're talking I was probably 20 when I started my portfolio, so 16 years ago. But I think really. Yeah, back then it was just knowing, finding the products that I could invest in that had minimum contribution amounts that I could afford to make every month. [00:15:13][56.5]

Bryce: [00:15:14] So where is your investing journey taking you? And what have been some notable highlights for you? [00:15:18][5.0]

Sarah: [00:15:19] I've been really fortunate to have started early and just always been contributing and building my wealth. So and then I started looking at my superannuation and choosing those investments and things. So I've now got a self managed super fund. So from a super perspective, that's changed. So I really got serious about making additional contributions and I probably maxed my contributions for the last five years or so. So I've built a significant balance in my superannuation fund that it was worth turning it into a self managed fund where I think they have that with my husband being in the investments that we have in there. We do have some direct shares that we've just decided and we kind of go in in our self managed to be because we have a much longer time frame. That's actually where we do our more risky investing. So things that we really want to take a long term view on. So we'll invest in my husband's much more into actually stock picking than I. I've never really been into that myself. But, you know, he'll take a bet basically on some speculative stocks or whatever it might be. But we've got a long time to kind of see how that plays out. We also do all of our investments in start-ups in the self-funded super fund. So we've invested in a bunch of start up companies as well. Same thing. You know, we don't need the liquidity. So within the super fund, we don't need to access that money so we can just wait it out and see what happens. We've got a pretty big cash position because we want to be able to use that if an opportunity arises. And then we do have some ETFs and managed funds and and things like that with a portion of the money as well. And then personally, I guess in our personal name, we also got some investments in start ups. We use an insurance bond for a lot of our kind of. Medium term wealth creation, and within that, insurance funds its index funds that we use, so diversified portfolio of index funds, I'm not really sure if everyone would know what insurance bonds are, but they basically have their tax paid investment vehicles. So you don't need to declare the income in your tax return. But you are you are committed to a 10 year time frame. They're pretty amazing product for kind of that medium term wealth building because there is some significant tax savings there. And then we just have a diversified portfolio as well and cash. And we have invested in property before. We're not owning any property right now, but we just do that based on the markets and what opportunities we think are existing. And then I guess my best investment, I'm an entrepreneur, so I'd have to say my best investment has been in myself and building my own building our own companies. And we've sold a couple of businesses. And so that's, you know, really where I see. But it's also super risky. Like I've had failures as well. [00:18:18][179.2]

Alec: [00:19:43] It sounds like you've invested in a lot and your investing career has spanned about 15 years now in that journey and through all those different investments, what's the most important thing that you've learnt and that adds value to your investment decisions today? [00:20:28][45.3]

Sarah: [00:20:29] Consistency and you have to invest. So all of those sort of interesting, very risky investments that I was talking about, like start ups and speculative stocks. I certainly wasn't doing that when I had a small amount of wealth. And even now it's only with about 10 percent of our total wealth that we do that. So it sounds fun and sexy and really cool that you've got all these great, you know, really risky investments. But it's not like I've got most of my money and things like that. So actually, consistency and keeping it simple, like a diversified portfolio of equities is and just consistently investing in it is really what's going to get you. That's what you've got to do over your whole entire lifetime. And that's what's going to get you where you need to go. So looking for those bets where you can get a big win, you know, it's exciting, but you've got to realise that you might just lose all that money as well. Whereas if you have a diversified portfolio, you're going to have market fluctuations, but you're not going to lose all your money. [00:21:31][61.7]

Bryce: [00:21:32] At what age did you take the conscious decision to start pursuing your superannuation quite vigorously to use a good means of investing as well? [00:21:41][9.0]

Sarah: [00:21:42] I think I would have been about thirty, twenty nine or thirty. So obviously you need to get to the point where you can afford to make those extra contributions. Actually, I would have made extra contributions before then. I probably did it almost all of my twenties, but that might have only been an extra thousand dollars a year or whatever, you know, I could afford at the time. But from the age of about thirty, I maximised. So the twenty five and then thirty thousand dollars a year that we could. Invest I-Max and lost it because I just wanted to build that balance. Now the other thing I think with investing is the longer that you have your money invested, obviously the better off you're going to be. So I knew if I could just build a really big super fund now, I can almost stop because if what I've got in there now, if even if I don't contribute much more, I just do like the minimum from now. I've got like so much more than the average person my age, which means it can I can not worry about it too much anymore. And it is going to grow massively because there's another 35, five, 30 something years that it can be invested. So it was kind of like for me, I thought, just get a real head start on that and then I can almost just let it grow. And I don't need to worry about trying to top it up later. And now I can focus on building my more medium term wealth. [00:23:03][80.6]

Alec: [00:23:03] Hmm, interesting. I think that's great advice for a lot of our listeners as well. We've talked about the beauty of compounding on the show before. Yeah. But just starting early and getting in the market and then just letting it grow over time from that. Would you say you have an overarching investment philosophy or style of investing? [00:23:21][17.3]

Sarah: [00:23:22] Yeah, definitely only take on as much risk as you need to. So as I said, I've got sort of 10 percent of the portfolio that we play with and that's our fun, like really taking these bets where we might lose all our money, all the that we invested in might not work out. So the stocks we've invested in might not work out, but that's OK because 90 percent of our money is invested. What I would call conservatively, because it's in a combination of cash and bonds and equities like international and Australian property funds and property from time to time. And it's just not taking on more risk than ever. Then you have a need to not take any more risk than you ever need to. [00:24:01][39.4]

Bryce: [00:24:02] So it sounds like the philosophy is more finding products that fit with the overall goal rather than pursuing one specific sort of asset class and going hard on that. Is that. [00:24:15][13.2]

Sarah: [00:24:16] Yeah, I think yeah, definitely. I think that would be more I mean, I'm big into having, as I keep saying, like that, diversified because equity markets could go crap and property market might go great and then vice versa. The bottom can fall out of the property market and maybe your equity market might be going better. So you kind of want to be like timing. The market is not what I do. That's kind of against my philosophy, if that makes sense, like trying to pick exactly when different things are going to happen for different types of investments. Really challenging. And I think some people are really good at it. You know, trading professionals who tried equities, that's all they do all day is sit and they know and they would work within it, usually within a segment of equities like a an industry or a sector or whatever. Same with people who people have different property strategies, people who know how to buy and renovate and sell properties. But I think there's too much of that out there that makes it look like everyone could do that. And the average person probably doesn't realise just how much knowledge you need to have to be hyper focussed and basically taking bets on one single time. And so for me, it's just consistency and having that diversification and just always just keeping going. And when markets are low, keep putting money. And when markets are high, you put money in as well. [00:25:42][86.2]

Bryce: [00:25:43] And does that mean in your portfolio for stocks, you're investing more in things like ETFs and listed investment companies more so than direct shares? [00:25:52][9.3]

Sarah: [00:25:53] So the bulk of my portfolio would be in mainly in ETFs and some managed funds and things manage funds more so in the past, not as much anymore. And only if it's you know, usually it's something that there's not an ETF for it or whatever. Like you really think that fund managers going to do something good with their thayn, but ETFs are becoming a much bigger part of what we're doing. But we do have some direct equities that we've just purchased that we think are good. But as I say, I don't actually do the stock picking because it's not my thing. But my husband knows. But I'm not going to lie on the financial. [00:26:30][37.5]

Bryce: [00:26:31] But your overall strategy. [00:26:33][1.2]

Alec: [00:26:34] Yeah, exactly. So this is a this is a question we ask every guest. Is there a must read book that you would recommend? [00:26:41][7.0]

Sarah: [00:26:42] Oh, it has to be my own book, Get Rich so everybody should write. No, seriously. So in terms of wealth creation. [00:26:53][10.6]

Alec: [00:26:54] Yeah. And just investing or sort of personal finance in general, is there anything that you've read and you've really thought that it had some good lessons and it's out of a lot of value to to your personal investing journey. [00:27:05][11.3]

Sarah: [00:27:07] So I think it's not like super specific on. Wealth management or investing, but I do believe that Think and Grow Rich is a good book. I just am a big believer in kind of the law of attraction and what you what you think and what you put your energy toward is what happens in your life. And I guess that book is really about getting that right. Mindset and mindset is a really big part of wealth creation. Like, honestly, if you don't believe that you can build wealth and be wealthy and have an abundant life, you are you won't have it. So mindset is such a huge part of being able to achieve financial freedom. [00:27:46][39.6]

Bryce: [00:27:47] So going off that stereo, CEO of Wealth Enhancers, which is financial advisory firm for Gen Y, and so that mindset pace, is that something that you try and instil with your clients and what sort of makes gen wealth enhancers different to any other financial advisory? [00:28:10][22.8]

Sarah: [00:28:12] Yeah, absolutely. We combined financial advice with coaching because I really, really believe that the whole like accountability piece. But also. And knowing what why you're investing, like, what are you trying to what lifestyle are you trying to create but really working on that psychology and the beliefs and how your relationship with money is, because it also changes like one of the things that can happen. You are striving and building wealth. And then one day you get financially free and then you have a whole nother relationship with money that you have to do it because it's like what I do in my life now, because now I don't need to work. And it sounds like amazing, but it's actually a bit of a process like people, because we are so used to strobing. Right. So, yeah, very much so. We work a lot around limiting beliefs and patterns of behaviour that are going to be negative in that way. Wealth creation phase and then the other things that happen on the life journey that can trigger new thoughts and feelings about money and how you likewise people can lose money. You know, they could things can just the bottom can fall out of something they're working on, particularly with business people. And, you know, there's a lot of work that we do at that stage as well. So a lot of stuff on psychology and obviously really high quality strategic financial advice and investment advice and all of that. But I think where our real point of difference is, is that we focus purely on Gen Y. So I think I mean Gen Y myself and all of the Tamar, and we just know and understand that market really well. We know and understand what we want. And we are different. We're different from previous generations. The way that we view the world, the way that we view the opportunity that is our lives is pretty different from previous generations. So, yeah, we're good at what we do. [00:30:10][118.3]

Bryce: [00:30:10] I think it's an interesting concept. [00:30:12][1.6]

Alec: [00:30:13] So comparing, you know, your first work in the financial sector, working for your dad and his financial advice business compared to what you're doing at wealth enhances, what are some of the unique things with working with Gen Y and sort of what some of the unique advice that you can give them to achieve their financial goals? [00:30:31][17.8]

Sarah: [00:30:32] Well, I think our generation is a lot more well, where a lot less conservative, I guess so previous generations really understood, like, OK, we've got to chip away at things and we've got to start building our wealth and then buy the house. And I'd live in that house their whole lives. And so they'd slowly just pay it off. A lot of them didn't do anywhere near the amount of overseas travel that we do. And so the thing I love about Gen Y is that we know how to go out and get it. We know how to make it happen. But what we haven't learnt is delayed gratification. And when it comes to money, easy access to credit, it's just so easy for us to just spend, spend, spend and have amazing lifestyles and get the photos and post them on Instagram and all of that kind of thing. And keeping up with the Joneses kind of takes on a whole new level with our generation, with social media and and all of that. So, you know, I think that's something that's really quite different, is helping our generation balance having this lifestyle now and harnessing that amazing passion and that power. I think that's in like we we go for things. We we try we give it a shot, like we're not as afraid of failure and we're not as conservative and that we don't get held back by fear as much as what previous generations did. I think there are a lot more following the rules and going along. So it's it's exciting for our generation and the way that we are. But it's also really challenging when it comes to wealth creation, because we're very much living in the moment and we have an optimistic attitude that we'll just work it out as we go and we'll work it out later. But when it comes to money, that obviously can be pretty detrimental, especially if you're spending more than you earn carrying around personal debt like credit cards and personal loans and those fine and everything. We can finance everything these days. So there's a lot of people that are earning great money, living amazing lifestyles, but they've got this personal debt. That's not great. So I think that's one of the big challenges. [00:32:34][122.0]

Bryce: [00:32:36] So your book Get Rich Slow. And I guess the guiding philosophy of wealth enhances the get rich slow philosophy seems to be sort of quite the opposite of the Gen Y. We want it now, now, now. So if we were to walk into wealth enhancers, are there any sort of immediate actions that you try to encourage Gen Y to start sort of today that our listeners could take away to sort of help them get the idea of this get rich slowly philosophy? [00:33:05][28.9]

Sarah: [00:33:06] Yeah, for sure. I mean, a lot of what we do is automating your cash flow so that you have a set amount of money that you can spend every week on whatever you want. So you can go to the bar or you can go out and buy avocado on toast every morning for breakfast or whatever it is that you want to spend your money on. But you got to stick to that amount and then the rest of your money is going toward saving and investing in debt reduction and obviously bills and all of that, those kind of living, the more irregular living expenses, rent and everything or mortgage payments. So I think if you can automate your finances and give yourself a weekly amount that you're allowed to stick to so that, you know, everything else is really being optimised, that's pretty much the core of how it's like it all starts there. It's really simple. But if you don't do that, then it's really hard to put any it doesn't matter how great the financial advice and strategy is in the investment advice. If you don't have the funds available to make the contributions because you don't have your personal spending under control, then it doesn't matter how great the advice is that we give. So I think, you know, having that weekly amount that you've got to stick to, it also means when you get a pay rise or increase or you get a bonus or something like that, you don't just absorb it into your everyday spending because you've got your set amount and you've been living on that and you should be quite fine with that. And then you can actually utilise any additional income to make larger contributions from your investments and achieve your goals sooner. So I think trying to develop like a level of comfort, comfortable lifestyle that you're happy with and then not just increase it every time you get more money. [00:34:47][100.8]

Bryce: [00:34:48] I think one of the I mean, that's what I do at the moment. But when I first did that and I worked out what I thought I needed to get through my fortnight and spending it, it's it's it's harder than I thought it would be because it required a lifestyle change in the sense. Yeah, I couldn't I couldn't just go out and keep spending, but now that I've become used to it, yeah. It's it's really good knowing that my savings will stay as my savings until the next pay because I've got my spending card. So yeah, just fairly soon as well. It requires that lifestyle change to begin with, but definitely very good piece of advice. [00:35:26][37.8]

Sarah: [00:35:27] It does. And what we always talk about with the lifestyle changes, it's not a. You know, cutting back on the things that you really love, it's about cutting out the things that you're spending money on, that you don't actually value that much. So one of the things I write about in my book was I always used to go for a run around the town in Melbourne with one of my girlfriends, and we would go and get breakfast in a coffee afterwards. And we started running like nearly every day, four or five days a week, and we would get breakfast in a coffee and end up being like one hundred and fifty dollars a week that I was spending on this breakfast. And I was like, well, yeah, well it's like like twenty five thirty dollars a day. Right. By the time you have a coffee and have a breakfast or have two coffees because you've been talking to ages. So you know, what I thought about though was what do I really value in this experience. And it wasn't really the food it was. But being in the cafe with my girlfriend and having a chat and having a coffee. And so we just decided not to eat breakfast and that when we got home and then he immediately dropped your bill each day from twenty twenty five dollars to like five dollars. So there's there's ways where you can just look at what am I spending and what do I value and what don't I value. And just trying to be more intentional and more mindful about spending money only on things that you really value, which is such a great exercise because it doesn't matter how wealthy I am, I don't want to waste money just for the sake of it. I'd rather give it to charity than to spend it on something that I don't care about. Yeah. [00:36:58][90.3]

Alec: [00:36:58] Yeah, definitely. So I think something that's quite unique about wealth enhancers is this coaching. And I know you touched on it before, but how does the coaching help people achieve their goals, not just initially sort of setting them up for success, but, you know, a year down the line or five years down the line? What does that coaching look like? [00:37:17][18.5]

Sarah: [00:37:18] Yeah, so it's very much like a typical relationship that you would have with a coach. So for anyone who's listening, who's had a life coach or a business card or something like that, it's very much those same kinds of conversations. Sometimes it's very focussed around money, but other times it could be focussed around something else. So at wealth, enhance is really what we're trying to do is help people be the absolute best version of themselves. They can be so with their careers, if they're starting a business with their family life, relationships and all of that, and money just underpins that because money really is just a facilitator of the life that we're trying to create. So it's really holding people accountable. And if we say that they might be stuck on something and they haven't moved because we usually set little challenges and outcomes like action items, I guess out of every session we have three sessions a year. And so if we get to the next session in my life, you haven't moved on that like you said you would. What's going on? And then we'll have a coaching conversation around what the block might be, what might be holding them back with like with couples. Sometimes you could be having a coaching session on just issues. How are you both feeling about money or how you're both feeling about your finances or how you're feeling about goals or what you're working toward in your life? So the conversations could be around anything, but it's designed to keep you on track, to keep you accountable and to keep you focussed on the life that you're trying to create and also help you help guide you as sometimes sometimes the goals change, sometimes priorities shift. And then reconciling that and working out, well, how does that work within the bigger picture of what what you're doing? [00:38:56][98.3]

Bryce: [00:38:57] So, yeah, does the coaching involve helping your members learn about different asset classes as well, or is it more like this is what we should be investing in and then let's just put the money there, are you and try to encourage them to make their own investment decisions beyond you guys, or is it sticking to the plans? [00:39:15][18.6]

Sarah: [00:39:17] Usually it would be sticking to the plan. I think the answer to that question, though, is coaching is probably separate from the financial advice piece. So the financial advice is more, you know, we're giving them the advice or explaining why we believe these investments are best for these goals. And we obviously on an ongoing basis, we're reviewing the performance of the investments and talking about their progress. And education for us is a very big part of that. So particularly initially, if we say a member really is lacking knowledge in that area in a particular area, we'll just have a session with them purely on margin loans or property or shares or whatever it might need to be, overall markets, how they work. So we do a lot of education at on an ad hoc basis as needed. Like as we we just try to feel the knowledge gaps and on an ongoing basis, just try to get them more and more savvy. We do see ourselves as the investment professionals, but at the same time, we definitely want our members to be engaged and active and taking part in those decisions and understanding what they're investing in and and being a part of that journey for sure. [00:40:22][65.5]

Alec: [00:40:24] Moving away from wealth enhancers, looking at your history, you've had a really successful series of. Start ups and companies that you founded for a lot of our listeners are very interested in entrepreneurship, it kind of is sort of the inverted thing to be these days. Do you have any advice for people who are trying to, you know, build wealth by starting their own company or don't want to sacrifice their financial security, but still want to go out for themselves and start something? [00:40:56][32.3]

Sarah: [00:40:57] The first thing I would say is the first couple of years, and that could be up to five, but probably the first two years, it's going to be really, really tough financially. You may not be able to pay yourself depending on how well your business is going, but start ups are hard, really, really hard, and it depends what business you're building. If you're going out and doing consulting your cash flow might be a little better because you can build for your time and you can probably manage without staff and overheads for a while. So in that case, probably a bit different. But if you're really starting something where it's a new idea or any concept or a product, there's going to be time where you're not receiving income and you need to build up that customer base. It is going to take time. So I think don't be caught in the fantasy that you're going to start a business and have all this flexibility and time and money that will come later. But you're going to have to be willing to put in really probably five plus years of very hard work before you get anywhere near that kind of thing, unless you're an absolute anomaly. And it does happen where the business takes off. But that's zero point zero zero zero one percent. I mean, that wasn't my journey. I worked my butt off for definitely the first five years, 12 hour plus days all the time working on the weekends. Not much of a social life. And I've always travelled a lot, but I always work when I'm away. So not having a whole lot, not not having an actual break for a long time. So I think it's just be aware. But I'm a big believer that the most wealth is created through business, because once you if you are prepared to work hard and you do put in the the effort and you have a good product or service and you can manage it well and everything, and you can build something that's scalable and scalable, it's a pretty great way to create a lot of wealth for you, for you. But you've got to be sensible and you've got to be sensible along the journey with your money. If you do have a business that is producing cash flow, well, invest it. Don't get carried away spending it, which is what a lot of people do because they think, well, I've got this great business and I'll be able to sell it one day. So I'm just going to have a good lifestyle. You never know when the bottom could fall out of whatever it is that you're doing. The government could change regulations, the market could shift and new product comes in and takes over what you're doing. Like I've seen it over and over again where you've got a business that was worth ten million dollars that now isn't worth anything literally overnight. So you can never bank on that. As entrepreneurs, we always know that's what we're aiming for. But build your wealth personally at the same time so that you know, you're getting value along the journey, as well as hopefully that big kicker at the end [00:43:36][159.4]

Bryce: [00:43:38] for the our listeners are just starting out. Is that an asset class that you particularly think or so, for example, I'm thinking like margin loans, that sort of stuff, to particularly stay away from, or that you would suggest being the easiest to start getting involved in on this sort of journey towards financial freedom? [00:43:57][19.5]

Sarah: [00:43:59] Yeah, well, I mean, yeah, I wouldn't go for a margin loan, but and likewise, you know, I think a lot of Australians first choice is property. And really, I just think that's challenging as well, because essentially it is borrowing a lot of money and backing one asset. So don't get me wrong, I've invested in property before and I'm one hundred percent believe that that's a big part of the overall strategy. But I would suggest ETFs and through these products, we can put in very small amounts of money. So I think that's really the best place to get started because you've got a diversified portfolio, you've got low fees, you don't need to borrow money. And in debt you can contribute what you can afford. And you can just get yourself familiar with investing because obviously investing in anything other than cash does have come with market fluctuations. So are you going to say the balance is going up and down? But, yeah, that's that's what I would suggest. I think property's amazing. But part of the problem, when people get too focussed on it and they buy that first property, all of their surplus cash is now stuck going into trying to pay that property off and the chance of them actually then one day signing a share portfolio is really reduced because they're just not going to get started and investing because they're going to be totally focussed on just paying off this property and making ends meet. Because most of the time, people property is so expensive in Australia, people are really overextending themselves to to do it. So I'm a big fan of. Get a really good savings habit with cash going, once you get a nice cash position, start getting into shares through ETFs or something like that, once you build that up to a substantial position, then start looking at property. [00:45:42][103.1]

Bryce: [00:45:43] That's fantastic advice. I think that's definitely the message that we're trying to send to the guys listening who are just starting out as well. Risk being consistent. [00:45:53][9.9]

Sarah: [00:45:54] It's hard because the great Australian dream is to get the property and there's a lot of pressure from previous generations that really success is owning your own home. But I think now hopefully I think our generation can get a bit bigger than that. And having a couple of million dollars in wealth that's not necessarily invested in property is not a bad thing. Like that's still successful. It doesn't matter if, but as I said, I still believe in property for sure. It's just the way that the order of which you do it and not overextending yourself. [00:46:25][30.7]

Bryce: [00:46:26] Well, sir, I think that'll be a wrap for us. We've definitely got some great pieces of advice from you and delved into wealth and Hatzis. And if any of our listeners want to check it out, it's wealth enhancers community. Sounds like a very interesting and also a very motivating community to be part of as well. So I'd just like to thank you for coming on the show, and I really appreciate your time and all the best for wealth enhancers. [00:46:54][28.1]

Sarah: [00:46:55] Thank you so much. We do offer a free session for people to just get a little bit more of a feel for how we might be able to help them. And that's a really valuable session. Whether you whether you become a member or not, you'll get some good tips and tricks and action items out of that session. So feel free for anyone to work in for that. [00:47:11][16.2]

Bryce: [00:47:12] Awesome. Thanks very much, Equity Mates. [00:47:14][1.8]

Sarah: [00:47:14] And the people appearing in this programme, they have positions in the companies mentioned. This is general advice for me. Please speak to a financial professional to understand how they pertain to your individual situation. [00:47:14][0.0]

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