From Zero to Investor: The Journey Of A Millennial Getting Into The Markets – Part 1

Bryce Leske: [00:01:34] Welcome to get started, investing a podcast that will give you the confidence you need to start your investing journey. This is for anyone who wants to start investing but isn't really sure where to start. Our aim is to cover all of the basics and to make the markets accessible to you. My name is Bryce and as always, I'm joined by my equity buddy Ren. How's it going? [00:01:53][18.6]

ALec Renehan: [00:01:53] Bryce, I'm very good. Bryce very excited to be back in the get started investing paid to be bringing not just this episode but the next two episodes. We're doing a bit of a three part series, bit different following an Equity Mates community members journey to actually start investing. And we're so excited that we're releasing it on both the get started investing Faid and the Equity Mates huge. [00:02:16][23.0]

Bryce Leske: [00:02:16] That is right Ren. Over the next three episodes, we're going to track the journey of a millennial and Equity Mates community member who has never invested before but knows it is the right thing to be doing. We're going to cover the basics, what he can invest in, and so all of his questions and then watch as he finally pulls the trigger on something more meaningful than a 60 inch 4k computer monitor. [00:02:36][19.4]

ALec Renehan: [00:02:38] Well, we should we should actually say speaking to him and we'll introduce him in a second. He actually bought an Apple Watch today. So he's spending but not investing know. [00:02:50][11.9]

Bryce Leske: [00:02:54] Hopefully, by the end of these three episodes, you two will be inspired to take your first step into the markets as we show you how easy it can be, particularly thanks to technology and apps such as Comsec Pocket. So let's meet our investor Roee. Welcome to get started investing. [00:03:07][13.1]

Rohan: [00:03:08] Thank you, Equity Mates. [00:03:08][0.8]

ALec Renehan: [00:03:09] Great to be here. Now we should reveal that Roee is an Equity Mates community member and he's also a friend of ours, been a friend for a while. And whilst we've been slaving away on the podcast trying to convince people to invest. we haven't been able to convince everyone. And that's been a real sore spot for us. [00:03:26][17.2]

Bryce Leske: [00:03:26] It has been a sore spot. I've known Rory for a number of years now, and it's always been something that you've put into the too hard basket. Is that how you would phrase it? [00:03:35][9.1]

Rohan: [00:03:36] I suppose so, yes. You guys have finally worn me down. I should also clarify that it was a 32 inch not 16. [00:03:43][7.3]

Bryce Leske: [00:03:44] Was it 4K? [00:03:46][2.3]

Rohan: [00:03:47] It wasn't 4k, no gaming Zeil only nine. [00:03:50][2.5]

ALec Renehan: [00:03:51] but its curved screen, which is quite nice. [00:03:52][0.4]

Rohan: [00:03:52] It's very nice. Very nice. [00:03:53][0.8]

Bryce Leske: [00:03:57] so as we intreod Rory, we're very keen to sort of track your journey over the next few weeks to actually get you into the market. So I think it's maybe it's because of Covid. I'm not sure. But you've recognized that now's the time that you want to get in, which we'll cover in a little bit. But before we do, perhaps it would be just a good idea for you to enjoy yourselves, to get started investing community. [00:04:15][18.5]

Rohan: [00:04:16] So I'm on, as the boys have pointed out, of being friends with him for a while now. And they really have been on my case almost on a daily basis to get into the market. So I think now is as good a time as any. I recognize yet probably time that I did something rather than make some material purchases. [00:04:35][18.7]

ALec Renehan: [00:04:35] I would rather they are. [00:04:38][3.0]

Rohan: [00:04:39] And yeah, let's start making my money work for me. [00:04:42][2.9]

ALec Renehan: [00:04:42] Hopefully not a bad tagline that we will take that. [00:04:45][3.1]

ALec Renehan: [00:04:47] So we've chosen you for this three part series, partly because you're on might, partly because to our eternal frustration, you didn't start investing. But also I think your experience is pretty common and pretty universal in terms of how old you are, where you are in your working life, and the fact that you still haven't pulled the trigger and started investing. So for a bit of context, for people genov, tell us your age, but tell us sort of like how long you been working and a bit about who you are. [00:05:11][24.3]

Rohan: [00:05:11] Sure, sure. Well, when it comes to age, I am of a very similar age to the two of you. [00:05:15][4.3]

Bryce Leske: [00:05:15] 29 and single. So let's just get it out. [00:05:18][2.2]

ALec Renehan: [00:05:19] Let's just get back to that. [00:05:20][1.1]

Rohan: [00:05:26] so yeah I have been working in my current profession for probably four or five years now, so, you know, making not a casual income. And I figured rather than, you know, just like let it while away, it's time to maybe be a bit more proactive and also think about the future as well. Yeah. If I'm being perfectly honest, I really haven't thought about what to do with the money. My efforts have pretty much been focused on making it, but I think, yeah, now it's time to go beyond that and transcend into getting some returns and yeah, start thinking about the future. [00:05:57][31.6]

Bryce Leske: [00:05:58] What has been your thought process over the last few years when it comes to your money? Are you actually putting it in other sort of assets or is it just been a let's keep it in the bank and save it for a rainy day, avoid the taxman? [00:06:10][11.8]

ALec Renehan: [00:06:12] May and the ATO are good. I think we're very good. [00:06:16][4.0]

Rohan: [00:06:16] I have not really thought about anything to do with it. I haven't invested in any other streams. So now is the time to probably start thinking about doing something with it, because we in the last few months I've had, as have all of us, had plenty of time to think. Yeah, my previous approach was just to let it. Pretty much sit in the bank. I'd like to say that I was creative in where I put it in the bank. [00:06:37][21.0]

ALec Renehan: [00:06:39] things like that, but I don't mean like in the British [00:06:41][2.1]

Rohan: [00:06:42] Virgin Islands. I was thinking about, like a high interest rate or something. Truthfully, I have not literally it just comes in and mostly sits in there. And yeah, it is the wrong approach. I guess some of my main reasons for not doing it in the past were putting it in the too hard basket, not knowing really where to start, because I do follow finance and general business and more broadly the economy. But to leverage that knowledge into working for me is not something that I had considered. Well, I had considered I just hadn't got around to it. You could bring it laziness, apathy, however you want to put it. But now is the time. [00:07:18][36.1]

ALec Renehan: [00:07:19] Let's unpack that a little bit, because I think a lot of people in a similar situation, I mean, I was definitely in a similar situation. If you follow business news, you know what's going on in the economy. You have this idea that investing is something you should do for me. It took me a while to start. And, you know, you say apathy and laziness. You're not a lazy guy. You know, you work hard within you. Thirty 32 inch monitor as well. So what do you think was actually stopping you translating the idea of investing in the you know, the knowledge that it's probably something you should do to actually taking that first step? [00:07:51][32.2]

Rohan: [00:07:51] Yeah, it's an interesting question. You're right. I do apply myself. I like to think, you know, in many other aspects of life, but mainly my job. And so the main thing, I guess, was really not knowing where to start. I had a general sort of idea of, you know, if I got online and did the research, probably spent a fair bit of time looking into it, as I do with so many other things, then I would be able to work it out. It just hadn't really interested me that much, particularly when I was younger. And now obviously I'm more interested in it, but I want to get invested in it to win the pump up. [00:08:37][45.4]

Bryce Leske: [00:08:40] was there an element of, you know, you've worked so hard to kind of get to where you want to in your career and to save diligently? I was there an element of fear, I guess, of putting money in the market, knowing that there is some risk associated with that, less so than in the bank. Not taking into account your interest rate is totally what I know. [00:09:03][23.0]

Rohan: [00:09:04] Definitely, as you guys know and generally tend to call out quite often, aside from my recent couple of impulse purchases, I'm you could probably say a frugal guy. [00:09:13][9.0]

Rohan: [00:09:18] risk averse to say the least. And yeah, the idea of maybe losing some of that money, I wasn't afraid of it. I probably used it as an excuse more than anything to not invest. I was just like, oh, well, there's the off chance that, you know, it might actually go down, which that definitely is. But as you guys have also told me, I won't know until I try. I'm judging by the stories that I've heard from yourselves. You have had similar experiences. [00:09:18][0.0]

Bryce Leske: [00:09:45] And I guess this is what happens to a lot of people as well. They are worried about losing that sort of hard earned cash that they've saved diligently and put it away. And maybe you're now in a position where you perhaps have that sort of chunk of savings and you're willing to take a proportion of that, not necessarily a whole amount. I think you kind of get to that point in your savings journey and your finance journey where you're like, OK, I'm willing to put down, I know a few hundred bucks or a few grand, whatever it may be. And that's kind of led you to this position. Is that fair? [00:10:13][28.2]

Rohan: [00:10:13] Yeah, I'd say so. And it's an interesting point you make about saving diligently as well. I think if if I was saving diligently, I would have looked to have made more use of the money. Realistically, I think it just circled back to just not spending it. Yeah, I bought the things that I want, but the rest of it sort of just goes that I didn't have a sense of appreciation for wanting to capitalize on the money that I had sitting in the bank. Yeah. [00:10:37][23.7]

ALec Renehan: [00:10:37] So really, you're here now because you want to invest, you're deciding to take the plunge, as you've mentioned. You know, you haven't been spending for a little while and you've got some money saved. I'm interested to unpack why you want to invest by first asking you why stocks? Is it just because Bryce and I bang on about it on a podcast? Or have you thought about other things like property and stuff like that? [00:10:59][21.9]

Rohan: [00:11:00] I have. I have well, firstly, to get into property, it's more cost prohibitive. Yes. And the second thing is, as I said earlier, I want to leverage my knowledge about general economy, business and finance and things that I'm already naturally inclined towards to try and make that work for something positive. If I was to get into the property game, aside from it being extremely expensive, I haven't followed the property market closely. It would have to be starting from scratch now, basically, whereas I have somewhat followed the news and the business. World for ages, so I feel like I have more of a chance of knowing what's going on. [00:11:37][37.0]

Bryce Leske: [00:11:37] I think that's a really good point and something that Alec and I have spoken about on the episodes in Get Started investing is that you actually probably know a lot more about the companies that you're going to be investing in in the world of finance, purely just from you reading probably work for some of them. [00:11:50][12.5]

ALec Renehan: [00:11:50] Exactly. [00:11:50][0.0]

Bryce Leske: [00:11:51] you, may work for some of them. You've got the Apple Watch, you've got your monitor. You've got like, you know, all these companies that you know a lot about just by nature or virtue of interacting with them and reading the paper and whatnot. So glad that you've recognized that. At least I think that's a very positive step. [00:12:05][14.5]

Rohan: [00:12:06] Hopefully with your guys help [00:12:07][1.4]

Bryce Leske: [00:12:08] management fees, 20 percent profits. [00:12:10][1.8]

Rohan: [00:12:10] So even I know that's about deal with some. [00:12:12][2.3]

ALec Renehan: [00:12:13] So this guy is good. [00:12:14][1.0]

Rohan: [00:12:17] You guys have a bleeping ball. [00:12:18][1.3]

ALec Renehan: [00:12:20] I think at this point, you know, that investing sort of makes sense in an intellectual way. You know a bit about why you want to invest in stocks. I'm interested to know what some of the questions that you have at this point. You know, you're thinking about taking the plunge. There's obviously a lot of uncertainty. So where's your head at at this point? What are you thinking about actually making that first investment? You know, you're fearful. Are you excited? And what are some of the key questions that you still have at this point? [00:12:47][27.8]

Rohan: [00:12:48] So first and foremost would be getting a sort of a nod in the right direction as to where to start, which I feel you're about to hopefully do. And the second thing is probably an understanding of how much to put in and how much to sort of consistently continue to put in going forward. We don't have to talk in actual figures, but even in terms of percentages, that would be a good point to clarify. [00:13:10][22.5]

Bryce Leske: [00:13:11] So let's start with where to start. When you say that, do you mean where to start finding information about what to invest in? Do you mean where to start in terms of literally how do I buy a stock? Do you mean a combination of the two? [00:13:24][12.5]

Rohan: [00:13:24] Yeah, yeah, yeah. So barriers to entry per say, but bad analogy. If I wanted to gamble on sports [00:13:30][6.0]

ALec Renehan: [00:13:30] or Bryce Bryce can help you out with that. [00:13:32][1.4]

ALec Renehan: [00:13:32] I'm sure he knows. He's not sure. I'm not true. [00:13:38][5.5]

Rohan: [00:13:39] So if I wanted to do that, you know, I would log on to one of the many betting gambling websites out there. It would be a quick PayPal situation. Yeah. To get your money in it and go from there. I know what the user interface is like and you know how it works. Basically, if I was to try to do that with stocks tomorrow, right now. Yeah, it would be a few hours worth of Internet research. [00:14:00][21.1]

ALec Renehan: [00:14:01] So I find that interesting because it's actually easier in this day and age to sign up for a brokerage and make your first trade than it is to sign up for a betting platform, put money and get verified and make a bet. But the perception is warped. The perception is that it's harder the other way. [00:14:15][14.1]

ALec Renehan: [00:14:15] Yeah, I think you've got to know that. [00:14:17][1.8]

Bryce Leske: [00:14:18] You've got to sort of be in it to know what's available. And I guess where we've come from, from what brokers used to be like to the technology. Now, first question, who do you bank with? Commonwealth perfect. So they make it incredibly simple through their Comsec Pocket app. [00:14:32][14.1]

Rohan: [00:14:32] Should have really said which bank, which. [00:14:33][1.4]

Bryce Leske: [00:14:35] Sure, Ren. And I also speak about this often the best place in the easiest way to start, and this is how both of us got started, was just through your bank. They usually have a broker attached to them. So Commonwealth Bank have Comsec, which is their brokerage account, and they've also just released Comsec Pocket, which allows you to invest in a whole bunch of different ETFs, which we can talk about later. And it feels like to me that's something that you could easily just sort of crack into. I mean, are you someone that would probably go into, I don't know, find a dotcom and try and compare brokers? [00:15:04][29.2]

Rohan: [00:15:05] I probably would, yeah. If I was to do it on my own without you guys helping, which most people aren't lucky enough [00:15:11][6.8]

ALec Renehan: [00:15:12] to have direct access to you guys. Well, I [00:15:14][2.3]

ALec Renehan: [00:15:14] mean, this hopefully this episode serves as a proxy. You know, people can put themselves in your shoes and they can think that were, you know, talking to them directly because it's all applicable. Not nothing when speaking to you here is unique to you. No offense. [00:15:27][12.7]

Bryce Leske: [00:15:28] So I think my first sort of suggestion, I guess, would be that before the next episode, have a think about, you know, and maybe look into what CommSec offer in terms of brokerage fees. That's very important. But also look in the Comsec pocket because they have a slightly different offer. But Ren, do you have any sort of thoughts on if always first question is like how to actually get in? [00:15:46][18.0]

ALec Renehan: [00:15:47] I think the best option that technology has enabled these days for people that want to start with a small amount is micro investing. So, you know, you guys mentioned Comsec Pocket is a good opportunity to put smaller amounts in and pay less for brokerage than you would in a traditional full service brokerage account. So I think that's a good place to start. The second thing you asked was around how much money to put in. And this is an unhelpful response, but it's a little bit like a how long's a piece of string question? There's some rule of thumb that I think we'll go through, but it really is up to your individual appetite for risk and how much money you are prepared to lose. So I think that's probably where you want to start is whatever money you put in the stock market should not be money that you need to cover your day to day expenses. [00:16:32][45.1]

ALec Renehan: [00:16:33] And after some it all, I [00:16:36][3.3]

ALec Renehan: [00:16:36] think if you are putting money in and then taking it out to cover rent or covering, you know, an upgrade of your monitor or something like that, that's money you shouldn't be investing because short term, there's risk in the stock market that things will fall and you might be pulling out a lot less than you put in. [00:16:52][15.4]

Bryce Leske: [00:16:52] I mean, if you're comfortable enough to talk in dollar terms, that would be great. The usual parcel that you start with through traditional brokers is a minimum of five hundred. Generally, what we're sort of seeing through the community is people start with 1000, 2000. That's sort of the general sort of starting range, [00:17:07][14.9]

Rohan: [00:17:07] probably what I would be thinking in the low thousands. [00:17:11][3.4]

Bryce Leske: [00:17:12] Yeah, nice. Is there any sort of particular sort of thinking behind that or it's just what you're comfortable with right now, [00:17:17][5.3]

Rohan: [00:17:17] sort of touching on what Ren said about, you know, not like not stinging me if I lose. That's basically it. It's something it's probably the figure at the moment. I'm going into it as a complete novice. Yeah. That I would be happy experimenting with. Yeah, I would say [00:17:33][15.5]

Bryce Leske: [00:18:45] Do you have any sort of more principles that you want to cover off? [00:18:50][5.1]

ALec Renehan: [00:18:50] Yeah, I think if we're going to talk about starting small with a micro investing up, I think an important concept to get your head around is dollar cost averaging. Yeah. So I think when you're planning out how much money you want to put in to start with, it shouldn't be. Well, it could just be you put it in once you set it and forget it. But I think building the habit of saving and investing in is is a really important habit. And so I think for people who are thinking about how much money they should put in, how much they can save and stuff like that, it should be about building a routine where every paycheck you take a bit and you put it in your micro investing app. So it's not about just that first hit. And I think it's a good number to start with, but then it's about building a plan, you know, for twelve months when you get paid, putting a little bit in every time and building your portfolio that way rather than. And this is how I used to think about it and how a lot of people think about it, you know, just saving and saving. You need to save and you get to a point and then you can put it all in. [00:19:46][56.4]

ALec Renehan: [00:19:47] Yeah, OK. [00:19:47][0.5]

Rohan: [00:19:48] That probably is one of the other things that did crossed my mind when I had had that internal conversation about investing is how easy is it to put that money in? What are the minimums, what are the fees? Those are some of the things like, yeah, that had crossed my mind, which I'd like to understand a little bit more about. [00:20:04][15.8]

ALec Renehan: [00:20:04] So if we're if we're talking about Comsec Pocket specifically, it's two dollars each time you invest, and that's up to a thousand dollars. If you put in over a thousand dollars, it's point two percent of the trade value. So, for example, if you put in one thousand one hundred dollars point two percent of that is two point twenty. So that's cheaper than any traditional broker. But yeah, fees are critical because especially if you're investing small amounts, they can eat into your returns very quickly. [00:20:30][25.8]

Rohan: [00:20:31] Thanks for the right man breakdown. [00:20:32][1.1]

ALec Renehan: [00:20:34] That's what I hear [00:20:34][0.3]

Bryce Leske: [00:20:35] in terms of minimums. As I said, you know, generally five hundred is the minimum with these micro investing. Some of them go down as little as a few cents. CommSec Pocker is a minimum of fifty bucks. So really, it's up to you to determine what are you comfortable with every paycheck to just start pushing into Comsec pocket? [00:20:52][16.7]

Rohan: [00:20:53] Yeah, that's actually a lot less than I was expecting. [00:20:54][1.6]

ALec Renehan: [00:20:55] Yeah. And in terms of your question about how easy it is, I did a experiment for a tiktok video that didn't really work. But I did the experiment anyway. I did. How long does it take to buy Amazon stock and how long does it take to buy Amazon socks like socks off Amazon? Twenty nine seconds to buy socks off Amazon's. Twenty four seconds to buy stock of Amazon. So in terms of how long it takes and how easy it is, it's pretty straightforward these days and pretty quick. [00:21:23][27.7]

Rohan: [00:21:23] So the stock's socks thing works pretty well for the alliteration side of things. But I think you're really in the market for some shows, BRO. [00:21:30][7.3]

ALec Renehan: [00:21:33] So we'll take that offline. So I guess the [00:21:37][4.4]

Bryce Leske: [00:21:37] question is, have you thought about how you will manage your I don't know if you paid monthly or fortnightly or whatever it is, how you will manage what you're going to put in at all? [00:21:47][9.8]

Rohan: [00:21:47] Well, based on the information you guys just gave me, probably I'd put in more than that thousand to start with. So I'd be hoping that. What is that point? [00:21:58][10.3]

ALec Renehan: [00:21:58] Point two percent. [00:21:59][0.5]

Rohan: [00:22:00] But after that, probably on a maybe a monthly basis, just to start every time I get paid. Yeah. I'll be apportioning a percentage of my salary that would otherwise just go straight into the bank, not into the up nine. [00:22:13][12.9]

Bryce Leske: [00:22:13] So before we move into, I guess, investing goals and then and then closing out, are there any other major burning questions? And I know we sort of just done this at a very high level and you've got some time to think about it until we catch up again. But are there any other sort of major burning questions around how to get started from a brokerage point of view or that sort of money management side of things? [00:22:34][21.1]

Rohan: [00:22:35] I'm sure that they'll come when I download and start using this app. The questions I've had so far is a pretty high level. As I start actually looking to do it, there'll be more things that popped into my mind which I will make sure to take note of. I'll do my homework like [00:22:50][14.7]

ALec Renehan: [00:22:50] a good boy [00:22:50][0.2]

Rohan: [00:22:51] and and come back prepared with a few questions for you guys. [00:22:54][2.9]

Bryce Leske: [00:22:54] Yeah, I'd certainly encourage you to look at other brokers as well and just do your comparison and understand fees and whatnot. But I think from our point of view, the easiest way to get in at that very first barrier is just going through what you've got. Comsec pocket. I just go and check that out, to be honest. [00:23:10][15.1]

ALec Renehan: [00:23:10] Yeah. Now, this is sort of where we wanted you to get to in the first episode. We wanted to get you to the downloading and signing up, putting money in the app stage in the next episode. We will then we'll talk to you about how you've actually found it and we'll answer any questions you have about using the app and actually what to invest in kids in Comsec pocket. There's seven choices, which is nice in a way, when you're getting started, you're not, you know, paralyzed by the amount of choices of individual stocks and ETFs out there. So we'll leave some of those questions for the next episode. I want to wrap up with one final question, which is [00:23:44][34.0]

Bryce Leske: [00:23:45] I think really what you tend to handle. Yeah. [00:23:47][2.1]

ALec Renehan: [00:23:50] Yeah. [00:23:50][0.0]

ALec Renehan: [00:23:51] What is your Instagram? And I saw it in your day. No, I think an underappreciated part of investing, and especially when we're young and we're not really thinking about, you know, what's going to happen in 20 years. And, you know, all of that is having investing goals and having a reason why you invest. So I think that really builds consistency if you have, you know, clear goals that you are aware of and that you're working towards. So I guess to wrap this first episode, do you have any goals? Is it something you've thought about? [00:24:22][31.4]

Rohan: [00:24:22] I want to be Warren Buffett. [00:24:24][1.2]

ALec Renehan: [00:24:27] Well, he started earlier than you, so you're already on the back of that. [00:24:30][2.9]

ALec Renehan: [00:24:30] But I haven't thought [00:24:31][0.8]

Rohan: [00:24:31] too much about it. I've got a general idea I would like to see. Obviously, my money grow. I think that's a given for. Yes. Anyone, No one [00:24:39][7.8]

ALec Renehan: [00:24:40] wanting to lose, [00:24:40][0.4]

Rohan: [00:24:41] but not in terms of specifics. That's another thing I don't know what's a realistic expectation of. Good question. What is a good rate of return and across what period of time? I know you guys always bang on about especially Leskie, about leave it in there. So I get that general principle as to what I can reasonably expect. In a good scenario. I'm not sure what the benchmark is. [00:25:05][23.8]

Bryce Leske: [00:25:05] Well, let's put it this way. Currently, your benchmark is what it is getting in the bank, right? You're getting an interest rate of I'm not sure what your interest rate in your savings account [00:25:14][8.5]

ALec Renehan: [00:25:14] is, probably is probably stocks within one or two. [00:25:16][2.0]

Bryce Leske: [00:25:17] So assuming that your stocks do go up from a very, very basic level, not taking into account inflation and that sort of stuff, but if it's doing better than that, then you're better off at this stage, right? [00:25:29][11.1]

Rohan: [00:25:29] I suppose so, yes. But I don't think that beating my paltry interest rate is really what I am going for. I'd like to see it ideally more than that. I'd be interested [00:25:44][14.8]

Bryce Leske: [00:25:44] to know just from and you can absolutely throw numbers out here because it's a great question. What would you hope for over a year say? [00:25:52][7.7]

Rohan: [00:25:53] Well, for argument's sake, I suppose not factoring in any just of my initial deposit and not factoring any subsequent deposits from Shong future paychecks, I don't know. I'd probably hope to see ten to 12 percent in 12 months time from my for my principal investment. [00:26:09][16.2]

Bryce Leske: [00:26:09] Yeah, the average return of the ASX is around that eight to 10 percent. Obviously we're in pretty unprecedented times at the moment, so we haven't had that [00:26:17][7.9]

ALec Renehan: [00:26:17] being said before. [00:26:18][0.3]

Bryce Leske: [00:26:19] Yeah, manage your expectations, but you're in the right ballpark, that's for sure. So I'm sure we can help you choose through particular ETFs that may give you some performance that might get there. But yeah, great question. What are your thoughts on that Ren? [00:26:31][12.5]

ALec Renehan: [00:26:32] In terms of expected return, [00:26:33][1.4]

Bryce Leske: [00:26:34] it's a good question, I think that a lot of beginners would have is and almost happy that we're thinking about that, not sort of just blindly putting money in, but how do you know if you're going well or should should he be managing otherwise? [00:26:45][11.2]

ALec Renehan: [00:26:46] So I think there's probably two ways to think about this. One is absolute return. And that's like what is the actual percentage at the end of the year? And over the long term, Bryce is right. The Australian market has averaged eight to 10 percent. I think it's like 10 percent since nineteen hundred ten percent a year. So in the long view, long term, eight to 10 percent should be sort of what you're expecting. I wouldn't expect that in the short term, though. That's just like is too much uncertainty. Hopefully it happens. But, you know, it's just as likely it's five percent as it is. 20 percent [00:27:18][32.1]

Rohan: [00:27:19] past performance is not. [00:27:19][1.0]

ALec Renehan: [00:27:19] exactly. [00:27:19][0.0]

Bryce Leske: [00:27:20] Yeah, yeah. So I know [00:27:22][1.4]

ALec Renehan: [00:27:26] one way to think about it is over the long term you can expect sort eight to 10 percent. But for me, the way that I think about it is relative return. And you know, we've been talking about your shockingly low-interest rate [00:27:38][12.0]

ALec Renehan: [00:27:40] that all know the Commonwealth could call [00:27:43][3.1]

ALec Renehan: [00:27:43] up. There's really no other asset class at the moment that offers on a relative basis the risk return profile of equities. So like if you had fifty thousand dollar parcels and you were thinking about investing in government bonds, you'd be getting one percent, maybe less, probably interest like cash, not doing that well, you know, unless you wanted to go all in on Bitcoin and take a real punt. There's no asset class that is accessible to us. Property is one that maybe offers a similar return profile. But as you said, it's so inaccessible for people our age at a stage of life. So I just think about it on a relative return basis. I think about maybe being 27 with the money I have. What's the best return I can get for my money? And on that basis, there's nothing better than stocks. And that's just my personal feeling. But that's sort of what the literature and the research bears out as well. [00:28:35][51.4]

Rohan: [00:28:35] I suppose another question I have as well is, again, coming at it from a novice from investing perspective, would you suggest I follow my gut and try pick my stocks based on sort of what I know? [00:28:49][14.1]

ALec Renehan: [00:28:49] This is a good question. I think this is an episode to question, though. [00:28:52][3.0]

Bryce Leske: [00:28:53] That is a great question. We've spoken on the show many times that there are ways that you can get into the market that take away the concentrated risk of picking individual stocks. If you're going to go out there and choose to stocks, then you are essentially, you know, putting all your money in both of those. If you go out and choose an ETF that spreads across one hundred stocks, then you're taking away that level of risk. It comes down to your risk profile, I guess. So if you're confident enough to start picking stocks, great. But my sort of general suggestion from the get-go is just to dip your toe in the water, perhaps through an ETF. And then once you're comfortable just understanding how the process works, what it's like to see your money move up and down on a daily basis, I'm sure you're going to be looking at that every day. [00:29:38][45.3]

ALec Renehan: [00:29:39] Oh, yeah, I don't know. [00:29:41][1.9]

Bryce Leske: [00:29:43] But I mean, it's hard not to. But look, I'm not going to say no to that at all, like, if that's what you want to do. But I think from my point of view, if it's a testing the water situation, there are ways that you can alleviate that sort of stress because there's a lot of fluctuation going on at the moment. [00:29:56][13.4]

Rohan: [00:29:56] Yeah, my line of thinking at the moment is probably my level of risk, acceptance or risk tolerance is correlated with the amount that I have invested at the start. It's not going to be huge. And just to sort of get my feel is out there and my tentacles spread across the market, I probably have a higher level of tolerance. And I'd also I wouldn't trade it as a game, but I'd like to get as much exposure as possible. So I'd like to try pick a few things myself while also balancing things like I'm guessing you're probably thinking, [00:30:30][34.1]

Bryce Leske: [00:30:31] yeah, yeah, yeah, yeah. [00:30:32][0.7]

Rohan: [00:30:32] As that figure goes up and probably in the long term, as I get older, I imagine I'd be more risk averse. [00:30:38][5.8]

Bryce Leske: [00:30:38] Yeah. [00:30:38][0.0]

ALec Renehan: [00:30:39] Yeah. I mean, let's put a real practical example on it. One of the ETFs in the Comsec pocket up is the Nasdaq 100 ETF, one of the biggest U.S. tech stocks. But just by virtue of them being US tech stocks, one of the biggest technology companies in the world, you could say, I'm going to invest in that ETF and basically make a bet on the technology industry becoming more important, becoming more ingrained in every industry, growing the size of the pie and whichever individual companies do well, technology is going to do well. Or you take the concentrated bet on picking an individual stock and you say, for example, Microsoft is going to keep doing well. There's just a whole bunch more risks that come in. If you're going to invest in individual stocks, you've got like management risk, like is Microsoft itself going to keep outperforming? You've got valuation risk. Microsoft is quite expensive at the moment. And so there's just a whole bunch more work that you have. To do and so the great thing about ETFs is in some ways, you just don't have to worry about a lot of those things, or at least you don't have to worry about them to the same extent. The great thing about ETFs is it allows you to take a more gradual approach into investing. You know, when Bryce started investing in bloody 1992, you didn't have that choice. You had to pick a stock and you had to live or die by how that stock went. But now you don't. So you can dip your toe in the water. You can use Michael investing AAPS to just get started with a small amount of money. You can buy an ETF to give you broad exposure to get a taste of it. You don't have to take that plunge into an individual stock to begin with. [00:32:13][94.2]

Rohan: [00:32:13] Yeah, I have a lot of questions about like what to invest in as well. [00:32:17][4.3]

Bryce Leske: [00:32:18] Let's use that as a cliffhanger. I think it's a great place to wrap there. We've covered off some of the major barriers you thought were there to get into the markets and hopefully we've been able to alleviate some of them. It would be awesome if next episode, I think you maybe have a think about some of the major individual stocks you'd be thinking about investing in and maybe why. And then also from an ETF perspective, you know, there's a lot of thematic ETFs out there. Marijuana Ren just mentioned one on the top hundred tech stocks in the US. You can go Asia, whatever it may be, maybe have a think about like to your point, you know, you're well read and you get an idea of what's going on. [00:32:56][37.7]

ALec Renehan: [00:32:56] Thank you very much. [00:32:57][0.5]

Bryce Leske: [00:32:58] So probably make a good assumption on what you think has good growth potential in that sort of stuff. And we can next episode really dig into what are your options to invest and we can go from that. Sounds good. What do you reckon? [00:33:10][11.6]

Rohan: [00:33:10] Yeah, no, that sounds good to me. So I probably hold off from actually investing just yet, would you say? [00:33:16][5.9]

ALec Renehan: [00:33:17] I reckon if at the start of next episode you signed up for Comsec Pocket and have got money in the account, that would be a good place. [00:33:23][6.4]

Bryce Leske: [00:33:23] We could do a lot of investment. We could [00:33:25][1.4]

ALec Renehan: [00:33:25] we could. [00:33:25][0.1]

ALec Renehan: [00:33:28] bvery first podcasting life investment challenge me, guys. [00:33:30][1.4]

Rohan: [00:33:32] So here's another question. Can I put money in there without it being invested in it? [00:33:36][4.3]

Bryce Leske: [00:33:36] Question. Yes. So all brokerage accounts, you're either linked to a cash holding account or the broker themselves allow you to just hold your money in cash. Ren every paycheck will send a bunch of cash to his broker, a brokerage account, and he'll sit there in cash so that when he's ready to pull the trigger, he can do it. [00:33:55][18.8]

ALec Renehan: [00:33:56] Think of it like a Sportsbet account, like he used that analogy earlier. It's exactly. Yeah, you put money in the account. It sits in cash until you actually [00:34:03][7.1]

Rohan: [00:34:04] want to do something with it. And if I want to say, like, I don't. But for the listeners out there. Yeah. If they decide to change their minds and yeah. [00:34:11][7.6]

ALec Renehan: [00:34:11] You can just pay is they're generally not. [00:34:14][2.1]

Bryce Leske: [00:34:14] No. OK, yeah. Another good question. So there's no harm in just putting money away at a regular basis. You don't have to invest that money, but at least you know it's going to be there. Flirt with the idea when you want to pull the trigger and if getting it out of your account and into the brokerage account is that step closer to investing, then so be it. [00:34:30][16.4]

ALec Renehan: [00:34:30] Yes. As Bryce was saying, I use it as my for saving. I transfer it in there. So when I am looking at 32 inch Covid monitors, I can't pull the trigger. [00:34:39][9.1]

ALec Renehan: [00:34:40] As cash flow is not even Baim, it can transform me for those three shoes. Usually this guy who runs the finance podcast, I am all invest all the time actually wearing shoes, isn't it is unbelievable. It's unbelievable. I don't look down in the World Cup. And I was like, oh my God, no, no, we are not going to sustain. [00:35:10][30.3]

ALec Renehan: [00:35:11] But I love investing so much that that's where my money goes. And Roee, you're going to catch the bug soon as well. [00:35:17][5.6]

Bryce Leske: [00:35:18] So we've spoken about potentially starting with Comsec pocket. It is easy to start small with Comsec pocket. You can download it at the App Store or play store and get started. [00:35:27][8.8]

ALec Renehan: [00:35:27] And not only can you, but you will download it. I will at this three part series is really going to fall on very quickly. [00:35:33][6.4]

Bryce Leske: [00:35:35] best of luck over the next few weeks or however long it is until the next episode. Thinking about what stocks you're going to invest in. We look forward to picking it up then. [00:35:42][6.8]

Rohan: [00:35:42] Thank you very much. [00:35:42][0.0]

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