Community Spotlight: Investment Tips with Alisha Aitken-Radburn

Bryce: [00:01:10] Welcome to Get Started Investing feed in this podcast, we cover all the basics that you need to start your investing journey. Are you joining us for the very first time or is this the start of your journey? Well, before you dive into this episode, we suggest that you go straight to the start of our feed as we recommend that starting from the first episode is the best place to start. If you're feeling brave, though, and just want to dive in, then don't let us stop you here at Get Started Investing feed. We unpack all the jargon and confusing bits here, investing stories with the goal of making investing less intimidating. And of course, along the way we want to have a good time. My name is Bryce and as always I'm joined by my Equity Mates Ren. How are you going? [00:01:49][38.8]

Alec: [00:01:49] I'm very good Bryce very excited for this episode. We love speaking to members of the Equity Mates and Get Started Investing feed community. Hearing their stories. People hear enough from us, so I'm excited to do that again today [00:02:03][13.5]

Bryce: [00:02:05] It is our pleasure to welcome to the show. Alicia Aitken-Radburn. Alicia, welcome. [00:02:09][4.2]

Alisha: [00:02:10] Thank you so much for having me, equity buddy. [00:02:11][1.7]

Bryce: [00:02:14] It is exciting. We've been chatting on email for for a while now for this very moment. You've got plenty of questions to ask about your investing journey. We've got plenty of questions to ask you as well. So over the next sort of half an hour or so, we're going to be unpacking, unpacking all sorts of things. Really, it's it's it's going to be exciting. But look, before we we start, for those of you who haven't come across here before, Alicia, are you able to introduce yourself and maybe tell us a bit about who you are and what you're doing with your investing journey at the moment? [00:02:45][30.1]

Alisha: [00:02:45] Oh, gosh. OK, Felicia, some of you may recognise me or know me from my I've done a couple of reality TV appearances also very, very highly likely. A lot of I don't know what the sort of shared audience between Get Started Investing feed Equity Mates community and Bachelor in Paradise for you. [00:03:09][23.6]

Speaker 4: [00:03:10] Big crossover, big, huge crowds. [00:03:13][2.8]

Alisha: [00:03:15] But for anyone who doesn't know me, I was on three seasons in total. I was on The Bachelor. I started off on the Honey Badger season, and then I did two seasons of Bachelor in Paradise. So that's probably like more my public facing identity. And other than my other side, I do feel like I live to live sometimes is I've predominantly worked in politics. I've worked for a range of shadow ministers, parliamentarians, no ministers yet because I'm a Labour Party person and I'm from New South Wales. So from the state level, New South Wales, Labour hasn't so much seen in a while. [00:03:59][44.8]

Speaker 1: [00:04:00] You are in Perth now, though, so a little bit more like over there. [00:04:04][4.2]

Alisha: [00:04:05] Exactly. So but I've sort of moved out of politics now and I work in corporate communications, so I work for a fabulous firm called Newgate and we do a whole range of comms work for a range of fabulous clients. And as for my investing journey, I started investing seriously when I started listening to Equity Mates and Get Started Investing feed. I went from the very first episode in only about August last year. So it's been about six months. And yeah, I'm fully into it now. I've got a I think I like to think I've got a strong core and I maybe I don't know about the satellite rover alternative Afterpay [00:04:55][50.0]

Speaker 4: [00:04:57] cause there's no [00:04:59][2.0]

Alisha: [00:05:01] it's all ticking along really [00:05:02][0.9]

Speaker 4: [00:05:02] well. Well, I've [00:05:03][1.1]

Bryce: [00:05:03] got plenty of questions about Bachelor in Paradise, but I think we'll take that offline and focus on the investing journey. So we'll start with a couple of true or false questions that we always kick things off and then we'll just have a bit of a chat. [00:05:15][12.4]

Alec: [00:05:16] Yeah, let's do it. So true or false, your very first investment has been your most successful? [00:05:23][6.6]

Alisha: [00:05:28] False. Quickfire, or do we well know the story? [00:05:30][1.9]

Alisha: [00:05:32] OK, so it's like I think you'd be quite proud. Sort of. It's fifty fifty. It's not been my most fruitful, but it is sort of generally in line with the Get Started Investing feed or Saffy. When I first started investing I think I was listening to a couple of episodes here and there. I also knew that a sort of number of my peers, my sort of group of mates from uni had started on the sort of like ATF wagon. And I literally asked, we've got like a group of all my uni mates who have now moved across Australia and we are all adopting, etc.. And I think. I literally posted a thread and I was like, so what what am I buying? Very sort of. We were talking about investing styles and I unfortunately have a big streak of taking it here. But someone that I think like, you know, everyone was jotting down their favourite like three three letters. And I think I ended up going with I was writing through them all. I ended up going with Vachss at the end and I j i j the global issues. Health care. At the Medick ATFP that is. [00:06:44][72.5]

Speaker 4: [00:06:46] Yeah. Yeah. No stuff. [00:06:48][1.9]

Alisha: [00:06:49] Because, you know, like they haven't necessarily but they haven't been my successful investment, my most successful investment has probably been Bendigo Bank. OK, I that was like my first individual stock that I bought and I did have some thought process around it because I really liked a lot of people would know that Bendigo Bank has just released recently up Bank as a sort of subsidiary and a product. And so I thought, you know, I think that that's going to go gangbusters, like amazing interface. I loved using it. It was really helping my saving. And so I had a bit of a thesis there and I went with it. And that's been very fruitful. So, you know, my first investments went my most fruitful investments, but I think that they were not bad decisions. [00:07:38][48.9]

Alec: [00:07:39] Yeah, yeah. No, no, that's that's a good way to start. You mentioned Dogecoin earlier. I'm surprised that's not been your most successful investor. [00:07:47][7.9]

Alisha: [00:07:48] Actually, you know, this week maybe. Yeah. I've got a bit of a from listening to the podcast. Am I right in saying Ren you're probably more of the impulsive one of the two Bryce. [00:07:59][11.2]

Speaker 4: [00:08:02] Bryce is pretty sensible. [00:08:03][0.8]

Bryce: [00:08:05] Sensible. Yeah, you're definitely more impulsive when it comes to, I think, buying on the stock market. [00:08:10][5.5]

Speaker 4: [00:08:11] Yeah. Yeah. You have [00:08:11][0.7]

Bryce: [00:08:11] many more individual positions [00:08:13][1.3]

Speaker 4: [00:08:13] than I do. [00:08:13][0.3]

Alec: [00:08:14] I'm just less impulsive when it comes to crypto or maybe just less bullish. [00:08:17][3.2]

Speaker 4: [00:08:18] Obviously hold more crypto assets than I do. [00:08:20][2.5]

Speaker 4: [00:08:20] Really. Yeah. [00:08:21][0.4]

Bryce: [00:08:21] I don't have Ethereum [00:08:21][0.4]

Alisha: [00:08:25] my Ethereum is going very well. Yeah, that's right. I got I got lucky with Bitcoin in the sense that actually you know what, technically probably vast. That's like, you know, those ETFs are my most recent investment in this investing journey that I've started in August, which is like more serious. But something amazing happened to me last year. I think it was probably around right around like July, August last year. All the Bitcoin chat started up again. And and I had been around the last time the Bitcoin chat really took off, which was about like twenty end of twenty seventeen. [00:09:00][35.4]

Speaker 4: [00:09:01] Yeah, yeah. [00:09:01][0.5]

Alisha: [00:09:02] Beginning of twenty eighteen. And me and my friend Julian, we got on that train hard. We were like buying. I think I've got like I've got some Troughton or something. Anyway I bought, I bought this bitcoin I think Bitcoin s and some other random coins and cos I like from twenty seventeen to now like August when I've now started my formal and just investing journey, I've been between jobs and stuff. So I assumed that I cleaned all of my accounts of any sort of money I could find. But this year I just thought I was sitting at my desk. I searched Bitcoin in my email and I started to look into all of these, you know, coin slot, coin jar. And I found I found like two hundred bucks here. Two hundred bucks. And I'll just leave it. I'll just leave it. And now it's been very meaningful. [00:09:54][52.0]

Speaker 4: [00:09:55] So that's great. That is seven figure. Yes. [00:09:58][3.2]

Bryce: [00:10:01] So Alicia, you know, we always talk about investing goals and the motivations behind starting to invest. And sometimes it's really difficult for for someone to articulate why they've started or what their investing goals are when they're at the beginning of their journey, which is completely fine. Have you thought about what you're trying to achieve by starting to invest or do you have a goal in mind? Is it a short term goal? Long term goal? What how are you sort of playing this? [00:10:29][28.0]

Alisha: [00:10:30] Oh, yes. So, I mean, for context, I guess my sort of like childhood, I it was just me and my mom and we didn't we didn't really like investing was never something that would have been able to be even thought of. We were very much a paycheque to paycheque kind of family. That being said, my grandpa was a, you know, school of Equity Mates. He was buying like blue chips, leaving them for thirty years. Obviously, ETFs weren't sort of as proliferated then. So I've always known and I was always very impressed by that, like he was a figure in my life. And I always had this sense, like I. They need to learn how to do this, and I'm glad I have, because I do think that it is not to get too philosophical, but I do think that investing and what you guys are doing with Equity Mates and Get Started Investing feed, I truly believe that learning how to grow wealth and put your money to work is a really big thing in our society. That sort of it leads to a bit of class division in a soft sense. Like I do think that by people not being educated about how to put their money to work. Yeah, it's it's a really sort of defining factor. And so I'm glad that you guys are doing this my now intention for. So I think that that definitely played a role in it. I think that my mum invested in me and so I felt this sort of obligation to learn and to invest in myself further and growing my money. So my current intention is saving for a house deposit like so many of us, like I'm twenty eight, so many sort of late 20s, early 30s, it really seems to be like head down, bum up. And everyone's trying really, really hard. And, you know, you guys can help me with this a little bit further because I do fear that even though, like, I hear all this chat in the Equity Mates community and I listen to your podcast and I think that you guys have a very long term view. I fear that because I'm so desperate for a house deposit that while I am investing and I'm doing everything right, like I'm waiting till I've got a good parcel of money putting it in my brokerage account and buying a parcel of relatively safe ETFs in I listen to him again. I think I'm doing everything right, but I do fear that just an undercurrent subconsciously. I do think I probably want to pull out a portion of my portfolio at some stage to supplement the cash savings that I have to buy a house. And I think I'm worried I'm shooting myself in the foot that I'm taking out all this beautiful compounding magic that I could be doing. But I don't really know what the alternative is in this, like, low interest rate context where I'm earning like seventeen dollars every month. [00:13:31][180.9]

Speaker 4: [00:13:31] My interest requiring. Yeah, yeah, yeah. Well, let's talk about this, because [00:13:37][5.4]

Bryce: [00:13:38] you're probably not the only one who has this similar feeling of wanting to accelerate your cash savings and take advantage of, I guess, the beauty of the stock market and the inadequate interest rates that you're getting in your bank account. And that is to say, for a deposit for a house, you know, we all want to get into the housing market and it's super inaccessible for a lot of us. And saving that deposit is incredibly difficult and balancing that with with the message that we're trying to give, which is keep your money in there, because the benefits of long term compounding is very valuable. And I think we also try and talk about, you know, if you are thinking of short term savings, then I guess the risk associated with being in the stock market versus having it in a super safe bank account is something to consider. [00:14:27][49.2]

Alisha: [00:14:28] So I guess my question is Bryce, do you think that investing as a whole should be considered as an avenue to boost your house deposit savings? Should we should we as an Equity Mates community, even be considering putting our money somewhere for less than like five to seven years? [00:14:49][20.7]

Speaker 4: [00:14:51] It's super personal question, I guess. Yeah, so I think I think this is where we go, no financial advice. We're out. [00:14:56][5.8]

Alec: [00:14:58] We got we got to preface this with exactly that. But everyone's circumstances are different. Go and speak to a financial adviser to to factor in your individual circumstances. But I think from like a high level, the reason that we say that a lot of people say you shouldn't use the share market as a savings vehicle is because just that volatility and like what we saw in twenty twenty, what we saw in 2008, even if what we saw at the end of twenty eighteen, like it can crash and it can crash hard. And if you're getting to that point where you've, you know, you're getting your mortgage approved, you're, you're bidding on houses and all of a sudden the market falls 40 percent, like that's a terrible situation to be in and it can take a while to recover. So that's that's probably the first key thing to keep in mind, that if you are going to use it as a savings vehicle, no matter how safe you go, if you go like Vanguard, highly diversified ETF, it could still fall 40 percent right. When you need it. So so that's really the first thing. Yeah. [00:16:00][62.2]

Bryce: [00:16:00] I guess the question, how would you feel if we had a repeat of March twenty twenty last year when 30 percent of the stock market just fell away? [00:16:09][8.3]

Alisha: [00:16:09] Well see, this is where I get myself into sort of tricky thought. Sackfuls, because I'm I'm very much like I think it's really good how you put it that way. Ren that when you from a more practical perspective, like what happens if your home opens and you're signing the pieces of paper and you like, you know, hopefully I would have hoped that maybe I would have had a exit strategy. [00:16:32][22.8]

Speaker 4: [00:16:34] You know, [00:16:35][0.7]

Alisha: [00:16:35] I'm not thinking like, oh, I just got to get those few extra dollars from [00:16:39][3.2]

Speaker 4: [00:16:41] those dad. [00:16:41][0.4]

Alisha: [00:16:42] And I think that my thought, like my bad thought cycle here, is that maybe it's not that bad. Like maybe I can be a bit more about it, like it's not the end of the world. But I do like I guess I think that or, you know, if March 2020 was to happen, like I'll do what I do with Bitcoin, I'll just toddle and we'll just try and we'll try and buy a house in two years. Like I think I guess that's my I like I want to be completely honest because I do think that people tend to avoid this area of, like, actually pulling out their money for property because we are all trying to be this, like, angel investor who is putting money into like super safe ETFs and just holding for 40 years for our retirement. But I do want to be honest, like I think that probably, you know, the like, there is probably a good likelihood that let's hope that some of my satellite does well. I think probably down the track, let's say two or three years, I will probably sell some of those assets and that probably will supplement my house deposit. [00:17:52][70.1]

Alec: [00:17:52] Yeah, I reckon I am probably the same. Like, I'm not putting money into the share market being like I'm going to pull it out in five to seven years to buy a house. Hopefully I can buy a house before then we'll say. But it's probably pretty common to take some of your money out when you need to make a big purchase like that. I yeah. Yeah. I think the main thing is like you just have to be willing to like you have to know that it may not all be there exactly when you need it. [00:18:19][27.1]

Bryce: [00:18:20] Yeah, I have a couple I had a couple of mates at work who liquidated up to sort of 80 per cent of their portfolio to buy a house. And they were sort of comfortable with the fact that, yeah, sure, I'm going to be taking these out. I'm equally going to be buying an asset that I hope he's going to appreciate over time and that I'll be able to keep and rent it out if I were to move on to another house. So it's not like they're liquidating 80 percent of their portfolio to go on a holiday to Hawaii. And that's where you can really miss out on the long term opportunity for compounding or, you know, missing out on developing wealth and building wealth. And and they structured their finances as such that they had the mortgage, bought the house and then were comfortable with or I will now just start again and keep chipping away at building my core. So, yeah, I don't think there's I don't think getting caught up in knots about it is is worth it, if that makes sense. [00:19:16][56.7]

Alisha: [00:19:17] But I do think that you have to be honest with yourself and like have that conversation with yourself that you might not be able to have as strict timelines on your wealth building as you might want to. Like where are we now? Twenty, twenty one. Like, I can't say to myself, I'm going to use my share portfolio as a vehicle to get me to twenty twenty three, then I'm going to eight and then I'm going to buy because you know it might not work that way. You could have like untouched bloody wood but GFC 2.0 and you might. Have to wait out like a longer period of time, it might change all of your plans. [00:19:55][37.8]

Speaker 4: [00:19:55] Yeah, yeah, absolutely. [00:19:56][0.7]

Alec: [00:19:56] And I think also, like, if you're thinking that short term, then it also is like, well, what are you going to invest in? And, you know, if you're a year out from buying a house, you're not going to be putting it in like Dogecoin and SIFMA and stuff like that or even like, you know, triple leveraged ETFs and stuff like that. It's like if I think I'm going to need this money soon, I'm going to treat myself like a retiree basically who's, you know, almost about to retire in investing super conservative. [00:20:25][28.6]

Alisha: [00:20:26] Yeah. And I think like for me as well, it's you know, I'm not viewing myself as necessarily a retiree with. But I think I think that are investment vehicles out there at the moment, that particular assets, whatever that you can of probably like a bit safely. I think that there are avenues where you can get a better return than a savings account, for instance. [00:20:50][23.9]

Alec: [00:20:51] Honestly, you almost couldn't get a worse return than a savings account. [00:20:55][3.6]

Bryce: [00:20:56] Yeah, I mean, I do peer to peer lending, and that's just rolling over month to month. And that's giving a better a better return. It comes with risk, of course, but essentially you put your money into a platform and then that business will then go and loan that money to someone else who guides, who needs it. And then they'll they'll pay back, pay back the money with a higher return, an interest rate that is higher than your savings account if the risk is that obviously they don't pay it back. Yeah, there are, I guess, things in place to help investors if that does happen. But yeah, [00:21:36][39.8]

Alec: [00:21:36] if you think about a bank, it's like you put your money in the savings and then they loan it out to people who want to borrow. It basically just cuts out the middleman. And it it's a platform that says you just lend it directly to the people that want to borrow it and you'll get a high interest rate and they'll get a better interest rate because the banks are not sitting in the middle. [00:21:54][18.0]

Speaker 4: [00:21:54] Have a look at it. [00:21:55][0.5]

Bryce: [00:21:55] It's called it's called plenty if you want to have a look. [00:21:57][2.3]

Alisha: [00:21:58] Oh, yeah, I've heard of it with my own hands. [00:21:59][1.8]

Speaker 4: [00:22:00] Yeah. Classic collectivistic classic. Yeah. Yeah. [00:22:05][4.7]

Alec: [00:22:05] There's plenty that I think we both use. There's other ones out there. It's a it's an interesting one. It, it obviously we can't make recommendations about what to use, but it's a good one to look into. [00:22:16][10.6]

Bryce: [00:23:33] So they said we had a bunch of questions to ask, but I'm liking this kind of conversation and we really want to talk about barriers and questions that our community face. So are there any other sort of barriers or questions that you're currently thinking about or facing that we can chat through? [00:23:52][18.7]

Alisha: [00:23:53] Yeah, I guess. Oh, gosh, I could take this in like a multitude of directions because because all of my I worried about this one. We were corresponding Bryce that like there wasn't any general theme because I just it's like five million questions. OK, I'm just going to start a really random one out there. But I mentioned, I think in my first email to you, which I have yet to add, but, you know, it's going into the AFL, so I don't know what I want to say, but I don't I don't understand how, like, let's say, oh, this is the perfect example and it's a really bad indictment or maybe because it's definitely satellite. I bought like a exploratory mine the other day. Well, it taught me some really good lessons, like I'm not going to continue down that strategy, but I'm sitting there and just like to paint a picture. I think it was the price was like fifteen cents or something like that. And when it goes up and down, like just to like 14 cents and this is and people are going to be scared now hearing how I talk about this and be like my you need to like not be investing or you need to like learn, get some better like maths skills, but it's like going down to 14 cents. But then that's like six percent. And that's the biggest move on my portfolio. I think the only other like that. So like extreme movement like that that I'd seen was like I've also got a position in am I allowed to talk about my position. [00:25:29][96.5]

Speaker 4: [00:25:30] Yeah, yeah, yeah, yeah, yeah, yeah. [00:25:31][1.6]

Alisha: [00:25:32] I've talked to lots of Equity Mates in the group about going to the moon. And so that was the only other individual stock that I'd seen that like moved like, you know, I felt like it would go up a couple of Dollars or something and it would be quite significant percentage wise. How does this specky exploratory are? That's fifteen cents. That is like CSL to two hundred and fifty bucks a share. How do they get their prices like I get the movement stuff and I get you know, but I don't understand. Like what makes a company B two hundred fifty dollars first. We think that's the question. [00:26:17][44.4]

Alec: [00:26:17] That is a really good question and it's definitely one that a lot of Equity Mates would have. So, so basically if you the company decides how many shares they want to issue, like, you know, Equity Mates to start with, I think we had two shares Bryce own one. I wanted [00:26:32][14.8]

Speaker 4: [00:26:32] a billion shares [00:26:33][0.6]

Alisha: [00:26:34] on shares. Are you guys IPO? [00:26:35][1.9]

Speaker 4: [00:26:39] Yeah, we've actually just broken news. Yeah, we're IPO. It would be epic content. Yeah. Yeah. [00:26:49][9.7]

Alisha: [00:26:50] That's the next chapter. [00:26:51][1.0]

Speaker 4: [00:26:54] A huge but [00:26:55][0.5]

Alec: [00:26:55] let's say let's say Equity Mates is worth one hundred bucks and Bryce ones. And like as a company we decided Bryce owns one share ion one. Share a share is fifty dollars because the company worth one hundred Bryce wanted to issue a billion shares. I don't know if you can do the maths quickly. What's a hundred. Over a billion. But like if Bryce got his way and issued a billion shares, each share would have been worth a fraction of a cent because the the company's still worth on Reebok's. So and that's market cap is what you'll say, like the total value of the company. That's the important thing. That's how much the company's worth. [00:27:33][37.9]

Alisha: [00:27:34] And so the market cap is what the company is worth. [00:27:36][2.5]

Alec: [00:27:37] Yeah. And then if you go market cap divided by the number of shares. Yeah. And the company, there's no rules about how many shares it can be as many or as few as the company wants. Then that gets to the share price. So you know, zip it, zip they're what are they like eight bucks now about that. [00:27:55][17.9]

Speaker 4: [00:27:56] No, no, no, no. [00:27:58][2.4]

Bryce: [00:27:59] So the second part to that question is how do you get from eight to two hundred and fifty? And yes, that is all done through the stock market and that is just people willing to pay more and more for the stock. So essentially, you've got the share market is where people who want to buy the stock and people who want to sell the stock come together. The people who want to buy the stock on one side are all putting in bids through their brokers and they're saying it's eight dollars. I'm prepared to pay eight dollars. And one cent, I'm prepared to pay seven point fifty nine. And there's. Just a whole range of people who are prepared to pay X price, and there are a whole range of people who are prepared to sell it at certain prices, and the share market matches these sellers and buyers together. And if there are more people willing to buy than there are to sell, then the price just continues to go up and up and up because the sellers can essentially force higher prices because there's more demand. Likewise, if there's too many people willing to sell and not enough to buy, the price goes down. So essentially to get from eight to 250, it just means that there are so many people willing to pay more and more and more for the price for that stock. And it just keeps on rising. [00:29:12][73.1]

Alisha: [00:29:13] I mean, I think I could talk about this all day, but, you know, it would take up a lot of our time. But going back to that original example of, like you guys, both, you know, Equity Mates is one hundred bucks. You guys both have a share, 50 dollars, and then Bryce wants to issue one billion share. Is that is that just a decision that is made by the company's owners? And can they do whatever they really want? And how does that impact the market cap or. [00:29:38][25.0]

Alec: [00:29:39] Yeah. Yeah. So the company can make a decision. So like let's say Equity Mates was like we want to acquire every finance podcast's in Australia. We want to roll them up. That's the business. We one way we could do that, we could go to the bank and be like, we want to borrow some money and we'll pay you interest and we'll pay it back. Or we could go to the market and say, this is our business plan. We're going to issue these shares. You guys buy these shares from us, and then we'll use the money to then go and execute the business. So companies sell shares to raise money. And similarly, companies can say, all right, we've got heaps of money, we're going to buy shares back of you and just destroy them. So because we want less shares in the market. So companies make that decision to buy and sell their own shares just to manage how many shares they've got an issue and stuff like that. [00:30:29][49.8]

Alisha: [00:30:30] And what would be the what do you guys find is usually the general reason why? You know, I was just joking about like Equity Mates IPO ing. Let's use that example. You want to take over. We're getting an insight into your mind for [00:30:47][16.9]

Speaker 4: [00:30:47] coming back on the money. [00:30:48][1.1]

Alisha: [00:30:50] You want to take over every finance podcast, but you're going to need a lot of money to do so. Right. But it will also probably result in like you'll be going to Rich after we've got like one James you like probably, you know, you're going to be telling these shareholders that IPO or whatever, that you're going to make a lot of money for them by having all of these finance costs. What does a company like? Why would a company choose to go through like a private route or list on the stock market? Is that it? Does that make? It does. [00:31:24][34.2]

Alec: [00:31:24] It's a good question. It's a question that a lot of CEOs spend a lot of time trying to figure out. So, like, if you if you go public, your access to capital is so much greater. So, like, going doing an IPO gives you a chance to raise a heap of money and like get a lot of value, like get a higher valuation. So like, if you have grand plans to take over the world and you won't need a lot of money to do it, the best way to get that money is to list and go public. Right. But going public kind of sucks in some ways. You know, Whole Foods over in the US. Yeah. So they went public. And the CEO, John Mackey, who also founded Whole Foods, hated it, hated it so much, complained about it because, like, it's a very public job, [00:32:10][46.0]

Alisha: [00:32:11] like everyone has, like your AGM is on. And exactly who owns stocks is like, I don't think you should be selling fundamentals anymore. [00:32:19][8.6]

Alec: [00:32:20] Yeah, exactly. And it's like if you're like, I want to think super long term, but your shareholders are like, where's my dividend? Why did the share price fall this week? It's like you've got to answer to them because I own part of your company. And so Whole Foods is a great example where eventually John Mackey was like, I don't want to be public anymore. And then they sold to sell to Amazon. Yeah. And so now he's I mean, Amazon's public, but he's now sort of protected from all that because he's now part of a bigger company. So it's like, you know, as a as a business you like do we want to raise money? Do we want to let you know our early investors sell their shares in the share market and stuff like that? That's some reasons why you might go public. But there's there's a lot of scrutiny, a lot of additional reporting requirements, a lot of lot more shareholders you have to manage. So it's a lot more work to be a public company. If you don't need to go public, you just stay private. So that's a lot of noise that we don't need. And that's why you say all those like massive US start ups or they don't really start ups anymore. But, you know, like Airbnb, about all of those guys stayed private for so long ages. Yeah. Because I just had so much cash. And so they were like, we don't need to go public. [00:33:28][68.8]

Alisha: [00:33:29] And because they were so like innovative and disruptive, I guess. Did they have a lot of, you know. I don't know what it's called, like private equity or like the people, like private people being like, I want to give you money. [00:33:42][12.9]

Alec: [00:33:42] Yeah, that's exactly yeah. There's so much money from private equity, venture capital, all of that stuff. [00:33:48][6.1]

Bryce: [00:33:49] Yeah, I'm I'm aware that you've got a gazillion questions. [00:33:53][4.0]

Speaker 4: [00:33:54] So do we want another one [00:33:56][1.9]

Alisha: [00:33:56] at the tip of my tongue. Yeah, let's do it. Let's go to the question that I asked about. We got in it ETF territory now, so we love it. Very nice and boring as we like it. What happens? OK, so recently there was a nice dividend paid by you mentioned it before, Ren Vanguard, highly diversified. I'm going to get the acronym wrong, but [00:34:20][23.7]

Alec: [00:34:22] yeah, they [00:34:22][0.3]

Alisha: [00:34:23] love it. There was a nice dividend and it's like from what I understand, it is what it says it is. It's highly diversified. It's got basically like a four in it. Why would someone and I got super jealous because people like posting up their dividends and, you know, you imagine you get quite good compounding in, you know, just putting all your money into that one ETF. Why would someone why wouldn't we all just put our money in that rather? And the comparison I'll make here is like I've probably gone down more of a route like the hypothetical portfolio. I know you guys are shifting the structure, not financial advice. Why would someone choose to do what I'm doing right for any decision? I guess where I go for more like I've got I'm doing like vast. So I like tracking a three hundred and I haven't bought yet because I already made that decision to buy ethe. And I thought that, I thought that that Covid actually quite a lot of, sort of I think ethe is global or heavily loaded to America. I think it's like seventy percent American. So I've sort of just been keeping down that route rather than buying. I think it's beats that tracks America. [00:35:47][84.3]

Alec: [00:35:48] Yeah. Total U.S. market is it. Yeah. Yeah, yeah. [00:35:50][2.4]

Alisha: [00:35:51] So why would someone choose to go like vasts of VTS and maybe like a European ETF tracker in you know in comparison to the highly diversified vanguard. [00:36:03][11.9]

Alec: [00:36:04] So it's a really good question. I think the the first thing to note is that if you look at the highly diversified Vanguard ETF, it basically is doing what we're talking about with the core portfolio. So it owns an Australian shares index fund, which is let's use index fund, an ETF interchangeably rather them. Yeah, yeah. So an Australian shares ETF and international shares ETF, a bond ETF, a small companies ETF, an emerging markets ETF and a fixed income ETF. But like the majority of its holdings are the Australian and the International Shares ETF. So basically if you buy the H.J., you're doing that core portfolio, but just in one transaction. And so you're getting access to a lot of things that you would otherwise, maybe some things that you're not super interested in, like fixed income and a bond ETF is together 10 percent of the portfolio. Maybe you want it, maybe you don't. [00:37:06][61.8]

Alisha: [00:37:07] And that's like super conservative, right? [00:37:09][1.9]

Alec: [00:37:09] Like, yeah. Yeah. But that's where that's where the extra juice in the dividend comes from. Like you get a derived from the Australian shares stuff and the international shares stuff. But owning the bond and the fixed income, that gives you an extra payout. So that's probably why the dividend looks so good. So, so really ADHD, it's shortcode. If it's like I want to buy one thing, I don't want to think about it a lot, but if you're like, oh no, I want to include maybe some thematic ETFs in my core or I don't want to include some of these things that they're holding. You basically just replicating the same thing yourself. [00:37:44][34.7]

Bryce: [00:37:45] Yeah, it's about concentration. And, you know, you might only think that the best investments are going to be the Australian Stock Exchange and the American Stock Exchange over the next 40 years. So buying something that gives you bonds and fixed income and cash is not aligning with your investment goals and your thesis. So you wouldn't go down that path. And it also for me, it's about where you're at in your investing journey. I think for me, you know, you can buy ETFs that are heavily weighted towards bonds and cash and quite a conservative structure. And that's something you'd think about, you know, later in life when you're trying to preserve capital. But for now, for me, it's like I really just want full exposure to equities. I'm not so concerned about cash and fixed income and taking a massive dividend. I'd rather have great growth over the next ten or twenty years and then think about, well, how do I save my. [00:38:34][49.4]

Alisha: [00:38:35] Do you get this do you get worried, I guess, that you're not and I might have this wrong, so please correct me. Let's say I have ten thousand dollars. Are you not getting more compounding magic if you just chuck all of that? Ten thousand dollars in a highly diversified, you know, Vedi state, you know, everyone knows what we're talking about versus splitting that 10 grand across four ETFs. Are you getting better compounding? [00:39:05][30.1]

Bryce: [00:39:07] It depends. If you're thinking about compounding from the point of view of dividends, then right then no. Compounding doesn't come just from being paid dividends. Compounding is, you know, your if your ETF goes up 10 percent in year one, it then goes up five percent year to year compounding year on year that way. Yeah, it's it is incorrect to assume that splitting your money, you're going to lose out on compounding, because if all four ETFs that you put, you split. If they compound at 20 per cent each year on year, then that's that's massive relative to one ETF that would compound it 15 percent or whatever it may be. So split thinking that if you split your money you're missing out on compounding opportunities is not true. [00:39:53][46.7]

Alisha: [00:39:54] That is the comfort that I was looking for. [00:39:55][1.6]

Alec: [00:39:58] Yeah, yeah. Think of ADHD is like a portfolio all in one thing. So even look at if you're going to buy things individually, look at how your portfolio compounds and then compare that to have ADHD, which is GE, which is a portfolio in one. But either way, look at how your whole portfolio portfolio goes. [00:40:17][18.8]

Bryce: [00:40:18] So some other questions. Speaking about ETFs, you had a good one that you sent through, which was when, where? How does the management fee for this get taken? Yeah. Yeah. Is it deducted by my broker? I've never noticed it in which I imagine is [00:40:31][13.4]

Speaker 4: [00:40:32] a good thing. [00:40:32][0.4]

Alisha: [00:40:34] Oh, because I was like super scared because, you know, we high fees, but the fees seem quite minuscule for most of them and I don't know. So yeah. [00:40:46][11.4]

Bryce: [00:40:46] You don't notice and it's a it's a it's, it's not sneaky but it's, it's done in a way that you're not it's not deducted from your broker. It's you're not going to get a statement each month saying you own beta shares in Vanguard three cents. You know, it's how they do it is a management fee is based on the total assets that the fund manager holds. So Vanguard or or beta shares, for example, if you're in the ASX 200 ETF has maybe a billion under management. So they'll take one point five percent of that or whatever the fee is point for. [00:41:20][34.0]

Alec: [00:41:20] Yeah. Who's paying one point for. [00:41:22][1.5]

Speaker 4: [00:41:23] The way that [00:41:23][0.3]

Bryce: [00:41:24] they do this though is to reflected in the actual price of the ETF and without going into too much detail. But they essentially calculate it each day and and they build that into the price of the ETF and then take it out of the funds each month that are under management. So you will never see it. But it is just reflected in the price of the actual ETF. [00:41:45][21.2]

Alec: [00:41:45] Yeah. So they do all the work. [00:41:46][0.9]

Bryce: [00:41:47] Yeah, they do all the work. You don't need to know anything [00:41:48][1.6]

Alisha: [00:41:50] about while I've got you guys. Like I feel quite honoured so I feel like I need to get as many questions on my email now. So let me ask this question because it's so far it's [00:42:02][12.5]

Speaker 4: [00:42:03] probably a dumb question. Why are you guys talking? [00:42:07][4.2]

Alisha: [00:42:08] You guys were talking to some I forget your name, but it was amazing. I loved the interview from Ozzie Beers. And he was just talking, you know, as on those Equity Mates podcast episodes, they you guys, you're talking at a higher level. So sometimes I'm just using it as sort of like a it's just washing over. I'm sure he was talking he was talking about what the market expects. I can't remember what the exact sentence was. But he was like, I think the market expects blah, blah, blah, or will react in this way with this, like royal wave of the market. Is this like us being like what is the market? Is that being driven by? I assumed when I was like, I wonder what that is. It probably means like more of the sort of banking dudes and what they are chatting about in their banking circles. [00:43:05][57.5]

Speaker 4: [00:43:07] I you're pretty you're pretty well, right? [00:43:09][1.6]

Bryce: [00:43:09] Yes. So when people talk, what is the market expecting? You know, people are employed, thousands of people are employed to analyse companies and come up with assumptions and on what their companies should and shouldn't be, I guess, doing and and what are the prices that we should expect or what is the stock price that we should expect this company to grow? Over the next 10 years, based on a bunch of analysis and you've got all these investors who are making decisions, expecting companies to do X, Y and Z. And so when you're talking about the market and if the market expects Woollies to have a great earnings season, we're talking about really everyone who is involved in making investment decisions as professionals and who are analysing companies. I mean, Ren and I could you know, we could all be part of the market. Oh, you [00:44:02][52.6]

Alisha: [00:44:02] probably are now. [00:44:03][0.9]

Speaker 4: [00:44:05] Wait, wait, wait. Equity Mates you're part of the bottom part of the market. [00:44:11][5.8]

Alisha: [00:44:12] Yeah, that's actually Solidarity's of influence, right? [00:44:15][3.7]

Speaker 4: [00:44:16] Absolutely. [00:44:16][0.0]

Alisha: [00:44:18] The same amount of influence is like a dude at ANZ who has five billion dollars. But you do have you do have a lot of influence over retail investors. [00:44:27][9.0]

Alec: [00:44:28] Bryce his dream is to be that tier one influencer. [00:44:30][2.0]

Speaker 4: [00:44:35] But, yeah, [00:44:35][0.2]

Alec: [00:44:35] it's it's exactly what Bryce is saying. You know, like everyone is putting predictions out there and people are, like deciding what price they're willing to buy and sell the stock based on those predictions and the analysis. And then all of that sort of goes into the price of the stock. And there's, you know, if the price, the price has certain, like assumptions or expectations built into it, you know, if Woollies is doing really well, it shows that the market is expecting Woollies to keep growing really strongly. But then if Woollies stops growing, then, you know, they didn't meet the market's expectations because you could say that all these analysts were putting out a report saying we expect the woollies to grow strongly and the price was growing to reflect that. So when people talk about the market, which you're right, it's kind of weird when when now that we think about it, that's what they mean. It's just like, what's the consensus idea around this company and what's going to happen to it based on like all the people in finance and. Yeah, the all the bankers Bryce. [00:45:39][63.7]

Alisha: [00:45:39] I've got one more key question. Sure, it might be a big one, but I'm sure you can direct me to an episode or you guys can. [00:45:47][7.8]

Speaker 4: [00:45:48] I like this now when we're good wine, we [00:45:50][2.0]

Bryce: [00:45:51] will we'll finish this question. We won't just palming off to another. [00:45:54][3.1]

Speaker 4: [00:45:54] I think it really curly that he's committed to this. [00:45:59][4.9]

Alisha: [00:45:59] I've heard of this concept of rebalancing, which I generally I guess I understand it to be, let's say, looking at my little self wealth portfolio. Let's say zip goes the moon in the next six months. And now I've got like now I've got lawdy thirty thousand bucks worth of zip. But my the rest of like my nice ETFs have just been tracking along consistently. I guess I thought of rebalancing meaning putting your money like moving your money about so it still fits your investment style and general goals and aims. Can you tell me a bit more about rebalancing? How practically do you do it? Because like so many others in the Equity Mates community, I'm I'm very scared of CGT, which is probably the biggest thing that is keeping me, you know, not pulling out a whole heap of money. And should someone like me, let's say Zipp does go to thirty bucks, am I going like it? Should it be something that I seriously consider? If it's if one of my stock holdings or one of my it's not going to happen to an ETF, but one of them is, you know, now become eighty percent of my portfolio. [00:47:13][73.3]

Bryce: [00:47:14] Great question. And CGT for those that have just joined, is capital gains tax. So rebalancing is something that professional investors do much more than I would say retail investors do because they have like a number of mandates generally that they have to construct a portfolio around. And so, for example, Kathak over in the United States, she'll [00:47:40][25.6]

Speaker 4: [00:47:41] be look at people. I don't know. I said that was [00:47:44][2.8]

Alec: [00:47:45] that was your team, Apple. [00:47:45][0.8]

Speaker 4: [00:47:46] You, Kathy Wood, who runs Arek Investments, [00:47:49][3.1]

Bryce: [00:47:51] she has the mandate that Tesla can never be more than five or 10 percent of her portfolio. [00:47:55][4.8]

Alisha: [00:47:57] So if where's that mandate come from, [00:47:59][2.2]

Speaker 4: [00:47:59] she makes [00:48:00][0.4]

Bryce: [00:48:00] sure she applies that mandate in herself. Yeah. So professional investors will well make mandates about their portfolio so that those investing in the portfolio know what to expect. And they know that there's some sort of structure and rhyme and rhythm to what they're doing. It's not just, hey, we're going to take all your money and hope that zip goes to the moon and then have a portfolio that is 80 percent zip. It's all about like capital protection. [00:48:25][24.9]

Alisha: [00:48:25] That would be irresponsible. [00:48:26][0.4]

Speaker 4: [00:48:27] Yeah, exactly. No, not irresponsible. [00:48:28][1.4]

Bryce: [00:48:29] From a professional investors point of view. It would be. So they have all these mandates and rules that. Lead to them rebalancing portfolios and, yes, selling positions and allocating them so that if they always have to have 30 per cent exposure to Australian equities, they need to make sure that they always have that in 20 per cent to high growth, etc.. So that's where rebalancing comes in. And yes, there are reasons that people do it from a tax point of view. You might sell some that have been going well and take a profit and then sell some that have lost and then offset. From a retailer's point of view, though, from a retail investor, it's not something that I personally don't rebalance to often, if at all. Really. I think for me, if Zipp is going to the moon and it's 80 per cent of your portfolio, let it run like [00:49:17][47.8]

Speaker 4: [00:49:18] you're a [00:49:18][0.4]

Bryce: [00:49:18] retail investor. Like there's no need to [00:49:20][2.0]

Alisha: [00:49:21] say long as your thesis doesn't change, [00:49:23][1.7]

Bryce: [00:49:23] as long as your thesis doesn't change, of course. But like, what's the point in saying, oh my God, I've just made so much money on Zet, but my ETF over there is looking a little under underwhelm underwhelming. [00:49:33][9.7]

Speaker 4: [00:49:34] I want to divert some funds. [00:49:35][1.3]

Bryce: [00:49:36] It's like you have no reason to do that. And I mean, if Zipp hits 30, 30 bucks and you're saving for a house, maybe you take it out and put it in the house deposit. But like, you have to have a reason to be rebalancing and doing it for the sake of it is is pointless. You're paying brokerage fees to buy and sell. And if you're selling Zipp at 30 bucks just for the sake of rebalancing, it might go to 60. And you just completely missed that. [00:49:59][23.6]

Speaker 4: [00:49:59] So, yeah, you've [00:50:00][0.6]

Bryce: [00:50:00] completely missed that. [00:50:01][0.7]

Alec: [00:50:01] So the the only thing to add to that is like for a professional investor, they have a set pool of money like they might have one hundred million dollars that they got from people and that's all they have to invest. So it becomes like 80 percent of the portfolio. It's not like they can get more money in and buy other stuff. They have to sell Zipp. If they want to buy other stuff, will they have to sell something? If they want to buy something new as like everyday retail investors, we have this great advantage that if we're saving, we can keep putting more money into the market. And so rather than saying I'm going to sell some zip and put it into some other stuff, you can just say, all right, well, look, Zipp of Zip's, a big part of my portfolio. I'll let that keep going. I won't buy more and I'll just balance my portfolio by the money that I'm saving. I'll put into other stuff. And so that's awesome. Yeah. Yeah. By other stocks. Yeah. [00:50:50][49.1]

Alisha: [00:50:51] I think I've found that I've been doing that naturally in the sense that like, you know, I'll go through Equity Mates and I will probably have bought you know, I've talked about a couple of individual stocks, but I like to think I've generally maintained the current satellite approach in the sense that, you know, my most recent purchase was this speculative mining stock, which will teach me a lot, I think. And I haven't put in more than I'm willing to get Slater and Gordon. [00:51:20][29.3]

Speaker 4: [00:51:21] And I would assume that whatever I like how they're using [00:51:28][7.6]

Alec: [00:51:29] that as like a [00:51:29][0.6]

Speaker 4: [00:51:30] Slater and Gordon. [00:51:31][0.6]

Alisha: [00:51:33] So it's so, you know, like I've had that little fun and now I can see the impact that that's having on my portfolio as a whole. So now probably over the next few months, I will probably rebalance in the sense that I will be putting more and more of my savings into those safer ETFs to sort of just offset the six percent losses that I'm facing every time it drops the [00:51:59][26.3]

Speaker 4: [00:51:59] same, say, well, look, [00:52:03][3.6]

Bryce: [00:52:04] I know that there's plenty more that we can chat about, but we are limited by time, unfortunately, Aleisha. So we are going to have to leave it there. But firstly, thank you so much for coming on and sharing your journey and asking the questions that I know many other people in the Get Started Investing feed community and Equity Mates community probably also have on the tip of their tongue. I would also like to invite you back on at another point to continue [00:52:27][23.3]

Speaker 4: [00:52:29] to continue chatting. I'm going to get back. Maybe we need to do a colonoscopy for cancer. I think in your first I know [00:52:45][15.4]

Alec: [00:52:45] you said you were a bit of a head of Rowan and he [00:52:48][3.2]

Speaker 4: [00:52:50] one step ahead is a bit of a competition. [00:52:52][2.4]

Alisha: [00:52:53] Go on. He's I'm really excited. I like you know, I know he came on recently, but I'm I'm excited for the stage of his journey when he moves onto I can't remember from last time if he's on like a not taking away from Comsec pocket, but whether he's moved on to like a proper force. [00:53:10][17.3]

Alec: [00:53:11] This guy, he hasn't yet. [00:53:13][2.0]

Speaker 4: [00:53:13] I don't think he would have been asked to do that, but he's going to be [00:53:18][5.5]

Alec: [00:53:19] stoked that he's used as a barometer. [00:53:20][1.7]

Speaker 4: [00:53:23] And so we'll get you back on plenty. [00:53:25][2.0]

Bryce: [00:53:25] Plenty more to discuss, I'm sure. But a massive thank you for coming on today. And as I said, sharing a journey. I know it's going to be a lot of. To those in our community, so, yeah, let's look forward to connecting again and yeah, thank you. [00:53:41][16.3]

Alisha: [00:53:42] Thank you so much, guys, for the work that you do, because I do think, like, I touched the beginning, but I do think that you have a bigger role than you probably think in terms of helping people really move out of maybe a space that they were in before and really empowering them and getting them involved in the stock market. [00:54:04][21.7]

Bryce: [00:54:05] Well, I appreciate those comments. That's yeah, it's nice to hear. Thank you. [00:54:08][2.9]

Speaker 3: [00:54:09] Get Started Investing feed is a product of Equity Mates media. All information in this podcast is for education and entertainment purposes only. It is not intended as a substitute for professional finance, legal or tax advice. The hosts of Get Started Investing feed are not financial professionals and are not aware of your personal financial circumstances. Before making any financial decisions, you should read the product disclosure statement and if necessary, consult a licenced financial professional. Do not take financial advice from a podcast. For more information, head to the disclaimer page on the Equity Mates website, where you can find the ASIC resources and find a registered financial professional near you in the spirit of reconciliation, Equity Mates media and the hosts of Get Started Investing feed Knowledge, the traditional custodians of country throughout Australia and their connexions to land, sea and community. We pay our respects to their elders past and present, and extend that respect to all Aboriginal and Torres Strait Islander people today. [00:54:09][0.0]

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