Speaker 1: Just before we get started, we'd like to acknowledge and
Speaker 1: pay respect to Australia's Aboriginal and torrest Right Islander people's.
Speaker 1: They're the traditional custodians of the lands, the waterways and
Speaker 1: the skies all across Australia. We thank you for sharing
Speaker 1: and for caring for the land on which we are
Speaker 1: able to learn. We pay respects to elders past and present,
Speaker 1: and we share our friendship and our kindness.
Speaker 2: She's on the Money, She's on the Money.
Speaker 3: Hello, and welcome to She's on the Money, the podcast
Speaker 3: Millennials Who Want Financial Freedom. My name is Jessica Ricky,
Speaker 3: filling in for George Key this week today, with of course,
Speaker 3: as always, Victoria Devine.
Speaker 1: Hello, Hey, going, you're just sneaking on in here to
Speaker 1: do you were pod about investing.
Speaker 3: Oh, you know, I love investing, so I'm very excited
Speaker 3: for it.
Speaker 1: Did you just knock George out of the ring because
Speaker 1: You're like, this is going to be a really good topic.
Speaker 1: I've been talking to Victoria about it a lot in
Speaker 1: the office, obviously, because we're planning this. I'm just going
Speaker 1: to do it myself.
Speaker 3: Yeah, I st what I gave her the flu so
Speaker 3: I could, Oh my, you are so kind. I know
Speaker 3: I'm really evil, but the like me, we're always just
Speaker 3: so excited to see people start their investing journey. We
Speaker 3: know that numbers of people starting that journey are increasing
Speaker 3: right across Australia, having risen significantly over the course of
Speaker 3: the pandemic, which is just great to see.
Speaker 1: Yes, Jesse, it makes my heart absolutely seeing and I
Speaker 1: want to take some credit for that because I feel
Speaker 1: like that She's on the money community make up a
Speaker 1: really big portion of that. So let's say that it's
Speaker 1: she's on the money. They're the investors in this community.
Speaker 1: But what we really want to do with this show
Speaker 1: is talk more about investing conversations and open up this
Speaker 1: platform even more to talk more specifically, because I feel
Speaker 1: like we've graduated a bit, like a lot of people
Speaker 1: are still in their budget and cash flow journeys, but
Speaker 1: a lot of graduated to the point where they're picking
Speaker 1: between different investment platforms, and there's lots of conversation and
Speaker 1: questions in our community at the moment, Jess about what
Speaker 1: platforms should I consider, how do I review them? What's
Speaker 1: the difference between micro investing and like a share trading
Speaker 1: platform and robo advice, and for me, I obviously know
Speaker 1: what the difference is. I'm like, what do you mean?
Speaker 1: But you've had these questions before, We've gone through them,
Speaker 1: and it's just something we haven't covered in detail on
Speaker 1: the pod. So today we are going to be breaking
Speaker 1: down the differences and who they might best serve.
Speaker 3: And we really recommend you head back and listen to
Speaker 3: our mini series on micro investing, which we did back
Speaker 3: in twenty twenty.
Speaker 1: I think I don't want to enjoy about it. It was
Speaker 1: so long ago, can you imagine?
Speaker 3: But we've done quite a few investing episodes since then.
Speaker 3: So if you are at the point we are studying
Speaker 3: your journey, definitely go back through the feed because we've
Speaker 3: got the Investing one oh one series where we cover
Speaker 3: the asset classes and then also that micro investing deep
Speaker 3: dive as well.
Speaker 1: But V where do we start, Jess, Let's talk about
Speaker 1: the importance of understanding the different capabilities of the platforms,
Speaker 1: because I feel like so many of us have only
Speaker 1: recently started our investing journeys, which is why we're asking
Speaker 1: questions like do I go with a micro investing platform
Speaker 1: or do I go direct and buy some shares, or
Speaker 1: do I need to see a financial advisor? Like, one
Speaker 1: of the most common questions in our community is do
Speaker 1: I need to see a financial advisor? If so, how
Speaker 1: do I find one? What does that mean? And a
Speaker 1: lot of people are shocked when they come to find
Speaker 1: out how expensive financial advisors are, but then they think
Speaker 1: that maybe that's the only way you can access investing,
Speaker 1: and that's just not the case. There are so many
Speaker 1: options that put you in the driver's seat and in
Speaker 1: the best possible position to actually invest and have a
Speaker 1: positive impact on your future and feel empowered and get
Speaker 1: education without actually having to see a financial advisor. Obviously,
Speaker 1: there are some circumstances like if you've inherited a lot
Speaker 1: of money or you're going through, you know, a significant
Speaker 1: change in your life where you're like, you know what,
Speaker 1: I do need to see an advisor. I would always
Speaker 1: recommend that, but given the fact that to see a
Speaker 1: financial advisor it's probably going to cost you a minimum
Speaker 1: of three and a half thousand dollars in a statement
Speaker 1: of advice fee, that's quite prohubitive for so many people.
Speaker 1: So I think breaking down the different options that are
Speaker 1: out there for us is going to put us in
Speaker 1: the driver's seat, and I want to break them down
Speaker 1: in I guess levels of complexity. So like, let's frame
Speaker 1: today in the context of primary school, high school, and university,
Speaker 1: except we'll call it entry level, mid level, and advanced
Speaker 1: kind of investing. Now, when I say advanced investing, I
Speaker 1: don't mean, oh my gosh, you have to be an
Speaker 1: absolute wizard like Warren Buffett and have millions of dollars.
Speaker 1: It's just the level of complexity. It's kind of like
Speaker 1: three steps. And I would love to maybe we'll make
Speaker 1: a YouTube video on this. I would love to get
Speaker 1: in front of a whiteboard and show you guys the differences.
Speaker 1: But this is my way of framing that in an
Speaker 1: audio context. I love that.
Speaker 3: So let's say I'm right at the startup my journey.
Speaker 3: I've got, you know, maybe a couple of hundred dollars
Speaker 3: to invest. I've never invested before, and I am feeling
Speaker 3: overwhelmed and intimate.
Speaker 1: Yeah, And it can be so disempowering when you're like, oh,
Speaker 1: I finally save Like maybe it's like your first three
Speaker 1: thousand dollars, or maybe it's you know, your first one
Speaker 1: hundred dollars, Like we don't know your situation. But when
Speaker 1: you get to that point and you've made that decision
Speaker 1: to invest, it can be really overwhelming. As you said
Speaker 1: to go, well, I can't afford advice, like do I
Speaker 1: just sit here with my savings? I'd like what I
Speaker 1: want to do is invest, and that's what this episode
Speaker 1: is for. So let's start Jess with the primary school.
Speaker 1: Let's start with the entry level. Let's talk about micro investing.
Speaker 1: So obviously there are a couple of big ones in
Speaker 1: Australia that I talked about in our community, and I
Speaker 1: will shout them out by name. We're not going to
Speaker 1: break down the actual product. We will do another investing
Speaker 1: episode at some point breaking down the differences in specific product.
Speaker 1: But right now, this is your foundational level of understanding
Speaker 1: of the different types of platforms that exist. The choice
Speaker 1: of what you use and what is going to work
Speaker 1: for you is actually on you, it's not on listening
Speaker 1: to a podcast. So let's talk about micro investing. Spaceship
Speaker 1: and Race the two names that come to mind when
Speaker 1: we think of micro investing here in Australia. If you're
Speaker 1: in the Shees on the Money community already, you've probably
Speaker 1: seen people in our community talking about the two and
Speaker 1: the differences and what they do and how they work,
Speaker 1: because they are two very different products, but they both
Speaker 1: fall into the category of being micro investing platforms. So
Speaker 1: micro investing is when you deposit really small amounts of
Speaker 1: money into an investment portfolio over time. Some people this
Speaker 1: is an absolute dream because it breaks down the barrier
Speaker 1: that used to exist, which was like, jess, if you'd
Speaker 1: like to start investing, you need fifteen thousand dollars or
Speaker 1: you need five thousand dollars or something that seems or
Speaker 1: feels really prohibitive, like it's just just such a high hurdle,
Speaker 1: like not many of us can actually say, look, I've
Speaker 1: got five grand in savings, like life is expensive and
Speaker 1: do we get that, But it's from little things that
Speaker 1: big things do grow. It's been a while since I've
Speaker 1: been allowed to say that on the podcast. So basically,
Speaker 1: to start micro investing, it is relatively easy. You don't
Speaker 1: need to go see a financial advisor, you don't need,
Speaker 1: you know, sign up for some complex platform. It can
Speaker 1: be as easy as downloading an app from one of
Speaker 1: your app stores, creating an account, and starting Most of
Speaker 1: them have the ability to connect your bank account straight
Speaker 1: there there's obviously going to be some level of identification
Speaker 1: that is required, so don't be terrified of that when
Speaker 1: they say, hey, Jess, can you upload a photo of
Speaker 1: your ID? And you go, oh my gosh, what for?
Speaker 1: In Australia, they actually need to collect that information about
Speaker 1: you because we need to know who our client is, right,
Speaker 1: So this applies to financial advisors as well. And I
Speaker 1: actually think it's quite funny, Jess. If you came to
Speaker 1: me as a client, which surprise you have before. If
Speaker 1: you came to me as a client and we sat down,
Speaker 1: I actually need to verify your identity because it's in
Speaker 1: the counter Terrorism Act, right, Yeah, I need to make
Speaker 1: sure that you're not laundering money. Yeah, so we need
Speaker 1: to make sure that you are who you say you are,
Speaker 1: regardless of how much money you're investing, whether that is
Speaker 1: one cent or it is a million dollars, Like, I
Speaker 1: still need to make sure as the person who's a
Speaker 1: advising you that you're doing the right thing. And a
Speaker 1: platform would have those same responsibilities as well. So they'm
Speaker 1: asking for your ID, isn't them asking too much? It's
Speaker 1: actually a legal requirement. The other feature that people really
Speaker 1: seem to love about micro investing platforms is their ability
Speaker 1: to round up. So a lot of micro investing platforms
Speaker 1: offer the ability to round up. And if you haven't
Speaker 1: heard of this before, it's a fun concept where jess,
Speaker 1: if you say when and bought a note latte for
Speaker 1: three dollars fifty, what that would mean if you had
Speaker 1: roundups enabled on your account and you were connected to
Speaker 1: a micro investing platform is that they would round that
Speaker 1: purchase up to the nearest dollar. So instead of that
Speaker 1: transaction costing three dollars fifty, it would cost four dollars
Speaker 1: and your micro investing platform would take fifty cents and
Speaker 1: put it into your investing platform. For a lot of people,
Speaker 1: this is such a more accessible way to start investing,
Speaker 1: especially if you're a gen Z or a millennial, or
Speaker 1: you're really young and you're at UNI, or you know,
Speaker 1: you might just be strapped for cash, but you still
Speaker 1: want to feel like you're doing something for your future.
Speaker 1: This is a really good way of just rounding up
Speaker 1: those purchases. And the reason I kind of lean into
Speaker 1: it and go, do you know what, that's actually a
Speaker 1: really smart way of finding some extra cash. There are
Speaker 1: a lot of savings accounts that have that capability too.
Speaker 1: The reason I like that is sometimes, Jes, you just
Speaker 1: don't have the wiggle room in your budget to allocate
Speaker 1: extra twenty or thirty bucks a month towards investing. But
Speaker 1: you can always connect your bank account that your discretionary
Speaker 1: spending is on, So if you're buying a coffee or
Speaker 1: something that is not your rent and not your bills,
Speaker 1: you actually have that capacity to invest or save or
Speaker 1: do whatever you want. I think it's a cool feature
Speaker 1: across the board, regardless of platform. So for me that
Speaker 1: makes a lot of sense, and for you, if you're
Speaker 1: an investor using a micro investing platform, you might really
Speaker 1: like the fact that you're dollar cost averaging into the market.
Speaker 1: So dolar cost averaging, if we haven't discussed it before,
Speaker 1: is where instead of dropping lump sums into the market
Speaker 1: over a longer period of time, you're consistently transacting in
Speaker 1: the market, so you're dropping money in on a regular basis,
Speaker 1: which means that you're always making use of the highs
Speaker 1: and the lows of the market. So on average, over
Speaker 1: time we end up paying the average, right, And that
Speaker 1: is good because Jess, if we could time the market,
Speaker 1: we would be so rich, like beyond rich. Look at
Speaker 1: Warren Buffett, He's able to time the market. I don't
Speaker 1: know how. I think he's a wizard, or maybe he
Speaker 1: has something magic fairy duest in that house.
Speaker 3: He won't give up sold has sold to somebody to
Speaker 3: figure that out.
Speaker 1: I think, yeah, look, let me know, Warren, if you
Speaker 1: want to catch up a coffee, I will buy you
Speaker 1: an oat latte, and I will round up my purchase
Speaker 1: and I will invest fifty cents.
Speaker 3: So these platforms v I know that it's kind of
Speaker 3: two primary ways that they break down the investing. It's
Speaker 3: managed funds and ETF fuss. Yes, what's the difference between
Speaker 3: the two?
Speaker 1: Oh my gosh, she's done her research, kind of obsessed
Speaker 1: with you. All right, So micro investing platforms are not
Speaker 1: all created the same. So you don't just go all right, well,
Speaker 1: i've seen this brand or i've seen that brand. I'm
Speaker 1: just going to go with one or the other. I
Speaker 1: like the marketing, or I like you know, the branding,
Speaker 1: or i've seen an influencer to use it like that
Speaker 1: is not how we make decisions. The way we should
Speaker 1: be making decisions is by actually looking at the different products,
Speaker 1: their features and benefits and going this one suits me better,
Speaker 1: or this one suits me better. Right, So the difference
Speaker 1: between a managed fund and an ETF is is quite
Speaker 1: big in the grand scheme of things, but to you
Speaker 1: as a consumer, it's probably not. There are a couple
Speaker 1: of different products on the market when it comes to
Speaker 1: micro investing, and some of them have different portfolios that
Speaker 1: you can choose from. So they will have like a
Speaker 1: conservative portfolio or an aggressive portfolio. They might have like
Speaker 1: a sustainable portfolio for you to choose from, and then
Speaker 1: those portfolios are made up of different ETFs that that
Speaker 1: micro investing platform has chosen that might work for you.
Speaker 1: So that is one way of investing. And an ETF
Speaker 1: is an exchange traded fund, which is basically where instead
Speaker 1: of buying individual shares, there is a portfolio that is
Speaker 1: put together. It's like a big bucket, right, That's how
Speaker 1: I see ETFs. Like every time someone says ETF, I
Speaker 1: think bucket very sexy. But it's essentially a bucket that
Speaker 1: is run by an ETF manager and they put all
Speaker 1: of their different shares into a portfolio and they manage it,
Speaker 1: and then you purchase into that bucket instead of purchasing
Speaker 1: individual shares. On your own, and one of the benefits
Speaker 1: of that is that you get instant diversification. So diversification
Speaker 1: is making sure that your assets are spread out instead
Speaker 1: of having all your eggs in one basket. And an
Speaker 1: ETF is quite a popular way of making sure that
Speaker 1: you have access to diversification, which is really important when
Speaker 1: it comes to investing. You need to make sure that
Speaker 1: you do have good diversification because when we are investing
Speaker 1: law or amounts, we don't have the ability to be
Speaker 1: instantly diversified, right, especially when like if you look at
Speaker 1: like a bank's share, right that could be like anywhere
Speaker 1: between sixty and one hundred dollars per share to own.
Speaker 1: And then if you're creating your big portfolio, like how
Speaker 1: do you get diversification across all the different sectors? Like
Speaker 1: you want to own some banks, maybe you want to
Speaker 1: own some commodities, you want some sustainable things in there,
Speaker 1: you might want some retail. There's not a lot of
Speaker 1: ways that you can make sure that happens with a
Speaker 1: limited budget when you're buying directly, So a lot of
Speaker 1: people like ETFs.
Speaker 2: Right.
Speaker 1: The alternative in the micro investing space is what's called
Speaker 1: a direct managed fund and a managed fund is where
Speaker 1: instead of having different portfolios that you choose from that
Speaker 1: might be like conservative or aggressive or as we said, sustainable,
Speaker 1: they actually just have a set list of stocks that
Speaker 1: that company has chosen and you buy into that managed fund.
Speaker 1: A managed fund then has an allocated fund manager, so
Speaker 1: that could be a person that is in charge of
Speaker 1: making sure that performs and they make decisions on all
Speaker 1: of those shares in that portfolio. But instead of you going,
Speaker 1: I'm a conservative investor, I want to match this to
Speaker 1: my risk profile, you're picking a type of managed fund,
Speaker 1: and some of them in the market at the moment
Speaker 1: have maybe one or two or even three different types
Speaker 1: of managed funds you can choose from, but instead of
Speaker 1: aligning to your risk they actually align to maybe your values.
Speaker 1: So it might be like up and coming companies, or
Speaker 1: it might be you know, the stock standard top two
Speaker 1: hundred companies, So it really depends on what you're looking for,
Speaker 1: and I think understanding those differences and how they work
Speaker 1: is really really important because you just want to know
Speaker 1: what you're getting, Like it's not just about reading the
Speaker 1: front of the cereal box. It's about reading the ingredients
Speaker 1: and how you're meant to mix it up and how
Speaker 1: it works and who it's going to suit. So for me,
Speaker 1: it's really important that you understand that not all micro
Speaker 1: investing platforms are created equally. But one of the things
Speaker 1: that is really attractive to a lot of people in
Speaker 1: the community is they're very low entry fees. So a
Speaker 1: lot of microinvesting platforms won't charge you until you get
Speaker 1: to a minimum amount, and that amount could be five
Speaker 1: thousand dollars invested, or they might have a very low
Speaker 1: monthly fee when compared to bigger investing platforms that would
Speaker 1: have the platform fee, but then you'd also be paying
Speaker 1: brokerage and maybe some advice like It completely depends, but
Speaker 1: accessibility on microinvesting platforms seems to be something that people adore.
Speaker 3: In terms of those different types of funds, would it
Speaker 3: be fair to say that something like Spaceship is an
Speaker 3: example of a managed fund, and then something like comsec
Speaker 3: pocket would be an ETF fund where you're choosing your
Speaker 3: selection yet.
Speaker 1: So I'm trying here to just give you an idea
Speaker 1: of the types of platforms, but yes, we can talk
Speaker 1: about that. So raise they have different portfolios that you
Speaker 1: would pick based on your risk tolerance and then they
Speaker 1: pick ETFs which build up that portfolio. Something like Spaceship
Speaker 1: has more of a managed fund approach where you pick
Speaker 1: the managed fund that works for you, and then comsect
Speaker 1: Pocket is the platform that you can log into and
Speaker 1: pick one of their limited options of ETFs available.
Speaker 3: Got it?
Speaker 1: Now?
Speaker 3: What can't these platforms do because they're sounding pretty good
Speaker 3: right now.
Speaker 1: Honestly, they do sound pretty good, pretty accessible. But a
Speaker 1: few weeks back, on our chat about growth and dividend investing,
Speaker 1: we mentioned el Maate Warren Buffett, who clearly I talk
Speaker 1: about a lot on this podcast. He keeps coming back.
Speaker 1: People are going to start accusing me of having a crush,
Speaker 1: which I very much do. But we talked about his
Speaker 1: quote that said, if you aren't thinking about owning a
Speaker 1: stock for ten years, don't even think about owning it
Speaker 1: for ten minutes. And I feel like that should really
Speaker 1: be taken into consideration when we talk about what your
Speaker 1: investing journey should look like, because a micro investing platform
Speaker 1: isn't the type of platform that a financial advisor would
Speaker 1: recommend to someone who's about to retire, and the reason
Speaker 1: for that is because you can't take the income that
Speaker 1: is being made in your investment portfolio as a income
Speaker 1: for you directly, it just automatically gets reinvested and your
Speaker 1: portfolio is there and it grows and you would have
Speaker 1: to cash the entirety out to make money. So from
Speaker 1: my perspective, accessibility is really good. It's easy to get
Speaker 1: on these platforms. A lot of people in our community
Speaker 1: really like it because they feel like they're not, you know,
Speaker 1: putting their life savings into an investment. They can just
Speaker 1: start with like five or ten dollars so that they
Speaker 1: can see how the market starts to perform and how
Speaker 1: they feel when it's off and what that looks like,
Speaker 1: and slowly start building from there. But what we do
Speaker 1: see in our community is a lot of people using
Speaker 1: micro investing platforms to springboard into like a shared trading
Speaker 1: account or robo advice or then seeing a financial advisor.
Speaker 1: So what I'm seeing is a lot of people using it.
Speaker 1: It's kind of like the start point. It's like primary school.
Speaker 1: As we said, let's talk about that.
Speaker 3: So say I've been micro investing and I'm understanding the
Speaker 3: ebbs and the flows, I'm feeling a bit more confident
Speaker 3: and I'm a little bit more in control. What would
Speaker 3: I be looking at for more of that mid level
Speaker 3: investing point.
Speaker 1: Okay, so mid level so this is secondary school or
Speaker 1: like you know, if you were going skiing, it would
Speaker 1: be a blue run. So just mid level investing is
Speaker 1: more about DIY platforms where I genuinely believe you need
Speaker 1: to have a little bit more knowledge before you log
Speaker 1: in and start trading. So these could be things like
Speaker 1: Chaz's and Superhero and self wealth, which we've all talked
Speaker 1: about in the community. I feel like those are some
Speaker 1: pretty big as that people in our community are going
Speaker 1: to be very well aware of. And the thing is
Speaker 1: they're not harder to access than a micro investing platform. Right.
Speaker 1: All of these bar self wealth that I've mentioned, have
Speaker 1: apps that you can download that are super user friendly
Speaker 1: that you can just download from an app store, upload
Speaker 1: your information, and start trading, which is so exciting, right,
Speaker 1: and it means that investing is so much more accessible.
Speaker 1: Something like self wealth load does have like an access
Speaker 1: point where you need a minimum of like five hundred
Speaker 1: dollars to invest, So obviously that's not as accessible, but
Speaker 1: if you compared that to like a SHARESI is you
Speaker 1: only need one cent to invest, and I just feel
Speaker 1: like that is such a new idea these days. Like
Speaker 1: historically entry level to direct share trading was so prohibitive
Speaker 1: because you'd need so much money, you'd have to pay
Speaker 1: a ridiculous amount of brokerage, and it would just feel
Speaker 1: like it was so beyond what you could control. Now
Speaker 1: it's super easy. But the thing that I would want
Speaker 1: you to be aware of is that you need to
Speaker 1: have a knowledge of like, jess, what are you gonna
Speaker 1: buy once you've downloaded that a how do you know
Speaker 1: what you want to trade? So it's a bit more
Speaker 1: DIY and that you don't just go on the app,
Speaker 1: pick a portfolio and go yep, cool, this is what
Speaker 1: I'm buying. You go on the platform and depending on
Speaker 1: what app you've downloaded, you could have access to Australian shares,
Speaker 1: US Shares, New Zealand shares, you could have access to
Speaker 1: some platforms have crypto and NFTs. Like there's so much
Speaker 1: diversification and range that you're going to need to have
Speaker 1: some level of education to make a decision that is
Speaker 1: right for you. And I don't want that to sound overwhelming,
Speaker 1: because as we said before, ETFs are really popular. You
Speaker 1: can buy ETFs on share trading platforms, so it shouldn't
Speaker 1: be overwhelming. And sometimes just downloading an app and having
Speaker 1: a look through is a really good start of an education.
Speaker 1: Like you're not going to be bullied into investing five
Speaker 1: thousand dollars just by downloading the app and having a
Speaker 1: bit of a play with a small amount of money.
Speaker 1: But what I do want you guys to understand is
Speaker 1: it is a bit more of a responsibility on you
Speaker 1: to be making those decisions. And you do need to
Speaker 1: understand what an ETF is or a managed fund, or
Speaker 1: what type of direct shares you do want to be
Speaker 1: purchasing for and why. And I think why is the
Speaker 1: biggest question we need to answer here is what's your intention?
Speaker 1: Are you buying it just because it's a bit of
Speaker 1: fun like your friends, you know, a couple of years
Speaker 1: we're talking about after paties. Do you want to have
Speaker 1: a bit of a dabble in a few tech stocks
Speaker 1: or are you genuinely starting your journey towards creating financial freedom,
Speaker 1: in which case it is important to pick stocks that
Speaker 1: you buy and hold and go back to Warren Buffett's
Speaker 1: quote about holding it for ten years.
Speaker 3: So say you're someone like me and you're using the
Speaker 3: Shares's platform, and you're buying stocks that really align with
Speaker 3: your values or the things that you think could be
Speaker 3: really fantastic in the future or make a difference. Can
Speaker 3: I purchase those and hold them long term in a
Speaker 3: way that I can't really on micro investing play.
Speaker 1: Yes, absolutely you can. And that is the intention of
Speaker 1: a lot of platforms, Like I know we're talking to
Speaker 1: Chase's and they've said directly to us, no, that's the intention,
Speaker 1: Like they don't actually want people going on there and
Speaker 1: buying and selling and being like day traders, which is
Speaker 1: a completely different conversation to be had. And I think
Speaker 1: that that's the important thing. It is a responsibility on you.
Speaker 1: You need to make a decision that you feel is
Speaker 1: right for you. But the intention when buying shares should
Speaker 1: be a buy and hold strategy, like and that's not
Speaker 1: financial advice. That is just saying that we wouldn't want
Speaker 1: you to put yourself in a position where you had
Speaker 1: to sell something really quickly, Like I want you to
Speaker 1: be in the financial position where you don't have to
Speaker 1: sell something, because you shouldn't be investing your emergency fund
Speaker 1: right you should only be investing money that can be
Speaker 1: allocated towards investing directly, and that's a question. We get
Speaker 1: a lot like, oh my gosh, well my emergency fund
Speaker 1: is doing nothing, And I'm like, that's the point of
Speaker 1: an emergency fund, Like it's meant to be super accessible.
Speaker 1: You're meant to know that that money is there rain, hail,
Speaker 1: or shine for you in the case of an emergency.
Speaker 1: It's not there to create wealth, Like, its job is
Speaker 1: to keep you safe. And I think we need to
Speaker 1: differentiate between the role that money has in our lives.
Speaker 1: Some money is there to keep us safe. Its job
Speaker 1: isn't to make money. But then other money, like we're
Speaker 1: going to put that to work, and that's really important.
Speaker 1: And that's the type of money you'd put on an
Speaker 1: investing platform. So if you're in a position where you
Speaker 1: don't have an emergency fund yet, I definitely would be
Speaker 1: considering that before downloading an investing app, because in investing app,
Speaker 1: it should be for the long term. Regardless of what
Speaker 1: app you've picked.
Speaker 3: What types of features do these share trading platforms have
Speaker 3: that maybe we wouldn't be seeing on a micro investing platform.
Speaker 1: So they usually have a whole heap more research, so
Speaker 1: they have the underlying actual asset. You'll be able to
Speaker 1: click into a particular stock and see what they're doing,
Speaker 1: what their performance has been over time. There's not going
Speaker 1: to be any aspect of advice on there, Like you're
Speaker 1: not going to click into a NAB share and it'll
Speaker 1: say this is a good share to purchase, like that's
Speaker 1: not how it works. But it'll explain to you what
Speaker 1: the dividend yield might be and what that share is
Speaker 1: going to cost you to purchase, and it's going to
Speaker 1: explain to you what it's been doing over time, which
Speaker 1: I think is a really powerful thing and really important
Speaker 1: to tak into consideration when making this. As we said before,
Speaker 1: these apps exist to be a bit more DIY, like
Speaker 1: you're meant to be doing these things yourself, like that
Speaker 1: is your decision, whereas when compared to a microinvesting app,
Speaker 1: like the decisions are made for you. You don't have
Speaker 1: to pick stocks, whereas on a shared trading platform you've
Speaker 1: got the power to pick your stocks. And I feel
Speaker 1: like I'm making this sound like it's a big responsibility,
Speaker 1: and it absolutely is, but it can be really empowering
Speaker 1: once you start looking into things and go, do you
Speaker 1: know what I'm going to download this app and I'm
Speaker 1: going to buy an ETF, probably going to buy two
Speaker 1: or three eutfs that might align to my values. But
Speaker 1: then it gives you the access to be able to
Speaker 1: buy things that are in line with your values as well, which,
Speaker 1: as shees on the Money, we always want you to
Speaker 1: be buying things that are in line with your values.
Speaker 3: So there are so many share trading platforms out there,
Speaker 3: I would say way more than micro investing platforms. How
Speaker 3: do people figure out what is right for them?
Speaker 1: So the important thing is to go onto their different websites,
Speaker 1: have a look at the features and benefits, and maybe
Speaker 1: write your own little bucket list, like what do you
Speaker 1: actually want out of this process? Do you want really
Speaker 1: good tax reporting or do you want to be able
Speaker 1: to access an overseas market or are you just looking
Speaker 1: for an app that will give you access to ETFs?
Speaker 1: Like what do you want? And then also what type
Speaker 1: of accessibility do you want? Are you looking for the
Speaker 1: ability to start at one cent or are you looking
Speaker 1: for the ability to invest your first few thousands of dollars?
Speaker 1: And obviously an option that has one cent is going
Speaker 1: to work for a few thousand dollars. But if you're
Speaker 1: in this situation where you're like me, I have my
Speaker 1: first five hundred, like and I want to maybe start
Speaker 1: with one hundred, You're going to want to look for
Speaker 1: options that are aligning to your ability to access a platform. Right,
Speaker 1: So I would go on to their websites and just
Speaker 1: look for how much is it going to cost me?
Speaker 1: Am I able to access the things I want to access?
Speaker 1: Is the reporting that I want there? And am I
Speaker 1: happy with the values and goals of this company as well?
Speaker 1: So from my perspective, it's not just about going, can
Speaker 1: I access something good? It's about looking at the team
Speaker 1: and going, am I comfortable with the way they run
Speaker 1: this business? Do I like this as a thing that
Speaker 1: I'm going to interact? Because when you're picking a shared
Speaker 1: trading platform, like the idea would be to buy and hold,
Speaker 1: but also stick with that platform for that period of
Speaker 1: time because it can get a little bit messy when
Speaker 1: you try and change platforms. So I'm making it sound
Speaker 1: dramatic that it's a really big decision, but it is
Speaker 1: and I need you guys to take it as seriously
Speaker 1: as I do.
Speaker 3: Incredible, So we've talked micro investing we've talked share trading.
Speaker 3: We've still got one more to go, robo investing.
Speaker 2: Jess.
Speaker 1: I am trying so hard to not get too deep
Speaker 1: on these. You keep saying that it is an overarching thing,
Speaker 1: so there are going to be so many more episodes
Speaker 1: where I'm like, all right, we're going to break down
Speaker 1: the different platforms and their features and benefits. Like I
Speaker 1: have an entire spreadsheet that I want to share with
Speaker 1: you guys, So just wait, it's coming. But yes, let's
Speaker 1: go to a quick break, and when we come back,
Speaker 1: I'm going to deep dive straight into robo advice.
Speaker 3: Already we're back, We're chatting investing platforms. It's very exciting, Victoria.
Speaker 3: I'm telling you to ren it in because we only
Speaker 3: have so much today. So let's tackle the last kind
Speaker 3: of option under that big umbrella that you gave us
Speaker 3: at the start, which is robo investing.
Speaker 1: I don't know if I want to call it advanced.
Speaker 1: I'm going back on what I said. I don't know
Speaker 1: if this is advanced because at the same time as
Speaker 1: it being kind of like that third step up, so
Speaker 1: it goes kind of like micro investing. Then you've got
Speaker 1: your DIY investing platforms and then you've got robo advice.
Speaker 1: The reason I'm calling it like that third step up
Speaker 1: or the advanced option, is not because it's more complicated.
Speaker 1: It's because it's a little bit more expensive and a
Speaker 1: little bit more complex and comprehensive, and I think that
Speaker 1: that's important to understand. It's not because it's harder to access,
Speaker 1: it's not because it requires so much more knowledge on
Speaker 1: your behalf. It's actually because it's the one option that
Speaker 1: includes personalized investment advice. So it's basically just the same
Speaker 1: as going and seeing a financial advisor and just talking
Speaker 1: to them about investments. So, as you guys know are
Speaker 1: here in Australia, financial advice can be really expensive and
Speaker 1: it's important for you to understand why that's the case.
Speaker 1: So I'm a financial advisor and I give this advice
Speaker 1: and just before we even get into robo advice, so
Speaker 1: I think it's important to give you a little bit
Speaker 1: of insight as to why it costs so much, because
Speaker 1: if you go the like why does it cost you
Speaker 1: so much to go hey, invest in X, Y and Z,
Speaker 1: Like why is it between three and a half and
Speaker 1: seven thousand dollars for you to do that, but it's
Speaker 1: all about the relationship, right, So, like you would come
Speaker 1: in and sit with me as a financial advisor, and
Speaker 1: I take into consideration absolutely every part of your personal life,
Speaker 1: your values, your goals, your tolerance to risk, what that means.
Speaker 1: Then we'd have another meeting. It might be another two
Speaker 1: hours or so on strategy. What you think you want
Speaker 1: to do? Do you want to buy property? These are
Speaker 1: the different options we have. Do you want to be
Speaker 1: investing in shares? What does the future look like. We've
Speaker 1: just got a lot of strategy to sort out, and
Speaker 1: then honestly, it takes hours for me to put together
Speaker 1: a statement of advice. So a statement of advice is
Speaker 1: an official document, our one in our office I think
Speaker 1: usually sits between sixty five and eighty five Paige, depending
Speaker 1: on what type of advice I'm giving. You know, the
Speaker 1: more complex obviously, the more pages. But I don't want
Speaker 1: you guys thinking it's just it's like little one page
Speaker 1: that says heyes inversting exercise, because that's not how it works.
Speaker 1: Like it's this really comprehensive document that compares and contrasts
Speaker 1: every option and shows you exactly why the option I'm
Speaker 1: putting on the table is the right option for you
Speaker 1: so that you feel empowered. Honestly, a lot of clients
Speaker 1: are just like V this is too much to read.
Speaker 1: Please tell me what the outcome is. I will look
Speaker 1: at that later and it makes sense. But these things
Speaker 1: honestly take hours. Then there's implementation, so I actually then
Speaker 1: have to go and set it up. And accessibility of
Speaker 1: platforms that are available to financial advisors isn't available to you, Jess,
Speaker 1: so it does require different setups. And let's be honest,
Speaker 1: the financial advice industry is also a little bit backwards.
Speaker 1: It's why I can't use a Mac. Do you know
Speaker 1: that half of the financial advice software is don't work
Speaker 1: on Max? Really? So rude? Cool goal, Yess? Yes, cool girl.
Speaker 1: I'm not a cool girl. But I have to go
Speaker 1: and implement all of those things. I also have to
Speaker 1: get paperwork signed and submitted and organized because like due diligence.
Speaker 1: But it's one of those things where I don't think
Speaker 1: people understand how long it takes. But do you know
Speaker 1: what robo advice has done, Jess, What's automated my job?
Speaker 1: So I'm not mad, I'm just a little envious that
Speaker 1: when it comes to robo advice. Obviously, you're not getting
Speaker 1: that holistic advice. You're not going to go sit down
Speaker 1: with a financial advisor and talk about your goals and
Speaker 1: values and help sort those out, because you're going to
Speaker 1: have to know what your goals and your values are
Speaker 1: before you go. And they're not going to talk to
Speaker 1: you about insurance needs and they're not going to talk
Speaker 1: about superanuation because to be honest, those two things are
Speaker 1: way too complicated at the moment for me to even
Speaker 1: comprehend an algorithm doing it. But if you were seeing
Speaker 1: a financial advisor just for investing, this is what robo
Speaker 1: advisors do. It's automating that entire process, so that fact
Speaker 1: find meeting and that risk profile that you do and
Speaker 1: the strategy it's all done in the background. And most
Speaker 1: robo advice platforms do that for fe free, like the
Speaker 1: statement of advice is free, and you only start paying
Speaker 1: once you start actually implementing that advice, which I think
Speaker 1: is quite accessible in comparison. The thing that frustrates me
Speaker 1: about these comparisons, though, is so many times and you
Speaker 1: would have seen it in the community, Jess, people go,
Speaker 1: oh my gosh, robo advice so much more expensive the
Speaker 1: micro investing and you want to kind of go or
Speaker 1: I want to kind of go. No, Like it's completely different.
Speaker 1: It's like comparing apples with oranges because you're just dumping
Speaker 1: your money into something on a micro investing platform, whereas
Speaker 1: with robo advice, you've got that full piece of advice,
Speaker 1: you get a statement of advice, but then on the
Speaker 1: back end there are actual people doing actual work to
Speaker 1: make sure your portfolio is doing the right thing, to
Speaker 1: make sure it is aligning to the performance that is expected.
Speaker 1: They will rebalance your portfolio. So rebalancing a portfolio is
Speaker 1: incredibly important because over time, you will have different weights
Speaker 1: of different assets in your portfolio and you need to
Speaker 1: make sure they're even and aligne into your goals and
Speaker 1: values depending on what your risk profile is, and that
Speaker 1: can actually be quite complex. But all of that is
Speaker 1: done for you with a robo investing platform, so you're
Speaker 1: able to access things like ETFs and a portfolio that
Speaker 1: is recommended by that statement of advice while having all
Speaker 1: of the back end support. So it can be kind
Speaker 1: of like the step up for people who are like
Speaker 1: I am not interested in DII share trading. Not for me.
Speaker 1: Some people absolutely adore it. I totally get it. Robo
Speaker 1: advice is that step up which is kind of giving
Speaker 1: you advice but not being prohibitive on cost.
Speaker 3: So what does that cost look like for robo investing platforms?
Speaker 1: So it can range, but it's usually anywhere between six
Speaker 1: dollars twenty five and maybe like ten dollars a month,
Speaker 1: depending on what platform you choose and how that works.
Speaker 1: There are a few platforms in circulation. So there's stock Spot,
Speaker 1: which you might have heard of before. There's six park
Speaker 1: which you've probably heard of before because we do have
Speaker 1: an affiliation with them, which means that we have those
Speaker 1: shees on the money six Parker. To go back to
Speaker 1: the question you are actually asking, Yes, it is definitely
Speaker 1: higher than a micro investing platform, which you can access
Speaker 1: for about three dollars fifty a month. Please do remember, though,
Speaker 1: that if you're paying for advice fees, so like robo
Speaker 1: advice fees or financial advice fees or even your micro
Speaker 1: investing like fees that you pay, it's all claimable and
Speaker 1: tax So definitely write that one down for JUNI three.
Speaker 1: But I think it is kind of as a financial
Speaker 1: advisor a little bit frustrating when people compare a micro
Speaker 1: investing platform to a platform that you know does so
Speaker 1: much more and is actually a very different offering. And
Speaker 1: I mean, you guys go mass investing Victoria and I'm like, no,
Speaker 1: it's not. It's so different. And the important thing I
Speaker 1: would be taking into consideration there when it comes to
Speaker 1: robo advice is the background information. So I really believe
Speaker 1: in automating processes that can be automated, right, Like, the
Speaker 1: less work I am doing day to day on the
Speaker 1: things that can be automated, the more time I have
Speaker 1: to spend all my clients and their goals and their
Speaker 1: values and maintaining those relationships and making sure that you
Speaker 1: are doing exactly what you said you were going to do, right.
Speaker 1: And if the fact find process, which, to be honest,
Speaker 1: is a big survey that we go through and I
Speaker 1: collect all the information about you the risk profile, which, again,
Speaker 1: to be honest, I do do this big risk profile.
Speaker 1: But again I'm manually calculated. If all of that can
Speaker 1: be automated and we can create an algorithm that spits
Speaker 1: out advice, it's probably smarter than me. Like like, no
Speaker 1: room for human error, No room for human error there.
Speaker 1: But when you flip to the back end. That's when
Speaker 1: I think it's really important to consider what that type
Speaker 1: of follow up looks like, like are you going to
Speaker 1: have access to people? Are you going to have a
Speaker 1: supportive community behind you if you're joining something like this.
Speaker 1: And something else that's important to consider is do they
Speaker 1: actually have like some kind of investment committee or some
Speaker 1: kind of human overlay over the top of an algorithm,
Speaker 1: Because an algorithm is really smart, but you do need
Speaker 1: to still have that level of human interaction and human
Speaker 1: nouse that I don't believe in Algornith Rhythm has nailed
Speaker 1: on the head yet. So if you look at it,
Speaker 1: you go, all right, well an algorithm could solve it.
Speaker 1: And some robo advice platforms are one thousand percent algorithm.
Speaker 1: There's no room for human intervention at all. And some
Speaker 1: other platforms actually have that automated process of the statement
Speaker 1: of advice and the implementation process. But once you're there
Speaker 1: and invested, they have an investment committee that oversees all
Speaker 1: of the investment in addition to making sure that they're
Speaker 1: doing the right thing. So for me, it's about just
Speaker 1: working out what aligns to your values and really understanding
Speaker 1: and comparing and contrasting platforms to go, well, which one
Speaker 1: would I be the most comfortable on if I'm asking
Speaker 1: for advice?
Speaker 3: Last question on robo advice, what is the barrier to
Speaker 3: entry on those kinds of platform because if you're getting
Speaker 3: that level of advice, I'm assuming it's going to be
Speaker 3: a little pricier.
Speaker 1: Yes, but it's not just price, it's actually accessibility. So
Speaker 1: robo advice platforms, because they do have that level of
Speaker 1: diversification that they would need to achieve and they are
Speaker 1: putting you into a portfolio and providing advice, the entry
Speaker 1: point is a lot higher, so it's not going to
Speaker 1: cost you more, but you would have to have a
Speaker 1: bigger initial investment, and most of them started about two
Speaker 1: thousand dollars for like a more limited profile, and then
Speaker 1: five thousand dollars for a very comprehensive profile. So it
Speaker 1: definitely requires a bigger upfront investment. But it's also about well,
Speaker 1: what's going to suit your situation, Jess, Like what do
Speaker 1: you actually want to do and where are we actually
Speaker 1: going with this? And then I guess to compare and
Speaker 1: contrast that to a financial advisor, similar things happen as well,
Speaker 1: got it?
Speaker 3: So I guess to summarize, micro investing platforms really low
Speaker 3: barrier to entry, probably not going to sit there forever
Speaker 3: because you can't make those dividend payments that set you
Speaker 3: up to kind of make passive income the way we all.
Speaker 1: Dream of is that what you got out of what
Speaker 1: I said, because like that's a better summary. Just like
Speaker 1: cut everything I said earlier and drop that in thank you.
Speaker 3: Welcome to my podcast. So share trading platforms. Barrier to
Speaker 3: entry varies. It can be as little as one cent,
Speaker 3: like our friends at Chairs's, or it can be slightly
Speaker 3: higher for different platforms. Great for the long term because
Speaker 3: you can get that dividend yield and set yourself up. However,
Speaker 3: you're taking on more responsibility personally because you're the one
Speaker 3: selecting your shift.
Speaker 1: I'm responsible, gal Jess Grici one hundred percent.
Speaker 3: You are, but it means that you have to make
Speaker 3: sure that you're diversified and that it's in line with
Speaker 3: your values and all of those other fun things. Robo
Speaker 3: investing means that that responsibility is off of you. Somebody
Speaker 3: else is making those decisions, or maybe it's you know,
Speaker 3: an algorithm, not a person.
Speaker 1: It's an algorithm. I'm trusting the algorithm, though, Like I
Speaker 1: feel like everybody is so skeptical, and that's cause old
Speaker 1: fuddy duddy financial advisors are skeptical because they don't want
Speaker 1: their jobs taken from them. That's me. I will do
Speaker 1: an entire podcast on the industry at some point. I
Speaker 1: won't be making friends in that episode, that's for sure.
Speaker 1: But I just have this idea that like, automation is
Speaker 1: the way of the future, and if we can embrace
Speaker 1: it as advisors, we can lower the cost of advice
Speaker 1: in general. Like, imagine if we can get to a
Speaker 1: point where everybody's sitting on some kind of robo advice
Speaker 1: platform and we know that the investing stuff is just
Speaker 1: ticking along really well, so I can focus on like
Speaker 1: goal setting with you, and I can focus on actually
Speaker 1: achieving things and changing your money mindset, which I think
Speaker 1: is so much more important.
Speaker 3: So those rabo investing platforms like six Park or stock Spot,
Speaker 3: they've got the algorithm ticking away doing work for you.
Speaker 3: Maybe there's a person on the back end keeping it
Speaker 3: in check. Maybe there's not, but it's a much higher
Speaker 3: barrier to entry because you have a higher minimum investment
Speaker 3: and generally higher fees.
Speaker 1: Yes, did I get it all? I think you've got
Speaker 1: it all. I think we're done for today. Do you
Speaker 1: want to read out the disclaimer to say that I
Speaker 1: am a legit financial advisor and charge lots of money
Speaker 1: if you came to see me personally. Oh, if you insist,
Speaker 1: I try really hard. Guys.
Speaker 3: Don't forget guys. The advice shared on She's on the
Speaker 3: Money is generally nature and does not consider your individual circumstances.
Speaker 3: She's on the money if it's purely for educational purposes
Speaker 3: and should not be relied upon to make an investment
Speaker 3: or a financial decision. And victoria divine and she's on
Speaker 3: the money?
Speaker 1: Is it? Author? That's shiny?
Speaker 3: So Fancy is an authorized representative of Infocused Securities Australia
Speaker 3: Proprietary Limited ABN four seven nine seven seven nine seven
Speaker 3: four nine AFSL two three six five two three.
Speaker 1: We'll see you all on Friday.
Speaker 3: See then, guys.
Speaker 1: Bye. They