Welcome to How Do They Afford That? The podcast that peaks into the financial lives of everyday Australians. I'm Uncle Thompson. I'm an author and the co host of the podcast Fear and Greed business news As always, I'm with Canna Campbell, financial planner and founder of Sugar Mummer TV, the financial literacy platform covering YouTube, podcast, books, Instagram threads, TikTok and more. Did you hear me pause between financial and planner? Then I just suddenly suddenly just hit me financial planner and financial advisor. Is there a difference?

Welcome to How Do They Afford That? The podcast that peaks into the financial lives of everyday Australians. I'm Uncle Thompson. I'm an author and the co host of the podcast Fear and Greed business news As always, I'm with Canna Campbell, financial planner and founder of Sugar Mummer TV, the financial literacy platform covering YouTube, podcast, books, Instagram threads, TikTok and more. Did you hear me pause between financial and planner? Then I just suddenly suddenly just hit me financial planner and financial advisor. Is there a difference?

Yes, a financial planner tends to be more experienced. Okay, I may have had more qualifications and training behind them. Normally a financial advisor is reserved for maybe a junior, like someone who is new to the industry. Maybe not necessary to have as much experience as many qualifications.

Yes, a financial planner tends to be more experienced. Okay, I may have had more qualifications and training behind them. Normally a financial advisor is reserved for maybe a junior, like someone who is new to the industry. Maybe not necessary to have as much experience as many qualifications.

Okay, Well, I will no longer hesitate when I get to that, and I'll just jump straight in with financial plan How are you going?

Okay, Well, I will no longer hesitate when I get to that, and I'll just jump straight in with financial plan How are you going?

I'm well.

I'm well.

How are you I'm good? I'm good, Thank you, we are we're going back to basics today. Yeah, this is good, it's good. It is one of the most common questions that we get here at how today afford that? How do I get started investing in shares? So today we are you going to put together a step by step guide to investing in shares? If you're open to.

How are you I'm good? I'm good, Thank you, we are we're going back to basics today. Yeah, this is good, it's good. It is one of the most common questions that we get here at how today afford that? How do I get started investing in shares? So today we are you going to put together a step by step guide to investing in shares? If you're open to.

That sounds good to me?

That sounds good to me?

Okay, all right, Before we do that, obviously, everything that we talk about is general in nature. It is never personal investment, strategic or product advice. It is purely financial education purposes only. I'm actually going to rewind slightly and say why shares? Why should an investor think about investing in equities?

Okay, all right, Before we do that, obviously, everything that we talk about is general in nature. It is never personal investment, strategic or product advice. It is purely financial education purposes only. I'm actually going to rewind slightly and say why shares? Why should an investor think about investing in equities?

All right? There are lots of reasons why you should be investing, okay, So obviously before on shares today. So having ownership of a business that is going to hopefully grow over time and obviously means your money is growing over time. It's also a source of passive income to you. To give you that financial freedom. It is an opportunity to grow wealth over the long run and try and exceed or beat inflation. And shares are a lot more liquid than say property. You know, if you have a property worth say five hundred thousand dollars, and you need suddenly fifty thousand dollars, you can't go and sell one bedroom, whereas with a share portfolio you can fill fifty thousand dollars shares and then the money will be in your account within a couple of days.

All right? There are lots of reasons why you should be investing, okay, So obviously before on shares today. So having ownership of a business that is going to hopefully grow over time and obviously means your money is growing over time. It's also a source of passive income to you. To give you that financial freedom. It is an opportunity to grow wealth over the long run and try and exceed or beat inflation. And shares are a lot more liquid than say property. You know, if you have a property worth say five hundred thousand dollars, and you need suddenly fifty thousand dollars, you can't go and sell one bedroom, whereas with a share portfolio you can fill fifty thousand dollars shares and then the money will be in your account within a couple of days.

Okay, we will get to some more of the benefits as we go through, as we go through our step by step guide. But when you buy a share, what are you actually buying?

Okay, we will get to some more of the benefits as we go through, as we go through our step by step guide. But when you buy a share, what are you actually buying?

Buying a slice of the company.

Buying a slice of the company.

It is as simple as straightforward as.

It is as simple as straightforward as.

That you're own a percentage of that business, and it doesn't matter how small, you still own a percentage, and obviously you can build that over time with various different strategies, but you also have right to some of the gains through a dividend, and obviously the long term growth of that share price, which is your represents your share of the business. But obviously, at the same time you carry the risks that that company may go through a tough time, or the value may drop, or they may stop dividends for a period of time. So it's like owning an investment property when you buy shares, but instead of receiving rent, you receive dividends, and of course you are hopeful that the value of that property goes up. You're hopeful that the value of that share your ownership and that business goes up as well.

That you're own a percentage of that business, and it doesn't matter how small, you still own a percentage, and obviously you can build that over time with various different strategies, but you also have right to some of the gains through a dividend, and obviously the long term growth of that share price, which is your represents your share of the business. But obviously, at the same time you carry the risks that that company may go through a tough time, or the value may drop, or they may stop dividends for a period of time. So it's like owning an investment property when you buy shares, but instead of receiving rent, you receive dividends, and of course you are hopeful that the value of that property goes up. You're hopeful that the value of that share your ownership and that business goes up as well.

Okay, so you're buying a share, a slice of the company, and you are sharing in the fortunes of that company moving forward, whether it goes up or down, whether they make money, whether they lose money. That you are also.

Okay, so you're buying a share, a slice of the company, and you are sharing in the fortunes of that company moving forward, whether it goes up or down, whether they make money, whether they lose money. That you are also.

Bearing that you're like a business owner.

Bearing that you're like a business owner.

Okay, shall we get to the steps. Why are you laughing at that? Is it just because I like to put everything into a list.

Okay, shall we get to the steps. Why are you laughing at that? Is it just because I like to put everything into a list.

I'm going to ask you a question in a second, because I feel like there is an ulterior motive behind the topic today. And yes, you're looking very.

I'm going to ask you a question in a second, because I feel like there is an ulterior motive behind the topic today. And yes, you're looking very.

Scared right now. No, I just I don't I like to ask the questions on this show. I don't like it when you turn it back on me because I never know where you're going to go with things, and I don't like to get caught out. Step number one, do you start with research? Yes, that was an assumption, and I made a correct assumption for once. This is a good day. Look.

Scared right now. No, I just I don't I like to ask the questions on this show. I don't like it when you turn it back on me because I never know where you're going to go with things, and I don't like to get caught out. Step number one, do you start with research? Yes, that was an assumption, and I made a correct assumption for once. This is a good day. Look.

The golden rule but that it comes to investing is that you never invest in something you don't understand. And that doesn't mean that you go, oh, I don't understand this, Therefore I won't invest in it means no, you need to keep going with your research until you understand what that is and then you can work out whether it is the right investment for you. So a great place to start is look at things that you were generally interested, generally and genuinely interested in. And there is so much free research online that is an amazing quality, you know, such as like more Star and the AX has so much brilliant online tutorials as well to help you get started with investing. But look at brands that you use daily, the supermarkets that you visit, or where you do your banking, or you know where you buy your appliances from, so things, you know, places that feel really relevant and real. That's a great place to get started. And then of course you need to think about well how am I going to buy these shares and that's when you need most of us need an online share training account unless you're going to go through a user stockbroker.

The golden rule but that it comes to investing is that you never invest in something you don't understand. And that doesn't mean that you go, oh, I don't understand this, Therefore I won't invest in it means no, you need to keep going with your research until you understand what that is and then you can work out whether it is the right investment for you. So a great place to start is look at things that you were generally interested, generally and genuinely interested in. And there is so much free research online that is an amazing quality, you know, such as like more Star and the AX has so much brilliant online tutorials as well to help you get started with investing. But look at brands that you use daily, the supermarkets that you visit, or where you do your banking, or you know where you buy your appliances from, so things, you know, places that feel really relevant and real. That's a great place to get started. And then of course you need to think about well how am I going to buy these shares and that's when you need most of us need an online share training account unless you're going to go through a user stockbroker.

Okay. Can I also make one recommendation that in terms of research, and that is go back and listen to an episode that we have done previously where we spoke to Roger Montgomery who took us through in detail what he looks for in buying a quality company, and he goes through in really plain English kind of how to look at what the company is planning to do in the future, whether it's making money, and what its future prospects are, and whether that might make a good choice to put some money into.

Okay. Can I also make one recommendation that in terms of research, and that is go back and listen to an episode that we have done previously where we spoke to Roger Montgomery who took us through in detail what he looks for in buying a quality company, and he goes through in really plain English kind of how to look at what the company is planning to do in the future, whether it's making money, and what its future prospects are, and whether that might make a good choice to put some money into.

So he's got his book as well.

So he's got his book as well.

Yeah, absolutely, he spoke to us about twelve months ago, so you will find that in the how to they afford that playlist. Step one start with research. How do you decide then what you are going to buy? And this is quite broad because it's not just specifically which company you are going to buy, because there's actually a number of ways that you can be investing in shares. You might not be just going for a particular company. You might be buying an ETF, an exchange traded fund.

Yeah, absolutely, he spoke to us about twelve months ago, so you will find that in the how to they afford that playlist. Step one start with research. How do you decide then what you are going to buy? And this is quite broad because it's not just specifically which company you are going to buy, because there's actually a number of ways that you can be investing in shares. You might not be just going for a particular company. You might be buying an ETF, an exchange traded fund.

Or even a listed investment company. So all right, you've got lots of different choices out there, so you can go with your individual shares. Obviously that involves a lot more research, a lot more risk. You've got to make sure that you quickly diversify because initially your first investment might be solely in just one company, so you need to make sure that as new money comes in, you know, you diversify, so there is there is risk with that, and if you're a beginner investor, that's where I would strongly suggest starting to with your research around things like ETFs and listed investment companies, even you know, maybe managed funds, because it means you're buying a investment into an investment portfolio that's already diversified for you. It's like grabbing a shopping basket that's already been pre packed for you.

Or even a listed investment company. So all right, you've got lots of different choices out there, so you can go with your individual shares. Obviously that involves a lot more research, a lot more risk. You've got to make sure that you quickly diversify because initially your first investment might be solely in just one company, so you need to make sure that as new money comes in, you know, you diversify, so there is there is risk with that, and if you're a beginner investor, that's where I would strongly suggest starting to with your research around things like ETFs and listed investment companies, even you know, maybe managed funds, because it means you're buying a investment into an investment portfolio that's already diversified for you. It's like grabbing a shopping basket that's already been pre packed for you.

In diversification. You ask anybody and they will talk about the fact that that is a really important part of your strategy. It is about spreading the risk.

In diversification. You ask anybody and they will talk about the fact that that is a really important part of your strategy. It is about spreading the risk.

Exactly, and it saves you a lot of time as well, because if you're new to investing, it is very overwhelming and you want to get started. Do you want to get hit a bit of a block and go, Okay, I haven't invested yetuse I haven't worked at what stopped be buying at. But if you look at something like a listed investment company or an ETF, which are very similar just different tax structures, this can mean that you can actually get your foot in the door start building that investment portfolio. You know, set up a regular investment plan. But then you can in the meantime know that your money is invested in working for you. But you continue on your financial education journey and start maybe thinking, Okay, I've got ten thousand into this listed investment company, I want to go and cherry peak my next five stocks I'm going to buy individually. So you aren't backed into a corner where you can only go into ETFs or listed investment companies. You can have a blend of everything. And that's actually what I have.

Exactly, and it saves you a lot of time as well, because if you're new to investing, it is very overwhelming and you want to get started. Do you want to get hit a bit of a block and go, Okay, I haven't invested yetuse I haven't worked at what stopped be buying at. But if you look at something like a listed investment company or an ETF, which are very similar just different tax structures, this can mean that you can actually get your foot in the door start building that investment portfolio. You know, set up a regular investment plan. But then you can in the meantime know that your money is invested in working for you. But you continue on your financial education journey and start maybe thinking, Okay, I've got ten thousand into this listed investment company, I want to go and cherry peak my next five stocks I'm going to buy individually. So you aren't backed into a corner where you can only go into ETFs or listed investment companies. You can have a blend of everything. And that's actually what I have.

Yeah, And so in terms of listed investment companies, typically there will be you are essentially buying a piece of that company, which in turn owns a whole bunch of other companies that are chosen by professionals working behind the.

Yeah, And so in terms of listed investment companies, typically there will be you are essentially buying a piece of that company, which in turn owns a whole bunch of other companies that are chosen by professionals working behind the.

Scenes exactly up just eighty different companies, not.

Scenes exactly up just eighty different companies, not.

More, and they may have different themes to them as well. And then ETFs the exchange traded funds. They might be a fund that tracks a particular part of the market to buyte track kind of the ASX two hundred of might track the tech companies, or it might track companies and stocks that are exposed to gold, for instance, And you can really kind of pick where you want to be putting your money by going with it, say ETFs or listed investment.

More, and they may have different themes to them as well. And then ETFs the exchange traded funds. They might be a fund that tracks a particular part of the market to buyte track kind of the ASX two hundred of might track the tech companies, or it might track companies and stocks that are exposed to gold, for instance, And you can really kind of pick where you want to be putting your money by going with it, say ETFs or listed investment.

Companies, and you can look at their historical returns. Now, obviously that does not indicate future performance, but also when you look at these companies and read the research reports, you can see the fees that they're charging as well and in what dividends they're paying, and you know how they've attracted in comparison to the benchmark. And they're very easy to read. Just going to sit down and just have a look, and there are lots of cheat sheets available online as well.

Companies, and you can look at their historical returns. Now, obviously that does not indicate future performance, but also when you look at these companies and read the research reports, you can see the fees that they're charging as well and in what dividends they're paying, and you know how they've attracted in comparison to the benchmark. And they're very easy to read. Just going to sit down and just have a look, and there are lots of cheat sheets available online as well.

Yeah, you are right, it's a good place to start for someone getting into it looking at these listed investment companies or ETFs because they are they can be quite broad, but you'll often find some good kind of research material around it and explain the material as to kind of what they are investing in and benefiting from the expertise and the experience of the people that are actually running them. What do you need then, So say you've kind of made all of these decisions, you've done a whole lot of research, what do you need in terms of an app or a platform for physically buying these shares? Should you be looking for something that is attached to your bank or should you be going there's a whole lot of different apps and platforms now to buy shares. What do you look for?

Yeah, you are right, it's a good place to start for someone getting into it looking at these listed investment companies or ETFs because they are they can be quite broad, but you'll often find some good kind of research material around it and explain the material as to kind of what they are investing in and benefiting from the expertise and the experience of the people that are actually running them. What do you need then, So say you've kind of made all of these decisions, you've done a whole lot of research, what do you need in terms of an app or a platform for physically buying these shares? Should you be looking for something that is attached to your bank or should you be going there's a whole lot of different apps and platforms now to buy shares. What do you look for?

There are so many out there, and there are so many great ones. Obviously making sure it's you're low or I'm not going to say low, because they can sometimes be a bit of a cash So you want to look at cost effective brokerage fees. Don't necessarily go with the cheapest because they may be making a profit in an indirect way, which I think we've explained in a previous episode. But also making sure that it's very user friendly, like there's nothing worse than getting stuck and not understanding about how to put a trade through or how to pounce or something, or know how to access certain components. So an intuitive you know what, they call it, a friendly interface online platform. Then looking at making sure that there's actually some really great free resources that are independent, such as independent research, and then making sure you've got updates so as to what's going on around the world, you know news feed as well. But then this one is missed by a lot of people, and it's actually access to wealth building tools such as margin loans, and this is you know, if you're someone who doesn't own property and would like to borrow to invest, you're limited as to how you can access loans to build your share portfolio. Now. If your platform offers a marginal loan facility, that's great because you can sometimes if it's the right product for you, go through that. If they don't offer a gearing facility like a margin loan, you then have to find another one, which means moving your share portfolio to a new account, which could be It's doable, It's fine, but it can be a little bit fiddly, So think about what you need immediately, but also what tools you're going to be able to want to have access to further down the track so you don't have to create more paperwork for yourself and moving money around.

There are so many out there, and there are so many great ones. Obviously making sure it's you're low or I'm not going to say low, because they can sometimes be a bit of a cash So you want to look at cost effective brokerage fees. Don't necessarily go with the cheapest because they may be making a profit in an indirect way, which I think we've explained in a previous episode. But also making sure that it's very user friendly, like there's nothing worse than getting stuck and not understanding about how to put a trade through or how to pounce or something, or know how to access certain components. So an intuitive you know what, they call it, a friendly interface online platform. Then looking at making sure that there's actually some really great free resources that are independent, such as independent research, and then making sure you've got updates so as to what's going on around the world, you know news feed as well. But then this one is missed by a lot of people, and it's actually access to wealth building tools such as margin loans, and this is you know, if you're someone who doesn't own property and would like to borrow to invest, you're limited as to how you can access loans to build your share portfolio. Now. If your platform offers a marginal loan facility, that's great because you can sometimes if it's the right product for you, go through that. If they don't offer a gearing facility like a margin loan, you then have to find another one, which means moving your share portfolio to a new account, which could be It's doable, It's fine, but it can be a little bit fiddly, So think about what you need immediately, but also what tools you're going to be able to want to have access to further down the track so you don't have to create more paperwork for yourself and moving money around.

It seems as though as soon as you start talking about margin loans and things, it's a good time to be going. Okay. Might get some advice on this, yes, talk to a financial advisor or a financial planner and just see if it is right for you and get some information on how all of that works, because it can be a val valuable tool as long as that's right for you.

It seems as though as soon as you start talking about margin loans and things, it's a good time to be going. Okay. Might get some advice on this, yes, talk to a financial advisor or a financial planner and just see if it is right for you and get some information on how all of that works, because it can be a val valuable tool as long as that's right for you.

It is I mean borring to invest is definitely a high restray. It's not for everybody, it's for long term game plan, so always go and get advice. And the other thing you want to look for when it comes to picking the right platform for yourself is what other asset classes can you reach? You know, maybe you just want to invest in Australian shares now, but maybe next year, once you feel more confident with investing, you might want to access international share markers as well. Is that still going to be the right platform. Hence why I say look at what you need now, but also make sure you're taking into consideration your long term needs.

It is I mean borring to invest is definitely a high restray. It's not for everybody, it's for long term game plan, so always go and get advice. And the other thing you want to look for when it comes to picking the right platform for yourself is what other asset classes can you reach? You know, maybe you just want to invest in Australian shares now, but maybe next year, once you feel more confident with investing, you might want to access international share markers as well. Is that still going to be the right platform. Hence why I say look at what you need now, but also make sure you're taking into consideration your long term needs.

Okay, are there this is what step number five? I forgot to number the steps step four, step five. Are there minimum amounts that you need to buy or are there minimum amounts that you should be looking to buy in order to maximize efficiency? Because I can't. I'd imagine that you don't want to see all of your money eatn up in brokery.

Okay, are there this is what step number five? I forgot to number the steps step four, step five. Are there minimum amounts that you need to buy or are there minimum amounts that you should be looking to buy in order to maximize efficiency? Because I can't. I'd imagine that you don't want to see all of your money eatn up in brokery.

Yeah, so obviously there are lots of micro investing platforms around. I'm not a huge fan of micro investing at all.

Yeah, so obviously there are lots of micro investing platforms around. I'm not a huge fan of micro investing at all.

What do you mean by micro investing?

What do you mean by micro investing?

So investing with small amounts of money? So you know five dollars ten dollars look over time. You know, if you've got a consistent strategy in place, it's great. But as you know, I call it sort of the Friday Flat of is share investing. You're never gonna build. It's gonna take a really long time and highly unlikely you're going to build a million dollar portfolio. When you're investing with small amounts of money, you want to make sure that your portfolio is growing along with your own financial literacy. And obviously it doesn't mean investing constantly large amounts of money, but you need your portfolio needs to grow and you need to grow as well. So if you can only afford to invest ten dollars a month, that's fine, use that to get started. But the moment you find that you're actually able to start investing a larger amounts of money, you know, closer to sort of between five hundred and thousand dollars at a time, great, that's when you've outgrown those micro investing platforms, and that's when you are more likely to build that million dollar investment portfolio because you're investing larger amounts of money on a regular basis and taking it a lot more seriously. Investing more time, thinking about your goals, thinking about the strategy, thinking about the risk, tracking your dividends. It's like it's sort of you know, I speak to people about micro investing. They tend to have a couple of different micro investing accounts with you know, between a one thousand dollars and fifty dollars because there isn't enough in there. They're not investing their time and energy to make it grow and make it work for them. So it's kind of a little bit inefficient. Okay, that's my issue. It's it's still great to help people get started, and that's hence why I call it the Friday flat. You learn to get started like skiing on Friday flat.

So investing with small amounts of money? So you know five dollars ten dollars look over time. You know, if you've got a consistent strategy in place, it's great. But as you know, I call it sort of the Friday Flat of is share investing. You're never gonna build. It's gonna take a really long time and highly unlikely you're going to build a million dollar portfolio. When you're investing with small amounts of money, you want to make sure that your portfolio is growing along with your own financial literacy. And obviously it doesn't mean investing constantly large amounts of money, but you need your portfolio needs to grow and you need to grow as well. So if you can only afford to invest ten dollars a month, that's fine, use that to get started. But the moment you find that you're actually able to start investing a larger amounts of money, you know, closer to sort of between five hundred and thousand dollars at a time, great, that's when you've outgrown those micro investing platforms, and that's when you are more likely to build that million dollar investment portfolio because you're investing larger amounts of money on a regular basis and taking it a lot more seriously. Investing more time, thinking about your goals, thinking about the strategy, thinking about the risk, tracking your dividends. It's like it's sort of you know, I speak to people about micro investing. They tend to have a couple of different micro investing accounts with you know, between a one thousand dollars and fifty dollars because there isn't enough in there. They're not investing their time and energy to make it grow and make it work for them. So it's kind of a little bit inefficient. Okay, that's my issue. It's it's still great to help people get started, and that's hence why I call it the Friday flat. You learn to get started like skiing on Friday flat.

Okay, you learn the basics, basics.

Okay, you learn the basics, basics.

You learn how to how to move safely down the slopes. But then you've got to get yourself onto the different runs of the mountain and learn how to you know, go down moguls and steeper runs and scare over ice and we'll snowboard over ice. That's my issue with micro investing, So keep going, just don't stop playing in the safe kiddie pool.

You learn how to how to move safely down the slopes. But then you've got to get yourself onto the different runs of the mountain and learn how to you know, go down moguls and steeper runs and scare over ice and we'll snowboard over ice. That's my issue with micro investing, So keep going, just don't stop playing in the safe kiddie pool.

Hang on a week I sound all, now we could be eating a snow melts melted. I'm enjoying this, and please continue this crossed analogy here.

Hang on a week I sound all, now we could be eating a snow melts melted. I'm enjoying this, and please continue this crossed analogy here.

I'll go back to Friday Flats. We're skiing on flat surfaces. It's safe, it's can't hurt yourself. You're can't get too much trouble.

I'll go back to Friday Flats. We're skiing on flat surfaces. It's safe, it's can't hurt yourself. You're can't get too much trouble.

Are our clothes wet from being in the pool, because that would be mighty cold.

Are our clothes wet from being in the pool, because that would be mighty cold.

Well, if it depends how many times you've fallen down in the snow, if you keep falling down the snow, maybe stay on Friday Flats until you find yourself learning how to ski safely, stop and start and make turns and not smash into people.

Well, if it depends how many times you've fallen down in the snow, if you keep falling down the snow, maybe stay on Friday Flats until you find yourself learning how to ski safely, stop and start and make turns and not smash into people.

Okay, and then we get then we get into the pool.

Okay, and then we get then we get into the pool.

The tea bar and go, oh my god, Okay, we're stopping the there's no more pool analogy. Sorry, I got over excited. I diversified my analogy. Bring it back to the skiing snowboarding.

The tea bar and go, oh my god, Okay, we're stopping the there's no more pool analogy. Sorry, I got over excited. I diversified my analogy. Bring it back to the skiing snowboarding.

I understand what you are saying. I get it, and thank you for indulging me.

I understand what you are saying. I get it, and thank you for indulging me.

So can I recommend people speaking from experience? Because I built a three hundred and something thousand dollars share portfolio by doing this is parcels of one thousand dollars thousand all the project. I literally hustled one thousand dollars at a time. The moment I had a thousand dollars saved up, I immediately invested it before I got time to spend it, and I reinvested the dividends and it's grown and I gamified it by just sticking to that. That's why it's a three hundred and something thousand, three hundred and ten thousand dollars diversified share port follow It was enough for me to fathom and you know, actually see myself coming up with that money didn't seem unreasonable. So I just got on and did it. And because I've put more in, obviously, it's grown significantly with the help of a small, very small margin loan attached.

So can I recommend people speaking from experience? Because I built a three hundred and something thousand dollars share portfolio by doing this is parcels of one thousand dollars thousand all the project. I literally hustled one thousand dollars at a time. The moment I had a thousand dollars saved up, I immediately invested it before I got time to spend it, and I reinvested the dividends and it's grown and I gamified it by just sticking to that. That's why it's a three hundred and something thousand, three hundred and ten thousand dollars diversified share port follow It was enough for me to fathom and you know, actually see myself coming up with that money didn't seem unreasonable. So I just got on and did it. And because I've put more in, obviously, it's grown significantly with the help of a small, very small margin loan attached.

Yeah, so you're in the lap pool now.

Yeah, so you're in the lap pool now.

Yeah, it's actually quite satisfying to think that's never come out of my saving. I'm not biting. I'm not biting.

Yeah, it's actually quite satisfying to think that's never come out of my saving. I'm not biting. I'm not biting.

You just ignored men, didn't you, Because.

You just ignored men, didn't you, Because.

I'm sorry, I just got caught up in the moment of prode like think you should.

I'm sorry, I just got caught up in the moment of prode like think you should.

You should be proud of that. That is an amazing achievement.

You should be proud of that. That is an amazing achievement.

It is not single dollar has ever come from my savings or for my salary.

It is not single dollar has ever come from my savings or for my salary.

Really.

Really.

Oh wow, Yeah, I've hustled hard.

Oh wow, Yeah, I've hustled hard.

You certainly have. Okay, there's a few things as you mentioned there that I want to follow up on. You talk about dividends and at tracking dividends and reinvesting dividends and a bunch of other things there. It will take a quick break and come back, because that is our first five steps, and we have three more steps to go straight after the break. Canad Today we are doing a step by step guide to investing in shares. We've gone through the process of research and finding a platform and the minimum amounts or the amounts the meaningful amounts to invest in order to make a difference and to help build your portfolio and hopefully get ahead into the future. Next step, you've bought your shares. Now, what how often do you check them?

You certainly have. Okay, there's a few things as you mentioned there that I want to follow up on. You talk about dividends and at tracking dividends and reinvesting dividends and a bunch of other things there. It will take a quick break and come back, because that is our first five steps, and we have three more steps to go straight after the break. Canad Today we are doing a step by step guide to investing in shares. We've gone through the process of research and finding a platform and the minimum amounts or the amounts the meaningful amounts to invest in order to make a difference and to help build your portfolio and hopefully get ahead into the future. Next step, you've bought your shares. Now, what how often do you check them?

I would recommend people never check their portfolios daily or even weekly, Okay, I would suggest either monthly or even quarterly. Shares are naturally very volatile in a short to medium term, so if you're looking at it on a regular basis, you can become a little bit emotional and make knee jerk reactions which can come with regret. So just look at it every now and again, and what I strongly suggest people do is instead of checking the value of the portfolio, check the passive income. Is your investment portfolio still paying you a passive income? Has that passive income grown? You know, where are the sort which sources are they coming from? Do we need to add more to help diversify that portfolio? So look at the passive income. Otherwise you can sometimes make regretful decisions. And then obviously you want to stay informed what's going on in the world. You know what's going on in particular industries and the companies that you're investing in, and understand that there are times where you know there are headlines. You know, these headlines about billions of dollars being wiped off and calls of a market crash. There are always going to be those stories around. There's nothing new, but knowing what to listen to and what to turn the volume down on a brilliant resources. I recommend anyone tune into when they're worried about whether they should sell, particularly at times like this. Is a economist called Shane Oliver from AMP and he is brilliant at explaining what is going on in the world and what you need to do, and he helps really calm your emotions and explain everything and also to see the potential long term opportunity in what's going on. So you've really got to think about like shares as baking a cake. You know, once you put the cake in, you're giving me these looks as then oh my god, can it not again?

I would recommend people never check their portfolios daily or even weekly, Okay, I would suggest either monthly or even quarterly. Shares are naturally very volatile in a short to medium term, so if you're looking at it on a regular basis, you can become a little bit emotional and make knee jerk reactions which can come with regret. So just look at it every now and again, and what I strongly suggest people do is instead of checking the value of the portfolio, check the passive income. Is your investment portfolio still paying you a passive income? Has that passive income grown? You know, where are the sort which sources are they coming from? Do we need to add more to help diversify that portfolio? So look at the passive income. Otherwise you can sometimes make regretful decisions. And then obviously you want to stay informed what's going on in the world. You know what's going on in particular industries and the companies that you're investing in, and understand that there are times where you know there are headlines. You know, these headlines about billions of dollars being wiped off and calls of a market crash. There are always going to be those stories around. There's nothing new, but knowing what to listen to and what to turn the volume down on a brilliant resources. I recommend anyone tune into when they're worried about whether they should sell, particularly at times like this. Is a economist called Shane Oliver from AMP and he is brilliant at explaining what is going on in the world and what you need to do, and he helps really calm your emotions and explain everything and also to see the potential long term opportunity in what's going on. So you've really got to think about like shares as baking a cake. You know, once you put the cake in, you're giving me these looks as then oh my god, can it not again?

It is high risk. We've just wasted a whole lot of time with a skiing mix with swimming and baking a gate. Where is the baking cake going to end up? Is it going to end up in the zoo? Perhaps? Well?

It is high risk. We've just wasted a whole lot of time with a skiing mix with swimming and baking a gate. Where is the baking cake going to end up? Is it going to end up in the zoo? Perhaps? Well?

Building a sharebool follows like making a cake. Once you put the cake in the oven, if you're constantly opening the door every five minutes, you're probably going to ruin the cake, or it's going to take a lot longer to actually cook and be eaten.

Building a sharebool follows like making a cake. Once you put the cake in the oven, if you're constantly opening the door every five minutes, you're probably going to ruin the cake, or it's going to take a lot longer to actually cook and be eaten.

Is that it? That?

Is that it? That?

Is it? My friend?

Is it? My friend?

You're not introducing another kind of unusual element.

You're not introducing another kind of unusual element.

I promise there'll be no more analogies this episode.

I promise there'll be no more analogies this episode.

I promises you unable to keep What about dividends? How do they work? And how do you reinvest them?

I promises you unable to keep What about dividends? How do they work? And how do you reinvest them?

Great questions?

Great questions?

Two questions. I rolled them into one. I gave you a bonus okay.

Two questions. I rolled them into one. I gave you a bonus okay.

Two for the press of one. So dividends. Dividends are typically paid two times per year, and they get paid as a percentage of the share price. So a five percent yield means you earn five dollars and dividends for say one hundred dollars invested.

Two for the press of one. So dividends. Dividends are typically paid two times per year, and they get paid as a percentage of the share price. So a five percent yield means you earn five dollars and dividends for say one hundred dollars invested.

And so this is typically a share of the profits of the company after they've reported their earnings the halfway mark through the year, and then again at the full and if they've got x amount of money that they've made in profit, they may choose to pay a dividend to their Yes.

And so this is typically a share of the profits of the company after they've reported their earnings the halfway mark through the year, and then again at the full and if they've got x amount of money that they've made in profit, they may choose to pay a dividend to their Yes.

They look at their profits and they go, all right, we need to reinvest into the company, employment more staff, spend more money on marketing, product development, and so forth. And we've also need to pay out some money to our shareholders. So they'll split the profits a balance between the two in whichever way they see fit. And that's when you receive a dividend, which is the equivalent of earning rent from an investment property. To reinvest your dividends, which essentially means instead of taking that money for yourself and spending it, you actually say no, don't pay me that dividend. I want to have the money used to buy more shares in that company. Now, there are various ways of doing this. Some platforms actually will allow you to set it up with an online broker, or you have to go through the share registry online and tick the box for dividend reinvestment.

They look at their profits and they go, all right, we need to reinvest into the company, employment more staff, spend more money on marketing, product development, and so forth. And we've also need to pay out some money to our shareholders. So they'll split the profits a balance between the two in whichever way they see fit. And that's when you receive a dividend, which is the equivalent of earning rent from an investment property. To reinvest your dividends, which essentially means instead of taking that money for yourself and spending it, you actually say no, don't pay me that dividend. I want to have the money used to buy more shares in that company. Now, there are various ways of doing this. Some platforms actually will allow you to set it up with an online broker, or you have to go through the share registry online and tick the box for dividend reinvestment.

And that's all through that. You say, the share registry, that's the that's the.

And that's all through that. You say, the share registry, that's the that's the.

Body link market services.

Body link market services.

They will be the ones that send you all the correspondents in relation to when you purchase your shares. You'll get it in the mail or you'll get a Vira email saying you congratulations, you're in our shareholder in X company, and we are the registry for it and we'll be running this et cetera. And they are the ones that you can talk to potentially.

They will be the ones that send you all the correspondents in relation to when you purchase your shares. You'll get it in the mail or you'll get a Vira email saying you congratulations, you're in our shareholder in X company, and we are the registry for it and we'll be running this et cetera. And they are the ones that you can talk to potentially.

About It's all done online. And I mean you have to do this anyway because you need to upload your tax file number and your bank account details. How I will say, sometimes companies might not necessarily offer an automatic dividend reinvestment opportunity, which means you have to take it as cash. That doesn't mean you can't reinvest it just means you need to manually reinvest it so you get receive a dividend, I say a hundred dollars, hold onto that one hundred dollars, and then go and buy physically yourself one hundred dollars worth more shares. Okay, Dividend reinvestment is very powerful because you don't have to pay brokerage, so it actually can help you save money. But you need to make sure your portfolio is diversified also on that not dibidends. Some companies may go through a period of time where they have to pause a dividend reinvestment plan, which means you have to take it as cash and you still have to pay tax in coome tax that is on that dividend, whether it's reinvested or not as well, which a lot of people sort of miss.

About It's all done online. And I mean you have to do this anyway because you need to upload your tax file number and your bank account details. How I will say, sometimes companies might not necessarily offer an automatic dividend reinvestment opportunity, which means you have to take it as cash. That doesn't mean you can't reinvest it just means you need to manually reinvest it so you get receive a dividend, I say a hundred dollars, hold onto that one hundred dollars, and then go and buy physically yourself one hundred dollars worth more shares. Okay, Dividend reinvestment is very powerful because you don't have to pay brokerage, so it actually can help you save money. But you need to make sure your portfolio is diversified also on that not dibidends. Some companies may go through a period of time where they have to pause a dividend reinvestment plan, which means you have to take it as cash and you still have to pay tax in coome tax that is on that dividend, whether it's reinvested or not as well, which a lot of people sort of miss.

Yeah, and I want to talk to you then about the tax implications because this is and you've talked about that in the past, about people not realizing that they still need to pay tax on these dividends, these earnings. But there's also like franking, credits and all kinds of other elements that come in when we're talking about dividends, and it is helpful to have a good accountant when it comes to all of this.

Yeah, and I want to talk to you then about the tax implications because this is and you've talked about that in the past, about people not realizing that they still need to pay tax on these dividends, these earnings. But there's also like franking, credits and all kinds of other elements that come in when we're talking about dividends, and it is helpful to have a good accountant when it comes to all of this.

Yes, definitely because you need to look at the dates, so you know how long have you held that particular asset forward, do you qualify for any of capital gains, tax discounts? Really important? And then there's things like franking credits. We almost need to do I think an episode purely on franking credits because it's it sounds a lot more complicated than what it is, but it's incredibly valuable, particularly for people who are approaching retirement or are retired.

Yes, definitely because you need to look at the dates, so you know how long have you held that particular asset forward, do you qualify for any of capital gains, tax discounts? Really important? And then there's things like franking credits. We almost need to do I think an episode purely on franking credits because it's it sounds a lot more complicated than what it is, but it's incredibly valuable, particularly for people who are approaching retirement or are retired.

Yeah, it's one of the main kind of benefits to investing in Australia as opposed to investing overseas. The franking credit system we have here.

Yeah, it's one of the main kind of benefits to investing in Australia as opposed to investing overseas. The franking credit system we have here.

That's why I love Australian industrial shares. But you know, having knowing your franking credits, the tax credits that is attached to each of them, is really important. And then obviously being I wouldn't say meridiculous, but you need to be organized with keeping a record of what date you purchased, what dates you know, how much was reinvested at what share price, you know, what if the costs, how much you've spent on brokered all those sorts of little things that you need to do and be on top of.

That's why I love Australian industrial shares. But you know, having knowing your franking credits, the tax credits that is attached to each of them, is really important. And then obviously being I wouldn't say meridiculous, but you need to be organized with keeping a record of what date you purchased, what dates you know, how much was reinvested at what share price, you know, what if the costs, how much you've spent on brokered all those sorts of little things that you need to do and be on top of.

Did you have a question for me earlier. I remember earlier in.

Did you have a question for me earlier. I remember earlier in.

The episode, had you reminded me? Because I wish you would have forgotten.

The episode, had you reminded me? Because I wish you would have forgotten.

Well, I'm just thinking of potentially listeners who are hanging out for this question to hear me put on the spot, and if we didn't deliver, that would be an unsatisfied customer.

Well, I'm just thinking of potentially listeners who are hanging out for this question to hear me put on the spot, and if we didn't deliver, that would be an unsatisfied customer.

Have you as you know? Now to go back, We've been doing this podcast for how many years?

Have you as you know? Now to go back, We've been doing this podcast for how many years?

What? Three or three and a half four?

What? Three or three and a half four?

I think it's three. It feels like a it'll be approaching three. So have you started an investment portfolio? Well, started investing at least?

I think it's three. It feels like a it'll be approaching three. So have you started an investment portfolio? Well, started investing at least?

Ah, I taught you. You have taught me a lot. You know what I have done? Yes, you know what I have done. I have started seeing a financial planner, Okay, and investing is all going to come as part of that, all right, all right?

Ah, I taught you. You have taught me a lot. You know what I have done? Yes, you know what I have done. I have started seeing a financial planner, Okay, and investing is all going to come as part of that, all right, all right?

All right?

All right?

So if you have taught me nothing else, and you have taught me a lot of things, the number one lesson I have taken from you is the importance of getting professional advice, all right, all right, So therefore I think I've managed to evade any kind of trouble from you. Can I ask you one more question? Yes? And I've left you no time to answer this. There's this whole principle of with shares, the idea being that that time in the market is so much more important than trying to time the market itself. How do shares then work as a long term, long, long term, potentially investment strategy, that it's not so much about trying to find the right time to buy into the market, that it is about kind of how this is going to play out over ten, fifteen to twenty plus years.

So if you have taught me nothing else, and you have taught me a lot of things, the number one lesson I have taken from you is the importance of getting professional advice, all right, all right, So therefore I think I've managed to evade any kind of trouble from you. Can I ask you one more question? Yes? And I've left you no time to answer this. There's this whole principle of with shares, the idea being that that time in the market is so much more important than trying to time the market itself. How do shares then work as a long term, long, long term, potentially investment strategy, that it's not so much about trying to find the right time to buy into the market, that it is about kind of how this is going to play out over ten, fifteen to twenty plus years.

Well, when you look at the historical performance of all the different asset classes, and if anyone wants to get a quick, easy free resource, go to the Vanguard website and type in Vanguard chart because you can actually see all these different color lines. They're really easy to read. But time in the market wins, so historically the share market rises over the long run. So staying the course, going the distance reduces your risk of trying to miss the best market days. And even experts who've been doing this for ten, fifteen, twenty, thirty forty years still get this wrong. And you also look at the when you do get it right, the capital games attacks that comes off your profit and then obviously the cost of getting back into the market and then timing to try and get back in the right point. So there's a lot of danger in this. So if you had invested ten thousand dollars into the AX two hundred and twenty twenty and left it untouched, it would be worth significantly more than it would be worth significantly more today. So investing is like growing a tree. You know, you I promised there wouldn't best no.

Well, when you look at the historical performance of all the different asset classes, and if anyone wants to get a quick, easy free resource, go to the Vanguard website and type in Vanguard chart because you can actually see all these different color lines. They're really easy to read. But time in the market wins, so historically the share market rises over the long run. So staying the course, going the distance reduces your risk of trying to miss the best market days. And even experts who've been doing this for ten, fifteen, twenty, thirty forty years still get this wrong. And you also look at the when you do get it right, the capital games attacks that comes off your profit and then obviously the cost of getting back into the market and then timing to try and get back in the right point. So there's a lot of danger in this. So if you had invested ten thousand dollars into the AX two hundred and twenty twenty and left it untouched, it would be worth significantly more than it would be worth significantly more today. So investing is like growing a tree. You know, you I promised there wouldn't best no.

More analogies, and now we are. We have gone from skiing into the kitchen to bake a cake. Now we are growing a tree. Go on, plant those seats, all right.

More analogies, and now we are. We have gone from skiing into the kitchen to bake a cake. Now we are growing a tree. Go on, plant those seats, all right.

It's like planting growing a tree. You plant the seat and you see nothing for maybe a couple of years, and you think, oh my gosh, I planted. It's done nothing. And then you might see a little sprout and you think, oh, is that all I've got? That's nothing. It looks like a weed. You would get tempted to pull it out and start all over again. But if you just trust the process, make sure it's got some sunlight, some water, you know, watch the pests, then the elements, let it do its thing, and over time it grows into fruit tree and it gives you back fruit berries, apples, peaches, pears, whatever you like, as you can enjoy the fruits of your patients, your dedication and your commitment because you've just not tried to time the right time to plant, but you've just let it's time work. It's magic for you.

It's like planting growing a tree. You plant the seat and you see nothing for maybe a couple of years, and you think, oh my gosh, I planted. It's done nothing. And then you might see a little sprout and you think, oh, is that all I've got? That's nothing. It looks like a weed. You would get tempted to pull it out and start all over again. But if you just trust the process, make sure it's got some sunlight, some water, you know, watch the pests, then the elements, let it do its thing, and over time it grows into fruit tree and it gives you back fruit berries, apples, peaches, pears, whatever you like, as you can enjoy the fruits of your patients, your dedication and your commitment because you've just not tried to time the right time to plant, but you've just let it's time work. It's magic for you.

Are you using those fruits in the cake that you're making?

Are you using those fruits in the cake that you're making?

I could make I make a really good brownie and I sometimes put raspberries in that. So if I can filt me use raspberries, it's hay packup mix, I will.

I could make I make a really good brownie and I sometimes put raspberries in that. So if I can filt me use raspberries, it's hay packup mix, I will.

Okay, And that's good fuel for skiing.

Okay, And that's good fuel for skiing.

It is, But I don't go and open the door all the time and I'm checking the brownies.

It is, But I don't go and open the door all the time and I'm checking the brownies.

God, this is just one of those episodes where you'll have to listen to it three times just to make sense of all of the various analogies, which I'm sorry I have actually just deliberately tried to confuse you there At the end. I think, I think that's a great job. You know what?

God, this is just one of those episodes where you'll have to listen to it three times just to make sense of all of the various analogies, which I'm sorry I have actually just deliberately tried to confuse you there At the end. I think, I think that's a great job. You know what?

That was?

That was?

A what eight step program to investing into shares? I think gold star to us? Can we do that? Yes? We can award ourselves a gold star. If anybody wants more information from you, Canna, where do they find you.

A what eight step program to investing into shares? I think gold star to us? Can we do that? Yes? We can award ourselves a gold star. If anybody wants more information from you, Canna, where do they find you.

If you're a confused by all my different analogies, please feel free to reach out to me on Instagram at Sugar Mama TV and I'll happily come back to you as soon as possible with.

If you're a confused by all my different analogies, please feel free to reach out to me on Instagram at Sugar Mama TV and I'll happily come back to you as soon as possible with.

A personalized analogy.

A personalized analogy.

Yes, so I will even jump on a call and help I explain something.

Yes, so I will even jump on a call and help I explain something.

To confuse you even more. You can hear me every day with Sean Aylmer on Fear and Greed, daily business news for people who make their own decisions. Thank you for listening to how Do They Afford That? Remember to hit follow on the podcast, and the best thing you can do is to tell somebody else. Send them a link to this episode if you think they might be interested, spread the word about how do they afford that? Thank you for your company. Join us again next week

To confuse you even more. You can hear me every day with Sean Aylmer on Fear and Greed, daily business news for people who make their own decisions. Thank you for listening to how Do They Afford That? Remember to hit follow on the podcast, and the best thing you can do is to tell somebody else. Send them a link to this episode if you think they might be interested, spread the word about how do they afford that? Thank you for your company. Join us again next week