What is stressing you out financially right now?

Bryce: [00:00:15] Good day, Equity Mates.And Welcome back to another episode where we are following our journey of investing and whether you're an absolute beginner or approaching Warren Buffett status. Our aim is to help break down your barriers from beginning to dividend. Now, if you have joined us for the very first time, a massive welcome, welcome to the Equity Mates community. Welcome to the start of your investing journey. We do have another podcast, Get started investing to get you up to speed if you're still feeling a little overwhelmed. Now we are licensed, but we're not aware of your financial circumstances. So any information on this show is for entertainment and education purposes only. Any advice is general. With that said, my name is Bryce and as always, I'm joined by my equity buddy, Ren. How you going? 

Alec: [00:00:56] I'm very good, Bryce. Great to be here for this episode. We are trying something a little bit different, this episode, getting a little vulnerable, sharing our deepest fears, stresses where you are. So we will get to that. And then we've also got a few questions from the Equity Mates community. But before then, Bryce is a reminder for everyone that we are in the final days of our Equity Mates merch sale. Yes, we've got four shirts to choose from, some crackers, We've got the black shirt with the Equity Mates logo that you and I are both wearing now. We've got a white version with an embroidered logo, very high quality, and then we've got two more shirts, one with the OJ Equity Mates logo. If you've been listening for a long time since 2017, you may remember it. It's you and I riding the Wall Street bull. And then finally we have the FinFest unicorn shirt as well. If you loved FinFest last year, if you can't wait for it this year, you don't want to miss out on that one equitymates.com/shop sale ends this week. 

Bryce: [00:02:01] Love it. They are running out the door. Now, Ren, as you mentioned, a bit of a different format for the first half of this episode. We are excited to sit down with Maddie from You're In Good Company, one of the shows in the Equity Mates Media Network. They're doing an awesome job. In fact, their most recent episodes have been interviewing some of Australia's leading founders. Their most recent episode was with Laura Henshaw. So if you want to go and check that out, please do. 

Alec: [00:02:31] And you're going to want to be subscribed to that feed because they have maybe the biggest guest in Equity Mates history across any of our shows coming up in a couple of weeks. 

Bryce: [00:02:41] Yeah, we're not embellishing this, but they are one of the world's biggest, most recognised investors. It's a phenomenal effort that they've been able to secure this investor. So make sure you're subscribed to You're In Good Company. But we're joined by Maddy, who challenged us to the idea of sitting down and trying to emulate the format on one of Australia's leading podcasts at the moment, The Imperfect, a podcast that I hadn't listened to leading into this Ren, which you had. So I was a bit nervous about what was to come. 

Maddy: [00:03:24] Well, I am very excited for today because even though I set you guys some homework, only one of you completed it by listening to The Imperfect in advance. So for us, going in for us is coming in pretty blind to this episode. But for those of you who don't know what the Imperfect is, it is a podcast hosted by Hugh Van Cuylenberg, the founder of The Resilience Project. His brother Josh Van Cuylenberg and Ryan Shelton. And basically they interview guests who are willing to make themselves make themselves vulnerable by sharing their imperfections. So the way each episode works is that the guests enter what is called the Vulnerability house, and they are presented with three cards or prompts and have to pick one to answer. So we did this a few months ago on YIGC, and it was one of our favourite episodes to date. So today we are going to pay homage to the imperfect with an investing twist and do an investing version of their podcast. So I'm going to give each of you three money related prompts. Who wants to go first? 

Alec: [00:04:31] You guys? 

Bryce: [00:04:31] I'll go first.

Maddy: [00:04:32] Okay. Any questions before we start? 

Alec: [00:04:34] Are we getting the same prompts? 

Maddy: [00:04:36] No.

Alec: [00:04:37] Oh, okay. Okay. And so the rules of the game for people who haven't listened to this podcast, like Bryce, you get three questions and you answer one of them, correct? 

Bryce: [00:04:47] Okay, cool. I get to choose which.

Maddy: [00:04:50] And you get to choose. You get to choose which one. So I'm going to pop the three questions into a dork now, and I want you to write them out. I want you to tell us what you're thinking. Like 

Bryce: [00:05:05] Yeah. Where's the dork? 

Maddy: [00:05:07] I'll be sharing it with you now. Bit of patience. 

Bryce: [00:05:08] So these are all money related questions.

Maddy: [00:05:11] They are loosely. 

Alec: [00:05:14] Loosely. 

Bryce: [00:05:17] Heart's kind of racing. 

Maddy: [00:05:20] I wish I did. How much money do you have? A good run? [00:05:22][2.5]

Alec: [00:05:23] I don't know What? Okay, The three questions are what is stressing you out financially right now? Nice. 

Maddy: [00:05:34] You'd have to say live reaction. What kind of a live react to that? 

Alec: [00:05:37] I know exactly what you're going to say. Oh, well, let's kick it. Yeah. 

Bryce: [00:05:42] Is it your responsibility to be a good financial role model to anyone? 

Alec: [00:05:48] Yeah. 

Bryce: [00:05:48] Okay. That's to date. 

Maddy: [00:05:57] As the leader of Equity Mates. 

Bryce: [00:05:58] Yeah, that's what I was thinking. I was like. Okay, who or what is currently influencing the way you think about money? Okay. I think for that one, I think. Oh, go. It's because it's most front of mind. It is the what is stressing you out financially right now. 

Maddy: [00:06:17] Right. Let's get into it. Okay. What's on your mind? 

Bryce: [00:06:22] We are in the process of trying to buy a house. And. And that's been something that has been a goal for a while. Waving. Harriet, my wife and I, we got married in October last year.

Maddy: [00:06:36] Congratulations. 

Bryce: [00:06:36] Thank you very Much. 

Maddy: [00:06:37] You must have missed them out in the mail. 

Bryce: [00:06:39] Yes. Stealing the mail. And. You know, we spent a lot of time talking on the show about growing wealth through the stock market and. And I've probably got more of a grasp on that than Harriet does. And I think, you know, for her, the goal has always been a house. And we live in Sydney, and the price of housing is incredibly expensive. And so I think at a high level, thinking about the commitment that a mortgage brings, coupled with the coupled with running a business is stressful, I think. And I meant what I mean by that is I would feel much more comfortable committing to a mortgage if I was in a corporate strategy job at Woolworths.

Maddy: [00:07:36] All right. First of all, I'm glad that you're not saying that you are stressed about the business Equity Mates going under financially. So that's a big tick from my perspective. You're guilty of it. Anyway, Move on. Do you think that your current situation?

Bryce: [00:07:53] It's funny you say that. Actually, that actually does stress me out. 

Maddy: [00:07:57] That's kind of what I thought you might say. 

Bryce: [00:07:58] But it's a different stress. If that makes sense. 

Maddy: [00:08:03] Why? 

Bryce: [00:08:03] I don't know. It's a stress that is like. It's more like a. Like the like we're like, I know we can get through it. Yeah, that makes sense. Like, I know there are options, but the stress of having, like, my wife involved in a decision that is tied like. And yeah, I think it's for some reason it's different with having her involved in that, if that makes sense. And like making a commitment to a mortgage that if we then go bust, it's kind of. Like she did. Do you know what I mean? 

Alec: [00:08:39] Yeah, I know exactly what you mean. I mean. The The rational side of my brain says this You would be unemployed, you would be unemployed for two weeks, like at most, like Woollies would have you back in a heartbeat. Everyone we work with would hire you. So, like, there's really no risk. But it's scary. 

Bryce: [00:09:02] Yeah. I also think it's the unknown of, like, what It actually, I think when we're going through the process of buying a house, going through the process of like getting pre-approval and those sorts of things, one of the mortgage brokers was like, everyone can put numbers in a spreadsheet and think that, you know, you can afford X, Y and Z, but until that actually starts coming out of your bank account and you're like, Oh shit, this is it for 30 years. And that readjustment of like, that's literally I'm not gonna be how to get that back. It's been there for 30 years. It was like, yeah, you know, wait, talk about not paper trading because it's not until you're in it that you understand how it feels. And unless you like, do a practice run of like, let's pretend we have a mortgage and start like, yeah, no money to it, just a random account to be like.

Alec: [00:09:47] Isn't that renting? 

Bryce: [00:09:49] If mortgage was the Cost of rent, we'd be cheering. 

Maddy: [00:09:55] Do you think? Is it the sense of being tied down by the mortgage or is it the sense of not being able to afford it that makes you fearful?

Bryce: [00:10:03] I think this is just I think it's like a combination of wanting to stretch yourself enough that you get a place that you're not going to want to do that in three years, you know, to be like, we need to sell. And then knowing and then that which is fine. I get the idea of stretching yourself. Now if you are in like a job and a corporate job where you can see a path of pay rises and promotions and it's like, okay, I know that if I just commit myself here for ten years or five years or whatever, I'm unlikely to get an increase in pay so I can stretch myself. Now where I don't we don't have that certainty to be like in a year, in two years rent, I'm going to be giving ourselves pay palms. It could be we are cutting our pay so this thing doesn't go under. And so that commitment is what's scary. It's like what is the right thing to do right now? That is the nice mix of right place, right amount of money going out, you know, all that sort of stuff. 

Alec: [00:11:01] Yeah. It's the biggest financial commitment anyone makes buying their first house. Up to that point. No one's had anything that big. 

Bryce: [00:11:09] And then like it's also like we're both getting help from Bank of Mom and Dad, which is like it is what it is and very, very fortunate to be in that position. If I wasn't, I don't like, if I was still single I reckon I wouldn't be even thinking about a house right now if that makes sense. Yeah. Just be stress free. I'd just be pouring money into the stock market now. 

Maddy: [00:11:36] Financially stress. How much do you think the rising interest rate environment has affected or not affected how you're feeling? [00:11:44][7.8]

Bryce: [00:11:44] Yeah, I've thought about this. I reckon it's a blessing in. I think that if we were looking for a house two years ago and had the means to do what we do now, I reckon we'd be way more bullish On. Extending ourselves. Way more bullish. We'd be like yeah, we can afford that. Interest rates are so low. RBA saying we're all sweet for two years and and probably would have way overextended ourselves and got into it, probably got into a fair bit of trouble because you'd be looking at 1%. The difference between 1% and 5% we all know is massive. It's massive. Yeah. And so I think it's a blessing to be like a it does happen if interest rates do go up and can go up quickly. And I think that's something I'll always now have in any big financial decision over the next over my life. It's, oh, that was a defining kind of moment. And it's like, okay, the advantage of being kind of at the top of a rate cycle, fingers crossed over the next 20 years or so, you would imagine we would benefit from that rate cycle, hopefully going down again. Fingers crossed. 

Alec: [00:12:53] I don't know about that? I think we're going From three and a half. 

Bryce: [00:12:55] We won't go back to one, you know, but. Well, three and a half is cash rate in mortgage rates. Five and a half. So like, I think it's a blessing to be honest, in that it's made us much more conservative with what we probably Would have been. 

Maddy: [00:13:11] So you mentioned that you had gone through the pre-approval process, if you don't mind sharing where you're at with it now. How are you feeling about it? 

Bryce: [00:13:19] Right now. We actually checked out a place last night that was great. Well, not last night. When was it? 

Alec: [00:13:26] That's why you had to leave our meeting early. 

Maddy: [00:13:28] So much from my mother in law. 

Bryce: [00:13:30] That's her birthday the night before. 

Alec: [00:13:32] The night before. 

Bryce: [00:13:35] And Harriet and my in-laws went in, checked it out again today. So we have pre-approval. We've checked out a number of places. This is probably the closest we've been to finding a place, but it has a massive development site right next to it that is like it has been in development for ten years and hasn't moved from that. 

Alec: [00:13:54] So you get the we. 

Bryce: [00:13:58] The bulldozer rolls in. Yeah. It's just like that for me is just what it's like. What is the risk that we're willing to take on that? Because it's the biggest financial decision that we're likely to make. And God, I'll be freaking angry if in a year's time the development side goes off and you're like. 

Alec: [00:14:16] Is that going to be a constant stressor if you buy it for and then every time you Like is it gonna be today?

Bryce: [00:14:23] I know. 

Maddy: [00:14:24] It's today. Today.

Bryce: [00:14:26] Well, I mean, the ideal scenario here and what I keep telling Harriet is that in five years Equity Mates is going to be absolutely cruising. We may exert. 

Maddy: [00:14:40] A potential buyer. 

Alec: [00:14:42] Or we'll move on. and then we'll be able to afford the three houses that goes up.

Maddy: [00:14:48] Find the developments. 

Bryce: [00:14:49] But yeah, the pre-approval process was an interesting one. I think it was eye opening to see how it happens and how the number that you're given is not actually the number that you can afford. And I think it's bullshit. They just go, okay, what's your combined income? Roughly times that by five subtracts if you've got hex debt, if you've got credit cards or whatever. Okay. Your, your capacity capacity is X. But then if you plug that into how much of my repayments on a mortgage going to be, it's like. Way out of our league of being able to repay it. And so it's like why in the first instance, is the mortgage brokers even giving you the idea that you can afford this as your capacity? It's just not your capacity. So then you can see how people get into a position of going, Oh yeah, we got this. 

Bryce: [00:15:45] Let's go Out. 

Alec: [00:15:46] It's a funny one. Let you try and you unpick that and it's there's a few layers to it because you're like, why the mortgage brokers giving you that number? But then like, why the banks lending it to you? 

Bryce: [00:15:58] Yeah, yeah, yeah. Well, the mortgage brokers give you that number because their incentive is to give you the biggest loan possible. 

Alec: [00:16:04] Because they get a Commission. 

Bryce: [00:16:05] They get a Commission on the loan for the entirety of the loan. 

Alec: [00:16:07] And if you can't afford it, then you're probably for refinance at some point. 

Bryce: [00:16:10] And I Yeah, exactly. And I know the banks do their due diligence when so the mortgage broker goes. Yep. They then go to the bank at the time of the purchase. I think they then relook at your finances. But nothing's going to change between two months ago when we got it now. And so it's on us to get the spreadsheet out and be like, what can we actually afford here? Combined with our expenses? Combined with what, what, what might happen over the next five years and our lives. 

Alec: [00:16:33] Equity mates good. But do you have a kid? 

Bryce: [00:16:34] Yeah. Do we have the emergency fund? What? What happens if it takes a year off for maternal maternity leave? If I then have a mortgage, can I handle that mortgage? Like that's not discussed with you? With the mortgage broker, they just go, Here's your money. Let us know when you find a place. So it's like. It's kind of bullshit. 

Maddy: [00:16:57] Yeah. It's a bit concerning, isn't it? 

Alec: [00:17:00] It's almost as if. Personal financial advice should be accessible and affordable. 

Bryce: [00:17:06] So all of those things combine to, I think, a super exciting experience, but one that is like, you know, brings a level of stress. 

Alec: [00:17:15] Oh, I've just got to say I'm outraged that we're not making content about it. 

Bryce: [00:17:21] Want my property journey? 

Bryce: [00:17:30] so Yeah, That's what's stressing me. And it. It's funny. Well, you're going to say that I. Did You think I was going to do Equity Mates? 

Alec: [00:17:37] No. I knew you were going to do the house.

Bryce: [00:17:38] Because the running joke is, every month I tell Ren how stressed I am that Equity Mates is going to run out of money. 

Alec: [00:17:48] He's the boy hat cried Wolf.

Maddy: [00:17:50] I still remember I was up in Sydney a few months ago. I work in the office one day and the power went off and we thought like, Do you remember that? Yeah, I don't really like, have we run out of money? 

Bryce: [00:18:02] Just to be clear. For those that listening, we are okay. Well, that was just me doing cost cutting measures. 

Alec: [00:18:08] Anyone listening? If you would like to sponsor us to keep our lights on bryce@equitymates.com. 

Maddy: [00:18:11] Love it. 

Bryce: [00:18:15] Yeah, I think the stress with that obviously comes that we have eight people working for us. That's this stress. And that, that that is one that I do. I think it's I think it's been such a, it's been such a consistent level of stress that it's now normal. You know what I mean? So it's like, that's the baseline. 

Maddy: [00:18:35] All right. Ren, can you please read aloud your three problems?

Alec: [00:18:39] Sure. What's one money mistake you keep making? What's the biggest financial epiphany you've ever had? And then if you could make an investment with no financial risk, what would it be? And why?

Maddy: [00:19:05] All right.

Alec: [00:19:06] Part of me Wants to do a Hamish Blake and answer all three. I think what's one money mistake you keep on making? What's the biggest financial epiphany you've ever had? If you can make an investment with no financial risk, what would it be and why? I think the answer to the last one is a little bit obvious, so I'll just say it, but I'll answer the second one. Make an investment with no financial risk. The spec iest of the micro caps and make some money or Equity Mates. If I knew that Equity Mates wasn't going to fail, what would I do? 

Maddy: [00:19:50] Can we talk about that. 

Alec: [00:19:52] Sure. I don't know. Probably not. Work as hard. 

Maddy: [00:19:58] Right? Yeah, maybe. 

Alec: [00:20:03] Well, what would you do? If you knew we weren't going to fail? 

Bryce: [00:20:06] Like, does that mean we have unlimited capital? 

Alec: [00:20:08] No. It just means everything's going to be okay. 

Bryce: [00:20:10] Oh, everything's going to be okay. Oh, well, we would definitely be doing FinFest 2023.

Alec: [00:20:16] Yeah, true. I would be so hard on ourselves. Podcast. Oh, yeah. I'd do an NFL podcast for sure, but like a one that's for. 

Bryce: [00:20:27] I think what we do. Yeah. Is that just be way less focus on commercialising content. Yeah. And we'd probably be truly. Following the content that we just wanted to do every single episode. 

Alec: [00:20:41] Yeah. Oh, we would have like 20 minute long intros and we're just chatting as well. Like all of them. Like the media lessons that we've learned over the years were just throughout. The day. Yeah. 

Bryce: [00:20:51] And probably expand overseas somehow. Go overseas and try and expand those.

Alec: [00:20:56] Equity Mates Indonesia. Anyway, good question. 

Maddy: [00:21:02] Actually though, and you're actually you're going to be. 

Alec: [00:21:03] The biggest financial epiphany I've ever had. The first financial epiphany I had was when I was living with Bryce and I was introduced to the stock market. That was in hindsight a big sort of turning point for me, learning about this whole world, the opportunity to get my head around just how big an opportunity it is compared to other ways to build wealth as a near broken student.

Maddy: [00:21:33] So can you take us back? How old were you? Where were you living? Paint the picture. 

Alec: [00:21:37] Uh, how old? I would be in 24 and 24. No, no, when we. So we met when I was 18. But I. Really. Yeah. Yeah, We weren't really talking about stocks. Well. Yes, I definitely were. Yeah, it was. And then when we lived together, it would've been like 22. 23. And I don't know how it started. 

Maddy: [00:22:04] Are you in melbourne? 

Alec: [00:22:05] Canberra. 

Maddy: [00:22:06] Canberra.

Alec: [00:22:07] Yeah, Yeah. So that was the first, But I think the biggest has been this idea that no one in the financial community, well known in financial media, really talks about this idea of enough. What is doing enough as a young person, how much do we need to invest to live the life that we want? And I think it's a product of so much of financial media comes out of the institutional world and there's no such thing as enough in the institutional world. Like your job is to make the extra basis point and make the index buy more and more. And like if you can get more, you take more. And then like in that world and the world of high net wealth and stuff like that, like money, it really returns. All of that eventually just becomes a way to keep score. And it's a little bit divorced from like why we actually need to invest and why everyone should be investing. And I'm sure if I had a financial advisor, there would be a lot more conversation around like, here's what you need to do. You can be confident, are you doing enough to live your life? But that just doesn't really come through in. It didn't really come through in financial media, but it should, because I think that more than anything turn so many people off investing. Investing looks like this, like a deep, cavernous rabbit hole that you just have to jump in headfirst and keep falling down and it becomes all consuming. Whereas really it's the shallowest of pulls that you can just tiptoe in and then keep walking.

Maddy: [00:23:45] So as someone who has now built a business in the financial media space and who I guess is trying to create an alternative to the traditional finance media out there, have you figured out what is enough? 

Alec: [00:23:58] So I think there's a few different answers to this question. I think the simplest answer is a number of retirement organisations around the world quantify how much money you need in retirement. And so enough is just taking the market's average return. How much do I need to invest today to get there? By the time I want to retire? These days, I can't recall the numbers of to my head, but you're looking at like one and a half million. It's kind of like today what a good number is today if you own your own home to live a comfortable retirement in your super account or your pension account or your 41k in the US. And so then you just work back from there and you say markets averaged 8% a year over the long term and what does that look like? And the number becomes pretty manageable, like if you're investing. A couple of hundred dollars a month. If you're in your twenties and you're investing a couple of hundred dollars a month in a index fund, you're doing enough. And then like over time you'll earn more. You can invest more. But just be confident that doing that now. Live your life financial. Have confidence that you're setting yourself up for retirement. So yeah, I don't know if that's a real epiphany, but I think it's just something that I felt was lacking from the way that I thought about money. And now for me, everything that I do outside of that, because I still invest in individual stocks and I still want to make that extra basis point. And, you know, I still want to do all those things. But for me, it's like I now think of that as that's more than enough. And I've done enough of it. 

Maddy: [00:25:34] I think one part of that fact around the number for retirement that I always find really interesting is that point about around if you own your own home, because that I think correct me if I'm wrong, is taking into account or assuming that you've paid off your mortgage by this point. So you're essentially not paying rent or mortgage in any way possible. And I just wonder whether, you know, in the past that's been quite a realistic expectation, probably fair to say in previous generations. But I wonder if it will be the same more broadly for our generation. 

Alec: [00:26:09] We've got a lot of content around this. We've got a book on this concept coming out later this year. And so when we were researching it, it is universal. It's not just an Australian thing that they like. The retirement planners and the organisations and associations all say if you own your own home, this how much you need. It's across all Western countries. It's just assumed mainland Europe is probably the example where like there's much more of a renting culture. And honestly, I couldn't tell you what the numbers are in Germany and stuff like that, but um, yeah, I don't know what it would look like because it would, the number would blow out. You would think, Yeah, I love bankers and building things and working. So for me it's like I'm more than happy to work up into the retirement age and I'm pretty confident that I'm going to keep working well past retirement age. So I don't have a number where I'm like, just got just 30 more years, I'll get to 60 and I'll be able to call it. So I'm not super worried about that. Again, back to this concept of enough for me. It's like, I would love to get to that point as soon as possible, just so it's like stress is off the table. Yeah, but I'm also very mindful of Bryce's earlier point that I'm in this golden period now where I'm not married, I don't have kids and I don't have a mortgage. And so it's like it's on me right now to make the most of this time and invest as much as possible, because very quickly that money is going to go elsewhere. 

Maddy: [00:27:36] So you touched on how at this stage in your life, your child free, you've got the ability to, you know, really try to invest, I guess, in your future self. How do you balance that with this notion of being young, being in your twenties or thirties and wanting to make the most of these years and really like to live your life, whether it be travel or spending time with friends. 

Alec: [00:28:01] It doesn't cost a lot of money to spend time with friends. But I think it's a good question. People often paint it as a dichotomy. It's like I have to either have I can have fun now and have no money or I can get serious with money and then not have any fun now and have and, you know, hopefully have fun later on. I think it's a dichotomy. I think if I look back on my life when I was the loosest with money, I also didn't have the means to do anything. I was just for me, getting serious, like learning about investing, understanding the value of a dollar has meant that I've had more money to do things that I want to do now, like travel and stuff like that. And it's also just a product of, you know, as we get older we make more money. And so it feels like that a little bit. But I think it's like if you get serious and you pay attention to your money, it's not like it's all going to go to investing. It's also going to go to that travel savings account. It's also, you know, going to go to that prices house deposit account that he's built up. It's kind of an enabler for everything that you want to do. It's an enabler for the life you want to live in the future, but it's also an enabler for the fun you want to have now. And I think so for me, it's not like it's a false dichotomy. The choice is actually between just being loose with your money and not being able to do anything now and in the future, or being intentional with your money and being able to do more now and more in the future. 

Maddy: [00:29:28] Makes sense. Thank you both for your vulnerability and for embracing today's episode. I do want to end with one quickfire question for each of you, and it is. I would like it to be quick. What is your top money green flag and what is your top money red flag? straight off the. Top of your head like.

Alec: [00:29:48] In a relationship? Is that. Is that the idea?

Maddy: [00:29:52] Yeah. Let's do that. That's fun.

Bryce: [00:29:53] Mine fits both.

Maddy: [00:29:55] Okay.

Bryce: [00:29:56] Discipline. Uh.

Maddy: [00:29:59] How is that? 

Bryce: [00:30:00] Green flag? Discipline. Green flag. No discipline. Red flag. 

Maddy: [00:30:07] Great. 

Alec: [00:30:08] Yeah, I like it. I don't want to just copy Bryce. Like, we're very similar, but I feel like it's, like, overall vibe towards money. I know. I think. 

Bryce: [00:30:20] Like, an appreciation. 

Alec: [00:30:22] Yeah. And just like have You got your shit together. How do you think about money? Do you think about money? But honestly, like, it's not. I think I think about money enough for multiple people. Like, I. Don't know, like to look for a. Job. We speak about it all the time. Like, for me, a relationship doesn't isn't made up broken by that? I don't know. 

Bryce: [00:30:55] I think from a relationship point of view, if it's something that you've got to be on the same page with before. Any level of commitment. 

Alec: [00:31:03] I think now that I've said that, I actually probably disagree with myself, I just probably. 

Maddy: [00:31:07] It's not about that. 

Alec: [00:31:08] No, no, no. It doesn't make or break it. 

Maddy: [00:31:11] Yeah. Thanks, guys. 

Alec: [00:31:21] Allright Bryce Well, that was certainly different. 

Bryce: [00:31:23] Yeah, I enjoyed that.

Alec: [00:31:24] Yeah. 

Bryce: [00:31:25] I think it was good. And I think we should say that if you're listening at home and interested in contributing a question, this is something I think that we will wave into the format of Equity Mates over time. 

Alec: [00:31:40] Yeah, well, I think we'll do the segment again. 

Bryce: [00:31:41] Yeah. So hit us up at Contact@equitymates.com and our producer Sascha will make sure that any of your questions, um, finance related or are we opening out? Let's go finance. 

Alec: [00:31:52] Well, I think we can't open it up too much because then we're just ripping the imperfect off more than we already have. 

Bryce: [00:31:57] So let's just. Keep it finance related. But, um, yeah, that was. That was good. I did enjoy it. Yeah. If a different bit of a different segment. 

Alec: [00:32:06] Well, Bryce, let's take a quick break. And then after the break, we're going to talk about the do's and don'ts in investing in companies that are being acquired or doing some acquiring and also explain how the pricing of ETFs works. 

Sascha: [00:32:51] It's the Equity Mates Listener Mailbag. Visit Equity Mates dot com forward slash Contact us and leave us a voice message. And we might be answering your question on a future episode 

Alec: [00:33:01] Alright Bryce, we're back and we've got some listener questions that we're going to answer for the rest of this episode as we get more professional as podcasters. We've also got segment openness. 

Bryce: [00:33:12] All right. So we've got a couple of questions here from the community to get stuck into. First one is from Riley. 

Riley: [00:33:19] Good Equity Mates, Riley here. Recently I found your podcast and have really enjoyed your 12 steps to get started investing and you'll get start Investing series. I've yet to start my investing journey, but I'm really close. Thanks to you guys. My question is, if there are rumours of a company being brought or sold, is that a good idea. To be purchasing stocks from that company. Or would it be better to invest in the company that is making the purchase? Alternatively, what happens if you own stocks from a company that has just been brought out? Thanks, guys.

Bryce: [00:33:50] Nice. Thanks, Riley, and congrats on getting through the 12 episodes and almost starting your investing journey. Some big questions there for someone who's just just kicking into the market, but some valid questions and. I think my first overall answer, Ren, is don't try and play the market based on rumours. It's silly, silly thing to do. I can understand where this comes from though. Like you often say, a rumour of a company being bought and then that company's share price absolutely run up and you can see the temptation of trying to be involved in that. But my point of view is it's a fraught game to try and be buying companies based on rumour, and you'll often find that your information flow is not the first person to find that rumour. So any sort of share price has been sort of baked in and you're going to miss any massive, massive run up, if that makes sense. 

Alec: [00:34:49] Yeah, well, I think you've covered rumours, but I think there's a bigger question around just when it's not a rumour anymore, when it's been announced to the market that an acquisition is happening. How do you invest or if you own stocks, how should you manage it? And there's a whole world of investing and a whole investing strategy called merger arbitrage. And basically what that style of investing says is when announcement is no longer when an acquisition is no longer a rumour, when it's, you know, it's in play. And Equity Mates has said they're going to acquire Commonwealth Bank for $100 a share. The Commonwealth Bank share price will run up and it will get close to $100, but not quite there. And as the deal gets more and more certain, as it gets regulatory approval, as Equity Mates gets its financing in order and the Commonwealth Bank shareholders vote for the takeover, the share price will get closer and closer to $100. And that indicates the increased likelihood that the deal goes through. And so there's a whole world of investing and there's a whole, you know, there's heaps of content we could do on it. But if that is something that you're interested in, that is a rabbit hole you can go down, not something you need to worry about, especially as a new investor. So I think if you own shares in a company that's getting acquired, it's much of a muchness. You could sell it before the acquisition happens and get most of that money back. Or you could hold right until the company's acquired and then get shares in the acquirer company or get your money back. Like get your money. I've, I generally have just held like we did in Slack back in the day and it got acquired by Salesforce. Um then we got shares. I got shares in Salesforce, Afterpay and. 

Bryce: [00:36:41] Block. 

Alec: [00:36:41] Did you get on with Slack? Did you hold and give some. 

Bryce: [00:36:45] Slack. 

Alec: [00:36:45] Didn't you, after HM1? 

Bryce: [00:36:47] No.

Alec: [00:36:48] Remember When TDM pitched it. 

Bryce: [00:36:50] No, I didn't buy it. 

Alec: [00:36:51] Oh, okay. You tricked me. 

Bryce: [00:36:53] I don't think I. Yeah, no, I didn't. 

Alec: [00:36:54] Okay, well, yeah. Afterpay and BLOCK. What did you do when you owned Afterpay and then. 

Bryce: [00:36:58] Sold Afterpay?

Alec: [00:36:59] You sold off to buy it? Yeah. Yeah. Didn't want block. 

Bryce: [00:37:02] Didn't want block. And it was also had yeah. Sold Afterpay after the news of the acquisition, obviously. 

Alec: [00:37:10] So that's that's if you own shares in a company that's being acquired and then just under if a company is acquiring like if you owned block in that example and it was acquiring Afterpay, I don't think you the only reason you should do something is if it changes your investment thesis. But if you invested in it. BLOCK because you believed that digital payments are going to take over the US and that the Square operating system is like a great solution for small and medium sized businesses, your investment thesis doesn't change if they buy Afterpay, so in that case, you don't have to do anything. Yeah. So a few aspects to it.A lot of the short of it is you don't have to do anything, a lot of investing. You just don't have to do it right. Yeah, but your companies go to work. 

Bryce: [00:38:00] Yeah. Just buy for a long time. Yeah. Let them, let them chill out. Nice. Well, thanks, Riley. Keep the questions coming. Coming. Our second question is from Bailey. 

Bailey: [00:38:11] Good day, guys. So I've just read the ETF section of your book, and I'm looking at investing in Australia's top companies. Now I'm looking at the vis from Vanguard, which is the top 300 companies, a management fee of 0.1% currently and around $90 trading. But I've also Betashares, which is the top 200 companies, it has a management fee of 0.04%, but it's at a $120. So I'm a little unsure why there's such a big price difference. Obviously we want the lower fees, but I'm just stuck. Which way to go? 

Bryce: [00:38:48] Nice. Thanks, Bailey. This is something that does confuse a lot of people when they first start investing in ETFs and comparing ETFs to comparing the price of ETFs is not the way to compare ETFs. 

Alec: [00:39:03] And why is that? Is because the starting price of an ETF is is highly arbitrary. 

Bryce: [00:39:10] Yeah, it is just set. 

Alec: [00:39:11] The ETF provider says where launching an ETF and the units are going to be priced at this. And so if you go if you look at Vanguard Australia one of the two ETFs that Bailey just spoke about, you can see that it's starting price back in 2009 was $50 a unit and a Betashares A200 When they listed that in 2018, they started a $100 a unit. Yeah. And so those two starting prices were the starting prices. And then over time, the ETF has moved with the Australian market. But that's why the price is different. 

Bryce: [00:39:46] Yeah, so it is no indication of one performing better than the other. I don't use price as a comparison. The two other things that you mentioned there, Bayley, around management fee and underlying holdings is actually the more important things to be thinking about. And the clear difference between the two, as you already noted, was vast, is top 300 companies, So it's Australian shares and the BETASHARES is a 200, the ASX 200, so the top 200 shares. So it's actually got different underlying holdings and is going to be based on that have different performance. So the question you really need to answer, Bailey, is do I want exposure to the top 300 or the top 200? And that will probably guide this decision. More than one is priced at $90 and one is 120. Which should I be going?. 

Alec: [00:40:37] Management fee was the other thing you mentioned there. And you know, the both of their management fees are incredibly low. Betashares is the lowest in the market. Someone came for that crown and cut their fees and then British has cut even further to maintain the lowest. Realistically, it is a basis point or two. So you're not making a bad decision with either one. What's probably going to drive the performance more is what you were speaking about. Price The A200 has more of the big companies, more of BHP, more say, so more of Commonwealth Bank because it's a little bit more concentrated, whereas Vanguard's 300 will give you access to some of the smaller and potentially up and coming companies in tiny percentages of the eighth. But you know, maybe you get a bit of that growth a little bit earlier, but tiny, tiny percentages, the very similar ETFs. You're not going to make a bad decision choosing between these two ETFs. I think that's a fair comment. Yeah, there's no bad decision here. I think that's the confusing thing when it comes to investing is like it is so hard to you putting your own money on the line and it's so confusing. There's so much jargon, there's so much unknown. But like just be confident that you've identified two good ETFs to build a core portfolio around.

Bryce: [00:42:09] So a massive thanks to Riley and Bailey both for submitting your questions. Keep them coming. Head to equitymates.com/contact to leave a voice message or if we can't get to it, There are plenty of people in the Facebook community who are able to help along your investing journey, so head to the Facebook group if you're not already a member. But Ren, that does bring us to the end. We've got an Ask an Adviser coming up this Thursday with one of our good friends and very quality financial planner and advisor, Jacob. We're getting him in to answer some questions around how he'd invest 10,000, whether or not you should pay off hacks faster now that the indexation is up. And he shares some of the strategies he's seen some of his wealthiest clients put in place. So that drops on Thursday. Super excited to continue our asking advisor series, but Ren as always, absolute pleasure. We'll pick it up next week. 

Alec: [00:43:05] Sounds good.