1 00:00:05,670 --> 00:00:07,920 Sean Aylmer: Welcome to the Fear and Greed Business Interview. I'm Sean 2 00:00:08,130 --> 00:00:12,059 Sean Aylmer: Aylmer. The intergenerational wealth gap is holding young Australians back 3 00:00:12,240 --> 00:00:14,849 Sean Aylmer: according to new research, and seven in 10 people are 4 00:00:14,849 --> 00:00:18,119 Sean Aylmer: facing financial strain due to lower wages growth and high 5 00:00:18,210 --> 00:00:20,520 Sean Aylmer: inflation. But even in the midst of the cost- of- 6 00:00:20,520 --> 00:00:24,030 Sean Aylmer: living crisis, investors are apparently choosing to cutback in other 7 00:00:24,030 --> 00:00:27,090 Sean Aylmer: areas rather than limit the amount they're saving or investing. 8 00:00:27,300 --> 00:00:30,450 Sean Aylmer: The findings are from the Stake Ambition Report, a survey 9 00:00:30,450 --> 00:00:34,109 Sean Aylmer: of more than 2, 000 non- retiree investors by online 10 00:00:34,109 --> 00:00:37,680 Sean Aylmer: investment platform Stake. Remember, this is general information only and 11 00:00:37,680 --> 00:00:40,589 Sean Aylmer: you should always seek professional advice before making investment decisions. 12 00:00:40,800 --> 00:00:43,800 Sean Aylmer: John Howie is the CEO of Stake. John, welcome back 13 00:00:43,800 --> 00:00:44,550 Sean Aylmer: to Fear and Greed. 14 00:00:44,848 --> 00:00:45,479 John Howie: Great to be here. 15 00:00:46,200 --> 00:00:48,420 Sean Aylmer: I'll get to the investing side of the report shortly, 16 00:00:48,420 --> 00:00:50,278 Sean Aylmer: but it also showed just how much the cost- of- 17 00:00:50,280 --> 00:00:53,789 Sean Aylmer: living crisis is hurting people and one of the main 18 00:00:53,789 --> 00:00:55,650 Sean Aylmer: challenges is slow wages growth. 19 00:00:55,800 --> 00:00:59,040 John Howie: Yeah, absolutely. That's right. I think what we've seen from 20 00:00:59,040 --> 00:01:03,209 John Howie: the report is wages haven't really kept up with inflation 21 00:01:03,270 --> 00:01:06,659 John Howie: over the last few years, and the respondents to the 22 00:01:06,660 --> 00:01:09,690 John Howie: survey are really feeling that and ultimately they're starting to 23 00:01:09,690 --> 00:01:11,969 John Howie: think about what they can do to shore up their 24 00:01:11,969 --> 00:01:13,048 John Howie: financial futures. 25 00:01:14,999 --> 00:01:17,580 Sean Aylmer: I've heard you talk about it. I mean, they're upskilling, 26 00:01:17,880 --> 00:01:21,809 Sean Aylmer: they're putting things off, engaging with financial markets to hopefully 27 00:01:21,809 --> 00:01:24,959 Sean Aylmer: make some money. They're being quite proactive though to make 28 00:01:24,959 --> 00:01:26,039 Sean Aylmer: up the gap, John. 29 00:01:27,000 --> 00:01:29,069 John Howie: Yeah, that's right. I think that was probably one of 30 00:01:29,069 --> 00:01:31,620 John Howie: the more interesting results that we got from the survey 31 00:01:31,620 --> 00:01:36,420 John Howie: is that rather than do nothing or pretend things are 32 00:01:36,420 --> 00:01:39,090 John Howie: going to change, what we've seen is the respondents to 33 00:01:39,090 --> 00:01:41,699 John Howie: the survey actually are starting to take control of the 34 00:01:41,700 --> 00:01:45,479 John Howie: things they can actually control, and that is how much 35 00:01:45,480 --> 00:01:49,170 John Howie: they spend, how much they save, what they own. A 36 00:01:49,170 --> 00:01:52,260 John Howie: lot of the respondents were saying ultimately that what you 37 00:01:52,260 --> 00:01:54,240 John Howie: own is more important than how hard you work, and 38 00:01:54,240 --> 00:01:57,149 John Howie: that's evidenced by the fact that even though people are 39 00:01:57,150 --> 00:02:00,870 John Howie: feeling the pinch, 80% of them are still actually focused 40 00:02:00,870 --> 00:02:02,490 John Howie: on maintaining their investments. 41 00:02:03,089 --> 00:02:05,279 Sean Aylmer: Yeah. I mean, did that surprised you, the fact that 42 00:02:05,279 --> 00:02:08,730 Sean Aylmer: they did say that? The fact that the majority of 43 00:02:08,730 --> 00:02:12,060 Sean Aylmer: people think that what they own is more important than 44 00:02:12,060 --> 00:02:15,389 Sean Aylmer: how hard you work because that's the antithesis of how 45 00:02:15,389 --> 00:02:16,679 Sean Aylmer: I was brought up, for example. 46 00:02:17,639 --> 00:02:19,740 John Howie: Yeah, look, it's really interesting. When we looked at the 47 00:02:19,740 --> 00:02:24,508 John Howie: numbers, many of our older survey respondents actually said the opposite. 48 00:02:25,200 --> 00:02:27,150 Sean Aylmer: John, you now you're aging me. You know that, don't you? 49 00:02:28,860 --> 00:02:29,820 John Howie: Not intentional. 50 00:02:30,000 --> 00:02:32,459 Sean Aylmer: No, I know. I think I did it myself. Go on. 51 00:02:33,300 --> 00:02:37,530 John Howie: But yeah, I think older investors still say that how 52 00:02:37,530 --> 00:02:40,500 John Howie: hard you work is really important, but I think younger 53 00:02:40,500 --> 00:02:45,030 John Howie: investors have lived through a different reality in that we've 54 00:02:45,030 --> 00:02:51,418 John Howie: seen asset prices, both property and shares, accelerate really strongly, 55 00:02:51,480 --> 00:02:55,738 John Howie: certainly over the last 10 years or so. Younger investors 56 00:02:55,740 --> 00:02:59,729 John Howie: are feeling the pressure from housing prices, and again, housing 57 00:02:59,730 --> 00:03:04,290 John Howie: prices have become out of reach for many. And I 58 00:03:04,290 --> 00:03:07,740 John Howie: think what you're seeing is that that's then coming through 59 00:03:07,740 --> 00:03:12,540 John Howie: in the responses, in that younger investors really have observed 60 00:03:12,570 --> 00:03:15,538 John Howie: what's been going on in markets in terms of wages, 61 00:03:15,540 --> 00:03:18,570 John Howie: in terms of property prices, and I think there's truth 62 00:03:18,570 --> 00:03:19,260 John Howie: in what they're saying. 63 00:03:20,310 --> 00:03:23,880 Sean Aylmer: So does it motivate younger Australians? I mean the fact 64 00:03:23,880 --> 00:03:27,809 Sean Aylmer: that older people, i. e. me, I have a mortgage, 65 00:03:27,809 --> 00:03:29,700 Sean Aylmer: but at least I've paid a bunch of it down. 66 00:03:29,700 --> 00:03:31,860 Sean Aylmer: I have superannuation and I've been working for many years, 67 00:03:31,860 --> 00:03:34,529 Sean Aylmer: so I have a chunk of superannuation. Is that a 68 00:03:34,529 --> 00:03:37,950 Sean Aylmer: motivating factor for younger Australians seeing elder Australians in that position? 69 00:03:38,910 --> 00:03:42,420 John Howie: I think it cuts both ways. I think we do 70 00:03:42,420 --> 00:03:46,830 John Howie: see response to the survey, there are concerns about the 71 00:03:46,830 --> 00:03:51,780 John Howie: generational wealth gap, and I think younger investors are thoughtful 72 00:03:51,780 --> 00:03:54,390 John Howie: around that. I think from a societal point of view, 73 00:03:54,840 --> 00:03:57,150 John Howie: we do need to just keep that in the back 74 00:03:57,150 --> 00:03:59,279 John Howie: of our mind, that I don't think from a societal 75 00:03:59,280 --> 00:04:01,890 John Howie: point of view it's healthy that that gap gets too 76 00:04:01,890 --> 00:04:06,210 John Howie: wide. But I also think that younger investors realize that 77 00:04:06,240 --> 00:04:09,630 John Howie: they've got time on their side. And ultimately what that 78 00:04:09,630 --> 00:04:12,570 John Howie: means is that if they, again, stay focused on the 79 00:04:12,570 --> 00:04:16,169 John Howie: things they can control, obviously it's very hard for an 80 00:04:16,170 --> 00:04:20,250 John Howie: individual to control property prices or control groceries prices for 81 00:04:20,250 --> 00:04:23,789 John Howie: example, but they can control what they do with their money. 82 00:04:23,849 --> 00:04:27,839 John Howie: And when we talk to younger investors, actually more than 83 00:04:27,839 --> 00:04:31,440 John Howie: half, two thirds of them actually say they are reasonably confident about 84 00:04:31,440 --> 00:04:35,159 John Howie: their financial futures, which is great news. And ultimately what 85 00:04:35,160 --> 00:04:38,070 John Howie: that means in terms of the practicalities of how they 86 00:04:38,070 --> 00:04:41,219 John Howie: manage their money is they are cutting back on luxuries 87 00:04:41,219 --> 00:04:43,980 John Howie: like going out, maybe holidays and things like that, but 88 00:04:43,980 --> 00:04:47,339 John Howie: they're maintaining their investments, and again, they stay pretty positive about 89 00:04:47,339 --> 00:04:47,820 John Howie: the future. 90 00:04:48,300 --> 00:04:50,010 Sean Aylmer: Stay with me, John, we'll be back in a minute. 91 00:04:56,339 --> 00:05:00,539 Sean Aylmer: I'm speaking to John Howie, CEO of Stake. It's a 92 00:05:00,540 --> 00:05:04,559 Sean Aylmer: pretty responsible way to think about the next 40, 50 years 93 00:05:04,559 --> 00:05:07,920 Sean Aylmer: if you're a 25 or 30- year- old if you're still investing. 94 00:05:08,279 --> 00:05:10,830 Sean Aylmer: Did that surprise you, just the fact that they are still investing? 95 00:05:12,150 --> 00:05:16,440 John Howie: It didn't surprise us because we see how our customers 96 00:05:16,440 --> 00:05:20,249 John Howie: behave on the Stake platform every day and we see 97 00:05:20,250 --> 00:05:22,949 John Howie: that they continue to save, they're in it for the 98 00:05:22,949 --> 00:05:26,010 John Howie: long term. We talk to them in other surveys about 99 00:05:26,250 --> 00:05:29,490 John Howie: what their goals are, and really their goals are multi- 100 00:05:29,940 --> 00:05:34,260 John Howie: decade goals about building a comfortable retirement, having enough income 101 00:05:34,260 --> 00:05:37,738 John Howie: to live on, potentially having the option to throttle back 102 00:05:37,740 --> 00:05:39,959 John Howie: on how hard they work in later years. So they've 103 00:05:39,960 --> 00:05:43,140 John Howie: really got long- term goals. I think it is a 104 00:05:43,140 --> 00:05:47,040 John Howie: little bit surprising, relative to the narrative that we sometimes 105 00:05:47,040 --> 00:05:50,760 John Howie: hear more broadly, in that I think in the past 106 00:05:50,760 --> 00:05:54,750 John Howie: you've had ... I guess there's been potentially disparaging comments around 107 00:05:54,750 --> 00:05:57,329 John Howie: smashed avo on toast and those kinds of things heard 108 00:05:57,330 --> 00:06:00,030 John Howie: a few years ago, where there was I guess an 109 00:06:00,360 --> 00:06:04,589 John Howie: implication that young people were not responsible with their money. 110 00:06:04,589 --> 00:06:07,830 John Howie: And I actually think in this survey we've seen exactly 111 00:06:07,830 --> 00:06:11,428 John Howie: the opposite in they are thinking very carefully about long- 112 00:06:11,428 --> 00:06:13,649 John Howie: term. They're planning for that and they're taking action. 113 00:06:14,700 --> 00:06:17,669 Sean Aylmer: What about in terms of where they're putting their money? 114 00:06:17,670 --> 00:06:20,430 Sean Aylmer: Now I know we have some figures here from you 115 00:06:20,820 --> 00:06:24,810 Sean Aylmer: in terms of the top five stocks, ASX stocks bought 116 00:06:24,810 --> 00:06:28,799 Sean Aylmer: last financial year. What I think is fascinating is four 117 00:06:28,800 --> 00:06:31,560 Sean Aylmer: of the top five, in fact the top four, are ETFs. 118 00:06:32,070 --> 00:06:35,940 John Howie: Yeah, that's right. This is a pretty consistent pattern that 119 00:06:35,940 --> 00:06:38,669 John Howie: we see. So we obviously provide access both to US 120 00:06:38,670 --> 00:06:42,870 John Howie: equities and Aussie equities, and that includes exchange traded funds, 121 00:06:42,870 --> 00:06:47,609 John Howie: which are listed on those exchanges. What we generally see 122 00:06:47,610 --> 00:06:51,779 John Howie: is our investors will usually pick single stocks that they 123 00:06:51,779 --> 00:06:55,409 John Howie: are familiar with and that they believe are going to 124 00:06:55,439 --> 00:06:58,710 John Howie: continue to be part of I guess the evolution in 125 00:06:58,710 --> 00:07:02,339 John Howie: the digital economy and the growth in technology. So we 126 00:07:02,339 --> 00:07:04,800 John Howie: see a lot of stocks in the US in particular, 127 00:07:04,800 --> 00:07:07,500 John Howie: just because the US has such a large and active 128 00:07:07,559 --> 00:07:13,380 John Howie: technology sector, but our investors also think about important investing 129 00:07:13,380 --> 00:07:18,150 John Howie: concepts like diversification. And ultimately where we see that manifest 130 00:07:18,150 --> 00:07:21,510 John Howie: in their use of exchange traded funds. As you said, 131 00:07:21,510 --> 00:07:26,129 John Howie: the top five securities held in Australia from our investors 132 00:07:26,130 --> 00:07:29,069 John Howie: are actually ETFs, and generally those broad ETFs which are 133 00:07:29,070 --> 00:07:34,380 John Howie: giving investors exposure to broad Aussie equities, broad US equities, 134 00:07:34,380 --> 00:07:36,420 John Howie: broad international equities, for example. 135 00:07:37,110 --> 00:07:39,330 Sean Aylmer: And then the US stocks that are bought on Stake, 136 00:07:40,050 --> 00:07:43,320 Sean Aylmer: exactly the names you would expect, except for the order. 137 00:07:43,559 --> 00:07:47,040 Sean Aylmer: So Tesla was number one, then Nvidia, Apple, Amazon, Microsoft. 138 00:07:47,369 --> 00:07:50,730 Sean Aylmer: It is interesting that Tesla, and it has an incredibly 139 00:07:50,730 --> 00:07:55,290 Sean Aylmer: charismatic and high- profile boss, probably the worst performing of 140 00:07:55,290 --> 00:07:58,290 Sean Aylmer: those five stocks last year, but it still seems to 141 00:07:58,290 --> 00:07:59,130 Sean Aylmer: attract investors. 142 00:07:59,969 --> 00:08:04,620 John Howie: Yeah, look, it's interesting. Tesla's been a very long- term 143 00:08:04,949 --> 00:08:07,920 John Howie: popular stock on our platform. I think thankfully for our 144 00:08:07,920 --> 00:08:09,871 John Howie: investors that the share price has kind of turned around in the last couple of weeks, which is great. 145 00:08:09,871 --> 00:08:09,872 Sean Aylmer: Yeah, that's true. 146 00:08:09,872 --> 00:08:15,870 John Howie: Nvidia has been huge. Obviously a lot of focus on 147 00:08:15,929 --> 00:08:19,739 John Howie: AI, but then you've got the other names that you 148 00:08:19,740 --> 00:08:24,030 John Howie: would expect like Apple, Microsoft, et cetera, really those huge, 149 00:08:24,660 --> 00:08:29,250 John Howie: broadly diversified, very successful technology companies, which makes a lot 150 00:08:29,250 --> 00:08:29,790 John Howie: of sense. 151 00:08:30,570 --> 00:08:32,610 Sean Aylmer: Looking ahead to the next 12 months, investors say they're 152 00:08:32,610 --> 00:08:36,450 Sean Aylmer: looking at gold, Evs, as in electric vehicles, and artificial 153 00:08:36,450 --> 00:08:40,860 Sean Aylmer: intelligence. I can understand EVs and AI because they're high- 154 00:08:40,920 --> 00:08:44,400 Sean Aylmer: profile spaces, the fact that gold came in that, I 155 00:08:44,400 --> 00:08:46,828 Sean Aylmer: think it was number one in fact, I mean, I 156 00:08:46,830 --> 00:08:49,110 Sean Aylmer: suppose it suggests there is nervousness out there, but I've 157 00:08:49,110 --> 00:08:51,179 Sean Aylmer: never thought of gold as a sexy place to put 158 00:08:51,179 --> 00:08:51,600 Sean Aylmer: your money. 159 00:08:52,110 --> 00:08:58,170 John Howie: Yeah, I don't know. I certainly wouldn't call it sexy. I think this 160 00:08:58,170 --> 00:09:04,110 John Howie: is evidence of people being mindful of particularly of inflation, 161 00:09:04,830 --> 00:09:08,700 John Howie: and there are a few ways that investors can think 162 00:09:08,700 --> 00:09:12,899 John Howie: about hedging themselves against inflation. Commodities generally is one of 163 00:09:12,900 --> 00:09:16,260 John Howie: the very popular areas to think about that. And ultimately, 164 00:09:16,619 --> 00:09:20,040 John Howie: gold is that core store of value. So we have 165 00:09:20,040 --> 00:09:24,090 John Howie: seen gold used very much as an inflation hedge, and 166 00:09:24,480 --> 00:09:28,620 John Howie: to some extent a protection against the devaluation of fiat currencies. 167 00:09:29,429 --> 00:09:32,670 Sean Aylmer: It's kind of encouraging I think that people who are 168 00:09:32,670 --> 00:09:36,179 Sean Aylmer: younger are thinking about all this stuff, John, because we 169 00:09:36,179 --> 00:09:37,858 Sean Aylmer: have the baby ... I mean, the oldest of the baby 170 00:09:37,860 --> 00:09:40,650 Sean Aylmer: boomers are probably at the end of their life. The 171 00:09:40,650 --> 00:09:44,610 Sean Aylmer: youngest of the baby boomers are retiring now. So there's 172 00:09:44,610 --> 00:09:49,230 Sean Aylmer: this big bump of wealth there, which be it through 173 00:09:49,259 --> 00:09:52,199 Sean Aylmer: inheritance or bank of mom and dad or whatever, will 174 00:09:52,199 --> 00:09:56,040 Sean Aylmer: be passed down. But it is encouraging I reckon that 175 00:09:56,220 --> 00:09:58,380 Sean Aylmer: people are thinking so much about it, and particularly people 176 00:09:58,380 --> 00:10:00,329 Sean Aylmer: who aren't 50, but who are 30 or 40. 177 00:10:01,020 --> 00:10:05,160 John Howie: Look, I think it's extremely encouraging. And as I said, I think we 178 00:10:05,160 --> 00:10:07,858 John Howie: think about this, obviously from a business point of view 179 00:10:07,860 --> 00:10:10,109 John Howie: we want to serve our customers, we want to give 180 00:10:10,109 --> 00:10:16,020 John Howie: them really seamless ways to participate in financial markets. But 181 00:10:16,020 --> 00:10:18,449 John Howie: from a broad societal point of view, it's really important 182 00:10:18,450 --> 00:10:21,599 John Howie: that everyone feels like they can participate, that they can take 183 00:10:21,599 --> 00:10:24,870 John Howie: control of their own financial futures. That there are things 184 00:10:24,870 --> 00:10:28,139 John Howie: that they can do despite the fact that inflation comes and 185 00:10:28,139 --> 00:10:31,650 John Howie: goes and property prices go up and down. But when 186 00:10:31,650 --> 00:10:34,650 John Howie: we talk to our customers, a sense of control, a 187 00:10:34,650 --> 00:10:37,860 John Howie: sense of confidence in managing their financial futures is really 188 00:10:37,860 --> 00:10:40,679 John Howie: important to them. And ultimately that's I think the results 189 00:10:40,679 --> 00:10:42,780 John Howie: that you're starting to see through surveys like this. 190 00:10:43,200 --> 00:10:44,940 Sean Aylmer: John, thank you for talking to Fear and Greed. 191 00:10:45,210 --> 00:10:45,990 John Howie: Really appreciate it. 192 00:10:46,320 --> 00:10:49,800 Sean Aylmer: That's John Howie, Chief Executive of online investment platform Stake. 193 00:10:50,040 --> 00:10:52,350 Sean Aylmer: This is the Fear and Greed Business Interview. Remember, this 194 00:10:52,350 --> 00:10:55,140 Sean Aylmer: is general information only and you should seek professional advice 195 00:10:55,140 --> 00:10:58,229 Sean Aylmer: before making investment decisions. Join us every morning for the 196 00:10:58,230 --> 00:11:00,509 Sean Aylmer: full episode of Fear and Greed, business news, for people 197 00:11:00,509 --> 00:11:03,478 Sean Aylmer: who make their own decisions. I'm Sean Aylmer, enjoy your day.