How can I build my portfolio like a pro? | Guest expert Sarah King

Maddy Guest: [00:00:05] Hello and welcome to another episode of You're In Good Company, a podcast for like minded people who want to make smart investment decisions. I'm Maddie and I'm here with my good friend Sophie. [00:01:21][75.9]

Sophie Dicker: [00:01:21] Good morning, Maddie. I'm very excited to be talking with you today. It is part two of our very important two part series with Sara King. But before we start today's episode, I would like to acknowledge and pay respects to the 100 people of the nation who are the traditional owners of this land on which we are recording today. We pay our deepest respects to the elders past and present and to the next generation who we hope to create a different future for. [00:01:48][26.5]

Maddy Guest: [00:01:48] So Sof how did you first start building up your portfolio? [00:01:52][3.6]

Sophie Dicker: [00:01:53] To be honest. In the beginning, I honestly didn't even know what a portfolio was. I kind of just started out buying certain stocks, as I mentioned in previous episodes I bought into after pay and then I was buying into some other companies that interested me. And I was kind of enjoying, I guess, like the thrill of it all. And I wasn't really thinking about building a thrill. Seriously, though, was a bit of a thrill. But, yeah, I wasn't really thinking about, I guess, a long-term portfolio. And as I've gotten a bit more into the research and thinking about my goals a lot more, especially in my long-term goals, I've moved into buying more stable, I guess, ETFs and more stable investment decisions in companies. So I guess my portfolio started a bit later in the game, but now I note down what I'm buying. I watch, I guess, the percentages of companies that I have, and I guess it's always just a work in progress for me at the minute. What about you? Sop. [00:02:50][57.1]

Sophie Dicker: [00:02:51] I don't think your portfolio has started being built any later. You're just a bit more may be aware of what's in it. Yeah, that's true. That's true. Yeah. Looking back, I think I was probably thinking about it without actually realizing that's what I was thinking about if that makes any sense at all. So I was aware that I sort of can't buy into ETFs because it gave me really broad exposure to lots of different things. I also bought gold really early on and will touch on this a little bit more later today. But gold is what's known as a defensive asset. So in general, it tends to move in the opposite direction to the broader stock market. But I've definitely really learned sort of more about basic things that have gone along and got into it. And, yeah, enjoying sort of figuring out how to gain exposure to different companies and things that I'm interested in. And as I build out my portfolio flights of fancy word,. [00:03:41][50.0]

Sophie Dicker: [00:03:42] It is a bit of a fancy word. So I guess your gold would have done pretty well over Carveth then when the stock market crash. What happened with you? Yeah, exactly right. In that respect, I was pretty lucky that I bought, you know, a defensive asset very early on because when the rest of my stocks were going down, I think gold hidden like all time high that, you know, the highest it's ever been. So that was great. Where we are now going to cross over to our chat with the lovely Sarah King about building up your own portfolio and how to manage it in the future. [00:04:11][29.1]

Maddy Guest: [00:04:11] Today, we're back with Sarah King to talk about building your portfolio. Last episode, we broke down the risks involved in investing and how you can determine your own risk tolerance. Today, we are going to be talking about what a portfolio is and how you can build one that aligns with your own risk profile so that you can ensure you're making the right investments. Now Sara, we have a myth to be busted. Building and managing a portfolio is a job done by many professionals, including yourself, who have years of experience. So sometimes it can seem like a very large task to do this yourself. Do you need to be an expert to build your own portfolio? [00:04:48][36.6]

Sarah King: [00:04:49] Look, that's that's a good question. Look, I think it does take a little bit of expertize and I think to build a well diversified portfolio and one that's going to help your money to grow long term, but also be protected, which is really what you want with investing. Yeah, may maybe it may mean that you need to get some advice, but yeah, hopefully a lot of what we go through today will give the audience, you know, some foundations on how to go about building your own portfolio and the things to consider so that you can go away and do your own research and maybe work out how you can approach it yourself. [00:05:22][33.1]

Sophie Dicker: [00:05:23] So if I go back to the basics, because I used to think that portfolios was something that my sister was submitting for her, VCA outclasses. What is a portfolio when it's when we talk about investing? [00:05:35][11.8]

Sarah King: [00:05:37] Yeah, and I mean, it's a great analogy because we've you know, you've got your series of artworks and they're all quite different with investing. I guess it's quite similar. An investment portfolio is really just a mix of different types of investment. So if you think about different types of investments, that can be things like, you know, bonds like your fixed interest investments, that can be things like shares, it can be things like global shares of Australian jazz and global shares. It can be property. It can even be things like artwork or collectibles. You know, we've now got things like cryptocurrency as well. So and we've got people having different types of investments. Collectively, you would call that your investment portfolio. [00:06:15][38.4]

Maddy Guest: [00:06:17] So a very common term that I sometimes hear discussed when we're talking about portfolios is closer to terms is core and sort of what can you tell us a bit about what those two words mean? [00:06:28][10.7]

Sarah King: [00:06:28] Yeah, so this is really it's an investment approach in a way that you can build your portfolio to capitalize on buying and holding for the long term. That's the core part. And I'll go into a bit more detail in a second and then imagine like it's like the sun with this little planet sort of going around it. You've got these little sort of satellite investments and they're sort of partly you're trying to have a little bit more of like a tactical management, something that you can try and outperform a benchmark or achieve a slightly better return in the shorter term compared to the core part. That's really your buy and hold approach. So, yeah, but it's definitely a way that you can combine both index investing with a little bit of active management on the side. [00:07:10][41.5]

Sophie Dicker: [00:07:11] So do you have kind of a rule of thumb for the percentage wise of how much current satellite you should have or is just really dependent on the person and their goals [00:07:19][8.3]

Sarah King: [00:07:20] can be really dependent on the person and their goals? But I for me personally, I would have a much larger proportion to your index investing the index, the core part. And then depending on your satellites, I would say no more than three to four weeks, really, maybe a five percent allocation for eight. So I would definitely look at having the core part is a much larger part of my portfolio. Maybe, you know, your your 70 per cent, 80 per cent and then sort of a smaller sort of allocation to each of those satellites. But it's really dependent on the investor, their specific risk profile and what type of returns that they're trying to achieve. [00:07:58][37.9]

Sophie Dicker: [00:07:59] Yeah, that makes sense. We actually had a guest on Tasch Investment the other week and she was saying that I can't remember the exact fact that a lot, but a lot of fund managers really struggled to outperform the S&P 500 or a lot of ETFs. So she just kind of sticks to that real core because, I mean, you're going to get the performance there 100 percent. [00:08:17][18.4]

Sarah King: [00:08:17] I completely agree. [00:08:18][0.6]

Maddy Guest: [00:08:19] Yeah. You talked about, I think maybe five percent to three or four sort of satellite stocks. I think that's the arrangement. I've got the moment maybe like an 80, 20 rolls or 80 percent sort of core and around 20 percent satellite. So for someone who has never invested before, what do you think is the best way to start sort of thinking about building a portfolio? [00:08:38][19.3]

Sarah King: [00:08:39] Yes. So first and foremost, I think this is very often overlooked. The first question you should be asking yourself is, how do I want to own these investments? This is quite important. I see a lot of I talk to a lot of clients who are like, oh, I wanted to set that up in joint names. And they've already started investing in their individual names. So this is really important how you're structuring your investment so that you know that you're getting the right tax structure for yourself. So do I want to own in my individual name? Do I want to own my investments 50 50 with someone else? If I have an established trust, do I want to invest by the trust a certain tax or asset protection reasons? That's important. It can save you a bit of a headache down the line in terms of if you need to then transfer assets across to a different structure. So always think about how you want to own your investment. Most of the time it's just in your individual name, right? If you're investing on your own, the next thing to think about is, OK, I know that there's risk when I invest. What can I do to try and reduce that as much as possible? And this is where your asset allocation comes in. What type of investment do I want to own in my portfolio? So, for example, you look at the different asset classes, so you want to have growth investments. That seems like your Australian and global share is going to help your money grow ahead of inflation. Then you want to have assets that are going to help to protect your money as well. And they're called your defensive investments. And these are typically things like bonds and gold. So you want to make sure that you've got a blend of both that is going to help you to reduce the risk that you can't really control right through a talking about risk last week. There are certain risks that are sort of systemic in the system that you can't really get rid of them are things like the government or the RBA might change interest rates or there might be a crash in the market. So you might have ten Australian shares. But what about your global shares? What about if the Australian share market falls? What's going to protect you on the downside so that you want to have your Grossinger defensive, you then want to think, OK, what's my goals? Am I investing for super long term? Is it more medium term? What is my investment time frame? You know, am I doing it for three years, five years, 10 years or more? This is going to help dictate the percentage you should have to your growth versus your defensive. Right. So typically, the longer you're investing, you can afford to have a lot more annual growth. So your share investments compared to your defense, because you've got time on your side, investing is really about time in the market. So compared to someone who might have only, say, three or four or five years to invest, you want to have a much higher allocation to your defensive investments compared to shares because you don't have as long. So that will then dictate what what allocation you have to each of those asset classes. So, yes, we've got the asset allocation, we've got your specific weightings. And that's also linked to your risk profile, which we spoke about last week. And then within that, you've got OK, this is the last part and often the part that people think is the most exciting, but it should really come up. And that's what actual investments am I going to own. So diversification is all about not putting your eggs in one basket and making sure that you can then again eliminate as much risk as possible. And so you can do that by owning hundreds of different types of companies, 100 different types of bonds. And in my opinion, the best way to do that is only exchange traded funds because you can use one ETF in each of those asset classes. So that way you're really spreading your your money across lots of different companies and spreading your risk. So that's the most important thing. And then you just want to monitor it year on year. You want to do some rebalancing along the way and make sure that you're always aligned to whatever your strategy and then you want to build it. Don't look at it all the time. Like that's the most important thing is long term. Keep a long term perspective. [00:12:25][225.6]

Sophie Dicker: [00:12:26] Just for the minute, I'm going to take it back one little step just so that we can break it out a little bit. So we've kind of established that our portfolio, and especially in investing, is with our stocks, index funds, bonds, and then more broadly in property, potentially art. And one way to think about growing that is thinking about your core and then your satellite, then to reduce your risk within your portfolio. Is this term that you mentioned diversification. And I know that we've touched on a little bit. But just to break it down a little bit more, what actually is diversification? [00:13:01][35.3]

Sarah King: [00:13:02] Yeah, so diversification is essentially not putting all of your eggs in one basket. So this is when you're investing it the best way to help you to reduce risk. So, for example, sometimes clients come to me and they said, like Sara, I've got five Australian shares in my portfolio. I think I'm pretty diversified. And I'll often say to them, well, whatever you might say, well, I've got CommBank, I've got NAB, I've got ANZ, I've got BHP. And then I'll say, oh, guys, we're not really diversified. You've got three banking stocks and you've got one mining and resource stocks and you're fully invested in the Australian share market. So, you know, that's really not going to help you to reduce your risk if, say, you know, there's the banks aren't doing well or they're not paying dividends or there's changes in interest rates. Similarly, like we saw, we covered, you know, that impacted sort of the mining and resources sector. So what you want to do when you are investing is have exposure to as many companies as possible and as many different sectors, as many different industries. So that if one of those companies doesn't do well, it doesn't matter because you've got such broad diversification. So diversification is the best way to reduce risk. And that's the risk that you can, you know, reduce as much as possible through owning hundreds of different types of companies, investing in things like gold as well as in things like bonds. So, yeah, in simple terms, not putting all your eggs in one basket, trying to get exposure to companies and different economies like emerging markets, global developed markets, and really helping you reduce your risk as much as possible for a certain amount of return that you're trying to achieve. [00:14:41][98.9]

Sophie Dicker: [00:14:43] Yeah, I think that's a good point that you make, because I've had some of my friends, for example, come to me and talk about what they're investing in and they say, you know, well, I've got something in the banking, I've got something in the mining, I've got something in the race House. So that's quite diversified. But there are different types of diversification, I guess. And you do need to be thinking about not just that, I guess, that industry level, but at the market level and then also into, I guess, other actual assets, which will touch on a little bit later on. So just to confirm, I guess, the benefits of diversifying your portfolio, then ultimately to reduce your risk, is that correct? [00:15:19][36.0]

Sarah King: [00:15:20] Absolutely right. Yeah, correct. [00:15:21][1.4]

Sophie Dicker: [00:15:22] So you mentioned that, you know, it's really good to be diversifying across a really broad range of industries, companies, ETFs. Is there such thing as too much diversification? And how can people know when to stop branching out to new things? [00:15:36][14.4]

Sarah King: [00:15:38] Yeah, great question. So in my opinion, yes, there can be a point where adding an extra asset class or another type of investment to your portfolio isn't helping you reduce your risk any more. So even at stocks, what we've done a lot of research on this and we only we have five asset classes in the portfolio and five eighths. Right. So we feel like adding insult, another asset class like property outside of the five that we have isn't giving our investors much more diversification benefit and isn't helping them generate much more additional returns. So in my opinion, that's where exchange traded funds are great because you can spread it. You can invest in thousands of companies around the world through just holding four or five different investments, which is fantastic. [00:16:26][48.4]

Maddy Guest: [00:16:27] One thing that we have heard about with ETFs, which I just want to touch on now, is sort of this idea of duplication. So can you sort of explain to us a little bit what that means in terms of if you're holding, say, Vyas, which is, you know, the top Australian companies, and then you might be holding another ETF, which is for Australian banks, how we need to be aware that we're actually holding the same thing in two different ways. Can you explain that a little bit better than I just did? [00:16:56][28.6]

Sarah King: [00:16:57] Yeah, I think you explain that very well. So obviously, if you use that, you're getting exposure to Australia's top 300 companies right within that. That's all the big banks and financials. And then, as you said to your your example, maybe you might also have. Yeah. Like a financial ETF, for example. And so what that can mean is that you're doubling up on those holdings. Look at what it can mean is that you're a bit heavily concentrated. It's called concentration risk. So, look, it might mean that you're holding the same investment twice. You might be paying unnecessary fees that you don't need to because you're actually paying another ETF, a small fee to own that investment. So what you want to do is you get a bit more technical about it. You can look at all of your total money, what portion is, say, in financials? And if you want to sort of reduce that out, you could look at getting rid of one of those ETF and just holding a broader, you know, your top three hundred, top two hundred. If you do want to get a bit more focus, maybe a bit more Nesat, maybe you want to have exposure to some smaller companies instead of the big financials because you've already got that. But yeah, if you're sort of if you're buying similar ETF, it can mean that you're holding the same companies twice over. [00:18:10][72.7]

Sophie Dicker: [00:18:11] You know, that makes that makes a lot of sense. And I think it's something that people need to be really aware of when they are buying into ETFs. Just kind of noting down which companies are in there and making sure that you're not exposed. But you think you might think you're exposed to other companies, but you're actually not. And then it's obviously not going to really help with the diversification. We are going to take a quick break for our sponsors, but we'll be right back to discuss how you can manage asset allocation in your portfolio. [00:18:35][24.9]

Sophie Dicker: [00:19:14] So we've mentioned asset allocation a couple of times in this episode, and also last week we spoke a little bit about diversifying into assets such as shares, gold bonds, property. But if we get back to the basics and give it a definition, what is asset allocation? [00:19:31][17.0]

Sarah King: [00:19:33] Yes. So a very broadly asset allocation is the specific asset classes so that things like Australian shares, global shares, things like bonds, your fixed interest asset class and things like commodities, gold, that's how you're going to allocate your money across those different types of investments. And this is the really, really important part. Your asset allocation is what's going to help generate the most amount of returns in your portfolio. So when you're investing into different asset classes, you want to have you want to have investments going to help your money to grow so that things like your Australian and global shares is going to help your money to grow ahead of inflation, is going to help you to access markets outside of Australia. But then you also want to have as part of that asset allocation, investments are going to cushion your portfolio when the share market might fall. And that's things like your bonds and gold. If you look back through history, any time the Australian share market has fallen, bonds have done the opposite. So your asset allocation is important because it's helping you to have different types of investments that have different characteristics and do different things at different times. But the best way to help you mitigate those risks that you can't otherwise control, [00:20:48][75.1]

Sophie Dicker: [00:20:49] this is a bit of a step back a little bit. But we've mentioned gold a couple of times. Why is it that gold goes the other way to the stock market? Do you know? Can you explain? [00:20:58][9.0]

Sarah King: [00:21:01] So, yes, this is one of our most commonly asked questions. So gold is really an insurance policy for your portfolio. So typically when gold isn't performing, that means that generally all of the other asset classes are right for basically a hedge for your portfolio. So as we look back to covid last year when the share market fell, everything went crazy. Investors were flocking to gold as a safe haven investment. And this is what you want for your portfolio in times of severe share market volatility, when maybe bonds might also not be performing as well. Investors will flock to gold at that store of value. So, yeah, that's the benefit of the asset class diversification. And having those defensive insurance policy investments in your portfolio, they're very, very important for when those volatile share market periods arise [00:21:56][54.9]

Sophie Dicker: [00:21:57] and you can buy gold just like a stock. Right. Like it trades on the stock market. You don't need to go and buy like an actual thing of gold. [00:22:03][6.1]

Sarah King: [00:22:04] Yes. Yes, exactly. So you can do it through an ETF these days so you can go and buy like a gold ETF and you're actually you're actually becoming an owner of that gold. So the one in our portfolio, the gold is actually stored in a vault in London. And each time you buy a gold ETF unit, you're becoming a physical owner of that underlying asset. But what it means is you don't have to worry about things like storing gold. You know, if you're owning gold directly, you've got to go and buy it from the mint. You've got to store it. There can be other costs involved because it's a really easy, accessible way for you to buy something like gold. You know, you can do it with silver. There's a mix of commodities that you can do through ETFs these days, but yet super easy, buy it like a share on the ASX. [00:22:50][45.5]

Maddy Guest: [00:22:51] And when you're trying to sort of start building up your portfolio, do you have any tips for knowing how much of any one stock or one thing to buy is sort of a maximum percentage that we should try and follow as our portfolio builds up? [00:23:03][12.5]

Sarah King: [00:23:05] Yeah, I mean, my advice to that is like investing in one stock is super risky. I would always say one stock, two per cent, maximum five per cent. So that's what we're seeing a lot with. I guess it's more of an asset class or an alternative with cryptocurrency at the moment. You know, we're seeing a lot of investors wanting to put all of their savings into cryptocurrency, hugely risky, very volatile asset class. So I would always say to investors, if you've got a particular stock or something like a cryptocurrency, two percent of your overall portfolio maximum, you know, you don't want to put your life savings into one thing and run the risk of it, of losing your money or experiencing huge amounts of volatility along the way. So even if a stock like half the pay that are doing well and all of those tech stocks, you really want to try and diversify as much as possible, you know, that's really going to help you to manage your risk. It's going to help you to sleep easier at night. You don't have to worry about what's happening with that one stock day to day. So, yeah, really, I would say personally, maximum of two percent feeling that five percent and otherwise diversify. I get as much exposure as you can, so. Lots of different types of companies in different regions around the world and different sectors. [00:24:18][73.4]

Maddy Guest: [00:24:19] Now, moving on a little bit more to sort of managing our portfolios and an ongoing basis. Now, I feel like this is maybe something that scares people off a bit because it sounds like a lot of work and a huge Fage sort of managing your stock portfolio. But can you maybe elaborate on this a little bit about what this might look like for an everyday investor? And if you have any recommendations for sort of any programs or any methods that can help spur sort of managing your portfolio on an ongoing basis? [00:24:45][26.6]

Sarah King: [00:24:47] Yeah, well, look, for me personally, I. I don't want to be looking at my portfolio day to day. And I think this is where the behavioral side of managing your money is super, super important. You really want something that you can set up and then not have to worry about looking at it day to day. And that's the benefit of having asset class diversification and diversification of the investments. Right. The more that you're looking at it day to day, you might freak out. You might see investments moving up and down. And this is going to happen day to day. In the short term, it can then lead you to making suboptimal investment decisions. You might be buying and selling at the wrong time. So personally, I think the best thing is to have your long term strategic asset allocation so that, you know, you're going to stick to those percentage weightings in your portfolio. You've got your mix of investments, and then from time to time, you might need to check it, because those weightings might twist a little bit from where you want them to be. And that's when you might want to do something like a rebalance. And also along the way, making sure you're not moving it around too much because you're going to be paying way too many fees and that that that those costs actually eat away at your returns long term. So they're the fundamental things you should be focusing on, in my opinion. [00:25:58][71.3]

Maddy Guest: [00:25:59] So how often should we be buying into the stock market? I know that every time you do buy that, you pay a fee, some brokerage, things like that. So how often should you be buying? And I guess on that as well, is there a minimum that you should invest time? [00:26:13][14.0]

Sarah King: [00:26:15] Yeah. So you should be buying as often as you can. But if you've got excess savings, you want to be building your investment portfolio. If it's money that you don't need in the short term and you're serious about building your wealth to reach a goal or fund your retirement, you want to look at buying as much as you can. Right. So we have a lot of client to invest money every month. This is called a dollar cost averaging strategy. So you just always adding to your portfolio regularly topping up the beauty of robo advisors and they often won't charge you for brokerage that sort of absorbing the cost. But if you are managing your portfolio yourself, each time you are investing and buying, you're going to pay a brokerage fee for that. I mean, there are a lot of other platforms out there now that aren't charging for brokerage, but it may not be that you're you know, you've got yourself a diversified property investment portfolio through some of those platforms. So I would always recommend trying to top up as much as possible, use a platform where you're not getting stung with brokerage. And that's where robo advisors are great. And then, yeah, like the more that you're topping up, that's going to supercharge how much your portfolio grows by. You're going to earn more distributions along the way. You're going to be reinvesting those and that series, you're going to help with the compounding of returns over time and the fact that you're edging your way into the market, whether it's week to week, month to month to month, remove the need to try and time the market and focus on what the market's doing because you're just averaging your way in. So, yeah, I really think that the more you can buy, the better, as long as it's in line with your financial circumstances, you know, overextending yourself, you still got your cash reserve outside. You can call on. But also, you know, if you are on a platform where you're paying a lot of brokerages, be very mindful of those costs and try to minimize those as much as possible. [00:28:03][108.0]

Sophie Dicker: [00:28:04] And then what about, I guess, the flip side, we don't want to touch on selling too much because we almost think it's an episode in it's own about when to sell. But we did want to touch on maybe the tax implications of selling, you know, if you sell within the first year that you might have different tax implications, too, if you hold it for more than a year. Could you explain that a little bit to us? [00:28:28][23.7]

Sarah King: [00:28:30] Yeah. So the golden rule when you invest is you want to buy and hold long term. Right. And minimize selling when you sell it. If you're doing a rebalance of your portfolio, the more that you're selling, you can be crystalizing things like tax. Right. So when you when you own an investment, let's break down the return side. You're going to earn income along the way. That's your investment income so that things like your dividends and distributions that form part of your assessable income, it's a bit like, you know, savings from a savings account. But when you when you sell an investment, if that investment has gained over time, so let's say you buy a separate 10 dollars today and then you go to selling at twenty dollars, that's a ten dollar gain that you've got. So if you're if you're selling in. Less than 12 months in terms that you haven't owned the investment for over 12 months, you get taxed at your marginal rate on that whole ten dollars, right. Whereas if you've held that investment for over 12 months, you only get taxed on 50 percent of that gain. So the government does actually give you an incentive to hold your investments for for as long as possible. And they do that, by the way, of a tax concession on that. So then if you held it for longer than 12 months, you'd only be paying tax on five dollars. So that's 50 percent of that. Pendle again. So definitely advantages of buying and holding. And the beauty of investing is that the more that you're not selling, you know, you're buying and holding for the long term, you're really deferring all of those tax implications until the future. [00:29:59][88.6]

Sophie Dicker: [00:29:59] Great overview of this pretty big topic of portfolios, you know, building up a portfolio, looking at your core and satellite, understanding the assets that are in your portfolio. And I guess the percentages of those assets that you might have touching a little bit on diversification are actually a lot on diversification so that our risk is really spread. And then I guess kind of just buying and holding for the long term so that we really rate those long term benefits of investing to round out this episode. Each episode we have been asking our guests to add a stock company, news trend or industry to our watch list. Now, the purpose of this is to get us thinking outside the box and to broaden our horizons in the investing space. But we are not financial advisors and this is purely for educational purposes and absolutely does not constitute investment advice. So, Sarah, what are you saying to the watch list today? [00:30:58][58.5]

Sarah King: [00:30:59] Yeah, great question. So as someone who is so invested in helping Australians feel connected to their superannuation as early as possible, I'm very much watching, you know, the rise in the superannuation guarantee that's supposed to come into play this June. There's a bit of a hot debate with the Morrison government coming off the back of covid and people having access to superannuation early. I think Scott Morrison is looking at making that optional. Do you have the option to continue to pay nine and a half per cent or you have the option of increasing that to 10 per cent with a view that it's going to increase to 12 per cent by twenty twenty five? This is a really important consideration. I know that a lot of Australians are probably feeling like paying more in their superannuation isn't a good thing at the moment. Met a lot of people have lost their jobs and we're coming out of the back of a global pandemic. But, you know, people who have access to early for example, that twenty 20 twenty thousand dollars that they took out can mean a difference of up to five hundred thousand dollars in their retirement. So in my view, I think it's prudent for Australians to be looking to get as much as they can into super. And I'm looking forward to also seeing what the super funds are doing off the back of these your super your future reforms that are coming into fruition over the coming months about creating greater transparency for Australians, reducing their fees and actually being benchmarks against certain things so that a lot of these super funds that aren't acting in Australia's best interests and having poor performance might be weeded out and forced to close down. So I think it's a really interesting space to watch. And for someone who's passionate about, you know, we know women are retiring with less super than men, I think whatever we can do to build awareness about superannuation and engagement and making sure that you're in a good fund and paying low fees with the right allocation and topping up as early as possible means that you're going to have so much easier at night and have a much, I guess, more flexible and brighter future ahead. So, yeah, absolutely. Watching that, [00:33:12][132.8]

Sophie Dicker: [00:33:13] yeah. I feel like that is an amazing thing to be adding to the watch list. Barrie and I have spoken about superannuation in our own personal conversations quite a bit, especially with people taking out money over covid. It's very understandable. But obviously some people might not understand the long term ramifications of doing that. And I think it is something that people need to be very aware of, which is which is the superannuation fund, because it's your money for the future. So, you know, it's a topic we all need to be across. Now, Sarah, to to finish the episode today, we ask every guest this question. What piece of advice would you give your younger self when you first started out investing? [00:33:53][40.8]

Sarah King: [00:33:55] Good question. There are so many things, a younger self. But I think it would just be that it's never too late to start. And honestly, it is so, so simple. But I did start investing in my 20s, but then I had an experience where I took on too much risk and it freaked me out. And then I stopped and I didn't start. Like close to 10 years after, and I look back and I think, God, if I had this had that extra 10 years in the market for my money to grow and compound. So, you know, regardless of how much he had to start with, you can start with a hundred dollars. You can start with two thousand dollars. Just, you know, feel comfortable taking a little bit of take some measured risk. And you do that through all the things we discussed today and just get started once you do. It's great. It's empowering. You can top it up along the way and it really builds confidence. You know, you feel like you're confident about where you're heading financially and it's going to give you a nice pool of money that you can draw on in the future to fund whatever goal that might be, whether it's in your 20s, in your 40s or 50s or 60s. So definitely just if you're thinking about it to start as soon as possible, use a robot adviser or something to help you get started, to stick it in slowly and gradually build confidence [00:35:07][72.6]

Maddy Guest: [00:35:09] that is some great advice. And we want to say thank you so much for joining us. Over the last two episodes, you have been an absolute joy to chat to and you've been very generous with your time helping us break down to massive themes that are so important in investing, especially when starting out. So thank you very much. And we hopefully will do more with you in the future. [00:35:29][20.4]

Sarah King: [00:35:30] Thank you so much for having me on the show. It's it's been my pleasure. [00:35:33][2.5]

Sophie Dicker: [00:35:33] Well, that rounds out our two episodes with the lovely Sarah King. We hope you enjoyed the chat with her and that you've taken away something that can help you build up your very own portfolio if you haven't already follow us on Instagram at YIGC podcast or join our Facebook group YIGC investing discussion podcast group. It's a bit of a mouthful, but I promise there's some good content on that. Also, if you feel like it, give us a review on your favorite podcast platform. It'll really help us reach more people just like you and get them on their very own investment journey until next week. [00:35:33][0.0]

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