Money 101: Managing and Investing your Money as a Young Person

Summary

In this episode, we sit down with Abhishek Maran, Investment Analyst at Folklore Ventures, to discuss the fundamentals of personal finance. We talk about how to save, how to invest, how to think about portfolio allocation across assets as a young person, and how to start today.

  • What led Abhi to VC and investing
  • How to buy a stock? Or an ETF?
  • How to think about how much to save as a young person?
  • How to invest that saving?
  • How to allocate your portfolio as a young person?
  • How to think about property?
  • How to think about your super?

Key Takeaways

  1. Think about the priorities that mean a lot to you and spend a lot on those. But then cut ruthlessly on the items that really don’t mean too much to you.
  2. There’s a compound growth effect that gets applied. The more you invest early, that will kind of grow a lot quicker and into a larger sum of money. 
  3. The key to investing is more time in the market rather than timing the market. The best time to invest was actually yesterday
  4. Take as much risk as you can early on and then adapt and learn and grow as you continue your career and your money journey as well

Transcript

Viv: Hi, welcome back everyone to Sprout. Today’s episode is going to be a little bit different. We’re talking about all things money today and personal finance featuring our very special guest, Abhi. Abhi is currently working as an investor at Folklife Ventures. In his past life he worked in the corporate world for 2.5 years before taking the plunge to leave the rat race and move into an operations role at an early-stage Fintech called Upstreet. Welcome Abhi.

Abhi: Thanks for having me. 

Sydney: Yeah, we’re super excited to have Abhi here. The reason how this came about was I actually work with Abhi at Folklore, and I think it was the first day we were both back in the office. And within five minutes of us having a conversation, I realized something: Abhi is really wise about money. So I thought what a good idea it is to invite him on our show. And just like have a conversation about the fundamentals of personal finance, how to save, where to invest and just like have a conversation about what to start looking into as a young person. Yeah, so thanks so much for coming Abhi. Ok, now let’s jump in. It’d be great if you could share more with us about your story. I know a little bit, but I think it’d be really helpful for the audience. 

Abhi: Yeah, definitely. I think we can start from when I joined Uni. So I started Uni in 2015, studying a bachelor of actuarial studies at Macquarie university. And whilst doing that degree, I got really bored with the STATs side and became really enamoured with the investing and finance side. So I ended up graduating with a bachelor of applied finance from Macquarie university in the middle of twenty eighteen. 

Immediately I joined an investment consultant called Cambridge Associates. And I worked as an investment consultant there, really working with foundations endowments and super funds to build out their investment portfolio. So essentially, all of these organisations have one hundred million to over a billion dollars in funds and they need allocated in the financial markets. And that’s kind of what I did, was really working on the portfolio construction site and allocating these funds across various asset classes. 

Whilst doing that, I got really bored after a year and so I kind of spent a year fiddling around trying to think about different things to do, and eventually took a plunge into joining a fintech startup called Upstreets which is essentially a share rewards program where every time you shop you own shares in the companies that you shop with. So, it’s a really good way to kind of get involved in the personal finance side of things and start your investing journey. After what he had achieved for about four months, I was actually talking to Alistair Coleman and Folklore. And eventually he had a role for me there and I just joined folklore this week really. And so really excited to be working with Sydney

Sydney: A lot of fun. 

Viv: I don’t think we ever mentioned that she works at Folklore, but there you go. She works there. 

Sydney: Yeah, so how did you learn about personal finance, what they think you learned through jobs or personal ratings? 

Abhi: Yes, that’s a really good question. And actually, my foray into investing started way before I joined the uni. And so actually really early days I did the paper on when I was in year six and I had a thousand dollars saved up. Wow. Big, big bucks. Yeah. And so about four hundred dollars went into a Nintendo DS when I was in year seven. And then six hundred dollars was just sitting in a savings account under my mom’s name, I think. Anyway, in year nine or 10, I played the ASX share market game in commerce and I got really into stocks. I was like, damn, this is really fun. I just get to pick businesses and they just go up and I was having a lot of fun anyway throughout that I saw a business called Macquarie group and I was like, yeah, this is a really good business. And it didn’t really know too much, but I was like, ok, this seems like a pretty good bank. They’re kind of more business focused compared to the other banks and I think they’re going to go up. So, I put my remaining 600 dollars in them for I think 19 shares at about thirty/ thirty-two dollars per share. And I just kind of set up that. So that was my first foray into investing – ASX share market game, buying Macquarie group stock at thirty bucks. 

Viv: Going back to like very, very basics. How do you actually buy stock? Is it a website?

Abhi: So you can buy stocks in multiple ways, but probably the easiest is, at least here in Australia is probably using a website called Selfwealth. And so Selfwealth will allow you to buy various stocks or ETFs. 

Sydney: I feel like this is probably getting a bit granular, but I know that multiple ways of owning a stock like it can be in your name or not. Can you touch on that? 

Abhi: Yeah, that’s right, so there are a couple of ways that you can own a stock. So the first way is through a CHESS sponsored holdings account. And so essentially that means that when you purchase a stock, let’s say a Macquarie group stock, that single Macquarie group stock will be attributed to you. So your name will be, I guess, assigned to that stock. However, there is another way, and this is probably a lower cost way through brokers such as Superhero, which is a lot newer. And that’s through like a custodianship model. And so, the custodianship model essentially means that there is like some sort of custodian that holds all the stocks for all of the Superhero clients. And so for those who say you buy a macquarie group stock through Superhero, the owner of that stock will be whoever the custodian is and in most cases it’s going to be one of the big four banks in Australia. 

Viv: Would you mind clarifying what is meant by Superhero? 

Abhi: Superhero is just another online brokerage firm, so you can buy stocks and ETFs through Superhero. 

Sydney: like robin hood, like robin hood. 

Abhi: So these are separate businesses that allow you to do this sort of business, adjusting predominantly through like a mobile app as well. 

Sydney: So, jumping to another train a little bit. So say that I am a uni student starting to get my first Paycheck and I love eating out. I love just going on experiences. How should I be thinking about what to save and how much to save and why to save? 

Abhi: Yeah, so that’s a really interesting question and I think there’s a few ways you could probably think about this. But the way that I like to think about saving is mainly thinking about what items or what things are a priority to me in terms of my spending. So for example, I am a big reader and so I love spending money on books whenever I can. And I don’t really think about how much I’m spending on books just because they mean so much to me. But in another way of putting that drinking coffee on a daily basis is not something that is a priority to me. I don’t really like doing it. I don’t necessarily like drinking coffee as well, and so I don’t drink coffee at all and I don’t spend any money on snacks and things like that because none of that is a priority to me. So the way I like to think about it is just think about the priorities that mean a lot to you and spend a lot on those. But then cut ruthlessly on the items that really don’t mean too much to you. And so this is a bit more of an introspective question that you’ll need to ask yourself when you’re thinking about this is what means a lot, and what does it actually mean a lot to me? 

Viv: I’m really interested in getting our thoughts on how you feel about the importance of young people saving like, is that something we should worry about at this age? 

Abhi: Yeah, it actually is really important because if you start building a really good savings habit, now you’ll will kind of stick through as you continue getting older. And now even though you’re probably not earning as much through internships or part time jobs, it’s still important to save a little bit of that Paycheck. And by doing that, saving is kind of like a muscle that you’re kind of training continuously. And so if you start saving a little bit, now you’ll be able to save a lot more later on. And then we can talk about how to kind of invest their savings. But the more you invest earlier on, there’s a compound growth effect that gets applied. The more you invest early, that will kind of grow a lot quicker and into a larger sum of money

Sydney: Do you have a personal rule for how much you save like a percentage that you try to stick by or is it like after the expenses you just said how much you had left? 

Abhi: Yeah, so that’s a really good question and fortunately I still live at home with my parents, so I save a lot of my Paycheck. And so typically, I think from a month to month basis it’s probably I get to save about 85 to 90 percent of my Paycheck. 

But in saying that I still go out for a really fancy dinner. I still meet up with my mates and grab drinks or whatever that is, but it’s kind of that stuff is really important to me spending money with people that I really like hanging out with, but is super important to me. So I don’t really think about, you know, is this beer ten dollars or is that cocktail? Twenty dollars, that doesn’t really matter to me. If I want it, then I’ll get it. But then I’ll cut a lot more. The things that don’t really mean a lot to me. 

Sydney: That’s a really to think about what you value your life as well. Yeah, absolutely. 

Viv: Should take some time to reflect after this 

Sydney: So what do you actually do with this 90 percent or 85 percent of the money that you say now? 

Abhi: Yeah, so typically whatever I’d say at the end of a month, that typically goes into my brokerage account, and from there that gets invested in a single ETF, I think it’s called VDHG, so it’s the vanguard diversified high growth ETF. And so why I’ve chosen that ETF is essentially it’s kind of very well diversified across multiple asset classes and, and given my own risk profile, that’s pretty much what I’m comfortable with. 

Viv: So, what is a risk profile and what is an ETF? 

Abhi: So let’s start with an ETF or an ETF is essentially a basket of stocks. So being very basic, you can think about, let’s say the top 200 companies in Australia. Imagine that all the stocks from those companies sitting in one little basket. And you can actually invest in that basket rather than investing in each of those companies individually. So it gets your exposure to the financial performance of all of those companies without having to do that in an individual manner. 

Viv: And what is meant by risk profile? 

Abhi: So a risk profile is essentially um, how tolerant or how willing you ought to take on risk. So, being very risk tolerant means that you can take on a lot of risk and typically that’s when you don’t have a lot of obligations. So when you’re a bit younger, you can take on a lot more risk. But also, in saying that there is risk willingness, so you need to be willing to take on a lot of risk when you’re younger. So, people can be risk averse, meaning that they don’t actually like taking, taking on a lot of risk. And what I mean by risk in this case is um, it’s the volatility or it’s how much a stock can move in a single day or a week or in a year. For example, if a stock goes up 10 percent in a year, that’s not too volatile. But, but for example, with cryptocurrency, bitcoin can jump 10 percent or even go down 30 percent within a day. And that’s incredibly volatile. And so if you’re willing to take on a lot of risk, then you might have a larger allocation to bitcoin in your portfolio. Meaning that you can kind of be comfortable with bitcoin dropping 30 percent and you’ll still be happy in holding that position. Well, not happy in terms of performance, but you’ll be able to stomach that drop really easily where someone who’s a bit more risk averse might be really scared or might be really fearful about what might happen if bitcoin dropped 30 percent. So there’s a bit of difference and a bit of nuance and a lot of it is very like intuitive and it’s also very introspective as well. 

Viv: What are you personally comfortable with in terms of that? 

Abhi: Yes so if you’re thinking about it from like a theoretical perspective, which I’ve done for myself, I’m still pretty young and there’s still about 40 years till I get till I retire. And so in this stage of life, you should be very willing to take on a lot of risk and also be willing to place to make some calculated risky bets in your portfolio. So for example, I’ve got, let’s say five to 10 percent allocation to bitcoin in my portfolio of cryptocurrency as a whole really there’s a few different coins in there. I’ve got a lot of my in a lot of my wealth in VDHG, which is 90 percent equities and so that will kind of compound in itself. And as I get closer to retirement, that risk allocation will kind of shift towards more defensive sort of assets such as fixed income, or maybe more property as I start to buy more investment properties and things like that.

Sydney: I know that a core concept in finance is that there’s a correlation between risk and returns, right? Um, so how do you think about that in the different asset classes that you invest in? 

Abhi: Yes, and that’s a really good question. So for example, with equities, how you would think about this is an ETF is a diversified basket. And so, you can expect less in terms of the expected return that you could get in a given year. But also, in saying that the movement or the pattern the returns take will be a lot smoother than say, a single stock. So, a single stock might jump two percent or drop two percent on a daily basis and it could keep ping-ponging like that across a year, but still end up at that 10 percent return for that year. Whereas an ETF will take a lot smoother path and might only move one percent on a daily basis and end up at the same 10 percent return. So it really depends on the market. Typically what happens is the more volatile or the more risky an asset is, the more return you’ll get. So by investing in a single stock, you might expect, let’s say 15 percent, but investing in an ETF you might only expect 10 percent just because it’s a little bit more diversified. You’re getting exposure to more assets, but also in smaller chunks. And so that kind of balances that up. 

Sydney: But what about the other asset class that you mentioned like crypto property or these other things like, where did they rank in terms of risk reward compared to like your ETFs and just single stocks? 

Abhi: Yes crypto is by, by far, probably the riskiest asset class as we, as we probably all know, it can drop 30 percent in a day for really one or two. And it could jump 30 percent in a day if it wanted to. And so for that, if you are someone who’s willing to take on a lot of risk, then you might even want to put most of your money in there. But that’s really an individual question where you have to be willing, or you have to be able to take on a large drop in the market, the value of the crypto market and still be happy with that. Still be very comfortable with that and not panic and sell out of your assets essentially, the key to investing is more time in the market rather than timing the market. So it’s really hard to buy any asset at the very lowest point and sell at the highest point. But what’s actually important is that you should, you should be invested, or you should invest in things for as long as possible and as soon as possible. So for example, the best time to invest was actually yesterday. But the next best time is actually today or tomorrow

Viv: Wow, that’s very insightful. I’m curious to see in terms of investment versus savings, how much do you have ready in your bank account and how much is actually tied up in your investments?

Abhi: Yeah, so that’s actually a really good question. So typically, I probably have, let’s say 10 percent as an emergency savings amount. So, 10 percent of my overall net. net wealth is in an emergency savings account, just kind of collecting interest on a monthly basis. But I don’t really touch that at all. That’s only there if let’s say, an emergency medical bill comes up or my parents kick me out and I need to rent one month, or there’s like a big purchase that I really need to do. So that’s just there, don’t touch it at all. But everything else is kind of invested away or gets spent. 

Viv: So there’s no money sort of sitting just in your bank account that isn’t your emergency money. 

Abhi: Well, so yeah, so it’d be like if I can forecast what am I spending for that month It might be like a grand or two grand or something like that. Depending on how much I plan to spend that month. 

Sydney: Do you have a rule of thumb for how you allocate your investing portfolio for between like ETFs, single stocks, crypto, like all these other thingsin your portfolio? 

Abhi: Yeah, um, so this one’s a bit more of a personal question, I guess. And so for me personally, I built a pretty decent crypto portfolio early on, probably back in early 2017. And since then, that’s kind of grown by itself and it’s taken a large chunk of my portfolio in terms of percentage and maybe a little bit more than what I traditionally comfortable with. And so right now, a lot of my money is kind of just going into stocks to try to rebalance that portfolio so that stocks kind of take the majority chunk of my portfolio. That’s how you have to kind of think about it. So all of these things will move on a daily basis. And so some might move a lot more, which Crypto has done over the last couple of years. It’s risen a lot in value and said that’s taken up a large chunk of my portfolio where stocks has also risen a lot, but not as much as Crypto; and so that’s kind of fallen in terms of its percentage allocation in my portfolio. So right now my entire strategy is towards investing a lot more in stocks are a lot of my paycheck just goes into stocks or spending. That percentage allocation will grow over time as I keep doing that. And the krypto percentage allocation will drop as I keep adding to the stockpile. 

Sydney: That makes sense. Yeah. How do you actually invest in crypto or like property? Do you just google, “let me invest in Crypto”. 

Abhi: I think Binance is a really good option for people. So Binance will give you a large selection of different coins that you can invest in. But also Coinbase is also a pretty decent way of getting invested in crypto, but you’ll have to pay a higher fee. Um in those are kind of the two platforms that I’ve used for investing in crypto and they’re pretty good. But I probably haven’t invested much recently, so that may be a better platform, so it’s always worth googling. What’s the best platform to use? What’s the cheapest platform to use and kind of doing a bit more self research in terms of the fees and how fees are deducted every time you don’t make a trade. 

Viv: And with so many websites being out there makes sense to go with the cheapest option. Why would you want to go with a platform that has more fees? 

Abhi: Um yeah, so a platform with much more fees might have more features as well added in. So for example, coinbase makes it really easy to purchase Crypto just from your bank account straight away, whereas Binance I think you might have to transfer a few different times to different accounts and the entire process of buying Crypto is just a bit harder or a bit more lengthy, essentially with Binance. Whereas with Coinbase, it probably only takes five 10 minutes to actually buy and hold crypto. 

Viv: Hmm. Interesting. 

Sydney: So what about property? 

Abhi: Yeah. Um, so if we’re thinking about property very holistically. Um I think in Australia there’s been like, it’s kind of like the great Australian dream is to own your own home. And to have five different investment properties scattered around. And we’ve kind of seen in recent years that a lot of millennials or GenZs don’t really have enough money to make a down payment to actually buy a property or they have to buy like in ridiculous places out west or even in the country or different states and things like that. So property can be really good and it can also go really badly. It is a lot of it is dependent on various factors outside of your control as well. So that could be population growth infrastructure spend in those specific areas. And so it’s a very tough, tough asset class to get right to achieve the most returns that you can receive. So for example, let’s say I want to invest in Brisbane. I might do my research and think about, hey, this suburb in Brisbane has a lot of infrastructure spend plan. I think it’s going to increase in terms of the population size of the suburb. So I’m going to buy a property there. But what actually might happen 10 years later is that none of the infrastructure spend that kind of committed to that area actually happened, or there’s massive delays. And subsequently the population growth in that area didn’t actually occur. And so your house, even though it may have risen slightly, hasn’t risen as much as a house in a different suburb in Brisbane, where a lot of, you know, new families are going immigrants and things like that. And so it’s a very nuanced sort of discussion to have and a lot of research into different suburbs and different areas and different policies need to be had if you’re thinking about an investment property. 

On the other hand, if you’re thinking about buying your first property, it’s a bit of a different sort of discussion. And I think buying a property in general gives you that sense of security that hey, I can never be kicked out of my rental home, but, and also saying that it’s making a large commitment on a monthly basis of repaying the bank with your mortgage. So it might be up to, let’s say 80 percent of your monthly salary goes towards your mortgage and thinking about the priorities that we spoke about before in terms of your spending, you might not be, you’ll need to definitely reprioritize your spending and you might not be able to spend on the things that you wish to spend on. And so that’s the conversation that you need to have in your mind is, is having that safety and security of owning my own home as important as giving up the ability to spend on other things in my life that might give me more happiness. Because the worst part about it is if you have a large commitment or large financial obligation to pay the bank on a monthly basis, and let’s say you can’t go out with your friends every week. You can only go out once a month. And that makes you really sad, and then your mental health kind of deteriorates. I think that’s not worth the safety and the security of actually having your own home. So that’s the discussion or the conversation you need to have in your own mind is, is owning my own home worth giving up 80 percent of my paycheck. Because you’ll be able to make the same investment returns investing in the stock market as well. Um, but it’s, yeah, it’s a different conversation, I guess. 

Viv: Yeah, you brought up a really good point about doing your research. And I’m curious as to how you actually go about doing that research. I guess for property research, there’s a bunch of different blogs or like a bunch of different databases that you can look at or a database that I used to look at quite a lot was I think it was called Corelogic and you can sign up for a free trial for like 14 days and just kind of explore that. So I did that because my dad wanted to buy an investment property and he asked for my help, and so I did that for him. So that was a really good one in terms of understanding the different financial metrics that goes into buying property or that goes into understanding I guess the median rents of the median house prices for that specific suburb. In terms of thinking about overall property strategy, I think you can kind of Google this and there’s tons of Australian podcasts like everyone in Australia loves talking about property and the strategies are fairly similar and so it’s more just kind of exposing yourself to those sorts of resources. There aren’t any that specifically come to mind. 

Viv: Yeah. What about when you’re researching your stocks? 

AbhiL One of the things you look for had your research that Yes, if a stock’s i guess in terms of ETFs, I think you can kind of look at the FIRE communities that have kind of sprouted up fire community. So FIRE essentially stands for Financially Independent Retire Early. So a lot of these people, what they kind of subscribe to, the fact is, saving as much as possible and investing everything. But a lot of their saving comes at the expense of having fun now. But they’ll retire early and then have fun later on. Whereas I think the conversation should be trying to have fun now and trying to have fun later on, rather than just giving up your fun now.

Sydney: maximize the total value.

Abhi: Yeah, exactly. Um, but a lot of those communities where you can take is the ETFs sort of approach where they might say, hey, this ETF is really good for x, Y, z. And you can kind of follow that. So just kind of type in Australian FIRE and you’ll find a bunch of communities that kind of will guide you in terms of what ETFs to buy. I said might be like an ASX 200 ETF or the big one that I try to use um, all of this, there’s like a thousand different ETFs out there. But what I would suggest is pick one and make a commitment to invest in it monthly. Don’t overthink the decision, the easier you make it. You make investing the easier it will be to kind of follow through with it and that’s the best part of it. Because time in the market is everything. 

Viv: How much money would you put in at a time like are we talking about a thousand hundred one hundred dollars? 

Abhi: Yeah, so that really depends on the brokerage that you’re paying. So for SelfWealth that’s about ten dollars per trade. And so if you’re kind of doing that, then I would probably try to save up to a thousand dollars and put that in at a single time. So that might be on a monthly basis quarterly basis or whenever it is possible to do that. If you’re going with Superhero um, then I think that zero dollars for buying ETFs. And so you can kind of do that whenever you feel like investing. So I would try to have like a regular time, so it might be on a monthly basis or quarterly basis. And then just make it a routine in terms of investing because that’s the easiest way to do it. Just make it really simple and then you’ll actually follow through because if it can be over complicated and it can get really murky in terms of the intricate strategies that you can employ. But the easiest way to do it is just pick an ETFs and just put a lot of money in there. 

Sydney: That’s really good advice. excited to Google that this afternoon. 

Viv: Yeah, I like, I’m not really invested right now, but I probably should start looking into it and do something with the money in my bank as opposed to just leaving it there. Um question though, what if you wanted to go on a holiday? You need like fifteen thousand dollars or like twenty thousand dollars to go to Europe and your money is in your stocks. Would you recommend pulling it out of there? Like what’s the strategy when you’re invested and you need money? 

Abhi:Yeah, so that’s, that’s a pretty common question I feel and everyone will kind of have that sort of question when travel opens back up. Yeah. And I think my advice would be to try and forecast your large expenses as early as possible. If you do have like a 20 grand expense, let’s say at the end of the year, that instead of investing every month into an ETF, I would just kind of save that money. Rather than actually invest it just say that in a different bank account and that, that will kind of serve as your pool of savings for that 20 grand at the end of the year. So it’s not so you should try to not pull out money from your investments just because you’ll be recognizing a capital gain or a capital loss and you’ll have a tax obligation on that. Whereas if you just leave it, invest it in kind of sitting away, then there’s no tax obligation generated. And so it’s kind of stress free where free. So just try to focus as much as possible. I mean, there may be instances where you do have to pull a little bit out, but if you forecast early enough, then that little amount will be as little as possible. So that’s how to try and go about it. In addition, you also do have your emergency savings account there as well. And so pull from there before you pull from your investments. And then what I would actually do is once you pulled from your emergency savings, try to top that back up as quickly as possible as well. 

Viv: Yeah, really great point. So, invest early and leave it there. Don’t try to pull it out. 

Sydney: I know a lot of people who are just starting out in the workforce have a lot of questions about Super. It’s just this mysterious thing that happens. Oh, is there any like high level overview for how you think about Super? Yeah, so super is a pretty good savings tool for Australians that a lot of countries actually don’t have around the world or they might have a substandard version of it. And so for us in Australia, I think we get nine point five percent paid into our super account on a yearly basis by our employer. And so you should really try and make use of that as much as possible. This is kind of going back in terms of the risk profile discussion, where, how much risk can you actually take on? And so for your superannuation account, if you’re a young person probably under the age of 30 to 35, then a lot of your super account or your super balance should probably be allocated to the growth or the high growth option at your super fund. And so all super funds will kind of have a growth in a high growth option. The high growth option will typically be allocated 50 percent Australian equities and 50 percent in international equities in most cases. Obviously do your own research with your super fund in terms of what the asset allocation is. But that will give you the opportunity to have the most exposure to equity markets, which are probably the riskiest, but also the highest returning markets in the liquid financial space. So your super company is investing essentially. Your super fund is essentially investing on your behalf into a bunch of different stocks with the high growth option with the growth on the balance option. 

There may be other asset classes included. So for example, fixed income, which is a bit more of a defensive asset class, it may be invested in infrastructure or property or venture capital, private equity. Um, there’s a whole bunch of other stuff that it could be invested in the balance growth option. But high growth is typically the one that I would recommend, at least for the early, let’s call it 10 years or 15 years of your life. And from there you kind of taper it back, so from a high growth, you would actually switch back to growth for another 10, 15 years. And then you can switch back to balanced as you’re kind of approaching retirement. Because those will kind of align to the risk profiles of your life and when you would expect to receive that money. So that’s kind of how I would think about structuring. 

Viv: Really interesting. I think a lot of my Super is just a lot of different default accounts and I just never look at them. 

Abhi: So that’s the other thing actually. So by having your super in different accounts, just because you’ve worked different jobs and you’ve kind of gone with the default company super, that’s actually eroding your returns because each super fund will charge fees on you having an account with them. So the number one thing you should do if you do have multiple accounts is just pick a super fund, it doesn’t really matter which one. But in most cases, Sun Super and AustralianSuper are the biggest ones, choose one of them and put all your super fund money in there to keep it really simple. So you don’t have to kind of keep track of which fund has XYZ amount of money in it, just kind of consolidate all of them. That’s number one. And then they’ll allowed to compound as a whole, as well. 

Sydney: Yeah, well this has been so insightful. I feel like I have a better idea of what I’m doing going forward. Just a final question. What do you think has been your biggest learning over the years? About money, investing or just about your career in general? 

Abhi: Hmm. So I think in terms of like, even money and career are kind of similar, they kind of follow the same sort of traits is just taking a lot of risk early on in your life because you can always recover later on. So I would just try to take a lot of risk early in your career. So do something a bit crazy or do something a bit out of the typical norm and just try to explore as much as possible in the first five years of your life. Because by the time you’re 30, you’ll still have a good career, even if you have screwed up in the early part of your life, that’s kind of what I’ve sort of led and taken. So for example, when I switched from my corporate job to upstate, i took a 50 percent pay cut in doing that. And so that was a big risk for me because you know, to take a 50 percent pay cut is a big thing for anyone. 

Viv: I think there’s actually a massive 50 like five, zero, five zero. 

Abhi: But I kind of knew what I wanted, and I knew what my end goal would be. And I managed to achieve that in about four months, which is a lot sooner than I expected. But you have to do take those risks if you do want outsized returns at the end of the day with your career. And the same thing with your money, you have to take sufficient risks, calculated risks with your money if you do want to achieve a lot more return. So I would say take as much risk as you can early on and then adapt and learn and grow as you continue your career and your money journey as well.

Sydney: Yeah, I love that. And I love the theme of growing! Thank you so much for coming on our show today. Abhi. We’ve really learned a lot about how to save, what to do with our savings, and like you said, be willing to take risks early in our careers for upsized returns. 

Viv: Yeah, absolutely. 

Abhi: Thanks for having me. 

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