1 00:00:00,360 --> 00:00:02,880 Speaker 1: Just before we get started, we'd like to acknowledge and 2 00:00:03,000 --> 00:00:06,720 Speaker 1: pay respect to Australia's Aboriginal and torrest Rate islander peoples. 3 00:00:07,000 --> 00:00:10,280 Speaker 1: They're the traditional custodians of the lands, the waterways and 4 00:00:10,320 --> 00:00:13,680 Speaker 1: the skies all across Australia. We thank you for sharing 5 00:00:13,800 --> 00:00:15,800 Speaker 1: and for caring for the land on which we are 6 00:00:15,880 --> 00:00:19,360 Speaker 1: able to learn. We pay respects to elders past and present, 7 00:00:19,440 --> 00:00:21,680 Speaker 1: and we share our friendship and our kindness. 8 00:00:22,120 --> 00:00:41,400 Speaker 2: She's on the Money, She's on the Money. 9 00:00:44,960 --> 00:00:48,120 Speaker 3: Hello, and welcome to She's on the Money, the podcast 10 00:00:48,159 --> 00:00:51,960 Speaker 3: for millennials who want financial freedom. Half of Australians, an 11 00:00:52,080 --> 00:00:56,480 Speaker 3: estimated nine point five million people now own shares. But 12 00:00:56,760 --> 00:00:59,920 Speaker 3: if you don't know your divid beginnings from your dividends, 13 00:01:01,920 --> 00:01:05,320 Speaker 3: this is the episode for you. My name is Georger 14 00:01:05,440 --> 00:01:08,560 Speaker 3: King and joining me as always to discuss growth investing 15 00:01:08,640 --> 00:01:12,679 Speaker 3: versus dividend investing is financial advisor Victoria define V. 16 00:01:13,120 --> 00:01:15,880 Speaker 1: How funny this early in the morning, G King, how 17 00:01:16,160 --> 00:01:19,240 Speaker 1: like it? I like it? Indeed, it is a hot topic. 18 00:01:19,360 --> 00:01:22,280 Speaker 1: I mean probably not a hot topic in our community yet, 19 00:01:22,640 --> 00:01:25,000 Speaker 1: but a hot topic in my world and something that 20 00:01:25,040 --> 00:01:28,039 Speaker 1: I really really want to talk about and low key 21 00:01:28,160 --> 00:01:29,680 Speaker 1: The reason I want to talk about it is because 22 00:01:29,680 --> 00:01:31,920 Speaker 1: I've just finished writing the chapters in my book on 23 00:01:32,000 --> 00:01:34,399 Speaker 1: dividend and growth investing in I was like, we need 24 00:01:34,400 --> 00:01:37,399 Speaker 1: to talk about this because they're both very different strategies, 25 00:01:37,400 --> 00:01:40,319 Speaker 1: and I really think that there's so much value in 26 00:01:40,360 --> 00:01:44,240 Speaker 1: really deeply understanding different strategies, even if you're not planning 27 00:01:44,240 --> 00:01:46,560 Speaker 1: on investing yet. Like, I just want you to know 28 00:01:46,800 --> 00:01:49,120 Speaker 1: when someone says I'm a growth investor, you don't just 29 00:01:49,160 --> 00:01:52,880 Speaker 1: go that's your risk profile, right, because it's not. But Gking, 30 00:01:52,920 --> 00:01:55,320 Speaker 1: did you know that during the COVID nineteen Panini we 31 00:01:55,440 --> 00:01:58,800 Speaker 1: actually saw a surge in first time investors. The Panini 32 00:01:58,920 --> 00:02:03,160 Speaker 1: the se a very delicious, disgusting sandwich, but nobody wants 33 00:02:03,200 --> 00:02:04,920 Speaker 1: to buy at the shop love it? Okay? 34 00:02:04,960 --> 00:02:06,640 Speaker 3: Hang on, So you said we saw a search in 35 00:02:06,680 --> 00:02:09,200 Speaker 3: first time investors through the Panini. 36 00:02:08,919 --> 00:02:12,639 Speaker 1: Through the Beanini. Why Well, I would love to think 37 00:02:12,680 --> 00:02:14,760 Speaker 1: it was because that's also when she's on the money 38 00:02:14,880 --> 00:02:18,280 Speaker 1: was finding its feet. Genuinely, I'm just correlation, not causation, 39 00:02:18,600 --> 00:02:21,079 Speaker 1: So we'll just go with that. But what I think 40 00:02:21,120 --> 00:02:23,440 Speaker 1: it is is a lot of people were home thinking 41 00:02:23,480 --> 00:02:26,200 Speaker 1: about their wealth. There was a lot more journalism about it, 42 00:02:26,240 --> 00:02:28,120 Speaker 1: there was more stuff in the media, and we've also 43 00:02:28,160 --> 00:02:32,040 Speaker 1: seen a whole heap of brilliant new micro investing and 44 00:02:32,280 --> 00:02:35,960 Speaker 1: individual share investing companies pop up that are making investing 45 00:02:36,000 --> 00:02:38,800 Speaker 1: so much more accessible. So I think it's pretty amazing, 46 00:02:38,840 --> 00:02:41,240 Speaker 1: obviously because this is what I'm passionate about, but also 47 00:02:41,280 --> 00:02:43,800 Speaker 1: adore that people are prioritizing their money. But it also 48 00:02:43,880 --> 00:02:46,400 Speaker 1: tells us that a lot of people are now taking 49 00:02:46,400 --> 00:02:48,760 Speaker 1: the leap into the investing world for the first time 50 00:02:48,840 --> 00:02:51,480 Speaker 1: and putting future them first, which I love. And if 51 00:02:51,520 --> 00:02:53,840 Speaker 1: you are in the privileged position of being able to 52 00:02:53,880 --> 00:02:57,639 Speaker 1: do this, then yay, exciting for you. And g research 53 00:02:57,720 --> 00:03:00,600 Speaker 1: done by our friends that Finder last year actually showed 54 00:03:00,800 --> 00:03:04,160 Speaker 1: that gen Z so those people twenty five and under 55 00:03:04,200 --> 00:03:07,160 Speaker 1: which we are not Georgia King, they tend to find 56 00:03:07,200 --> 00:03:10,240 Speaker 1: investing the least intimidating and they are more likely to 57 00:03:10,240 --> 00:03:13,440 Speaker 1: give shares ago than any other generation, followed closely by 58 00:03:13,560 --> 00:03:16,280 Speaker 1: jen y, which is us those peeps who are aged 59 00:03:16,320 --> 00:03:19,040 Speaker 1: between twenty six and forty. So double yay. This makes 60 00:03:19,040 --> 00:03:22,440 Speaker 1: me really really happy. So I thought today, even though 61 00:03:22,480 --> 00:03:24,920 Speaker 1: you don't seem that keen on it by the look 62 00:03:24,960 --> 00:03:27,200 Speaker 1: on your face, I thought today we would take a 63 00:03:27,240 --> 00:03:29,600 Speaker 1: little bit two different types of investments and get to 64 00:03:29,639 --> 00:03:30,640 Speaker 1: know them a little. 65 00:03:30,360 --> 00:03:34,240 Speaker 3: Bit deeper before we do move on. Really shocked that 66 00:03:34,320 --> 00:03:38,040 Speaker 3: people twenty five and under are the ones that aren't 67 00:03:38,080 --> 00:03:41,120 Speaker 3: afraid of investing. That is news to me. What's that about? 68 00:03:41,240 --> 00:03:43,160 Speaker 1: I don't know, Like, these are the ones that are 69 00:03:43,160 --> 00:03:45,320 Speaker 1: on TikTok and they're just much cooler than us. Like, 70 00:03:45,320 --> 00:03:46,960 Speaker 1: if you're onto the age of twenty five and listening 71 00:03:47,000 --> 00:03:49,320 Speaker 1: to this podcast, like you already know you're cooler than us. 72 00:03:49,320 --> 00:03:52,280 Speaker 1: So I'm just I reckon. That's here, just the cool fact. 73 00:03:52,360 --> 00:03:57,120 Speaker 3: Okay, interesting, interesting take. So let's talk growth versus dividend investing. 74 00:03:58,000 --> 00:03:58,520 Speaker 1: Can't wait? 75 00:03:58,760 --> 00:04:03,880 Speaker 3: What are they like? Comparing apples and oranges? Gucci and Kmart? Perhaps, 76 00:04:04,120 --> 00:04:06,760 Speaker 3: talk me through it. That's a very big parallel. 77 00:04:07,040 --> 00:04:09,920 Speaker 1: I like the Gucci Camart kind of vibe because on 78 00:04:09,960 --> 00:04:13,480 Speaker 1: the way, oh no, no, absolutely not, I wore a 79 00:04:13,560 --> 00:04:16,919 Speaker 1: Kmart headband with a very expensive pair of designer shoes 80 00:04:16,960 --> 00:04:18,320 Speaker 1: and I was just real happy about it. 81 00:04:18,360 --> 00:04:20,520 Speaker 3: A gorgeous fusion, yeah, a gorgeous. 82 00:04:20,080 --> 00:04:22,880 Speaker 1: Fusion that aligned with my values and also made me 83 00:04:22,960 --> 00:04:26,360 Speaker 1: really happy because I liked both of those things equally. 84 00:04:26,480 --> 00:04:29,200 Speaker 3: Perfect let's bring us back to investing. No, I want 85 00:04:29,240 --> 00:04:33,520 Speaker 3: to talk about shoes, growth, fee, dividend just what. So 86 00:04:33,560 --> 00:04:36,039 Speaker 3: I wouldn't say it's like apples and oranges. I also 87 00:04:36,120 --> 00:04:40,120 Speaker 3: wouldn't say it's like a Gucci Kmart comparison. It's actually 88 00:04:40,200 --> 00:04:43,960 Speaker 3: just different strategies for different times in your life. So 89 00:04:44,200 --> 00:04:48,080 Speaker 3: to quickly summarize, a growth investment is one where you're 90 00:04:48,080 --> 00:04:51,560 Speaker 3: investing in that particular share because you are hoping that 91 00:04:51,640 --> 00:04:54,560 Speaker 3: it increases in value. You're not looking at it going, 92 00:04:54,600 --> 00:04:57,880 Speaker 3: oh my gosh, the dividends it pays out are so sexy. 93 00:04:58,240 --> 00:05:00,880 Speaker 3: I really want to have some dividends in my life. 94 00:05:00,960 --> 00:05:04,000 Speaker 3: You're actually looking at it going, hey, that company has potential. 95 00:05:04,440 --> 00:05:07,359 Speaker 3: I'm young, I have the power of time on my side, 96 00:05:07,480 --> 00:05:08,760 Speaker 3: and I'm going to see this grow. 97 00:05:08,920 --> 00:05:11,400 Speaker 1: So at some point my portfolio is worth a lot 98 00:05:11,440 --> 00:05:14,440 Speaker 1: more than it was yesterday. Then on the flip side, 99 00:05:14,480 --> 00:05:17,320 Speaker 1: we've got dividend investing. Honestly, Georgia, you could be a 100 00:05:17,360 --> 00:05:20,160 Speaker 1: regular investor and investing in both of these types of 101 00:05:20,200 --> 00:05:23,240 Speaker 1: shares because I actually own both of these types of shares. 102 00:05:23,520 --> 00:05:26,680 Speaker 1: It's just important to know why you might pick one 103 00:05:26,839 --> 00:05:29,800 Speaker 1: over the other and how that works. So a dividend 104 00:05:29,920 --> 00:05:33,320 Speaker 1: investing strategy or a divid end share is actually a 105 00:05:33,360 --> 00:05:37,160 Speaker 1: share that you purchase, not necessarily with the intention of 106 00:05:37,200 --> 00:05:40,839 Speaker 1: it becoming super super expensive on the ax. You're actually 107 00:05:40,880 --> 00:05:44,839 Speaker 1: purchasing it to get some income into your portfolio. So 108 00:05:44,920 --> 00:05:47,120 Speaker 1: a good example of that is blue chip shares, and 109 00:05:47,160 --> 00:05:49,960 Speaker 1: that sounds like a really lame term for essentially really 110 00:05:50,000 --> 00:05:53,440 Speaker 1: basic white collar shares. Like we're talking things like banks, 111 00:05:53,760 --> 00:05:55,360 Speaker 1: where you know, you might look at a NAB or 112 00:05:55,400 --> 00:05:57,839 Speaker 1: a CommBank or a Westpac share and they don't really 113 00:05:57,839 --> 00:06:01,880 Speaker 1: fluctuate heaps in price, but they do pay a dividend 114 00:06:01,920 --> 00:06:04,760 Speaker 1: because they distribute the profit that they make each and 115 00:06:04,800 --> 00:06:08,120 Speaker 1: every single year to the people who are their shareholders. 116 00:06:08,480 --> 00:06:11,719 Speaker 1: Whereas you look at something like an after pay which 117 00:06:11,800 --> 00:06:13,760 Speaker 1: I'm using as an example because I feel like our 118 00:06:13,800 --> 00:06:16,279 Speaker 1: community in our Facebook group last year, we're talking so 119 00:06:16,400 --> 00:06:18,479 Speaker 1: much about after pay shares and how much they went 120 00:06:18,560 --> 00:06:21,279 Speaker 1: up and that was really sexy. But after pay never 121 00:06:21,360 --> 00:06:24,840 Speaker 1: paid a dividend. So the only way in that moment 122 00:06:25,000 --> 00:06:27,000 Speaker 1: to make money from an after pay share was to 123 00:06:27,080 --> 00:06:29,840 Speaker 1: sell them once your share price had increased in value, 124 00:06:29,960 --> 00:06:30,280 Speaker 1: so like. 125 00:06:30,240 --> 00:06:33,480 Speaker 3: The capital growth from it, rather than during the process. 126 00:06:33,279 --> 00:06:36,200 Speaker 1: And both of those things serve us really well in 127 00:06:36,240 --> 00:06:39,359 Speaker 1: a portfolio because obviously we want our portfolio to increase 128 00:06:39,400 --> 00:06:42,839 Speaker 1: in value, but the closer and closer we get to retirement, 129 00:06:43,160 --> 00:06:44,880 Speaker 1: the more we don't want to have to sell our 130 00:06:44,920 --> 00:06:47,479 Speaker 1: shares down, but we actually want to be able to 131 00:06:47,520 --> 00:06:50,159 Speaker 1: generate an income. I want my share portfolio to be 132 00:06:50,200 --> 00:06:52,839 Speaker 1: paying me for having it without having to dispose of 133 00:06:52,880 --> 00:06:55,040 Speaker 1: any of it or sell some of it down, like 134 00:06:55,080 --> 00:06:57,680 Speaker 1: I want that to exist forever, essentially, so I can 135 00:06:57,720 --> 00:07:00,520 Speaker 1: create a legacy as I get older and maybe one 136 00:07:00,560 --> 00:07:03,520 Speaker 1: day when I'm not around, my future children can benefit 137 00:07:03,600 --> 00:07:06,479 Speaker 1: from that instead of having to sell your assets down 138 00:07:06,520 --> 00:07:07,760 Speaker 1: over time. Does that make sense? 139 00:07:07,760 --> 00:07:08,679 Speaker 3: It does make sense. 140 00:07:08,800 --> 00:07:12,560 Speaker 1: Good, We're done. That is the entire podcast question. 141 00:07:12,640 --> 00:07:16,840 Speaker 3: Though. Can you have a growth investment that also pays dividends? 142 00:07:16,920 --> 00:07:20,040 Speaker 1: Yes, you can pay okay so g Yes you can 143 00:07:20,080 --> 00:07:23,040 Speaker 1: have a growth and dividend share, But they are arguably 144 00:07:23,040 --> 00:07:25,640 Speaker 1: fum or rare like a unicorn. They are what I 145 00:07:25,680 --> 00:07:28,120 Speaker 1: would love everybody to have, Like I would love to 146 00:07:28,160 --> 00:07:31,120 Speaker 1: think that you buy a share tomorrow, get it starts 147 00:07:31,120 --> 00:07:33,320 Speaker 1: paying you out a really nice dividend that you can 148 00:07:33,360 --> 00:07:37,640 Speaker 1: either reinvest or uses income to fund your lifestyle and 149 00:07:37,960 --> 00:07:40,040 Speaker 1: in a couple of years time, it's worth a whole 150 00:07:40,080 --> 00:07:43,000 Speaker 1: heap more than it was yesterday. Sadly, they're not as 151 00:07:43,040 --> 00:07:45,440 Speaker 1: common as we would like them to be though, because 152 00:07:45,480 --> 00:07:48,320 Speaker 1: more often than not, when you're looking at a growth share, 153 00:07:48,680 --> 00:07:50,440 Speaker 1: you've got to look at it as though you're on 154 00:07:50,520 --> 00:07:54,120 Speaker 1: the journey with that business as they are growing. It's 155 00:07:54,120 --> 00:07:56,440 Speaker 1: not like you're buying. And I use this example all 156 00:07:56,440 --> 00:07:59,600 Speaker 1: the time just because it is a very common share 157 00:07:59,760 --> 00:08:03,280 Speaker 1: now share or a combink share, like they're not consistently 158 00:08:03,320 --> 00:08:05,560 Speaker 1: growing year on year on year, Like they're just a 159 00:08:05,600 --> 00:08:07,640 Speaker 1: big business and all the cogs are turning and you 160 00:08:07,720 --> 00:08:10,480 Speaker 1: know that they're reliable and they're not going anywhere orreas 161 00:08:10,480 --> 00:08:13,200 Speaker 1: an afterpay. When they came into the market, everyone started 162 00:08:13,240 --> 00:08:15,280 Speaker 1: talking about them and they had a low share price, 163 00:08:15,360 --> 00:08:18,720 Speaker 1: and obviously that has increased significantly. But to have that 164 00:08:18,800 --> 00:08:22,120 Speaker 1: type of growth, businesses need to reinvest in themselves, and 165 00:08:22,160 --> 00:08:25,040 Speaker 1: they can't pay a dividend to you, i e. They 166 00:08:25,080 --> 00:08:27,960 Speaker 1: can't give the profits to you gking because they actually 167 00:08:28,000 --> 00:08:30,320 Speaker 1: need to reinvest it into the business for it to grow. 168 00:08:30,520 --> 00:08:33,880 Speaker 1: So it's usually one or the other, but sometimes you 169 00:08:33,920 --> 00:08:36,920 Speaker 1: do get unicorns that do both because they have increased 170 00:08:36,920 --> 00:08:40,120 Speaker 1: significantly because they might have done something really sexy. But 171 00:08:40,240 --> 00:08:42,600 Speaker 1: also they're in a position to pay profits out to 172 00:08:42,640 --> 00:08:45,960 Speaker 1: their shareholders. But I wouldn't be banking on it, but 173 00:08:46,120 --> 00:08:48,360 Speaker 1: they are my favorite type, right, Okay? 174 00:08:48,559 --> 00:08:51,080 Speaker 3: So is it as simple as it's saying on the 175 00:08:51,160 --> 00:08:54,480 Speaker 3: tin what is what? So, for example, you go on 176 00:08:54,720 --> 00:08:57,719 Speaker 3: to the share shop and you're buying a share. 177 00:08:58,200 --> 00:09:00,400 Speaker 1: The shop the shahp okay? 178 00:09:00,480 --> 00:09:03,080 Speaker 3: Is it as simple as choosing like the one that 179 00:09:03,120 --> 00:09:06,720 Speaker 3: says growth or dividend? Like, how do you know what 180 00:09:06,760 --> 00:09:08,520 Speaker 3: you're choosing? So you've got to do a little bit 181 00:09:08,520 --> 00:09:11,400 Speaker 3: of research. You've got to look into the historics of 182 00:09:11,440 --> 00:09:14,120 Speaker 3: the share. It's really easyg If you just go to 183 00:09:14,160 --> 00:09:16,480 Speaker 3: the ASX website and look up the share, it will 184 00:09:16,520 --> 00:09:19,200 Speaker 3: tell you whether or not it has paid a dividend. Ever, 185 00:09:19,600 --> 00:09:23,600 Speaker 3: what those dividends look like. So let's talk pros and 186 00:09:23,760 --> 00:09:28,600 Speaker 3: cons then V we'll start with growth investing growth shares. Yes, 187 00:09:28,840 --> 00:09:31,880 Speaker 3: talk me through the benefits why we should look at 188 00:09:31,920 --> 00:09:34,720 Speaker 3: doing this, and then maybe the downfalls as well what 189 00:09:34,800 --> 00:09:35,640 Speaker 3: we need to be mindful of. 190 00:09:35,800 --> 00:09:38,200 Speaker 1: So there are a few reasons why you do both 191 00:09:38,240 --> 00:09:40,680 Speaker 1: of them, right, And I actually think it plays a 192 00:09:40,679 --> 00:09:43,400 Speaker 1: lot into one your risk profile, so like how willing 193 00:09:43,480 --> 00:09:45,959 Speaker 1: you are to take on risk. But growth share is 194 00:09:46,040 --> 00:09:49,040 Speaker 1: actually a bit riskier than a dividend share, and that's 195 00:09:49,040 --> 00:09:52,760 Speaker 1: for obvious reasons because there's significant fluctuations in the share 196 00:09:52,800 --> 00:09:55,000 Speaker 1: price and it's due to the growth of the company, 197 00:09:55,280 --> 00:09:58,440 Speaker 1: whereas a share that actually just pays a dividend, like 198 00:09:58,480 --> 00:10:01,200 Speaker 1: they're pretty tried and true when tested, like they're the 199 00:10:01,240 --> 00:10:04,160 Speaker 1: steady steed that keeps plodding along. And you might be 200 00:10:04,240 --> 00:10:08,000 Speaker 1: spending you know, sixty or seventy dollars a share, but 201 00:10:08,080 --> 00:10:11,760 Speaker 1: you're actually buying a very small portion of income, and 202 00:10:11,840 --> 00:10:14,360 Speaker 1: as time goes on, that income can do one of 203 00:10:14,400 --> 00:10:16,199 Speaker 1: two things. As I said to you before, it can 204 00:10:16,200 --> 00:10:18,560 Speaker 1: fund your lifestyle. So by that, I mean it just 205 00:10:18,600 --> 00:10:20,880 Speaker 1: becomes income in your bank account that you can spend. 206 00:10:21,280 --> 00:10:24,400 Speaker 1: But on the flip side, you could reinvest those dividends 207 00:10:24,440 --> 00:10:27,080 Speaker 1: into your share portfolio, which is an option when you 208 00:10:27,160 --> 00:10:31,199 Speaker 1: invest and those dividends purchase you more shares, which ultimately 209 00:10:31,240 --> 00:10:34,360 Speaker 1: result in you having more shares and more income, which 210 00:10:34,440 --> 00:10:38,280 Speaker 1: is really sexy. A growth share, though, as I said before, 211 00:10:38,320 --> 00:10:41,600 Speaker 1: you're purchasing with the intention of it increasing significantly in 212 00:10:41,640 --> 00:10:44,840 Speaker 1: price because you believe in that company, or you believe 213 00:10:44,880 --> 00:10:47,280 Speaker 1: in the growth of that company and see a future 214 00:10:47,320 --> 00:10:50,960 Speaker 1: with them. Sometimes growth shares turn into dividend shares, so 215 00:10:51,000 --> 00:10:53,360 Speaker 1: a share might be relatively cheap on the ax and 216 00:10:53,400 --> 00:10:56,320 Speaker 1: then over time it significantly increases, and maybe for the 217 00:10:56,360 --> 00:10:58,920 Speaker 1: first ten years they don't pay a dividend, but then 218 00:10:58,920 --> 00:11:00,920 Speaker 1: they flip over to being like, oh my gosh, we're 219 00:11:00,960 --> 00:11:03,480 Speaker 1: so stable as a business. Now we're able to share 220 00:11:03,480 --> 00:11:06,559 Speaker 1: the profits with our shareholders, and as a shareholder, you'd 221 00:11:06,600 --> 00:11:10,480 Speaker 1: then get given your dividends, which is very exciting. I 222 00:11:10,520 --> 00:11:13,840 Speaker 1: suppose the differences there are quite obvious, But when it 223 00:11:13,880 --> 00:11:18,079 Speaker 1: comes to downfall, if you are closer to retirement, holding 224 00:11:18,120 --> 00:11:21,280 Speaker 1: growth shares might not be aligned to the value or 225 00:11:21,320 --> 00:11:24,800 Speaker 1: the strategy that you're trying to implement. Because when I'm retired, 226 00:11:24,840 --> 00:11:27,800 Speaker 1: g I want to have income, Like, it doesn't actually 227 00:11:27,840 --> 00:11:30,480 Speaker 1: matter what your share is worth if it's not making 228 00:11:30,520 --> 00:11:32,440 Speaker 1: you any money that you can spend and fund your 229 00:11:32,480 --> 00:11:35,840 Speaker 1: lifestyle with. So they have pros and cons on either side, 230 00:11:35,920 --> 00:11:38,360 Speaker 1: and I think it's more about your life stage. So 231 00:11:38,480 --> 00:11:41,120 Speaker 1: are you happy to invest in a growth share? If so, 232 00:11:41,360 --> 00:11:44,959 Speaker 1: what does that mean? Obviously with a growth share, if 233 00:11:44,960 --> 00:11:47,920 Speaker 1: you then decide to sell it, you will have capital 234 00:11:47,920 --> 00:11:50,920 Speaker 1: gains tax to pay. Just as an fyi for those 235 00:11:50,920 --> 00:11:54,560 Speaker 1: people who like trading shares on a short period of time, 236 00:11:54,960 --> 00:11:57,440 Speaker 1: if you buy a share and then sell it within 237 00:11:57,480 --> 00:12:00,520 Speaker 1: the same year, your tax is far higher than had 238 00:12:00,520 --> 00:12:02,800 Speaker 1: you held it for an entire year. And a lot 239 00:12:02,840 --> 00:12:06,520 Speaker 1: of people actually in our community even found themselves in 240 00:12:06,559 --> 00:12:08,160 Speaker 1: a little bit of a pickle because they either bought 241 00:12:08,160 --> 00:12:10,240 Speaker 1: after pay or they were buying things like bitcoin, and 242 00:12:10,280 --> 00:12:14,080 Speaker 1: they were buying assets that had significantly increased in value, 243 00:12:14,320 --> 00:12:15,880 Speaker 1: and they were like, oh my gosh, I got to 244 00:12:15,920 --> 00:12:17,760 Speaker 1: get out, Like I don't want to be invested in this. 245 00:12:18,120 --> 00:12:21,480 Speaker 1: They didn't think about their tax consequences sold it, whereas 246 00:12:21,480 --> 00:12:23,760 Speaker 1: if they'd held it for another three months or so, 247 00:12:24,160 --> 00:12:25,640 Speaker 1: they would have ended up with a whole heat more 248 00:12:25,640 --> 00:12:28,760 Speaker 1: profit because they didn't have to pay exorbitant tax rates. 249 00:12:29,080 --> 00:12:31,920 Speaker 1: So I think it's really important to know what that means. 250 00:12:32,360 --> 00:12:35,000 Speaker 1: And there was a really good quote actually by our 251 00:12:35,040 --> 00:12:38,800 Speaker 1: friend Warren Buffett, fancy guy man. He's arguably a growth investor. 252 00:12:39,080 --> 00:12:42,520 Speaker 1: He's probably the most famous growth investor in the entire 253 00:12:42,600 --> 00:12:46,359 Speaker 1: world because he purchases shares when they are significantly undervalued, 254 00:12:46,400 --> 00:12:48,600 Speaker 1: and then they blow out of the water. I don't 255 00:12:48,600 --> 00:12:50,880 Speaker 1: know what this guy does, whether he has a crystal 256 00:12:50,920 --> 00:12:54,200 Speaker 1: ball or whether he's just a wizard, but he is 257 00:12:54,360 --> 00:12:57,560 Speaker 1: arguably the only person in the entire world that I 258 00:12:57,640 --> 00:13:00,280 Speaker 1: have seen be able to time the market. If I 259 00:13:00,280 --> 00:13:01,920 Speaker 1: could do that, I've said on the pod before, G, 260 00:13:02,080 --> 00:13:04,440 Speaker 1: I'd be a really rich woman. You would. I can't, 261 00:13:04,880 --> 00:13:07,600 Speaker 1: so I have a different investing strategy than him. But 262 00:13:07,720 --> 00:13:10,480 Speaker 1: he actually said, if you weren't thinking about owning a 263 00:13:10,520 --> 00:13:13,320 Speaker 1: stock for ten years, you shouldn't even think about owning 264 00:13:13,400 --> 00:13:16,080 Speaker 1: it for ten minutes. And I think that's really powerful 265 00:13:16,160 --> 00:13:18,720 Speaker 1: here because I think too often. And we've had this 266 00:13:18,840 --> 00:13:22,439 Speaker 1: conversation G, between you and I and Ana Lisa offline 267 00:13:22,880 --> 00:13:24,800 Speaker 1: about how a lot of people think the way to 268 00:13:24,800 --> 00:13:26,600 Speaker 1: make money in shares is to kind of be flipping 269 00:13:26,600 --> 00:13:28,640 Speaker 1: them and buying them. When they increase in value, you 270 00:13:28,679 --> 00:13:30,920 Speaker 1: sell them and then you buy more. Like it doesn't 271 00:13:31,000 --> 00:13:34,160 Speaker 1: have to be that active. Yes, some share traders do that, 272 00:13:34,600 --> 00:13:37,040 Speaker 1: but I just really feel like if you're listening to 273 00:13:37,040 --> 00:13:39,520 Speaker 1: a shese on the Money podcast, you're probably not a 274 00:13:39,559 --> 00:13:44,000 Speaker 1: share trader, and neither am I. And just trust Warren Buffett. Yeah, 275 00:13:44,040 --> 00:13:45,920 Speaker 1: I mean, I don't know if i'd trust him because 276 00:13:45,960 --> 00:13:46,559 Speaker 1: you know, it's. 277 00:13:46,360 --> 00:13:49,199 Speaker 3: One hundred and twenty three point five billion US dollars. 278 00:13:49,240 --> 00:13:50,480 Speaker 1: He's got a couple of dollar rues. 279 00:13:50,480 --> 00:13:51,880 Speaker 3: Do you just a coupler? 280 00:13:51,920 --> 00:13:53,680 Speaker 1: Do you know what? My favorite part about him is 281 00:13:53,679 --> 00:13:55,839 Speaker 1: though he's cute, little muff and face, Oh my gosh, 282 00:13:55,920 --> 00:13:58,880 Speaker 1: yes that, but have you looked at his house and 283 00:13:58,960 --> 00:14:02,760 Speaker 1: his car? Oh my gosh, house and cup house and car. 284 00:14:02,840 --> 00:14:04,440 Speaker 1: G google his house and car. 285 00:14:04,640 --> 00:14:09,720 Speaker 3: I don't know what to expect here live on the pod. Okay, 286 00:14:10,679 --> 00:14:11,720 Speaker 3: I was quite modest. 287 00:14:11,880 --> 00:14:13,760 Speaker 1: Yeah, he lives in the house he bought for his 288 00:14:13,840 --> 00:14:17,200 Speaker 1: wife before he even started being like a massive share trader. 289 00:14:17,400 --> 00:14:20,840 Speaker 3: Look, is he a cross that he is incredibly wealthy? 290 00:14:20,920 --> 00:14:25,960 Speaker 1: Yeah, he just doesn't see the value in purchasing that. No, 291 00:14:26,520 --> 00:14:29,160 Speaker 1: assets don't matter to this man, and I really respect that. 292 00:14:29,280 --> 00:14:31,440 Speaker 1: Like me, he is arguably one of the richest men 293 00:14:31,480 --> 00:14:34,880 Speaker 1: in the world. He has everything at his disposal. He 294 00:14:34,880 --> 00:14:39,480 Speaker 1: could buy mega mansions with his change. Yet he's like 295 00:14:39,880 --> 00:14:41,560 Speaker 1: the house my wife and I bought, like it does 296 00:14:41,600 --> 00:14:41,960 Speaker 1: the job? 297 00:14:42,040 --> 00:14:44,280 Speaker 3: Good on you, Warren, if you're listening. Should we move 298 00:14:44,320 --> 00:14:47,400 Speaker 3: on now to dividend investing? V talk us through the 299 00:14:47,400 --> 00:14:48,320 Speaker 3: pros and the cons there. 300 00:14:48,480 --> 00:14:50,840 Speaker 1: I love a good dividend share, and the reason I 301 00:14:50,840 --> 00:14:52,880 Speaker 1: do is because I love being paid to own things 302 00:14:52,960 --> 00:14:55,880 Speaker 1: Like how cool Like g if you earn that water bottle, 303 00:14:55,920 --> 00:14:57,440 Speaker 1: I give you twenty cents every year. 304 00:14:57,520 --> 00:14:58,080 Speaker 3: That's fun. 305 00:14:58,200 --> 00:15:01,800 Speaker 1: That's fun. Like that's what a shared. It's very very exciting. 306 00:15:01,960 --> 00:15:05,000 Speaker 1: But with dividend shares, you actually are a winner in 307 00:15:05,120 --> 00:15:07,000 Speaker 1: arguably two ways. I mean, you're a winner with growth 308 00:15:07,000 --> 00:15:08,720 Speaker 1: shares as well, So it's not to say one is 309 00:15:08,760 --> 00:15:12,680 Speaker 1: better than the other, but they both have underlyingly different strategies. 310 00:15:13,040 --> 00:15:15,960 Speaker 1: So when a share rise is in value and the 311 00:15:16,000 --> 00:15:18,680 Speaker 1: company cuts you a check, they're basically giving you a 312 00:15:18,760 --> 00:15:21,520 Speaker 1: portion of the profits. So they're saying, look, je, you've 313 00:15:21,560 --> 00:15:25,760 Speaker 1: owned this company and you're basically a mini company owner. Therefore, 314 00:15:25,840 --> 00:15:28,120 Speaker 1: any money that we make you get a percentage of. 315 00:15:28,440 --> 00:15:31,120 Speaker 1: So the better that company does in a financial year, 316 00:15:31,120 --> 00:15:33,440 Speaker 1: the better your dividend is going to look. But the 317 00:15:33,480 --> 00:15:36,400 Speaker 1: same is true if that company doesn't do well. So 318 00:15:36,440 --> 00:15:38,600 Speaker 1: if they don't turn a profit, you don't get a dividend. 319 00:15:38,840 --> 00:15:40,680 Speaker 1: So there's obviously a little bit of risk there when 320 00:15:40,720 --> 00:15:43,520 Speaker 1: you are purchasing these, But if the share price of 321 00:15:43,560 --> 00:15:47,640 Speaker 1: an individual stock decides to rise by let's say four percent, 322 00:15:47,800 --> 00:15:50,840 Speaker 1: and the company then pays you a three percent dividend 323 00:15:50,880 --> 00:15:55,080 Speaker 1: out you're going to pocket a seven percent profit minus taxes. 324 00:15:55,200 --> 00:15:57,800 Speaker 1: So for me, one of the main benefits is essentially 325 00:15:57,920 --> 00:16:01,520 Speaker 1: you securing a steady stream of income for yourself. So 326 00:16:01,800 --> 00:16:04,320 Speaker 1: it's not something that we can all afford to run 327 00:16:04,360 --> 00:16:07,240 Speaker 1: out and buy enough shares in a dividend company to 328 00:16:07,560 --> 00:16:10,920 Speaker 1: replace our incomes. That takes a long time. But the 329 00:16:10,960 --> 00:16:14,560 Speaker 1: benefit of the dividend share is that over time, when 330 00:16:14,560 --> 00:16:16,600 Speaker 1: you get paid a dividend when you are young, or 331 00:16:16,600 --> 00:16:18,600 Speaker 1: you are like me and you're not looking to make 332 00:16:18,640 --> 00:16:21,960 Speaker 1: money in the short term from your investment portfolio, I'm 333 00:16:22,000 --> 00:16:24,640 Speaker 1: doing that for future me. I reinvest all of my 334 00:16:24,760 --> 00:16:27,920 Speaker 1: money and the power of compounding interest is wild. So 335 00:16:28,080 --> 00:16:29,880 Speaker 1: say in the first year, you know, you get a 336 00:16:29,920 --> 00:16:32,880 Speaker 1: seven point five percent return g and you've got you know, 337 00:16:32,920 --> 00:16:35,640 Speaker 1: one thousand dollars in the market. You'll be like, well, V, 338 00:16:35,880 --> 00:16:38,000 Speaker 1: that's like not that much money in the grand scheme 339 00:16:38,040 --> 00:16:41,640 Speaker 1: of things, I can't retire. But over time, that seven 340 00:16:41,680 --> 00:16:44,560 Speaker 1: point five percent that your money made the previous year 341 00:16:44,960 --> 00:16:47,880 Speaker 1: is now going to make money the year after for you. 342 00:16:48,320 --> 00:16:50,800 Speaker 1: So the money that your money made is now making 343 00:16:50,800 --> 00:16:53,760 Speaker 1: you money. And if you then stretch that over a 344 00:16:53,800 --> 00:16:56,760 Speaker 1: period of like thirty plus years, that's a lot of 345 00:16:56,760 --> 00:16:59,120 Speaker 1: money and a lot of good return. And one of 346 00:16:59,120 --> 00:17:02,120 Speaker 1: my favorite exams, which if you've listened to this podcast before, 347 00:17:02,160 --> 00:17:05,560 Speaker 1: I do apologize, but I want it batted into your brains, 348 00:17:06,160 --> 00:17:09,439 Speaker 1: and that is if you're investing for a thirty year period. 349 00:17:09,600 --> 00:17:11,280 Speaker 1: So say you twenty one and you're like, you know what, 350 00:17:11,600 --> 00:17:14,000 Speaker 1: I really want to invest all the way up until retirement. 351 00:17:14,160 --> 00:17:17,240 Speaker 1: I'm going to do five hundred dollars a month, every 352 00:17:17,280 --> 00:17:20,520 Speaker 1: single month until I retire at sixty five. We're going 353 00:17:20,560 --> 00:17:22,600 Speaker 1: to have an average rate of return of seven and 354 00:17:22,600 --> 00:17:25,840 Speaker 1: a half percent over that period of time. Had you 355 00:17:25,920 --> 00:17:29,280 Speaker 1: saved that money, you'd have two hundred and forty thousand 356 00:17:29,280 --> 00:17:32,160 Speaker 1: dollars in your savings account, and you go, that's pretty sexy, 357 00:17:32,440 --> 00:17:36,520 Speaker 1: but g due to compounding interest. If you had put 358 00:17:36,560 --> 00:17:39,200 Speaker 1: that into the share market at that seven point five 359 00:17:39,240 --> 00:17:42,560 Speaker 1: percent return, you'd have one point two million dollars. So 360 00:17:42,640 --> 00:17:46,560 Speaker 1: you're basically making a million dollars by riding out the 361 00:17:46,640 --> 00:17:50,080 Speaker 1: investment journey for the long term, but also making use 362 00:17:50,119 --> 00:17:52,399 Speaker 1: of those dividends that are being paid to you to 363 00:17:52,480 --> 00:17:54,720 Speaker 1: reinvest them. So when I say, oh, it's the money 364 00:17:54,720 --> 00:17:57,600 Speaker 1: that your money makes, like that sounds small when it's 365 00:17:57,600 --> 00:18:00,680 Speaker 1: only a seven and a half percent return, because you go, well, 366 00:18:00,720 --> 00:18:02,440 Speaker 1: seven and a half percent on one thousand dollars a va, 367 00:18:02,480 --> 00:18:05,879 Speaker 1: that's not actually that much. But over time that obviously 368 00:18:05,960 --> 00:18:08,840 Speaker 1: grows into something that is so much bigger than what 369 00:18:08,960 --> 00:18:11,199 Speaker 1: a lot of us are able to comprehend. And I 370 00:18:11,320 --> 00:18:13,399 Speaker 1: say that not because I'm like, oh my god, you 371 00:18:13,480 --> 00:18:16,680 Speaker 1: don't get it. You totally get it, But as humans, 372 00:18:16,760 --> 00:18:19,880 Speaker 1: we are actually wired to think in a linear way, 373 00:18:20,160 --> 00:18:24,960 Speaker 1: so we go one plus one equals two, whereas compounding 374 00:18:25,040 --> 00:18:28,360 Speaker 1: interest is not linear. It is one plus one equals 375 00:18:28,400 --> 00:18:30,919 Speaker 1: three pretty much, and you kind of go, well, that 376 00:18:30,920 --> 00:18:33,600 Speaker 1: doesn't make sense. No comprehendo, not going to happen. So 377 00:18:33,640 --> 00:18:35,960 Speaker 1: I think we need to reframe the fact that a 378 00:18:36,000 --> 00:18:37,640 Speaker 1: lot of us like, oh, I don't get it. I'm 379 00:18:37,680 --> 00:18:41,399 Speaker 1: not smart to know investing is actually very hard for 380 00:18:41,440 --> 00:18:45,200 Speaker 1: the human brain to comprehend because we are actually wired 381 00:18:45,240 --> 00:18:47,240 Speaker 1: to just be very linear in the way that we think. 382 00:18:47,480 --> 00:18:49,679 Speaker 1: So that's why I think a lot of people are 383 00:18:49,720 --> 00:18:53,600 Speaker 1: overwhelmed by investing and overwhelmed by this conversation because it's 384 00:18:53,640 --> 00:18:56,280 Speaker 1: just not something we can comprehend. There is nothing else 385 00:18:56,320 --> 00:18:58,320 Speaker 1: in our life that works in the same way. 386 00:18:58,600 --> 00:19:01,480 Speaker 3: Yeah, I mean, as someone who still hasn't invested, I 387 00:19:01,480 --> 00:19:04,400 Speaker 3: think just remembering that exactly what you said there, if 388 00:19:04,400 --> 00:19:06,600 Speaker 3: you saved five hundred dollars, was five hundred a month? 389 00:19:06,720 --> 00:19:09,119 Speaker 1: Five hundred a month if you are twenty one all 390 00:19:09,160 --> 00:19:11,000 Speaker 1: the way until retirement, Yeah. 391 00:19:10,720 --> 00:19:13,960 Speaker 3: So would you rather two fifty k or one point 392 00:19:14,000 --> 00:19:16,119 Speaker 3: two mil? Exactly? I know where I'd rather be. 393 00:19:16,280 --> 00:19:19,240 Speaker 1: And the power of compounding interest over a long period 394 00:19:19,320 --> 00:19:22,720 Speaker 1: of time is honestly insane. So we're talking about five 395 00:19:22,800 --> 00:19:24,920 Speaker 1: hundred dollars a month, and if you're in the privileged 396 00:19:24,960 --> 00:19:27,360 Speaker 1: position of being able to save that or invest that, 397 00:19:27,359 --> 00:19:29,720 Speaker 1: that is fantastic. We are not saying everybody is. It 398 00:19:29,800 --> 00:19:33,199 Speaker 1: is just an example. But if you then jump a 399 00:19:33,240 --> 00:19:35,400 Speaker 1: couple of years in advance and go, all right, gee, 400 00:19:35,480 --> 00:19:38,840 Speaker 1: you haven't invested, that's totally okay. There's no such thing 401 00:19:38,840 --> 00:19:42,080 Speaker 1: as too late. But if you are forty and you 402 00:19:42,160 --> 00:19:44,320 Speaker 1: want to achieve the same outcome of that one point 403 00:19:44,320 --> 00:19:47,399 Speaker 1: two million dollar investment portfolio, you're going to have to 404 00:19:47,440 --> 00:19:50,840 Speaker 1: cough up about four thousand dollars a month to achieve 405 00:19:50,920 --> 00:19:54,879 Speaker 1: the same goal. That's insane. That's so much more money. 406 00:19:55,040 --> 00:19:57,399 Speaker 1: And to comprehend that, because I think a lot of 407 00:19:57,480 --> 00:19:59,679 Speaker 1: us are like, oh, well, I'll just invest when I 408 00:19:59,720 --> 00:20:02,560 Speaker 1: have money. Like, I'm not in the position where I 409 00:20:02,600 --> 00:20:04,920 Speaker 1: can compromise that at this point in my life. When 410 00:20:04,960 --> 00:20:07,320 Speaker 1: I'm older, i'll be rich. I'll have four grand a 411 00:20:07,320 --> 00:20:10,040 Speaker 1: month that I can put into anything. I'm sorry you 412 00:20:10,119 --> 00:20:14,200 Speaker 1: won't because you'll have more financial commitments, you'll have lifestyle creep, 413 00:20:14,280 --> 00:20:17,080 Speaker 1: unless you're Warren Buffett, because apparently he doesn't have any 414 00:20:17,160 --> 00:20:20,560 Speaker 1: form of lifestyle creep. But also, you're far more likely 415 00:20:20,880 --> 00:20:24,359 Speaker 1: to have financial responsibilities. You're far more likely to have 416 00:20:24,359 --> 00:20:26,600 Speaker 1: a mortgage that needs paying off, You're far more likely 417 00:20:26,640 --> 00:20:28,800 Speaker 1: to probably have car loans and stuff like that. And 418 00:20:28,840 --> 00:20:31,560 Speaker 1: also children. And I'm not saying that everybody's going to 419 00:20:31,600 --> 00:20:34,199 Speaker 1: have children and our journeys a cookie cutter, but I 420 00:20:34,200 --> 00:20:37,080 Speaker 1: think it's very common for that demographic of people to 421 00:20:37,119 --> 00:20:39,560 Speaker 1: have more financial commitments, and the amount of people I 422 00:20:39,600 --> 00:20:42,520 Speaker 1: sit down with and go hey, to achieve this goal, 423 00:20:42,560 --> 00:20:46,359 Speaker 1: we have to sacrifice significant amounts of money when you 424 00:20:46,400 --> 00:20:48,400 Speaker 1: could have just done that with five hundred bucks a month. 425 00:20:48,440 --> 00:20:50,919 Speaker 1: So even when you're forty, you're just investing that five 426 00:20:51,040 --> 00:20:53,359 Speaker 1: hundred bucks a month, and hopefully in a perfect world 427 00:20:53,520 --> 00:20:56,160 Speaker 1: you do have more disposable income so that five hundred 428 00:20:56,160 --> 00:20:58,080 Speaker 1: dollars a month becomes you know, one thousand dollars a 429 00:20:58,080 --> 00:20:59,960 Speaker 1: month or more, or you know, when you get birth 430 00:21:00,160 --> 00:21:02,800 Speaker 1: or Christmas or you know, bonuses from your job that 431 00:21:02,800 --> 00:21:05,679 Speaker 1: you're obviously going to be excelling at. You invest that, 432 00:21:06,000 --> 00:21:08,560 Speaker 1: and that one point two million dollar portfolio could be 433 00:21:08,560 --> 00:21:12,520 Speaker 1: more like four or five million dollars. Now we're token, yes, also, 434 00:21:12,560 --> 00:21:13,919 Speaker 1: but to add to that, because I know you're going 435 00:21:13,960 --> 00:21:16,960 Speaker 1: to try and like segue me into a break. Gee, 436 00:21:17,080 --> 00:21:19,240 Speaker 1: let's talk about why it's important to have a one 437 00:21:19,280 --> 00:21:21,960 Speaker 1: point two million dollar portfolio, because you go, great, I 438 00:21:21,960 --> 00:21:23,760 Speaker 1: get to that point and I've got one point two 439 00:21:23,760 --> 00:21:28,080 Speaker 1: million dollars invested. Thee do be spending it? No super yacht? 440 00:21:29,000 --> 00:21:31,120 Speaker 1: Onebuff it doesn't have one. You can have a super 441 00:21:31,200 --> 00:21:33,760 Speaker 1: yacht when he has he could have so many. I know, 442 00:21:33,840 --> 00:21:35,840 Speaker 1: he could be like the king of super yachts. Yet 443 00:21:35,840 --> 00:21:38,600 Speaker 1: he's choosing not to be. And that's real cool, is it? 444 00:21:38,680 --> 00:21:39,080 Speaker 1: I like it? 445 00:21:39,119 --> 00:21:41,000 Speaker 3: If I was warrant I'd tell you the things I'd 446 00:21:41,040 --> 00:21:41,400 Speaker 3: be doing. 447 00:21:41,480 --> 00:21:44,240 Speaker 1: Oh my gosh, what would you do? What would you do? First? 448 00:21:44,240 --> 00:21:47,280 Speaker 3: I'd buy a superhot man, get to the Mediterranean. 449 00:21:47,359 --> 00:21:49,679 Speaker 1: It's not happening. Also, I just feel like you're not 450 00:21:49,720 --> 00:21:50,320 Speaker 1: a yacht girl. 451 00:21:51,320 --> 00:21:53,360 Speaker 3: Well I don't think I've been on a yacht. I've 452 00:21:53,359 --> 00:21:54,680 Speaker 3: just seen that below deck show. 453 00:21:54,760 --> 00:21:57,000 Speaker 1: All right, No, no, no, that speaks to me. Yeah, 454 00:21:57,000 --> 00:21:58,760 Speaker 1: all right, I think we should go on a super yacht. 455 00:21:58,840 --> 00:22:01,800 Speaker 1: She's on the money tour around Australia, but on a yacht. 456 00:22:01,840 --> 00:22:02,320 Speaker 3: Stop it. 457 00:22:02,440 --> 00:22:04,600 Speaker 1: Let's hit up, let's show it up below deck and 458 00:22:04,760 --> 00:22:07,720 Speaker 1: ask them if they'll let us on their boat. Perfect, 459 00:22:07,760 --> 00:22:09,080 Speaker 1: But do you want meaning to answer the question? 460 00:22:09,160 --> 00:22:10,440 Speaker 3: Yeah, I can't even remember. Okay. 461 00:22:10,440 --> 00:22:13,040 Speaker 1: So the question, or the thing I was trying to 462 00:22:13,040 --> 00:22:15,960 Speaker 1: get across here, is that when you have a one 463 00:22:16,000 --> 00:22:18,960 Speaker 1: point two million dollar portfolio, we don't just start spending 464 00:22:19,000 --> 00:22:23,000 Speaker 1: that because hopefully we have dividend yielding stogs that are 465 00:22:23,119 --> 00:22:26,040 Speaker 1: paying us to own that, and a seven point five 466 00:22:26,080 --> 00:22:29,040 Speaker 1: percent return gee on a one point two million dollar 467 00:22:29,080 --> 00:22:32,120 Speaker 1: portfolio is about sixty thousand dollars a year. So what 468 00:22:32,200 --> 00:22:35,240 Speaker 1: you then have is an asset that is paying you 469 00:22:35,280 --> 00:22:38,320 Speaker 1: sixty grand a year just to exist. You don't have 470 00:22:38,400 --> 00:22:40,479 Speaker 1: to go to work, you don't have to sign time sheets, 471 00:22:40,480 --> 00:22:42,679 Speaker 1: you don't have to do anything except for what your 472 00:22:42,720 --> 00:22:45,240 Speaker 1: bank account grow. And I think that's really cool. But 473 00:22:45,320 --> 00:22:48,639 Speaker 1: it's also really important to set realistic goals in retirement. 474 00:22:48,880 --> 00:22:51,040 Speaker 1: So if you're like, oh, V like sixty grand's not 475 00:22:51,080 --> 00:22:52,879 Speaker 1: going to be enough, Okay, cool, Maybe you need more 476 00:22:52,920 --> 00:22:56,240 Speaker 1: than five hundred dollars a month, but it's all about 477 00:22:56,240 --> 00:22:58,720 Speaker 1: making sure that you know what that contribution is and 478 00:22:58,760 --> 00:23:01,840 Speaker 1: how that works, and then working backwards to achieve bloody brilliant. 479 00:23:01,920 --> 00:23:03,520 Speaker 3: I reckon, we'll leave it there, and I knew you 480 00:23:03,520 --> 00:23:05,119 Speaker 3: were going to take us to a break. On the 481 00:23:05,160 --> 00:23:07,680 Speaker 3: other side, we will be chatting through a little comparison 482 00:23:07,800 --> 00:23:10,160 Speaker 3: of the two and what gets you up, So we'll 483 00:23:10,160 --> 00:23:13,119 Speaker 3: see you on the other side. Straight back into it. 484 00:23:13,400 --> 00:23:13,680 Speaker 1: VD. 485 00:23:13,840 --> 00:23:18,440 Speaker 3: Now we've gotten the lowdown on both growth and dividend investing. 486 00:23:18,480 --> 00:23:19,960 Speaker 3: I just forgot there a little bit. 487 00:23:20,080 --> 00:23:22,720 Speaker 1: Can you actually here recap it? What's a growth share? 488 00:23:22,720 --> 00:23:24,760 Speaker 1: What's a dividends share? 489 00:23:24,920 --> 00:23:28,240 Speaker 3: A growth share is one that you hold on to 490 00:23:28,400 --> 00:23:31,080 Speaker 3: for the long hold, which let's be real, guys, let's 491 00:23:31,119 --> 00:23:33,240 Speaker 3: remember what Warren said you should be doing with most 492 00:23:33,240 --> 00:23:36,560 Speaker 3: of your shares. Yes with me, So that is growth, 493 00:23:36,800 --> 00:23:40,000 Speaker 3: and the idea there is that you get your growth 494 00:23:41,280 --> 00:23:44,680 Speaker 3: from the end when you sell it. That's how it works. 495 00:23:44,760 --> 00:23:48,200 Speaker 1: But I might also turn into a dividend chair correct, sexy. 496 00:23:47,960 --> 00:23:51,280 Speaker 3: Because that's what happens when the company makes enough money 497 00:23:51,320 --> 00:23:55,440 Speaker 3: to be able to pay its people. I love that, Yes, 498 00:23:55,640 --> 00:23:59,960 Speaker 3: and then dividends. Sure, they might not make you really rich, 499 00:24:00,040 --> 00:24:01,680 Speaker 3: but also maybe they will. 500 00:24:01,680 --> 00:24:05,120 Speaker 1: Because I will counting interest you king on tua. 501 00:24:05,040 --> 00:24:07,160 Speaker 3: They will, but they'll also pay you along the way. 502 00:24:07,359 --> 00:24:09,040 Speaker 3: So I feel like they're both good. 503 00:24:09,119 --> 00:24:11,479 Speaker 1: They're both very good options, and like one is not 504 00:24:11,520 --> 00:24:13,879 Speaker 1: necessarily better than the other, and they wouldn't want you 505 00:24:13,880 --> 00:24:16,840 Speaker 1: guys thinking that I'm in one column and not the other. 506 00:24:17,040 --> 00:24:19,360 Speaker 1: I think it's really important for you to understand why 507 00:24:19,400 --> 00:24:22,200 Speaker 1: you'd hold the different ones. But also recently I've seen 508 00:24:22,240 --> 00:24:24,000 Speaker 1: a bit of confusion because people are like, when do 509 00:24:24,040 --> 00:24:26,560 Speaker 1: I get paid my dividends? And I'm like, well, what 510 00:24:26,640 --> 00:24:28,320 Speaker 1: do you hold? And they're like, I bought all of 511 00:24:28,359 --> 00:24:31,040 Speaker 1: these shares of X company. I'm like, babe, they don't 512 00:24:31,040 --> 00:24:34,159 Speaker 1: pay your dividend. There isn't one coming. I'm sorry. So, 513 00:24:34,240 --> 00:24:36,760 Speaker 1: as someone who really wants to talk about investing deeply 514 00:24:36,800 --> 00:24:38,959 Speaker 1: with you, Like, I really think you deserve to know 515 00:24:39,040 --> 00:24:41,600 Speaker 1: that before you get into it, because there's so much 516 00:24:41,720 --> 00:24:44,360 Speaker 1: research to be done. But at the same time, these 517 00:24:44,359 --> 00:24:46,840 Speaker 1: are really easy points that you can learn along the way. 518 00:24:47,680 --> 00:24:51,520 Speaker 3: So return wise, though, what's the difference, what looks better 519 00:24:51,640 --> 00:24:52,960 Speaker 3: or does it really just depend on the. 520 00:24:53,200 --> 00:24:55,439 Speaker 1: It really depends on the individual. And to be honest, 521 00:24:55,480 --> 00:24:58,680 Speaker 1: I wouldn't ever, ever, ever recommend putting all your eggs 522 00:24:58,680 --> 00:25:00,520 Speaker 1: in one basket and just go, oh, well, I'm just 523 00:25:00,560 --> 00:25:03,240 Speaker 1: going to go buy NAB shares because Victoria mentioned a 524 00:25:03,359 --> 00:25:06,320 Speaker 1: NAB share one time, which is not a recommendation to 525 00:25:06,400 --> 00:25:09,760 Speaker 1: urchase on the podcast, Like, you wouldn't have any level 526 00:25:09,800 --> 00:25:13,159 Speaker 1: of diversification, like if you are going to buy individual shares, 527 00:25:13,520 --> 00:25:17,239 Speaker 1: which from my perspective, is a very risky way of 528 00:25:17,280 --> 00:25:20,920 Speaker 1: starting your investment journey because how are you diversified? How 529 00:25:20,960 --> 00:25:23,600 Speaker 1: are you educated enough to be making these big share 530 00:25:23,600 --> 00:25:27,120 Speaker 1: decisions that are usually reserved for fund managers. I would 531 00:25:27,160 --> 00:25:29,840 Speaker 1: be looking for something that really helps you get a 532 00:25:29,880 --> 00:25:32,240 Speaker 1: whole heap of diversification in the first place. 533 00:25:33,440 --> 00:25:36,359 Speaker 3: Okay, so if we do want to invest, then is 534 00:25:36,440 --> 00:25:39,200 Speaker 3: the best way to be as diverse as we can 535 00:25:39,320 --> 00:25:42,600 Speaker 3: incorporate some growth shares and some dividend shares. Is that 536 00:25:42,640 --> 00:25:44,040 Speaker 3: the way to do it. 537 00:25:44,000 --> 00:25:48,040 Speaker 1: Yes, absolutely, but also completely aligned to your values. Like 538 00:25:48,160 --> 00:25:52,000 Speaker 1: I have a number of incredibly conservative clients who are 539 00:25:52,160 --> 00:25:57,000 Speaker 1: only dividend shares. They will only buy tried, true, tested, 540 00:25:57,119 --> 00:25:59,720 Speaker 1: blue collar shares. They don't want ETFs, they don't want 541 00:25:59,720 --> 00:26:03,280 Speaker 1: any So I manage a direct portfolio of probably ten 542 00:26:03,320 --> 00:26:07,080 Speaker 1: to twelve shares on average that can fluctuate depending on 543 00:26:07,080 --> 00:26:09,199 Speaker 1: whether I've made the decision to sell down some of 544 00:26:09,240 --> 00:26:12,000 Speaker 1: their stock or buy something new to introduce it to 545 00:26:12,040 --> 00:26:15,040 Speaker 1: the portfolio. But they just want to hold direct shares, 546 00:26:15,080 --> 00:26:17,080 Speaker 1: and I totally get that. But the reason they want 547 00:26:17,080 --> 00:26:19,400 Speaker 1: that is they want to hold the West Farmers, the BHP, 548 00:26:19,600 --> 00:26:21,240 Speaker 1: they want some of the big banks. They want to 549 00:26:21,280 --> 00:26:24,120 Speaker 1: hold Woolies, they want to hold coals. Like they are 550 00:26:24,160 --> 00:26:27,800 Speaker 1: just buying very tried and true blue chip stocks, and 551 00:26:27,840 --> 00:26:30,920 Speaker 1: that is okay, that is absolutely fair. But the reason 552 00:26:30,960 --> 00:26:33,199 Speaker 1: they are doing that is because they're getting closer to 553 00:26:33,280 --> 00:26:37,200 Speaker 1: retirement and they are prioritizing income. But also they're just 554 00:26:37,240 --> 00:26:39,840 Speaker 1: a bit more conservative. Like at the end of the day, 555 00:26:39,840 --> 00:26:41,960 Speaker 1: at blue ship stock is not a growth stock. It 556 00:26:42,040 --> 00:26:44,840 Speaker 1: is not something that is going to skyrocket into being 557 00:26:45,040 --> 00:26:47,560 Speaker 1: the most successful share of the year, because at the 558 00:26:47,560 --> 00:26:51,560 Speaker 1: same time, as you know, after Pay increasing so significantly 559 00:26:51,640 --> 00:26:54,080 Speaker 1: in share price, a whole heap of other shares that 560 00:26:54,119 --> 00:26:56,359 Speaker 1: people bought at the same time as after Pay because 561 00:26:56,400 --> 00:26:58,560 Speaker 1: they saw the same value in them and they saw 562 00:26:58,600 --> 00:27:02,000 Speaker 1: the same potential plummeted. So I think it's important to 563 00:27:02,040 --> 00:27:05,320 Speaker 1: realize that investing is a journey, and that's why we 564 00:27:05,359 --> 00:27:08,720 Speaker 1: want to invest in a diversified portfolio, because if I 565 00:27:08,760 --> 00:27:11,040 Speaker 1: have to pay is returning, you know, sixty percent, and 566 00:27:11,080 --> 00:27:15,240 Speaker 1: then another share that you've bought actually completely plummeted, you're 567 00:27:15,240 --> 00:27:17,800 Speaker 1: going to end up with a pretty good average instead 568 00:27:17,840 --> 00:27:20,880 Speaker 1: of only being exposed to one of those percentages. 569 00:27:21,480 --> 00:27:25,400 Speaker 3: Okay, that makes sense. Obviously the market has been really 570 00:27:25,480 --> 00:27:28,840 Speaker 3: volatile of late. Would you say it, based on what 571 00:27:28,880 --> 00:27:31,760 Speaker 3: you just said, that this would affect gross investments more 572 00:27:31,800 --> 00:27:34,360 Speaker 3: than dividend because dividends may be a little safer. 573 00:27:34,760 --> 00:27:38,360 Speaker 1: Yes and no. So it really depends because obviously, if 574 00:27:38,400 --> 00:27:42,520 Speaker 1: a dividend share is decreasing in price and it's experiencing 575 00:27:42,560 --> 00:27:44,840 Speaker 1: the same volatility, they might not end up having the 576 00:27:44,840 --> 00:27:47,480 Speaker 1: same profits that they had the year before. So when 577 00:27:47,520 --> 00:27:49,679 Speaker 1: you look at the market as a whole, there's usually 578 00:27:49,760 --> 00:27:53,240 Speaker 1: some kind of trigger or reason why that volatility exists. 579 00:27:53,240 --> 00:27:56,120 Speaker 1: And volatility is essentially just how much the share price 580 00:27:56,160 --> 00:27:58,840 Speaker 1: increases and decreases over time. We know it goes up 581 00:27:58,880 --> 00:28:04,040 Speaker 1: and down. When a Panini happens, Georgia King and we 582 00:28:04,200 --> 00:28:06,320 Speaker 1: all are thrown into a bit of a storm that 583 00:28:06,359 --> 00:28:09,800 Speaker 1: we're not sure how to navigate. Most companies, on average 584 00:28:09,840 --> 00:28:12,240 Speaker 1: don't make as much profit as they were the year before, 585 00:28:12,400 --> 00:28:16,160 Speaker 1: so your dividend might be decreased. However, I was having 586 00:28:16,160 --> 00:28:18,840 Speaker 1: this really interesting conversation with someone the other day and 587 00:28:18,840 --> 00:28:21,679 Speaker 1: they're like, oh my god, my shares have decreased significantly, 588 00:28:21,720 --> 00:28:22,960 Speaker 1: and I was said, yeah, but you're still going to 589 00:28:22,960 --> 00:28:24,880 Speaker 1: get paid really good dividends because they had really good 590 00:28:24,880 --> 00:28:28,480 Speaker 1: profits that year. So even if your share price decreases, 591 00:28:28,560 --> 00:28:31,160 Speaker 1: you still own the same amount of shares. So if 592 00:28:31,200 --> 00:28:34,160 Speaker 1: you bought ten shares in a bank and you bought 593 00:28:34,200 --> 00:28:36,359 Speaker 1: them for ten dollars a share, you've got one hundred 594 00:28:36,400 --> 00:28:40,000 Speaker 1: dollars as your investment portfolio, and maybe those shares they 595 00:28:40,000 --> 00:28:42,880 Speaker 1: pay you a ten cent dividend each and every single year, 596 00:28:42,960 --> 00:28:47,160 Speaker 1: and that's really exciting. But if those shares decrease in 597 00:28:47,280 --> 00:28:50,360 Speaker 1: value gene now they're worth fifty cents each in your portfolio. 598 00:28:50,440 --> 00:28:52,360 Speaker 1: Oh my gosh, when you log into your platform and 599 00:28:52,360 --> 00:28:54,400 Speaker 1: have a look at it, you only have fifty bucks 600 00:28:54,480 --> 00:28:57,400 Speaker 1: worth of shares. You're actually still being paid the same 601 00:28:57,400 --> 00:28:59,640 Speaker 1: amount of dividends because you still have the same amount 602 00:28:59,640 --> 00:29:02,680 Speaker 1: of shares, So it's not as significant. Whereas if you're 603 00:29:02,760 --> 00:29:06,600 Speaker 1: buying a growth stock and then your portfolio has significantly 604 00:29:06,640 --> 00:29:09,680 Speaker 1: decreased in value over time, what else are you getting 605 00:29:09,680 --> 00:29:11,240 Speaker 1: out of this? Like no one's paying you any of 606 00:29:11,280 --> 00:29:13,640 Speaker 1: the profits, Like are they going to increase so that 607 00:29:13,680 --> 00:29:16,280 Speaker 1: you can make profit? Or has it gone below what 608 00:29:16,320 --> 00:29:19,840 Speaker 1: you originally purchased it for? But again, they make up 609 00:29:19,880 --> 00:29:22,880 Speaker 1: a really good part of a well diversified portfolio. Both 610 00:29:22,920 --> 00:29:26,080 Speaker 1: of them slightly off topic. But if you did have 611 00:29:26,200 --> 00:29:28,800 Speaker 1: a gross investment and it did fall below what you 612 00:29:28,840 --> 00:29:30,560 Speaker 1: paid for it, I feel like usually would be like 613 00:29:31,000 --> 00:29:33,840 Speaker 1: hold on right out that wave, Yes, of course, but 614 00:29:33,920 --> 00:29:36,480 Speaker 1: how do you know if you should or not? Like 615 00:29:36,520 --> 00:29:38,640 Speaker 1: that's the general advice. But what if it's just a 616 00:29:38,800 --> 00:29:40,960 Speaker 1: dodgy share and it's going downhill? Like, how do you 617 00:29:41,000 --> 00:29:44,040 Speaker 1: know that? As just a regular research and that's why 618 00:29:44,160 --> 00:29:47,520 Speaker 1: we're not punters in the share market. Georgia King. This 619 00:29:47,720 --> 00:29:50,200 Speaker 1: isn't a gamble. This is something that you would make 620 00:29:50,320 --> 00:29:54,040 Speaker 1: a very well and very educated decision on, and if 621 00:29:54,080 --> 00:29:57,000 Speaker 1: a share is going down, I don't want anybody to 622 00:29:57,040 --> 00:30:00,800 Speaker 1: ever be superactive. That's what created a lot of loss 623 00:30:00,880 --> 00:30:02,920 Speaker 1: during the GFC. So we're not saying that that's the 624 00:30:02,960 --> 00:30:06,760 Speaker 1: reason the GFC existed. But during the Global Financial Crisis, 625 00:30:06,840 --> 00:30:09,080 Speaker 1: a lot of people lost a lot of money because 626 00:30:09,080 --> 00:30:13,200 Speaker 1: they saw their share portfolios absolutely plummet, and they freaked 627 00:30:13,200 --> 00:30:14,840 Speaker 1: out and they were like, oh my gosh, I've got 628 00:30:14,840 --> 00:30:17,720 Speaker 1: to get my money out while it's still there. But 629 00:30:17,840 --> 00:30:19,720 Speaker 1: what they didn't think about was like, oh, I bought 630 00:30:19,760 --> 00:30:22,000 Speaker 1: those ten bank shares. I still own ten bank shares. 631 00:30:22,040 --> 00:30:25,720 Speaker 1: They're just valued at less today, and the value is 632 00:30:25,760 --> 00:30:27,719 Speaker 1: how much you would get if you sold them today. 633 00:30:28,080 --> 00:30:30,880 Speaker 1: So today you might only get fifty bucks. But if 634 00:30:30,880 --> 00:30:33,400 Speaker 1: we ride that wave out over time, we know on 635 00:30:33,480 --> 00:30:36,320 Speaker 1: average money should double every ten years. If it's not 636 00:30:36,400 --> 00:30:40,320 Speaker 1: a quote terrible stock and it's just the market being reactive, 637 00:30:40,600 --> 00:30:42,600 Speaker 1: then we should ride it out. But there is a 638 00:30:42,600 --> 00:30:44,720 Speaker 1: lot of research to be done into a share that 639 00:30:44,720 --> 00:30:47,200 Speaker 1: you go, oh, this hasn't been performing well for a while. 640 00:30:47,520 --> 00:30:50,440 Speaker 1: I'd be using some research from different investment houses and 641 00:30:50,480 --> 00:30:54,160 Speaker 1: having a look at potentially what we could do instead. 642 00:30:54,360 --> 00:30:56,240 Speaker 1: And sometimes you just have to bite the bullet and 643 00:30:56,240 --> 00:30:59,440 Speaker 1: go do what. This wasn't a good investment, I'm going 644 00:30:59,520 --> 00:31:02,600 Speaker 1: to sell this particular asset. So I might sell, you know, 645 00:31:02,920 --> 00:31:05,960 Speaker 1: this particular brand that I have bought and buy something 646 00:31:05,960 --> 00:31:09,000 Speaker 1: else to replace it in my portfolio. But if you 647 00:31:09,160 --> 00:31:13,160 Speaker 1: are being a good, well diversified investor, that's not your 648 00:31:13,320 --> 00:31:16,040 Speaker 1: entire wealth, that's not going to matter in the grand 649 00:31:16,040 --> 00:31:17,800 Speaker 1: scheme of things. You'll sell it down and be like, oh, 650 00:31:17,840 --> 00:31:20,280 Speaker 1: that was pretty terrible. They didn't have a good return. 651 00:31:20,440 --> 00:31:22,440 Speaker 1: But luckily all the other shares that I've got they 652 00:31:22,480 --> 00:31:24,240 Speaker 1: do have a good return, and I'm going to buy 653 00:31:24,240 --> 00:31:26,560 Speaker 1: something else. Over time is going to benefit me. And 654 00:31:26,600 --> 00:31:30,600 Speaker 1: that's why I'm so passionate about diversifying your investments and 655 00:31:30,640 --> 00:31:32,920 Speaker 1: not just going, yeah, they I own three different shares. 656 00:31:32,920 --> 00:31:35,160 Speaker 1: I'll be like, babe, that's not enough. Yeah, Like that 657 00:31:35,920 --> 00:31:39,520 Speaker 1: exposes you to if that company does really badly, like 658 00:31:39,560 --> 00:31:41,560 Speaker 1: you're going to feel that you're kind of putting a 659 00:31:41,560 --> 00:31:45,000 Speaker 1: buffer between yourself and the share market by having a 660 00:31:45,080 --> 00:31:47,720 Speaker 1: number of stocks. It's kind of like spreading it out 661 00:31:47,840 --> 00:31:50,240 Speaker 1: so they fall softly instead of all in a big lump. 662 00:31:50,280 --> 00:31:52,720 Speaker 3: Do you ever think about how blessed you are to 663 00:31:52,840 --> 00:31:55,320 Speaker 3: be you and just have all of this knowledge in 664 00:31:55,360 --> 00:31:57,520 Speaker 3: your brain? Obviously you worked really hard to like learn 665 00:31:57,520 --> 00:32:02,680 Speaker 3: to get bullied a lot at school. Yeah, but like 666 00:32:03,000 --> 00:32:05,680 Speaker 3: I can imagine everybody is cool now because I've put 667 00:32:05,720 --> 00:32:09,120 Speaker 3: a peachy brand on it. But like I just wish 668 00:32:09,240 --> 00:32:11,120 Speaker 3: I knew what I was doing as much as you did. 669 00:32:11,120 --> 00:32:13,080 Speaker 1: Like maybe if you listened to our podcast recording. 670 00:32:13,960 --> 00:32:17,720 Speaker 3: So now, sometimes let's round out this chat V by 671 00:32:18,000 --> 00:32:22,280 Speaker 3: quickly chatting about tax difference in I loved how how 672 00:32:22,360 --> 00:32:23,240 Speaker 3: they work with each. 673 00:32:23,480 --> 00:32:25,840 Speaker 1: A lot of people get really frustrated. They're like, oh 674 00:32:25,840 --> 00:32:27,360 Speaker 1: my god, I'm not going to win best because I'll 675 00:32:27,360 --> 00:32:30,640 Speaker 1: have to pay tax. Get girl, if you're paying tax, 676 00:32:30,720 --> 00:32:32,840 Speaker 1: do you know what that means? You made money? And 677 00:32:32,880 --> 00:32:37,120 Speaker 1: I think that we need to reframe how we view tax. Like, yes, absolutely, 678 00:32:37,120 --> 00:32:39,240 Speaker 1: you need to consider tax and what that means for 679 00:32:39,280 --> 00:32:41,400 Speaker 1: you and how that works. And as I said before, 680 00:32:41,440 --> 00:32:45,000 Speaker 1: there are different rules and regulations on you know, the 681 00:32:45,040 --> 00:32:47,880 Speaker 1: tax rates for different holding periods, i e. If you 682 00:32:48,040 --> 00:32:51,000 Speaker 1: hold a share for less than twelve months and then 683 00:32:51,040 --> 00:32:53,440 Speaker 1: sell it and you've made a good profit. You're gonna 684 00:32:53,440 --> 00:32:54,840 Speaker 1: have to pay more tax on it then if you 685 00:32:54,880 --> 00:32:56,600 Speaker 1: held it for more than a year, so I think 686 00:32:56,640 --> 00:32:59,920 Speaker 1: it's important to understand that. But then also, you're going 687 00:32:59,920 --> 00:33:02,160 Speaker 1: to be taxed at your marginal tax rate if you 688 00:33:02,240 --> 00:33:05,520 Speaker 1: hold those shares individually in your own name, So ge 689 00:33:05,680 --> 00:33:08,360 Speaker 1: whatever tax you're paying now, that's the amount of tax 690 00:33:08,520 --> 00:33:11,360 Speaker 1: you'll pay on the profits of your share portfolio, which 691 00:33:11,400 --> 00:33:14,080 Speaker 1: is very exciting. But the other thing that I think 692 00:33:14,200 --> 00:33:16,480 Speaker 1: is really sexy when it comes to tax, and I'm 693 00:33:16,480 --> 00:33:18,640 Speaker 1: not an accountant, so that's why I'm not giving you 694 00:33:18,680 --> 00:33:21,600 Speaker 1: specific advice on what to do and what not to do. 695 00:33:21,840 --> 00:33:24,240 Speaker 1: Only you can work that out. But the other sexy 696 00:33:24,280 --> 00:33:28,880 Speaker 1: thing g franking credits, h our old friends, our old friends, 697 00:33:28,920 --> 00:33:33,360 Speaker 1: franking credits and so essentially franking credits are sexy. And 698 00:33:33,880 --> 00:33:36,720 Speaker 1: a lot of you already have shares in your superanuation 699 00:33:36,880 --> 00:33:39,480 Speaker 1: funds that are franked, and that's very exciting. But the 700 00:33:39,520 --> 00:33:42,800 Speaker 1: benefit of frank shares is essentially when a dividing gets 701 00:33:42,800 --> 00:33:45,760 Speaker 1: paid out of the profits that have already been subjected 702 00:33:45,800 --> 00:33:48,080 Speaker 1: to tax, right, so that business has already paid their 703 00:33:48,120 --> 00:33:51,320 Speaker 1: thirty percent tax rate. You get a little credit. It's 704 00:33:51,360 --> 00:33:53,760 Speaker 1: like a little sticky note that comes on top of 705 00:33:53,800 --> 00:33:56,360 Speaker 1: the share. So when the tax offer see it, they go, 706 00:33:56,400 --> 00:33:58,840 Speaker 1: oh my gosh, this share that she's made some money 707 00:33:58,880 --> 00:34:00,480 Speaker 1: on has a little sticky note on it. And that's 708 00:34:00,480 --> 00:34:04,040 Speaker 1: a franking credit. And that means that shareholders can actually 709 00:34:04,040 --> 00:34:06,479 Speaker 1: get a rebate for the tax that was paid by 710 00:34:06,520 --> 00:34:09,640 Speaker 1: the company on the profits that were distributed as dividends. 711 00:34:10,160 --> 00:34:12,719 Speaker 1: That was a mouthful, it was. It was pretty impressive though. 712 00:34:13,360 --> 00:34:15,359 Speaker 1: Thanks thanks for coming to my ted talk. 713 00:34:15,440 --> 00:34:16,160 Speaker 3: Loved it. 714 00:34:16,239 --> 00:34:19,160 Speaker 1: But essentially that means that you kind of get a refund. 715 00:34:19,480 --> 00:34:23,120 Speaker 1: So you're paying less tax because the company's already paid 716 00:34:23,120 --> 00:34:24,799 Speaker 1: thirty percent of it. So that's a bit of a 717 00:34:24,840 --> 00:34:28,600 Speaker 1: money win. And you're entitled to receive a credit for 718 00:34:28,719 --> 00:34:31,160 Speaker 1: any tax the company's paid for you, which I really 719 00:34:31,200 --> 00:34:34,760 Speaker 1: really like. And if your top tax rate is less 720 00:34:34,800 --> 00:34:36,920 Speaker 1: than the company's tax rate, which a lot of us 721 00:34:36,960 --> 00:34:39,520 Speaker 1: would be, so a lot of you won't be paying 722 00:34:39,560 --> 00:34:42,279 Speaker 1: more than thirty percent in tax, you actually get a 723 00:34:42,280 --> 00:34:45,600 Speaker 1: refund from the ATO. That's really nice and that's more 724 00:34:45,640 --> 00:34:48,040 Speaker 1: money in your back pocket and the benefit of that 725 00:34:48,120 --> 00:34:50,080 Speaker 1: and the reason why I'm talking about this is not 726 00:34:50,160 --> 00:34:52,840 Speaker 1: because it's super sexy in the individual shares you're buying, 727 00:34:53,160 --> 00:34:56,880 Speaker 1: but because it's super sexy in your superannuation portfolio. And 728 00:34:56,920 --> 00:34:59,680 Speaker 1: guin why I say that, Because the tax rate in 729 00:34:59,719 --> 00:35:02,240 Speaker 1: your super portfolio is fifteen percent? 730 00:35:02,360 --> 00:35:02,879 Speaker 3: That's right? 731 00:35:03,080 --> 00:35:05,400 Speaker 1: And gee, how much tax? Did we just say that 732 00:35:05,440 --> 00:35:10,400 Speaker 1: the company paid thirty So what's thirty minus fifteen? It's half, 733 00:35:10,560 --> 00:35:14,640 Speaker 1: So you get fifteen percent back, which makes those shares 734 00:35:14,719 --> 00:35:18,320 Speaker 1: even if your dividend was absolutely tiny, that's automatically a 735 00:35:18,360 --> 00:35:23,240 Speaker 1: return of fifteen percent money week. Okay, that's very sexy. 736 00:35:23,360 --> 00:35:25,320 Speaker 1: But yes, there are always going to be tax questions 737 00:35:25,320 --> 00:35:27,040 Speaker 1: that we need to address, but I think the most 738 00:35:27,040 --> 00:35:29,279 Speaker 1: important thing here is just to be aware of them 739 00:35:29,520 --> 00:35:31,920 Speaker 1: and not be evasive of them. Because if you're paying tax, 740 00:35:31,960 --> 00:35:33,799 Speaker 1: my friend, it means that you're making money, and that's 741 00:35:33,880 --> 00:35:36,120 Speaker 1: exactly what we plan to do with investing. 742 00:35:36,280 --> 00:35:38,520 Speaker 3: Yeah. I think that is probably the perfect place to 743 00:35:38,640 --> 00:35:39,160 Speaker 3: leave it today. 744 00:35:39,239 --> 00:35:41,760 Speaker 1: V Well, thank you for coming to my TED Talk 745 00:35:41,840 --> 00:35:45,279 Speaker 1: slash deep dive into dividend and growth shares. I'm very 746 00:35:45,280 --> 00:35:47,200 Speaker 1: excited that you're now allowing me to do this on 747 00:35:47,280 --> 00:35:49,640 Speaker 1: the podcast. But I hope this was fun and I 748 00:35:49,640 --> 00:35:51,000 Speaker 1: guess we'll see you next week. Do you want to 749 00:35:51,040 --> 00:35:53,240 Speaker 1: tell them that I'm an authorized Yes? 750 00:35:53,280 --> 00:35:53,360 Speaker 3: Do? 751 00:35:53,400 --> 00:35:53,919 Speaker 1: That'd be good? 752 00:35:54,000 --> 00:35:54,560 Speaker 4: Alrighty. 753 00:35:54,680 --> 00:35:57,360 Speaker 3: The advice shared on es on the Money is general 754 00:35:57,440 --> 00:36:00,560 Speaker 3: in nature and does not consider your individual circuit steps. Yes, 755 00:36:01,080 --> 00:36:04,440 Speaker 3: She's on the Money exists purely for educational purposes and 756 00:36:04,480 --> 00:36:07,040 Speaker 3: should not be relied upon to make an investment or 757 00:36:07,080 --> 00:36:10,960 Speaker 3: a financial decision. And remember, guys that Victoria Devine is 758 00:36:10,960 --> 00:36:15,880 Speaker 3: an authorized representative of Infocused Securities Australia Propriety Limited ABN 759 00:36:16,040 --> 00:36:19,120 Speaker 3: four seven zero nine seven seven nine seven zero four 760 00:36:19,200 --> 00:36:21,960 Speaker 3: nine AFSL two three six five two three. 761 00:36:22,200 --> 00:36:25,040 Speaker 1: And as always, we would adore it if you joined 762 00:36:25,040 --> 00:36:27,799 Speaker 1: our Facebook group, where our community shares money tips and 763 00:36:27,840 --> 00:36:31,360 Speaker 1: tricks every single day, free of judgment. So She's on 764 00:36:31,400 --> 00:36:33,920 Speaker 1: the Money on Facebook and join us. If Facebook's not 765 00:36:33,960 --> 00:36:35,960 Speaker 1: you think, We're also on Instagram at She's on the 766 00:36:35,960 --> 00:36:39,840 Speaker 1: Money a US and I'm also on TikTok making terrible videos, 767 00:36:39,960 --> 00:36:41,839 Speaker 1: so find us there and don't forget. If you are 768 00:36:41,880 --> 00:36:45,800 Speaker 1: adoring the podcast, to rate, review and subscribe. See you soon, guys. 769 00:36:45,880 --> 00:37:01,320 Speaker 4: Bye bye. Did to