I started a new job this week, and my new team has a weekly lottery pool that everyone in the team is part of. In the past I would’ve joined the lottery pool without hesitation, however this time I decided to do something different.
The Lottery Syndicate (or Lottery Pool as I like to refer them them)
I’ve been involved with a few lottery pools in previous jobs, and I actually ran one after the previous person left. Lottery pools for those who aren’t familiar are where a group of people pool their money together each week / pay period and buy a lottery ticket (or tickets). The aim of the pool is that by pooling your money together you can purchase ‘better’ tickets (e.g. tickets that have a better chance of winning). According to some sources 1 in 5 jackpots are won by lottery pools and therefore lottery pools are pretty popular (I’m a little hesitant to believe such a stat).
My Work Lottery Pool
My work Lottery Pool is pretty straight forward its a $5 weekly payment to the pool of approximately 20 people. The pool of funds approx. $100 a week is then used to purchase a lottery ticket of that price.
If we win over a certain amount of money (usually over $200) this is split between everyone equally otherwise if it’s less than this amount we will use the funds to buy an even better ticket than usual.
I calculated that over the next year my personal contribution to the lottery pool would be $260. Over the years I’ve been part of a lottery pool I have won zero dollars so working on this assumption, and the current statistical likelihood of winning the lottery its a pretty safe bet that I’m going to see zero return (and lose my capital as well) if I join the work lottery pool.
Investing in Crypto
I’m a slow and steady investor who doesn’t enjoy a lot of volatility, and before this week I have never considered investing in crypto currency. However as I pondered the lottery pool and the likelihood of ever winning my mind thought about how I could better use that $260 a year. My mind initially thought of putting extra to my Spaceship Investments, but then I thought about crypto.
You have to have been living under a rock if you haven’t read about the crazy rise of Bitcoin over the last few years (and other Crypto Currency’s). I decided to find a calculator to run some calculations on what would happen if I put $260 into Bitcoin one year ago (the $260 representing a year of lottery pool contributions).
The screenshot below absolutely shocked me!!!!
If I invested $260 into Bitcoin a year ago I would have almost $2500 today (this is an 840% return).
Please note: Historical returns are not a predictor of future return, and all investing comes with risk.
Gambling vs Crypto
The bitcoin investment return numbers shocked me to my core. The numbers made me realise that investing in crypto has a far better chance of me coming out with anything then joining a lotto pool (this is even considering the fact that crypto in the past has had fluctuations of -70%).
Although crypto is not considered gambling I view it as close to gambling as it gets when it comes to investing (it’s not for the faint hearted).
So from here on in I’m officially a very unlikely crypto investor, who is investing ‘lotto’ money that I was likely going to lose anyway.
Feel free to hit me up in the comments and share your reasons for investing in crypto.
Really excited to finally be sharing this news with you. We joined Pearler last year, however we delayed investing until they had joint accounts available.We are now all set up and I’m looking forward to sharing my experience to date so far.
What is Pearler?
Pearler is an investment platform founded by 3 friends in 2018 who had the desire to create an investment platform that made it easy for Australians to invest in shares and ETFs. The platform aims to decrease the stress of investing, and empower Australians to improve their financial literacy. To find out more on the Pearler founders click here.
Is Pearler CHESS Sponsored?
100% yes !!!!!! Pearler is a CHESS Sponsored brokerage platform which means that you own your investments directly.
Are my investments safe given that Pearler is a relatively new start up company?
Pearler may be a start up, but your investments are as safe as any investments you would buy on other plaforms such as Commsec, SelfWealth or any other big online broker. Pearler have written a great article which details why your investments are safe with them, and I encourage you to read it.
What are the key features of Pearler that makes it stand out in comparison to other brokerage platforms?
Although we are not using this feature ourselves as our ETF’s aren’t included in the list of brokerage free ETF’s I think this is a great idea. Click on the link above to find out more on what ETF’s are included.
Pearler is a lower cost brokerage option in comparison to many online brokers out there. I was quite impressed by the price in comparison to my broker, and considering the addition features I receive. Click on the link above for current pricing.
Click on the link above to see the FI Resources that Pearler has available to use. This includes 3 calculators including one which is aptly named Financial Freedom Calculator. There are also a number of awesome and informative resources via the Simplifi section of Pearler. Pearler have also published the stories of others on their Financial Independence in their own FREE for download AussieFI eBook. I strongly encourage you to check out their resources even if you don’t end up investing with Pearler.
I really love the community feel of Pearler which allows you to follow other investors and see what they are up to. Click on the link above to follow me and see my portfolio (Note: Remember to do your own research before buying ETFs/Shares that others have as my circumstances are likely to be different to you). This community feature is something that is nothing like what other online brokers I’ve seen offer. When you join up with Pearler you can update your own profile (optional), follow others, and track your progress to your financial independence goals.
How do I set up an account?
Signing up with Pearler is so easy simply head on over to their online site (click here for link). The online sign up process for me took less than 10 minutes (and we did a joint application). The user interface is really simple and clean. Once you have completed your online sign up you will have access to your Pearler account, however you will have to wait for email confirmation before you can start trading (this normally takes a couple of days).
I wish Pearler was around when I started investing. When we started investing we chose to invest through our bank (which is what we felt comfortable with at the time). The experience we had with applying for an online share trade account our first time was not easy or simple at all. We submitted our applications on the clunky online portal (which took ages), and then had to come into the branch to submit further paperwork. All up it took about a month to get it all sorted.
Why did we move to Pearler?
The ability to auto invest was 100% the main reason we made the move to Pearler. As we’ve progressed and refined our financial plan towards financial independence we’ve found that automation has been a key foundation for building our own portfolio to date. Prior to Pearler we had an automated transfer of funds each payday to our share trade account, however we still had to pull the trigger and invest the funds ourselves. This may not seem like a bad thing, but often I’ll admit I would delay investing for the ‘perfect’ day (eg. I tried to time the market sometimes). Auto investing takes the decision out of when to invest, and promotes dollar cost investing. Time in the market beats timing the market any day.
Save money on brokerage costs
Although our ETF’s aren’t on the brokerage free list we are saving $12.45 each month by moving over to Pearler. This doesn’t sound like a lot, but if we continue investing over the next 31 years that equates to just over $17,000 !!!!! (Assuming we invest the brokerage savings and get a return of 7.5%).
Not just a number
With the community features, helpful investing articles, and attentive customer help I have never just felt like a number with Pearler. I feel that the relationship is more than just customer and business, its a relationship where Pearler want our family to actually reach our investing goals.
Feel free to drop a comment below with a link to your Pearler account I would love to follow you.
Note: Please note that the links to Pearler are referral links that will result in you (and me) getting one free trade if you sign up to Pearler.
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So what’s the deal with the micro-investing platform called Spaceship.
I started hearing about an investing platform called Spaceship on Instagram about 2 years ago. I will admit I avoided it like the plague until very recently, and the reason for avoiding it was lack of real information about it.
I’m a naturally anxious person and as a result I like facts and this guides my desire to explore something further. I mean who names an investing platform Spaceship?
Name aside I finally started using the platform after listening to the two part podcast episode on micro-investing from She’s on the Money . Listening to the podcast gave me the confidence to explore micro-investing, and do my own research. After 3 months using the platform I’ve decided to review it here on the blog so you can make your own mind up.
What is Spaceship?
Spaceship is the name of the company which own the micro investing platform Spaceship Voyager. The Spaceship Voyager micro investing platform has been around since 2018. As per Spaceship’s current information they have over 100,000 customers (this includes customers that use their other products such as Spaceship Super). Spaceship’s head office is located in Australia and prides itself on five key values when it comes to its products. These values are:
Investing = To place money into shares, property, or other financial schemes with the expectation of achieving a profit.
So in a nutshell Micro-Investing is small investing, and in the case of Spaceship its investing small amounts of money into a pre-determined portfolio of shares.
What are the benefits of micro-investing over regular investing platforms?
The main benefit of micro-investing over regular investment platforms is that they allow you to dip your toes into investing without the usual larger initial investment. They are also typically very simple to use in comparison to more conventional share trade platforms. This makes micro-investing the perfect place to start your investment journey as a new investor.
What are the benefit’s of using Spaceship?
No Minimum Investment Amount – invest $1 or invest $100 it’s your choice.
Instant Diversification –Spaceship have already created 3 pre-diversified portfolios that have been designed to suit a range of investing values/risk appetites. The benefit of having a diverse portfolio is that the risk is somewhat spread across the different companies.
No Fees to Trade – This for me is a big plus given the usual cost per trade given that in a traditional investment platform each individual trade ranges from $9.50 – $25.
Fee Free below 5k – Once you hit 5k then dependant on the portfolio option you chose your fees range from 0.05% to 0.10% P.A. Which for a 10k portfolio equates to between $2.50 and $5 per year.
Simple to Use – There are limited buy options (no option to buy at market price, to limit price or make a conditional order) which means that its really easy to start investing (you don’t need to know all these terms straight up, although you might want to). To invest you simply select how much money you wish to invest eg $5 through the application on your phone and hit invest. Your investment is then processed dependant on the time you submitted it. If you submit an investment request through the app before 5.00pm on a business day, you’ll generally receive the unit price calculated as at the close of markets on that day. However if you miss the deadline then you’ll generally receive the unit price calculated as at the close of markets on the next business day.
What are the potential disadvantages of using Spaceship?
Risk – All investing carries risk. Don’t let anyone tell you otherwise. Micro-investing is no different. Each investment portfolio within Spaceship is assigned a risk profile (Low/Medium/High), and this is designed to assist you in selecting an investment that suits your risk profile. Spaceship give no guarantees of return and previous fund performance is not indicative of future fund performance. If you choose to invest you are taking on the risk that you could lose some or all of your investment.
Limited Investment Options – You get to pick from 3 pre-diversified portfolios, however you have no choice in what is in them. For some investors this may not be what you are looking for, and if this is the case then you will need to look at another option.
Limited timing / buy options– For those used to investing on regular share investment platforms you may miss the fact that your investment isn’t automatic or that you aren’t able to choose a price to invest at etc (no options to limit price, make a conditional order or market order).
Taxation Considerations – Like any investment you are subject to taxation laws, and Spaceship recommend you seek professional advice before investing in their products.
Not for short term investors – Investing is for the long term so I wouldn’t recommend using Spaceship for short term investing (you are better off parking that money in a high interest savings account). Time in the market generally beats timing the market so invest what you can afford to, and only invest money that you don’t require for at least 2 years (the longer the better).
How often can I invest?
Spaceship gives you two options to invest. You can make investments in the following way:
One off investments on an ad-hoc basis. You are able to choose the amount you invest, and when you want to invest.
As part of a regular investment plan. This is where you invest an amount you specify regularly (weekly, fortnightly or monthly) to suit you. You decide the amount you would like to regularly invest, and this could any amount ($1 or $100). You can change your investment plan at any time through the app (so you are not locked in).
These distributions are calculated annually (if available again there is no guarantees) on or around the 30th June each year. You are then paid these distributions within 90 days of this date. To be eligible for this distribution you need to be a unitholder before the calculation date (30th June).
You will have the option to have your distribution paid to you, or if offered you can participate in DRP (Distribution/Dividend Reinvestment Plan).
As previously mentioned I’ve been using Spaceship for 3 months. I have $181.03 (at the time of this post) in my account (see photo below). Of this total amount $4.21 is growth and the rest is my own money.
I currently invest $25 a fortnight which aligns with our payday. I also add additional amounts to round down my everyday transaction account. Eg If my account is $152.50 then I will transfer $2.50 to my Spaceship account.
I enjoy investing in Spaceship as it allows me to add little bits of money we make over the year and pop it in. This allows us to siphon off side hustle and other bits of money we won’t miss before we fritter that money away on other things. We plan to continue investing in Spaceship for the foreseeable future and believe it sits well beside our main conventional share trading account.
Remember I’m not a finance professional, and really just some random on the internet so make sure you do your own advice before looking to invest in any investing product or platform.
Do you want to find out more?
Well head on over to the Spaceship Voyager website, and after doing your own due diligence decide to go ahead feel free to use my link and code below to get $5 (after your first investment).
What the hell is an ETF anyway? and what are the potential benefits and cons of ETF’s.
ETF’s or Exchange Traded Funds are managed funds that you can buy or sell just like an individual share on the ASX or Australian Securities Exchange (or if you are in another country your own country/regions share exchange).
There are many different types of ETF’s so its important that you do your research into a potential ETF before taking the plunge and investing any of your hard earned funds.
If you’ve heard of ETF’s on the #debtfree or #fire community then you would likely have heard of people (like me) in these communities investing in ETF’s.
What is the difference between ETF’s and Individual Shares?
ETF’s differ from individual shares in that you don’t own the underlying assets/or shares held within the ETF. You own the units within the ETF and the ETF provider (eg Vanguard a well known ETF provider owns the investment itself).
ETF’s differ as well in regards to individual shares in that they typically give you exposure to more than one company, sector, asset, or market. Dependant on what ETF you select this spreads your risk exposure to more than one company, and offers diversification to reduce your risk in the event of a company failing or a market event.
What kind of ETF’s are out there?
As of March 2020 there were 200 ASX listed ETF’s and this list is always growing. Additionally ETF’s are becoming more diverse in terms of what they invest in as demand for ETF’s grows. The list I’ve complied below lists some of the different markets, sectors and other assets that ETF’s invest in:
Sector based share holdings (eg banking, technology, healthcare or mining)
Bonds (eg fixed income investments)
Gold or other metals
and there are many others.
I hope you can see from the list above its important to know exactly what your ETF invests in before you invest in it yourself. Its important to align your values and risk profile with a ETF that meets your needs.
Benefits of ETF Investment
Diversification – This is the big one for me. You can purchase a number of shares in a single trade within single or multiple markets (eg Australia and International Shares). You can also select ETF’s that are diversified across multiple markets/asset classes to spread your risk even further. You can also select ETF’s that aim to provide fixed income or monthly dividends. Don’t skimp on your research.
Access to Markets – Investing in individual shares in overseas markets can be difficult for Australian’s so an ETF may be an easier option if let say you wanted to invest in the Indian Share Market.
Low Cost – ETF’s are usually cheaper than an actively managed fund. If you do want to know more about actively managed funds use this link here. You can find out the cost of the ETF by checking the management expense ratio or MER (%). You can find this information when you are researching your ETF (if you can’t find the MER referred to directly your ETF may also call it their yearly fees).
Trade like a Share – ETF’s can be traded just like a share, and just like buying an individual share you buy during the trading hours of the exchange.
Dividends/Distributions – ETF’s just like shares may also offer regular dividends or distributions monthly, quarterly, semi yearly, or yearly. Many ETF’s also offer Dividend Reinvestment Plans (see article here to learn more) , which may be something on your list of wants for your future investment.
Higher Liquidity over Property – Just like a typical Share Holding when you sell an ETF you should expect to receive your funds within 2 business days of the close of market. This means that ETF’s offer better liquidity than an investment property for example.
Cons or Risks
Investment Risk – The biggest con of all of ETF’s is market risk (same as buying shares). Buying a diversified ETF doesn’t shield you from market risk. The investments your ETF invest in could still fall in value, and anyone who owned ETF’s during Covid-19 (or any other crash) would agree. However if you view any ETF investment as long term you will also know that the market has since rebounded, and no money was lost unless you sold out your holdings. Buy and hold forever is my strategy for investing so I don’t worry about what is happening to the market day to day.
Choice – As previously mentioned you need to do your research before buying ETF’s. There is a lot of choice out there, and you need to do your due diligence (just like investing in anything). Two ETF’s may both invest in the Technology Sector, but there may be important differences between the two. Make a shortlist of ETF’s, research the ETF provider to ensure they are reputable, and know what your ETF holdings are made up of.
Tax – If you are used to investing in individual shares you will likely know how your tax is calculated. Dependant on your ETF holding you may find that doing your tax for an ETF is quite different to owning individual shares. Your end of year ETF statement provided by Computershare (link to article) may include distributions rather than typical dividend income, foreign income, and capital gains even though you didn’t physically sell any ETF’s. Make sure you know your tax responsibilities in regards to any ETF’s you purchase, and consider seeking professional taxation advice.
Why I invest in ETF’s
I’m 100% a passive investor therefore ETF’s suit me well. I don’t like to actively manage my shareholdings or sell shares to rebalance my portfolio. Instead I take a set and forget approach and aim to buy and never sell. I’m 100% a passive investor therefore ETF’s suit me well.
Please note: This is not advice this is what I have researched and what I feel comfortable investing in. I evaluate my investments regularly and my investments and risk profile may change over time.
If you would like to know more about what ETF’s are available I have listed some ETF providers below (Australian Links):
If you are new to investing and want to participate in your holdings Dividend Reinvestment Plan (DRP) then this post is for you.
When I first dipped my feet into shares I had absolutely no idea how to do anything. Taking the step to buy shares in the first place took me long enough. Once I bought my first shares I wanted to participate in the holdings DRP, and have my dividend income automatically invested in buying more shares.
Computershare provides share registration services including transfer of shares, tax reports, dividend income reports, and the ability to update how and where you would like your dividend income to be paid.
How to opt into the Dividend Reinvestment Plan (DRP)?
Opting into a DRP is quite straight forward once you’ve set up your Computershare Account.
Dividend Reinvestment Plans or DRP’s are a type dividend (income) distribution option that some share holdings provide to their shareholders.
If you have selected to be paid your dividends via a DRP then your dividend income will be automatically reinvested in purchasing more shares (to the value of the dividend).
Example – If your dividend payment was $50 and the share price was $25 you would have an additional 2 shares added to your portfolio instead of a cheque / or bank deposit of $50.
What options do I have in terms of being paid my dividends?
You can opt to have your dividends paid to you in the following ways:
Dividend Reinvestment Plan (if offered)
Do all share holdings offer a Dividend Reinvestment Plan?
No. Not all holdings offer the option of a Dividend Reinvestment Plan, and if this is the case you will need to opt for one of the other options to receive your dividends.
That said as DRP’s become more popular I’ve recently noticed a trend where some holdings automatically opt you into the DRP, and you have to opt out of it if you don’t want to participate (example – DHHF ASX | High Growth ETF Australia | BetaShares).
What are the benefits of opting into the Dividend Reinvestment Plan?
No temptations – This was an important consideration for me. For me being enrolled in DRP means my portfolio is constantly growing, and I’m not tempted to spend my dividend income elsewhere.
No brokerage fees – There are no brokerage fees passed onto you within a DRP, which is a significant money saver over time as trades can cost upwards of $20 per trade.
Supports a Dollar Cost Averaging approach – If you subscribe to DRP you are by default opting for a Dollar Cost Averaging approach. This approach suits those who are in it for the long haul, and aren’t trying to time the market. You have no control of the price of the shares you are purchasing within a DRP, and therefore sometimes the shares you receive through DRP will be overvalued and sometimes they will be undervalued at the time you receive them. Regardless the principle around dollar cost averaging is that over time this will even out and won’t be an issue.
KISS Approach – DRP keeps things pretty simple in terms of managing your income payments, and will suit those who enjoy a hands off approach to investing.
Compound Effect – DRP is a great way to quickly build and grow your portfolio as each time you are paid a dividend you will receive a larger number of shares than the last pay-out (This is based on the assumption that the dividends are unchanged).
What are the considerations of opting into a Dividend Reinvestment Plan?
Lack of Control – If you like having a hands on approach to your portfolio and investments then DRP might not suit you. You will not have any control over the price and timing of the purchase of shares under a DRP, which may result in you buying shares at the higher price than you would if you purchased them yourself. That said if you are planning on holding your shares for the long term then the nature of DRP means that the price paid for your shares should even out over time.
Unbalanced portfolio and/or reduced diversification – DRP involves the automatic purchase of shares in the same holding, which means your portfolio may become unbalanced over time. This can be an issue for those with a portfolio where they manage the balance of asset classes and diversification of holdings.
Not for short term investors – DRP isn’t recommended for those who are not looking at holding shares for a long period of time. Short term investors would likely be better off opting for a direct payment (bank deposit or cheque) and purchasing additional shares separately.
Not for those who are dependant on dividends as an income stream – If you are looking at drawing an income from your dividend stream (eg retired) then DRP isn’t for you as any income is turned into shares.
Record Keeping – DRP requires additional record keeping (sad face). You will need to keep records of the purchase price and dividend payment amount every time a dividend payment is made. Sharesight provide a really great guide here for more information.
So how do I update my Dividend Distribution Options?
So you’ve started investing and want to know what the deal with Sharesight is. Well here is my personal experience, and my plans for use in the future.
So what is Sharesight?
Sharesight sells itself as the Best Share Portfolio tracker for Australian Investors. In a nutshell it’s a web application accessed through your web browser (i.e Google Chrome, Safari, Edge etc) that allows you to track your shares, your portfolio performance over time and gives you access to investment reporting.
How much is Sharesight?
Sharesight is FREE for those with 10 or less shareholdings, which makes it a popular choice for new investors looking for a simple to track their portfolio. For those with over 10 holdings or those who are wanting some of the more advanced features of the platform then prices start at $19 a month (and max out at $48 a month). Pricing information available here.
What does the Sharesight platform look like?
Sharesight is quite easy to use and easy to understand. The user interface is quite simple with clear menu tabs at the top providing the following options;
Overview Tab (as per screenshot) – This gives you an overall view of your portfolio as per your own personal settings (including timeframe, graph type eg line, stacked, or growth, and lastly you can also view by group). I personally like to keep it simple and like to see my calendar year, stacked graph type and default grouping.
Holdings Tab – This provides you with a sub menu to view your holdings individually and then drilldown into their individual performance. It provides you with a summary performance graph, a breakdown of trade cost and date, current holding details (eg share price) and any income associated with the holding (share).
Reports Tab – This tab provides you with a list of 10 reports. 6 of these reports are included in the FREE version of Sharesight and the other 4 are available in the paid options. Sharesight offers a sample of the paid reports so you can try before you invest in a paid membership.
Settings Tab – This tab allows you to customise your portfolio to your current setup. It has a range of different settings you can customise from basic settings like the name of your portfolio to more complex settings. You can adjust tax settings for use as an individual, , trust, company or SMSF in this section. You can also customise the frequency of Sharesight alerts to your inbox (I enjoy getting my weekly portfolio summary). Lastly you can share your portfolio with others which is great if you have a partner who doesn’t want to set up an account but wants to stay informed (eg like mine).
Integrations Tab – Full disclosure I haven’t used any integrations during my time with Sharesight, however I feel its important to note the features available including Xero integration (please note this integration is only available to those on investor or expert plans). There are also integrations available within in the free plan that may be appealing including auto recognition of trades via the emails that your broker sends you each time you make a trade (buy or sell). I personally prefer to add mine in manually, but each to their own.
Help Tab – Lastly the Help tab links you to Sharesight Community, the Sharesight Blog, and contact details to send a specific issue you may have to the Sharesight team.
How do I get started with Sharesight?
It’s fairly straight forward setting up your Sharesight account itself, and you just need to provide your email account and basic personal details.
How do I add my previous trades (buy/sell)
When I started with Sharesight I had already been trading shares for a couple of months, and had to add my trades in. Adding your trade history is a lot easier than it sounds and Sharesight gives you three options:
Import from a Broker (if your broker is listed here )
Manually add a trade
Import from CSV (Excel file)
What are my favourite features of Sharesight?
The overview performance page of Sharesight is great, and I challenge you to try not to log into it everyday once you sign up (it’s pretty addictive tracking your progress and seeing your portfolio grow).
The FREE End of Year Taxable Income Report is a real game changer for helping you manage your end of financial year tax obligations. I manage my tax myself and this report makes it easy to continue to do so.
Lastly I’m a bit of a one trick pony when it comes to investing (I choose to invest in only one holding currently), however I love the Share Checker function. Its located next to the Add Holdings button on the Overview Screen (see screenshot below). It allows you to enter a holding and check the performance of $10000 invested in it over a set period of time (eg the calendar year). It then provides you with some really powerful insights into where you would be.
So should you set up a Sharesight account?
100% yes. I highly recommend starting a free Sharesight account to any investor, and trialling the platform. It offers performance and tracking ability that your broker likely doesn’t offer. Additionally if you do have over 10 holdings you can try before you buy to ensure you will get the most from it.
Refer A Friend
Please note that Sharesight is 100% free for those who have 10 or less holders and don’t wish to use the advanced integrations and reports.
That said if you do wish to sign up please feel free to use my refer a friend link here which gives you 10% off your annual payment if you decide to upgrade your account to a paid account. It also gives me $5.00 that I can use towards my Sharesight account.
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