The Investor Story Podcast: William - goals, satellites and a house deposit.

As always, we don’t disclose personal details but this is the full transcript of my interview with William.

Evan Lucas: EL

William: W

EL: William welcome to ‘InvestSMART’s ‘Investor story’ podcast – Let’s start with the obvious question: What drove you into investing in the first place?

W: I think I sort of first got into through my dad.

I’d started work out of university and had saved a bit of cash as I’d been working overseas and a lot of my expenses were covered so I built up a fair bit of cash. He directed me towards putting money initially, into a mutual fund through the bank. Once I did that, he put me in that direction to sort of say.

“You need your money to be working for you and that way it can be chugging along and increasing in value while you’re just continuing to work, and you don’t have to worry about it.” 

So that’s how I first got into it all. It was just on the back of recommendations from my dad, really.

EL: You said you originally started in a mutual fund and then have gone from there your next step?

W: I initially started with the mutual fund because I was quite unsure about how to do any of that stuff, so I just put some money towards that. But then I did want to take a little bit more risk with some smaller amounts of cash. I initially went through the bank, bought some shares in a ‘share pack’ that they put together for you - at the time it was BHP, CSL, Macquarie, those sorts of blue-chip stocks.

This was a way of dipping my toe in the water and then as I was watched those grow I got more and more involved in it, doing all my own research, I then took the next step again and setup my own trading account to be able to buy and sell stocks by myself. 

Then having done that for a little while, I sort of got sucked into it, that was when I stumbled onto InvestSMART and then decided that I’d probably be better off just moving some money into InvestSMART’s exchange traded fund accounts. TI put the majority of my cash there leaving a little bit for me to dabble on my own. 

EL: It sounds like you’ve got a strategy we call a ‘satellite setup’ so what’s your next step with your current strategy and what’s your goals going forward?

W: I guess I’d never really thought about what to call it until actually reading the InvestSMART stuff, but the whole satellite idea was that I would have a strong base that I can grow and use that as well as a way to save for my goal of a house deposit. 

That house deposit will be five or more years in the future, so my timeline in terms of that is medium-term.

I’m pretty comfortable with having some higher risk assets in there, so really happy to have international and Australian stocks with only a small amount of cash in the portfolio.

Mainly, it’s about building that wealth, but then it’s also about the house deposit and given the time horizon that I’ve got, happy to have it in those slightly higher risk allocations at the moment.

EL: That’s a very common thing to hear, that drive for that house deposit is the main goal that most of the clients we have certainly talk about.  Getting back to the discussion about your dad getting your money to work harder - is that because you know that you couldn’t get your house deposit without going down this route, or is it because you are happy to take that bit of risk and make that money work harder? 

W: Yeah, I think that’s pretty much spot on. What happened to me was, I was initially trying to save for a house deposit purely in a high savings bank account because the rates I was getting there were initially better than most term deposits. But even then, when I was looking at the rates on offer they just kept dropping, and dropping, and then the more I thought about it, the amount of time it was going to take me to get anywhere close to a deposit was just getting bigger and bigger, so that’s sort of what drove me to eventually save the quickest and – not the easiest because the risk is still there, but the best way that I can make this money work for me and get close to that goal. It’s not risk free but it’s the best option I think that I have at the moment.

EL: What made you jump across to InvestSMART? Because obviously you had an account at the bank and you were using them already, what made you switch?

W: I was thinking about this the other day. I initially found out about it, through mum and dad. I’d seen the finance reports on ABC News and so I knew about Alan Kohler and I saw some initial things in the Eureka Report. I had an account through that for a little and was reading its articles. Then, when I saw InvestSMART had funds that you could invest in, that piqued my interest. I liked how easy it was to be able to track everything and have everything right there in the portfolio manager. 

I just liked the InvestSMART ethos – I think that is the right word – in terms of the simplified approach that was easy to understand, but also the approach to long-term investing, looking for value, that sort of side really interested me as well. 

The more I looked into it, the more it made sense and it was easy to use as well. It just seems more personable than the bank, to a degree.  Speaking to yourself or being able to speak to people through the InvestSMART system, it just seems like I’m talking to the real people and it seems sort of easy for me to use.

EL: William, that’s a fantastic story, we really wish you all the best with your investment timeframe and investment goals and good luck for the future.

W: Thank you so much for having me.