finder.com.au Money Podcast #36: Money guru Noel Whittaker helps millennials solve their finance challenges
This week on the podcast Marc and Liz chat to best-selling author and personal finance guru Noel Whittaker about how young Australians can secure their financial futures. Some of the topics include:
- How younger Australians can choose and manage their superannuation
- Why Noel loves investing using Acorns
- Noel's three best financial tips for Millennials
- Noel's favourite investments
- How Australians should manage their debt
- Noel's thoughts on rentvesting
- Noel's best advice for Australians saving for a home
- What Noel thinks about the idea of there being a property bubble in Sydney and Melbourne
- The best resources for Australians looking to learn about managing their finances
- A life-changing book Noel read which helped him with his finances
- The benefits of compound interest
- Noel's thoughts on if young Australians should speak to a financial planner
Also on the show Adam and Liz talk about the changing Australian property market, ING's new roundup feature and Eminem's Detroit mansion sale.
Listen or download the episode below
To download press the 
button.
Subscribe to the podcast on iTunes
Notes and links mentioned in the podcast
- 3 out of 4 Australians check their receipts to see if they've been overcharged
- ING launches roundup feature
- Number of $1 million property sales hits record high
- Properties under the $400K mark are vanishing
- Court ‘big mouth’ butt-dials reporter, admits he barely shows up for $166K job
- Eminem is selling his Detroit mansion for a $4 million loss
- Noel Whittaker's website
- Superannuation Made Simple by Noel Whittaker
- Making Money Made Simple by Noel Whittaker
- What is Acorns and how does it work?
Read the transcript of this episode
-
Announcer: Welcome to the "Money Podcast" from finder.com.au, Australia's most visited comparison site. The Finder "Money Podcast" is your weekly dose of finance and consumer news, tips, and tricks without the boredom.
Adam: Hello and welcome, everybody, to yet another episode of the wonderful Finder "Money Podcast."
Elizabeth: Marc, you sound really different.
Adam: I know. I've been working on my American accent.
Elizabeth: Sounds really fake.
Adam: Yeah. Yeah, I know, not very good. So, I am Home Loans editor, Adam Smith. I am here with editor of multiple disciplines, Elizabeth Barry.
Elizabeth: Hi.
Adam: And you may notice our fearless leader Mr. Marc Terrano is not with us today.
Elizabeth: We have to admit we feel a little lost.
Adam: It's like kids take over the school day. It's one of those days. It's like the day you have a substitute teacher and they obviously, they don't...you don't really respect their authority. They're like, maybe they're, like, fresh out of uni and they just can't keep control of the class, and everything just goes nuts.
Elizabeth: Yep.
Adam: That's today, basically.
Elizabeth: Pretty much.
Adam: Basically, Liz is going to run all over me in this podcast.
Elizabeth: Yep, already am.
Adam: It's already happening. So, no, Marc is off in Melbourne right now. But we thought, "You know what, the show must go on."
Elizabeth: Indeed.
Adam: For the benefit of you, the listeners. So, here we are. Liz, how have you been going?
Elizabeth: I've actually been great, but today in Sydney, it's blowing a gale.
Adam: It's a blustery, isn't it?
Elizabeth: Yeah. I almost got blown into the street today.
Adam: Did you, like, at any point, have you see, like, a man in a business suit standing in, say, a telephone box and it blows over but he keeps talking on the phone, like one of those type of situations?
Elizabeth: Yeah, at least three times today.
Adam: Yeah. It's that windy. It's happening all over the place. Yeah, actually, they shut down trains.
Elizabeth: Did they really?
Adam: Yeah. Over the Harbour Bridge.
Elizabeth: Oh, over the Harbour Bridge because, what, they did blow off?
Adam: I suppose, going into the harbor willy-nilly.
Elizabeth: That's the only thing I could assume. But they let the cars still go?
Adam: The cars, like I said...
Elizabeth: The ones that aren't really, like, nailed down
Adam: Like attached to anything. I guess because the cars are lower to the ground so they don't catch the wind. Maybe they shouldn't put those big sails on the trains.
Elizabeth: Yeah, well, there you go.
Adam: So today on the podcast, we have newspaper columnist, radio personality, bestselling author, personal finance guru, Noel Whittaker.
Elizabeth: I was especially excited to interview him. I just had so many questions, completely bursting with questions actually. He's just so knowledgeable in a lot of areas in personal finance and, yeah, it was a great interview. Marc and I sat down with him.
Adam: So it's a bit of a piecemeal podcast, isn't it? Last episode, it was Marc and I, no Liz except during the interview when I disappeared and Liz tagged in. And then this week, it's Liz and I, no Marc except during the interview, where I disappear and Marc tags in.
Elizabeth: It's almost like a jigsaw puzzle that we're just kinda sticky-taping together as best we can.
Adam: Yeah, it's like the three of us can't be in the same room at the same time because of like...
Elizabeth: Hatred.
Adam: Yeah, exactly, like it's written into our contracts. We're like Fleetwood Mac, we've just been at war with each other for so long and we just can't tolerate all being in the same room at the same time without a fight breaking out, so.
Elizabeth: Well, secretly, you know, two of us are the same person, but you don't know which ones.
Adam: Well, look, that's probably news to you guys but there's some more news out there. Some more stuff has been happening this week so let's get down to it.
Elizabeth: Yeah. So, Finder actually did some research this week on receipts and Australian's checking receipts. So let me ask you a question, Adam. When you leave the grocery store, do you check your receipt?
Adam: Never, never, never, not once. And most of the time, if given the option, I say no receipt.
Elizabeth: Yeah, so do I. I think of it like I'm saving paper.
Adam: Exactly, like I'm doing my bit for the environment.
Elizabeth: Exactly.
Adam: It's the only thing I do, but, gosh, darn it, it's something.
Elizabeth: I agree, I'm glad you're doing something. But we did some research and we found that three out four Australians check their receipts to see if they've been overcharged.
Adam: Really?
Elizabeth: Yeah. But if you find out that you've been overcharged. We found that no one will go back unless it's $10.50 over, at least $10.50 over. So there's gotta be, you know, a little bit of a reason to go back. You know, if it's like $5, it's kind of not enough of a reason to go back and be like, "Hey, look, you've overcharged me."
Adam: Interesting. So, is it happening often that people are getting overcharged?
Elizabeth: Not actually too sure.
Adam: How is that happening? Is it just supermarkets, they're changing prices on stuff and they're not updating it? Like, they've got the big red hand out. [Inaudible 00:05:17].
Elizabeth: Prices are knocked down.
Adam: Exactly. It's like they've just forgotten. They've done all these stuff with the big red hand. They just forgot actually to update their database. Well, look, I'll tell you something that's not discounted. Property. Okay, so there's a number of pieces of data that have come out that paint a pretty grim picture for house prices, which, a lot of it, we already knew. First of all, nationwide, the number of $1-million-property sales has hit a record high, right?
Elizabeth: Oh, no. So it's not in just properties for sale, it's properties that have been sold.
Adam: Have sold. So, nationwide, 15.4% of all houses and 8.8% of all units sold in the 12 months to June this year were sold at a price of at least $1 million. That's nationwide, right?
Elizabeth: Oh my gosh.
Adam: Now, in Sydney and Melbourne, it gets pretty dire. In Sydney, 47.8% of houses and 21.3% of units sold above the million-dollar price point. Melbourne, 25.9% of houses and 7.4% of units, so not quite as bad but still pretty bad.
Elizabeth: And Sydney, it's almost half of houses?
Adam: Almost half of houses. They're selling for over the million-dollar mark. And this is CoreLogic research that reveal this. Now, at the same time, in the 12 months to June, the number of properties nationwide under the $400,000 mark are vanishing, right? So only 17% of house sales and 28.4% of unit sales across capital cities go for less than $400,000, okay?
Elizabeth: Oh my gosh.
Adam: In Sydney, once again it gets even worse. Only 3.5% of houses sold for under $400,000. And a decade ago, that number was 35.5%.
Elizabeth: And, like, where were they exactly? Like, they're probably being kind of...I'm not gonna say that they were in, you know, the middle of gray areas, close to transport, and...
Adam: Yeah, exactly. Yeah. And even units, it's not much better, 7.4% of Sydney units sold for less than $400,000 compared to 53.9% 10 years ago, right?
Elizabeth: Oh my gosh.
Adam: So, along with this, we've had a Westpac exec, George Frazis, who is the head of consumer banking, in an interview with the "Australian Financial Review." He's basically pleading for banks and the government to do more to help first-time buyers, that we've got to do something to get people into home ownership. And his big thing is that it's not about house prices going down, it's about ensuring that people who could service a mortgage but can't afford a deposit can still get into the housing market. Because he's saying that's the biggest hurdle. You know, there's a lot of people out there who they'd be perfectly capable of paying, making the payments on a home loan, but they can't raise the deposit that they need. And he said that 75% of Westpac's first-time home buyer customers are using guarantor home loans, which...
Elizabeth: That's interesting, isn't it?
Adam: Yeah, which if you're not familiar with the guarantor home loan, that's basically...what happens is that your parent or close family member puts their house up as a guarantee for your debt instead of having a deposit, right? So basically, they're taking out a second mortgage on their house so that if you don't pay your home loan, the bank can come and get that money off your parents via their house.
Elizabeth: It's an interesting concept that he brings up because it's quite true, you know. I know a lot of people in my social circles that, you know, are earning pretty decent money. It's just that sort of savings barrier where it's taking $100,000 to kind of get into the property markets.
Adam: Yeah. Well, you know, it's like if you look at the actual repayments on home loans close to the million-dollar mark, it's not extraordinarily higher than the comparable rent for, you know, that type of property, for a property of that caliber. It's just, where do you get the deposit from? So, yeah, you're kinda trapped in this rental cycle. I'd be interested to know, of the 75% of first-time home buyers who are using guarantors, how much of the other 25% are still getting help from their parents in some way?
Elizabeth: Yeah. Like, in terms of, you know, lump sum payments or something like...or staying at home longer so that they can save.
Adam: Yeah, exactly. Yeah, yeah. Or their parents are buying a house and then renting it to them or something like that. Well, I guess it wouldn't be considered first-time buyers. Scratch that one. But it is interesting. It's like it doesn't surprise me at all that 75% are using a guarantor. I'd be very surprised if the other 25% aren't getting some sort of help from their parents.
Elizabeth: A question I had. If, you know, parents wanna help their kids out, surely, they could only help out one of their children with a guarantor home loan. You can only take out an extra guarantor loan once on your property, right?
Adam: I believe so. Let me do some research on that.
Elizabeth: It would be an interesting question because, you know, if you have three children and they all need help with their properties...
Adam: Well, I think the thing is you have to hope that you've spaced out your kids about...
Elizabeth: So my parents had three kids in three years.
Adam: Okay, that's the problem. The thing with guarantor loans though is that they are temporary solutions, right?
Elizabeth: Yeah.
Adam: It's not like, you know, your parents have this mortgage hanging over their heads forever. As soon as you make enough payments on your house and your house rises in value enough that the amount you still owe is less than 80% of the property's value, your parents can be released from that guarantor deal, right?
Elizabeth: Okay.
Adam: So basically, as soon as, basically, you've built up enough equity that would be like a 20% deposit, they can be released. So, with house prices rising the way they are, you know, building up 20% equity in a house probably wouldn't take a hell of a long time, you know. So, I guess if you're a parent, you basically just go on down the line, get released from one guarantor deal and enter right into another one.
Elizabeth: Go into another one, yeah. Very interesting.
Adam: Wow.
Elizabeth: Well, for people that are looking to save, an interesting little product release that I saw announced was from ING. So it kind of rivals Acorns which we have discussed on the podcast a little bit. So they've introduced a round-up feature for their savings account holders. So basically, it does automatic round-ups for their customers so you can, you know, have a round-up for dollar amount so it goes automatically into your savings account.
Adam: Oh, wow.
Elizabeth: Automated savings.
Adam: Wow, that's pretty cool.
Elizabeth: Get that deposit quicker.
Adam: Yeah. I would say the one thing that Acorns has on that is that you're likely to get a much better rate of return.
Elizabeth: Oh, definitely.
Adam: Yeah, because you're not popping into your savings account 1.5% interest. But, yeah, it is interesting because I've thought about this a lot with Acorns. It's like how little you would notice that money not being there, you know, like not being in your transaction account. You signed up for an Acorns account, right?
Elizabeth: Yeah, I did, and I actually discussed this in the interview that you'll hear. But I'm actually using the round-up paycheck [inaudible 00:12:19]. I just put a lump sum in there to see what would happen. But it's doing quite well.
Adam: Having done that for a while, would you think about also using the round-up feature, like adding that to it?
Elizabeth: Yeah, no, I definitely would now that I've seen that it's working and I'm so excited about the $4. I'm like, "That's like coffee."
Adam: Yes.
Elizabeth: In like a week. You wouldn't get that from a savings account. So I took the money from my savings account and put it in that. I probably wouldn't move all my money from my savings account but it was just like a portion.
Adam: Yeah. Although I have to say I bet if you went into a bank branch and opened a savings account, they'd just give you a coffee.
Elizabeth: Do you think?
Adam: Yeah, probably.
Elizabeth: Can I pretend to open a savings account and they'd give me a coffee?
Adam: Yeah, you just kind of...
Elizabeth: What a good hack.
Adam: That is Adam's money hack of the day. Go into a bank, pretend you want to open a savings account and ask if they have any coffee.
Elizabeth: Well, if you go into CommBank, they have bowls of lollies.
Adam: Well, they got that much sorted.
Elizabeth: Yeah, exactly. They ate enough. Well, I don't know about you but I'm pretty newsed [SP] out.
Adam: Yeah. I am done with news. It's time once again to laugh. It's time for funny money.
Elizabeth: So, I saw something that really did make me laugh because the guy in the story is just such an idiot. So, there was a court reporter in the U.S. who had just gotten of the phone to a reporter. So he was a spokesman for the court system basically. And he had just basically talked to a reporter from the "New York Post." He'd just been denying this story about how he hardly goes to work and everything like that. He then puts the phone in his back pocket and starts joking with a friend about how he actually does never go to work, and he's nearing his retirement, he doesn't really care anymore, and everything like that. And, yeah, he had butt-dialed the reporter. But the funny thing was because he was nearing his retirement, he has, like, quite a large salary, but he was saying that even if the story, you know, goes up, which, obviously, it has now, that it won't affect his retirement much.
Adam: Right. So basically, even if he gets fired, he'll still get part of his pension.
Elizabeth: Yeah, exactly. Apparently, he said it would affect his pension about $6.
Adam: Wow.
Elizabeth: In Australian dollars, his salary is $210,000.
Adam: Wow. Well, look, it seems like he's the one laughing here.
Elizabeth: Exactly.
Adam: He's retired earlier than he thought he was going to, and it only hit by about six bucks.
Elizabeth: Yeah. Well, it doesn't say whether he actually did get fired or not. So he could still be working his three days a week or whatever.
Adam: Have you ever either made or received a disastrous butt or pocket dial?
Elizabeth: No, I actually haven't. Yeah, I always have that fear that when I'm talking about someone, I always check my phone because I'm like, "Have I somehow called them and I'm, like, talking about them?" But I've never done it.
Adam: Can I tell you, I once received a disastrous pocket dial.
Elizabeth: Oh my gosh, I'm so excited to hear this.
Adam: I had called someone to interview them for a story, to quote them as a source. They asked me if they could call me back because they are at the doctor's office. I hang up, and about 10 minutes later, the phone rang and it was this person talking to their doctor about very sensitive and embarrassing, deeply, deeply embarrassing medical information.
Elizabeth: No. At least they didn't lie to you and say that they were at the doctors and like, "I don't wanna talk to this jerk."
Adam: Yeah, yeah. No. They definitely were at the doctor, let me tell you. And I learned way more about some of their ailments than I ever wanted to. Honestly, it haunts me to this...
Elizabeth: It's one of those things you just couldn't hang up.
Adam: Oh, no. As soon as I heard certain words about this person's embarrassing medical condition leave their mouth, I immediately went, "Oh my God," and hang up the phone.
Elizabeth: I wonder if they haven't noticed.
Adam: Oh, man, I don't know, but I interviewed this person, I don't know, dozens more times and it never came up so I hope not.
Elizabeth: Oh, God. How humiliating.
Adam: Yeah. Okay. So, if you want to live the baller lifestyle...
Elizabeth: I do, yes.
Adam: Yeah, of course, we all do...live like a world-class hip hop artist...
Elizabeth: Cool.
Adam: ...you have the opportunity right now, okay, because Eminem is selling his mansion, here's the catch, in Detroit. Right?
Elizabeth: How much is it worth, not much?
Adam: He paid $6.1 million for this mansion in 2003. He's selling it for $2.3 million.
Elizabeth: That's good, I heard.
Adam: Yeah. So nearly a $4-million loss. It's a five-bedroom, eight-bathroom, three garages, a bunch of swimming pools.
Elizabeth: Why would you need more than one swimming pool?
Adam: Maybe you pee in one and then you're like, well...
Elizabeth: That one's ruined.
Adam: Yeah, exactly. Like, give the filter at least, like, eight hours to...I don't know how long it takes a swimming pool filter, or just plain old evaporation, you know, to get rid of it, but I'm gonna give it eight hours. I'm gonna move over to the other pool.
Elizabeth: Fair enough.
Adam: Yeah, yeah. Because it's a tedious chore to get out of the pool and go all the way to the bathroom.
Elizabeth: Absolutely.
Adam: So if you're a guy like Eminem and you've got, like, an array of swimming pools, then what would stop you? Of course, you'll just be like, "I'm just gonna pee right here." And it says that it's got over 17,000 square feet of living space. It's got basketball courts. But, yeah, once again, the catch, it's in Detroit.
Elizabeth: Is it a classy-looking place?
Adam: Yeah, it actually is. It's not bad looking. Of course, it looks ostentatious because it's enormous, but it doesn't look tacky ostentatious, right? Yeah, so if you want a good deal...I mean, my goodness, $2.3 million, think about what that would buy you in Sydney? I guarantee right now, if you get on Domain and search "three-bedroom house in Double Bay for less than $2.5 million," you'll get zero results.
Elizabeth: Oh, there's no way, 100%.
Adam: Yeah. So, if you don't mind living in Detroit, $2.3 million.
Elizabeth: I wonder if you could air lift the house.
Adam: It's a pretty big house.
Elizabeth: I remember we were talking about, on a previous episode, how they were selling a mansion but the catch was you had to pay for it to be moved.
Adam: Yeah, yeah, the governor's mansion, that's right, in North Dakota.
Elizabeth: You had to pay for it to be air lifted out of the area. That was just a small catch.
Adam: Yeah. But that's the only thing you had to pay because the mansion was free. You just had to pay, like, 400 grand to move it. But still...
Elizabeth: As long as you have the space.
Adam: Once again as research indicated, you can't find a house in Sydney for under 400 grand. All right, so that'll do it for funny money. Up next, personal finance guru, Noel Whittaker.
Elizabeth: Let's do it.
Marc: So, in the studio today, we have a rare treat. We have the international, bestselling author and finance expert, Noel Whittaker. So Noel actually wrote one of the most influential books on personal finance, "Making Money Made Simple," which I have a copy of in the studio today.
Elizabeth: A well-worn copy, may I just say point out to everyone.
Marc: A really helpful book for me, actually, personally. But in addition to this, Noel is also finance and investment expert, radio broadcaster, news columnist, public speaker, and an Adjunct Professor and Executive-in-Residence with the Queensland University of Technology.
Noel: It's a busy job, Marc.
Marc: Yeah.
Elizabeth: Yeah, what haven't you done, Noel?
Noel: I'm still doing it. That's the good part.
Marc: So, you were in Sydney today talking all things superannuation and talking about a new book?
Noel: For my new superannuation book. All the rules changed on June 30th. And there is some great new stuff that haven't been publicized after June 30th. If you wanted to make an additional contribution to Super, you couldn't get a tax deduction. Now, you can.
Marc: Interesting. Superannuation is something that's quite interesting especially to younger Australians because it's something that you can always postpone and forget about dealing with. But now, obviously, there's, you know, heavier reliance on superannuation to buy property. What's your best advice for people who are comparing superannuation and wanna find the best fund?
Noel: Well, I think you need to have a fund that suits your risk profile and your goals. But the biggest factor in how much money you retire with is the right of return you're gonna achieve, which means if you're young, you've gotta look at the assets in your fund and go for high growth.
Marc: Right. And that's something that I see pretty often, is, you know, while you're young, think about going high growth.
Noel: High growth.
Marc: Yeah. And we were actually talking before because we have Acorns, which I know you're a fan of.
Noel: Yes, I love Acorns.
Marc: And we were talking about what risk strategies each of us has and it seems we were all saying, "Yeah, I'm going growth all the way."
Noel: Yes, of course, you do, [crosstalk 00:21:23] young.
Elizabeth: It's quite interesting, you know, because I've moved money from my savings account into Acorns. And it's quite terrifying doing that because, you know, with your savings account, you're just guaranteed to get a certain, albeit, lower return than you might get from Acorns. But when you're actually opting for a return from Acorns, you can go really aggressive, but obviously, you have a risk of losing it. I mean, how do you balance that? How do you say, "You know, I might risk my savings, but I might get some money out of this?"
Noel: If it's at Acorns, the risk is not losing it. What the risk is, if the market fell today, your money would fall but then it would come back. That's the big difference. I mean, every investment decision has risks. Leave your money in the bank, well, there's no tax benefits and no growth. At each share-based investment will rise and fall as the markets fall.
Marc: Right. And yesterday, we saw...or not yesterday, but towards...well, actually yesterday as well, but we've seen some, you know, issues with North Korea and things like that that may have impacted the share markets, so.
Noel: There's never a week when there's not an issue. Man, I woke up on Friday morning, the first thing I did was check out the Dow Jones, plans because of North Korea. Woke up this morning, it's all green because North Korea is good now. Last week, I'll sell Commonwealth Bank, this week, Commonwealth Bank is just going up and up. I mean, you stay in there. It's like a relationship. If it's a good one, there'll be ups and downs, you'll stay in there.
Elizabeth: You just have to have faith.
Noel: Gotta have faith. But if it's no good, you get out quick.
Elizabeth: Yeah. That's very true.
Marc: So, Noel, we thought it would be really helpful for our listeners to go over some sort of general finance tips especially for people who are around our age. What would you say, you know, your three pieces of advice would be to someone our age who's trying to, sort of, manage their money and build wealth for the future?
Noel: Okay, the first basic is you must spend less than you earn. And most people don't do that. And the second one is you improve your skills because improving your skills improves your income. And then invest the surplus wisely. To me, the best are investment shares, and the younger you get experienced with them, the more you will be happy with them when they have their normal rises and falls.
Marc: That's very interesting. We are in the ASX Sharemarket game.
Noel: Great, that's great.
Marc: Yeah. Sometimes, it's pretty nerve-wracking.
Noel: I mean, as Warren Buffett put it, if you had a farm, say it was worth a million dollars and your neighbor is mad. Monday, I'll give you $900,000 for your farm. Tuesday, I'll give you $1.2 million. Wednesday, I'll give you $1 million." It's just irrational. You don't think about it. You just hang in there. I mean, long term, the index is done 8% to 9% per annum. Just hang in there with it.
Elizabeth: And how does someone who's in a less-than-perfect financial situation, kind of, apply that advice? You know, what if they have, you know, maybe like $3,000 or $5,000 credit card debt, or maybe they have, like, a personal loan that they are paying off for a car loan? You know, a lot of people our age tend to take out car loans to purchase a vehicle rather than waiting five years to save up. What if someone in that situation is looking at building their wealth but they're still paying back debt. What do you suggest they do?
Noel: Okay. You need to understand the way numbers work. If the term is short, the rate doesn't matter. So take out a car loan fund but pay it back every 12 months. If you pay it back every 12 months [inaudible 00:24:58], the interest is minimal. Now, if a person has got a few debts, you look at the debt with the smallest balance and focus all your efforts on paying that back. When that's out of the way, you use the payments that are no longer needed for paying it back to attack the next smallest debt. When that's paid off, then you got double payments to add to the third debt. But you've got to have an aggressive paying-out-debt campaign. I mean, all of success expect the goals. And many people are in debt because they just hadn't any goals. [Inaudible 00:25:31], "I wanna save my house deposit or pay my car off," whatever goal you like, but you must have that goal and the goals provide the focus.
Marc: So, specifically, going back to goals, a common goal with a lot of people is to buy their first place.
Noel: Right.
Marc: And you mentioned before, you know, when you invest, you primarily go for shares. What's your sort of thinking behind that and...I suppose that's the first question, and then we'll work our way through your property questions.
Noel: Okay. Well, basically, I think what I would normally preach is you get your house first and then when you've got the mortgage under control, then you move into shares. You need both. I don't like investment property unless you're an expert because the key to property is you buy well, which means a desperate vendor, and you add value. You cannot add value to an apartment. It's pointless. I don't like apartments at all.
Elizabeth: So what are your thoughts on the current trend towards rent-vesting?
Noel: What's that mean?
Elizabeth: Buying a place that you generally wouldn't wanna live in, maybe interstate, sort of, you know, a lot of people are looking at Brisbane, I guess, just because it's cheaper and easier kind of entry, and then renting it out until you have enough, you know, wealth to just buy your own place and a place that you would wanna live.
Noel: That's a good idea, I think. Well, the first thing is you gotta get the right property, which means you gotta buy well and add value. So you've gotta find a place where the vendor is desperate and you can add value to it. And ideally, you would live in it for six months because then you'll establish it as your home, then you can be absent for up to six years without losing your capital gains tax exemption. That's the clever way. So you buy the property, you move into it. And after six months, having lived in it, that means you actually live in it, you know.
Elizabeth: Not just get your mail sent there.
Noel: And then you could be absent for six years.
Marc: Interesting.
Elizabeth: I suppose that goes back to what you were saying, is it's really suited to investors because I would just buy a property because I wanted to live in it, and that doesn't mean that everyone else will wanna live in it.
Noel: It doesn't. It doesn't. But I think there's some nasty people out there and they're called property spruikers, and they make 55,000 cold calls a week from the Gold Coast to induce people to buy overpriced properties. But they're always new properties.
Marc: Interesting.
Elizabeth: You mean off the plan or just brand new...
Noel: Well, off the plan normally so they can get a big commission, a $50,000 or $60,000. I mean, you don't wanna buy new property. The worst thing is new property.
Elizabeth: Really?
Noel: Absolutely. You want something you can add value to. How do you add value to a new property? You can't. But I guess if you lived there, you put the garden or stuff.
Elizabeth: If you can afford a place with a garden.
Noel: I know. It always starts around gardens.
Marc: Shared garden.
Elizabeth: Yeah, that's right.
Noel: [Inaudible 00:28:28] buy seeds.
Marc: So, Noel, what is your best advice for those that do wanna buy a home and are in that initial savings journey? You know, I know that you mentioned that Acorns is a personal favorite of yours. What is the sort of strategy? I know you kinda mentioned your kind of keys for millennials to follow when they wanna build wealth. But specifically for homes because I know in certain places like Sydney and Melbourne, it is pretty difficult to save. What's your advice in that situation?
Noel: Well, I think, these days, you need to get your parents' help if you can, which means living back home. If they can give you two or three years rent-free, that's your big starter. It also means that you may have to postpone having kids. It's just sad but it's what it is. I mean, in 1977, the average house in Brisbane was $30,000 and the average wage was $15,000. That's for two years. In Sydney in 1988, a house was $130,000, five times the average wage. Now, it's $1.1 million. It's 12 times the average wage. That's much harder. There's no doubt.
Marc: That was gonna be my question. It is really a bit harder to buy a place now than it used to be.
Noel: Yes. But again, I mean, we're talking Sydney. It would be the same in Tokyo, and New York, and London. I mean, there's plenty of other places. Or else, you rent and buy shares. It's always cheaper to rent than buy. But most people don't invest what they save. That's the problem.
Marc: Right. So we could discipline, and you are doing that, then it could potentially be a good choice to consider.
Noel: Oh, yeah. Yeah, sure, sure.
Marc: And do you think that the property market in certain places like Sydney, do you think it's in a bubble or overpriced?
Noel: I get very, very worried when I turn on the six o'clock news and they have a thing in Melbourne on where people are sleeping in their cars overnight to be first to buy brand new box of land for 30Ks [inaudible 00:30:23] because they're cheaper than Sydney at 60K [inaudible 00:30:26]. That, to me, has got the sign of a bubble about it, yes. And also, when you see an article like I did this week, "Housing is the new mining boom," this is scarier a lot.
Marc: Wow. I have heard though that, you know, part of the reason why so many people think it is a bubble is because there is so much media now and there's so many articles that come out on a weekly basis and...
Noah: Absolutely, yes.
Marc: They have to write about something and...
Noel: Yup. And also, rising prices draw buyers and the buyers push up rising prices. But the end of the boom is the month the most money goes in. But I was talking to a friend recently, he's telling me that if an overseas buyer buys a property in Sydney for $3.2 million, there's $500,000 of cost in that. There's double stamp duty, there's a $22,000 transfer fee, and there's double land tax. And the Chinese buyers are dropping off because of that.
Marc: It's not as appealing anymore.
Noel: Sure, sure, sure.
Marc: Interesting. Okay.
Elizabeth: In terms of the measures that the government have kind of introduced to help first-time buyers get into it. Obviously, you know a lot about Super. So the first-time Super Savers scheme, I mean, what are your thoughts on that?
Noel: I think it's stupid.
Elizabeth: Oh, okay.
Noel: Pointless. I mean, you can only put in the difference between what the boss is paying in $25,000. For most, that might be $19,000 maybe, max. When you take it out, you are taxed at your marginal rate plus the rebate. I worked out for a couple doing the Max. It was worth six grand or something.
Elizabeth: Really?
Marc: Oh, wow.
Noel: Don't forget, it's 12 months before it starts. You could be putting up buying for two years. The house could have gone up more than $6,000 in two years, who knows? I don't like it. I think it's pointless.
Elizabeth: What measures do you think they could introduce that could even help...people keep pushing the government to do something. I mean, is there anything they can really do that could really help?
Noel: Well, every measure the government does to make housing more affordable drives up prices. And what, I never mentioned, is the biggest component of property is the GST on the construction and the land and stuff. The more incentives, okay, if they abolished stamp duty, that means a house is $30,000 cheaper, the price will go up $30,000.
Elizabeth: Yeah. [Inaudible 00:32:46]...
Marc: Yeah, which is what a lot of people have been saying.
Elizabeth: Yeah, yeah.
Noel: You're chasing a tail. That's the problem. You're chasing a tail.
Marc: So I suppose, like, a good piece of advice is to not really rely on anything like that, is to mostly get, you know, your savings plan in order, start cutting down on what you...yeah, and then....
Noel: And by the time you buy, you should know the market backwards, so when you come across a bargain, you know it's a bargain, which means going to open houses, going to auctions, seeing what's happening.
Marc: Obviously, you have a whole range of books that can help people to get their finances on track. But what else do you suggest that someone should read or listen to or, you know, be watching, like TV shows or magazines? What else is helpful for someone who's trying to get, he's trying to learn all these?
Elizabeth: And apart from this podcast.
Noel: Apart from the podcast, well, I mean, if it's property I like, the Margaret Lomas books, and she's got a TV show on Sky. She just got to the ASX and do a course in shares, so you can take part in that in the Share game.
Marc: It's been a good experience.
Elizabeth: It's been eye-opening.
Noel: But again, the trouble with the Share game is it's short-term.
Elizabeth: Yeah.
Marc: Yes, that's the thing that we keep talking about.
Noel: Short term.
Marc: Yeah.
Elizabeth: Yeah, yeah. What are your thoughts on financial planners? When are you at the point where you should rely on a financial planner? I mean, you know, should you have all your wealth built up or, you know, can just a millennial with no wealth go to a financial planner and be like, "How do I get a deposit?"
Marc: My finances [inaudible 00:34:12].
Noel: Well, the problem is that they have regulated it so over-intensely that it costs you $2,000 or $3,000 to see a planner, which isn't gonna work if you'll be running at $2,000 to start.
Elizabeth: No. It is my idea.
Noel: I mean, to me, you can do it yourself by, A, you need equity insurance. Some Super funds offer some advice for free.
Elizabeth: Oh, okay.
Noel: There's a stack of stuff in my books and columns. I mean, once you start to become interested, you'll find things. Buy my books and read my columns or other people's books and columns, and you read that and you'll get friends who do it. See, one of the great tricks of becoming successful is you mix with successful people. The losers hang around with losers, the winners hang around the winners.
Elizabeth: I need to take another look at my friends.
Marc: I need to stop hanging out with you, Liz.
Elizabeth: Yeah.
Noel: Well, there was a life-changing thing for me when I read "Think and Grow Rich" by Napoleon Hill. Written 1937, it sold 100 million copies. It changed my life when I was 34. They're making a film at the moment called "The Legacy of Think and Grow Rich," and I'm the executive producer, and the premiere is in Los Angeles, October 14th. And it's featuring all these people whose lives have been changed by that book. And my son, James, is writing a book about the people, specifically all these sporting stars and billionaires whose lives have been changed by the book. And, you know, I think one of your best investments could be buy "Think and Grow Rich."
Elizabeth: I kinda wanna leave and go buy it now. I wanna be rich.
Noel: That's all about goals, and desire, and mixing with the right people. My own book, "Beginners Guide To Wealth," has got all the principles in it.
Elizabeth: Yeah, definitely. I mean, we'll put details [crosstalk 00:36:00] all your books on the podcast page so everyone can check them out.
Marc: I mean, "Making Money Made Simple," for me, the biggest key lesson was to save as a soon as I get paid, automatically. And that, basically, is why I have a house deposit now because it just automatically goes, otherwise, if you have money...
Noel: If you didn't...
Marc: ...you'll spend it.
Noel: Exactly. But also, the reason I like Acorns is it's capturing tiny bits. And they sent me a text this morning. "This month, you've invested $59." I didn't even invest this just money that they take somewhere. When everyone gets the MasterCard statement, what's the first thing you do?
Marc: Get scared.
Elizabeth: See how much you owe, I guess.
Noel: Well, you say...yeah, but it's wrong, "It can't be that much."
Elizabeth: Yeah, yeah.
Marc: Right.
Noel: "It can't be that much. It couldn't possibly be that much."
Elizabeth: You're like, "Who stole my card?"
Noel: I know, but it is that much. But you start to invest little bits through Acorns and those types of things, you'll be amazed at how fast it can grow.
Elizabeth: Yeah, yeah, that's very true.
Marc: Yeah. I did wanna talk about Acorns. So, who do you think is suited to using that?
Noel: Anybody.
Marc: Anybody? And why do you like it so much, because of that whole...it just [inaudible 00:37:05]...
Noel: Well, it has always been my dream that there would be a product where people can invest small sums of money, automatically, and it would be invested in shares. Acorns ticks every box.
Elizabeth: So I have a question. I'm using it a bit differently. So I just put a...
Noel: What are you using it for?
Elizabeth: I put a lump sum amount from my savings account.
Noel: How much?
Elizabeth: Five hundred dollars.
Noel: Oh, okay.
Elizabeth: Is that...but I don't have it linked to, you know, automatic round-ups.
Noel: Oh, you don't? Now, you wanna be at round-ups is the most important part of it.
Elizabeth: Maybe I should change it.
Marc: Doing it wrong, Liz.
Noel: You won't miss it. You won't miss it.
Elizabeth: That's true. I should change it.
Noel: I gave them $1,000 18 months ago.
Elizabeth: I know, I read your piece.
Noel: I know. Now, it's up to $1,900, I mean, with earnings and round-ups.
Marc: Wow.
Noel: Yeah. You don't miss it.
Marc: Yeah. As opposed when it's coming out constantly, you don't really realize and, yeah, you don't miss it.
Noel: You know, almost everyone gets paid and tax is taken out and they never have any trouble paying their tax.
Marc: Yeah, that's right.
Noel: Who has trouble paying all their tax?
Elizabeth: I don't. The only thing I miss is my HECS. I always check how much HECS is taken out, and I get angry.
Marc: Yeah, yeah.
Noel: Now, who has trouble paying their tax? All the wealthy barristers earning a million bucks a year who done a bit of tax taken out.
Elizabeth: Yeah, it's true.
Noel: And if the average worker got the tax bill on June 30th, they could not pay it.
Marc: That's true. Yeah, that makes sense.
Noel: I mean, the golden rule is you invest first. As you say, you take the savings out first, the investment money first. And Acorns like to do that.
Marc: Do you think that it is a useful platform for people who are, for example, saving for a big goal, like a house deposit, or do you still think that traditional savings accounts and term deposits are, you know, the better option for that sort of stuff?
Noel: Look, any market link fund can fall as well as rise. I'd say you need to be careful. I think the best thing about Acorns is that you get experience in the way markets work. Have some of both.
Marc: You split it up.
Noel: Split it up.
Elizabeth: Yeah, because the default option for most people, I would say, is still a savings account. But I would say, like, it's still good to have your savings account even if it's just to put your money in there.
Noel: Yeah, but remember, too, I spoke before about compounding. It's a term short to write their [inaudible 00:39:14]. If you put a two-year savings goal, it doesn't matter what the rate is. It makes no difference.
Marc: Interesting, yeah, because it is there for so short of a time.
Noel: Look, if I invested $1,000 a month for two years at 4%, I'd have $25,000. Invest $1,000 at 8%, same amount, almost. But if I went $50,000, it will be millions of dollars difference.
Marc: Yeah, that's what I wanted to ask you about. So, the whole benefit of compound interest is so miraculous as you say. Could you, for listeners who don't know, explain that and why that is?
Noel: As your money grows, it grows faster and faster and faster. And the sum you have depends on the time and the rate. But if the time is short, the rate doesn't matter. And in "Making Money Made Simple," I tell the story of the lily in the pond. It's a tiny speck and doubles every day and goes from...and how long to go from quarter-full to full if it fills the pond in 10 days? Two days. It goes from quarter to half on the 9th and half to full on the 10th. If you harvest it on the eighth day, you've lost three-quarters. Now, if that lily is your savings program and I've got 10 days and you've got 8 days, I'm gonna have 3 times more than you've got.
Marc: It's such a crazy way that it works.
Noel: Every day, every time your money doubles is more great in the last double than the sum of previous doubles. One thousand, 2,000, 2,000 to 4,000, 4,000 to 8,000, 8,000 to 16,000, 16,000, 32,000, there's always more growth in the last double than all the doubles combined.
Marc: So, as you say, it relies on time.
Noel: Time and rate.
Marc: And rate, yeah.
Noel: Yeah, yeah.
Marc: Just makes me wanna wish that I was saving since I was, like, one.
Noel: No, it's never too late to start, Marc. It's never too late to start.
Marc: Yeah. Noel, I also wanted to go back to Super just before we go to our closing question. So superannuation is obviously extremely important for any Australian because, you know, of a way that you are forced to save for your retirement. But what do you think about new players that are investing superannuation in things like technology and all those sorts of different asset classes?
Noel: Well, I think you've gotta decide where your skills lie. And my skills are not in stock-picking. I let the broker convince me to invest in Dick Smith. I lost the money. But I was in the financial planning business. The holy grail was financial planning software. Then X-Pen came out. X1 was owned by Iris, I bought Iris shares and they doubled, you know. So unless you know the industry, I'd rather what the experts do. Well, just go for the index. I mean, you can buy the index.
Marc: Yeah, that's right.
Noel: Takes no skill. Index is easy, and I think in Acorns, it's all indexes, I think. I think Acorns is all indexes. Yeah, I think so.
Elizabeth: Yeah. I guess there's something about the risk as well. I'd be worried because...
Noel: You like the word risk, don't you?
Elizabeth: I'm just so scared about everything.
Noel: What are you scared about?
Elizabeth: No, it's not that. But, you know, Super is just so important, and if it isn't something slightly riskier, you just have to really...
Noel: Riskier.
Elizabeth: Riskier, not risky. Riskier.
Noel: In the business, when we talk about the word risk, we mean volatility, but the man on the street means I'm gonna lose it. See? If you put your money in the first race, on horse number two, that's high risk. But if you buy the index, it's never gonna go broke. The worst that could happen is it will fall and recover. There's a big difference.
Elizabeth: That is a big difference.
Noel: Whereas, horse number two won't fall and recover, probably.
Elizabeth: That's a really good way of thinking about it, actually. I think because I'm not very well-versed in picking at myself, I guess, I just associate it with risk.
Noel: But the big issue occupying government's bond right now was put to me beautifully. That a couple retire, and think about they get on the boat. They are on boat and they got this whole stock of food. How much food can we have? Well, we don't know. We don't know how long the journey is because they don't know when they're gonna die. Therefore, if they don't know when the journey is, they eat less than they could have eaten. So one of the biggest problems now is that people are living far more frugally than they need to in retirement and they're dying with more than they started with.
Marc: Very interesting, really.
Noel: Very interesting, yeah. And there's a rule called the 10/30/60 rule. On the day you die, the amount of superannuation you'll have is 10% your own contributions, 30% growth while you were working, and 60% growth after you retire.
Marc: Sixty percent growth after you retire?
Noel: Right after you retire.
Elizabeth: Oh my gosh.
Noel: The quicker you can get the contributions in, then the more time you've got.
Marc: Do you recommend that, you know, a younger Australian consider voluntary contributions to the Super?
Noel: I don't think they should now. I think you're better off...now, if you could afford $5,000 a year as a tax-deductible contribution, that could be interest on a $75,000-loan per shares. And you've got $75,000 working for you.
Marc: Interesting. That's kind of like the opportunity.
Noel: Yeah. There's a great program now that the National Bank has where you can borrow for shares with no margin cost. You can put up a third deposit and they'll lend you two-thirds on a 15-year loan at no margin cost. "Whatever the market does, I don't care," because they're picking the basket of shares.
Elizabeth: Oh, okay. That's interesting there.
Marc: Right. Okay.
Noel: So, as long as you invest in their basket, which is the top 100, you'll never get a margin call.
Elizabeth: And you just do it through their platform, I would assume.
Noel: I don't know, but I'm about to write an article about that.
Marc: We'll find that article once it's live and then we'll post it...
Elizabeth: Yeah, definitely.
Marc: We'll place a link to it on our page...
Elizabeth: Yeah, for sure.
Marc: ...so people can read that.
Noel: A couple of weeks yet.
Marc: Awesome. Okay, Noel, so we usually have three questions that we ask of all our guests.
Noel: Here we go.
Marc: I suppose you've answered the first one which is, what do you like to invest in?
Noel: Shares, because they're simple. If you've got property and you need money, you can't sell the back steps.
Marc: That makes sense.
Noel: Right? And they produce dividends which are tax-effective, yeah.
Marc: What is the single best piece of general financial advice you can give to others?
Noel: Spend less than you earn and invest the rest without fail every week.
Elizabeth: I like that.
Marc: That's awesome, yeah.
Noel: And improve your skills, obviously. Actually, the best investment is improving your skills.
Marc: Interesting, so just courses, reading.
Noel: Absolutely. I still do them. Yeah.
Marc: Yeah. And the last one is, what's the worst piece of financial advice you've ever received?
Noel: I think the guy I went to business with a bankrupt to build a shopping center. And I lost half the money. That was a bad one.
Elizabeth: Oh gosh.
Marc: Wow.
Noel: A bad one. You know, but you learn from it. One of the "Think and Grow Rich" principles is, "There's always a disaster before success."
Marc: Okay.
Elizabeth: That's something to learn from.
Marc: Yeah.
Noel: Yes. But you must fail to succeed.
Elizabeth: I like that.
Noel: Because you'll learn from your failures, not from your winnings.
Marc: I had a final question which is...so I was obviously doing my fair share of Twitter-stalking before we talked.
Noel: Good on you.
Marc: And I noticed that, you know, Stoicism and that sort of philosophy seems to crop up a bit on your Twitter page. How have you found it useful for your financial personal life?
Noel: Well, my son is about your age and he got me into it. It's just such common sense. I get the daily Stoic and it's always great to read. You know, it's just sheer common sense and it goes right back to the ancient Greeks, Romans. And I think Socrates said in 384 BC, the best security is developing your skills. 384 BC.
Marc: Wow.
Noel: There's nothing new.
Marc: And it worked well for him. We're still talking about him today, so.
Noel: Yeah, I know. I know, I know.
Marc: Interesting.
Elizabeth: The words of Socrates.
Marc: It's good enough for Socrates.
Noel: And Marcus Aurelius, of course.
Elizabeth: Oh, wow, there we go.
Marc: Well, thank you so much, Noel, for being on the podcast. We've learned so much.
Noel: It's a pleasure, Marc, Liz. Thank you. I hope so.
Marc: And we'd definitely love to get you in next time you're up here.
Noel: Happy to.
Elizabeth: Yeah. That's gonna be great.
Marc: Yeah, thank you so much.
Noel: Pleasure.
Elizabeth: Thank you.
Adam: Wow, man, I missed a good one there.
Elizabeth: Yeah.
Adam: I missed a good one.
Elizabeth: Yeah. It was one of those interviews where I kind of left and I just wanted to change my life. I had a similar experience with Effie Zahos.
Adam: Yeah, we have some interviews like that, don't we?
Elizabeth: Yeah.
Adam: Where it's just like, "Man, this is gonna transform everything," and then we don't really do much. But there, you go make [inaudible 00:48:09] account.
Elizabeth: Yeah, yeah, exactly.
Adam: And Noel loves Acorns, and I'm hoping he's talking about the fintech platform and not like the seeds. You know, like he is just stashing acorns away in a tree for winter.
Elizabeth: I should have clarified with him because now, I have follow-up questions, like, you know, is he talking about that? Should I...
Adam: Should you be stockpiling actual acorns in a hollow tree?
Elizabeth: Do they get you good returns?
Adam: I mean, come winter.
Elizabeth: Depending on how you store them.
Adam: You'll wish you had those acorns. Talk to any squirrel and he'll tell you.
Elizabeth: It was a very inspiring interview. Obviously, he's very knowledgeable and I really do wanna set up those kinds of recurring deposits for my Acorns account so I can get more out of it.
Adam: Yeah. It's smart. Okay, so speaking of investment, it's time for a little segment, the one you all know and love, a little thing we like to call Thunderdome.
Here's the thing. Are we even paying attention? Like, we've been swept away with the excitement of the ASX game, haven't we?
Elizabeth: Yeah. I think that's pretty fair to say. I mean, looking at my Thunderdome dashboard, I have let a few of my stocks dwindle. And I still am in position four. My return is still positive, but I'm definitely just not in the good position. My current portfolio value is 50,571 so it's not quite near Adam's.
Adam: But then I'd say you're still in positive territory. So you still made money off the thing. And it's almost over, like you're gonna end this most likely having made money. Last week, Marc actually got the best return of anyone at 1.56%, and then, Liz, you were pretty close behind, 1.29%. That was pretty good return for the week. Yeah. I was down 0.10%.
Elizabeth: Good.
Adam: Yeah. So it shaved, you know, a couple hundee [SP] off my $5 million.
Elizabeth: I'm just so glad about that. Any kind of damage to your portfolio this week [inaudible 00:50:24]?
Adam: Well, as we learned before, I never reached the point of actual wealth with this game because I would need another $240,000 to do that. But the more interesting thing to talk about, of course, is our ASX Share trading game.
Elizabeth: Yeah. I'm still a little confused why I'm doing so well in this game.
Adam: Yeah, me, too, and I have to say it makes me really angry.
Elizabeth: So I'm currently ranked position 2 out of the 17 people that are in our league.
Adam: Yeah, you have such contempt for the entire process and yet somehow, you are just crushing it.
Elizabeth: I don't understand. I made a few investments early on and I decided on a strategy that I've decided to keep private because I don't want people to use my strategy. That's right.
Adam: Can I ask you, are you an active trader or are you buy and hold?
Elizabeth: No, I'm a buy and hold. Yeah, so I will say that I picked a certain industry, I guess, and I've stuck with that. And it seems it's done pretty well.
Adam: Interesting.
Elizabeth: Yeah. What I have noticed with other people because we have been talking about it at work, and we have an online chat system at work, we all kind of chat about it, I have noticed that people have been buying into larger companies, and sometimes, that doesn't go as well. That's what I have noticed, something that's quite interesting. And that's something I haven't done. I haven't bought big companies.
Adam: Yeah. I'll tell you what, I bought a lot of big companies and they can really, really hurt you but then they can turn around, like, in a heartbeat.
Elizabeth: Yeah, I think if you're an active trader, you could definitely make it work. But I am not that.
Adam: Yeah. Well, I think, you know, I'm falling into in this one doing what we were warned against by Chris from Stockspot, which is chasing your losses, which I've been doing basically, where I start losing money on a stock and I hold it and think it's gotta come back eventually. And thus far, I've been right, thankfully. Just by sheer luck, I've been right, and I have yet to sell stocks for an overall loss. But right now, everything I'm holding, it's only four companies I'm holding right now, but they're all down, most of them by triple digits. And my worse one right now is down almost $500. But yesterday, I'll tell you a strategy that I used that I thought I was too cool for school and I was a pretty smart guy, and it did not work in my favor in the end.
I started paying attention to the dividends and so I thought I'm gonna buy these stocks that have dividend payments coming up, right? Now, in real life, you have to hold a stock, I think, for 30 days after the dividend cut-off before you actually get paid the dividend, right? But in the ASX game, if you're holding it on the day of the dividend cut-off, you get the dividend. It doesn't matter, right? So I had this idea with CBA, with Commonwealth Bank. I thought Commonwealth Bank is taking a beating right now but I don't care because I can buy it today, tomorrow, I'll get a dividend of $2.30 per share, which is massive, and then I'll dump it, right? And so, I did just that. I woke up in the morning, I looked and I was up, like, 300 bucks from that dividend payment. I'm like, "I am very smart." So it was like sell all these stuff and it opened $300 down, right?
Elizabeth: Oh my gosh.
Adam: So, I broke even entirely. And if you look at the league rankings, it was the same thing today where I had a bunch of...because the league rankings don't update until the next day, right? So, as of this morning, I was holding a bunch of stocks that pay dividend payments. So right now, it looks pretty good if you look at the league rankings. I'm number three. My portfolio value is $51,227.92. But all those stocks that I had that paid dividends are tanking right now.
Elizabeth: Oh, no.
Adam: Absolutely tanking. They paid their dividends. So, like, one of them, I got a dividend of, like, $86, right? It's down $180 today. Another one, I got a dividend of, I think, just over $300 and it's down $156. So it hasn't wiped off all the profit I made, but still, it's very bad.
Elizabeth: Yeah. So this is a strategy that probably doesn't work.
Adam: Yeah, and I don't know if I've just been unlucky that I picked stock...because I haven't watched the market long enough to know, does this usually happen, that a stock has its, like, dividend cut-off and then it just tanks that day? I don't know. Like, is that a pattern? Have I uncovered a pattern in the markets or am I just a stupid dope who picked the wrong...?
Elizabeth: You should, like, look at whether it picks up after a couple of days afterwards.
Adam: Yeah. Well, I'm not gonna sell because I think one thing I have been doing which I think has worked okay so far is I've been paying attention to...every share I buy, I've been paying attention to its one-month high, its 52-week high, and its intraday trading high, right?
Elizabeth: Much more technical than I was. I'm like, "Hey, this graph looks good."
Adam: Yeah. It's like [inaudible 00:55:41] that closed at like, say, $4.50. But during the day of trading, it hit $4.75 and its 52-week high is something like $5.10. I'm gonna buy that stock, right, because I think, "Okay, it closed up for the day, but it closed off of a tie for that day and it closed well off of its 52-week high, so it's got room to grow," right?
Elizabeth: Yes, exactly.
Adam: If I see a stock that closed up for the day and it looks really good and it's been a growth trajectory, but where it closed is very close to a 52-week high, then I'm really weary, yeah, because I'm like what if it's had its day in the sun.
Elizabeth: Yeah. So I do look at the graph before I buy, and if it's close to the top of where it's the highest point, I'm like I'm not gonna buy that because, you know...
Adam: And, you know, it doesn't always pan out very well.
Elizabeth: No, but it's pretty good strategy.
Adam: Yeah, because I had one stock that I sold that was close to its 52-week high that's gained, like, another dollar since I sold it.
Elizabeth: Oh, no.
Adam: Yeah. So I felt pretty dumb about that. But I still made a good deal of money off it so you can't feel that dumb.
Elizabeth: Well, that's good. Yeah. So, as we mentioned, I am 2 and Adam is ranked 3, so poor Marc is coming down at number 12.
Adam: Marc is struggling. He's struggling.
Elizabeth: He's actually not down that much from his original $50,000. So he's only on $49,104. So he's only $900 down. That can be picked up quite easily.
Adam: Yeah. And there are people who are down considerably more than that.
Elizabeth: Yeah. So my portfolio value currently is $51,965. You know, there's not that much of a difference between the top and the bottom of the board.
Adam: Yeah. But when you look at the amount of time we've been doing this, was this like maybe the fourth week or so, that's a lot of money to make in, like, four weeks.
Elizabeth: Yeah, that's true. When I reveal what my investments were, you can all go, go and invest. But I'm not gonna do that because I don't want people to copy my strategy and then do it better than me. Because I really have no idea how I'm doing it. And every time, you know, I've been updating some people and I'm like, "Oh, yeah, I'm doing this," and they're like, "Oh, what have you been doing?" I'm like, "Honestly, I'm scared to touch anything because I don't know what's happening, I don't know why, and I don't know what to do. So, I'm just gonna leave it and see what happens."
Adam: I'll tell you a major bullet I did dodge is Telstra.
Elizabeth: Interesting. Okay, yeah. See, I'm scared of the big companies. I am quite scared.
Adam: I have a bit of trepidation about companies that are really seeing their results, buying them on that day because it could go very, very well or it could go very, very poorly. And in Telstra's case, they absolutely got hammered.
Elizabeth: Yeah. And it's the same case with Domino's as well. Look what happened with Domino's, if someone bought into that, it'd be not good.
Adam: Although Domino's is tearing up the charts today.
Elizabeth: Really? See, that's interesting. Yeah, but everyone's watching in and it's so volatile so, yeah, I'm just terrified.
Adam: Yeah, yeah. That's what surprised me with this is that some of the big companies from day to day, if you're holding quite a few shares in it, it looks really volatile. You know, like, I think if you looked at them over the long-term, then I'm sure that the graph kinda smooths out and it looks quite like, you know, kind of a fairly even kill growth trajectory. But when you're just doing this day to day, it's super volatile. And I guess that's why Alistair kinda recommended that kinda buy and just don't look at it because otherwise, you will get really freaked out. Because right now, I am super freaked out about a couple of this.
Elizabeth: Yeah, haven't been sleeping. That's why you look terrible.
Adam: Thanks, Liz.
Elizabeth: But, yeah, so I'm excited to keep watching it. Hopefully, I stay where I am. Increases my portfolio value, but we'll see.
Adam: Yeah. Well, next week is where I make my move and I'll grow this thing to $5 million.
Elizabeth: Yeah, I wanna see your strategy take place in the real world.
Adam: Yeah. No, it won't because it can't.
Elizabeth: What a shame.
Adam: Okay. Well, there you go. There's our update, and we will continue to update you on our progress. And whoever wins this thing, they'll have bragging rights but I feel like maybe we should make some kinda trophy.
Elizabeth: Yeah, that'd be great. Yeah.
Adam: Even if we just, like, fashion it ourselves out of things we find around the office.
Elizabeth: Or if it's something like World's Best Golfer and then...
Adam: Yeah. Oh, that'd be good. Let's get a bowling trophy.
Elizabeth: That'll be great. Okay, that sounds good.
Adam: But, yeah, there you go. That's your little update on Thunderdome.
Okay, so, look, we're still in a holding pattern with some of our finance road tests because we're going to either...we had challenged each other to either make $50 during the week or save $50 during the week. But we want to wait for Marc to be back so that we can all talk about how we went about that, and he can talk about what is, no doubt, the super dodgy way that he scammed some poor person of $50. I don't know that that's what happened but I just assume. In the meantime, Liz, what's happening with that eBay auction that you set up ages ago?
Elizabeth: I hope that eBay emails you when someone bids on...do they email you?
Adam: Well, do you have your eBay page open?
Elizabeth: So I just opened it but I actually haven't opened it since the last podcast.
Adam: It should tell you right there if there are any bids.
Elizabeth: There's no bids.
Adam: Oh, that's sad.
Elizabeth: But do I have to keep checking or will they email me? I assume they'll email...
Adam: I would assume they would email you.
Elizabeth: Okay, that's good. But I did what you recommended last time and I added that the shoes will fit.
Adam: That they'd fit regardless of the fact that they're different sizes.
Elizabeth: Exactly, yeah. Hasn't helped obviously, yeah. I don't know what to do. Maybe I should just take it out.
Adam: Do you have photos of the shoes.
Elizabeth: I do, I do. I put an image on the ad.
Adam: Okay. So that right there, you're helping. You know, the thing is so much of what we do here at Finder is focused on...we pride ourselves on really learning the ins and outs of SEO, right? That's what you need to apply to your listing. You need to apply some of this SEO knowledge that you've gained here at Finder to that listing.
Elizabeth: I can get it ranking?
Adam: Yeah, get it ranking. Like, look at Google Analytics, look at what people are searching to buy things like what you have.
Elizabeth: Actually, I've started going through eBay. That is honestly my worst fear. I was thinking of actually putting up the same ad on Gumtree and seeing if that one sold.
Adam: See which sells first? That's interesting.
Elizabeth: Yes, yeah. Well, if Gumtree sells within two weeks, it's already been in eBay. I think what would be interesting is using the exact same wording, the exact same photos, and just seeing if it sells.
Adam: Cool. That's interesting.
Elizabeth: Yeah, yeah. So we could do a little comparison.
Adam: Yeah. Well, there you go. We do a selling classified listing comparison.
Elizabeth: My own true sale comparison.
Adam: Yeah. And if neither of those work, you see, like, you compare how long it takes if you just leave them out on the sidewalk.
Elizabeth: That's a great idea. I'll just leave them, yeah, in front of my apartment building.
Adam: Yeah, see what happens.
Elizabeth: Yeah, great idea.
Adam: It will be minutes, I guarantee you.
Elizabeth: Oh, yeah, 100%.
Adam: No matter what you leave out in the front of your house, someone will take it within minutes. I every so often will do some homebrewing, make some beer. It's been a long time since I've done it. But I made this beer one time and it was a Trappist ale, which if you're familiar with beer, Trappist ales are very, very...they're great. They're really delicious but they're like rocket fuel. They're about 14% alcohol.
Elizabeth: Oh my gosh. It sounds great.
Adam: Oh, they're really good. They're really good, but they're very...like, you sip a Trappist ale, you don't sit there and [inaudible 01:03:44]. But I made it in this massive fermenter that I had and so I ended up with 50 liters of Trappist ale, and how are you going to make your way through 50 liters of beer that's like 14% alcohol by volume, you know? So when we moved house, I had a bunch of these just sitting in my shed because they're high-alcohol, they keep for a long time. So they'll keep for a couple years just fine. And I set them out in an old Ikea bag out just to be picked up for Council collection and, by God, some happy drunk came by and picked up that, like...you know, I had, like, probably 20 liters of the stuff left.
Elizabeth: Oh my gosh. It was me.
Adam: That's why Liz didn't come to the office for several weeks.
Elizabeth: I was strong [SP].
Adam: Gap in her memory.
Elizabeth: I wonder where I was.
Adam: [Inaudible 01:04:37] I was walking down the road with an Ikea bag just laughing and laughing. Then I woke up in a ditch.
Elizabeth: Yeah, exactly.
Adam: In a burlap sack.
Elizabeth: Wait, that was you.
Adam: There you go. So, we'll keep you updated. Hopefully, Liz can find someone to take these shoes. Maybe it could be you.
Elizabeth: Yeah, please.
Adam: If you're listening.
Elizabeth: Please, like I said last time, someone...
Adam: [Inaudible 01:05:00] the shoes. Consider it a pair of podcast memorabilia. And you know what, if you bid on it, let us know that it's you and Liz will sign them for you.
Elizabeth: I really will. I won't sign them on the outside. Don't worry. They are Mimco shoes.
Adam: All right, cool. Well, look, that'll do it for the finder.com.au "Money Podcast" for this week, and we'll see you next week with some more great guests and our fearless leader, Mr. Terrano, back in the driver's seat, keeping things under control for us.
Elizabeth: Very excited to have Marc back.
Adam: I think we all are. Until then, see you.
[01:05:41]
[Silence]
[01:06:33]
Announcer: Thanks for listening to the finder.com.au "Money Podcast." Head over to www.finder.com.au/podcast to find the show notes for this episode and more great episodes. The Finder podcast is intended to provide you with tips, tools, and strategies that will help you make better decisions. Although we're licensed and authorized, we don't provide financial advice so please consider own situation or get advice before making any decision based on anything in our podcast. Visit finder.com.au to learn more about how we're regulated, to compare your options, or to access our terms and conditions.
ASX sharemarket game instructions - join us!
- Go to the ASX website and create an account for MyASX
- Complete your registration for the sharemarket game
- When registered, go to 'Game play' > 'Leagues' > 'Join Leagues'
- Enter in the following details: League ID: 19917, password: angusrox123, league: finderAU
