BRENDAN DOGGETT | From Sharesies
BRENDAN DOGGETT | From Sharesies
What’s going on in markets at the moment? Does anyone have any idea? Are you looking at coal or lithium as the energy of the past, present and/or future? I was joined by Brendan Doggett to talk about the data from Sharesies and what it's revealing about investing behaviour.
“People learn through, you know, podcasts, great blog content talking to each other. And they, they get that, you know, the markets and downturn dollar cost averaging is super boring, but super popular and a really good way to invest through the market's ups and downs. And when the market's down dollar cost averaging is even better because the market's all things being equal will, will kind of keep continuing to rise.”
Brendan Doggett is the Country Manager of Sharesies AU. As the first Country Manager appointed to Sharesies AU, his role is to champion and grow the Sharesies brand in the Australian market. The Sharesies platform has over 550,000 investors across New Zealand and Australia who’ve collectively invested nearly $2 billion AUD.
Prior to joining Sharesies, Brendan developed extensive experience in the financial services industry in Australia, holding senior positions at Westpac, BT, Citi and Macquarie Group leading teams in risk and product. It was during this time that Brendan saw firsthand the power of giving everyone an equal opportunity to build wealth. Brendan is passionate about enabling people with $5 to have the same investment opportunities as those with $5 million and giving people the confidence and motivation to grow their wealth over time.
“The last eight months have been particularly volatile after quite a good bull market. So people were investing market was going up, they'd buy, you know, five companies and some ETFs when the market keeps being volatile. Some of the lessons I think of the last eight months have been when you're concentrated in companies, they can go up and down. And that's not a, that's not a comfortable place to be looking when your portfolio might be in the red in times like this. And so we see a return to more Australian blue chips or companies which can pass on inflation. Like you, you know, Wesfarmers Coles, Woollies whatnot, but then also ETFs give that diversification.”
TRANSCRIPT FOLLOWS AFTER THIS BRIEF MESSAGE
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Shares for Beginners.
My nephew is 12 when I was back in, back in New Zealand and Air New Zealand was doing a capital raising. He turned to me and said, I've got Air New Zealand in my Sharesies thing. Well, will this impact, you know, will my shares be diluted? He's 12. He's talking about share dilution. Like he understands compound returns and compound interest. Like I've been in the industry for 25 years. I still don't believe it it's but it's magic and, you know, returns will compound. And that's a massive gain that you're making returns on returns.
G' day. And welcome back to Shares for Beginners. I'm Phil Muscatello. What's going on in markets at the moment. Does anyone have any idea? Are you looking at coal or lithium as the energy source of the past present and or future. Here to explain everything is Brendan Doggett. Hello,
Brendan. Hi there. Thanks for having me.
Thank you very much for coming. Brendan Doggett is the country manager of SharesiesAU, which is a brokerage. We can call it a brokerage. Sure. Yeah. Description. The Sharesies platform has over 550,000 investors across New Zealand and Australia who have collectively invested nearly 2 billion Australian. So we were just chatting before we hit the record button, but you're from Wellington New Zealand when we were just talking about what a great little startup FinTech hub, New Zealand and Wellington especially is.
Brendan (1m 21s):
Yeah. So, so born in Wellington came over here in 2000. Yeah. Sharesies is a Wellington based firm. Lots of great fintechs in New Zealand, lots of good SaaS companies. Like the Kiwi ingenuity is really, really strong. And I think the community and Wellington particularly is very supportive of each other. So you have founders helping out other founders and people who've made some money maybe in early when they set up and got into Xero early and reinvesting that in startup. So it's a really kind of nurturing culture. I think that Wellington,
Phil (1m 48s):
Maybe something to do with the shakiness and the windiness of the city.
Brendan (1m 51s):
Oh yeah. You have to be tough and tough in New Zealand and, you know, good old Kiwi ingenuity.
Phil (1m 55s):
Yeah. I, I was really disappointed when I was, we were in Wellington. We were in that restaurant with the swinging chandelier. Oh yeah. Yeah. And I wasn't swinging the day that we
Brendan (2m 3s):
Probably one of the only days that didn't.
Phil (2m 6s):
So tell us about your background in finance.
Brendan (2m 8s):
Sure. So yeah, born and raised in Wellington went to university there started at Ernst and Young decided to head for London, but ended up in Sydney when the Olympics were on and thought, wow, this is beaches weather parties, jobs, finance, it was all kind of perfect. So I didn't get to London and then went to work at the stock exchange and, and kind of went through the houses, Macquarie and Citibank and, and Westpac mainly in compliance roles early in my career and legal roles. So really got to see the impact of good or bad decisions on customers and the financial services industry. And then the job at Sharesies came up. You know, I was at Westpac for seven and a half years ready for a change, good Kiwi company, great brand affinity in New Zealand, my nephew, it's the only job that he's ever been impressed that I have at Sharesies.
Brendan (2m 52s):
Cause he knows it he's in Wellington and then got the job spec through. And two of the co-founders happened to walk past my house and Darlinghurst, which was a very weird coincidence. So it was like, this is fate. I've gotta get this job. And I'm lucky enough to actually have got it.
Phil (3m 6s):
Let's talk about compliance. And because that wasn't really the point of the interview, but we did start raving again before we hit the record button. Compliance seems to be, I don't know. It feels from the outside looking in for someone who's not from a finance background like myself, that all these rules are set up obviously to protect people, but it's also not helping people find good financial advice.
Brendan (3m 34s):
That's right. So I was at Macquarie equities just before the GFC and after the GFC and compliance, compliance is very important. The outcomes for compliance are good outcomes for customers. So their money is protected. They're getting advice, which is in their best interest. And
Phil (3m 48s):
We should just define here compliance all the regulations.
Brendan (3m 51s):
Yeah. Regulations. So around
Phil (3m 53s):
Brendan (3m 53s):
Yeah. ASIC would be the, the, you know, the biggest regulator with regulations and relation to advice and the financial services industry that impacts us. And it's all around good customer outcomes, which no one would disagree with. That's like, that's awesome money.
Phil (4m 7s):
It comes from a good place,
Brendan (4m 8s):
Doesn't it? Yeah. And money people work hard for their money. They want to know it's secure. They want to know, someone's not just giving them dodgy advice for their advisors best self-interest. And, but it's been going for a long time. It's very complex. The corporations act is massive. The regulatory guides are incomprehensible. Sometimes people are worried. There's lots of things that can go wrong sometimes for by the advisor or just the market. So there's a lot of risk in that. And that creates a lot of complexity. So you've got your people on the street, you know, getting advice and investing well is important, but at the moment with the complexity of regulation and, and how the industry's going, either advice is very expensive or so general that it's not helpful.
Brendan (4m 50s):
And people just dunno where to go. So it, it is, it's a bit of a, it's a real gap. You can't get good quality affordable advice at the moment we,
Phil (4m 58s):
We append all of our episodes by saying, you know, consult a financial advisor, but then a financial advisor is not someone who's accessible to most people, especially if you don't have a lot of money. Yeah.
Brendan (5m 10s):
Where, where do you even find them these days?
Phil (5m 12s):
That's right. Yeah. Where do
Brendan (5m 13s):
You find people leaving the industry? Yeah. Like where do you yeah. Google them. What, you know, it's hard to, hard to even find, you know, do you have to go into an office? Do you fill out some forms? Do you need $200,000? Do you need, like, it's, there's so many barriers to
Phil (5m 25s):
That. And, and it's also like, you can't even make a phone call and ask them a simple question, you know, because suddenly you've gotta be given the whole $5,000 statement of advice. Yeah.
Brendan (5m 36s):
Because there's so much risk in it. And, and a good advisor will not just give you a little bit of advice cuz they wanna know your, you know, your, your goals, your investment horizon, what debts you have, how you're insured, what your family situation is like, how much you're on your mortgage. Like that's a big conversation. So they're very yeah. Reticent to, to give that advice for, for good reasons. But people just need a bit of help
Phil (5m 56s):
And isn't there an inquiry going on at the moment? Is it the Levy inquiry?
Brendan (6m 1s):
Yeah. There's looks to be some changes to, to the advice compliance structure. There is a best interest duty, which is kind of like you have to look everywhere and make sure the advice you're giving is in the best interest of the client. And there's no better advice anyway. That's massive. Right. And that's yeah. You know, it's not well defined. So people are a bit worried about that by giving advice. So, so some of that seems to be that that will be UN unwound a little bit, which might mean that advice is, is easier to get. But again, there's lots of compliance around that. So, so we'll see what happens.
Phil (6m 31s):
And many people, especially younger folk now are going online and YouTube videos and podcasts and TikTok and Instagram and all sorts of places to get financial advice. Yeah. What are your thoughts about that?
Brendan (6m 42s):
Well, it's like, I think there's some great, you know, she's on the money, your podcast, there's lots of great podcasts of people who really care about what they're doing and making sure people understand the markets and, and all the different types of investments and ways to do that. But it's hard to tell who's good. Who's bad. Who's self-interested, you know, ASIC has put out some guidance in relation to Finfluencers, which means lots of people aren't talking about financial matters anymore, which is, and leaves a big gap in the market. And then there's other areas like say crypto, which are less regulated that, that, you know, are kind of going into that gap. And that might be a bad outcome for some people, cuz really when you are starting out, when you're younger, you should work out a budget, you should pay down your high interest debt.
Brendan (7m 28s):
You should have an emergency fund. That's people should look investing. Yeah. And who's gonna, who's gonna pay for that advice or who's going to charge for that advice. Like that's not needed, you know, they have great concepts and that's the basis when you know, 20, c30 before you get a mortgage or something, that's all you really need.
Phil (7m 45s):
So we can't talk about that. speccy gold mine that we were planning to.
Brendan (7m 49s):
Well, we'll do that later. We'll
Phil (7m 50s):
Do that later. Yeah. Yeah. That's right. Okay. So let's get back to Sharesies let's look at some of the Sharesies is investor trends. This interview came off the back of your August newsletter, which you can talk about the data that you see from people investing, using Sharesies, these and what they're buying and selling. So we're looking at energy related stocks and coal and lithium, which seem to be talking about two different forces acting at the same time. Exactly.
Brendan (8m 15s):
It's super interesting because if you look at coal two years ago, Cole was being phased out. You know, we're, we're closing down on the coal fired stranded asset. Yeah, exactly. And like what, what was gonna happen? And people were really worried about that. Yeah. I think with the energy crisis overseas, the Russia Ukrainian conflict, continuing people are looking at Australian like digging coal outta the ground on Australia, which is great for us. So we've got lots of resources, but with these coal mines and the coal price is high. So they're making, you know, quite good money out of that. So, but where the profit's gonna go, they're not going to invest it into more coal infrastructure because in two years time, you're going much more to renewables and, and whatnot. So the, the idea is that they're making, making great profit, but that money's gonna have to go somewhere and it may be returned to shareholders through dividends or, or whatnot.
Brendan (9m 1s):
So that increases the kind of price, probably a shortish term play, I would say. And then if we look at lithium, Lithium's obviously a very important metal for, for battery storage for EVs. And it's also kind of linked quite closely to the tech story. So tech companies like Tesla, you know, big, big EV providers. So that's kind of seen as the, you know, the future of energy and we are lucky enough to have lots of lithium in this country as well. So it's but yeah, weird kind of that they're, they're both coming at the same time, but the world has been a bit weird for two years. So, you know, there's lots of lots to
Phil (9m 33s):
Surprise. Oh, I'd say for two millennia.
Brendan (9m 35s):
Exactly. It's always weird.
Phil (9m 38s):
And this is something I go on a little bit about is that both coal and lithium are actual commodities. Yeah. And I think people hear the story, they always hear the lithium story or they hear the coal story without actually thinking about what a commodity is, is that the case
Brendan (9m 55s):
Yeah. And commodities are interchangeable, right? So you have lots of different mining companies pulling the same metal outta the ground. It's the same metal potentially not scarce, you know, what does that mean? So the prices can fluctuate. As we see with the lithium mines, particularly the prices go up and down, you know, it's a little bit like Afterpay, used to be, it was quite quite a volatile stock. Lithium's the same. And I think tied to the tech company thing that also gives a bit of volatility because tech companies, by the very nature are forward focused and profit and they're taking a punt now, but the same with minerals, you know, it's like, are we gonna find that? Is it gonna be a big deposit? You know, there's lots at play, which keep that volatility going.
Brendan (10m 34s):
But with lithium, there is absolutely a need for it and, and all that kind of electronics, EV battery storage. So there is kind of a demand there, but yeah, it's a commodity and interchangeable.
Phil (10m 47s):
It is. It is. And I think over the last week and we're recording on September 15, just to date stamp, this is Elon Musk has been trying to secure lithium supplies for Tesla. Hasn't he? Yeah.
Brendan (10m 60s):
And Tesla like Elon is Tesla. Yeah. And I think, you know, he, he tweets we see what he does. He makes and he can move markets with what he's doing. And, you know, Tesla is delivering vehicles as continuing to innovate and need lithium for those batteries and is more car manufacturers move to EV there's gonna be greater demand for that. And I think with the geopolitical stuff in Europe that impacts, you know, where, where the world will get lithium from too and other components for those things. Yeah. So I think that's still like a, you know, there's a decent growth story in those companies, in those, the mining companies and the, the companies which use those minerals.
Phil (11m 37s):
And of course amongst your users, is that the best way to use 'em users and clients?
Brendan (11m 42s):
Yeah. We call them investors,
Phil (11m 44s):
Investors. Okay. Amongst Sharesies investors, Tesla remains one of the, the big stocks, doesn't
Brendan (11m 50s):
It? Yeah. And US Tesla is always up. If it's not number one, it's number two or three and on both buy and sell sides because of the volatility. But also our investors are really interested in holding companies, which they know they, you know, they believe the fundamentals of the company. The products are ones that they can see themselves using the management team is, you know, interesting, stable, visionary. And Tesla's got that and it's a bit of fun, you know? Yeah. Tesla, everyone wants to talk about Tesla or what Elon's done or you know, the up and down. So it's kind of good water cooler dinner party conversation as well.
Phil (12m 23s):
And he's, he's quite a, a character, isn't he?
Brendan (12m 26s):
Yeah. He's, you know, he's all over TikTok. He talks about lots of different things. You know, he's really, when you look at it, like rockets, cars, trucks high,
Phil (12m 36s):
When you look at the rockets, I mean, SpaceX, I think are the largest deliverers of payload in the world. Now that's not NASA anymore operations. It's it's space. And
Brendan (12m 46s):
You look up at the sky and you see lights going across and line. It's like, what's that? But that's eons low orbit satellites, delivering internet to, to the world. It's like who would've
Phil (12m 55s):
Thought. Yeah. And we're kind of a bit sanguine about it. Aren't we was just like, oh, it's just Elon being Elon. But it's pretty incredible what he's achieved.
Brendan (13m 2s):
It's incredible. I don't know. Like, does he sleep? I don't think he does.
Phil (13m 6s):
He obviously doesn't work out like all the other tech billionaires though. Yeah,
Brendan (13m 9s):
That's right. He, he got a bit of feedback on that. I think he's gone on a bit of a diet.
Phil (13m 19s):
So there's been a rotation out of individual stocks to ETFs. What, what is the nature of that rotation?
Brendan (13m 26s):
Yeah. What, what we see when the market is a continuing to be volatility. So the last eight months have been particularly volatile after quite a good bull market. So people were investing market was going up, they'd buy, you know, five companies and some ETFs when the market keeps being volatile. Some of the lessons I think of the last eight months have been when you're concentrated in companies, they can go up and down. And that's not a, that's not a comfortable place to be looking when your portfolio might be in the red in times like this. And so we see a return to more Australian blue chips or companies which can pass on inflation. Like you, you know, Wesfarmers, Coles, Woollies whatnot, but then also ETFs give that diversification.
Brendan (14m 6s):
So you think, oh, well, you know, my one company's gone down in that impacts my portfolio. Whereas an ETF for well-constructed ETF across the ASX or the US or world gives that diversification. Someone else has done that for you. It automatically kind of rebalances, it's a good place to park your cash. And then particularly if you look back at the 10 years of the market, you know, all things being equal, the markets are probably gonna keep rising. And the return for the last 10 years is around about 9% if you reinvest dividends. So that's kind of a, that's quite a good return, pop your money in there and just kind of keep investing. And lots of our investors have done that and they just are doing auto, invest weekly, putting some money in, just continuing to do that. And ETFs are super popular when there's a bit of uncertainty.
Phil (14m 50s):
Is that something about the learning process is that people go in gungho into the markets and they think, oh, I love all these companies and they're all going up, you know? And you go through that period. But then that's when the real learning comes is when there's a bear market, like we're going through now or a bearish depends on your point of view. Really? Isn't
Brendan (15m 6s):
It? Yeah. Yeah. And that's lots of our investors are new to investing. So when the market starts, do
Phil (15m 12s):
You have, do you have data on that? That they are actually very,
Brendan (15m 14s):
Yeah. Yeah. So lots of our investors. So we've got over 600,000 now in Australia and New Zealand, we survey them. They're not trading through anyone else they've been new to investing or, and it's like their first couple of years, which is great. And then we think, well, the market's just being a bit choppy in the moment. How do you feel about that? And so investors are telling us actually their risk profile hasn't changed. In fact, they're more bullish about buying. They understand the market cycles. And in fact, you know, some of those companies they've been watching feel a little bit cheap at the moment, potentially the products are still there. They're still demand, but they realize that the market price of that company is impacted by lots of things not to do with the company.
Brendan (15m 59s):
And they learn through, you know, podcasts, great blog content talking to each other. And they, they get that, you know, the markets and downturn dollar cost averaging is super boring, but super popular and a really good way to invest through the market's ups and downs. And when the market's down dollar cost averaging is even better because the market's all things being equal will, will kind of keep continuing to rise.
Phil (16m 23s):
I'm so heartened by all this, because I hear this from so many people, is that, you know, learning these skills and learning about dollar cost averaging and learning about diversification, just like become, have become basic lessons. Whereas, you know, even just 10 years ago, there was no information, very, very little information about this wasn't
Brendan (16m 41s):
There. Yeah. And my, my nephew is 12 when I was back in, back in New Zealand and in New Zealand was doing a capital raise. He turned to me and said, I've got in New Zealand and my shares, this thing, well, will this impact, you know, will my shares be diluted? He's 12, he's talking about share dilution. Like he understands compound returns and compound interest. Like I've been in the industry for 25 years. I still don't believe it it's but it's magic and, you know, returns will compound. And that's a massive gain that you're making returns on returns. Yeah. So there's all these concepts that people are naturally through investing and on Sharesies is you can buy, we fractionalize the market. So you can buy 1 cent for share.
Brendan (17m 21s):
So you can play around, test it out, learn without feeling like you're gonna lose 200, 300 bucks at a time, which people learn through doing and not being talked down to. So lots of our content is jargon free. We try and talk about, you know, what's diversification, we've got great brand assets and the pineapple and fruit. So we can talk about, you know, diversification as having a fruit bowl and, you know, different companies in there spreads the risk and people just pick these concepts up. And for too long, the industry has had so many walls to getting in like jargon. You know, you make, make customers feel stupid. So you, so that they have to come to you for advice. Like it's just a different world now.
Phil (17m 58s):
So goodbye Netflix. Hello Disney.
Brendan (18m 0s):
Yeah. Netflix seems to be losing subscribers. And I dunno about you, but I've got all the streaming services and Netflix doesn't seem to, you know, grab my attention anymore. And I think that's happening around the world. You know, they're dropping millions of subscribers and coming up with new ways to create revenue with ad thing. But people are saying, well, Disney's been around for a long time. Disney's already worked out how to monetize their content. They've got such a massive library, just library. It's unbelievable. They're using it really well. They've got access to sports and it seems to be, you know, the thing and those streaming services, there is a lot of them and you've gotta think there'll be consolidation. But Disney has like, got that brand, got the content, got the, the financial might behind them. And they're just adding subscribers.
Brendan (18m 41s):
So people are kind of flocking to that wall now.
Phil (18m 43s):
And they were a complete failure Disney. I was just reading about the history of Disney the other day. And I think during the, the thirties, till the forties that they, they were just losing money, hand over fist. They were like a, like a startup really?
Brendan (18m 56s):
Yeah. And it's like,
Phil (18m 58s):
I think it was Snow White and the Seven Dwarves, suddenly paid for everything and built the expansion that they went forward on.
Brendan (19m 5s):
Yeah. It's great. The history of Disney is awesome to look at from a it's it's almost like Richard Branson and Virgin, like, but it's played out again. And, and those are the companies that you wanna know the story research, do your due diligence on and believe in. And, you know, imagine if you got into Disney shares, you know, 30, 40 years ago and, and held onto them.
Phil (19m 25s):
And do you find investors are more interested in the US market than the Aussie market?
Brendan (19m 30s):
Definitely. The US market is our second most. So lots of people in Australia know the companies know the people know the products. Yeah. The US was very popular, particularly in tech names. So it's all the big, you know, Microsoft, Tesla, Apple, all the ones that you would expect and people like, oh yeah, I've brought shares in the US. And that's another, you know, interesting thing and people feel good about, but those are the kind of products that people use here, iPhones and, you know, everyone knows Windows and, and all that sort of stuff. Facebook, you know, Colgate yeah. Johnson
Phil (19m 59s):
And Johnson. So many, it's
Brendan (20m 0s):
Phil (20m 0s):
So many companies. Yeah. Yeah. And what of the most popular ETFs?
Brendan (20m 5s):
So yeah, ETFs that four of the top five ETFs at the moment have an ESG aspect to them in Australia. And I think 20% of our funds under management and ETFs are in relation to ESG exposure through ETFs, which is really interesting. But also I think because of our customer base, is it
Phil (20m 25s):
Part of a reflection of the demographic? Yeah,
Brendan (20m 27s):
I think so 80% of our customer base are under 40 and really believe about putting their money where their beliefs are. And, you know, the environment's very strong, clean energy, but also ESG exposure. It's hard to kind of work out what social and governance is in that ESG bit. So when you have fund managers who can package that up quite nicely, cuz people do believe about supporting companies which are trying to do better and trying to do good in the world. So that's yeah, four, the top five. And then we have the ETFs which provide diversified exposure to Australia, the US, and then the world excluding the us.USnd those are the usual sorts of ETFs. Thematic ETFs are great. Now that people can also then kind of focus in on battery tech or gaming or like there's so many ETFs out there, but yeah, people are still focused on, on putting their money, make the world a better place, but also diversification across the major markets.
Phil (21m 18s):
And of course the major markets. I mean, if we just look at an ASX 200 ETF, for example, there's the, the top 200 stocks obviously, but I always ask the question it, do we really need to own all of the banks and do we really need to own, I mean, do we really need to own Telstra? I mean, it's great for dividends, but you know, the share price movement has been pathetic for many, many years.
Brendan (21m 41s):
Yeah. And that's why you can find these ETFs, which exclude some of the banks or just for high growth companies or like there are so many ETFs out there managed by great people that give you all the detail of the underlying and say, yeah, cause do, do we need exposure to all the banks? It's like, but you could just go ASX, you know, top 20, probably all the banks again, but there are, there are ETFs which, which, you know, match your interest, match your values. And, and that's, that's really interesting and, and people do flock to
Phil (22m 7s):
Those. And I think it's always important as well, to understand, to look under the hood of an ETF. And because if you own maybe three or four broad market exposure ETFs in the Australian market, there's gonna be so much correlation across that. And people don't realize that.
Brendan (22m 21s):
Yeah, that's right. So diversification kind of goes like, if you have, you know, if you've got five Australian ETFs, the overlap's gonna be pretty big. So you've gotta, you've gotta think about that. And again, like lots of blog content, the money smart website that ASIC does is really good about talking about, we love
Phil (22m 35s):
Brendan (22m 36s):
Yeah. We love ASIC that, that website's really good. No jargon talks about how to invest in diversification as well. Obviously we've got some great content on Sharesies about that as well, but yeah, you're right. It's like just cuz it's ANF doesn't mean that some of those things might be the same. So you've gotta gotta think about that.
Phil (22m 52s):
And I've noticed there's a lot of educational material on Sharesies as well. So a listener just starting out for the first time, where would you direct them? I mean, what's the first thing that they should learn.
Brendan (23m 2s):
So go to sharesies.com.au and then we've gotta learn section in there. And that talks about, you know, what is investing, what does it mean to be an investor? What should you think about and kind of budgeting tools on, as I kind of said before, you wanna make sure that you're paying down your debt and you've got an emergency fund and then you wanna start investing and really have a look at that. And then the best thing to do is just start. And because you can invest from 1 cent on Sharesies, you don't need to put a lot of money in there. You can put $5 in there and just start getting a feel for the market. How it, how to put an order on you can sign up really quickly, all digital, no forms. And then you can be trading within minutes and you can buy a share in a company, you know, watch it, see how the share price goes, start being interested in what's going on in the media about it.
Brendan (23m 49s):
You know, learn more, feel more confident, start investing a little bit more, you know, get your ETF. So you have that diversification, but then also have a look at a company that you like. And you know, if you're Lithium's the future, you know, by that, or, or, or some of the brands that, you know, supermarkets, like there's so much opportunity, but you don't need to spend a lot of money to do that. And it's like, get in there, start a habit and just kind of build that over time.
Phil (24m 14s):
Yeah. A couple of guests have said use terms. One is a learn by doing and just listen to the words because the words aren't gonna make sense for a long time.
Brendan (24m 23s):
Yeah. And you just, you just get it like, and it, it is, it is learned by doing because then you're more confident people start talking to you. The, the thing about the growth in New Zealand, 2 billion funds under management for the New Zealand platform, 11% of the population in New Zealand trade on Sharesies. Lots of people were never investors before when the founders kicked off the idea, they asked people, Hey, if you had 50 bucks and you needed to do something with it by Friday, what would you do? No one talked about investing. And they said, well, you know, if you wanted to invest and what would you do now? I don't know how to start. 50 bucks isn't enough. It would be scary. I have to go into an office, there'll be someone in a suit or I have to fill out some forms and they just wouldn't invest in it.
Brendan (25m 3s):
So I see that $2 billion is money that pro that may have never been invested and 2 billion can change lives. And, and people are sitting around at dinner, talking about their, invest with their kids. My family, we never spoke about investing. That's right. Dad was a cop. There was no extra money really until I came to Australia and started working at the stock exchange and stuff. I didn't know that you, you know, this, how can you make income? Other than just your job? Like these things were never discussed. So you've gotta start somewhere. And because you can, the barriers to entry alone. Now give it a go. You know, everyone, some things will go up, some will go down, you might make a mistake. That's okay. Everyone makes mistakes. You know, most people will just talk about, oh, I brought Afterpay you know, $3 and made a Mo.
Brendan (25m 45s):
So it's like, people don't always tell you about
Phil (25m 48s):
Brendan (25m 49s):
Yeah. The failures, or, you know, but everyone does it and it's not. And if you're just investing a little bit of money, well, diversified portfolio, all things being equal will, will go up, but there will be some ups and downs.
Phil (25m 59s):
What about the, there is a bit of a debate about platforms and some are on the chess sponsorship model and others are on custodial is
Brendan (26m 7s):
Phil (26m 8s):
Yeah. And Sharesies, is custodial model. Is there any disadvantage or advantages between the
Brendan (26m 14s):
Two? No, it's Australia is very, it's an outlier in the world to do with people holding their shares individually. So it's a Holder Identification number. So on a chess statement, it's in your name legally
Phil (26m 26s):
That's when you get those paper statements, all
Brendan (26m 28s):
The time of paper statements, and like, how do you, where do you find where they are and what do you do with them? And like all that sort of stuff. And then back in the day, wraps were invented in Australia. So Macquarie wrap is a very popular one BT wrap where all the assets in that financial ones were owned by one custodial nominee who does all your paperwork for you? Does your tax statements manages all the admin of those, those shares. And that's what Sharesies is. And it used to be that you paid a premium for that model. And now, you know, with technology, it's easy to do. It's no cost to do that. So we hold it in a custodial HIN, but you still own your shares. You legally, still own your shares. And the custody HIN also enables us to fractionize a share.
Brendan (27m 10s):
So you kind of get the benefit of being able to buy a dollar of a Tesla share rather than whole share or, or bits of ETFs. So there's lots of benefits in relation to ease of admin consolidation, of tax reporting. You still own your shares. We're still regulated your money safe versus a, a HIN model. Like both, both do the same thing, but it's just, you know, what suits your purposes better? Really?
Phil (27m 32s):
And, and what about the brokerage? I mean, if you're buying a dollar worth of a company, is it, what's the brokerage
Brendan (27m 37s):
Super cheap? So it's like 0.5 of a percent.
Phil (27m 40s):
Oh, so there's no minimum,
Brendan (27m 42s):
No minimum. It's a, so if you buy 1 cent a share, we make a tiny bit of brokerage on that.
Phil (27m 47s):
So what would you tell someone who has only got $5 to invest? I mean, it really seems like a long way in the future to just start with $5,
Brendan (27m 58s):
But you've gotta start somewhere. And I think it's the habit. And so we talk to people and people are really proud that they've invested their first dollar or $5, cuz they're an investor now. And that means a lot of things to people.
Phil (28m 9s):
It changes the way you think about it,
Brendan (28m 11s):
Changes psychology. You start looking at the, looking at the world in different place. You think about, you know, you're invested in a company, you look at their products and you're like, oh, okay, cool. I can see that people really are interested in those products. You know, you read the papers more, you talk to your friends about it. You start investing more like regular investing habits and massive. The power of compounding returns is magic. Like, you know, you put $5 a week in it say if my dad put $5 a week away from me every week from when I was born, I would have a lot more money in the bank than I do now. And lots of that is interest off interest or returns off for returns, not the amount of money you've put him, but the habit is the best thing in. Do you
Phil (28m 48s):
Ever tell your dad that?
Brendan (28m 49s):
Yeah, I do. I do. No, no. I put money in his account and
Phil (28m 52s):
He says I'm grateful kid.
Brendan (28m 54s):
Exactly. But it's like, yeah, the power of a habit and yeah, $5 might not change the world for everyone, but that's a significant amount of money over time. Like, you know, it's time in the market, not timing the market and that regularity of investing and just getting used to it and then putting it up to 50 bucks when you can afford it or a hundred dollars or it's like superannuation. Right. So it's like just that power of time is super important.
Phil (29m 18s):
Okay. Brendan Doggett. Thank you very much. Thanks very much for joining me today. Thanks
Brendan (29m 22s):
For having me,
Phil (29m 22s):
Actually. I just wanted to ask you to say, I love hearing the word pathetic with a Kiwi accent.
Brendan (29m 28s):
Phil (29m 28s):
No you've been in a stretch. If you found this podcast helpful, please tell a friend, especially if it's someone who needs to start thinking about investing for their future, you'll be helping them and helping me to keep this show on the road.
Chloe (29m 42s):
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.
Phil (30m 1s):
And thank you for listening to my podcast.
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