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Speaker 1: Welcome to Ask Fear and Greed, where we take your

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Speaker 1: questions and do our best to answer them. I'm Michael Thompson,

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Speaker 1: and good afternoon, Sean Aylmer.

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Speaker 2: Hello Michael.

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Speaker 1: Now, Sean, today's question is a little bit different because

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Speaker 1: I reckon it is a question from the youngest listener

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Speaker 1: that we've had contribute to Ask Fear and Greed to date.

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Speaker 1: So Zaide says, I'm thirteen years old. Ah, just thirteen?

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Speaker 1: Is that incredible? And wait for it, it actually gets

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Speaker 1: even better because he says, I'm just getting into investing.

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Speaker 1: Oh God, I wish I got into investing when I

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Speaker 1: was thirsty. I would be in a vastly different position

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Speaker 1: to the one I'm in right now if I'd done

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Speaker 1: that anyway, he says, But me and my dad have

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Speaker 1: been listening to you for over a year in the

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Speaker 1: car on the ride to school. Here is my question.

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Speaker 1: How can people invest in the dollar and how does

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Speaker 1: the price fluctuate? For example, if I have Aussie dollars

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Speaker 1: in my bank and the price increases for Aussie dollars,

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Speaker 1: does my bank account balance go up? Or can I

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Speaker 1: exchange more dollars and get more value? If I'm exchanging

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Speaker 1: it to the US dollar. It's a good question. Can

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Speaker 1: you show me any other thirteen year old who is

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Speaker 1: thinking in that amount of detail right about currency, about

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Speaker 1: investing about market. Just good on his aid for just

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Speaker 1: for actually getting interested. Now, Sean, can you please enter

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Speaker 1: it for both of us?

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Speaker 2: You know, probably not, so I aid the dollar. It's

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Speaker 2: just a price used to value Australian goods and services.

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Speaker 2: That's all it is. It's just this thing that sits

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Speaker 2: there that we use to say something is worth something,

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Speaker 2: and we can put a value on that. And so

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Speaker 2: your bank account that is Australian dollars. You live in Australia,

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Speaker 2: mostly your buying stuff in Australian dollars. Now occasionally you

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Speaker 2: might buy stuff from Timu or something where like that,

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Speaker 2: so you may actually have to exchange in a sense.

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Speaker 2: It probably makes sense there. But this Ousie dollar goes

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Speaker 2: up and down against other currencies. So it goes up

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Speaker 2: and down against the US dollar, the euro, the yen,

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Speaker 2: all sorts of currencies, and that's just based on how

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Speaker 2: many people want it and how many people want to

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Speaker 2: sell it. So we talk about the aud usd exchange rate.

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Speaker 2: Let's say it's sixty five cents. That's how many USD

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Speaker 2: is needed to buy one aud So when we say

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Speaker 2: aud USD, it's how many the last one to buy

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Speaker 2: the first one. When the value goes up, it appreciates.

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Speaker 2: When it goes down, it depreciates. So that's the explanation.

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Speaker 2: The part which I'm loathe to talk about, Zaid is

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Speaker 2: the fact that we are not an investing podcast, so

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Speaker 2: we don't want to give advice on how you should invest.

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Speaker 2: I will say some things, though, I don't think using

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Speaker 2: currency as an investment tool is a particularly sensible thing

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Speaker 2: to do. Now. Alan Greenspan, who's a guy who used

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Speaker 2: to be the head of the central bank in the US,

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Speaker 2: the Federal Reserve Chair, he once made a famous comment.

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Speaker 2: He said forecasting a currency is like flipping a coin.

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Speaker 2: His point being you could be right, you could be wrong.

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Speaker 2: You've got a fifty to fifty chance. So he's saying

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Speaker 2: as an investment investment tool, that ain't a great thing.

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Speaker 2: Maybe a way of doing that. As an example, so

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Speaker 2: if you bought bitcoin today, let's say it's ninety seven

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Speaker 2: thousand US dollars unit you pay in your Australian dollars

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Speaker 2: that you've worked for, you buy one unit of bitcoin,

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Speaker 2: so you're paying ninety seven US dollars. That's about one

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Speaker 2: hundred and fifty Australian dollars. If the Australian dollars goes

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Speaker 2: from sixty five to seventy cents, before you make any money,

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Speaker 2: bitcoin has to go from ninety seven to one hundred

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Speaker 2: and five thousand US dollars. So currencies are tricky because

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Speaker 2: you can have investments and the asset you buy McDonald's shares,

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Speaker 2: Tesla shares, they may go up, but if the currency

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Speaker 2: works in the wrong way, you may not end up

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Speaker 2: with any more money. Michael, the question really was how

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Speaker 2: to do it, and I'm really loath to say it.

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Speaker 2: I mean, I actually once, I actually once got a

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Speaker 2: Comwealth Bank travel card and left money. I was going

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Speaker 2: to the States to put money into US dollars. I

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Speaker 2: think I got it at like seventy five US cents,

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Speaker 2: went to the States, came back, and kind of ages later,

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Speaker 2: the actual travel card was going to cancel because travel

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Speaker 2: cards canceled after a certain amount, and I exchanged the

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Speaker 2: money back at sixty seven cents. So in a sense

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Speaker 2: I made money in that transaction. But that was just

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Speaker 2: like maybe it was.

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Speaker 1: A forgot about the card?

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Speaker 2: Yeah, exactly.

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Speaker 1: The best kind of investment strategy, is it?

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Speaker 2: Nah? No, those money cards, I mean you get such

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Speaker 2: a dreadful exchange, right, those trouble money cards. I wouldn't

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Speaker 2: suggest that. Yeah, I mean you can invest in currency

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Speaker 2: etf so exchange trader funds, a place like Better Shares.

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Speaker 2: You can actually buy investments which what they say hedge

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Speaker 2: against the exchange rate risks, so you pay an extra price,

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Speaker 2: but they'll always give you a set exchange rate. So

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Speaker 2: there's that. But of course, if you're going to do it, Zaid,

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Speaker 2: you and your father go to a financial planner. That's

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Speaker 2: what I say, work out how to do it that way.

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Speaker 2: The actual Aussie dollar, when we talk about it going

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Speaker 2: up and down against Ustella, for you and your bank account,

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Speaker 2: probably doesn't make any difference whatsoever. That's not quite right.

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Speaker 2: But actually it's not quite right because it does make

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Speaker 2: difference to your dad. Right. Your dad's got money in

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Speaker 2: his bank account and he takes it out to fill

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Speaker 2: up the petrol you filip your car, and the price

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Speaker 2: of petrol actually goes up and down based on what

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Speaker 2: the Aussie dollar does, as well as oil prices. There

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Speaker 2: are two parts to it, so and actually for there's

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Speaker 2: a real life example how it does affect you, but

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Speaker 2: investing in it whiskey yea.

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Speaker 1: And I'm just so impressed. I am so so impressed

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Speaker 1: because they'd went on in his email to then say

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Speaker 1: basically that love the podcast and I'm relatively new to

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Speaker 1: investing as a thirteen year old, I don't fully understand

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Speaker 1: and this topic. So that's why I'm asking about it.

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Speaker 1: So not just the fact that he is investing, the

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Speaker 1: fact that he didn't know something so he is asked

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Speaker 1: about it. Interested, Yeah, yeah, just yeah, great anyway, tick

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Speaker 1: tick tick tick tick, a big tick for the answer

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Speaker 1: as well. All round. Great way to finish the week

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Speaker 1: with a fantastic ask, fear and greed. Thank you Zaid

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Speaker 1: for your question, and thank you Sean for answering it.

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Speaker 2: Thank you Michael, Thank you Zaid. Best question of the Yeah,

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Speaker 2: I'm going the whole year.

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Speaker 1: Were considering. We are kind of just we're almost there,

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Speaker 1: almost at I reckon it's going to be beaten. No,

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Speaker 1: we will see, we will see.

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Speaker 2: We get make sure that Zaid and or his dad

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Speaker 2: gets a me and mug.

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Speaker 1: Me and mug. Great idea. Yeah, fantastic IDEA great point.

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Speaker 1: All right, Look, if you've got your own question, you

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Speaker 1: can do it.

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Speaker 2: They did.

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Speaker 1: Send it in via the website. Go to fearangreed dot com.

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Speaker 1: Do you or headlong to LinkedIn, Facebook, Instagram, any of

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Speaker 1: our social media platforms.

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Speaker 2: Send you a question in and.

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Speaker 1: We will do our best to answer that one as well.

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Speaker 1: I am Michael Thompson and this is Ask Fear and

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Speaker 1: Greed