FinTalking

The ladies from FinTalking get together for one last time in 2020 with some thank yous in hand and reveal there will be some more FinTalking in 2021.

In this episode we consider the spectrum of financial infidelity, from innocent indiscretions to the darker elements that can stray into another world of financial abuse.

SHOW NOTES

00:27 Financial infidelity is the act of spending money, possessing credit cards, holding secret accounts or stashes of money, borrowing money or otherwise incurring debt without the knowledge of one's partner, spouse or significant other.


04:27 It could run away and become something quite meaningful, which almost becomes more like financial abuse.

06:45 There is a correlation to domestic violence, which is really scary because if you're in an abusive relationship and you need to exit, you need money.

07:55 99% of domestic violence cases involve financial abuse. It's a real problem.

10:00 If possible retain some financial independence, if you have to take time out of the workforce try to stay connected, because then if you need to re-enter, it's potentially easier.

12:08 It's a gender issue as women are more susceptible to the adverse consequences of all of this.

12:55 Sharing key Financial tasks (like doing your taxes together) can be a means of making sure both parties are on the same page when it comes to finances.

13:30 In situations of financial abuse, people don't have access, don't have control, don't even know what their financial situation is.

13:58 There's this book The Diversity Bonus and it talks about the benefits from the differences in how a group or a couple think about problem solving.

15:15 Around a third of people think that financial infidelities are actually worse than a physical infidelity.

18:00 Financial literacy is low and shining a light on these types of elements of finance is so important for all of our well-being.

Have our patriotic ways spilled over to our investment portfolios with Aussie equities representing a disproportionately large component of our investment portfolios?

Do you gravitate to investing in companies you know and like?

Might you suffer from the Vegemite effect, investing perhaps more than you should in local markets?

In this episode, we consider home bias and explore how investing in our beloved Australia might have unintended consequences, encouraging you to try other types of spreads.

SHOW NOTES

00:27 Australians are really patriotic people. As a country, we take great pride in supporting our local communities and we have that affinity for Australian produced products like Vegemite.

01:21 Mark Zuckerberg, CEO of Facebook, wears grey t-shirts all the time, it's an efficiency gain because he wants to minimise those more superficial decisions so he can focus on the ones that matter. And this is kind of the same in investing.

02:18 There's a lot of behavioural biases and home bias or familiarity bias is one to watch out for.

03:00 In an earlier episode - who can you trust? We raised Enron as an example. Employees not only lost their jobs, but a large amount of their retirement savings had been invested in Enron stock as well. This is a reminder familiarity bias can work against you.

05:32 Did you notice that the daily news always has a component on the stock market movements?

06:23 Australian market is highly concentrated. The All Ordinaries, the top 10 stocks account for roughly 37% of the total index.

08:04 Australia is a small equity market, like 2 or 3% of the size of global market cap.

10:07 An older study that was done in 1999, found Fund Managers suffer from this home bias as well.

12:46 In Australia we have franking credits that can incentivise investment in Australia because you're receiving a tax rebate based on the tax that has already been paid by the company on the dividend you receive.

13:28 The fact that there's negative gearing and also low interest rates has really seen people move to the Australian property market over time.

14:08 If you work as an individual for an Australian company, then your human capital is dependent on the Australian economy or that particular company doing well.

17:13 Home Bias is not just an Australian phenomena. It is global. In Japan, approximately 80% of Japanese investors invest into local Japanese companies. Yet Japan has only 9% market cap.

21:10 The power of diversification, a defense against home bias.

In this episode we unpack the complexity of retirement and liken the retirement puzzle to a half built car, exploring some tools worth considering to get motoring on the road to your best retirement.

SHOW NOTES

01:18 69% of women, compared to 63% of men aged over 65, depend on the aged pension to get themselves through retirement according to ABS (Australian Bureau of Statistics) statistics from 2017.

02:09 Retirement income and worrying about retirement income was the second biggest worry pre-retirees had according to a new study- The Retirement Income Worry. The study also found that women worry more and that people that were pre-retirees worried more than those that were in retirement.

04:40 45% of women between 65 and 69 have zero superannuation.

06:09 The Workplace Gender Equality Agency released a great report earlier this year revealing that there are more elderly women than men that are living in poverty in Australia and a growing number of women are experiencing homelessness.

08:08 When you look at cognitive decline it is even more complex. From age 65 women have a one in five chance of developing Alzheimer's (Alzheimer’s is the most common form of dementia).

09:56 The accumulation phase is pretty robust, but the decumulation phase is a bit more challenging. It's like a half built car. And then what we're asking people to do is to then finish building it; here is the spanner, here is the wrench, go sort it out.

13:05 A Milliman study found that more than half of retired Australians restricted their spending to less than the age pension

15:18 Retirement is the only time in your life when time no longer equals money.

16:41 The concept of a retirement coach or the advisor as the life coach who can take some of that worry away.

19:19 Enjoying retirement and having that last cheque bounce.

20:01 Great quote by the father of Value Investing, Benjamin Graham - ‘Investing isn't about beating others at their game, it's controlling yourself at your own game.’

In this episode, we explore many different ways to engage and talk to kids about money. Recognising that financial literacy is a life skill, let’s empower the next generation with the tools and knowledge to access a better financial future.

SHOW NOTES

01:02 The supermarket is a fantastic training ground for budgeting.

02:13 Financial literacy is a life skill, cutting through every aspect of our lives. Australian regulator ASIC has a great website for teaching kids about money.

03:57 So why is it hard to have these important money conversations with kids?

06:05 Westpac survey on kids and money found that gender inequality starts at home, boys are earning more weekly pocket money than girls.

07:58 It's all about starting kids on the right track early and setting up those right views and attitudes toward money and also around how much your time is worth.

08:27 The concept of giving is another important conversation to have with kids.

09:43 The three S’s - spending, saving and sharing - a framework that helps kids understand money.

10:10 We are on the cusp of a $3.5 trillion intergenerational transfer of wealth from the baby boomer generation to Gen X,Y,Z. Are we ready for this?

11:40 Understanding the perception vs reality when it comes to wealth is critical for kids. Kids compare themselves to others, however not everything is not always as it seems.

12:59 Debt, a concept explored in a previous episode, contains important messages to teach kids, in particular around the concept of keeping up with the Joneses or, to the new generation, keeping up with the Kardashians.

14:12 Buying lunch at the tuckshop has gone digital! Another micro lesson on budgeting.

14:39 Kids are digital natives. Budgeting on mobile data is a great learning ground for financial budgeting.

15:24 Even though it may not be a physical cash payment anymore, kids understand the concept of spending.

16:26 Talk to your kids as much as possible about finance. There's nothing to fear.

One of the consequences of the pandemic is the rise in government spending in order to support the economy and keep us from spilling into a deeper recession. The figures splashed across the media headlines is causing alarm with many wondering: Is this the right economic response? How will we ever pay this back? Will the future generations be burdened by these economic decisions?

In this episode, we explore whether we are collectively looking at the issue of government debt accumulation from the right lens and whether an alternative perspective is required for these alternative times.

Show Notes

Increase in government deficit during the COVID-19 pandemic. Is this the right economic response? Should we be worried? https://www.abc.net.au/news/2020-07-23/federal-government-coronavirus-deficit-economy-debt-frydenberg/12483360

1.09: In times of a pandemic what is the alternative? Fiscal response (i.e government spending) seems like the right course of action to keep us afloat during this current economic climate where unemployment is rising and households and businesses are struggling.

4.54: Government debt is not the same as personal debt. If the government is borrowing money to stimulate the economy, then that's not necessarily a bad thing. Effectively they are using debt to grow an asset, which is our economy.

7.34: There are a number of different ways you can manage an economy and Modern Monetary Theory (MMT) is one option that seems to be getting a bit of media attention. MMT looks beyond the cost of the debt, considering the broader social and economic impacts of government policy. MMT provides an alternative perspective of detaching ourselves from this notion that government debt is like household debt. https://www.businessinsider.com.au/modern-monetary-theory-mmt-explained-aoc-2019-3?r=US&IR=T#:~:text=MMT%20is%20a%20big%20departure,debts%20in%20their%20own%20currency.

13.40: Is MMT some kind of mystical fantasy where there is a pot of money governments can access that never has to be repaid just like the famous children's book "The magic pudding" which stars our anti hero Albert, the grumpy old pudding that replenishes itself each time it has been eaten. https://en.wikipedia.org/wiki/The_Magic_Pudding.

16.50: Taxes are not the only form of government revenue in offsetting government spending. And a government deficit does not automatically signal tax increases. Governments have alternative avenues.

A trend seen both in the US and Australia has been the surge in individual share trading post the market correcting in March. Why are we seeing record levels of new trading accounts open? What are some of the behavioural aspects influencing these outcomes? Do you know the difference between Zoom Technologies and Zoom Video Communications? Which one would you buy?

In this episode we examine the temptation to focus on short-term outcomes and question whether the pursuit for the here and now is compromising our long-term financial wellbeing.

00:46 People are buying stocks at record levels but are they investing or speculating?

01.18: What is the difference between investing and speculating?

02:50 What is Robinhood? A trading app that has been embraced by US millennials.

03:25 CommSec have experienced some of the busiest days they've ever had in their 25 year history in March.

04:25 Robinhood has been advertised predominately on TikTok, a video platform which targets short, fast entertaining information. Does this then encourage short-termism when it comes to Investing?

09:27 Elon Musk, the CEO and founder of Tesla, May 2nd, tweeted, Tesla stock price too high imo. At the time of this podcast, share price is now more than double since this tweet.

11:26 Are you at risk of being impacted by the The Dunning-Kruger effect, the more incompetent you are, the less aware you are of your incompetence.

14:40 The way we receive information could be feeding our confirmation bias

16:20 Ultimately the decisions you make impact your financial outcomes.

17:27 Which Zoom - Zoom Technologies or Zoom Video Communications? Seems there was some confusion between the two causing Zoom Technologies stock to rise by 240% before trading was suspended by the US Securities and Exchange Commission.

18:12 Do your homework before investing, otherwise it can cost you real dollars.

Why does Australia have one of the highest levels of household debt? Why do we feel the need to keep up with the Joneses and Kardashians? Does 90's Hip Hop hold lessons around our migration from Cash to Debt?

What can you do to improve your financial wellness and security?

In this episode, we examine why Australian’s have such a hunger for debt, why credit is so easily available, and how you can live within your means for a better financial future.

Is there a trust deficit in the finance industry? Does corporate culture and conduct matter? o we want investment to align with our values?

In this episode of FinTalking, Cassandra, Erica and Jemima exam the trust deficit in financial services; why it occurred and ways to rebuild trust.

Financial literacy pandemic, adverse impacts for women, key financial behaviours, importance of economists.

In our inaugural episode, Cassandra, Erica and Jemima explore whether the root cause of the current global economic crisis can be traced back to a hidden pandemic - financial literacy.