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Iona Bain: Hello, I'm Iona Bain, and welcome back to A Little
Iona Bain: Bit Richer, the podcast helping you feel more confident about
Iona Bain: your money, one conversation at a time, brought to you by
Iona Bain: Legal and General. Today, we're kicking off a two- part
Iona Bain: series all about investing. And if your immediate reaction to
Iona Bain: that is, well, sounds a bit overwhelming, sounds a bit
Iona Bain: risky, probably not one for me, you're very much not
Iona Bain: alone. So, whether you are already investing and wondering if
Iona Bain: you're getting things right or you just want to learn
Iona Bain: more about this sometimes quite daunting area, in this first
Iona Bain: episode, don't worry, we're not going to be diving straight
Iona Bain: into funds or portfolios. Instead, we're going to be talking
Iona Bain: about why investing can help your financial future, why we
Iona Bain: need to learn about emotions, and how we can keep
Iona Bain: a cool head and make informed decisions. And joining me
Iona Bain: to discuss all this is friend of the show, Emilie
Iona Bain: Bellet. Emilie is a former private equity analyst turned entrepreneur,
Iona Bain: author, and speaker. Emilie founded the financial education platform, Vestpod,
Iona Bain: and hosts the podcast, The Wallet. So, she is just
Iona Bain: the person we need to talk to today, to help
Iona Bain: investing feel a little more accessible. Welcome, Emilie.
Emilie Bellet: Thank you.
Iona Bain: Can you explain in 30 seconds or less what is
Iona Bain: investing and why it's so important? I'm going to put
Iona Bain: my timer on. Okay, go.
Emilie Bellet: With investing, you want to make your money work for
Emilie Bellet: you, and this is going to help you to achieve
Emilie Bellet: your long- term goals. That's different from saving money, where
Emilie Bellet: you put money into a safe place that you can
Emilie Bellet: access anytime that's really good for your emergency savings and short-
Emilie Bellet: term goals. With investing, you're going to put money into
Emilie Bellet: things called assets like shares, bonds, property, with the goal
Emilie Bellet: to grow your money over time.
Iona Bain: Brilliant. I think you had about five seconds to spare
Iona Bain: there. That is excellent work. So, that's a really good summary
Iona Bain: of what investing is and why it's important. But a
Iona Bain: lot of people watching and listening might be feeling quite
Iona Bain: nervous about the prospect of investing, particularly when they look
Iona Bain: at what's going on in the world. We've got geopolitical
Iona Bain: turmoil and uncertain economic outlook, frankly, lots of pressing headlines.
Iona Bain: And they might be wondering, why should I take risks
Iona Bain: with my money right now? Surely, it's better to just
Iona Bain: play safe.
Emilie Bellet: Yeah. So, I really understand why people feel a little
Emilie Bellet: bit uncertain about the stock market. But here, I think
Emilie Bellet: we have to differentiate between uncertainty and risk. So when
Emilie Bellet: you're investing money, and here we're talking about investing, achieving
Emilie Bellet: your long- term goals, you want to know the level
Emilie Bellet: of risk you're taking. Now there's the uncertainty on the
Emilie Bellet: market, no one can predict what's going to happen in
Emilie Bellet: the stock market. We see big draw- downs in the
Emilie Bellet: stock market where the market goes up and down at
Emilie Bellet: different points in time. So, what you want to have
Emilie Bellet: is time for your money in case something happens in
Emilie Bellet: the stock market and for your investments to recover. So,
Emilie Bellet: I think that's the difference. There's not a perfect time
Emilie Bellet: to invest. Maybe it was yesterday or today, but I
Emilie Bellet: would say, don't just wait and get triggered by everything
Emilie Bellet: that's going to happen. There's always going to be news
Emilie Bellet: on the market, but just getting started on a very
Emilie Bellet: small scale and try to be in the market, rather
Emilie Bellet: than timing and finding the best time to invest is
Emilie Bellet: actually going to be quite helpful with your investments. And
Emilie Bellet: it's not about putting all your savings into investing or
Emilie Bellet: into an investment pot today, but slowly, a step- by-
Emilie Bellet: step, building up a pot over time.
Iona Bain: And years ago I heard of this phrase, " Reckless conservatism,"
Iona Bain: which really resonated with me because it indicates that actually,
Iona Bain: if you are too safe with your money at times,
Iona Bain: that that in and of itself can be a bit
Iona Bain: reckless and irresponsible. That can be quite a difficult concept
Iona Bain: for people to get their heads around, can't it?
Emilie Bellet: I think it's quite tricky to understand that having all
Emilie Bellet: your money in cash, so in something really safe, is
Emilie Bellet: actually risky because you think, oh, all my money's in
Emilie Bellet: my bank, I'm getting an interest rate or small saving
Emilie Bellet: rates. But actually, what we have to look for when
Emilie Bellet: we invest is that there's inflation in the economy, and
Emilie Bellet: also, you want your money to grow faster. So this
Emilie Bellet: is why with your investments, you want to try to
Emilie Bellet: beat inflation or at least keep up. The economy is
Emilie Bellet: growing and you want your money to grow over time.
Emilie Bellet: So when you're thinking short term, it doesn't matter so
Emilie Bellet: much over a period of one to five years, but
Emilie Bellet: when you see longer picture, you lose purchasing power over
Emilie Bellet: time. So, keeping everything in cash is not always the solution.
Iona Bain: Yeah, it's a really good point. Now, many people who
Iona Bain: are watching and listening to this might be thinking, I'm
Iona Bain: not an investor. Why is that not necessarily true?
Emilie Bellet: So, this is what I hear very often, " I'm not
Emilie Bellet: an investor, this is very scary. I don't know where
Emilie Bellet: to start." And I think your first touch point is
Emilie Bellet: maybe your pension. I mean, if you have a workplace
Emilie Bellet: pension, most people will be actually invested in the stock
Emilie Bellet: market. So your money every month, you are saving money,
Emilie Bellet: your employer is putting money into your pension. This is
Emilie Bellet: tax efficient also, which is amazing. And the money will
Emilie Bellet: go into usually a selection of funds, so you will
Emilie Bellet: be exposed to a lot of companies in a lot
Emilie Bellet: of different markets and industries. So, your money is invested.
Emilie Bellet: So I feel that's already a win, you are an investor, and
Emilie Bellet: then that's maybe your starting point when you want to
Emilie Bellet: look at your investments.
Iona Bain: And so, if people maybe don't necessarily rush out and
Iona Bain: start investing after today, perhaps they can already start to
Iona Bain: understand this whole area just by engaging with their pension
Iona Bain: a bit more.
Emilie Bellet: So, this is a really good starting point. First of
Emilie Bellet: all, find your login details for your pension. I mean,
Emilie Bellet: if you don't necessarily check very often your pension, you
Emilie Bellet: don't know where it is, who's the provider. So, find
Emilie Bellet: your statements, go online, call your provider, try to log
Emilie Bellet: in into your pension. And then what you can do
Emilie Bellet: is review your contribution. How much money are you putting
Emilie Bellet: into your pension every month? Is your employer contributing to
Emilie Bellet: your pension and how much? Can you actually change this
Emilie Bellet: contribution? Can you increase them if you have the saving
Emilie Bellet: and investing capacity? And then it's looking at, how is
Emilie Bellet: my money actually invested? And you'll be surprised to see
Emilie Bellet: a series of funds. So, that's quite interesting to look
Emilie Bellet: at how it invested. You'll see the allocation, stocks and
Emilie Bellet: bonds and cash, and also maybe the type of funds
Emilie Bellet: and the level of risk. So usually, you will see
Emilie Bellet: three level of risk, A, B, C. So you will
Emilie Bellet: be adventurous, balanced, or cautious. And it's just making sure
Emilie Bellet: you are in the right level of risk for your
Emilie Bellet: age and the time horizon. If you're in your 20s, it's very
Emilie Bellet: different than if you're in your 50s, for example, when
Emilie Bellet: you look at investing for retirement.
Iona Bain: Yeah, it's really important to know what is appropriate for
Iona Bain: your stage in life because if you're younger, you can
Iona Bain: maybe take more risk, if you're older, maybe you play it a bit
Iona Bain: more safe. So Emilie, this is a bit of a
Iona Bain: tough question, but I have a feeling that you're going
Iona Bain: to be up for answering it. What's one mistake that
Iona Bain: you wish that you hadn't made but that you've learned
Iona Bain: from when it comes to investing?
Emilie Bellet: Oh, there's a lot of mistakes I've made, but I
Emilie Bellet: think one is around picking individual stocks. So when we
Emilie Bellet: talk about investing, we don't want to buy one thing
Emilie Bellet: and just hope for the best. So, we want to
Emilie Bellet: diversify our money into a lot of different asset classes.
Emilie Bellet: We want to be invested in the market, and the
Emilie Bellet: market is just like a collection of tens of thousands
Emilie Bellet: of companies. Now when I started investing, I built a
Emilie Bellet: very small portfolio of a handful of individual stocks, but
Emilie Bellet: then they were all in the same industry because I
Emilie Bellet: had more knowledge in this industry, probably all in the
Emilie Bellet: same geography. And also, only having five stocks is quite
Emilie Bellet: problematic. So, one of these companies starting to have operational
Emilie Bellet: issues that impacted its profits. Investors started to look at
Emilie Bellet: this company and started to lose confidence. I panicked, I
Emilie Bellet: sold my investments. Of course, the stock recovered a few
Emilie Bellet: months or a few years later, but I had a
Emilie Bellet: loss in my portfolio. And that one stock, I would
Emilie Bellet: have five, that's like 20%. So, that's a big mistake
Emilie Bellet: and that's why now I'm not going to look at
Emilie Bellet: single stocks, only if it's a very small part of my
Emilie Bellet: portfolio, but try to diversify via funds that will have
Emilie Bellet: hundreds or thousands of holdings. And the other one is
Emilie Bellet: checking your stocks on your phone and overreacting, I think.
Iona Bain: Yeah, I've been there.
Emilie Bellet: Oh, you have been?
Iona Bain: Yeah.
Emilie Bellet: And I think the two emotions that investors are triggered in
Emilie Bellet: the stock market is around fear and greed. My greed
Emilie Bellet: was to wait for the stock price to go higher
Emilie Bellet: and higher and higher and sell at the right time.
Emilie Bellet: When is the right time? And also fear, the fear
Emilie Bellet: of losing more money, and that's when I sold. So
Emilie Bellet: when you go into investing, it's really having a clear
Emilie Bellet: mind, being a bit more of a passive investor, so
Emilie Bellet: not overreacting to market fluctuations, and you can do that
Emilie Bellet: when you have a plan. So you know what you
Emilie Bellet: want your investments to achieve, for how long you're investing,
Emilie Bellet: what are your goals behind it? And having this on
Emilie Bellet: a piece of paper, it doesn't need to be complicated.
Emilie Bellet: At least you know what you're doing with your investments.
Iona Bain: Yeah, it's really hard though, isn't it? When you see
Iona Bain: your portfolio on your phone and if it has been
Iona Bain: going up, it gives you a dopamine buzz and then
Iona Bain: you become addicted to checking it. And even when it
Iona Bain: starts to go down, you just can't take your eyes
Iona Bain: off it. So, it's one of these areas of finance
Iona Bain: where actually, paying a little bit less attention is probably
Iona Bain: a good thing.
Emilie Bellet: It's a good thing, and I think investing should be
Emilie Bellet: boring. When investing starts to be a little bit exciting,
Emilie Bellet: that should probably be a red flag. You should ask
Emilie Bellet: yourself, is it actually too good to be true? And
Emilie Bellet: if it is, it's probably that you shouldn't invest or you should
Emilie Bellet: do more research.
Iona Bain: Yeah, very good point. Emotions as you were saying there,
Iona Bain: they really, really do drive a lot of investing decisions.
Iona Bain: And I think all of us like to think we're
Iona Bain: rational, cool as a cucumber. Can you just talk me
Iona Bain: through how we can keep calm when markets feel like
Iona Bain: they're going a bit crazy?
Emilie Bellet: So for me, it's about having this plan, first of
Emilie Bellet: all, being financially organized. So you have a budget and
Emilie Bellet: you know how much money you're putting into your investments
Emilie Bellet: every month. It's better to automate your investments so you
Emilie Bellet: are not deciding every month, oh, how much money should
Emilie Bellet: I invest this month? How much money should I save?
Emilie Bellet: And if you invest money, what funds do I buy this
Emilie Bellet: month? So I automate my investment, which means that every
Emilie Bellet: day on payday, a little bit of my pay is
Emilie Bellet: going into an investment portfolio. So, that removes any decisions
Emilie Bellet: for me to pick and choose whatever I want to
Emilie Bellet: buy. Now, there's times in a year where you can
Emilie Bellet: review, sit down, and look at your investments and check
Emilie Bellet: that your contributions are invested properly. So making sure you
Emilie Bellet: take a step back, I think it's fine to switch
Emilie Bellet: off financial and investing news sometimes. So if there's some
Emilie Bellet: areas that you're interested in, maybe take the time to
Emilie Bellet: research these areas instead of reacting to market fluctuations. So
Emilie Bellet: I would say have a plan, maybe don't check, automate
Emilie Bellet: some of your investments, and know when there's information overload.
Emilie Bellet: If you've been on some social media, it can be
Emilie Bellet: quite, quite triggering and you feel you're missing out, and
Emilie Bellet: that's a pretty bad emotion. The former where you're like,
Emilie Bellet: something is happening, everyone knows what we invest in, and
Emilie Bellet: I'm just sitting there doing nothing. So when you're feeling
Emilie Bellet: this, it's probably time to just switch off, go for a
Emilie Bellet: walk, switch off your investment app.
Iona Bain: So you;re a massive advocate, Emilie, for getting more women
Iona Bain: into investing, helping women understand that investing is very much for
Iona Bain: them, it's not just for the blokes. But there are
Iona Bain: myths and concerns that surround the whole area of women
Iona Bain: in investing. So, what would you say to challenge some
Iona Bain: of those myths and concerns?
Emilie Bellet: So what I hear very often in classes and boot
Emilie Bellet: camps is around, " I don't have a lot of money
Emilie Bellet: to start investing. I don't know enough. I need to
Emilie Bellet: be an expert. It's also too late."
Iona Bain: And what age typically do women say that to you?
Emilie Bellet: When you look at women, we may not have a
Emilie Bellet: linear career path. We know that women are still the
Emilie Bellet: primary carers for their families, for communities, for their children.
Emilie Bellet: So they may step out of work or earn less
Emilie Bellet: for a certain period of time, so usually 30s and 40s. So
Emilie Bellet: if it's less money invested, maybe they don't have the
Emilie Bellet: capacity to invest or maybe they're investing less. And because
Emilie Bellet: we know that investing compounds, the money that you haven't
Emilie Bellet: invested early on in your life then will not compound over
Emilie Bellet: a longer period of time.
Iona Bain: Yeah, so then women have this sense that they've missed out.
Emilie Bellet: And they've missed out on retirement, and sometimes they want
Emilie Bellet: to start and open a pension and they look at
Emilie Bellet: maybe a retirement calculator and they realize, oh wow, I
Emilie Bellet: will need to top up my pension, I need so
Emilie Bellet: much money now. So it's a little bit of, I'm
Emilie Bellet: not going to do it, I procrastinate, or I do it
Emilie Bellet: later. So what I say is, it's never too late
Emilie Bellet: to start and also, it's never too small. So you
Emilie Bellet: can start literally with, I mean, some platforms today even
Emilie Bellet: allow you to invest your spare change or even with
Emilie Bellet: 25 pound, 50 pound a month, you can start building
Emilie Bellet: a pot, especially a pension. We are usually quite good
Emilie Bellet: at thinking about short term goals, your next holiday or
Emilie Bellet: what you want to achieve next year, but what we
Emilie Bellet: need is a little bit more of a plan. It's
Emilie Bellet: very important that they look at their life goals and
Emilie Bellet: match them with their financial goals. What do I want
Emilie Bellet: to achieve in the short term? But at the same
Emilie Bellet: time, how do I pay myself for when I retire?
Emilie Bellet: Once people start even putting a little bit of money
Emilie Bellet: in the stock market is quite reassuring, they understand they
Emilie Bellet: can do it, and then they can work on their long-
Emilie Bellet: term goals. So I think we need to change also
Emilie Bellet: the mindset around investing. I think anyone can invest after
Emilie Bellet: having some savings of course, and repaid some of your
Emilie Bellet: expensive debts, but it's just about getting started. And I
Emilie Bellet: think now there's a lot of structural issues, gender pay
Emilie Bellet: gap, women earning less, taking career breaks, so that's going
Emilie Bellet: to have an impact on their pension and how much
Emilie Bellet: they can actually save and invest. And it's very important
Emilie Bellet: to build individual safety nets and individual security. So if
Emilie Bellet: you've been relying on your partner, it's making sure you
Emilie Bellet: start building your pot, you start building your investments, even
Emilie Bellet: if they're much smaller. But having this level of first
Emilie Bellet: financial security and then financial independence is going to be
Emilie Bellet: really important.
Iona Bain: Very well argued. So, I have a confession to make
Iona Bain: now, which is that I have been on a break
Iona Bain: from investing. I want to go back to it, but
Iona Bain: I want to buy a house in the near future
Iona Bain: and I want that money to be there for me,
Iona Bain: should I need it. And I'm imagining a lot of
Iona Bain: people do feel in the short term if they want
Iona Bain: to achieve certain goals like buying a house, that investing
Iona Bain: is not the right thing for them to do. Is
Iona Bain: that a sensible decision, Emilie, or am I wrong to
Iona Bain: have a break from investing?
Emilie Bellet: I think you know better than anyone what you need
Emilie Bellet: and what are your goals. We all have a different
Emilie Bellet: life and we save for different things. So when you
Emilie Bellet: invest, you should really go back to your goals. And
Emilie Bellet: I love to break my goals into short- term goals,
Emilie Bellet: medium term goals, and long- term goals. Here, you're talking
Emilie Bellet: about one of your goals that is buying a house,
Emilie Bellet: and depending on how far or how quick you want
Emilie Bellet: to achieve this goal, you will need to put money
Emilie Bellet: into these pots. So ideally, in the perfect scenario, we
Emilie Bellet: put some money into each of these pots, short- term
Emilie Bellet: goals, medium term goals, and long- term goals. What I
Emilie Bellet: would say is, depending on also where you are with
Emilie Bellet: work, it's completely fine to address your contribution depending on
Emilie Bellet: how money you need to cover also your lifestyle and
Emilie Bellet: to cover your needs. So you don't want to be
Emilie Bellet: in a position where you have a lot of credit
Emilie Bellet: card debt, you're struggling to repay, debt starts to snowball,
Emilie Bellet: but at the same time, you're investing when you're paying
Emilie Bellet: a lot of money on your interest. Same when you
Emilie Bellet: don't have an emergency fund, maybe you can keep investing
Emilie Bellet: a little bit, but also build this fund that you will
Emilie Bellet: have in case something happens. Because the problem with investing
Emilie Bellet: is that the money is invested in the stock market. If
Emilie Bellet: you need cash for any reason but if something crazy
Emilie Bellet: happens, tomorrow the stock market crashes, your investments drop maybe
Emilie Bellet: 20%, 30%, but you need the money. Where are you going to find
Emilie Bellet: the money if you can't sell your investments at a decent
Emilie Bellet: price? You're probably going to go with credit card debt
Emilie Bellet: or overdraft. So, it's all about managing what you need,
Emilie Bellet: what are your goals, versus what you can do. But
Emilie Bellet: I would say is, I don't think you should stop
Emilie Bellet: investing because of the uncertainties on the market. You may
Emilie Bellet: think, oh, look at what's happening today, I don't know
Emilie Bellet: when I'm going to start investing again. So maybe you
Emilie Bellet: have lower contribution, you keep investing, and then when the
Emilie Bellet: time is right, then you can start and up your
Emilie Bellet: contribution. Because we think as investing as sacrificing a little
Emilie Bellet: bit of money, it's locked for a long period of
Emilie Bellet: time. But think of it as really paying your future
Emilie Bellet: self and really visualizing why you will need the money and
Emilie Bellet: how you will use the money in the longer period
Emilie Bellet: of time.
Iona Bain: Yeah, and feeling inspired to invest because you know that
Iona Bain: that's going to be building up that bigger pot for
Iona Bain: you so you've got more choices further down the line.
Iona Bain: Okay, Emilie, you have convinced me that I may be ought
Iona Bain: to just get reconnected with my investing portfolio and it'll
Iona Bain: be for my own good. So, there will be people
Iona Bain: watching and listening who might be thinking, investing is not
Iona Bain: something that I can do right now. Maybe because I've
Iona Bain: got credit card debt, maybe it's just something that I
Iona Bain: just don't have the bandwidth to really think about. But
Iona Bain: what are some of the reasons why people should have
Iona Bain: a baseline of knowledge about investing, regardless of whether they
Iona Bain: do it or not?
Emilie Bellet: I think you can just really understand the basics of
Emilie Bellet: investing, that it's a way to build wealth over a
Emilie Bellet: long period of time, that your goal is to beat
Emilie Bellet: inflation. So, I really see it in two buckets, saving,
Emilie Bellet: short term, investing, medium to long term. So, that's the
Emilie Bellet: first thing you need to understand. The second thing is
Emilie Bellet: around maybe scams and anything that could happen around the
Emilie Bellet: investing space. Maybe people want your money. We've seen a
Emilie Bellet: lot of scams going around on social media, phishing emails
Emilie Bellet: and stuff like that. So just understand what is legit
Emilie Bellet: or not with investing, and these are very common and
Emilie Bellet: people feel for it. So if it happened to you, don't worry,
Emilie Bellet: it happened to so many people.
Iona Bain: That's really, really good advice because people could perhaps see
Iona Bain: something online and think, well, that looks like a fantastic
Iona Bain: scheme, I really need to get in on this. But
Iona Bain: actually, if it's too good to be true, then you
Iona Bain: need to walk away, and that's why I need to
Iona Bain: understand why investing works.
Emilie Bellet: It's about learning about yourself and your reaction when there's
Emilie Bellet: big moves in the stock market.
Iona Bain: Learning by doing.
Emilie Bellet: Learning by doing.
Iona Bain: So, if viewers and listeners are anything like me, they'll
Iona Bain: want to go and have a cup of tea or
Iona Bain: a cup of coffee after listening to this chat and
Iona Bain: really think about what we've been talking about today, because
Iona Bain: it's been so fascinating. But whilst they're waiting for the
Iona Bain: kettle to boil, what's one thing they could do after
Iona Bain: our discussion today?
Emilie Bellet: So, one thing they could do is probably check their
Emilie Bellet: pension contribution. How is their pension invested? And if you
Emilie Bellet: don't have a pension, is maybe getting informed about opening
Emilie Bellet: maybe a personal pension or a SIP and really trying
Emilie Bellet: to think about your future self, and this should be
Emilie Bellet: one of your top goals.
Iona Bain: Fab, log into your pension account. Great stuff. Thank you
Iona Bain: so much, Emilie, it's been such a pleasure having you.
Emilie Bellet: Thanks for having me.
Iona Bain: That's it for part one of our investing chat. In
Iona Bain: part two, we'll be getting more practical. We'll talk through
Iona Bain: the different ways you can invest and how to build
Iona Bain: a diversified portfolio. So, if today helps you feel a
Iona Bain: little bit curious about investing, part two is where we'll
Iona Bain: turn that confidence into action. So, why not share this
Iona Bain: episode with a friend? Start your investing journey together and
Iona Bain: help them get a little bit richer too. This podcast
Iona Bain: is brought to you by L& G. You can keep
Iona Bain: up with the show on YouTube, TikTok, and Instagram, at Legal and
Iona Bain: General. If you have a question or a topic that
Iona Bain: you would answered on the show, then you can get
Iona Bain: in touch on our socials. And until next time, see
Iona Bain: you soon. Thanks for listening and watching.