Jellyman Investing - Personal Finance for Australians

About Jellyman Investing - Personal Finance for Australians

If you're an Aussie (A.k.a Australian) and looking to get control of your debt, or maybe learn about investing in the stock market, possibly real estate investing, then you've come to the right place. My name is Jed Guinto and this is Jellyman Investing!! The origins of this podcast name will be explained in due course! Many years ago, I was broke and deep in 5-figure debt. I didn't know anything about finances, didn't know how credit cards worked, had no savings and the thought of one day buying my own property was just wishful thinking. Maybe you're going through some of this. Fast forward 5 years and everything has changed. No more debt, no more credit cards, 5 figures investments in the stock market, I have my own property and a passive income. All in 5 years. Is this something you'd like to achieve? My goal to teach you how to get control of your finances, teach you secrets and techniques we've personally used to take our lives back from Banks and institutions charging us exorbitant fees, real estate agents using fancy jargon to confuse you and finally, social media pressuring you to make financial decisions you don't understand. Welcome, to Jellyman Investing!

Publisher

Jed Guinto

Category

business · business · education

Language

en

Explicit

No

First episode

1 Jan 2024

Latest episode

19 Jan 2024

Latest episodes

20 episodes in the feed.

1. 

   19 Jan 2024

   S01_E20 - Basic Principals of Investing in Individual Companies

   https://www.patreon.com/Jellyman_Investing If you haven't researched Index Funds, I suggest you start there before investing in individual companies. Should you be brave enough and willing to do the work, you can invest in individual companies. Long term they can potentially provide significantly higher rewards. But remember. With higher reward, comes greater risk. What do you look for in a potential partner and how do you go about assessing those things? Do you give a questionnaire on the first date? Maybe an online survey? Do we interview her family members? Don't do any of those things. Those ideas are exactly why I do finance and not a course on finding love. When selecting individual companies we have to understand a few key concepts. We invest in individual companies because we'd like to make more money. But more money than what? We need to couple risk and reward. If you had two investments both with identical returns, yet one had much more risk than the other. Which would you choose? It's a no-brainer. We choose the one with less risk as it has a higher chance of paying off. To apply this, we need to benchmark the investment against something. Index funds are the way to go. A wide market index fund such as Vanguard Total U.S. Stock Market which mirrors the S&P500 in the U.S. can typically grow somewhere between 7-11% each year with a 2% dividend. It is a relatively low risk by the very nature of it being an index fund. Therefore, when selecting an individual company it needs to have equal or less risk (or volatility) than that of the Index fund whilst providing significantly more return. Otherwise, why take the risk? Next, we need to think about specific aspects that make an investment attractive long term. The key word is 'long term'. That is because we want enough time for Compound Growth to occur. If you're not sure about Compound growth there's an article on my Patreon that goes through it. If a company has little chance of making it into the future, our money will not grow. This leaves us with fewer options to choose from. Primarily strong, robust companies that have a good track record. We're not interested in newcomers that have yet to prove themselves. This track record also shows us that they can consistently generate profits and manage their business well. Next comes competitive advantage. Would you drink any other Coke than Coca Cola? Do you always buy an iPhone no matter how much it costs? Companies with strong brands and a competitive advantage can increase the price of their products with inflation. Those that can't are typically industries where it's a race to the bottom. These include airlines where the cheapest flight wins. Petrol and Gas stations. The next factor is consistency. We want to see consistent performance. This can be done several ways as the internet has made it very easy. We look at earnings, revenue, profit, debt, cash flow and more. We want to ensure no erratic behavior. Finally, we want to ensure we understand the company and the industry it's in. If you're an accountant who knows nothing about fashion, don't invest in fashion brands no matter how good the previous factors look. Reason is that when things change in the market in that industry, or the company itself has dropped in the share price, you won't understand why. Whereas investing in areas you understand, gives you such an edge that you can smell false news a mile away. Conclusion These are just some basic things I look for when starting to research potential companies to invest in.

2. 

   18 Jan 2024

   S01_E19 - Variable vs Fixed Mortgage Structures

   https://www.patreon.com/Jellyman_Investing When you purchase a house you'll have to choose between Variable or Fixed. This refers to how interest rate structure of the life of your loan. Deciding which is best depends on your long-term goals. The Allure and Risks of Fixed Interest Rates Fixed-rate home loans are particularly appealing due to their initial stability and predictability. They allow homeowners to lock in an interest rate for a period, usually between one to five years, resulting in consistent monthly repayments. This fixed period offers a shield against immediate fluctuations in the market, a boon during uncertain economic times. However, this apparent stability can be deceptive, especially when low fixed rates are used as lures to attract new customers. For instance, during the COVID-19 pandemic, interest rates plummeted to as low as 2% as part of the Reserve Bank of Australia's efforts to stimulate the economy. This dramatic drop led to an influx of customers locking in low rates, under the assumption that their repayments would remain constant. The challenge arises in the lack of understanding about the impact of interest rate changes. For example, on a $600,000 loan at a 2% interest rate, monthly repayments would be around $1,800. However, when interest rates spiked to nearly 7%, repayments jumped to over $3,300. Such an increase can be financially crippling for many, as they may not be able to afford the higher repayments once the fixed term ends and rates revert to higher variable rates. Variable Interest Rates: Flexibility and Uncertainty Variable interest rates, while offering flexibility, are susceptible to changes influenced by the Central Bank's policy decisions. The primary advantage of variable-rate home loans is the ability to make unlimited additional repayments, which can significantly reduce the overall interest payable and shorten the loan term. However, the risk of variable rates lies in their unpredictability. Rates can increase based on economic conditions, leading to higher monthly repayments. This can pose a challenge for budgeting and financial planning, especially in volatile economic climates. With a Variable rate structure, you can make unlimited additional repayments whereas in Fixed rates, you are capped. Which, if you’re in a position to make large additional payments, you would not be able to under a fixed structure. With Variable, you’re susceptible to increases in interest rates, but also can benefit from drops in interest rates in good times. If you sign on to a fixed rate at 5%, and market rates drop, you stay at 5%. Whereas in a variable structure, you’ll enjoy the rate drop. Key Considerations for Homeowners The essential factor for homeowners is to prepare for future rate changes, regardless of the initial appeal of a low fixed rate. It's vital to assess not just the current affordability but also the potential for increased repayments in the future. This involves considering a 'buffer' to accommodate potential rate hikes and ensuring that your finances can withstand realistic interest rate changes. Final Thoughts In deciding between variable and fixed interest rates, Australian homeowners must weigh the predictability and stability of fixed rates against the flexibility and potential savings of variable rates. Understanding the impact of interest rate changes on monthly repayments is crucial. Homeowners should not only look at the present benefits of a low fixed rate but also prepare for the eventual return to higher variable rates.

3. 

   17 Jan 2024

   S01_E18 - Understanding the Role of a Broker in First-Time Property Purchases

   https://www.patreon.com/Jellyman_Investing The journey into first-time property ownership often presents a labyrinth of complexities, from dodging aggressive real estate agents to navigating through the myriad of mortgage options from various banks. Undertaking this journey alone can be a daunting, stress-filled endeavor. This is where the expertise of a good broker shines, offering a beacon of guidance and efficiency. These professionals not only simplify the process but can also access a wealth of information rapidly, making the journey smoother. And the best part? They’re free! What is a Real Estate Broker? A real estate broker is not just an intermediary in property transactions but a pivotal figure in your journey to homeownership. Choosing a good, reputable broker is essential - akin to selecting a life partner in marriage. The importance of this phase cannot be overstated. A proficient broker knows how to negotiate favorable rates, complete paperwork efficiently, evaluate your finances to determine your purchasing power, manage risks, educate you on economic changes, and provide early access to government programs and grants. The best way to gauge a broker's performance is by asking for feedback from individuals who have recently bought a house. This level of diligence in selecting the right broker can make a significant difference in your property-buying experience. Key Responsibilities of a Broker in First-Time Purchases Market Knowledge and Property Identification: They offer insights into the real estate market and assist in finding the right property. Financial Guidance and Price Negotiation: Brokers provide financial advice, suggest financing options, and handle price negotiations. Property Viewing and Evaluation: They arrange viewings and evaluate the property’s condition and potential issues. Legal and Regulatory Guidance: Brokers navigate the legal procedures and ensure compliance with property laws. Managing Transactions and Closing Deals: They oversee the entire transaction process, ensuring a smooth closing. The Benefits of Working with a Broker Expertise and Experience: Brokers bring valuable knowledge and experience to the table. Time and Stress Reduction: They streamline the property search and reduce the stress involved in negotiations. Professional Network: Access to a broker’s network can be crucial in finding the right property and deals. Representation and Advocacy: A broker advocates for your interests throughout the process. Choosing the Right Broker When selecting a broker, consider their reputation, experience, local market knowledge, and reviews from previous clients. It’s essential to choose someone who aligns with your needs and whom you trust. Final Thoughts For first-time buyers, a broker is an indispensable ally in the journey to homeownership. Their expertise and guidance can demystify the complex world of real estate, ensuring you make informed decisions. Remember, the right broker can turn the daunting dream of owning a home into a manageable and rewarding reality.

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