The hot seat
What was your first job?
It was a summer internship at Merrill Lynch in 1998 when I was 13 and fascinated by investing and the stockmarket. The tech boom was in full swing and they were preparing for the float of pay TV provider Austar. Two years later I remember reading that Merrills had all but shut down its Australian operations. It was my first experience of a full market cycle.
What’s the best money advice you’ve ever received?
Res tantum valet quantum vendi potest. It’s Latin for “A thing is worth only what someone else will pay for it.” It perfectly captures the importance of cycles and psychology when investing.
What’s the best investment decision you’ve ever made?
When I was in Year 1, a friend came back from a family holiday to Indonesia with a 1000 rupiah note. He showed it around class and I was so impressed I offered to buy it for $1. When I got home from school that day I showed it to my little brother. Clearly impressed by all the zeros, he offered to give me all of his savings – which amounted to about $30 – in exchange for the note. To this day this has been my only thirty-bagger.
What’s the worst investment decision you’ve ever made?
When my brother went to my parents to brag about how rich he was, they took the role of financial regulator and instructed us to unwind the transaction. I ended up with the 1000 rupiah note, which is only worth about 10¢ today. It hasn’t been a good investment but for the 90¢ I lost it has been a great lesson on exchange rates and the impact of inflation on fiat currency.
What is your favourite thing to splurge on?
The ferry to work. It costs triple the bus but it’s so much more enjoyable and showcases our beautiful Sydney harbour. It’s always a great way to start the day.
If you had $10,000 where would you invest it?
When I do have spare savings it all goes into low-cost exchange traded funds (ETFs) across a range of different assets. That’s the smartest way I’ve found to grow my wealth. It’s also the reason I built Stockspot.
People take too much risk buying individual stocks. Others don’t know where to start so they leave their cash in the bank, which is even more dangerous in the long run as bank interest won’t keep up with the price of things you want to buy. Exchange traded funds and automated investing can help novice and expert investors grow their wealth without worrying or the hassle of do-ityourself investing.
What would you do if you only had $50 left in your bank account?
Convert it into rupiahs – I’d feel a lot richer.
Do you intend to leave an inheritance?
Warren Buffett once said that he wanted to leave his kids enough to do anything but not enough to do nothing. Growing up I learned that money can give you more freedom and flexibility but happiness comes from doing what you love. That’s the lesson I want to pass on to my kids some day.
Do you think property is a good investment in the current market?
Residential property is much closer to the top than bottom of its cycle in Australia. By any measure residential property is more expensive than Australian shares, so the contrarian in me would be reducing rather than increasing property as a percentage of my personal wealth.
That doesn’t mean property won’t keep rising, because it might, but eventually it will return to its long-term trend. Higher interest rates, when they do happen, combined with high leverage will cause a significant unwind at some point.
Complete this sentence: money makes …
a great magazine title.