Speaker 1: Welcome to the Friends with Money podcast, brought to you
Speaker 1: by Money Magazine, creating financial freedom for Australians since nineteen
Speaker 1: ninety nine.
Speaker 2: Hello, and thanks for joining us for another episode of
Speaker 2: Friends with Money, money Magazine's podcast to help you earn, save,
Speaker 2: and achieve your financial goals. My name is Tom Watson,
Speaker 2: a senior journal us here at Money Magazine, and as
Speaker 2: always it is a pleasure to be with you. On
Speaker 2: today's episode, we have a very special guest joining us,
Speaker 2: someone who are many of you listening will already be
Speaker 2: familiar with, but really his voice perhaps so very big.
Speaker 2: Welcome to author, retired financial planner and host of the
Speaker 2: This Is Money podcast, Glenn James. Glenn, it is a
Speaker 2: pleasure to have you on board today. Did I miss
Speaker 2: anything there in terms of your various titles and accomplishments.
Speaker 3: No, you didn't. Thanks for having me, Tom, It's great
Speaker 3: to have a chat with you.
Speaker 2: I know you're having a busy week mate, so we
Speaker 2: really appreciate you coming on board and listen. I might
Speaker 2: be doing a bit of a disservice here to our
Speaker 2: former guests, but I think it's fair to say that
Speaker 2: we might not have ever had a guest on Friends
Speaker 2: with Money before who's logged quite as many hours chatting
Speaker 2: about the world of money and finance as you have.
Speaker 2: So given that, and given that you've got a brand
Speaker 2: new book coming out on investing, Glenn, I think we'd
Speaker 2: be stupid not to tap into that experience of yours
Speaker 2: today and some of the investing tips and lessons that
Speaker 2: you've learned along the way. So does that sound all
Speaker 2: right to you?
Speaker 3: Sounds really good.
Speaker 2: Well, before we get into that, then tell us about
Speaker 2: your new book, Glenn. What's it all about? What inspired
Speaker 2: you to write it? And you know what can people
Speaker 2: expect to get out of it?
Speaker 3: Yeah, So thanks for asking firstly, And you know, I
Speaker 3: since I've done this is Money and it used to
Speaker 3: be called My Millennial Money, and we rebranded at the
Speaker 3: start of the year. I think we're into our seventh
Speaker 3: year of podcasting. The number one topic that our listeners
Speaker 3: want to talk about and to do is invest in shares, right,
Speaker 3: And it's been the same for all those years. And
Speaker 3: I've always wanted to, you know, write books and you know,
Speaker 3: put information out there and to help people. And I've
Speaker 3: only now just written the investing book because I didn't
Speaker 3: want to just start and write a book just on
Speaker 3: investing because I wanted to. The way I teach people
Speaker 3: is you need to get the structure of your life
Speaker 3: sorted first, basic money hygiene. You need to understand money,
Speaker 3: You need to understand the lay of the land. So
Speaker 3: we did that in the Sort your Money Out book,
Speaker 3: and then we did a book Sought your Career Out,
Speaker 3: which I called the prequel to that. And because if
Speaker 3: you look at investing, where do you get the money
Speaker 3: from to invest? From your job, from your career, And
Speaker 3: it was really important to me that people who listen
Speaker 3: to our podcast really get encouraged to dial into their
Speaker 3: career because your career is an annuity pumping out hundreds
Speaker 3: of thousands of dollars millions of dollars over your lifetime.
Speaker 2: So you need to get that right.
Speaker 3: So you get the basic personal finance stuff right, learn
Speaker 3: a bit about super debt, all the things, the boring stuff,
Speaker 3: live insurance, all that stuff. Then make sure your career
Speaker 3: is nailed. Then we can go, Okay, let's start investing.
Speaker 3: And that's why this year, in twenty twenty four, we're
Speaker 3: releasing the Quick Start Guide to Investing.
Speaker 2: So very important question. Then Glenn does, When does the
Speaker 2: book come out? And where can people get themselves a
Speaker 2: copy if they're interested.
Speaker 3: Well, the good news is Tom the book is available
Speaker 3: right now. It's just been released. You can get it
Speaker 3: wherever you find books online, anywhere, you know. I tell people,
Speaker 3: they're like, oh, you're an author, Like, I'm not an author.
Speaker 3: I'm just a guy who writes some books, because I'm not.
Speaker 3: I'm just out here trying to encourage people with their money,
Speaker 3: with their investing. And we're going to get to some tips,
Speaker 3: right And anytime I do content and tips, I rarely, rarely, rarely.
Speaker 3: I don't think I've ever done a podcast episode on
Speaker 3: what's the top five cheapest brokerage accounts? What are the
Speaker 3: top five cheapest ETFs? I've never done that. So when
Speaker 3: I teach people and the tips that we're going to
Speaker 3: get into, they're not tips like make sure you pay
Speaker 3: the lowest fees and make sure you've got the best
Speaker 3: app that you can use. Like all that stuff's hygiene,
Speaker 3: Like you can you can start investing today. That's not
Speaker 3: the issue. And talking about this book more and writing
Speaker 3: the book, I've really distilled that it's really easy to invent.
Speaker 3: The hard part is staying invested interesting. I really want
Speaker 3: to get into this now, so let's do it. I
Speaker 3: was dead keen before we came on to get some
Speaker 3: of your in science plan and some of the tips
Speaker 3: that you picked.
Speaker 2: Up along your journey so far. And as I said,
Speaker 2: I'm sure listeners are too, So where would you like
Speaker 2: to start?
Speaker 3: Look, they probably I'll do five quick tips and we'll
Speaker 3: start in order, because I think it's important to build
Speaker 3: on the next one. So the first one I touched
Speaker 3: on it with when I talked about my first book,
Speaker 3: You've got to get your house in order before you
Speaker 3: worrying about investing for the you of tomorrow. So I
Speaker 3: like to tell people we have to do the you
Speaker 3: of tomorrow a favor today, but we can't do that
Speaker 3: today if your house isn't in order, I teach, and
Speaker 3: it is in the Quick Start Guide to Investing my
Speaker 3: Sound Financial House, where when you build a house, you
Speaker 3: start with the foundations, then you pour the slab, then
Speaker 3: you put the walls up, then you put the roof.
Speaker 3: A lot of people when I was a financial advisor
Speaker 3: would come into my office and say, I want to
Speaker 3: invest in shares, I want to buy property. That's like
Speaker 3: the house of the roof. Yeah, we can do that,
Speaker 3: that's easy. But have you got good foundations? Have you got.
Speaker 2: Goals which is like the walls of the house.
Speaker 3: And so if we go to get your house in order,
Speaker 3: are you out of consumer debt? Do you have an
Speaker 3: emergency fund, do you have a spending plan or budget?
Speaker 3: Do you have your estate plans ordered? Do you have
Speaker 3: your life and income insurances in place? Like get your
Speaker 3: house in order? And then what that kind of leads
Speaker 3: to is, once you've got a solid spending plan slash budget,
Speaker 3: you will genuinely know how much money you've got left
Speaker 3: over each week, each month, each whatever. Then out of
Speaker 3: that leftover money and it's tied out there, so leftover
Speaker 3: money might be a lot less than it was five
Speaker 3: years ago. You can say I've got x amount left
Speaker 3: per month. I'm going to peel off a portion maybe
Speaker 3: forty percent, fifty percent and put into my current lifestyle goals.
Speaker 3: But then the rest I'm going to invest for the future.
Speaker 3: And this all comes back to it's easy to get invested,
Speaker 3: it's hard to stay invested because you start investing tomorrow
Speaker 3: you don't have your house in order. Rego comes up, Oh,
Speaker 3: I've got to sell down some shares and pay for
Speaker 3: that start investing tomorrow. That's easy. Oh crap, broke my
Speaker 3: tooth two thousand dollars root canal some stuff fly that
Speaker 3: I don't know. Oh, where are going to get the
Speaker 3: money from? Comes out of the investing account. So easy
Speaker 3: to get invested, it's hard to stay invested.
Speaker 2: I love that. I love the idea of getting your
Speaker 2: house in order, getting those fundamentals right, giving you that
Speaker 2: kind of nice base to kind of launch on, and
Speaker 2: then get into the investing side of things. So after
Speaker 2: people get the houses in order, Glenn, Yeah, what would
Speaker 2: you say next? What comes after?
Speaker 3: I want people then to think about why they are investing.
Speaker 3: And I covered this I think in the first or
Speaker 3: second chapter, and like, why do you want to build
Speaker 3: a strong financial future? Is it because you grew up
Speaker 3: and you didn't have much money and you want to
Speaker 3: change the rest of your life and your family tree?
Speaker 1: Is it?
Speaker 3: Maybe you've got children and you want to give them
Speaker 3: the opportunity that you didn't have growing up. Do you
Speaker 3: have older parents or relatives that don't have much money
Speaker 3: now and their retirement isn't dignified? So why do you
Speaker 3: want to invest? And this could even be back to savings.
Speaker 3: Most of the time, it's easy to save money if
Speaker 3: you've got a strong goal. It's like I want to
Speaker 3: save up and go on an overseas whole. I'm putting
Speaker 3: money in there. And then once you have that really
Speaker 3: strong goal, it's easier to fend off temptations like oh,
Speaker 3: I want to go to this concert. Okay, what do
Speaker 3: I want more to save for this holiday or to
Speaker 3: go to this concert in the short term, No, I'm
Speaker 3: saving for the holiday. So we need to get to
Speaker 3: that bedrock. Why do you want to invest? What is
Speaker 3: your why?
Speaker 2: I can see the financial advisor coming out near there. Man,
Speaker 2: I don't think i've ever so advisor or without talking
Speaker 2: about goals and no, yeah, yeah, absolutely, Ran as well,
Speaker 2: it's easy to say that I want to make more money,
Speaker 2: but having that clear goal, and we talked about this
Speaker 2: on a Saving Skoll episode a couple of months back
Speaker 2: as well, that really helps people kind of, as you said,
Speaker 2: lock in and kind of focus clearly on that and
Speaker 2: make sure that they're focusing on that as opposed to
Speaker 2: other things. So it makes a lot of sense.
Speaker 3: So my next tip tip three, once we've got our
Speaker 3: house in order. Once we've focused on our why and
Speaker 3: you got that nailed, we've got to look at our strategy.
Speaker 3: What is our strategy? Now this is a bigger discussion
Speaker 3: than three minutes on a podcast. And I spent a
Speaker 3: lot of time in the book in the strategy world,
Speaker 3: and as you said, the financial advisor jumped out of me.
Speaker 3: Now when it comes to strategy, there's a couple of
Speaker 3: things happening. The first thing you need to look at,
Speaker 3: coupled with your why you're investing, is when, like when
Speaker 3: is that money going to be needed? So a lot
Speaker 3: of that can come back to part of your strategy
Speaker 3: with your ownership structure. Am I investing it in my
Speaker 3: own name in a joint names with a spouse or partner?
Speaker 3: Are we using superannuation? Are we using an investment bond
Speaker 3: if we want to invest for our grandchildren for example?
Speaker 3: Are we using an investment bond for some type of
Speaker 3: a state planning thing? So we really get into ownership structure.
Speaker 3: So what ownership's structure do we use? Because within each
Speaker 3: ownership structure there's probably three main things that you need
Speaker 3: to consider. The first one is the tax year on year,
Speaker 3: So our investments produce income, So we need to look
Speaker 3: at taxiear on year. The second thing that we need
Speaker 3: to look at is tax upon disposal of an asset.
Speaker 3: Now disposal in the money world means a sale of
Speaker 3: an asset, So what is the tax ramifications when you
Speaker 3: sell down that asset. The third thing that you need
Speaker 3: to look at with the structure is what are the
Speaker 3: estate planning considerations? Is there a blended family, do you
Speaker 3: have children, do you have grandchildren? So you really need
Speaker 3: to look at where am i I've got this, why
Speaker 3: I've got my house in order I want to start investing.
Speaker 3: What's the ownership structure going to be? Because most brokerage accounts,
Speaker 3: most investment platforms, you can plug into any ownership structure.
Speaker 3: Basically it could be carving out investment bonds, but you
Speaker 3: could theoretically set up a trust if you had some
Speaker 3: larger income and high net worth stuff happening and there
Speaker 3: was a bit more complexity investment company all that stuff
Speaker 3: that can own the investing account. So the second part
Speaker 3: of the strategy is what type of investor are you
Speaker 3: going to be? Are you going to be one stop
Speaker 3: shop ETF or managed fund? Are you going to build
Speaker 3: your own small portfolio of ETFs, are you going to
Speaker 3: carve out a portion to have direct equities or some
Speaker 3: speculative things with a lower percentage. So in the book,
Speaker 3: I really give a lot of examples of some real
Speaker 3: life case studies of different life stages and ages and
Speaker 3: what structures and investments they've used.
Speaker 2: And do you find just just a kind of a
Speaker 2: scientist as well gone that people often skip this step,
Speaker 2: skip the strong and just start, as you said, to
Speaker 2: start inressing without that kind of you thought at all.
Speaker 3: Yeah, So I put up in that this is Money
Speaker 3: Facebook group when I was writing the book, I'm like,
Speaker 3: when you first start in investing, like, what percentage of
Speaker 3: you like actually looked at the structure first and thought
Speaker 3: about the strategy stuff. I think only maybe ten percent
Speaker 3: of people said yes to that.
Speaker 2: I would not be one of those. So I can
Speaker 2: totally totally understand.
Speaker 3: That it's all about you've got to do yourself of
Speaker 3: tomorrow a favor today, but also you need to within
Speaker 3: your why and your broader strategy, look at what's the
Speaker 3: most flexible and the most tax advantageous and year on year,
Speaker 3: end upon disposal, and also what happens if you die,
Speaker 3: because like the more that you add to your investment account.
Speaker 3: If it's the wrong structure, it could be a hard
Speaker 3: egg to unscramble. And we also talk in the book
Speaker 3: like if you've got a structure and it's not the
Speaker 3: right what do you do? So look, that's a big
Speaker 3: one there, strategy And I think if you nail the
Speaker 3: strategy piece first and you're why, you'll be all g
Speaker 3: in the H.
Speaker 2: I love this egg scrambling and org in the H
Speaker 2: wonderful something.
Speaker 3: So my fourth tip, you know, once you've set your
Speaker 3: strategy and what you're going to invest in, I want
Speaker 3: you to really go into your suite or into your
Speaker 3: bedroom and look it in the mirror and see who's
Speaker 3: standing there. And you need to work out what type
Speaker 3: of person you are when it comes to money and
Speaker 3: your Behavioral blind spots A lot of people and this
Speaker 3: can feed into strategy in terms of the investment selection.
Speaker 3: My behavioral blind spots is well, they are like I
Speaker 3: think I can build a portfolio and as the best
Speaker 3: portfolio in the world, and I'll get cute and try
Speaker 3: and chop and change and all that stuff and I
Speaker 3: can do it myself. Nah, I just can't do that.
Speaker 3: I need to know that my personality will want to
Speaker 3: do that. There is so much data out there about
Speaker 3: trading shares, single stops, stocks and all that, like the
Speaker 3: more you trade, the less you do over the long term.
Speaker 3: So I've just resolved I can't let that be part
Speaker 3: of my strategy. I need to do a set and
Speaker 3: forget that. You know, behavioral blind spots. I put a
Speaker 3: rule in place that ten percent or less of my
Speaker 3: portfolio value will not be in single stocks or any
Speaker 3: type of speculative angel investing in all that stuff. So
Speaker 3: you've got to understand your behavioral blind spots. Now, with that,
Speaker 3: that pendulum me wanting to do everything and I can
Speaker 3: change the world and all that. The other side of
Speaker 3: that pendulum is the I need perfection, I need certainty
Speaker 3: all this it needs to be perfect before I act.
Speaker 3: That analysis paralysis is on the other side of the
Speaker 3: spectrum or the pendulum. So you just and you might
Speaker 3: just need a bloody pick something and keep shoveling money
Speaker 3: into it because you can't control the world.
Speaker 2: As an excellent point, we talked about analysis paralysis again
Speaker 2: on a very recent pod, and it's something that stopped
Speaker 2: me from inresting for a very long time. Waiting trying
Speaker 2: to work out exactly what I wanted to do. But
Speaker 2: now that I'm in, it's interesting because I'm very similar
Speaker 2: to what you said at the time. You know, I've
Speaker 2: got a couple years under my belt now and I'm thinking, well,
Speaker 2: you know, why don't I try and buy this single
Speaker 2: stock and see how it goes? And it's off in
Speaker 2: those ones that are that don't go as well, so
Speaker 2: I'd like them too. So resonates resonates well with me,
Speaker 2: that's for sure.
Speaker 3: Now my fifth point kind of to bring it home
Speaker 3: is I've really really resolved that. Look, I once purchased
Speaker 3: an IPO pre IPO got convertible notes that listed I
Speaker 3: think I did seven hundred in two weeks, like huge,
Speaker 3: huge thing.
Speaker 1: And.
Speaker 3: I realized, and you can fall into the trap, and
Speaker 3: a lot of the crypto bros and all that are
Speaker 3: in this trap. You think that because you've picked a
Speaker 3: winner and you made lots of money, that you're somehow
Speaker 3: a pro when it comes to investing. Most like, no,
Speaker 3: you're actually a you're really good at being a plumber
Speaker 3: during the day, or you're really good at being a
Speaker 3: marketing manager during the day, Like you're a great nurse
Speaker 3: you you got lucky on a couple of those investing things,
Speaker 3: So stick to what you know. And I've really resolved
Speaker 3: in my life like I'm in the money world every day,
Speaker 3: I'm talking about this crap. Every day, I'm reading every day.
Speaker 3: I'm a nobody when it comes to investing. The market
Speaker 3: does not know Glenn James. The market does not care
Speaker 3: about Glenn James. Any winners that I've picked, guess what
Speaker 3: it's called luck. So I need to know that I'm
Speaker 3: a nobody when it comes to investing. I just focus
Speaker 3: on my income coming in, my expenses going out, and
Speaker 3: what's left over goes to some short term goals and
Speaker 3: then the rest gets parked for future Glen in broad
Speaker 3: based indexes, sure small, maybe little ten percent of some
Speaker 3: quote unquote fun stuff, But I'm in nothing when it
Speaker 3: comes to investing, and most of us.
Speaker 2: What's the what's to say? I'm going to butcher this,
Speaker 2: but it's something like, the more you know, the more
Speaker 2: you realize you don't.
Speaker 3: Know, the more you do something, the more you'll realize
Speaker 3: that you're a passenger in the investing world.
Speaker 2: Absolutely, And I think that's a great kind of lesson
Speaker 2: to learn at some point and also a great place
Speaker 2: to leave our chat today, which has been excellent and
Speaker 2: one that I've seriously enjoyed. Glenn, So thank you so much.
Speaker 2: But before we let you go, where can people find
Speaker 2: you online and listen to your voice and all those
Speaker 2: sorts of things.
Speaker 3: Yeah, so I run a podcast called This is Money.
Speaker 3: Nick my co author, runs a podcast called This is Investing.
Speaker 3: In fact, the parts of the book that he wrote,
Speaker 3: he drilled deep on all the crap that I don't
Speaker 3: do in my own life. So he talks about single stocks,
Speaker 3: he talks about options, trading and advanced strategies. Where so
Speaker 3: with two different people, I kind of put my case
Speaker 3: out of the world, he does his case, and yeah,
Speaker 3: and we've got our Instagram This is Money Dot podcast.
Speaker 3: But yeah, I really appreciate you having me on and
Speaker 3: letting me talk with your listeners today. I hope it's
Speaker 3: been encouraging.
Speaker 2: Well. It has for me and hopefully for everyone else
Speaker 2: as well. Glenn, Thank you so much. Go check out
Speaker 2: Glenn's podcast, everyone, go check out his book when it
Speaker 2: comes out. And we'd love to have you back on
Speaker 2: the show at some point, Glenn, So until then, bubbly chatting.
Speaker 3: Thanks Tom.
Speaker 2: See you friends Bay for this episode of the Friends
Speaker 2: of Money podcast, but don't forget to jump on our
Speaker 2: website moneymag dot com dot Au for your daily dose
Speaker 2: of financial news. Or you can go grab yourself a
Speaker 2: copy of the latest edition of Money Magazine in all
Speaker 2: good newsagents. As always, Friends of Money will be right
Speaker 2: back in your podcast feed next week, so until then,
Speaker 2: I am Tom Watson. Goodbye for now.
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