How we’re investing for 2024

Bryce: [00:00:29] Welcome to Get Started Investing, a podcast where we answer all your money and investing questions. If you've joined us for the very first time, a huge welcome. We strongly recommend that you scroll up and start at episode one. My name is Bryce and as always, I'm joined by my equity buddy, Ren. How are you? 

Alec: [00:00:45] Very good Bryce, good to be back in the studio. For 2024. Some say it's self-indulgent to start the working year in mid-February, but I say it's okay. Yeah. So we've just come off our Get Started Investing summer series, six episodes as we took the steps on our journey to financial freedom, ultimately ending in our conversation around financial independence. Retire early aka Fire. We'll, we'll get to that. And, what? We're thinking about it now. But before then, how was your summer? 

Bryce: [00:01:21] Summer was great. I spent some time down in Victoria with my family for Christmas. I spent some time in the Hunter Valley with some of my wife's friends, which was really nice. And then I spent some time in Sydney doing a whole bunch of DIY. 

Alec: [00:01:36] Nice

Bryce: [00:01:36] Thinking that all this Scotty came preparing for, my, what's what is it? My, I guess, application for the blog. 

Alec: [00:01:45] But I thought I would try so much to say. You and ham to the book together. 

Bryce: [00:01:50] Oh, it could end us, I reckon. We'd be decent. We'd be decent. We'd be better at it than if we went on survivor, I think. 

Alec: [00:01:58] Yes. 

Bryce: [00:01:59] You guys. 

Alec: [00:02:00] Would be bad at Survivor because you would think you know everything and you wouldn't listen to Ham, and that would frustrate Ham. 

Bryce: [00:02:07] On survivor? I actually think if I went on survivor, I would get so hungry, I'd just because I'd become delusional. I don't know how they do it? 

Alec: [00:02:16] Do it well with Hunter 

Bryce: [00:02:16] No way, no way, way too emotional. Yeah, yeah. And I just don't honestly know how they do it. No slate, no food, and you just got to think your way through it for seven weeks or whatever it's like. Anyway, that's why I don't think I'd go on Survivor.

Alec: [00:02:30] Okay. There you go.

Bryce: [00:02:31] A lot of things I've been considering over summer. And how is yours? The other very exciting summer I did.

Alec: [00:02:36] I had a big summer. I settled on our apartment, and, we settled on our apartment, and, we moved in, which was really exciting. 

Bryce: [00:02:46] Nice, any DIY?

Alec: [00:02:51] Yeah. Yeah. We know we have made we're trying not to do anything for sort of six months. We'll live in a we'll. Yeah. Get the vibe. Yeah, yeah, yeah. But, then, we also got engaged. 

Bryce: [00:03:03] Congratulations. 

Alec: [00:03:04] Yeah. Very exciting, very exciting. Big summer. Yeah. 

Bryce: [00:03:09] huge year coming up.

Alec: [00:03:11] Big year. 

Bryce: [00:03:11] Married within 12 months. 

Alec: [00:03:14] Yeah. Married within 12 months. Yeah. 

Bryce: [00:03:16] Nice. Way to do it. 

Alec: [00:03:17] Yeah. So yeah. Really, really great summer. Really exciting year ahead and a very exciting year ahead for Get Started Investing as well. Never been a better time to start investing. 

Bryce: [00:03:28] Yeah wow. Markets are ripping. So before we get into it all of that we must say that while we are licensed, we're not aware of your financial circumstances. So any information on this show is for entertainment and education purposes. Any advice is general. And to Ren's point about this being a big year for Get Started Investing, we want to hear from you and bring you on the show to answer your money and investing questions throughout the year. We've got the $100 challenge that will continue. We want to hear your ideas on how you can save or earn an extra $100 a month, and we've got an episode coming up in a few weeks time where we'll kick it off. But if you have a question, hit us up at Equitymates.com/contact. You can either leave us a voice message and we'll play it on the show. You can come onto the show and we can chat to you live, or you can just send us an email, but we'd love to hear from you. Anything money related, and we'll do our best to answer it. And if we can't, we'll get a professional to do it. 

Alec: [00:04:21] Yes. All right. Well, I think today we wanted to start the year by talking about how we're going to invest for 2024. But before then, I want to sort of pick up the summer series that we've just finished. In the last episode, when we were speaking about the FIRE movement, you said, it was like your quote was like, it's the most dangerous or something. So after, I'm sure you've listened back to the series and reflected on it, what do you where's your head? Out around the fire movement now. 

Bryce: [00:04:53] Well, firstly, the series is going gangbusters. So thank you to everyone who's listened. And if you haven't and you've just joined us, we do say go and listen to the very first 12 episodes. Then I would suggest coming to the most recent six because it's been an awesome series. But anyway, you figure it out on reflection. Have my views on fire changed? No. Okay. Yeah. No. I think, as we've said in the series, there're many concepts and principles that we can take from the Fire movement and that I do firmly believe in, but I think there are still elements of it that suit people. But, I think that finding a number for me is the sticking point. And living a life that is, sacrificing the here and now for a longer term. That's sort of where I find it. You got a bit unstuck for me. 

Alec: [00:05:52] It's like non-stop fire. Like an honest, anguished fire is the kind of mentality that you have where it's like all of the principles and habits when it comes to growing your wealth. You fully embrace. Yes, but there's no end point for you. It's an extinguished fire. It's the Olympic flame that forever burns.

Bryce: [00:06:16] Yes. Yeah, that's a great analogy. It is forever. Yeah. I'm not seeking a number. I'm just seeking to maximise growing wealth as best as I can. Right here, right now. 

Alec: [00:06:29] To the Day you die. So that I don't never get to enjoy it. 

Bryce: [00:06:34] Well, I know that it will get to a point in my life where I can say I now have an egg big enough to support what I want to do. Like we said in the series, we can literally invest our way to become millionaires. That to me is the exciting part. And whether that comes in 20 years or 40 years, so be it. But I think for me, it's just actively putting strategy and consistently doing it right here, right now and for the next 40 years. As best I can.

Alec: [00:07:07] Okay. 

Bryce: [00:07:07] Have you changed your view? You didn't, you didn't have quite a. 

Alec: [00:07:10] I don't know what your view is. Oh I think I, I think I generally align with you, but for me, like fire is. I think where my mentality is now, you know, we've just settled on this apartment. There's a 30 year mortgage there. Obviously, when I have kids, it's not obvious, I guess, but I want to have kids at some point, and I want to, you know, I'm obviously investing in the stock market and ETFs and the like. And so for me, it's just like, I don't see a world where I retire early, but I love the idea of reaching that fire number or that fire stage where, I don't, I'm good. 

Bryce: [00:07:54] Yeah. Yeah, yeah. Safety. Security. 

Alec: [00:07:56] Yeah, yeah. I've got a choice. 

Bryce: [00:07:58] Yeah. 

Alec: [00:07:59] I can do what I want to an extent, knowing that I'll still need to work. Yeah, but. Yeah. Flexibility. Yeah, yeah. Flexible fire. [00:08:07][8.1]

Bryce: [00:08:07] Flexible fire. Nice. 

Alec: [00:08:09] So I guess the question is, you said that we can invest our way to becoming millionaires. Yeah. So the question is, how are you approaching that in 2024? 

Bryce: [00:08:19] So 2024 for me is not going to be too much different to 2023, which was sticking to a very consistent core and satellite approach. I think I'm going to be a little bit more active in the satellite side of things than I was in 2023, but I'll get to that. 

Alec: [00:08:35] And I think for people who are new to the show, just quickly recap what a core and satellite approach is. 

Bryce: [00:08:40] A core and satellite approach is a way that you can build a portfolio and structure a portfolio where the a major part of your portfolio, in my case, about 80%, is invested in global low cost index funds that give you exposure to many different geographies, many different industries, and some of the largest companies in the world. And you just consistently build the core foundation of your portfolio around that. 

Alec: [00:09:09] Yeah. And these, the structure of these funds is such that you should never need to sell them like that you don't need to buy and sell at certain times. You can just continually put more and more money into them. They, rebalanced over time. And so you don't need to worry about that. And, so yeah, it's like a, it's a set and forget and keep investing approach. 

Bryce: [00:09:31] Yeah. And I think importantly when we say index it's not to get confused with ETFs so to speak. It's not thematic. Like I'm not going after marijuana ETFs or tech ETFs. It's just the big indexes across the major global economies. You don't. The ETF thing that was a bit. 

Alec: [00:09:51] Confusing because you are investing in ETFs. Yeah index ETF ETF thematic. 

Bryce: [00:09:57] Or actively manage. 

Alec: [00:09:58] Or activate. Yes. And there's heaps more active ETFs coming to market this year. So yeah you yeah not all ETFs are the same. Yeah. So okay so and then satellite is just your investments where you try and make a bit more money. You might be buying and selling more frequently. There might maybe individual stocks. 

Bryce: [00:10:19] Yeah. My time horizon in some instances for the core portfolio, it's not like I'm going to put this in a drawer for 40 years. It might be something that I can see playing out over five years or ten years, but it's not something that I'm going to set and forget. Yeah. 

Alec: [00:10:34] Yeah. So core and satellite approach. How are you of the money that you have left over after you've, you know, paid your mortgage and covered your expenses? How are you splitting that money between your core and satellite this year? 

Bryce: [00:10:48] So, as I said, I'm roughly 80-20. Okay. So the way that I do it is 80% goes into an Aussie ETF, an index ETF, a US index ETF. And then I've got a Asia ETF and a European ETF. and so it goes into those four. Then I have a little bit left over that sits in my brokerage account that I don't automatically invest. But when an opportunity comes up I will invest in it. Any spare cash that I get as well I will allocate. In the same way, if a tax return comes in, I'll say 80% of that is going to get split to my ETFs and then 20% I'll sit in and use that when opportunities come. For example, you might be really interested in what's going on with the obesity drugs at the moment, Novo Nordisk, Eli, whatever. Or you might want to get a bit more exposure to some of the tech players. That's where I start deploying that money. If managed funds pop up as well, like what is not in my core, emerging markets and small caps and those sorts of things. And so I think there's obviously an opportunity in that space. And that's where I'll stop putting my Satellite exposure. So it's pretty simple. The way that I love it is the whole thing is automated as we've spoken about on the show. I don't have to think about it. Every fortnight money goes into the account. That money is then distributed into the ETFs every fortnight. Done. Don't need to think about it. I get a nice text message saying that you've just bought all these ETFs. Nice. And away we go. Stress free.

Bryce: [00:12:24] So Ren, it's really interesting to hear how you're approaching 2024. Before we do, we'll take a quick break. We'll be right back. Welcome back to Get Started Investing. We're talking about how we are approaching our investing for 2024. We've covered core and satellite. So how are you breaking down yours? 

Alec: [00:12:45] Yeah so similar to your core and satellite I guess is the starting point and the core investments. I'm probably not 80-20. I'm probably. What would I be? I'd be like two thirds. One third. So not too far off. Two thirds to core. And that is automated. You know, when I get paid, it gets automatically transferred and automatically invested. So and then into five global ETFs. So thus Vanguard Australia for Australia IiVV I shares S&P 500 for America. HEUR Betashares Europe ETF for Europe. Footsie 100. The much unloved UK market gets a bit of a run. And then finally Vanguard Asia. So for me that gives me global exposure across those five ETFs. The important thing to stress is if you want global exposure, but you don't want to buy five ETFs, you can just do it through one ETF. We actually wrote a whole book about it. Don't stress Just invest wherever good books are sold. But an ETF like v d H.J. Vanguard Diversified high growth gives you global exposure. 

Bryce: [00:14:03] Yeah that is your one stock portfolio.

Alec: [00:14:06] Yeah yeah. Now all those ETFs I shared you know are not advice. That's just ETFs that work personally for me. but they can be the starting point for your research. Automated investments into those. And then I have an automatic transfer of a little bit of money that I transfer into another savings account, which is just like it's for my investing. And then that's really my satellite investments. And then when the mood strikes or when something is interesting, I see something interesting. That's sort of the pot of money that I can then invest from. Yeah. So there's no schedule for me for that. It's like, I've been doing some work and I found something quite interesting and I'm going to make an investment. Or like crypto. That's a risk. Let's put it in that. And so that for me, I've tried to set myself up. So I'm not constantly like, do I have the money to make another investment? I've got, like, a pot of money? Yeah, that is ready to go. That sits outside my, I guess, like my good money habits, my like saving and investing and mortgage and all that stuff. 

Bryce: [00:15:13] Yeah. I think the beauty of automating it as well is that you, you know, you don't have to go into the brokerage account and see your pool of money and be tempted not to do it. Because you're like, oh, the market's kind of dropped recently. Maybe I'll just hold out or it's at all times highs. Maybe I'll hold out. You just, it's just going to do it for you. And you're not going to have any emotional attachment to it. And when you log in to your brokerage account and see any sort of pool of cash available, you know the purpose of that. And you're not going to disrupt the dollar cost average process that you've been doing. So I think that's really important. 

Alec: [00:15:47] Yeah. So I think if people have, just joined us for the very first time with this summer series that we've just done and, you know, there's a when you first learn about investing and you sort of understand that it doesn't take a lot to become a millionaire. You know, it takes time, but, you know, building those small habits today and getting started with small amounts of money can really grow into something meaningful. You know this, over the course of this year, we're going to be doing the $100 challenge, where the premise, $100 invested every month for 40 years gets you $350,000 at the market's average return. And so, you know, if you start putting more than $100 a month in, the numbers start to grow really quickly. But what it requires is that 40 year period of consistency and good money habits. And so the initial excitement is great. But where the rubber hits the road, I guess, and where you know what we hope, what we hope we're going to achieve comes not from the initial excitement, but like the ongoing good habits discipline. And so it's not sexy. It's not always that exciting. Sometimes it feels quite repetitive, but it's important. Just consistently dollar cost averaging into broad based market ETFs. Having a little bit of money that, you know, gives you that excitement, but also gives you a chance to try and beat the market and make more money and just doing it. Again and again. Yeah. And again. 

Bryce: [00:17:26] Get excited. We can be millionaires. We can be millionaires with like no degree in finance, no training in investing, no MBA whatever. You literally have the opportunity to invest your way to become a millionaire. So that's going to be and has always been the overall concept of Get Started Investing. As we said at the top, though, if you do have any money related questions or investing questions, please send them through and we will answer them throughout the year. We should also say that we love your feedback, and it does have a material impact on the way that we create our content and build our shows. So if you can take ten minutes to complete the community survey, you'll find a link in the show notes. And if you do complete it in full, you'll go in the running to win 500 bucks.

Alec: [00:18:13] Yeah, and $500 compounded at 10% a year over 40 years. 

Bryce: [00:18:18] Is a shit load 

Alec: [00:18:18] I actually don't have that number in front of me, but yeah. Kickstart your investing journey by completing the Equity Mates Community Survey. 

Bryce: [00:18:25] That's it. Well, it's great to be back in the studio. Great to be back with you. And, a big welcome to everyone who has joined us over the summer. Stick with us throughout the year. Keep the questions coming and we'll pick it up next week.