ANDREW BAXTER | Australian Investment Education

Andrew Baxter saw his parents exchange the time for dollars. He was well and truly on that treadmill until he realised that that money can actually work for you. Andrew has helped thousands of people enjoy a richer financial future, by educating, coaching, and advising on practical investment strategies.

In this episode we explored "The 5 myths of financial markets":

• Cash is king
• The stock market is risky
• The wealthy don’t use super
• Dividends is the best way to invest
• Give your money to the pros

Andrew Baxter is a highly regarded keynote speaker across a wide range of topics within the trading/investing and trader mindset space. He has spoken alongside some of the world’s leading names, including Robert Kiyosaki, Anthony Robbins, Sir Richard Branson, and Tony Blair. Andrew is renowned for his ability to translate complex finance into simple, everyday, easy-to-follow processes. His philosophy of no jargon, clear and simple explanations, and total transparency have earned him a legion of fans around the World, in and out of the investment and trading industry.

TRANSCRIPT FOLLOWS AFTER THIS BRIEF MESSAGE

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EPISODE TRANSCRIPT

Phil (33s):

G'day and welcome back to Shares for Beginners. I'm Phil Muscatello. My guest today has an impressive track record. He's a highly regarded keynote speaker who's spoken alongside some of the world's leading names, including Robert Kiyosaki, Anthony Robbins, Sir Richard Branson and Tony Blair. Hello, Andrew.

Andrew (50s):

Hello, Phil. How are you doing?

Phil (51s):

Good. Thank you. Andrew Baxter is one of Australia's leading financial educators, 27 years in markets as a pro trader and has taught thousands of investors. Andrew, tell us a little bit about your background, where you came from and how you first started getting involved in finance and markets.

Andrew (1m 7s):

Yeah, I guess I got hooked on this at a pretty early age, Phil. I grew up in the UK. I grew up in a pretty poor working class family; my dad worked in a car factory and my mum was a cleaner and it was a poor household, very happy but poor. And I had a part-time job after school; slave labour or a university of life as it were, saved up some money and at school we'd been talking about how to invest in shares. So I thought I'll give it a go. And so I had about 500 pounds saved up and I invested literally a couple of weeks before the '87 crash. So I ended up losing all of my cash. So it was a pretty hard, pretty brutal first experience dipping a toe in the world of investing. And I'm actually very grateful.

Andrew (1m 47s):

It's funny when you look back in life at the various experiences you have and I'm grateful that my first investment was that because I think subsequently for the last 27 years, risk management has been something that's really been front and centre for me as a trader.

Phil (2m 0s):

How did you lose all your money? Did you just not diversify did you only go in a couple of shares at the time?

Andrew (2m 6s):

Well, if we go back to back in the good old days of monochrome green monitors and share prices being published in the newspaper. Yeah, that was a really, really severe crash: black Monday in the UK. And yeah, and it really taught the guts out of everything. And being unskilled and not knowing what to do, I guess, like most people that are unskilled and not knowing what to do, I cashed out at the bottom of the market licking my wounds. And that's really where I guess things went wrong and it was a turning point for me. I've always been a voracious reader and you'll see from the books behind, I still am. And I've put in a lot of work to learn more about how markets actually really worked, saved up some more money and I went around again. And this time, my second trade, I made about 1100% on that, had about five grand invested in it, I had some more money saved up.

Andrew (2m 50s):

And two of the biggest lessons I think I took out of that: number one, it was the first time in my life I'd ever seen really money work for me. I'd seen my parents exchange the time for dollars, I was welling truly on that treadmill after school and in school holidays exchanging my time for dollars. And this was really a candle that was lit that money can actually work for you if you know what you're doing. And I guess also to that point, yeah, the money I made from that trade to actually pay for me to go to university. So I was first person in my family to go to uni and, you know, that opens a lot of doors as we all know.

Phil (3m 18s):

Education as well. And I think that's one of the lessons as well. I guess it was a hard lesson because I believe that the '87 crash was pretty short and sharp and markets recovered reasonably quickly, didn't it? Would it have been the case if you had held your money in the market at the time that you wouldn't have lost quite so much?

Andrew (3m 35s):

That may well have been the case where there was some short term gratification and I could have enjoyed that recovery. Of course that's the benefit of hindsight, which is always correct. I think having that experience arguably was the best thing, it was the best investment I could have made in my actual financial education because, you know, that was 500 pounds, which was everything I had at the time.

Phil (3m 55s):

A lot of money at the time.

Andrew (3m 56s):

Yeah. Now I work with, you know, tens of millions of pounds. And if I hadn't have learned that life lesson, then you have the risk on the table would be exponentially higher, I suppose. So you've, I think you've always got to look for the positive learning experiences. Either a "profit" spelt with an F or a profit with a PH. Either way, it's a learning point that's for sure.

Phil (4m 12s):

Profit spelt with an F what's that?

Andrew (4m 14s):

Yeah. That's what we help people do cranking out of the market that's for sure. So that was that; finished uni and I started my career in finance. I was hooked after my, my first profitable investment. And I started working in the city of London, worked for a couple of pretty large financial institutions where I was a trader and all of a sudden sort of growing up in a poor working class town where you're, sort of, rubbing shoulders with people that are making literally millions and millions of pounds a year was quite an eye opener. It's also probably one of the most Darwinian environments to learn your craft. There's no probationary period. Let's see how you go. You either have it or you're done and you're either employed or you're fired and it's really as simple as that. So it's a very, very steep learning curve.

Andrew (4m 56s):

And again, you know, it's funny how the sort of thread of life can go through. And again, I'm eternally grateful for the opportunity I had to start my career there and the lessons I learned.

Phil (5m 2s):

So you're a fellow podcaster and are tuned into a recent episode. And I thought we might discuss what you discussed on this episode, which was the five myths of financial markets. So let's go through them. The first is cash: cash isn't king, according to yourself.

Andrew (5m 19s):

Yeah, look, it's a widely held misbelief. And I think everyone needs to hold some level of cash. We've all got bills, need that sort of emergency fund plus some, especially given today's cost of living rise. But at the same time, you know, that cost of living rises a poison chalice. If you're holding cash, the misbelief that people have is that it's safe and relative to being exposed to the uncertainty of the stock market or the property market or bonds or managed funds for that matter, it probably does seem that way. But what people fail to realize when they're holding cash is that there's a silent, hidden risk that no one really takes the time to point out. And that's why, you know, podcasts like ours podcasts like yours, where financial literacy is being promoted is key.

Andrew (5m 59s):

Now what I mean by the risk on that, let's say you're earning 0.2% on your money. And right now in Australia, we're looking at a cost of living rise of yeah. Around about 5% officially. I think anybody that's ever been to a supermarket petrol station picked up an electricity bill paid for their private health care. Know that it's well beyond 5%, but let's say there's 5%. Yeah. Every a hundred bucks you've got held in savings at the bank. You are guaranteed to lose 5% a year based on a cost of living rise. How can that be described as a safe investment when there is zero upside and you are absolutely guaranteed that you will be 5% worse off next year?

Phil (6m 32s):

Well, it leads into the next point that you want to make. And that's that the stock market is risky. People sort of say, well, okay, I might be losing money in cash, but not quite as fast as I can lose it in the stock market.

Andrew (6m 43s):

Yeah. Look, I mean, when we talk about the stock market and certainly based on my journey, literally from trade one, it is a jungle. You have to know what you're doing. You cannot possibly expect to play on the world stage and let's face it. If you're investing in the stock market, it is the world stage because there are people that are participating in that that are the best in the world at what they do. And they're remunerated accordingly. If you don't know what you're doing, you're going to get handed some pain fairly quickly. And again, so many investors go in perhaps with a misguided view that if they buy and hold something for the long-term it's all right, we'll ride out the term or that sort of mindset. Sadly, doesn't work, not just in the current market, but it probably hasn't for the last four or five years for investors.

Andrew (7m 24s):

And so there's a requirement like anything, if you're going to play a game, know the rules of that game, otherwise you're going to have a really Torrid time.

Phil (7m 32s):

I think that's really important to understand isn't it that a it's like learning a language, people sort of approach the markets. They've heard, someone's made some money out of the markets, one of their mates, one of their friends, someone, someone at the pub, but there's some hard lessons there and it's like learning a language. It's not going to happen overnight. Isn't

Andrew (7m 48s):

Absolutely not. And again, you know, like learning a language, you know, the flip side is learning language from a textbook is incredibly painful. We're going to sit in a Piazza in Italy, you know, pick it up by osmosis fairly quickly. And in some regards that's really how the stock market can work too. You've got to be in it to learn. It's like learning to swim. You've got to get in the pool. You can't describe how water feels. You've got to get wet and see what it feels like to get a mouth full of it and everything that goes alongside that. But at the same time, it's probably not a great idea to heal yourself in at the deep end, start at the shallow end, have a paddle, see what it feels like. And then, you know, as your skillset grows and your confidence and understanding grows, then, then in a very structured way, move down the pool

Phil (8m 26s):

And keep learning no matter what, keep learning

Andrew (8m 28s):

Happens every day, 27 years in and still learning things. That's for sure.

Phil (8m 32s):

Yeah. Is there anything recently that you've learned that you wanted to share? With all your experience is there something that you've just learned recently?

Andrew (8m 39s):

Yeah. I think if we take the terminal and inflation pressures that we're seeing around the world, not just here in Australia, you know, we do a fair bit of work in the US it's really mark over there. Normally during a time of inflation, you know, you typically see gold perform very well, and there's an economist, that's something I was taught at university quite some time ago. And in this cycle, that relationship appears to be broken down. And I think that the part of the reason for it, it's not exclusively the reason, but part of the reason for it, I think has been the emergence of crypto investing, particularly where you do have a non-correlated asset and it's given people an alternative to look at and yeah, crypto, I'm not an advocate for it by any stretch of the imagination, but it's commanded, I'm really massive market share, not just with young people that are looking to experiment, but with, you know, saying some fairly chunky allocations out of self-managed super now into that space.

Andrew (9m 26s):

So I think to an extent know there's been a little bit of a breakdown of that relationship it's also to do with the weakness and the US dollar. But yeah, crypto, I think has certainly sort of cut the grass of gold is that go-to safe haven asset. Although, you know, it's kind of ironic that we're talking about crypto being a safe haven when we look at the more recent performance in it.

Phil (9m 43s):

Well, it's interesting that you mentioned super there because that's the next myth we're going to talk about is that the wealthy don't use super.

Andrew (9m 48s):

Yeah. It's an interesting one. And we've published this in various adverts and you usually get your fair share of trolls going on. You know, as you say, the wealthy don't need super, the wealthy aren't using super to have a pension, let's get that straight. They've got multiple other streams of assets that pay very good income that they don't need super for that a lot of people overlook, particularly with self-managed super the virtues that it brings to the table, at least currently under legislation tax-wise, asset protection wise, but also, you know, it's got the potential to be an absolutely magnificent intergenerational asset protection vehicle. And there are very few things that are tax effective in that space and the wealthy most definitely use super.

Andrew (10m 31s):

And they use it particularly for that. Yeah. And the cynics out there will go, oh, it's just a way of avoiding paying taxes. Really no way to avoid paying tax because your super's audited every year, the ATO are all over it and you're going to pay your 15%. Okay. It might be less than what you might pay outside, but you will be paying tax. So again, you, the wealthy do you Sue, but, and they do pay tax.

Phil (10m 50s):

Why is it important then for a beginner investor to look at their super, I mean, a lot of people just think, well, they don't even think about it. It's taken out of their salary every fortnight month or whatever. Why is it important to consider it? Even if you're not wealthy,

Andrew (11m 5s):

It's something that can be a stalwart for you down the line. And people look at their financial circumstances and I say, look, I'm not wealthy. Look, I was born in a working class family and we were poor, but it doesn't mean to say that's where you stay. And so I think, you know, taking the time to be, to be educated as to how you can get your money working as effectively for you as you can, is a crucial development stage and a conversation to have with yourself, irrespective of your current financial circumstances. And I really emphasize that current financial circumstance because yeah, there were a lot of people out there Phil that are doing it very, very tough right now it's an expensive cost of living. There's been incredible amounts of trauma, whether that be Bush fires, droughts, COVID，， war in the world and everything else that goes alongside that.

Andrew (11m 49s):

So there's been massive amounts of uncertainty, which has left people feeling very and very, very uneasy, but whatever your circumstances are right now that doesn't have to be your life story. If you get yourself squared away and take the opportunity to, to not dream because dreams are just dreams, but set some goals and priorities for yourself. Because I suppose a goal is just a dream with a deadline they're similar but different and say, look, if making more money or having a better quality of financial life is, is something that's important to you start allocating some time to learn podcasts like this perfect place to start, because it's going to give you a little bit of a grounding it's free and you're going to get a variety of perspectives and start getting yourself educated as to what opportunities are there.

Andrew (12m 31s):

And you may not have much in super right now, but it doesn't have to be that way. We've got changes in legislation July one this year, where more money is going to be put into super by your employer. And so that money can grow, but take more of an interest in it. The whole passive let's just wack it in an industry super and hope it goes up. Yeah, I think industry super in particular has been shown to be not the place that investors probably think it was, but they've done very well with their marketing. And I'm sure, you know, we might open ourselves up to some criticism there, but the facts speak for themselves when you either look at the performance or some of the hidden fees and some of the charges that they've slugged their members with recently to cover any litigation, they might be in for wrongdoing down the line.

Andrew (13m 10s):

It's not the champion of the people, it's a business. So learning how to manage it yourself, whether that be through self-managed super or choosing a retail super that you can put your money in, but have some control. It's your future have control of it.

Phil (13m 22s):

Many people will come in thinking that they want dividends. I think dividends stocks are going to be safe and providing an income, but we believe it's a myth that dividends and chasing dividends is the best way to invest.

Andrew (13m 34s):

Yeah, it's an interesting perspective. And I think, you know, there's a distinction to draw in there and that is that companies that typically pay dividends have good earnings and they're good quality businesses. We like those kinds of companies, the area that perhaps we would sort of approach those companies differently from is that our dividend might be paid twice a year. And again, let's be quite direct on this. When a company pays a dividend and particularly if it's what we call in Australia fully franked as a uniquely Australian situation where the tax is paid on that that's an incredibly important income flow for people, particularly in, in self-managed super is a hugely important part of the game. If you have a dividend reinvestment plan, again, that's a very, very useful way to invest. However, from an income perspective, number one, it's very vulnerable to the company changing its policy.

Andrew (14m 21s):

And we saw that during COVID where, you know, multiple companies, Harvey Norman as one example, the banks and other scaled back their dividends, didn't pay them on given the uncertainty of the economy. And that was no question about it, the right decision to make at that time, if your income is solely dependent on that, somebody else has decided that, sorry, you're not getting paid this year, which is probably not the sort of news that you want to receive. So on one instance, there's a level of vulnerability for your cashflow, but perhaps the one that people don't necessarily identify with is that when a company pays a dividend, let's say it's paying out a billion dollars in dividend. That money is returned to the shareholders, which means it's no longer an asset of the company. The value of the company drops by a billion dollars. So whilst you've received your income, it's actually come from your capital account because invariably the share price will drop by a commensurate amount.

Andrew (15m 9s):

So you've moved the money from your left pocket to right pocket. You're not better off. You've just moved it from capital to income and possibly open yourself up to bank tax on it now. So in that regard, it's not the blind strategy of just buy, hold and hold for a dividend. And I think there are far better ways in the stock market to be able to generate far more regular and more controlled levels of income. If income is your goal, the underlying companies that pay dividend, we typically like because they're good businesses.

Phil (15m 34s):

Okay. So the last of the myths is give your money to the pros. A lot of people think, oh, well, there's a very highly trained people in the markets and they've got lots of experience and they've got very glossy brochures and lovely websites. Why shouldn't we give them the money?

Andrew (15m 48s):

How long do we have left on the podcast?

Phil (15m 51s):

Just give us your just quick answer your prices on this one. I think I know where you're going to be going with this, but yeah,

Andrew (15m 57s):

Well let's look at benchmarking first of all. So if we take the ASX 200 as a benchmark, according to Canstar 81%, or just under 81% of fund managers in active funds, underperform the ASX over a five-year period. So if you're giving your money to a fund manager, unless you happen to pick the one in five that gets to outperform, you are pretty much sentenced to underperforming the market. In addition to that, you're going to be paying. And this is I guess, the whole gig for a funds management business. And I've worked in them and I've, I've run a hedge fund myself in my past. It's all about assets under management that 2% annual management fee rain, hail or shine that's coming in the door. So it doesn't matter if the funds or performance is up or down, the money keeps coming in.

Andrew (16m 38s):

And so that level of care, and I'm not suggesting for a moment that a fund manager that doesn't have a duty of care to its investors. They're going to try that their bit within the mandate that they have, but they're not going to take the same level of care over your money that you would because it's your cash. You've worked hard. You've made the sacrifice, you know, what was involved with earning it and then saving whatever was left after the bills and then making that the decision to invest it. So, you know, giving it to the pros is something that people have relied on for a long time. And the Royal commissions also shown that to be a very flawed model too. I mean, there are a million other reasons we can give you, but underperformance and I guess your vested interest in your money should be higher than anybody's would be the two overarching points.

Phil (17m 16s):

Okay. Then a listener's decided to grab the bull by the horns, start trying to manage their money a little bit better in their investments a little bit better. What would you suggest in terms of managing risk?

Andrew (17m 32s):

Yeah, that's a brilliant question. And particularly given where my journey started these days, you know, financial instruments have evolved quite considerably and I'm a huge advocate for using exchange traded funds for investors, particularly when they're new, you've got the ability to have a thoroughly diversified portfolio in one transaction without lots of fees. And so from a purely diversification perspective, especially if you're starting small, which you should be, that's probably a good place to kick off as a step one. Step two is from a risk management perspective. Yeah, I'm a huge advocate for using stop losses. If the trade is not doing what you think it should be doing, hit the exit button, keep your powder dry and you can always buy in transaction fees are so low now it's not prohibitive to be able to buy and sell anymore and take your time and look to get back in when the dust settles.

Andrew (18m 21s):

And I'm not suggesting that you're in and out every day and trying to day trade the market and, you know, without sort of putting a date stamp on when we're recording this. Yeah, we've seen quite a significant selldown over the last four or so months. So if you bought in at the top of that, selldown, you know, you're now looking at 15, 20% drop. If you're invested in US equities and that's pretty painful. Whereas if you had a level of risk management that said, look, if it moves down by more than X or, or below what we in the industry called a support level, time to hit the exit button and pack up the bat and ball and come back later on when things have died down those two things, I think set people up in a good way to get started. And I'm very minded. Some of the advice I got on the London trading floor, I think it was my first or second day.

Andrew (19m 2s):

One of the old timers, about 35. It's an old timer in that industry, I guess said to me always remember this son, all big losses used to be small ones is just you that a lot of get out of control. And that advice has stuck with me over the years. So, you know, don't turn a small loss into a big one. If it's gone wrong, hit the exit button, you can always come back again.

Phil (19m 20s):

So setting a stop-loss, how would you suggest people look at that? Is it a percentage term or what people feel comfortable with? I mean, it's a very difficult thing. If you've got no one guiding you,

Andrew (19m 30s):

It is. And from a definition, point of view of stop loss is a level that you set before you get into the trade. That's also quite important, you know, because there's no emotion involved. Pre-trade once you're invested, I guess you're, you're in the heat of the game that if it hits a certain predetermined level, that's where you're getting out. And I like my clients to have those stop losses actually running in the market live so that they don't get time to think about moving them around. It's set in stone and it's there. So where do you put it? And you're quite right without guidance. It is quite hard because if you stop loss is too tight, you're going to get incredibly frustrated that it ticked down and then pushed higher and you should have still been in it. If it's too loose, you kind of have to wear and absorb the pain of it moving further away from you then perhaps you'd want to.

Andrew (20m 12s):

So yeah, there is an art form and, and we spend a lot of time teaching clients around this. I think looking for support levels in the market, those logical levels, typically round dollar amounts and giving yourself a little bit of wiggle room underneath is probably a good start. I'm not an advocate particularly for fixed percentages, but they're better than nothing. So yeah. Rather like let's say you put say five or 7% on it, given the market's a bit more volatile at the minute, say 7%, if a job's below 7% I'm out and yes, you're down 7%, but better to be down seven than 20

Phil (20m 41s):

Or 30 or 40

Andrew (20m 43s):

Or 50, or it keeps going,

Phil (20m 45s):

Which we're seeing a lot of at the moment. Yeah. Well this leads into an action plan. Why do you need an action plan? And I suppose stop-losses are just a small part of any action plan.

Andrew (20m 55s):

Yeah. Look, I'm a huge believer in, in planning. Nothing in life happens by accident. It's a combination of skill and focus and deliberate intention and an action plan starts to do exactly that. Sadly for a lot of people, when they approach the market, it is confronting because maybe they set up an online trading account, put some cash in it. And lo and behold here are these shares that you can invest in. And typically if you're brand new, looking at a chart, it probably looks like a bunch of squiggly lines. And you know, trying to make sense of that can be quite challenging. So setting your standard and say, well, number one, what is my goal here? And I know that sounds like a really dumb question to ask. You know, he goes probably to make money, but there are lots and lots of different types of way of making money. Is it income? Is it a moderate growth strategy?

Andrew (21m 36s):

Is it more speculative? Are you someone that's bearish the market and you're looking to profit from a fall and firstly working out what your intention is pretty blunt. And yes, we know it's to make money, but it's a question of how are you going to do that? Secondly, get what time do you realistically have to dedicate to your new hobby, which you want to move from being a hobby. You know, hobbies, cost, money, businesses make money, and you want to make that transition fairly quickly. So what sort of time are you setting yourself out for to do this? And again, you've got to be realistic. I have five kids, young kids. My oldest is seven. And so if I said to my wife, I'm going to start day trading, which I've done in my career in the past. So don't expect to see me between 10 and four.

Andrew (22m 16s):

It's not wholly conducive to my family life. And quite frankly, I've got no interest in doing that. Anyway, they traded 98% of day traders lose money. So it's not the best business to be in, unless you're pretty good. So if you've got, say, let's take an hour a week, which I think is something most people could probably find, what are you going to do within that hour a week? And it may be a question of browsing through some charts, maybe listening to some podcasts through the week in that passive time, maybe on the commute to work or something and join that hour of analysis. And decision-making set your stand up for the week. And then over the course of each day, five minutes a day, just to have a quick look at the market to see what it's doing, maybe mid-morning is probably, yeah. Have your morning. Coffee is probably a good time.

Andrew (22m 56s):

See how it's opened. You can see where it's at. And now what we've done is worked out what our overall intention is. We've created a little bit of time and some micro commitments towards getting started. Next thing is to get your account funded. It's no point having a gun with no bullets and then take the lunch small, slow, and steady. See how it feels because no, one's going to describe that feeling to you of what it actually feels like to have real money in the market until you've done it.

Phil (23m 20s):

It sounds like you want people to take incremental steps, just little small steps at any time and not just jumping in bits and all.

Andrew (23m 27s):

Yeah. If he jumped in boots and all invariably, unless you happen to be quite fortunate or lucky, you're going to get your backside handed to you. Now, if you look at the way the markets have behaved over the last, say two years through these sort of 2020 2021, you could buy almost anything. And it went up in value. And very sadly, a lot of people got involved with the market, which is great, but their confidence was so far past where their core skills and competence. And this year we've seen a much choppier market. A lot of those gains have been given back. And those people that had the fortitude to start one, two years ago are starting to have a massive wavering and confidence. And they've also decimated their account to a large extent.

Andrew (24m 9s):

And it's because they've started a business without really building a foundation properly. They just jumped in, build these incremental steps and these sort of micro commitments feel anyone can do this. But if you, if you say is an elephant and a knife and fork to eat it with, which effectively is the world of professional trading, it's too overwhelming for people take it. Step-by-step and as your skill goes, you move on to the next step. Don't try and jump five ahead. Because when you do that, the whole foundations are a bit shaky and it does come crumbling down. And you'll probably give it away only to probably given away one of the best businesses in the world, simply because it wasn't the market. It wasn't your broker. It was you. And the process that you took to get there. And you've got to own that.

Phil (24m 49s):

Yeah. It's really important to own what you're doing. Isn't it? No one else is going to look after your money like you do.

Andrew (24m 54s):

Not at all.

Phil (24m 54s):

Okay, Andrew. So let's have a chat about your podcast and also Australian Investment Education. If listeners want to come and see you, what would they be expecting from you?

Andrew (25m 4s):

We offer a number of pathways. And I think the podcast rather like today is such a brilliant innovation. There are squillions of mother finding the good ones, obviously becomes a little bit more challenging. What our goal was each week was to provide a level of currency of what's going on, not just in markets, but in terms of personal development and the steps that you can be taking as an investor, because for a lot of people, yeah, it is quite overwhelming making the decision to manage your own money. And so by being able to chunk it down into thin pieces, what's the psychology required. What are the hard tools in terms of a broking account? What sort of education, what books would you look at? What's the impact of an interest rate rise on the stock market? Why did the election happened the way it did?

Andrew (25m 45s):

And what does that mean? All of those sorts of things are pivotal questions that they're kind of the background to feeling more and more comfortable with something. And you can imagine a painter just painting out the background that ultimately gives the picture some depth. So very, very important part as a podcast. And again, being weekly, it's there, it's very easy to digest a meat and potatoes business or education business. Australian Investment Education is really a flagship. And you know, for 20 years now, we've been at the Vanguard with that operation. And our purpose is really simple and it's to help everyday people. You know, it's not about the big end of town. It's about people that are serious about wanting to have a different future. It's about really helping them create tomorrow's wealth today. The actions we take today determine where our future is, but it's so hard.

Andrew (26m 27s):

It's so easy to procrastinate, so easy to put off. And next year I set a new year's resolution to do this, and it never happens. So we provide a really practical, step-by-step easy to learn. Jargon-free supported education and advisory environment and ecosystem. If you will, that can let people come in the door with literally zero knowledge and within a fairly short period of time, a matter of three months or so, be up and running and feeling very, very confident with what they're doing in markets, by following a process. Now we've had about 50,000 people go through that channel now. And yeah, it's a very well-trodden path. It's kind of like a minefield. If you're going across it, walk in the footsteps of the people that have been there. And I guess the biggest challenge, there are a number of people out there that know how to make great money trading.

Andrew (27m 11s):

The skillset is in being able to articulate, being able to explain that in a way that people can not only understand, but build confidence to actually do because more than anything, markets are not a spectator sport. You've got to take that action step. You've got to get involved and you've got to take action if you want to make money. And so we provide all of the links in the chain to help people there.

Phil (27m 30s):

What are some of the misconceptions that people coming to you often have?

Andrew (27m 33s):

I think probably the biggest one, and this can be a massive roadblock, or it can be a real tail wind, depending on the circumstance of the person. In my experience, money only flows to people that are open and that they're teachable. And when we've had people come in that perhaps have in their opinion, got a reasonable level of knowledge, it's things that they know, but just because they know them doesn't mean to say that they're correct. And sometimes having to unpack and unlearn some of those bad habits that have become quite ingrained. You know, I'm a terrible golfer. And if a pro looked at my swing, I think for the first 20 lessons, they'd probably be unpacking the, the 30 years of incredibly bad habits that I've built up in there. Whereas if I were somebody that was brand new with no preconceived idea, it'd be much easier to teach because there's no pushback and defence of a previous belief that may have been wrong.

Andrew (28m 21s):

So as an observation, and I've seen that across literally tens of thousands of people. Now that's a big one. So I'd invite people to be open. The approach to markets, particularly that we take is probably quite different to what you may have looked at in the past. And I guess the reason people come to us is because what they've done in the past, hasn't worked. So you kind of gotta leave that baggage at the door and be open to a different outcome. So that is a big challenge for a lot of people.

Phil (28m 43s):

And I can't let you go without asking all of the speakers that you've worked alongside of. What's one of the main lessons you've learned from them.

Andrew (28m 52s):

Oh, gee, we said, they've all been quite different. If I were to give you say four real short snapshots, Mark Bouris was an interesting one. It talks about entrepreneurial-ism and having an exit strategy on your business before you start it, we take that into the trading space. So having an exit strategy on your trade before you get in is again, something that most investors don't do, they get in, and then once they're in, they want to work out what they're going to do as opposed to having a defined strategy. I think Tony Robbins be absolutely resolute in your goal. Be concrete, be so firm on what that goal is, but be extremely flexible on the way to get there. Richard Branson just be authentic in terms of what you are, enjoy, what it is, see your shortcomings and faults and leverage off his strengths.

Andrew (29m 34s):

No question about that. Here's a good one for you, Mike Tyson, everyone's got a game plan until they get punched in the face. And that's a great one for trading because you might have a plan until the market decides. Otherwise, just like I did way back in 1987, I wasn't buying my Rolls Royce that day. I was handed my backside on a silver platter. So yeah, we've all got a plan until there's a setback. And that's why getting educated in terms of mechanics, but also in terms of your psychology and mindset, two absolutely crucial, very different paths in the journey they're intertwined and they're as important as each other. So it's not just about learning about how to analyse it's about learning, how to manage you

Phil (30m 10s):

And where can listeners find out more?

Andrew (30m 12s):

Hit us up on social is Australian Investment Education. You'll find us across just about every social platform there is on the planet. So you'll find us on Twitter. You'll find us on Instagram, Facebook, particularly it is on our website, australianinvestmenteducation.com.au take a look at what we do there. And of course our Money and Investing podcast. So if you follow podcasts, whether it's on Spotify or the Apple iTunes, wherever it might be, where there, and we'd love to connect and share some of our wisdom with you and maybe help you on that pathway.

Phil (30m 38s):

Fantastic. And we'll put all those links in the show notes as well. Andrew Baxter, thank you very much for joining me today.

Andrew (30m 44s):

Absolute pleasure, Phil. Anytime,

Shares for Beginners is for information and educational purposes only. It isn’t financial advice, and you shouldn’t buy or sell any investments based on what you’ve heard here. Any opinion or commentary is the view of the speaker only not Shares for Beginners. This podcast doesn’t replace professional advice regarding your personal financial needs, circumstances or current situation