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Chapter 1: What are the initial steps to take control of your financial future?
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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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 Raskovich from Rask Finance.
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.
Kate, welcome to the next episode of the Australian Finance Podcast. Hi, Owen. Good to be back. Wonderful. It's a great topic for this episode. We're taking control of your financial future. Yeah, and this episode was actually built off a question we received a few weeks ago from a listener. And they were pretty much, they've listened to our basics episode. They've sorted out their debt.
They've sorted out their emergency fund. They've kind of got their basics under control. But they're pretty time poor, so they don't have time to read 101 books like we have done. and search Google for the best information and spend time researching stocks. So they have sent us this question. Now, they don't have a regular income and it fluctuates significantly.
And they've heard us speak about a whole range of different things on the podcast in terms of investing. So they're not really sure where to start and they don't really have anyone around them to ask. Yeah, and which would be perfectly normal. Pretty common. Yeah.
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Chapter 2: How can I assess my income and expenses effectively?
But there's plenty to choose from there. Next thing, which is a big thing you're a fan of, Kate, which is robo advice. So this is where a robot, picture of a robot just banging on a keyboard behind a computer. Is that what's going on? Yeah, really. So it's pretty much a human design system, but it's spitting out usually a statement of advice, a general statement of advice for you.
You answer a few questions about your tolerance for risk, how would you feel if the market dropped 30%, those sort of things. And based on that, they might say, we recommend you have a conservative portfolio or a high-growth portfolio or somewhere in between. And then if you agree with that, you can tick all the relevant – All the disclaimers. Yep.
And then you can set up your account, fund it, and they buy all the securities for you. Now, if you're using a robo-advisor, I'd want to make sure that all the securities were purchased in your name, which most of them do. So your name, you get your own holder identification number, and it's all pretty much you're paying them a management fee to buy and sell everything for you and rebalance.
And you can just set up auto... repay payments too so automatic yeah most of them have a associated cash management account and then once it gets to a certain level maybe two percent or three percent of the account it'll rebalance it so um you can set up automatic payments and just let that go So that's a robo-advisor.
You can go back to once again the same episode that had the apps in it or you can just Google robo-advisors Australia and then just do your research from there. Sign up on their website, fund the account, just keep going. Pretty simple. Next one, which is the one you mentioned before. Yeah, so exchange-traded funds.
So that requires setting up a brokerage account which it should all be free and most major financial institutions do it and if you Google brokerage accounts in Australia, you'll find other options as well. Yeah, we've covered this on many episodes in the past. So find a CanStar ASX. You'll be able to find comparisons for brokerage providers.
And then you've just got a, we did an ETF episode last week. Yep. So that will go in depth if you have a listen to it, if you haven't already, into all the things you should look for when you're buying an exchange-traded fund. Cool. Okay. The next one is individual shares. And you also do that in a brokerage account.
Yes, but that probably requires a lot more thought because you've got to make a big decision on which share you're going to buy. Why have you bought it? Do you know enough about it? Can you keep on top of it?
mm-hmm I mean this is what I do for a job but yeah no one loves buying individual shares but it's definitely something you probably should think about don't just buy it because your mate told you it's gonna be the next big thing actually put some thought into it if that's the path you want to take yep Or if you do, jump on whatever your mate told you to barbecue. Just don't go crazy.
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Chapter 3: What budgeting strategies should I consider?
For example, I'll give you an example. I probably spend, I'm going to say, upwards of 50 hours. That's the minimum time I'd spend researching a share before I buy it. Normally it's months, like constantly keeping tabs on what the company's doing. Do I like the management? All those types of questions. We've been through this on one of the first 10 episodes about individual shares.
Really good episode to go back and listen to. It's a bit more hands-on. You can get advice on this just like you can with any of them. Your financial advisor can do it or you can get general advice on it.
and you can pay for people to research shares for you totally can always take it with a grain of salt though you've got to make the decision yourself the ultimate decision is your own yep okay so the last one which is probably not more work but it does become a little bit difficult because it's it's kind of like predicting what these people are going to predict and this is investing with fund managers and when we say fund managers people that actively invest
Yeah, so you're paying for their expertise. Yeah, so we probably shouldn't have had this at the bottom of the list, but it is hard to know who's good, particularly if you're new to the world of investing. Once again, you can get research on this just like we can with individual shares, but you often have to sign up on their website.
You have to fill out paperwork and then you have to know that you have to send the money in and then you have to know that they're good at their job and keep tabs on them. A lot of the applications are online nowadays, but some of the large providers, when I've looked recently, they still make you... do a physical signature and scan that back to them. So it's an element of effort.
But usually they'll direct debit the funds out of your account if that's what you select for the initial investment or BPAY is often the option because it's easy for them to reconcile the funds. Okay, cool. Well, so these are the options, pretty much all the options.
You've obviously got property, which we haven't mentioned because in the question, the person who asked this question said, you know, I've invested in property before, so that's not what I'm after. But anywhere from super index funds, roundup apps, robo-advisors, ETFs, individual shares, fund managers, you've really got plenty to choose from.
it's a matter of how much time you want to put in are you interested in it you don't have to do one or the other you can do all of them you can do none of them you just keep your money in cash if you want to and like both of us we use a whole range oh yeah different options their ETFs fund managers individual shares
super funds yeah we've got it all here so you know it's definitely not one of the other you can start with one see if you like it keep building up go with another obviously all the usual caveats apply read the pds read the terms and conditions all that sort of stuff do it once do it right and you'll be on your way
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