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Australian Finance Podcast

Expert Guest: Miss Money Box

28 May 2019

Transcription

Transcript generated automatically by AI and may contain errors.

Chapter 1: What is the main topic discussed in this episode?

0.031 - 26.345 Owen Rascovich

Property investors often talk about using debt to build wealth. In the share market, that's called gearing. With the BetaShares WealthBuilder range, investors can access moderate gearing into shares, and with the newly launched GG-BL, That means exposure to a diversified portfolio of around 1,300 global companies excluding Australia, all with no loan applications, credit checks, or margin calls.

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26.786 - 44.868 Owen Rascovich

Gearing magnifies both gains and losses, so it's only suitable for investors with a very high tolerance for risk. You can learn more about the WealthBuilder range of ETFs at the BetaShares website. And don't forget to read the PDS and TMD to decide if it's right for you. BetaShares Capital Limited is the issuer.

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45.469 - 63.24 Owen Rascovich

Here's something worth knowing if you've been meaning to make the switch to a better broker. To celebrate their fifth birthday, Perla are offering three free trades a month for five months if you transfer your portfolio across with a minimum of $1,000. For anyone investing regularly, that's meaningful savings on brokerage that can stay invested instead.

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63.721 - 84.46 Owen Rascovich

Perla is chess-sponsored, built specifically for long-term investors, and now has over $3 billion invested on the platform. If you've been with a platform that doesn't quite fit your strategy anymore, it might be time to take a look. You'll find all of the details at perla.com slash lp slash rask. That's perla.com slash lp slash rask.

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88.405 - 102.499 Kate Campbell

Welcome to the Australian Finance Podcast, a podcast for people who want to learn more about their personal finances and get the most from their money. This series is hosted by Kate Campbell from HowToMoney and Owen Rascovich from Rask Finance.

103.812 - 120.306 Owen Rascovich

The Australian Finance Podcast is provided for educational purposes only. The information is general in nature and does not take into account your needs, goals or objectives. What that means is the information does not apply to you specifically. So consider getting the advice of a licensed and trusted professional before acting on the information.

122.689 - 127.893 Owen Rascovich

Hello, Kate, and welcome to the Australian Finance Podcast. We have a very special guest in today.

127.933 - 132.317 Bronwyn

Yes, we do. We've got Bronwyn from Miss Moneybox. Hi, guys.

132.382 - 138.55 Owen Rascovich

Hello. It's wonderful to have you aboard, our very first expert guest. How does it feel?

Chapter 2: What are the money lessons learned from Game of Thrones?

791.291 - 814.725 Owen Rascovich

I've got four lessons and they come from – Very reputable sources, The Big Short and The Wolf of Wall Street, no less. So the first one comes from The Big Short. And I probably, I reckon I tell someone this once a week at least, maybe even twice a week. And it's that there are no points for originality or there are no points for original ideas.

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814.705 - 825.944 Owen Rascovich

And this is obviously from the big short where they were betting on the housing crisis in the US and around the time of the GFC. And it's kind of like the two years leading up to the GFC and when it all just unfolded.

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826.745 - 846.518 Owen Rascovich

And so I've got a little note here that says that pretty much everyone in the big short was shorting property because one person who was Michael Burry, who was played by Christian Bale, found out about this housing crisis that was just about to unfold and these CDOs and all these exotic derivatives that were written over property markets and about to come undone.

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847.099 - 867.053 Owen Rascovich

But then what happened is all these other characters in the show, so we've got Mark Baum, who was played by Steve Carell, Jared Vinette, who was played by Ryan Gosling, and a couple of younger guys as well. They all got ridiculously rich from this one guy's idea. And if you think about it, they didn't actually do anything spectacular.

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867.433 - 869.316 Bronwyn

You don't get bonus points for being first.

869.497 - 883.14 Owen Rascovich

That's right. If it's a good idea, you just go with it. And sometimes they just fall on your lap and sometimes they're terrible, let's be honest. But sometimes the best ideas are the ones that you didn't come up with. And so I think that's a really good thing. We've talked about index funds and things like that.

883.741 - 887.828 Owen Rascovich

Just because everyone else is doing it doesn't necessarily mean that you need to do something different.

887.808 - 914.878 Owen Rascovich

you can you can you can just buy you need to find a completely different to everyone else you can just accept that that's that's okay okay so the second big lesson from the big show as you can imagine is that housing can go sharply backwards and it can happen very very fast so um we obviously know what happened or most listeners would know what happened around the time of the gfc particularly down south in the u.s a lot of houses just like the prices just went from like

914.858 - 926.996 Owen Rascovich

$1 million to $200,000. And effectively the banks were saying, if you can take on the loan, we'll give you the keys. And that was it. That was pretty much like the lending standards in the trough of the GFC.

Chapter 3: How does preparation relate to financial stability?

927.857 - 949.895 Owen Rascovich

And the point I wanted to make here is that property markets went backwards and suffered this great recession when everyone was most confident. And coming back to the behavior gap and the point about being fearful when others are greedy, it's shown through again. Yeah. Okay, so two from the Wolf of Wall Street. The first one is the finance industry has the best work breakups.

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950.577 - 955.429 Owen Rascovich

Anyone that's seen the show will know that there's some crazy parties that we have. No?

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956.438 - 960.142 Bronwyn

I haven't seen that movie. You haven't? I saw it a while ago.

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960.222 - 979.681 Owen Rascovich

Okay. Well, okay. Well, they have these massive parties and obviously that's representative of the entire finance industry. Whenever I go to someone, I say, yeah, I do investing. They're always like, oh, like the Wolf of Wall Street. That's a joke anyway. And no, we don't actually. I think you said to me you had like a work breakup was like chicken and something else.

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979.922 - 983.485 Bronwyn

Chicken and champagne. That was our last day of work. Okay.

983.505 - 985.247 Owen Rascovich

Chicken and champagne. So it wasn't like...

985.227 - 995.861 Bronwyn

No, we just went to Woolies, got a few bags of hot chickens, got a few bottles of cheap champagne, and there was a few side salads, I think, and maybe some daiquiris.

995.881 - 998.484 Owen Rascovich

But I only found out from you that that's kind of like a finance tradition, is it?

998.825 - 1004.552 Bronwyn

Apparently. That's what someone else told me. Right. Yeah, I was trying to find the origin of that, but then I think I...

Chapter 4: What does understanding your risk tolerance mean for investing?

1436.45 - 1456.581 Bronwyn

So it's something you have to point out. And it's definitely scary because I went into an annual review last year and I tried to document what I'd been doing. But it's definitely something you're like, oh, they are paying me what they're paying me. They're not going to offer you an extra 10K usually. So you actually have to ask for things. Yeah, for sure.

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1456.681 - 1483.363 Owen Rascovich

And just ask, right? Yeah. Yeah, it takes courage, but just ask. Yeah. And you'd have a pretty good feel for your employer or your boss as well. Yeah. Some workplaces might be open and you can just ask. There's no harm, no foul, right? It's definitely worth asking, yeah. See, I've been through this recently. I'm on the other side of the table in terms of hiring people. Yeah.

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1483.343 - 1504.616 Owen Rascovich

For me, it's kind of like just prove to me that you can do the job and you can add value. And as long as you can do that, then, of course, I'm willing to have the conversation. Because at the end of the day, someone who comes and joins your team, you're making an investment in them because they're going to return something to your business. It's just like any other thing that we do in our lives.

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1504.776 - 1521.643 Owen Rascovich

We do something for a reason to get something back or whatever. Just prove to them that you're worth more than what you're getting and the extra things that you've done are adding value to the business. Just have that bigger picture, the broader awareness of what's going on. And I think you stand a pretty good chance at least planting that seed in their mind at least.

1521.844 - 1537.802 Owen Rascovich

And if you don't get it, my other advice would be to ask them what you can do better. just get that feedback and it's hard. Some people don't take feedback very well, but try and take it on the chin and then think about how you can improve.

1538.17 - 1555.126 Bronwyn

Yeah, like saying to them if they're not going to give you anything, that review saying, well, can we schedule something in for six months' time? Perfectly. And if I demonstrate X, Y, Z, or if you have key, what are they, KPIs? KPIs, key performance indicators. Yeah, I've got some, but I don't know.

1555.506 - 1564.735 Bronwyn

If you've actually got them, say, well, if I can reach these in six months, can we discuss raising my salary by $5,000 or $10,000 or whatever it is for your particular field?

1564.715 - 1572.936 Owen Rascovich

yeah good one okay so finance definitely you know exactly like it's represented on TV fact or fiction oh

Chapter 5: Why is it important to switch financial allegiances?

1614.968 - 1615.849 Bronwyn

That actually sort of –

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1615.829 - 1638.732 Bronwyn

more documentary side of things but they actually look into various things that have happened um frauds and things in the past um scams and things and so that might give you an idea so you can look out for these things yourself and stay away from the dodgy companies um so that's there's definitely some interesting ones now on netflix and what people will do for money and how it changes people's behavior

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1638.712 - 1641.92 Bronwyn

I mean, even the Fyre Festival documentary.

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1641.94 - 1645.188 Owen Rascovich

Oh, yeah, that's a good one. Oh, yeah. F-Y-R-E. Yeah.

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1646.23 - 1654.51 Bronwyn

It's very interesting. There's quite a few documentaries on Netflix, I think, show how money changes people's behavior and what people are willing to do for money.

1654.49 - 1672.948 Owen Rascovich

So obviously there's a few classics in the investing side of things, which is like Wall Street and there's Wolf of Wall Street, Big Short. And then one of the sponsors of the show, or at least were for a while, Billions, is one that's on Stan, which is about, it's a bit fictitious, I guess, but it's about a hedge fund manager.

1673.348 - 1683.514 Owen Rascovich

So someone that's kind of like on the line between right and wrong and with a lot of money at their disposal. Yeah. Anything else? Any other shows?

1683.534 - 1684.876 Unknown

No.

1684.896 - 1691.305 Owen Rascovich

Okay. Well, that brings us to the end of the first expert guest insights episode.

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