1 00:00:00,680 --> 00:00:01,000 Speaker 1: Hello. 2 00:00:01,560 --> 00:00:05,040 Speaker 2: My name's Santasha Nabananga Bamblet. I'm a proud Yr the 3 00:00:05,160 --> 00:00:08,760 Speaker 2: Order Kerney Whalbury and a waddery woman. And before we 4 00:00:08,800 --> 00:00:11,440 Speaker 2: get started on She's on the Money podcast, I would 5 00:00:11,520 --> 00:00:14,520 Speaker 2: like to acknowledge the traditional custodians of the land of 6 00:00:14,560 --> 00:00:18,680 Speaker 2: which this podcast is recorded on a wondery country, acknowledging 7 00:00:18,680 --> 00:00:22,560 Speaker 2: the elders, the ancestors and the next generation coming through 8 00:00:23,040 --> 00:00:27,159 Speaker 2: as this podcast is about connecting, empowering, knowledge sharing and 9 00:00:27,240 --> 00:00:30,600 Speaker 2: the storytelling of you to make a difference for today 10 00:00:31,040 --> 00:00:32,640 Speaker 2: and lasting impact for tomorrow. 11 00:00:33,320 --> 00:00:36,600 Speaker 1: Let's get into it. She's on the Money. 12 00:00:36,760 --> 00:00:59,360 Speaker 3: She's on the Money. Hello and welcomed. She's on the 13 00:00:59,360 --> 00:01:03,280 Speaker 3: Money podcast for millennials who want financial freedom. My name 14 00:01:03,360 --> 00:01:07,160 Speaker 3: is Beck Sired and with me is Victoria Divine. Hello, 15 00:01:07,640 --> 00:01:08,640 Speaker 3: Divine Victoria. 16 00:01:08,920 --> 00:01:11,319 Speaker 1: I am very excited for this episode, but I'm not 17 00:01:11,400 --> 00:01:14,200 Speaker 1: sure that that feeling at the moment is mutual. 18 00:01:14,800 --> 00:01:18,160 Speaker 3: At the moment, you can see right through me, Yeah, 19 00:01:18,280 --> 00:01:19,480 Speaker 3: like you always can. 20 00:01:20,319 --> 00:01:23,480 Speaker 1: You're one of those people that definitely shouldn't be given 21 00:01:23,520 --> 00:01:24,440 Speaker 1: state secrets. 22 00:01:24,600 --> 00:01:25,240 Speaker 3: Yeah, that's true. 23 00:01:25,319 --> 00:01:28,720 Speaker 1: Like if a ransom man came and kidnapped you and said, Beck, 24 00:01:28,800 --> 00:01:30,640 Speaker 1: you need to tell us the code. You'd be like, oh, 25 00:01:30,720 --> 00:01:33,560 Speaker 1: the codes one, two, three, four, don't worries. Why did 26 00:01:33,600 --> 00:01:34,440 Speaker 1: you need to know? Again? 27 00:01:35,000 --> 00:01:36,720 Speaker 3: Yeah, yeah, exactly exactly what. 28 00:01:37,000 --> 00:01:38,959 Speaker 1: Oh it was a secret. Ah. 29 00:01:39,040 --> 00:01:42,160 Speaker 3: So unfortunately my face and my body and my words 30 00:01:42,240 --> 00:01:43,320 Speaker 3: can't keep a secret. 31 00:01:43,360 --> 00:01:43,960 Speaker 1: But that's okay. 32 00:01:44,040 --> 00:01:47,080 Speaker 3: And my secret today is that I do not care 33 00:01:47,080 --> 00:01:50,440 Speaker 3: about ship structures, but I feel like I have a 34 00:01:50,440 --> 00:01:52,040 Speaker 3: feeling you'll be able to explain it in a way 35 00:01:52,040 --> 00:01:53,000 Speaker 3: that gets me excited. 36 00:01:53,160 --> 00:01:54,680 Speaker 1: So you reckon, I think. 37 00:01:54,720 --> 00:01:54,800 Speaker 3: So. 38 00:01:55,080 --> 00:01:55,240 Speaker 1: I know. 39 00:01:55,280 --> 00:01:58,160 Speaker 3: A couple of weeks ago, we were talking about this 40 00:01:58,200 --> 00:01:59,640 Speaker 3: and we decided to do a part be because there's 41 00:01:59,640 --> 00:02:02,360 Speaker 3: a lot of information that goes into this. We were 42 00:02:02,480 --> 00:02:04,720 Speaker 3: talking about a few things that sparked my interests and 43 00:02:04,800 --> 00:02:07,320 Speaker 3: seemed super important to chat about. 44 00:02:07,840 --> 00:02:10,040 Speaker 1: It did, and it's one of those things where I 45 00:02:10,120 --> 00:02:13,400 Speaker 1: was like, Okay, well I don't want to overwhelm people 46 00:02:13,440 --> 00:02:16,640 Speaker 1: too much, but also we'll get into it. But there's 47 00:02:16,680 --> 00:02:20,600 Speaker 1: like two different ownership structures that we wanted to talk about. 48 00:02:20,680 --> 00:02:23,639 Speaker 1: So there was like personal ownership structures, so the way 49 00:02:23,680 --> 00:02:26,360 Speaker 1: that you can set up your own personal ownership, and 50 00:02:26,400 --> 00:02:29,480 Speaker 1: then the ownership structures that exist inside the assets that 51 00:02:29,520 --> 00:02:32,720 Speaker 1: you purchase and those aren't really changeable. It's not like 52 00:02:32,760 --> 00:02:34,799 Speaker 1: you can go, oh well with an ETF, I want 53 00:02:34,840 --> 00:02:36,960 Speaker 1: the ownership structure to be different. No, no, no, that's just 54 00:02:37,000 --> 00:02:41,000 Speaker 1: how an ETF functions. Whereas with your trusts or your 55 00:02:41,120 --> 00:02:45,120 Speaker 1: sole trader or your individual shareholdings, like that's all your 56 00:02:45,200 --> 00:02:48,160 Speaker 1: choice and you can hold it however you want. Whereas 57 00:02:48,200 --> 00:02:51,200 Speaker 1: this is more what you need to consider when buying 58 00:02:51,280 --> 00:02:53,440 Speaker 1: shares and what that actually looks like. And I feel 59 00:02:53,480 --> 00:02:56,240 Speaker 1: like our community has said a number of times things like, 60 00:02:56,480 --> 00:02:58,920 Speaker 1: oh well, if it's not Chess sponsored, you shouldn't be 61 00:02:58,919 --> 00:03:01,720 Speaker 1: buying it, and I don't necessarily agree with that, So 62 00:03:01,760 --> 00:03:03,839 Speaker 1: we want to, I guess, break down all of those 63 00:03:03,880 --> 00:03:06,960 Speaker 1: things that I feel can be really overwhelming at the 64 00:03:07,040 --> 00:03:09,200 Speaker 1: start of an investment journey where you're like, hold on, 65 00:03:09,280 --> 00:03:10,760 Speaker 1: I was just going to buy an ETF. Well do 66 00:03:10,760 --> 00:03:13,000 Speaker 1: you mean to have to think about chess ownership structure 67 00:03:13,080 --> 00:03:15,440 Speaker 1: or what's this or what's that. That's what this episode 68 00:03:15,560 --> 00:03:18,160 Speaker 1: is about to hopefully give you a bit more independence, 69 00:03:18,200 --> 00:03:21,000 Speaker 1: but also I guess confidence to go no, no, no, 70 00:03:21,080 --> 00:03:23,000 Speaker 1: like I am where I am and I'm starting here 71 00:03:23,040 --> 00:03:24,520 Speaker 1: and that's okay, sure. 72 00:03:24,360 --> 00:03:26,720 Speaker 3: Okay, and all of those terms and everything. We will 73 00:03:26,760 --> 00:03:29,200 Speaker 3: discuss a little bit later in the episode, but yes, 74 00:03:29,240 --> 00:03:31,320 Speaker 3: we were speaking about this a couple of weeks ago. 75 00:03:31,400 --> 00:03:33,800 Speaker 3: Basically the different structures we could set up personally to 76 00:03:33,880 --> 00:03:35,960 Speaker 3: own shares, and you promise that you'd give us a 77 00:03:35,960 --> 00:03:39,560 Speaker 3: part B and explain the different ownership structures that shares, 78 00:03:39,680 --> 00:03:43,000 Speaker 3: ETFs and managed funds use so we can understand them better. 79 00:03:43,360 --> 00:03:46,839 Speaker 3: So I'm ready. Let's go all right, let's recap though, 80 00:03:46,920 --> 00:03:48,840 Speaker 3: and strip it right back to the start fee. What 81 00:03:49,040 --> 00:03:51,640 Speaker 3: exactly is a shit and why should I buy one? 82 00:03:51,760 --> 00:03:52,040 Speaker 2: That is? 83 00:03:52,080 --> 00:03:53,000 Speaker 1: Really? Really the start? 84 00:03:53,080 --> 00:03:53,200 Speaker 3: Hey? 85 00:03:53,200 --> 00:03:56,880 Speaker 1: I really like it. So shares also known as stocks 86 00:03:56,960 --> 00:03:59,960 Speaker 1: or equities, same stuff. People just call it different things. 87 00:04:00,280 --> 00:04:03,080 Speaker 1: Shares is a more of an Australian term, stocks is 88 00:04:03,080 --> 00:04:06,560 Speaker 1: a more American term. Equities is more of a finance 89 00:04:06,600 --> 00:04:08,160 Speaker 1: bro term. If people are like, oh, yeah, I've been 90 00:04:08,200 --> 00:04:11,120 Speaker 1: buying equities, Sit down, sir, you just bought a share. 91 00:04:11,440 --> 00:04:15,040 Speaker 1: But essentially all of those things represent ownership in a company. 92 00:04:15,240 --> 00:04:17,440 Speaker 1: So when you own a share, you're essentially becoming a 93 00:04:17,440 --> 00:04:20,240 Speaker 1: teeny tiny part owner of that company. My favorite way 94 00:04:20,240 --> 00:04:21,960 Speaker 1: of looking at it is kind of like a pie chart, 95 00:04:22,160 --> 00:04:24,599 Speaker 1: and you took a really tiny sliver of the pie 96 00:04:24,960 --> 00:04:27,520 Speaker 1: and now it's your slither of the pie. And what 97 00:04:27,560 --> 00:04:30,919 Speaker 1: that does is it actually entitles you to any of 98 00:04:30,960 --> 00:04:34,040 Speaker 1: the growth and profit of that company because you're a 99 00:04:34,080 --> 00:04:36,560 Speaker 1: little baby shareholder, like you're the owner of the company. 100 00:04:36,920 --> 00:04:40,080 Speaker 1: So why should you care about that? Well, owning shares 101 00:04:40,120 --> 00:04:42,520 Speaker 1: can potentially give you a chance to grow your money 102 00:04:42,680 --> 00:04:45,880 Speaker 1: as the company's value increases over time, and hopefully that 103 00:04:45,960 --> 00:04:48,839 Speaker 1: company is doing so well that they're paying dividends. A 104 00:04:48,880 --> 00:04:53,200 Speaker 1: dividend is a profit that is distributed to the shareholders 105 00:04:53,240 --> 00:04:57,280 Speaker 1: of a company, and you just reinvest that money. Compounding 106 00:04:57,400 --> 00:05:00,359 Speaker 1: interest is what that is called. And over time, money 107 00:05:00,400 --> 00:05:02,640 Speaker 1: that your money has made starts making more money and 108 00:05:02,680 --> 00:05:04,360 Speaker 1: that becomes a really attractive beck. 109 00:05:04,440 --> 00:05:07,120 Speaker 3: Wow, that's just a snowball effect. Yeah, that's investing to 110 00:05:07,160 --> 00:05:10,120 Speaker 3: a t god it Okay, okay, okay, So now let's 111 00:05:10,120 --> 00:05:13,440 Speaker 3: talk about ownership. You mentioned off air that it's simple 112 00:05:13,680 --> 00:05:16,640 Speaker 3: and there are two ways to own shares directly and indirectly. 113 00:05:16,720 --> 00:05:18,680 Speaker 1: I did. I also mentioned it on air, but like 114 00:05:18,760 --> 00:05:21,640 Speaker 1: off air, absolutely, I've been ranting about this off air, 115 00:05:22,200 --> 00:05:25,680 Speaker 1: like there is definitely a difference, and from my perspective, 116 00:05:25,720 --> 00:05:29,280 Speaker 1: you're on the money, babe. But simply put, direct ownership 117 00:05:29,360 --> 00:05:33,040 Speaker 1: is when you buy shares in individual companies, while indirect 118 00:05:33,040 --> 00:05:36,360 Speaker 1: ownership often involves investing in funds that own the shares 119 00:05:36,480 --> 00:05:39,600 Speaker 1: for you gossip. That's kind of like the difference between 120 00:05:39,880 --> 00:05:42,200 Speaker 1: a direct share, like going I always use NAB. I 121 00:05:42,200 --> 00:05:44,600 Speaker 1: don't know why, let's change it. You're going to buy 122 00:05:44,680 --> 00:05:49,080 Speaker 1: a Combank share individually and Bechsaed is the owner, whereas 123 00:05:49,120 --> 00:05:51,479 Speaker 1: you might go and buy an ETF or a managed 124 00:05:51,520 --> 00:05:55,280 Speaker 1: fund that holds Combank. Combank doesn't know that Beck is 125 00:05:55,320 --> 00:05:58,839 Speaker 1: the owner. What Combank knows is that ETF or that 126 00:05:58,960 --> 00:06:01,880 Speaker 1: fund you've put your money into, they own a significant 127 00:06:01,880 --> 00:06:04,400 Speaker 1: portion of that share. And that's how it's broken down. 128 00:06:04,680 --> 00:06:08,039 Speaker 1: It's just an ownership structure. And as we'll get into it, 129 00:06:08,080 --> 00:06:10,560 Speaker 1: we'll talk about I guess the pros and cons, but 130 00:06:11,320 --> 00:06:13,760 Speaker 1: they are kind of much of a muchness in this 131 00:06:13,880 --> 00:06:16,040 Speaker 1: day and age, like in theory. I do get that 132 00:06:16,320 --> 00:06:18,159 Speaker 1: I do want to know more about the pros and cons, 133 00:06:18,240 --> 00:06:21,320 Speaker 1: But why should I choose direct ownership? Okay, so I 134 00:06:21,360 --> 00:06:24,039 Speaker 1: guess to summarize it, pros and cons are good. Direct 135 00:06:24,040 --> 00:06:26,440 Speaker 1: ownership means that you actually get to choose the companies 136 00:06:26,440 --> 00:06:29,720 Speaker 1: that you get to invest in well. Indirect ownership offers 137 00:06:30,040 --> 00:06:33,719 Speaker 1: more diversification, being able to spread your investment across multiple 138 00:06:33,760 --> 00:06:37,200 Speaker 1: companies so you can diversify your risk. Direct ownership, as 139 00:06:37,240 --> 00:06:39,960 Speaker 1: I said, it kind of puts you more in the 140 00:06:40,080 --> 00:06:43,120 Speaker 1: controls seat. You get to choose which companies align with 141 00:06:43,160 --> 00:06:46,719 Speaker 1: your personal values and goals. Plus, if those companies perform well, 142 00:06:46,920 --> 00:06:49,200 Speaker 1: your returns can actually be quite rewarding. 143 00:06:49,440 --> 00:06:53,080 Speaker 3: Okay, and sorry if this is a really silly question, 144 00:06:53,120 --> 00:06:54,000 Speaker 3: but probably not. 145 00:06:54,200 --> 00:06:56,680 Speaker 1: This is She's on the money. No such things, dumb questions, 146 00:06:56,760 --> 00:06:58,240 Speaker 1: sit down on, Thank. 147 00:06:58,000 --> 00:07:00,119 Speaker 3: You very much, Victoria Albert. I want to know why 148 00:07:00,240 --> 00:07:01,280 Speaker 3: doesn't everyone just do that? 149 00:07:01,320 --> 00:07:02,120 Speaker 1: Why do you just do that? 150 00:07:02,200 --> 00:07:02,960 Speaker 3: Why do you just do that? 151 00:07:03,040 --> 00:07:05,839 Speaker 1: Sounds good right because you're like, especially the way I 152 00:07:06,040 --> 00:07:08,280 Speaker 1: just explained it, I'm like, you've got so much control, 153 00:07:08,800 --> 00:07:09,840 Speaker 1: you could make money. 154 00:07:09,840 --> 00:07:10,080 Speaker 2: Beck. 155 00:07:10,800 --> 00:07:11,679 Speaker 3: Usually cool. 156 00:07:11,720 --> 00:07:15,040 Speaker 1: Why doesn't everyone just exactly? Because there's actually a number 157 00:07:15,040 --> 00:07:17,560 Speaker 1: of downsides we need to consider as well. So with 158 00:07:17,680 --> 00:07:22,480 Speaker 1: great power comes great responsibility, Beck. So they say direct ownership, 159 00:07:22,600 --> 00:07:25,520 Speaker 1: it does come with higher risks because your returns are 160 00:07:25,560 --> 00:07:29,840 Speaker 1: directly tied to the performance of individual companies. It also 161 00:07:29,920 --> 00:07:33,280 Speaker 1: requires a whole heap more research and monitoring. To make 162 00:07:33,280 --> 00:07:36,720 Speaker 1: sure that you are as an investor making informed and 163 00:07:36,840 --> 00:07:40,280 Speaker 1: smart financial decisions. That kind of like onus, and the 164 00:07:40,320 --> 00:07:42,600 Speaker 1: responsibility is far more on you. 165 00:07:42,880 --> 00:07:46,360 Speaker 3: Ah, Okay, I got you. I got you. So I 166 00:07:46,360 --> 00:07:48,960 Speaker 3: mean indirect shares have less responsibility. 167 00:07:49,280 --> 00:07:52,360 Speaker 1: I mean, we could absolutely say it that way. That's 168 00:07:52,360 --> 00:07:56,440 Speaker 1: how I personally feel about it. Indirect ownership, so things 169 00:07:56,520 --> 00:08:00,600 Speaker 1: like managed funds or ETF they offer you far more diverseification. 170 00:08:01,000 --> 00:08:03,440 Speaker 1: So essentially what you're doing is when you invest in 171 00:08:03,480 --> 00:08:07,640 Speaker 1: a managed fund or in ETF, similar concepts. They're not identical. 172 00:08:07,760 --> 00:08:10,240 Speaker 1: We'll get into that, but essentially what you're doing is 173 00:08:10,240 --> 00:08:12,720 Speaker 1: investing in a basket of companies instead of just one 174 00:08:12,800 --> 00:08:16,080 Speaker 1: direct company, which reduces the impact of you know, if 175 00:08:16,080 --> 00:08:18,440 Speaker 1: one company isn't doing so well and you just went 176 00:08:18,520 --> 00:08:20,840 Speaker 1: invested in that one, like you're going to feel all 177 00:08:20,920 --> 00:08:23,360 Speaker 1: the losses, whereas if that one was one of two 178 00:08:23,520 --> 00:08:26,560 Speaker 1: hundred beck it's a lot more consistent, it's a lot 179 00:08:26,560 --> 00:08:29,400 Speaker 1: more level. You're getting more consistent returns. And to me 180 00:08:29,920 --> 00:08:33,520 Speaker 1: as somebody who likes a more indirect approach to investing, 181 00:08:33,600 --> 00:08:35,800 Speaker 1: because I think I've mentioned it before on the podcast, 182 00:08:36,000 --> 00:08:38,720 Speaker 1: I do own ETFs, right, and I would argue that 183 00:08:38,920 --> 00:08:41,079 Speaker 1: I don't want to say like one of the best investors. 184 00:08:41,080 --> 00:08:43,080 Speaker 1: That's not what I mean at all. But like I'm 185 00:08:43,200 --> 00:08:45,800 Speaker 1: very educated in this space. I used to do wholesale 186 00:08:45,880 --> 00:08:48,920 Speaker 1: direct investing for ultra high netwalth clients. Well, I know 187 00:08:49,000 --> 00:08:51,040 Speaker 1: how to do that. I don't want to do it. 188 00:08:51,040 --> 00:08:54,440 Speaker 1: It's so much responsibility. Beck I love an ETF like 189 00:08:54,480 --> 00:08:58,120 Speaker 1: it works for me and my personal situation because as 190 00:08:58,200 --> 00:09:01,000 Speaker 1: much as I adore investing, don't get me wrong, don't 191 00:09:01,000 --> 00:09:02,480 Speaker 1: tell anyone, but I do like to have a little 192 00:09:02,480 --> 00:09:04,560 Speaker 1: bit of a punt on the side. I do like 193 00:09:04,600 --> 00:09:06,520 Speaker 1: finding a share that makes sense to me and reading 194 00:09:06,520 --> 00:09:09,600 Speaker 1: annual reports and investing. But that's such a small part 195 00:09:09,679 --> 00:09:13,280 Speaker 1: of my investment portfolio because to me, that's fun. And 196 00:09:13,360 --> 00:09:15,960 Speaker 1: if we look at the statistics, we know that index 197 00:09:16,040 --> 00:09:20,560 Speaker 1: funds and edfs outperform investors who are trying to chase return. 198 00:09:21,200 --> 00:09:24,720 Speaker 1: So like me chasing return and picking my individual stocks, 199 00:09:25,040 --> 00:09:26,680 Speaker 1: it's not going to put me in a better position 200 00:09:26,760 --> 00:09:31,240 Speaker 1: long term, so gotcha. Essentially, it reduces the impact if 201 00:09:31,280 --> 00:09:33,680 Speaker 1: one of the companies that you pick doesn't perform well, 202 00:09:33,960 --> 00:09:36,720 Speaker 1: and professional fund managers they essentially handle all of that 203 00:09:36,840 --> 00:09:39,280 Speaker 1: for you. So say a company isn't performing that well 204 00:09:39,320 --> 00:09:41,640 Speaker 1: in your ETF and it's one of two hundred, they 205 00:09:41,720 --> 00:09:44,320 Speaker 1: might go, We're going to bullet it because they go 206 00:09:44,360 --> 00:09:46,520 Speaker 1: and do all the research and they look into it 207 00:09:46,559 --> 00:09:48,200 Speaker 1: and go, you know what, We're going to bullet that 208 00:09:48,240 --> 00:09:50,880 Speaker 1: bank and replace it with this other one. It means 209 00:09:50,880 --> 00:09:53,000 Speaker 1: that there's a more hands off approach and you kind 210 00:09:53,000 --> 00:09:55,319 Speaker 1: of have some professionals in the background. Okay. 211 00:09:55,840 --> 00:09:58,120 Speaker 3: Also, I just realized how different we are as people. 212 00:09:58,160 --> 00:10:01,440 Speaker 3: When you said punt. I was immediately like, slap at 213 00:10:01,440 --> 00:10:02,199 Speaker 3: the pokeys. 214 00:10:02,360 --> 00:10:04,280 Speaker 1: You know what, that's like what I meant. That's kind 215 00:10:04,280 --> 00:10:05,440 Speaker 1: of what I meant. But I do it on the 216 00:10:05,480 --> 00:10:08,560 Speaker 1: aox because sports that are not getting my money. In fact, 217 00:10:08,600 --> 00:10:10,760 Speaker 1: every time one of their ads comes up, which I 218 00:10:10,800 --> 00:10:13,760 Speaker 1: don't know why it does on my TikTok, I'm like, 219 00:10:14,400 --> 00:10:17,880 Speaker 1: get off my feet. Okay, interesting feat. 220 00:10:18,080 --> 00:10:21,040 Speaker 3: I respect it. Now let's do a quick recap. What 221 00:10:21,200 --> 00:10:23,280 Speaker 3: is an ETF for any managed fund and are they 222 00:10:23,320 --> 00:10:24,760 Speaker 3: harder to buy than shares? 223 00:10:24,920 --> 00:10:27,080 Speaker 1: Yeah, okay, that's a good question. Because I keep talking 224 00:10:27,120 --> 00:10:29,720 Speaker 1: about atfs and managed funds, we definitely should dive into it. 225 00:10:29,800 --> 00:10:33,040 Speaker 1: So a managed fund is also known as like mutual 226 00:10:33,080 --> 00:10:36,800 Speaker 1: funds or like a unit trust. These are investment vehicles 227 00:10:36,800 --> 00:10:39,600 Speaker 1: in which a fund manager they essentially take all your money, 228 00:10:39,679 --> 00:10:43,839 Speaker 1: pull it together from multiple different investors, and allocate those 229 00:10:43,880 --> 00:10:48,640 Speaker 1: funds to a diverse range of assets. These could include shares, bonds, 230 00:10:48,760 --> 00:10:51,920 Speaker 1: other securities that they want to hold. Managed funds are 231 00:10:51,920 --> 00:10:55,000 Speaker 1: typically overseen by what they call a professional funds manager, 232 00:10:55,120 --> 00:10:59,960 Speaker 1: so that one usually white dude, Like there are female 233 00:11:00,040 --> 00:11:02,480 Speaker 1: fund maashes that aren't many of them. This is obviously 234 00:11:02,520 --> 00:11:04,719 Speaker 1: something that the average investor might not do. You might 235 00:11:04,800 --> 00:11:07,240 Speaker 1: just go, oh, this one performs really well, Like you 236 00:11:07,320 --> 00:11:10,040 Speaker 1: might go to a particular managed fund and go, I 237 00:11:10,040 --> 00:11:11,719 Speaker 1: want to know more about it, but you just look 238 00:11:11,720 --> 00:11:14,319 Speaker 1: at the investments. I go and look at the investments, 239 00:11:14,320 --> 00:11:16,320 Speaker 1: and then I go look at the fund manager and go, 240 00:11:16,600 --> 00:11:19,199 Speaker 1: who is he? Where has he worked before? What are 241 00:11:19,200 --> 00:11:21,960 Speaker 1: his values? What are his morals? What's his tenure look like? 242 00:11:22,000 --> 00:11:24,600 Speaker 1: Has he been working with this particular company for a year? 243 00:11:24,960 --> 00:11:26,920 Speaker 1: Is he new? Has he been there for ten years? 244 00:11:27,120 --> 00:11:30,880 Speaker 1: I'm honestly, I can't be trusted, so I like to 245 00:11:30,920 --> 00:11:37,200 Speaker 1: do that. But essentially, this usual dude actively manages investment 246 00:11:37,200 --> 00:11:39,520 Speaker 1: decisions on behalf of the investors. So Becky you don't 247 00:11:39,520 --> 00:11:41,160 Speaker 1: have to make that decision because they're going to do 248 00:11:41,200 --> 00:11:43,959 Speaker 1: it for you. Sure, and the aim is to achieve 249 00:11:44,000 --> 00:11:47,800 Speaker 1: that fund's objectives. So that fund might have different objectives. 250 00:11:48,080 --> 00:11:52,440 Speaker 1: So a fund might have the objective to meet the 251 00:11:53,000 --> 00:11:56,520 Speaker 1: industry benchmark, So they might go, look, this fund is 252 00:11:56,679 --> 00:11:59,320 Speaker 1: just investing in the top two hundred different shares on 253 00:11:59,360 --> 00:12:02,400 Speaker 1: the AA and our plan is actually just to stay 254 00:12:02,400 --> 00:12:05,319 Speaker 1: on track with what the market does. Great, no worries. 255 00:12:05,559 --> 00:12:07,800 Speaker 1: There are funds out there that have the aim of 256 00:12:07,840 --> 00:12:11,000 Speaker 1: beating the benchmark. There are funds out there that have 257 00:12:11,080 --> 00:12:14,120 Speaker 1: the aim of doing lots of different things. Make sure 258 00:12:14,120 --> 00:12:16,640 Speaker 1: you know that aim before you get into a fund, 259 00:12:16,720 --> 00:12:19,120 Speaker 1: because it might not align with your value. Sure, if 260 00:12:19,120 --> 00:12:21,079 Speaker 1: you're someone who's like, you know what, I want a 261 00:12:21,120 --> 00:12:24,959 Speaker 1: really low touch ETFU managed fund, I'm just going to 262 00:12:25,000 --> 00:12:27,680 Speaker 1: pick one that has the top two hundred. Make sure 263 00:12:27,720 --> 00:12:30,600 Speaker 1: that the two hundred that they're picking are trying to 264 00:12:30,640 --> 00:12:33,280 Speaker 1: meet the benchmark, not exceed it, because that would be 265 00:12:33,320 --> 00:12:37,040 Speaker 1: a different risk profile. Again, because obviously if they're trying 266 00:12:37,080 --> 00:12:39,080 Speaker 1: to be way more aggressive, like that's going to be 267 00:12:39,080 --> 00:12:41,160 Speaker 1: a different situation than just like, oh, I just want 268 00:12:41,200 --> 00:12:44,640 Speaker 1: to track the average of the average so ETF's on 269 00:12:44,679 --> 00:12:47,200 Speaker 1: the other hand, they're a type of fund that tracks 270 00:12:47,200 --> 00:12:50,640 Speaker 1: the performance of a specific market index or sector. So 271 00:12:50,720 --> 00:12:53,000 Speaker 1: I'll give you an example, and ETF might track the 272 00:12:53,160 --> 00:12:56,240 Speaker 1: SMP five hundred, which is essentially the top five hundred 273 00:12:56,280 --> 00:12:58,439 Speaker 1: companies in America. I've heard about this one. Yeah, that's 274 00:12:58,520 --> 00:13:01,240 Speaker 1: really standard. Often when you're like watching the news, so 275 00:13:01,400 --> 00:13:03,520 Speaker 1: like you know, like the little scrolling bar at the 276 00:13:03,559 --> 00:13:06,760 Speaker 1: bottom of the news, the SMP will usually be reported there, 277 00:13:07,000 --> 00:13:08,160 Speaker 1: and a lot of people will be like, I don't 278 00:13:08,160 --> 00:13:09,439 Speaker 1: know what that means, And it might be like a 279 00:13:09,480 --> 00:13:11,920 Speaker 1: little green arrow going up or a little red arrow 280 00:13:11,960 --> 00:13:14,520 Speaker 1: going down, or the yellow bar that's telling you if 281 00:13:14,559 --> 00:13:17,440 Speaker 1: the SMP five hundred went up that time or down, 282 00:13:17,559 --> 00:13:20,439 Speaker 1: or if it just stayed on track. So they might 283 00:13:20,480 --> 00:13:22,280 Speaker 1: track the s and P five hundred, or they might 284 00:13:22,320 --> 00:13:26,079 Speaker 1: track like a technology sector and only invest in tech companies. 285 00:13:26,840 --> 00:13:30,640 Speaker 1: Just like managed funds ETFs, they pull all of your investors' 286 00:13:30,640 --> 00:13:33,320 Speaker 1: money together into one big bucket and they invest in 287 00:13:33,360 --> 00:13:38,000 Speaker 1: a diversified basket of assets. However, instead of being managed actively, 288 00:13:38,400 --> 00:13:41,640 Speaker 1: so there's no one like Grampooba who's like making decisions 289 00:13:41,679 --> 00:13:46,680 Speaker 1: every day making sure everything's tracking ETFs are usually passively managed, 290 00:13:46,960 --> 00:13:49,760 Speaker 1: and their aim is to replicate the performance of their 291 00:13:49,880 --> 00:13:53,960 Speaker 1: underlying index or sector. So like if it's the technology 292 00:13:53,960 --> 00:13:56,920 Speaker 1: sector that I mentioned just before, they just go, oh, well, Beck, 293 00:13:57,160 --> 00:14:00,640 Speaker 1: we've put together this list of twenty tech com The 294 00:14:00,679 --> 00:14:02,760 Speaker 1: plan is to just get an average return of what 295 00:14:02,800 --> 00:14:07,760 Speaker 1: the tech industry returns you. Okay, no worries. That makes sense. No, 296 00:14:08,000 --> 00:14:11,520 Speaker 1: they're not harder to buy. That was your question before. Yes, 297 00:14:11,559 --> 00:14:14,040 Speaker 1: they're not harder. They're not more complex. In fact, they 298 00:14:14,040 --> 00:14:16,720 Speaker 1: are identical to buying a share, Beck. They are listed 299 00:14:16,760 --> 00:14:20,000 Speaker 1: in exactly the same way on the AX. You buy 300 00:14:20,000 --> 00:14:23,200 Speaker 1: them on a share trading platform, exactly the same way 301 00:14:23,240 --> 00:14:26,120 Speaker 1: you would buy an individual share. There's nothing more complex 302 00:14:26,120 --> 00:14:27,120 Speaker 1: about the purchase of them. 303 00:14:27,280 --> 00:14:28,560 Speaker 3: Okay, that's good to know. 304 00:14:29,040 --> 00:14:31,600 Speaker 1: What you will find though, while I'm on this topic, 305 00:14:31,920 --> 00:14:34,760 Speaker 1: is that a managed funds fees are usually higher than 306 00:14:34,800 --> 00:14:38,120 Speaker 1: an ETF because managed funds are actively managed. Sure for 307 00:14:38,840 --> 00:14:42,240 Speaker 1: you need to pay for that active management, and ETF 308 00:14:42,400 --> 00:14:45,360 Speaker 1: is usually lower fees because there's more of a passive approach. 309 00:14:46,040 --> 00:14:46,760 Speaker 1: Does that make sense? 310 00:14:46,760 --> 00:14:47,680 Speaker 3: That totally makes sense. 311 00:14:47,680 --> 00:14:49,960 Speaker 1: So managed funds usually a bit more expensive, usually a 312 00:14:50,000 --> 00:14:53,080 Speaker 1: bit more aggressive, usually trying to like beat a benchmark 313 00:14:53,440 --> 00:14:57,479 Speaker 1: ETF's usually a basket of the top performing shares in Australia, 314 00:14:57,840 --> 00:15:01,960 Speaker 1: passively managed cheaper to purchase. Both are purchased on the 315 00:15:02,000 --> 00:15:05,360 Speaker 1: share trading platform of your choice, listed in exactly the 316 00:15:05,400 --> 00:15:07,720 Speaker 1: same way as a share would be cool. Does that 317 00:15:07,760 --> 00:15:08,200 Speaker 1: make sense. 318 00:15:08,280 --> 00:15:10,960 Speaker 3: Yeah, I'm really shocked actually that I comprehended all of that. 319 00:15:11,040 --> 00:15:13,680 Speaker 3: Oh my god, I did say thank you very much. 320 00:15:13,760 --> 00:15:16,560 Speaker 3: That was fantastic. Now, as we've been talking, I've been 321 00:15:16,560 --> 00:15:19,200 Speaker 3: writing down little bits and pieces, so I'm hearing terms 322 00:15:19,200 --> 00:15:21,440 Speaker 3: like hin SRN. 323 00:15:21,360 --> 00:15:23,920 Speaker 1: Ches's sexy. It's not the game, it's not the game 324 00:15:24,080 --> 00:15:26,520 Speaker 1: the game. Do you know how to play chess? Yeah? 325 00:15:26,640 --> 00:15:28,240 Speaker 3: Oh I love chess. 326 00:15:28,480 --> 00:15:30,560 Speaker 1: I'm not smart enough for chess. I only know how 327 00:15:30,600 --> 00:15:32,280 Speaker 1: to do chess through the share market. 328 00:15:32,480 --> 00:15:32,760 Speaker 2: Huh. 329 00:15:32,760 --> 00:15:34,920 Speaker 3: Well, you know, I think that's just as important. 330 00:15:34,920 --> 00:15:37,680 Speaker 1: I would say, maybe more important, Probably the more important, 331 00:15:37,840 --> 00:15:39,880 Speaker 1: unless you're like a competitive chess and you make lots 332 00:15:39,920 --> 00:15:40,680 Speaker 1: of money. Drew. 333 00:15:41,320 --> 00:15:43,360 Speaker 3: I'm fortunately I'm not at that level yet, but. 334 00:15:43,400 --> 00:15:45,080 Speaker 1: I never will be. Don't worry. 335 00:15:45,680 --> 00:15:47,320 Speaker 3: But no, I do think I need a little bit 336 00:15:47,360 --> 00:15:48,760 Speaker 3: of time to break it down. Let's go on a 337 00:15:48,800 --> 00:15:50,840 Speaker 3: really quick break and when we come back, we'll discuss 338 00:15:50,880 --> 00:15:51,120 Speaker 3: it all. 339 00:15:51,240 --> 00:15:51,840 Speaker 1: I'm excited. 340 00:15:51,920 --> 00:15:58,240 Speaker 3: Let's go cool, we have back fee. 341 00:15:58,480 --> 00:15:59,440 Speaker 1: I'm excited about this. 342 00:15:59,640 --> 00:16:01,280 Speaker 3: We just knocked out the quick game of chess. 343 00:16:01,480 --> 00:16:03,880 Speaker 1: Definitely did not it definitely did not say that such 344 00:16:03,880 --> 00:16:04,280 Speaker 1: thing as. 345 00:16:04,160 --> 00:16:07,560 Speaker 3: A quick game of chess Actually probably not. That's probably 346 00:16:07,560 --> 00:16:08,080 Speaker 3: never exist. 347 00:16:08,160 --> 00:16:10,280 Speaker 1: I reckon it does exist if it was like a 348 00:16:10,320 --> 00:16:13,080 Speaker 1: really smart chess person playing against me, because they just 349 00:16:13,240 --> 00:16:15,320 Speaker 1: go bam bam bam, Victoria, you're out. 350 00:16:15,680 --> 00:16:18,000 Speaker 3: Yes, okay, I. 351 00:16:17,520 --> 00:16:21,760 Speaker 1: Thought that chess was a like reflection of intelligence as well. 352 00:16:22,040 --> 00:16:23,840 Speaker 1: Yeah me too. I'd always be like, oh, if you 353 00:16:23,840 --> 00:16:26,200 Speaker 1: can play chess, you must be real smart. Yeah, and 354 00:16:26,240 --> 00:16:29,120 Speaker 1: I never could so yeah, I could always felt really 355 00:16:29,400 --> 00:16:30,880 Speaker 1: something self conscious about that. 356 00:16:31,000 --> 00:16:35,400 Speaker 3: Oh no, it's not the case of chess. Yeah, absolutely, Yeah. 357 00:16:36,000 --> 00:16:37,600 Speaker 1: Why you're drinks at the bar, you bring the chest 358 00:16:37,640 --> 00:16:38,680 Speaker 1: out perfect. 359 00:16:39,040 --> 00:16:41,400 Speaker 3: Now, I know exactly what I said before the break 360 00:16:41,440 --> 00:16:43,200 Speaker 3: was that we're going to go into a few different terms. 361 00:16:43,320 --> 00:16:46,560 Speaker 3: But I'm curious. I know that you were talking about 362 00:16:46,600 --> 00:16:48,240 Speaker 3: how like when you're watching the news, you see that 363 00:16:48,280 --> 00:16:52,440 Speaker 3: little bar at the bottom, and I always wanted to 364 00:16:52,480 --> 00:16:54,560 Speaker 3: know what the all odds are. 365 00:16:54,720 --> 00:16:56,840 Speaker 1: Yeah, okay, that is a good one. It's very similar 366 00:16:56,840 --> 00:16:59,360 Speaker 1: to the SMP so all odds if you want to 367 00:16:59,360 --> 00:17:02,280 Speaker 1: look it up on the ASX, which is the Australian 368 00:17:02,320 --> 00:17:07,879 Speaker 1: Stock Exchange, its code is x AO and so essentially 369 00:17:08,480 --> 00:17:12,800 Speaker 1: the XAO. It tracks the top or the largest five 370 00:17:12,880 --> 00:17:16,600 Speaker 1: hundred companies in Australia that are listed on the AX 371 00:17:16,760 --> 00:17:20,600 Speaker 1: according to their market capitalization, so basically how big they are, 372 00:17:20,640 --> 00:17:22,920 Speaker 1: and that will change over time, like if a company 373 00:17:23,280 --> 00:17:25,800 Speaker 1: decreases in value, they might drop off the All odds 374 00:17:25,840 --> 00:17:28,800 Speaker 1: and another company that's worth more comes on, So essentially 375 00:17:29,000 --> 00:17:32,440 Speaker 1: the top five hundred largest companies in Australia. It's commonly 376 00:17:32,600 --> 00:17:36,240 Speaker 1: referred to as the All ords because it's actually considered 377 00:17:36,240 --> 00:17:40,120 Speaker 1: the benchmark index for gauging the performance of the broader 378 00:17:40,160 --> 00:17:44,640 Speaker 1: Australian market. So the All Odds was originally calculated in 379 00:17:44,720 --> 00:17:47,560 Speaker 1: I think it was nineteen eighty with a starting level 380 00:17:47,560 --> 00:17:50,919 Speaker 1: of five hundred and represents close to ninety percent of 381 00:17:50,960 --> 00:17:53,359 Speaker 1: the AX, so it's not like a little bit of 382 00:17:53,359 --> 00:17:56,560 Speaker 1: the ASEX, it's a lot of the ASX and it's 383 00:17:56,680 --> 00:18:00,879 Speaker 1: essentially a good way of quickly checking in and seeing 384 00:18:01,119 --> 00:18:03,880 Speaker 1: how's the Australian market doing. If the all odds are 385 00:18:03,880 --> 00:18:07,720 Speaker 1: down right, it means that ninety percent of the ASX 386 00:18:08,000 --> 00:18:10,640 Speaker 1: is on its way down. There must be something going 387 00:18:10,680 --> 00:18:13,560 Speaker 1: on in the economy that is, you know, pushing it down. 388 00:18:14,160 --> 00:18:16,280 Speaker 1: If the all odds is up, it means the economy 389 00:18:16,320 --> 00:18:18,320 Speaker 1: is doing really well. So it's kind of like that 390 00:18:18,520 --> 00:18:21,280 Speaker 1: one number that's like a really good sense check or 391 00:18:21,280 --> 00:18:24,320 Speaker 1: a pulse check to see what's our market doing. Is 392 00:18:24,359 --> 00:18:27,600 Speaker 1: it okay? And it's a good idea to track this 393 00:18:27,760 --> 00:18:30,320 Speaker 1: if you're an investor, not because you're going to invest 394 00:18:30,400 --> 00:18:33,639 Speaker 1: in it, but because you want to have your finger 395 00:18:33,680 --> 00:18:36,040 Speaker 1: on the pulse. And it can be really jarring. Right 396 00:18:36,080 --> 00:18:38,600 Speaker 1: as a baby investor you've just started, You're like, oh, 397 00:18:38,640 --> 00:18:42,000 Speaker 1: my gosh, my whole portfolio is completely off. Do you 398 00:18:42,040 --> 00:18:43,920 Speaker 1: know what makes you feel a lot better? Looking at 399 00:18:43,920 --> 00:18:47,080 Speaker 1: the all odds and saying, ah, the broader economy is 400 00:18:47,119 --> 00:18:49,760 Speaker 1: a little bit off. Sure, this makes sense. So this 401 00:18:49,840 --> 00:18:51,359 Speaker 1: is one of those things. I'm in the middle of 402 00:18:51,359 --> 00:18:54,480 Speaker 1: writing my investing master class, and this is something that 403 00:18:54,640 --> 00:18:56,520 Speaker 1: you know, I asked the community a little while ago, 404 00:18:56,720 --> 00:18:58,560 Speaker 1: just in the Facebook group, because I haven't announced it 405 00:18:58,560 --> 00:19:01,320 Speaker 1: publicly that I'm doing that. Listening to this on the pod, 406 00:19:01,680 --> 00:19:04,080 Speaker 1: You're welcome, But we're writing an investing mask glass, and 407 00:19:04,080 --> 00:19:06,800 Speaker 1: I said, what do you want to know? Like, obviously 408 00:19:06,880 --> 00:19:09,520 Speaker 1: I can write everything that I know about the stock 409 00:19:09,560 --> 00:19:12,000 Speaker 1: market and what that actually looks like, how to do it? 410 00:19:12,040 --> 00:19:14,479 Speaker 1: What to start? And someone's question, I can't remember who 411 00:19:14,560 --> 00:19:16,880 Speaker 1: it was, so do apologize? It was my favorite question? 412 00:19:17,000 --> 00:19:19,959 Speaker 1: Yet She's like, what does it actually mean to do 413 00:19:20,000 --> 00:19:23,760 Speaker 1: your research? So I go back, you know, before investing, 414 00:19:23,800 --> 00:19:27,000 Speaker 1: do your research? What the heck can is invest in research? 415 00:19:27,480 --> 00:19:28,400 Speaker 1: How do I do that? 416 00:19:28,560 --> 00:19:29,160 Speaker 3: Great question? 417 00:19:29,320 --> 00:19:31,400 Speaker 1: So I've made a whole unit on how to quote 418 00:19:31,440 --> 00:19:33,159 Speaker 1: do your research and what to look at and what 419 00:19:33,200 --> 00:19:36,440 Speaker 1: can make you feel a bit more comfortable because investing 420 00:19:36,520 --> 00:19:38,280 Speaker 1: is one thing. Yes, I can show you how to 421 00:19:38,359 --> 00:19:40,879 Speaker 1: do your research to check if a share or a 422 00:19:41,119 --> 00:19:44,320 Speaker 1: ETF is a good investment for you personally and whether 423 00:19:44,359 --> 00:19:46,600 Speaker 1: you would choose it or not with the right you know, 424 00:19:46,880 --> 00:19:49,960 Speaker 1: technology behind it. Sure, but also like what about a 425 00:19:49,960 --> 00:19:52,000 Speaker 1: bit of a sense check? Beck, Like, what if you're 426 00:19:52,000 --> 00:19:54,119 Speaker 1: a bit stressed, how do I do a bit of 427 00:19:54,160 --> 00:19:56,440 Speaker 1: research to make sure that I can just still feel 428 00:19:56,440 --> 00:19:58,879 Speaker 1: a little bit comfy in the market? The all odds 429 00:19:58,920 --> 00:20:00,920 Speaker 1: is something that I would look at first to go 430 00:20:01,200 --> 00:20:04,680 Speaker 1: what's the broader economy doing If that's off, what makes 431 00:20:04,720 --> 00:20:07,600 Speaker 1: sense that your shares are off? Beck because the whole 432 00:20:07,640 --> 00:20:10,760 Speaker 1: economy is a bit messed up, right now, gotcha? That 433 00:20:10,840 --> 00:20:12,440 Speaker 1: might make you feel a bit more comfortable. But yeah, 434 00:20:12,480 --> 00:20:14,520 Speaker 1: the all odds is actually really important, and I'm glad 435 00:20:14,560 --> 00:20:15,119 Speaker 1: you brought it up. 436 00:20:15,359 --> 00:20:17,919 Speaker 3: Oh great, I've shocked that I finally figured out what 437 00:20:17,920 --> 00:20:19,359 Speaker 3: that was, because I feel like it's something that we 438 00:20:19,480 --> 00:20:21,359 Speaker 3: joke about in like high school. The all odds are. 439 00:20:22,840 --> 00:20:25,880 Speaker 1: You don't know what it means, but essentially TLDR it's 440 00:20:25,920 --> 00:20:29,440 Speaker 1: the top five hundred biggest companies in Australia and it's 441 00:20:29,480 --> 00:20:32,440 Speaker 1: a benchmark to see are they doing well? Are they 442 00:20:32,480 --> 00:20:35,080 Speaker 1: not doing well? It's why you'll see the all odds. 443 00:20:35,359 --> 00:20:37,960 Speaker 1: The numbers aren't massive when they move right. It's always 444 00:20:38,000 --> 00:20:40,080 Speaker 1: like the all lords are ze point one percent, right, 445 00:20:40,240 --> 00:20:43,400 Speaker 1: like you never hear twelve percent. Yeah, because that's five 446 00:20:43,520 --> 00:20:47,439 Speaker 1: hundred companies and the average is going to have to 447 00:20:47,480 --> 00:20:50,359 Speaker 1: be pretty significant to have a bigger than a you know, 448 00:20:50,400 --> 00:20:53,000 Speaker 1: a one or two percent jump, gotcha. But it'll always 449 00:20:53,000 --> 00:20:55,960 Speaker 1: be small amounts and it's just like slow fluctuations. And 450 00:20:56,000 --> 00:20:57,879 Speaker 1: then if you look at it over the broader, like 451 00:20:58,080 --> 00:21:00,520 Speaker 1: you know, scale of time, because we say on the 452 00:21:00,560 --> 00:21:03,640 Speaker 1: pod lame that it's my favorite saying when in doubt, 453 00:21:03,720 --> 00:21:06,040 Speaker 1: zoom out, like look at the bigger picture back. You 454 00:21:06,119 --> 00:21:08,240 Speaker 1: might see that the all lords over time are just 455 00:21:08,280 --> 00:21:12,320 Speaker 1: slowly tracking upwards. That's reflective of a really healthy market. 456 00:21:12,640 --> 00:21:15,639 Speaker 1: Or you might see it tracking downwards, like going into COVID, 457 00:21:15,760 --> 00:21:18,440 Speaker 1: we saw the all lords track downwards. Going into any 458 00:21:18,480 --> 00:21:21,399 Speaker 1: type of recession, we see it track downwards, and you 459 00:21:21,400 --> 00:21:24,240 Speaker 1: can see how fast or slow that is and go, oh, 460 00:21:24,320 --> 00:21:27,080 Speaker 1: that's happening pretty quickly or that's actually really slow. It's 461 00:21:27,200 --> 00:21:29,440 Speaker 1: interesting once you know what it is. Yeah, Okay, I 462 00:21:29,480 --> 00:21:31,119 Speaker 1: won't go on and on about it because I totally 463 00:21:31,119 --> 00:21:31,560 Speaker 1: go it. 464 00:21:32,560 --> 00:21:35,480 Speaker 3: And I could totally listen all day, but we do 465 00:21:35,680 --> 00:21:40,360 Speaker 3: full of it an episode to get to all, right, 466 00:21:40,960 --> 00:21:46,480 Speaker 3: what on Earth is h SRN and chess? Are these 467 00:21:46,520 --> 00:21:47,359 Speaker 3: online games? 468 00:21:48,800 --> 00:21:51,879 Speaker 1: Online game? Let's do one at a time. Can I 469 00:21:51,920 --> 00:21:53,840 Speaker 1: break it up? Because I'm not gonna answer all three 470 00:21:53,880 --> 00:21:56,880 Speaker 1: at one time because I think that would be irresponsible. 471 00:21:56,920 --> 00:22:00,200 Speaker 1: And while my job often is to completely overwhelm you, 472 00:22:00,440 --> 00:22:02,719 Speaker 1: it's funny someone slid into my DMS and the like utoria, 473 00:22:02,760 --> 00:22:04,840 Speaker 1: this is so embarrassing, But sometimes I have to listen 474 00:22:04,840 --> 00:22:07,119 Speaker 1: to your episodes three times to get them. It's not 475 00:22:07,200 --> 00:22:10,680 Speaker 1: embarrassing embarrassing, that's smart. Yeah, it is like do you 476 00:22:10,720 --> 00:22:13,560 Speaker 1: know how much research I often do on these episodes 477 00:22:13,600 --> 00:22:16,920 Speaker 1: tojam pack them full of information that hopefully you get. Yes, 478 00:22:17,000 --> 00:22:19,360 Speaker 1: I can't expect you to walk away. It's like going 479 00:22:19,440 --> 00:22:20,840 Speaker 1: to a lecture. Did you listen? 480 00:22:20,960 --> 00:22:23,640 Speaker 3: Probably not watch it three, four, five, six, seven times? 481 00:22:23,720 --> 00:22:27,000 Speaker 1: Yeah, and on like double speed, Yeah, and not spend 482 00:22:27,000 --> 00:22:29,040 Speaker 1: that whole time doing it. But it is not embarrassing 483 00:22:29,080 --> 00:22:30,440 Speaker 1: to have to go back and listen to it again. 484 00:22:30,560 --> 00:22:33,240 Speaker 1: In fact, hard to watch a Barbie movie three times 485 00:22:33,240 --> 00:22:36,080 Speaker 1: before I got everything in it, Yeah, exactly, So like 486 00:22:36,359 --> 00:22:38,679 Speaker 1: the same should be true for my podcast because like 487 00:22:38,720 --> 00:22:41,320 Speaker 1: they're basically on part with a Barbie movie. Right, Oh yeah, 488 00:22:41,359 --> 00:22:45,160 Speaker 1: oh absolutely. All right, So let's start with chess, okay, 489 00:22:45,160 --> 00:22:47,399 Speaker 1: because it sounds the most like a game, and I 490 00:22:47,400 --> 00:22:50,240 Speaker 1: feel like it's most spoken about in our community as well. 491 00:22:50,320 --> 00:22:55,359 Speaker 1: So put simply, chess is clearing house electronic subregistered system, 492 00:22:55,720 --> 00:23:02,080 Speaker 1: oh sexy. So essentially that means that the AX is 493 00:23:02,160 --> 00:23:04,440 Speaker 1: just keeping a list of who owns what chess. That's 494 00:23:04,480 --> 00:23:09,280 Speaker 1: what chess means. Okay, So it's the clearing house electronic 495 00:23:09,400 --> 00:23:14,159 Speaker 1: subregister system. It's just registering everybody who owns shares in 496 00:23:14,200 --> 00:23:16,600 Speaker 1: the ASEX. So if you go and purchase a share 497 00:23:16,680 --> 00:23:19,080 Speaker 1: on the ASEX, they want to keep track of everybody. 498 00:23:19,320 --> 00:23:21,919 Speaker 1: That's what CHESS does. So if your shares are quote 499 00:23:22,080 --> 00:23:25,480 Speaker 1: Chess sponsored, it means that when you buy or sell 500 00:23:25,520 --> 00:23:27,679 Speaker 1: shares on the ASEX, it has a record of you 501 00:23:27,840 --> 00:23:30,720 Speaker 1: owning the shares directly or not. And this is the 502 00:23:30,800 --> 00:23:33,720 Speaker 1: main way in Australia that people buy and sell shares 503 00:23:33,720 --> 00:23:35,679 Speaker 1: because they go to a broker, They might go to 504 00:23:35,680 --> 00:23:39,200 Speaker 1: an online platform purchase a share and then they will 505 00:23:39,240 --> 00:23:42,560 Speaker 1: get a whole heave of paperwork, usually from computer share 506 00:23:42,800 --> 00:23:44,760 Speaker 1: that says you now own this, here's your chest number, 507 00:23:44,760 --> 00:23:47,280 Speaker 1: here's this, here's that, and it's just tracking that you're 508 00:23:47,359 --> 00:23:51,840 Speaker 1: the actual underlying owner of that asset. Just be aware 509 00:23:52,119 --> 00:23:55,479 Speaker 1: when it comes to choosing a broker for buying and 510 00:23:55,520 --> 00:23:58,560 Speaker 1: selling these because some brokers are and some brokers aren't 511 00:23:58,760 --> 00:24:01,679 Speaker 1: Chess sponsored. Don't mean they're worse or different. It's just 512 00:24:01,760 --> 00:24:04,960 Speaker 1: something that you need to understand and we'll obviously get 513 00:24:04,960 --> 00:24:08,199 Speaker 1: into those different arrangements soon. Okay, So I'm not going 514 00:24:08,280 --> 00:24:09,679 Speaker 1: to go on and on about it now because I 515 00:24:09,720 --> 00:24:11,040 Speaker 1: know I've got a round coming soon. 516 00:24:11,640 --> 00:24:15,520 Speaker 3: Yeah, you can feel it bubbling up. Okay, So this 517 00:24:15,840 --> 00:24:19,679 Speaker 3: is if you're I'm assuming the owner of the share. 518 00:24:19,720 --> 00:24:21,720 Speaker 3: But what if you're in an ETF or a managed fund? 519 00:24:22,320 --> 00:24:24,679 Speaker 3: Will used to be chess sponsored? Does that? 520 00:24:25,160 --> 00:24:27,360 Speaker 1: So that's where remember at the start of the episode, 521 00:24:27,400 --> 00:24:29,720 Speaker 1: I said there's two ways to hold shares. There's indirect 522 00:24:29,760 --> 00:24:32,520 Speaker 1: and direct. Yes, So a chess sponsor, if it is 523 00:24:32,560 --> 00:24:33,919 Speaker 1: in your name, that would be direct. 524 00:24:34,119 --> 00:24:34,800 Speaker 3: Gotcha. 525 00:24:34,920 --> 00:24:38,280 Speaker 1: ETFs and managed funds are essentially indirect, and that means 526 00:24:38,280 --> 00:24:41,399 Speaker 1: you are absolutely correct, Beck. If your shares are chess 527 00:24:41,440 --> 00:24:45,480 Speaker 1: ASX sponsored, it means that you personally own them directly, 528 00:24:45,640 --> 00:24:48,880 Speaker 1: so like the name on the certificate would say becksayed, 529 00:24:49,480 --> 00:24:52,040 Speaker 1: rather than someone else holding them on your behalf like 530 00:24:52,040 --> 00:24:54,320 Speaker 1: an ETF or a managed fund in the pool that 531 00:24:54,359 --> 00:24:57,680 Speaker 1: we were talking about before, So you would receive dividends 532 00:24:57,680 --> 00:25:00,240 Speaker 1: directly if you're the underlying owner of them. So that's 533 00:25:00,320 --> 00:25:03,320 Speaker 1: essentially the profit the company pays to its owners, i e. 534 00:25:03,640 --> 00:25:04,639 Speaker 2: You and you. 535 00:25:04,760 --> 00:25:08,560 Speaker 1: Actually, if you're the underlying direct owner, you have voting rights. 536 00:25:08,760 --> 00:25:11,320 Speaker 1: Not many people care about their voting rights, and let's 537 00:25:11,359 --> 00:25:14,160 Speaker 1: be honest, if you only own one share your voting rights, 538 00:25:15,280 --> 00:25:17,800 Speaker 1: they're not going to have the biggest influence. But that's okay. 539 00:25:17,960 --> 00:25:20,800 Speaker 1: Some people really really want to have them. Is it 540 00:25:20,880 --> 00:25:23,639 Speaker 1: bad that you don't own them directly? Is the next question. 541 00:25:23,680 --> 00:25:27,240 Speaker 1: I think people are probably thinking no, not necessarily. Some 542 00:25:27,320 --> 00:25:30,880 Speaker 1: people are honestly, wildly passionate about this. You might see 543 00:25:30,880 --> 00:25:33,399 Speaker 1: it all over the internet if you are someone like 544 00:25:33,440 --> 00:25:37,040 Speaker 1: me who is this embarrassing. Might be troll's reddit forums 545 00:25:37,160 --> 00:25:39,879 Speaker 1: about like what shares are being bought and sold, in 546 00:25:39,880 --> 00:25:42,560 Speaker 1: people's opinions on different ETFs, like I'm gonna need to 547 00:25:42,560 --> 00:25:45,199 Speaker 1: know all of that information, right, But a lot of 548 00:25:45,200 --> 00:25:47,359 Speaker 1: people will be like, it's terrible because it's not chess 549 00:25:47,359 --> 00:25:49,920 Speaker 1: sponsored and you're not the direct owner of it. Rare anyway, 550 00:25:50,040 --> 00:25:53,600 Speaker 1: I could not care less. But some people, as I said, 551 00:25:53,640 --> 00:25:56,440 Speaker 1: are wildly passionate about it. But as someone who does 552 00:25:56,680 --> 00:26:00,520 Speaker 1: arguably know the industry very well and invests in ETFs 553 00:26:00,520 --> 00:26:03,480 Speaker 1: and managed funds directly, it doesn't worry me because all 554 00:26:03,480 --> 00:26:06,560 Speaker 1: my investments are still safe and are still secure, and 555 00:26:07,080 --> 00:26:10,879 Speaker 1: essentially what my shares in my ETF and managed funds 556 00:26:10,920 --> 00:26:14,439 Speaker 1: are operating under is what's called a custodian model. So 557 00:26:14,640 --> 00:26:18,320 Speaker 1: that all sounds very complex, you could say, But a 558 00:26:18,320 --> 00:26:22,200 Speaker 1: custodian model essentially means that someone else is currently holding 559 00:26:22,280 --> 00:26:25,480 Speaker 1: that share certificate on my behalf. It's all above board. 560 00:26:25,720 --> 00:26:28,760 Speaker 1: If either of those companies, like let's say the share 561 00:26:28,800 --> 00:26:32,720 Speaker 1: trading platform that I have picked, operates under a custodian model, 562 00:26:33,119 --> 00:26:35,920 Speaker 1: which means that the etf I board or even sometimes 563 00:26:35,960 --> 00:26:38,080 Speaker 1: the share that I buy isn't going to be in 564 00:26:38,080 --> 00:26:40,600 Speaker 1: my direct name. It's under this custodian model. You might go, 565 00:26:40,840 --> 00:26:43,520 Speaker 1: but what if they go bankrupt, Victoria, what if they 566 00:26:43,520 --> 00:26:44,560 Speaker 1: lose all their money? 567 00:26:44,840 --> 00:26:45,080 Speaker 3: True? 568 00:26:45,119 --> 00:26:46,320 Speaker 1: Are you going to lose your shares back? 569 00:26:46,720 --> 00:26:47,480 Speaker 3: It's a good question. 570 00:26:47,600 --> 00:26:50,720 Speaker 1: You're not, because it's held under a custodian model, which 571 00:26:50,720 --> 00:26:53,720 Speaker 1: means that the owners of that company that you're investing with, 572 00:26:53,840 --> 00:26:55,840 Speaker 1: they don't actually have access to that. They can't just 573 00:26:55,880 --> 00:26:59,359 Speaker 1: transfer it to their name. Custodian means they're the custodians 574 00:26:59,359 --> 00:27:02,920 Speaker 1: of it, not the the lying owner. The share owners are, 575 00:27:03,280 --> 00:27:05,840 Speaker 1: and essentially the owner of the share. It isn't as 576 00:27:05,880 --> 00:27:08,760 Speaker 1: clear as if it was responsored, but there still is 577 00:27:08,920 --> 00:27:12,159 Speaker 1: a direct line of working that out, and that company 578 00:27:12,160 --> 00:27:14,240 Speaker 1: can't just yeed off with your shares, Like, you're not 579 00:27:14,280 --> 00:27:17,280 Speaker 1: going to lose out in that circumstance. The only way 580 00:27:17,280 --> 00:27:19,600 Speaker 1: you would lose out, and you know there might be 581 00:27:19,640 --> 00:27:21,719 Speaker 1: an issue with your share is if your share actually 582 00:27:21,720 --> 00:27:23,679 Speaker 1: loses value, but it wouldn't have anything to do with 583 00:27:23,720 --> 00:27:28,119 Speaker 1: your broker. However, in that custodian model, your shares are 584 00:27:28,119 --> 00:27:30,880 Speaker 1: actually held within a trust. So remember in the first 585 00:27:30,880 --> 00:27:34,560 Speaker 1: episode we were talking about trusts and direct ownership. Companies 586 00:27:34,560 --> 00:27:38,240 Speaker 1: can set up trusts to hold their client's assets. So 587 00:27:38,400 --> 00:27:41,200 Speaker 1: my shares are currently being held in a trust by 588 00:27:41,280 --> 00:27:44,520 Speaker 1: my custodian, which is my broker, and they're not going 589 00:27:44,600 --> 00:27:46,919 Speaker 1: to go missing if that company goes bankrupt or they 590 00:27:46,960 --> 00:27:49,200 Speaker 1: shut down. So you're okay. And I think a lot 591 00:27:49,200 --> 00:27:51,720 Speaker 1: of people get really worried about that because they're like, oh, 592 00:27:51,760 --> 00:27:53,600 Speaker 1: but someone's going to, you know, take off with my 593 00:27:53,640 --> 00:27:55,600 Speaker 1: shares because they've got my share certificate and I'm like, 594 00:27:56,040 --> 00:27:58,240 Speaker 1: not so quick, Like, that's not how it works. 595 00:27:58,960 --> 00:28:00,600 Speaker 3: Okay, how it works. 596 00:28:00,600 --> 00:28:02,520 Speaker 1: So you're safer than you might think you are. 597 00:28:02,840 --> 00:28:04,520 Speaker 3: That's good to know. It's always good to be safer 598 00:28:04,560 --> 00:28:05,080 Speaker 3: than you think. 599 00:28:05,440 --> 00:28:06,080 Speaker 1: Exactly. 600 00:28:06,800 --> 00:28:10,400 Speaker 3: What about HIN and SRN, are they equally. 601 00:28:10,040 --> 00:28:12,399 Speaker 1: Like I'm overloading this episode, but like, I feel like 602 00:28:12,400 --> 00:28:14,080 Speaker 1: this all needs to go in the same episode, so 603 00:28:14,119 --> 00:28:18,920 Speaker 1: I do apologize, but no, thankfully. So historically shareholders, you 604 00:28:19,040 --> 00:28:21,560 Speaker 1: actually would have received like a share certificate, like a 605 00:28:21,600 --> 00:28:24,160 Speaker 1: legit one in the mail to prove that you are 606 00:28:24,240 --> 00:28:27,240 Speaker 1: the underlying owner of that asset. You can still receive 607 00:28:27,280 --> 00:28:29,640 Speaker 1: those if you really want to. I get mine by email. 608 00:28:30,359 --> 00:28:34,159 Speaker 1: Shares are now automatically held digitally on what's called a 609 00:28:34,440 --> 00:28:38,160 Speaker 1: hi N if you go with a stockbroker, So a HIN. 610 00:28:38,640 --> 00:28:43,240 Speaker 1: It's actually very simple. It means hold up identification number. Again. 611 00:28:43,280 --> 00:28:46,120 Speaker 1: It's just a number that tracks who owns what and 612 00:28:46,160 --> 00:28:49,720 Speaker 1: when and where, which is essentially like an ID card 613 00:28:49,800 --> 00:28:52,520 Speaker 1: or an ID number for your shares. It's not super complex. 614 00:28:52,600 --> 00:28:54,720 Speaker 1: You don't need to be super across it. Just know 615 00:28:54,920 --> 00:28:57,280 Speaker 1: that each time you would buy, you would be, you know, 616 00:28:57,800 --> 00:29:00,480 Speaker 1: given a HIN. It's essentially just to track your shares 617 00:29:00,520 --> 00:29:02,800 Speaker 1: so the ASEX knows who owns what and when and where. 618 00:29:02,880 --> 00:29:06,800 Speaker 1: M mmm, beck. You also asked about an SRN, So 619 00:29:06,960 --> 00:29:09,800 Speaker 1: you're gonna have an SRN if you buy shares with 620 00:29:09,880 --> 00:29:12,360 Speaker 1: the registry soon. How I said before, you get a 621 00:29:12,400 --> 00:29:14,480 Speaker 1: HINT if you go with a stockbroker. If you go 622 00:29:14,640 --> 00:29:17,800 Speaker 1: directly with the registry, you're actually gonna get an SRN, 623 00:29:17,960 --> 00:29:24,280 Speaker 1: which stands for Security Reference number. Again just another ID number, okay, 624 00:29:24,320 --> 00:29:28,000 Speaker 1: which is unique to each company's shares that you own. 625 00:29:28,280 --> 00:29:30,800 Speaker 1: So both of which are honestly just acronyms for numbers 626 00:29:30,800 --> 00:29:33,479 Speaker 1: you're gonna get when you register your investments. So no 627 00:29:33,520 --> 00:29:37,040 Speaker 1: matter which way your shares are held, you remain ultimately 628 00:29:37,040 --> 00:29:41,160 Speaker 1: the beneficial owner even if the stockbroker or the registry 629 00:29:41,280 --> 00:29:45,560 Speaker 1: goes bankrupt. Oh so you're okay, you safe safe. These 630 00:29:45,600 --> 00:29:47,880 Speaker 1: are tracking numbers, So if you get them in the mail, 631 00:29:47,960 --> 00:29:50,800 Speaker 1: or you get them in your emails, save them somewhere important, 632 00:29:50,840 --> 00:29:53,520 Speaker 1: in a folder in your emails, or like my favorite, 633 00:29:53,560 --> 00:29:55,840 Speaker 1: I don't care paper in my house, I'm gonna lose it. 634 00:29:55,880 --> 00:29:58,320 Speaker 1: But you know what if I don't lose pieces of 635 00:29:58,320 --> 00:30:00,760 Speaker 1: paper in my house, I I have been on the 636 00:30:00,760 --> 00:30:02,360 Speaker 1: phone and I flip them over and I draw all 637 00:30:02,440 --> 00:30:04,840 Speaker 1: over us lists and then I rip them up like 638 00:30:04,880 --> 00:30:07,080 Speaker 1: it is not a good idea. So I actually take 639 00:30:07,120 --> 00:30:08,920 Speaker 1: photos of all of mine and just save them in 640 00:30:08,960 --> 00:30:11,520 Speaker 1: an album in my phone, or I email them to myself. 641 00:30:11,680 --> 00:30:14,560 Speaker 1: But definitely keep track of these numbers. Because ultimately they 642 00:30:14,600 --> 00:30:16,720 Speaker 1: are important, but you're not going to use them every 643 00:30:16,800 --> 00:30:18,520 Speaker 1: day when you're doing share trading. 644 00:30:19,240 --> 00:30:21,200 Speaker 3: Great idea, d I don't know if you do the 645 00:30:21,240 --> 00:30:22,960 Speaker 3: same thing as I take photos. I send it to 646 00:30:23,000 --> 00:30:27,040 Speaker 3: myself and I put like a trillion different keywords in 647 00:30:27,080 --> 00:30:27,640 Speaker 3: the email. 648 00:30:27,760 --> 00:30:32,719 Speaker 1: I'm like, hi, n identification number for XYZ share share trading, 649 00:30:32,840 --> 00:30:37,000 Speaker 1: stop broking investment account, like exactly, because what if I 650 00:30:37,040 --> 00:30:38,960 Speaker 1: forget what to google email? 651 00:30:39,160 --> 00:30:41,280 Speaker 3: What future are me going to think about? 652 00:30:41,440 --> 00:30:44,040 Speaker 1: And I can't trust future me. I have proven to 653 00:30:44,120 --> 00:30:46,720 Speaker 1: myself I can't be trusted. I agree. 654 00:30:46,960 --> 00:30:48,920 Speaker 3: Okay, so I just want to quickly wrap my head 655 00:30:48,920 --> 00:30:50,240 Speaker 3: around this all because it is a lot. 656 00:30:50,400 --> 00:30:53,160 Speaker 1: It is a lot. I'm sorry, but I okay, you've 657 00:30:53,160 --> 00:30:54,479 Speaker 1: gotten across it really quickly. 658 00:30:54,600 --> 00:30:56,640 Speaker 3: Thank you so much. I mean, there might be gaps 659 00:30:56,640 --> 00:30:57,560 Speaker 3: in my knowledge. 660 00:30:57,360 --> 00:31:01,360 Speaker 1: But so the episode was so that we listen to it. 661 00:31:01,320 --> 00:31:05,440 Speaker 3: To us exactly, if I buy shares directly in my 662 00:31:05,520 --> 00:31:08,000 Speaker 3: own name, my own name will be listed down on 663 00:31:08,080 --> 00:31:10,479 Speaker 3: the share register. Yeah, I'll be able to buy and 664 00:31:10,520 --> 00:31:13,360 Speaker 3: sell individual shares whenever I want. My dividends will be 665 00:31:13,400 --> 00:31:15,960 Speaker 3: paid directly to me, and I have voting rights. 666 00:31:16,200 --> 00:31:18,520 Speaker 1: WHOA, Yes, exactly, you're the money. 667 00:31:19,040 --> 00:31:20,200 Speaker 3: Thank you so much. 668 00:31:20,280 --> 00:31:21,240 Speaker 1: You're on the money. 669 00:31:21,360 --> 00:31:24,400 Speaker 3: That is so sick. Okay, So while I'm at it, 670 00:31:24,840 --> 00:31:28,080 Speaker 3: when you indirectly invest, yes, the name on the share 671 00:31:28,120 --> 00:31:31,720 Speaker 3: register is the ETF or the managed funds company. Yes, 672 00:31:31,800 --> 00:31:33,960 Speaker 3: not my name, not your name, but they hold the 673 00:31:33,960 --> 00:31:36,480 Speaker 3: assets on my behalf and manage what the ETF or 674 00:31:36,520 --> 00:31:38,280 Speaker 3: managed fund is made up of. So I don't have 675 00:31:38,320 --> 00:31:41,640 Speaker 3: to worry about buying and selling, Yes, but I do. 676 00:31:41,680 --> 00:31:43,680 Speaker 3: I still get my dividends though. What happens if the 677 00:31:43,720 --> 00:31:46,040 Speaker 3: share makes a profit. Oh that's a good question. I 678 00:31:46,120 --> 00:31:48,280 Speaker 3: like that you're thinking about this thing now. It makes 679 00:31:48,320 --> 00:31:50,200 Speaker 3: me so proud. I'm like, oh, so you're just worried 680 00:31:50,240 --> 00:31:51,600 Speaker 3: about where a dividends is going to go? 681 00:31:51,880 --> 00:31:55,520 Speaker 1: Thank you something the profit still goes to you, do 682 00:31:55,600 --> 00:31:58,560 Speaker 1: not worry, okay. So it will just be filtered directly 683 00:31:58,840 --> 00:32:02,360 Speaker 1: through your et or managed fund. It does get distributed 684 00:32:02,400 --> 00:32:05,080 Speaker 1: in a bit of a different way, but it's still 685 00:32:05,080 --> 00:32:07,960 Speaker 1: there for you. You are not missing out. Often when it 686 00:32:08,000 --> 00:32:10,920 Speaker 1: comes back in the fees that you've agreed to pay 687 00:32:11,080 --> 00:32:13,800 Speaker 1: for your ETF or managed fund to get taken out 688 00:32:13,880 --> 00:32:16,280 Speaker 1: of that amount and then it gets distributed to you 689 00:32:16,800 --> 00:32:19,240 Speaker 1: or through your etfor managed fund. You might have picked 690 00:32:19,280 --> 00:32:22,800 Speaker 1: what's called a dividend reinvestment plan, which means they never 691 00:32:22,800 --> 00:32:25,360 Speaker 1: give you the cash. They actually just reinvest it back 692 00:32:25,360 --> 00:32:28,400 Speaker 1: into the same ETF for you. So it's all automated, 693 00:32:28,440 --> 00:32:31,480 Speaker 1: which can be really helpful because if you're planning to 694 00:32:31,520 --> 00:32:33,720 Speaker 1: invest over the long term and you own a share, 695 00:32:34,040 --> 00:32:36,160 Speaker 1: you know, and let's pretend it paid you ten dollars 696 00:32:36,200 --> 00:32:38,560 Speaker 1: this year, you don't want that ten dollars this year. 697 00:32:38,560 --> 00:32:41,200 Speaker 1: You want it reinvested into the share market so that 698 00:32:41,240 --> 00:32:43,040 Speaker 1: it can grow over time and then when you reach 699 00:32:43,080 --> 00:32:45,520 Speaker 1: retirement you can make use of it. But that's what 700 00:32:45,560 --> 00:32:47,400 Speaker 1: I mean when I say the money that your money 701 00:32:47,400 --> 00:32:50,160 Speaker 1: makes makes money is because the money that your money 702 00:32:50,200 --> 00:32:53,479 Speaker 1: made gets reinvested, and then that money makes money. So 703 00:32:53,520 --> 00:32:57,040 Speaker 1: that ten dollars that gets reinvested, then you know, might 704 00:32:57,040 --> 00:32:59,320 Speaker 1: make a dollar next year, and then that dollar makes 705 00:32:59,360 --> 00:33:03,040 Speaker 1: money and it just compounds from there. Okay, So it 706 00:33:03,080 --> 00:33:05,640 Speaker 1: doesn't necessarily mean that you're missing out, but it might 707 00:33:05,680 --> 00:33:08,080 Speaker 1: get filtered through a different way, but those profits are 708 00:33:08,120 --> 00:33:11,440 Speaker 1: still yours. And like, for example, if Combank says that 709 00:33:11,480 --> 00:33:14,680 Speaker 1: they're paying a dividend to investors, that is still going 710 00:33:14,760 --> 00:33:16,440 Speaker 1: to come to you, sure you don't miss out? 711 00:33:16,880 --> 00:33:18,600 Speaker 3: Good to know, very good to know. 712 00:33:18,760 --> 00:33:21,920 Speaker 1: Don't miss out, don't miss out. And arguably the most 713 00:33:21,960 --> 00:33:24,200 Speaker 1: important thing about investing is making money. So like, I'm 714 00:33:24,240 --> 00:33:26,360 Speaker 1: not going to let you miss out. Oh joking, I'd 715 00:33:26,360 --> 00:33:28,560 Speaker 1: be like, don't do that. That's terrible. You won't get paid. 716 00:33:28,640 --> 00:33:30,640 Speaker 1: That would be silly, that would be so dumb. 717 00:33:31,000 --> 00:33:33,640 Speaker 3: I trust that you're not done with teaching, but I 718 00:33:33,800 --> 00:33:35,640 Speaker 3: probably amn you're done. 719 00:33:35,760 --> 00:33:37,120 Speaker 1: Okay, don't worry. 720 00:33:37,320 --> 00:33:39,360 Speaker 3: But before we wrap up, how do we pick which 721 00:33:39,400 --> 00:33:40,720 Speaker 3: option works best for us? 722 00:33:40,880 --> 00:33:43,280 Speaker 1: Okay? So this is a good question, but also a 723 00:33:43,280 --> 00:33:46,280 Speaker 1: really personal question because like, I can't tell you what's 724 00:33:46,320 --> 00:33:49,200 Speaker 1: going to work best for you. From my perspective, it's 725 00:33:49,240 --> 00:33:52,400 Speaker 1: really important to consider your goals and your risk tolerance 726 00:33:52,440 --> 00:33:55,040 Speaker 1: and your lifestyle. Like some people might want to be 727 00:33:55,360 --> 00:33:59,040 Speaker 1: individual share traders and consistently, you know, rebalance their own 728 00:33:59,080 --> 00:34:02,080 Speaker 1: portfolios and manager that way. If your hands on and 729 00:34:02,120 --> 00:34:04,720 Speaker 1: you want to pick your own companies, like direct ownership 730 00:34:04,800 --> 00:34:07,280 Speaker 1: might actually be your own style, Beck, But if you're 731 00:34:07,280 --> 00:34:12,080 Speaker 1: looking for diversification, maybe a little less involvement, maybe a 732 00:34:12,080 --> 00:34:15,279 Speaker 1: little less risk. Because when you diversify more, Beck, you're 733 00:34:15,360 --> 00:34:18,480 Speaker 1: lowering your risk so the more diversification you have, the 734 00:34:18,480 --> 00:34:21,160 Speaker 1: more risk you have. Maybe indirect ownership is a better 735 00:34:21,160 --> 00:34:25,000 Speaker 1: fit because you go, well, I can get instant diversification 736 00:34:25,480 --> 00:34:28,560 Speaker 1: less involvement if I go and buy a top two 737 00:34:28,640 --> 00:34:32,800 Speaker 1: hundred asx ETF, And that might make you really comfortable. 738 00:34:33,120 --> 00:34:35,920 Speaker 1: But again, you might be widely passionate about picking your 739 00:34:35,920 --> 00:34:38,680 Speaker 1: own shares, or maybe you don't want the top two hundred, 740 00:34:38,800 --> 00:34:40,840 Speaker 1: or maybe you just want a bit more control. So 741 00:34:40,840 --> 00:34:42,840 Speaker 1: it's really going to depend on who you are and 742 00:34:42,920 --> 00:34:45,279 Speaker 1: what you do. And as I've said, you know this 743 00:34:45,480 --> 00:34:48,319 Speaker 1: is what I do, but I do both. I'm not 744 00:34:48,360 --> 00:34:50,359 Speaker 1: saying that both is right for you. I do both 745 00:34:50,440 --> 00:34:53,640 Speaker 1: because let's be honest. Direct share investment for me is 746 00:34:53,760 --> 00:34:56,239 Speaker 1: me having a good time in the share market. I 747 00:34:56,320 --> 00:34:58,880 Speaker 1: love it, Beck, It's so lame, Like I love not 748 00:34:59,000 --> 00:35:02,480 Speaker 1: my research. I love looking at new companies and what 749 00:35:02,520 --> 00:35:05,080 Speaker 1: they are made up of, and what their board looks like, 750 00:35:05,120 --> 00:35:08,440 Speaker 1: and what their CEO has done historically and how they've performed. 751 00:35:08,800 --> 00:35:11,799 Speaker 1: That is not everybody's cup of tea. Everybody else in 752 00:35:11,840 --> 00:35:14,040 Speaker 1: our community, or a lot of people in our community 753 00:35:14,120 --> 00:35:16,880 Speaker 1: might turn around and be like, v we hear you, 754 00:35:17,520 --> 00:35:21,000 Speaker 1: we see you, We understand the importance of investing. We 755 00:35:21,120 --> 00:35:24,400 Speaker 1: know that to create financial freedom, we want to invest. 756 00:35:25,000 --> 00:35:27,960 Speaker 1: But I just want to send some money into an 757 00:35:28,000 --> 00:35:30,319 Speaker 1: investment every month and not think about it again. Ye, 758 00:35:30,560 --> 00:35:33,440 Speaker 1: you're a psychopath. I am not going to be looking 759 00:35:33,800 --> 00:35:37,080 Speaker 1: at the annual reports of each and every single company, 760 00:35:37,120 --> 00:35:40,600 Speaker 1: because one, I don't comprehend them, but I also just 761 00:35:40,680 --> 00:35:43,120 Speaker 1: don't care. That's fair and that's so fair. So I 762 00:35:43,120 --> 00:35:46,640 Speaker 1: think that understanding the difference between indirect and direct investing 763 00:35:47,000 --> 00:35:49,319 Speaker 1: is going to be a really personal decision. But I 764 00:35:49,320 --> 00:35:52,440 Speaker 1: think the crux of this episode is helping you to 765 00:35:52,560 --> 00:35:56,960 Speaker 1: understand that when we talk about HIN or SRN or chess, 766 00:35:57,920 --> 00:36:02,760 Speaker 1: those things are not as important as a lot of people, 767 00:36:03,040 --> 00:36:05,080 Speaker 1: you know, jump up and down about and say, Oh, 768 00:36:05,120 --> 00:36:08,280 Speaker 1: it's so important. That's chess sponsors, so you have direct control. 769 00:36:09,160 --> 00:36:12,160 Speaker 1: I personally don't need direct control. What I want is 770 00:36:12,200 --> 00:36:14,840 Speaker 1: to know that if everything goes south, my investment is 771 00:36:14,840 --> 00:36:18,640 Speaker 1: going to be safe, irrespective of who was the custodian 772 00:36:18,680 --> 00:36:21,120 Speaker 1: of that. And I know I'm safe, so I'm fine. 773 00:36:21,360 --> 00:36:22,759 Speaker 1: And I think that a lot of people in our 774 00:36:22,800 --> 00:36:25,719 Speaker 1: community wanted to hear that, because you go, well, if 775 00:36:25,719 --> 00:36:28,279 Speaker 1: it's not chess sponsored maybe it's less secure, and that's 776 00:36:28,280 --> 00:36:30,880 Speaker 1: not the case at all. So that's where I'm at. 777 00:36:30,960 --> 00:36:33,000 Speaker 1: But it's going to be a personal decision, not a 778 00:36:33,040 --> 00:36:35,759 Speaker 1: decision that I can make for you, because I don't 779 00:36:35,800 --> 00:36:37,480 Speaker 1: know you well enough. I wish I did, so let's 780 00:36:37,520 --> 00:36:37,839 Speaker 1: hang out. 781 00:36:39,480 --> 00:36:41,680 Speaker 3: I guess, Like, lastly, are there any regulations we need 782 00:36:41,719 --> 00:36:42,239 Speaker 3: to be aware of? 783 00:36:42,480 --> 00:36:44,719 Speaker 1: A look at you with your questions, all right, So 784 00:36:44,880 --> 00:36:48,800 Speaker 1: owning shares obviously comes with lots of different rules and regulations. 785 00:36:48,840 --> 00:36:51,799 Speaker 1: But don't worry. We won't dive right now because I 786 00:36:51,840 --> 00:36:55,680 Speaker 1: really want to go home now into the technicalities of them. 787 00:36:55,880 --> 00:36:59,000 Speaker 1: But just know that direct ownership, as we've been talking 788 00:36:59,040 --> 00:37:02,000 Speaker 1: about it, means that you have to stay informed and 789 00:37:02,040 --> 00:37:04,799 Speaker 1: you have to actively manage your investments, so like you've 790 00:37:04,800 --> 00:37:06,400 Speaker 1: got to be across it. You've got to do all 791 00:37:06,400 --> 00:37:11,000 Speaker 1: the reporting. Yourself managed options like a managed fund or 792 00:37:11,040 --> 00:37:14,640 Speaker 1: an ETF, they actually handle most of the regulation for you. 793 00:37:15,000 --> 00:37:17,759 Speaker 1: So that's kind of an attractive thing. We won't Maybe 794 00:37:17,760 --> 00:37:20,520 Speaker 1: I'll do a whole episode one day on regulation, but 795 00:37:20,600 --> 00:37:22,640 Speaker 1: it won't be that sexy. Sure, maybe will like do 796 00:37:22,680 --> 00:37:24,759 Speaker 1: it as a bonus for people who are just like me, 797 00:37:24,920 --> 00:37:28,160 Speaker 1: because I know you will not give two flying fruit bats. 798 00:37:28,200 --> 00:37:30,239 Speaker 1: I've already yeah, you're like, no, I don't even know 799 00:37:30,239 --> 00:37:32,839 Speaker 1: why I asked you the I actually have done now, 800 00:37:33,120 --> 00:37:34,319 Speaker 1: But to make sure everyone's on the same. 801 00:37:34,239 --> 00:37:38,479 Speaker 3: Page, just give us a really quick overview of one 802 00:37:38,640 --> 00:37:41,440 Speaker 3: more over, you're like, really drill in envy? 803 00:37:41,640 --> 00:37:42,000 Speaker 2: All right. 804 00:37:42,160 --> 00:37:45,240 Speaker 1: So, obviously today we have covered the basics of direct 805 00:37:45,320 --> 00:37:49,440 Speaker 1: and indirect ownership of shares. We have talked about direct 806 00:37:49,520 --> 00:37:52,719 Speaker 1: ownership when it comes to investing directly in shares on 807 00:37:52,760 --> 00:37:55,640 Speaker 1: the AX or any stock exchange, to be honest, and 808 00:37:55,719 --> 00:37:59,920 Speaker 1: we've talked about indirect ownership through managed funds and ETFs. Obviously, 809 00:38:00,080 --> 00:38:02,640 Speaker 1: these are not the only asset classes that exist in 810 00:38:02,640 --> 00:38:05,680 Speaker 1: the world. These are just two really good examples of 811 00:38:05,719 --> 00:38:08,720 Speaker 1: how these work. I think we need to also remember 812 00:38:08,719 --> 00:38:10,960 Speaker 1: there's no such thing as a one size fits all approach, 813 00:38:11,120 --> 00:38:14,120 Speaker 1: and as I said before, choose the method that aligns 814 00:38:14,120 --> 00:38:16,640 Speaker 1: to your goals and your values, not just what someone 815 00:38:16,760 --> 00:38:20,719 Speaker 1: on a Reddit thread said was the most important thing. Honestly, 816 00:38:20,880 --> 00:38:23,120 Speaker 1: great advice. Don't take Reddit as gospel. 817 00:38:23,800 --> 00:38:27,839 Speaker 3: I'll have to remember that you done done, I'm done done. 818 00:38:27,920 --> 00:38:30,600 Speaker 1: Oh, I think we deserve some cheeky mickeyde's. 819 00:38:30,200 --> 00:38:31,000 Speaker 3: Let's do it. Let's go. 820 00:38:31,120 --> 00:38:32,000 Speaker 1: We have a good week, guys. 821 00:38:32,040 --> 00:38:32,480 Speaker 4: We love you. 822 00:38:32,520 --> 00:38:33,319 Speaker 3: Bye bye, guys. 823 00:38:39,440 --> 00:38:42,000 Speaker 4: The advice shared on She's on the Money is general 824 00:38:42,040 --> 00:38:45,879 Speaker 4: in nature and does not consider your individual circumstances. She's 825 00:38:45,920 --> 00:38:49,400 Speaker 4: on the Money exists purely for educational purposes and should 826 00:38:49,440 --> 00:38:52,600 Speaker 4: not be relied upon to make an investment or financial decision. 827 00:38:53,000 --> 00:38:55,600 Speaker 1: If you do choose to buy a financial product. 828 00:38:55,239 --> 00:38:58,800 Speaker 4: Read the PDS TMD and obtain appropriate financial. 829 00:38:58,360 --> 00:39:00,000 Speaker 1: Advice tailored towards your knee. 830 00:39:00,520 --> 00:39:04,480 Speaker 4: Victoria Divine and She's on the Money are authorized representatives 831 00:39:04,480 --> 00:39:06,880 Speaker 4: of money sherper P T y L t D A 832 00:39:07,000 --> 00:39:09,920 Speaker 4: b N three two one six four nine two seven 833 00:39:10,000 --> 00:39:12,839 Speaker 4: seven zero eight a F s L four five one 834 00:39:13,040 --> 00:39:14,920 Speaker 4: two eight nine