WEBVTT - Why Playing It Safe with Money Can Be Risky 0:00:00.270 --> 0:00:02.940 This series is brought to you by L& G, helping 0:00:02.940 --> 0:00:04.980 you build a future that's a little bit richer. 0:00:06.600 --> 0:00:09.930 Hello, I'm Iona Bain, and welcome back to A Little 0:00:09.930 --> 0:00:13.410 Bit Richer, the podcast helping you feel more confident about 0:00:13.410 --> 0:00:16.710 your money, one conversation at a time, brought to you by 0:00:16.950 --> 0:00:20.579 Legal and General. Today, we're kicking off a two- part 0:00:20.579 --> 0:00:24.329 series all about investing. And if your immediate reaction to 0:00:24.329 --> 0:00:27.750 that is, well, sounds a bit overwhelming, sounds a bit 0:00:27.750 --> 0:00:30.990 risky, probably not one for me, you're very much not 0:00:30.990 --> 0:00:34.650 alone. So, whether you are already investing and wondering if 0:00:34.650 --> 0:00:37.800 you're getting things right or you just want to learn 0:00:37.800 --> 0:00:42.000 more about this sometimes quite daunting area, in this first 0:00:42.000 --> 0:00:44.610 episode, don't worry, we're not going to be diving straight 0:00:44.610 --> 0:00:48.180 into funds or portfolios. Instead, we're going to be talking 0:00:48.420 --> 0:00:53.220 about why investing can help your financial future, why we 0:00:53.220 --> 0:00:56.400 need to learn about emotions, and how we can keep 0:00:56.400 --> 0:00:59.670 a cool head and make informed decisions. And joining me 0:00:59.670 --> 0:01:02.580 to discuss all this is friend of the show, Emilie 0:01:02.580 --> 0:01:06.990 Bellet. Emilie is a former private equity analyst turned entrepreneur, 0:01:07.319 --> 0:01:12.300 author, and speaker. Emilie founded the financial education platform, Vestpod, 0:01:12.510 --> 0:01:15.600 and hosts the podcast, The Wallet. So, she is just 0:01:15.600 --> 0:01:17.700 the person we need to talk to today, to help 0:01:17.700 --> 0:01:22.080 investing feel a little more accessible. Welcome, Emilie. 0:01:22.170 --> 0:01:22.619 Thank you. 0:01:23.069 --> 0:01:27.000 Can you explain in 30 seconds or less what is 0:01:27.000 --> 0:01:29.880 investing and why it's so important? I'm going to put 0:01:29.880 --> 0:01:32.640 my timer on. Okay, go. 0:01:32.910 --> 0:01:36.180 With investing, you want to make your money work for 0:01:36.180 --> 0:01:38.340 you, and this is going to help you to achieve 0:01:38.340 --> 0:01:41.069 your long- term goals. That's different from saving money, where 0:01:41.069 --> 0:01:43.170 you put money into a safe place that you can 0:01:43.170 --> 0:01:46.200 access anytime that's really good for your emergency savings and short- 0:01:46.200 --> 0:01:49.110 term goals. With investing, you're going to put money into 0:01:49.110 --> 0:01:53.730 things called assets like shares, bonds, property, with the goal 0:01:53.730 --> 0:01:55.230 to grow your money over time. 0:01:55.410 --> 0:01:57.840 Brilliant. I think you had about five seconds to spare 0:01:57.840 --> 0:02:02.190 there. That is excellent work. So, that's a really good summary 0:02:02.250 --> 0:02:05.580 of what investing is and why it's important. But a 0:02:05.580 --> 0:02:09.120 lot of people watching and listening might be feeling quite 0:02:09.270 --> 0:02:13.200 nervous about the prospect of investing, particularly when they look 0:02:13.200 --> 0:02:15.600 at what's going on in the world. We've got geopolitical 0:02:15.600 --> 0:02:20.669 turmoil and uncertain economic outlook, frankly, lots of pressing headlines. 0:02:21.150 --> 0:02:23.880 And they might be wondering, why should I take risks 0:02:23.880 --> 0:02:26.520 with my money right now? Surely, it's better to just 0:02:26.550 --> 0:02:27.269 play safe. 0:02:27.510 --> 0:02:30.630 Yeah. So, I really understand why people feel a little 0:02:30.630 --> 0:02:33.990 bit uncertain about the stock market. But here, I think 0:02:33.990 --> 0:02:38.040 we have to differentiate between uncertainty and risk. So when 0:02:38.040 --> 0:02:41.549 you're investing money, and here we're talking about investing, achieving 0:02:41.550 --> 0:02:45.330 your long- term goals, you want to know the level 0:02:45.330 --> 0:02:48.060 of risk you're taking. Now there's the uncertainty on the 0:02:48.060 --> 0:02:50.310 market, no one can predict what's going to happen in 0:02:50.310 --> 0:02:52.650 the stock market. We see big draw- downs in the 0:02:52.650 --> 0:02:55.470 stock market where the market goes up and down at 0:02:55.470 --> 0:02:58.260 different points in time. So, what you want to have 0:02:58.350 --> 0:03:02.070 is time for your money in case something happens in 0:03:02.070 --> 0:03:04.980 the stock market and for your investments to recover. So, 0:03:04.980 --> 0:03:07.680 I think that's the difference. There's not a perfect time 0:03:07.680 --> 0:03:12.510 to invest. Maybe it was yesterday or today, but I 0:03:12.510 --> 0:03:16.200 would say, don't just wait and get triggered by everything 0:03:16.200 --> 0:03:18.419 that's going to happen. There's always going to be news 0:03:18.419 --> 0:03:21.180 on the market, but just getting started on a very 0:03:21.180 --> 0:03:24.419 small scale and try to be in the market, rather 0:03:24.419 --> 0:03:26.760 than timing and finding the best time to invest is 0:03:26.760 --> 0:03:29.310 actually going to be quite helpful with your investments. And 0:03:29.310 --> 0:03:32.610 it's not about putting all your savings into investing or 0:03:32.610 --> 0:03:35.910 into an investment pot today, but slowly, a step- by- 0:03:35.910 --> 0:03:38.100 step, building up a pot over time. 0:03:38.730 --> 0:03:42.990 And years ago I heard of this phrase, " Reckless conservatism," 0:03:42.990 --> 0:03:47.730 which really resonated with me because it indicates that actually, 0:03:47.730 --> 0:03:50.610 if you are too safe with your money at times, 0:03:50.790 --> 0:03:53.340 that that in and of itself can be a bit 0:03:53.340 --> 0:03:56.610 reckless and irresponsible. That can be quite a difficult concept 0:03:56.610 --> 0:03:58.170 for people to get their heads around, can't it? 0:03:58.290 --> 0:04:01.020 I think it's quite tricky to understand that having all 0:04:01.020 --> 0:04:03.780 your money in cash, so in something really safe, is 0:04:03.780 --> 0:04:06.510 actually risky because you think, oh, all my money's in 0:04:06.510 --> 0:04:08.970 my bank, I'm getting an interest rate or small saving 0:04:08.970 --> 0:04:11.700 rates. But actually, what we have to look for when 0:04:11.700 --> 0:04:14.700 we invest is that there's inflation in the economy, and 0:04:14.700 --> 0:04:17.310 also, you want your money to grow faster. So this 0:04:17.310 --> 0:04:20.219 is why with your investments, you want to try to 0:04:20.310 --> 0:04:23.520 beat inflation or at least keep up. The economy is 0:04:23.520 --> 0:04:25.529 growing and you want your money to grow over time. 0:04:25.740 --> 0:04:28.380 So when you're thinking short term, it doesn't matter so 0:04:28.380 --> 0:04:30.810 much over a period of one to five years, but 0:04:30.810 --> 0:04:34.109 when you see longer picture, you lose purchasing power over 0:04:34.110 --> 0:04:37.529 time. So, keeping everything in cash is not always the solution. 0:04:37.560 --> 0:04:40.529 Yeah, it's a really good point. Now, many people who 0:04:40.529 --> 0:04:43.110 are watching and listening to this might be thinking, I'm 0:04:43.110 --> 0:04:46.800 not an investor. Why is that not necessarily true? 0:04:46.800 --> 0:04:48.930 So, this is what I hear very often, " I'm not 0:04:48.930 --> 0:04:51.510 an investor, this is very scary. I don't know where 0:04:51.510 --> 0:04:54.690 to start." And I think your first touch point is 0:04:54.690 --> 0:04:57.120 maybe your pension. I mean, if you have a workplace 0:04:57.120 --> 0:05:00.779 pension, most people will be actually invested in the stock 0:05:00.779 --> 0:05:04.110 market. So your money every month, you are saving money, 0:05:04.110 --> 0:05:07.080 your employer is putting money into your pension. This is 0:05:07.080 --> 0:05:10.260 tax efficient also, which is amazing. And the money will 0:05:10.260 --> 0:05:13.950 go into usually a selection of funds, so you will 0:05:13.950 --> 0:05:16.529 be exposed to a lot of companies in a lot 0:05:16.529 --> 0:05:20.339 of different markets and industries. So, your money is invested. 0:05:20.370 --> 0:05:24.570 So I feel that's already a win, you are an investor, and 0:05:24.570 --> 0:05:27.180 then that's maybe your starting point when you want to 0:05:27.180 --> 0:05:28.200 look at your investments. 0:05:28.830 --> 0:05:31.710 And so, if people maybe don't necessarily rush out and 0:05:31.710 --> 0:05:36.000 start investing after today, perhaps they can already start to 0:05:36.270 --> 0:05:39.420 understand this whole area just by engaging with their pension 0:05:39.480 --> 0:05:40.050 a bit more. 0:05:40.140 --> 0:05:42.690 So, this is a really good starting point. First of 0:05:42.720 --> 0:05:45.870 all, find your login details for your pension. I mean, 0:05:45.870 --> 0:05:48.120 if you don't necessarily check very often your pension, you 0:05:48.120 --> 0:05:51.060 don't know where it is, who's the provider. So, find 0:05:51.060 --> 0:05:54.390 your statements, go online, call your provider, try to log 0:05:54.390 --> 0:05:56.670 in into your pension. And then what you can do 0:05:56.700 --> 0:05:59.610 is review your contribution. How much money are you putting 0:05:59.610 --> 0:06:03.029 into your pension every month? Is your employer contributing to 0:06:03.029 --> 0:06:06.150 your pension and how much? Can you actually change this 0:06:06.150 --> 0:06:09.089 contribution? Can you increase them if you have the saving 0:06:09.089 --> 0:06:12.270 and investing capacity? And then it's looking at, how is 0:06:12.270 --> 0:06:14.729 my money actually invested? And you'll be surprised to see 0:06:15.000 --> 0:06:17.580 a series of funds. So, that's quite interesting to look 0:06:17.580 --> 0:06:21.089 at how it invested. You'll see the allocation, stocks and 0:06:21.089 --> 0:06:25.140 bonds and cash, and also maybe the type of funds 0:06:25.170 --> 0:06:27.480 and the level of risk. So usually, you will see 0:06:27.779 --> 0:06:30.570 three level of risk, A, B, C. So you will 0:06:30.570 --> 0:06:34.800 be adventurous, balanced, or cautious. And it's just making sure 0:06:34.800 --> 0:06:36.990 you are in the right level of risk for your 0:06:37.050 --> 0:06:40.050 age and the time horizon. If you're in your 20s, it's very 0:06:40.050 --> 0:06:42.479 different than if you're in your 50s, for example, when 0:06:42.480 --> 0:06:44.160 you look at investing for retirement. 0:06:44.550 --> 0:06:48.089 Yeah, it's really important to know what is appropriate for 0:06:48.089 --> 0:06:50.490 your stage in life because if you're younger, you can 0:06:50.490 --> 0:06:53.219 maybe take more risk, if you're older, maybe you play it a bit 0:06:53.220 --> 0:06:55.589 more safe. So Emilie, this is a bit of a 0:06:55.589 --> 0:06:58.200 tough question, but I have a feeling that you're going 0:06:58.200 --> 0:07:01.230 to be up for answering it. What's one mistake that 0:07:01.230 --> 0:07:04.950 you wish that you hadn't made but that you've learned 0:07:04.950 --> 0:07:06.420 from when it comes to investing? 0:07:06.870 --> 0:07:09.210 Oh, there's a lot of mistakes I've made, but I 0:07:09.210 --> 0:07:13.350 think one is around picking individual stocks. So when we 0:07:13.410 --> 0:07:16.260 talk about investing, we don't want to buy one thing 0:07:16.260 --> 0:07:18.660 and just hope for the best. So, we want to 0:07:18.660 --> 0:07:21.630 diversify our money into a lot of different asset classes. 0:07:21.690 --> 0:07:23.700 We want to be invested in the market, and the 0:07:23.700 --> 0:07:26.610 market is just like a collection of tens of thousands 0:07:26.880 --> 0:07:31.410 of companies. Now when I started investing, I built a 0:07:31.410 --> 0:07:35.070 very small portfolio of a handful of individual stocks, but 0:07:35.070 --> 0:07:37.380 then they were all in the same industry because I 0:07:37.380 --> 0:07:39.990 had more knowledge in this industry, probably all in the 0:07:39.990 --> 0:07:43.590 same geography. And also, only having five stocks is quite 0:07:43.590 --> 0:07:46.710 problematic. So, one of these companies starting to have operational 0:07:46.710 --> 0:07:50.040 issues that impacted its profits. Investors started to look at 0:07:50.040 --> 0:07:53.970 this company and started to lose confidence. I panicked, I 0:07:53.970 --> 0:07:56.760 sold my investments. Of course, the stock recovered a few 0:07:56.760 --> 0:07:59.340 months or a few years later, but I had a 0:07:59.340 --> 0:08:01.590 loss in my portfolio. And that one stock, I would 0:08:01.590 --> 0:08:04.800 have five, that's like 20%. So, that's a big mistake 0:08:04.800 --> 0:08:07.170 and that's why now I'm not going to look at 0:08:07.230 --> 0:08:09.810 single stocks, only if it's a very small part of my 0:08:09.810 --> 0:08:12.960 portfolio, but try to diversify via funds that will have 0:08:13.200 --> 0:08:16.650 hundreds or thousands of holdings. And the other one is 0:08:16.920 --> 0:08:20.640 checking your stocks on your phone and overreacting, I think. 0:08:20.880 --> 0:08:21.840 Yeah, I've been there. 0:08:21.900 --> 0:08:22.410 Oh, you have been? 0:08:23.490 --> 0:08:23.491 Yeah. 0:08:23.491 --> 0:08:27.390 And I think the two emotions that investors are triggered in 0:08:27.390 --> 0:08:30.330 the stock market is around fear and greed. My greed 0:08:30.330 --> 0:08:32.280 was to wait for the stock price to go higher 0:08:32.280 --> 0:08:33.959 and higher and higher and sell at the right time. 0:08:34.260 --> 0:08:37.020 When is the right time? And also fear, the fear 0:08:37.020 --> 0:08:39.630 of losing more money, and that's when I sold. So 0:08:39.630 --> 0:08:42.059 when you go into investing, it's really having a clear 0:08:42.059 --> 0:08:44.970 mind, being a bit more of a passive investor, so 0:08:44.970 --> 0:08:48.510 not overreacting to market fluctuations, and you can do that 0:08:48.510 --> 0:08:51.090 when you have a plan. So you know what you 0:08:51.090 --> 0:08:53.850 want your investments to achieve, for how long you're investing, 0:08:53.850 --> 0:08:56.280 what are your goals behind it? And having this on 0:08:56.280 --> 0:08:58.590 a piece of paper, it doesn't need to be complicated. 0:08:58.830 --> 0:09:01.709 At least you know what you're doing with your investments. 0:09:01.830 --> 0:09:03.990 Yeah, it's really hard though, isn't it? When you see 0:09:03.990 --> 0:09:06.809 your portfolio on your phone and if it has been 0:09:06.809 --> 0:09:10.559 going up, it gives you a dopamine buzz and then 0:09:10.650 --> 0:09:13.710 you become addicted to checking it. And even when it 0:09:13.710 --> 0:09:16.740 starts to go down, you just can't take your eyes 0:09:16.740 --> 0:09:20.160 off it. So, it's one of these areas of finance 0:09:20.160 --> 0:09:22.949 where actually, paying a little bit less attention is probably 0:09:22.950 --> 0:09:23.400 a good thing. 0:09:23.429 --> 0:09:25.590 It's a good thing, and I think investing should be 0:09:25.590 --> 0:09:28.500 boring. When investing starts to be a little bit exciting, 0:09:28.590 --> 0:09:31.559 that should probably be a red flag. You should ask 0:09:31.559 --> 0:09:34.170 yourself, is it actually too good to be true? And 0:09:34.170 --> 0:09:36.660 if it is, it's probably that you shouldn't invest or you should 0:09:36.660 --> 0:09:37.410 do more research. 0:09:37.440 --> 0:09:40.319 Yeah, very good point. Emotions as you were saying there, 0:09:40.320 --> 0:09:42.959 they really, really do drive a lot of investing decisions. 0:09:42.960 --> 0:09:44.490 And I think all of us like to think we're 0:09:44.790 --> 0:09:47.670 rational, cool as a cucumber. Can you just talk me 0:09:47.670 --> 0:09:51.179 through how we can keep calm when markets feel like 0:09:51.179 --> 0:09:52.170 they're going a bit crazy? 0:09:52.200 --> 0:09:55.470 So for me, it's about having this plan, first of 0:09:55.470 --> 0:09:59.820 all, being financially organized. So you have a budget and 0:09:59.820 --> 0:10:02.010 you know how much money you're putting into your investments 0:10:02.010 --> 0:10:05.790 every month. It's better to automate your investments so you 0:10:05.790 --> 0:10:08.309 are not deciding every month, oh, how much money should 0:10:08.309 --> 0:10:10.500 I invest this month? How much money should I save? 0:10:10.860 --> 0:10:13.349 And if you invest money, what funds do I buy this 0:10:13.350 --> 0:10:16.440 month? So I automate my investment, which means that every 0:10:16.440 --> 0:10:18.300 day on payday, a little bit of my pay is 0:10:18.300 --> 0:10:22.620 going into an investment portfolio. So, that removes any decisions 0:10:22.620 --> 0:10:24.929 for me to pick and choose whatever I want to 0:10:24.929 --> 0:10:27.870 buy. Now, there's times in a year where you can 0:10:27.870 --> 0:10:30.630 review, sit down, and look at your investments and check 0:10:30.630 --> 0:10:33.600 that your contributions are invested properly. So making sure you 0:10:33.600 --> 0:10:36.300 take a step back, I think it's fine to switch 0:10:36.300 --> 0:10:39.809 off financial and investing news sometimes. So if there's some 0:10:39.809 --> 0:10:42.450 areas that you're interested in, maybe take the time to 0:10:42.450 --> 0:10:46.290 research these areas instead of reacting to market fluctuations. So 0:10:46.290 --> 0:10:49.830 I would say have a plan, maybe don't check, automate 0:10:49.830 --> 0:10:53.610 some of your investments, and know when there's information overload. 0:10:53.610 --> 0:10:55.440 If you've been on some social media, it can be 0:10:55.440 --> 0:10:58.469 quite, quite triggering and you feel you're missing out, and 0:10:58.470 --> 0:11:00.689 that's a pretty bad emotion. The former where you're like, 0:11:00.900 --> 0:11:04.500 something is happening, everyone knows what we invest in, and 0:11:04.500 --> 0:11:07.755 I'm just sitting there doing nothing. So when you're feeling 0:11:07.755 --> 0:11:10.410 this, it's probably time to just switch off, go for a 0:11:10.410 --> 0:11:12.330 walk, switch off your investment app. 0:11:12.510 --> 0:11:15.900 So you;re a massive advocate, Emilie, for getting more women 0:11:15.900 --> 0:11:19.800 into investing, helping women understand that investing is very much for 0:11:19.800 --> 0:11:22.830 them, it's not just for the blokes. But there are 0:11:22.830 --> 0:11:27.510 myths and concerns that surround the whole area of women 0:11:27.510 --> 0:11:30.510 in investing. So, what would you say to challenge some 0:11:30.510 --> 0:11:31.860 of those myths and concerns? 0:11:32.040 --> 0:11:34.410 So what I hear very often in classes and boot 0:11:34.410 --> 0:11:36.569 camps is around, " I don't have a lot of money 0:11:36.630 --> 0:11:40.050 to start investing. I don't know enough. I need to 0:11:40.050 --> 0:11:42.540 be an expert. It's also too late." 0:11:42.660 --> 0:11:45.209 And what age typically do women say that to you? 0:11:45.420 --> 0:11:48.000 When you look at women, we may not have a 0:11:48.000 --> 0:11:50.400 linear career path. We know that women are still the 0:11:50.400 --> 0:11:53.819 primary carers for their families, for communities, for their children. 0:11:54.059 --> 0:11:56.040 So they may step out of work or earn less 0:11:56.040 --> 0:11:59.969 for a certain period of time, so usually 30s and 40s. So 0:11:59.970 --> 0:12:02.370 if it's less money invested, maybe they don't have the 0:12:02.370 --> 0:12:05.550 capacity to invest or maybe they're investing less. And because 0:12:05.550 --> 0:12:08.190 we know that investing compounds, the money that you haven't 0:12:08.190 --> 0:12:11.760 invested early on in your life then will not compound over 0:12:11.760 --> 0:12:12.870 a longer period of time. 0:12:12.929 --> 0:12:15.540 Yeah, so then women have this sense that they've missed out. 0:12:15.690 --> 0:12:18.449 And they've missed out on retirement, and sometimes they want 0:12:18.450 --> 0:12:20.880 to start and open a pension and they look at 0:12:20.880 --> 0:12:23.580 maybe a retirement calculator and they realize, oh wow, I 0:12:23.580 --> 0:12:25.380 will need to top up my pension, I need so 0:12:25.380 --> 0:12:28.380 much money now. So it's a little bit of, I'm 0:12:28.380 --> 0:12:30.510 not going to do it, I procrastinate, or I do it 0:12:30.510 --> 0:12:33.569 later. So what I say is, it's never too late 0:12:33.570 --> 0:12:36.929 to start and also, it's never too small. So you 0:12:36.929 --> 0:12:40.170 can start literally with, I mean, some platforms today even 0:12:40.170 --> 0:12:42.840 allow you to invest your spare change or even with 0:12:42.840 --> 0:12:45.870 25 pound, 50 pound a month, you can start building 0:12:45.929 --> 0:12:50.100 a pot, especially a pension. We are usually quite good 0:12:50.160 --> 0:12:53.970 at thinking about short term goals, your next holiday or 0:12:53.970 --> 0:12:56.160 what you want to achieve next year, but what we 0:12:56.160 --> 0:12:58.199 need is a little bit more of a plan. It's 0:12:58.200 --> 0:13:00.870 very important that they look at their life goals and 0:13:00.870 --> 0:13:03.240 match them with their financial goals. What do I want 0:13:03.240 --> 0:13:05.100 to achieve in the short term? But at the same 0:13:05.100 --> 0:13:08.220 time, how do I pay myself for when I retire? 0:13:08.610 --> 0:13:11.250 Once people start even putting a little bit of money 0:13:11.280 --> 0:13:13.770 in the stock market is quite reassuring, they understand they 0:13:13.770 --> 0:13:16.050 can do it, and then they can work on their long- 0:13:16.050 --> 0:13:18.449 term goals. So I think we need to change also 0:13:18.450 --> 0:13:21.780 the mindset around investing. I think anyone can invest after 0:13:21.780 --> 0:13:24.150 having some savings of course, and repaid some of your 0:13:24.150 --> 0:13:27.390 expensive debts, but it's just about getting started. And I 0:13:27.390 --> 0:13:30.420 think now there's a lot of structural issues, gender pay 0:13:30.450 --> 0:13:33.209 gap, women earning less, taking career breaks, so that's going 0:13:33.210 --> 0:13:35.520 to have an impact on their pension and how much 0:13:35.520 --> 0:13:38.339 they can actually save and invest. And it's very important 0:13:38.340 --> 0:13:42.450 to build individual safety nets and individual security. So if 0:13:42.450 --> 0:13:44.910 you've been relying on your partner, it's making sure you 0:13:44.910 --> 0:13:47.939 start building your pot, you start building your investments, even 0:13:47.940 --> 0:13:50.670 if they're much smaller. But having this level of first 0:13:50.670 --> 0:13:54.059 financial security and then financial independence is going to be 0:13:54.059 --> 0:13:54.720 really important. 0:13:55.320 --> 0:13:58.679 Very well argued. So, I have a confession to make 0:13:58.679 --> 0:14:02.010 now, which is that I have been on a break 0:14:02.100 --> 0:14:05.160 from investing. I want to go back to it, but 0:14:05.490 --> 0:14:08.219 I want to buy a house in the near future 0:14:08.220 --> 0:14:10.050 and I want that money to be there for me, 0:14:10.500 --> 0:14:13.890 should I need it. And I'm imagining a lot of 0:14:13.890 --> 0:14:17.370 people do feel in the short term if they want 0:14:17.370 --> 0:14:20.820 to achieve certain goals like buying a house, that investing 0:14:20.850 --> 0:14:24.210 is not the right thing for them to do. Is 0:14:24.210 --> 0:14:27.390 that a sensible decision, Emilie, or am I wrong to 0:14:27.390 --> 0:14:28.410 have a break from investing? 0:14:28.410 --> 0:14:30.570 I think you know better than anyone what you need 0:14:30.570 --> 0:14:33.210 and what are your goals. We all have a different 0:14:33.210 --> 0:14:36.300 life and we save for different things. So when you 0:14:36.450 --> 0:14:39.630 invest, you should really go back to your goals. And 0:14:39.630 --> 0:14:41.880 I love to break my goals into short- term goals, 0:14:41.880 --> 0:14:44.280 medium term goals, and long- term goals. Here, you're talking 0:14:44.280 --> 0:14:46.170 about one of your goals that is buying a house, 0:14:46.650 --> 0:14:49.170 and depending on how far or how quick you want 0:14:49.170 --> 0:14:51.060 to achieve this goal, you will need to put money 0:14:51.060 --> 0:14:54.990 into these pots. So ideally, in the perfect scenario, we 0:14:54.990 --> 0:14:56.970 put some money into each of these pots, short- term 0:14:56.970 --> 0:14:59.520 goals, medium term goals, and long- term goals. What I 0:14:59.520 --> 0:15:02.220 would say is, depending on also where you are with 0:15:02.220 --> 0:15:05.580 work, it's completely fine to address your contribution depending on 0:15:05.580 --> 0:15:09.480 how money you need to cover also your lifestyle and 0:15:09.480 --> 0:15:11.190 to cover your needs. So you don't want to be 0:15:11.190 --> 0:15:13.800 in a position where you have a lot of credit 0:15:13.800 --> 0:15:17.190 card debt, you're struggling to repay, debt starts to snowball, 0:15:17.400 --> 0:15:19.230 but at the same time, you're investing when you're paying 0:15:19.410 --> 0:15:21.900 a lot of money on your interest. Same when you 0:15:21.900 --> 0:15:24.479 don't have an emergency fund, maybe you can keep investing 0:15:24.480 --> 0:15:26.850 a little bit, but also build this fund that you will 0:15:26.850 --> 0:15:30.240 have in case something happens. Because the problem with investing 0:15:30.450 --> 0:15:33.960 is that the money is invested in the stock market. If 0:15:33.960 --> 0:15:37.110 you need cash for any reason but if something crazy 0:15:37.110 --> 0:15:41.220 happens, tomorrow the stock market crashes, your investments drop maybe 0:15:41.250 --> 0:15:44.130 20%, 30%, but you need the money. Where are you going to find 0:15:44.130 --> 0:15:46.320 the money if you can't sell your investments at a decent 0:15:46.320 --> 0:15:49.380 price? You're probably going to go with credit card debt 0:15:49.380 --> 0:15:53.310 or overdraft. So, it's all about managing what you need, 0:15:53.310 --> 0:15:55.800 what are your goals, versus what you can do. But 0:15:55.800 --> 0:15:58.500 I would say is, I don't think you should stop 0:15:58.500 --> 0:16:01.080 investing because of the uncertainties on the market. You may 0:16:01.080 --> 0:16:03.180 think, oh, look at what's happening today, I don't know 0:16:03.180 --> 0:16:06.450 when I'm going to start investing again. So maybe you 0:16:06.450 --> 0:16:09.480 have lower contribution, you keep investing, and then when the 0:16:09.480 --> 0:16:11.700 time is right, then you can start and up your 0:16:11.700 --> 0:16:15.510 contribution. Because we think as investing as sacrificing a little 0:16:15.510 --> 0:16:17.460 bit of money, it's locked for a long period of 0:16:17.460 --> 0:16:20.430 time. But think of it as really paying your future 0:16:20.430 --> 0:16:23.430 self and really visualizing why you will need the money and 0:16:23.610 --> 0:16:25.770 how you will use the money in the longer period 0:16:25.770 --> 0:16:26.130 of time. 0:16:26.190 --> 0:16:29.910 Yeah, and feeling inspired to invest because you know that 0:16:29.910 --> 0:16:31.830 that's going to be building up that bigger pot for 0:16:31.830 --> 0:16:34.620 you so you've got more choices further down the line. 0:16:35.100 --> 0:16:37.739 Okay, Emilie, you have convinced me that I may be ought 0:16:37.740 --> 0:16:41.670 to just get reconnected with my investing portfolio and it'll 0:16:41.790 --> 0:16:44.910 be for my own good. So, there will be people 0:16:44.910 --> 0:16:47.730 watching and listening who might be thinking, investing is not 0:16:47.730 --> 0:16:50.520 something that I can do right now. Maybe because I've 0:16:50.520 --> 0:16:53.040 got credit card debt, maybe it's just something that I 0:16:53.040 --> 0:16:56.190 just don't have the bandwidth to really think about. But 0:16:56.190 --> 0:16:58.170 what are some of the reasons why people should have 0:16:58.170 --> 0:17:01.110 a baseline of knowledge about investing, regardless of whether they 0:17:01.110 --> 0:17:01.740 do it or not? 0:17:02.160 --> 0:17:04.800 I think you can just really understand the basics of 0:17:04.800 --> 0:17:07.260 investing, that it's a way to build wealth over a 0:17:07.260 --> 0:17:09.150 long period of time, that your goal is to beat 0:17:09.150 --> 0:17:13.560 inflation. So, I really see it in two buckets, saving, 0:17:13.560 --> 0:17:16.649 short term, investing, medium to long term. So, that's the 0:17:16.650 --> 0:17:19.380 first thing you need to understand. The second thing is 0:17:19.380 --> 0:17:22.379 around maybe scams and anything that could happen around the 0:17:22.380 --> 0:17:25.950 investing space. Maybe people want your money. We've seen a 0:17:25.950 --> 0:17:29.189 lot of scams going around on social media, phishing emails 0:17:29.190 --> 0:17:32.459 and stuff like that. So just understand what is legit 0:17:32.460 --> 0:17:35.459 or not with investing, and these are very common and 0:17:35.460 --> 0:17:37.200 people feel for it. So if it happened to you, don't worry, 0:17:37.500 --> 0:17:39.210 it happened to so many people. 0:17:39.660 --> 0:17:43.530 That's really, really good advice because people could perhaps see 0:17:43.530 --> 0:17:46.530 something online and think, well, that looks like a fantastic 0:17:46.530 --> 0:17:48.810 scheme, I really need to get in on this. But 0:17:48.810 --> 0:17:52.050 actually, if it's too good to be true, then you 0:17:52.050 --> 0:17:53.760 need to walk away, and that's why I need to 0:17:53.760 --> 0:17:55.080 understand why investing works. 0:17:55.290 --> 0:17:58.830 It's about learning about yourself and your reaction when there's 0:17:59.010 --> 0:18:00.420 big moves in the stock market. 0:18:00.840 --> 0:18:01.830 Learning by doing. 0:18:01.890 --> 0:18:02.669 Learning by doing. 0:18:03.630 --> 0:18:06.660 So, if viewers and listeners are anything like me, they'll 0:18:06.660 --> 0:18:08.160 want to go and have a cup of tea or 0:18:08.160 --> 0:18:10.169 a cup of coffee after listening to this chat and 0:18:10.170 --> 0:18:12.660 really think about what we've been talking about today, because 0:18:12.660 --> 0:18:15.690 it's been so fascinating. But whilst they're waiting for the 0:18:15.690 --> 0:18:19.170 kettle to boil, what's one thing they could do after 0:18:19.440 --> 0:18:20.730 our discussion today? 0:18:21.150 --> 0:18:23.189 So, one thing they could do is probably check their 0:18:23.190 --> 0:18:26.670 pension contribution. How is their pension invested? And if you 0:18:26.670 --> 0:18:30.389 don't have a pension, is maybe getting informed about opening 0:18:30.450 --> 0:18:33.540 maybe a personal pension or a SIP and really trying 0:18:33.540 --> 0:18:37.109 to think about your future self, and this should be 0:18:37.109 --> 0:18:38.190 one of your top goals. 0:18:38.400 --> 0:18:41.580 Fab, log into your pension account. Great stuff. Thank you 0:18:41.580 --> 0:18:43.590 so much, Emilie, it's been such a pleasure having you. 0:18:43.770 --> 0:18:44.490 Thanks for having me. 0:18:46.109 --> 0:18:48.840 That's it for part one of our investing chat. In 0:18:48.840 --> 0:18:51.960 part two, we'll be getting more practical. We'll talk through 0:18:51.960 --> 0:18:54.449 the different ways you can invest and how to build 0:18:54.480 --> 0:18:58.740 a diversified portfolio. So, if today helps you feel a 0:18:58.740 --> 0:19:01.950 little bit curious about investing, part two is where we'll 0:19:01.950 --> 0:19:06.060 turn that confidence into action. So, why not share this 0:19:06.060 --> 0:19:09.540 episode with a friend? Start your investing journey together and 0:19:09.540 --> 0:19:13.530 help them get a little bit richer too. This podcast 0:19:13.619 --> 0:19:16.080 is brought to you by L& G. You can keep 0:19:16.080 --> 0:19:20.850