Mailbag, incl: Don’t miss the glimmers of light. August 23, 2026

26:20There you go. I said it. No, fair. Fair, fair. One thing I would say, and this is, you'd say this often, it's like, okay, with all that, what do you do, given how the world is? And I guess to our questioner slash ranter, I would say if it's appropriate for you, and I'm not giving you personal advice because I can't, I wouldn't, consider investing. Because, you know, if advice is eating your cash, I get it. I wouldn't keep the cash either. But there are, maybe there shouldn't need to be, but there are options you can employ that actually make that money make money. And so, you have to. Yes, you could.

26:50Yeah. Or he's saying, or she's saying they're spending it, right? Instead of saving it. Like, well, you can do that. That's okay. The alternative is to actually do save the money, but then save in the context of put it aside to invest with, and then you actually will get ahead of inflation. That is how you are going to get ahead. Should you have to? That's a fair comment. Ram's got a similar view, and I'm not miles away from it either. But changing the system aside, there are steps you can take to counteract inflation other than just spending everything straight away. That's the real, that's one of the other great tragedies here is you've got to earn your money twice, as they say.

27:22You've got to earn it through the delivery of a service, through your job, you know, and then you've got to work on weekends and evenings to be an investment specialist so you can at least preserve your purchasing power. Like it's a madness. It's an absolute madness. I mean, what is so, what is it, why is it such a radical idea that I should just be able to save my money without massive counterparty risk and giving it to some other bozo to like speculate on, you know, mortgage-backed securities or collateralized debt obligations. I mean, it really is amazing. Like it's sort of like it's accepted because it's normal for us, but I think you sort of look back at it at any first principal's perspective.

28:02It's like why is the plumber having to understand fiscal policy? Yeah, yeah, yeah. You know, why is it that I have to have a view on the bond market and what UST bills are doing? It's like, it is the craziest thing in the world, right? So anyway, hopefully it won't be the condition for a long time. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

28:32That one's from Ralph. He says, hi, Scott and Andrew. My name is Ralph. Go to Ralph. I'm 45. Five, it's the younger than us. Where's bastard territory start and stop? Is it anyone younger than us? It probably should be. We can't really be cranky old people without sort of being direct and, you know, just arbitrary. Is there a range or is it just the younger than us so they've got more time so they're bastards? Well, I think I might have said this on a former pod. I think that I'm actually coming around to the view that it's sort of like as much as I don't like having my physical faculties degrade in an exponential fashion.

29:08I don't know if I'd trade places. I mean, think about, imagine if you were 20 today, right? Oh, I don't know, mate. I'd take the time, I think. I mean, yeah. Yes. Again, I'm rationalizing. Yeah, again, I'm trying to make myself feel better. But, you know, home prices are, you can't ever buy a home. You're working two jobs. You've got to become an investment specialist. Inflation's eating your standard living. And by the way, all the bots are going to take your job. So good luck with that. But you're 20. But you're 20. Yeah, okay, bastards. Youth is wasted on the young. Have we talked about the sunscreen song on this part?

29:50I don't know. I've spoken to you previously about it with a fork. I think you may have mentioned it. So the sunscreen song was written by Baz Luhrmann a million years ago and narrated by a spoken word song that was out in 1990-something anyway. And it's basically an old bloke giving advice to young people. And it's not one of those hectoring things. Because he says things like, you know, be gentle with your knees. You'll miss them when they're gone. And they kind of, you know, it's very much one of those. Yeah, and like everything. I saw it mentioned on an Instagram reel only this week. And it's one of those ones.

30:17I know it's overused the idea, but it was like, wishlessness in our 20s, it hits harder now you're 50. It's like, yeah, it really, really does. It really does. It's like, oh, you can't appreciate it. Anyway, Ralph says, I am 45, bastard, and really enjoy the podcast. I've been a listener for over three years now. Well done, Ralph. You only would have heard us repeat ourselves about 48 times, so you're ahead of some other people. I invest in two ETFs and two companies. The two ETFs are the iShares S &P 500, unhedged, and the iShares S &P ASX 200. I love, though, he says, researching on my own, micro and small caps.

30:56Man, you're in straw man land here. I started off with a very large watch list and trimmed it down as the years went by. I got, I believe, slightly better at looking for signals that indicate a company's potential success. Now, can I say I love this, mate? I read ahead. I'm looking at signals like, oh, don't tell me. No, you look at companies, which is wonderful, not just stocks. My biggest win, Artria, A-R-T-R-Y-A. I researched deeply, developed the conviction and bought around 40 cents per share. The other one is Lumos, bought at 23 cents and the share price dropped after they had a big win those who issued more shares creating maybe an unnecessary dilution I wonder if you're aware of any of these two companies if you could please share your thoughts of course general advice only thanks very much for helping us the plebeians to understand the markets better cheers Ralph do you know one of those companies mate?

31:46Artria did you say? AYA is the code A-R-T-R-Y-A is the name of the company no I don't and what was the other one? LDX is the code oh god that's a 10x return Lumos Diagnostic Holdings No, no, no. Not gone so well. No, no, no. Yeah, but well, well, that's actually, that's actually something I will riff on for a little bit there as well. Because that is, I keep making the point because I think too often, particularly new investors get, they get the wind knocked out of their sails when they suffer a loss like that. And I just feel as, and then it's like, oh, this is too hard. This is too scary. I'm gone.

32:25And I just feel as though it's one of those things that you just expect from the outset. particularly in stocks in general. I don't care if you're only investing in the top 20, but certainly at the smaller end of the market, you're just going to lose all the time. And it's not the point. The point is that your wins offset your losses and you're dealing with very, very, there's a widespread of possible futures. And with these kinds of companies, it really is. Like you could be 10X, 100X better off, or you could be down 90%. And when you sort of step into that pond, You just got to be hyper aware of that kind of stuff.

33:01Where people make mistakes is they continue to hold long after there's any rationality to do so, or they feel as though, oh, I've made a profit. I need to lock that in without any recourse to actually what's going on with the company. And I've actually learned the hard way that the better often thing to do is really is just like as a company is executing and delivering on its promise and there's real business momentum there and everything's going well. It's just like, I'm not going to lock in a profit purely because it happens to be higher than when I, as an individual, bought it. The market doesn't know that.

33:33It doesn't care that. It's absolutely irrelevant to what's going to happen in the future. And you can imagine all of the times that people have thought that they were clever. Oh, I doubled my money. And then 10 years later, it's like, oh, that would have just paid for my entire retirement. That happens all the time. So don't be despondent. Not that you were saying that you were. With the spread of those outcomes, but it's very much how I try to apply this myself. I am absolutely knowing that I am going to probably get best have a 50-50 strike rate. But if I continue to do it right, I'll probably have very, very reasonable, let's not get too hyperbolic, reasonable overall portfolio returns.

34:14You know, and it's just people and yourself, you'll be very tempted to call yourself lucky. It was like, oh, if you took out that one or two stocks, your overall returns would have been terrible. It's like, yeah, if I took out the three worst ones as well. It's silly and it's cherry picking. It's only a valid criticism if you just threw it all at the dartboard and just happened to be lucky. If you're making a reasoned bull case and a couple of them happened to execute in the manner that you expect and others didn't, not through anything that was obvious, but just through the natural difficulty that comes with entrepreneurship and running a business.

34:51I mean, these are very different kinds of things. And it's just, I'm not articulating it well, but people don't really grok the probabilistic nature with this. And I think it's, though it's a dangerous analogy to make, I think the professional gamblers really have it right. You know, those rare individuals who actually make a living betting on the ponies, you know, and it's just like, you know, ask them if they're worried that their last, you know, ticket didn't win. And it's like, no, it's absolutely, same with poker players, you know, like all professional gamblers. And again, it's a very uncomfortable kind of analogy to draw, but they're not a million miles away here.

35:32I just, that, you mentioned Eddie Duke, was it last week, a professional poker player? She's excellent. Very good. Excellent books. and that's really the TLDR of what she's sort of saying here. It's just like you're not a good investor because this stock you bought went up. You're a good investor because you win more than you lose and such that the wins offset the losses to the degree that you outperform the market. That's what makes you a good investor. The strike rate is irrelevant, absolutely irrelevant to my way of thinking. No, I like it, mate. I think that's right. I think, you know, what's interesting about the only Duke and kind of the probability stuff you talked about is you talk about professional gamblers and you made the point of the good ones, the very good ones.

36:10And I think that's right. In fact, it's 100 % right. I would actually, even the ones that lose, get it right. And I don't mean that they're doing it well. I mean they're understanding the game properly. The hardest part for professional gamblers, I get people on Twitter all the time tell me that share market and gambling is the same. And I usually say in a short number of characters, it's not the same thing. But there are some similarities in terms of the way you should think about it. Why investing and gambling are different is investing has a positive expected outcome, speaking of anti-juicant outcomes.

36:39Why? Because the mark goes up over time. Gambling, I win, you lose, you win, I lose. And the house takes its cut. So it's a negative expected outcome on average for the gamblers. You're playing an entirely different game. But the approach that each takes, I feel, I'll say sorry for gamblers, not morally, just like, gosh, take that skill and invest. You are literally trying to win in a game where the average gambler must lose. literally it's the way it's designed because the house tax is cut and you and the other guy one wins one loses the average gambler must lose the average investor I won't say must win but should win does win because the market goes up about 9 % a year on average not every day not every month not every year not every five years but over time the system has a positive expected outcome but I only make that point to say it's not just the successful gamblers who are doing it the right way the unsuccessful ones are too Now, not the amateur gambler who just puts 50 bucks on the nose on some horse in one race on Saturday, but even the losing gambler who says, I'm going to work this out on a probabilistic basis.

37:43I'm going to weight my bets. That's literally the idea. And so there is a lot in common between the two. As I said, for the good ones, it's like, just take that skill. It's like crime, right? It's like if you're spending all that time, energy, effort to commit a crime, that effort put to actual legal use is probably going to make you a whole lot less money and a whole lot more money, sorry, and probably not leave you in jail. So I'll let people make their own decisions, but I think you make a very, very good point. I think that's exactly the story. Yeah. Yeah. Well, the only, I agree with you.

38:11The only, the only wrinkle I would add to it is it's sort of like there are people in there who just, I think you've, you've got to be very honest with yourself and sort of asking, where is my edge? Like, am I really as special as my mummy said I was? Or, you know, like, why is it that I feel as though I can do something that, that, that most people can't? Now, just pick on horses for a moment. Like, you know, there are people who have been steeped in that industry from a very young age, know the ins and outs of it. They're just, it's very much in their wheelhouse and in their circle of competence.

38:41I feel as though everything you said is true, but I would make the one exception being is if you happen to have some kind of insight or edge that you can objectively sort of define against the average kind of punter. You know, I'm not talking about inside information or you know what the horse is going to be given before it runs. I don't know, whatever shenanigans goes on in that kind of thing. But that carries over to elsewhere as well. It's like property or shares. Well, maybe if you've spent 30 years in the property market and the industry and you know it inside and out and you've got special insights there, but you don't know the first thing about an income statement, I don't know, maybe property is the better place for you to invest.

39:19Or even within the share market, it's like, gosh, I have worked my entire career inside the retail industry. And I know I've just got a really good sense of what matters and what doesn't and how it all works. It's sort of like, even with inequities, it's like, you should probably focus there, right? Like that's, you're going to do so much better. Even then, a very well-educated, well-credentialed analyst in Martin Place, you know, might have an IQ of 180, but they're 23 and never run and worked in retail in their entire lives and you know it's just sort of like it's it's uh i i feel as though i mean these are the obligatory bug buffett quote for the day it's like it's not it's not the size of the circle of competence that matters it's knowing where the boundaries lie and i've i've i've um butchered that but that's that's exactly yeah that's the general thrust anyway of it and i feel as though i mean so we we had a chat um with a resource company yesterday as part of the ceo interviews that we do.

40:18And it's a really interesting company, but I'm not going to buy any shares in it. Why is it a bad company? Do I not like it? No, I just know that every time I've dipped my toe in that particular water, I don't do well. I don't know the game. I've got no special insights. You know, it's just like you've got to be really honest with yourself here. And let me just round this out a little bit. I'm not saying that you need to have four PhDs and decades of experience here. You don't even have to be in the top 2 % of all people in the world that understand in a special situation investing or, you know, whatever, ASX Biotex or whatever the thing happens to be.

40:54But you want to have a confidence that you're in the top 50 % maybe, you know, like that's enough. That's enough of an edge. Like it puts you ahead of most people. So, yeah, I just want to make sure I'm not saying to people only invest in things that you happen to be an unquestioned expert in. Actually, that's really important, mate, because I do think that can also do overconfidence. Yeah. And you can invest in excellent retail, but not actually necessarily know what the future is going to look like. And so there's overconfidence. Many years ago, I used to work for Blackmoors. And I left the company.

41:28I sold my shares after I left. Not directly after, but some point after. Because like, oh, I know the company. I know. And what I thought I knew was things that were, quote, wrong about the company. Things that annoyed me as an employee, right? And it's like, actually, it turns out those things didn't actually cause any drama. The price went up. and and it's not to say i was wrong necessarily but i kind of had that idea of you know to two i was too confident i thought i knew too much and and that's there is such things knowing too much in the sense that not in itself but in the sense of what mistakes it leads you to make and we see so many experts even like biotex for example people are you know if you're an expert biotech by biotex like well the companies that start these things that try and find their drugs still can't get it right not because they're stupid just because it doesn't work or science might have worked but didn't or whatever.

42:11And so you've got to be careful to make sure your edge is a genuine edge on top of other people, not just, I think I know more about this thing and that leads you to be a little bit too cocky. And that's, it's a different game to play. I'll take your example. I work for a lot of consumer companies, right? I think I know consumer companies pretty well, but I got Blackmore's wrong. I work there. So it's, you know, it's trying to get that combination right is really hard. Yeah. Yep. Well said. Mate, let's move on. This is from a correspondent who calls himself Cheeseman. Cheeseman. And says, you may use my name.

42:46I mean, sure, Cheeseman, sure. Dear stewards of elite investing and obliterators of listener misconceptions, I humbly request your counsel. In brackets, I was told to say that. Close brackets. Now, this might be a workplace crime. So I'm just saying if action needs to be taken after this, my supervisor plays your podcast at work, says Cheese Man, and constantly steers me towards an investing mindset for the sake of my future self. And to reinforce this, he made me take time out of work to send this email to your mailbag. Well done, Cheese Man's boss. Again, I don't know what the Fair Work Commission would say, but yeah, I'll allow it.

43:29That's great. That's cool. I am 22. too. In brackets, he told me to apologize to you. Yes, yes, bastard. And I earn$135 ,000 a year on a mine site, having started out here early in 2025. Having talked a lot about money and life during long shifts at work, he and another co-worker explained compounding and investing in shares, ETFs, etc. to create passive income streams so that later in life I can take it easy. They persuaded me to stop spending all my money on my POS Land Cruiser. If you know what POS is, it's not suitable for work. It's a piece of garbage. Point of sale, isn't it? That might be what they mean.

44:14POS Land Cruiser toys and weekend pub trips and talked me into putting aside money to get me ahead in life. Speaking of pub trips, buy them a beer. I'm currently putting away$300 a week for a house deposit,$650 a week into a fund for buying ETFs, and spending the rest on living expenses, holidays, and enjoying life. This is just a brag so far. In total, I have saved$10 ,000 for my house deposit and have$46 ,000 spread across the NASDAQ ETF, S &P 500 ETF, VDL. Don't use codes, Cheeseman. Your boss should have told you. Cheeseman's boss, you should have schooled him better. All right? He's 22. I'll allow it this time.

44:56So NASDAQ, VDL, whatever that is, and S &P 500 ETF, with another$20 ,000 in cash about to be put into those same ETFs. Mate, you're at a cracking start. I'm never going to do the maths on that, but$66 ,000 at$22 ,000, mate, compounded until$67 ,000. Do you want to do that in the background for me while I finish the question? Sorry,$66 ,000. $66 ,000 at$22 ,000. Compound it for 45 years for me. Okay. While I understand this is good, yes, it is, I'm also getting pressure from my family to use all of my money and ETF fund to buy a house as soon as possible. My work colleagues who taught me about ETFs said it would still be a good decision if it helps me sleep better at night to just buy a house, but that no matter what house I bought, it would not be quite right for my eventual spouse whenever she comes along and I'd be buying another anyway.

45:46We ran some calculations on how much a mortgage would cost and an entry level in-house in my area was 65 % of my net wage. My God. It's still enticing to own a house, but I'm torn between this idea and the idea of building a portfolio that will eventually pay me without having to get out of bed and being able to enjoy life while I'm young and single, go on holidays and footy trips and all of that stuff. My boss told me to apologize again. Yes. If you were 22 again, obviously the most important thing to do would be to run off and find and then woo, Mrs. Page and Mrs. Phillips But after that area of life was locked down, without providing financial advice at 22, dear stewards, how would you approach life with a good income?

46:29How would you weigh up owning a house against enjoying life and building a portfolio to get the most out of long-term compounding? Kind regards, Cheeseman. You may use my name. I am now going to be looking, every old Land Cruiser, every POS Land Cruiser, with the number plate C-H-S-M-A-N. and if that's you, I'll know it's you, Cheeseman. I'm figuring maybe you've gone to the personalized plates. So, Ram, 66 grand at 22. If it compounds at the market, what did you use, 9 %? I used 10 to make it easy. All right. So, 66 grand compounded at 10 % for 45 years turns into? Oh, I did 35 years and it was almost$2 million.

47:12Sorry. Okay. So, yeah. So, it was retiring at 57 with$2 million. Yeah. But you know what that misses, of course? That just means he just stops right now. Correct. You know, it's just like, yep, I'm never saving a cent for the rest of my life. You know, that's pretty cool. And you're still fine, by the way. You're great. Yeah. I mean, yeah, purchasing a dollar value. I'm not saying you shouldn't, by the way. I'm just saying you're such a great start was my point. Yeah, I mean, it's such an incredible start. Yeah, I mean, I was going to get pedantic and sort of say, you know, $2 million in 35 years ain't going to be$2 million that it is today.

47:48I've got no notes. Cheese man, you're doing it. You're just, you're nailing it. You're nailing it. I don't know. I don't know what I could possibly say that I always, I'll say this because I haven't done this little rant for a while. I think budgeting is a waste of time. And that just goes, it makes every financial planner just clutch their heart and fall off their chair. Only because it's sort of, life is way too messy and things just don't tend to fit into your spreadsheet in the way that you envisage. And I just love the way that cheese man's done it. just set just set a savings commitment each week i'm going to save this much and after that i can do whatever that damn well i want to play anything i damn well please yeah it's just it's it's more practical it's easier you don't have to think oh what did i allocate towards entertainment this week versus what i was probably like no one like it's like setting one of those stupid impossible diets that you're going to stick to for three weeks and then fall away from whereas if you can just say the day the pay hits my bank account, I transfer some here and I transfer some there.

48:45And then the rest is just whatever. I can spend it. I can not spend it. I don't have to think about it. It's just, it's so much easier. And, and, and, and, and the, the, the thing, the way the, let me start again, the maths that, that really matters here, isn't so much taking a number and compounding it for a long time, although that's massive. What, what the, what you'll find here, and this is the study show this again and again, is it's actually the thing, particularly for young people starting out, what matters, what is the biggest variable that determines your eventual nest egg? It's not the rate of return, it's the amount that you save.

49:20So in other words, you are better off being someone who saves a lot and gets a very ordinary return, as opposed to someone who hardly ever saves, but gets very good returns. Now, before anyone throws a spreadsheet at me, obviously at the extremes, that's going to be very, very different. If you save a lot and get massive negative returns, well, you're not going to do too well, right? If you happen to be someone who can compound at 30 % for 40 years, well, maybe you don't need to save that much. But for most of us, you know, it's just sort of like, oh, frankly, it's like the taco end. Why not do both?

49:54You know, like why not sort of aim for attractive returns and save? My point being is that it's the one thing that you can have far more control over. We can all, target a market beating return or whether or not we do is a very different story. But targeting a savings goal is much, much, much more achievable. So yeah. And the other thing I'll say too, which goes against sort of accepted wisdom is that, you know, I think we, you've got to live for the moment, right? You're only 23 once or whatever. I feel sorry. I just, I'm a finance guy, I'm an investing guy, you know, I, you know, I'm here, I'm a card carrying member.

50:35I'm here to evangelize, you know, the, the, the, the benefits of doing it. But, but the 23 year old who eats two minute noodles and never goes out and experiences the world. I mean, that's, and you might retire at 50 with a gazillion dollars, but I just think it's sad, you know, it's like, Take it from 50 year olds. Take it from me. Like, you know, like just don't, Well, take it from me who's got neither of the best of both worlds there. But I would love to be 22 again is the point. I would love to be 22 again. I guess all I'm really just sort of saying here is that balance matters, you know. Go for the pub trips.

51:12Have your fun with your car. Do all of that kind of stuff. Why wouldn't you, right? But just put some away. What most people do is that they spend everything. That's what most people do. It's like the person who I have, I just have, you know, Maccas for breakfast, lunch, and dinner every day. It's like, you know, you eat one carrot a week and you just move the needle in a massive fashion. So the person who's spending every single cent that they earn is just like, you know, I just put 50 bucks aside every fortnight. It's not, you know, it's not earth shattering, but it's that getting off zero or, you know, just moving that one step in the right direction that is so, so, so, so powerful.

51:51In fact, far more powerful than someone who's been doing it pretty much right their whole life and then decides that they can save 10 % extra or manages to get an extra 1 % or 2 % average annual return. Don't get me wrong. Brilliant things. Excellent. Well done. Absolutely strive for that. But it's those initial low-hanging fruit kind of actions that you can take. That is just game changer. Game changer. One of the nice little examples of the old industry super ads with two people up an escalator or whatever is just like you look at tiny differences and you compound them for a long period. of time and yeah the maths is just maths and it it it it becomes a it becomes a no-brainer you just got to start and you just got to be disciplined and um and take some time to smell some roses along the way love it mate oh just just for just for the fun of it because i can while you were chatting uh so i started with 20 it was 66 000 i added 650 bucks a week which is what cheese man's doing for 10 years and it's nothing after that not anything after that uh and let's go with your here's the numbers if you just save the cash and do nothing else you have$404 ,000 you've got a 5 % return you'd have 3, this is by 67 by the way so I went longer than yours $3.1 million at 5 % at 7 % $7.2 million and at 10 % $25.1 million wow that's a pretty attractive thing you aim for But a cheese man, I would echo Ram entirely, entirely, entirely, entirely.

53:19Live your life, enjoy your life. The richest person in the cemetery is still dead. Don't do that. Don't be that person. So enjoy your life. Do what you want to do. Enjoy your lane cruiser. Maybe don't put, you know, just pull back on a couple of the accessories. But, you know, have your life. Enjoy your life. You're on the right track. Here's the thing. I'm not going to give you advice, cheese man, although I'd like to see Attic prosecute me for telling cheese man what to do with his money. They may still, so I won't do it. Don't invite that. Don't invite that. I'm amused by the lawyers up in court just to end the conversation.

53:49Did you tell Cheeseman what to do with his money? Goddamn right I did. Whatever stops them investigating the major fraudsters out there. That's the main thing. As long as they're not looking at the big banks or anyone else, then that's cool. Good point, good point. Anyway, here's the thing. You can actually effectively do both. And what I mean by that is you're not locking yourself out, Cheeseman, of making a different decision at some point in the future. so the question really for you to ask right now and i'm not going to answer it for you i'll give you my thought is if i invest in etfs and let's say in three five ten twenty years time you decide i'm gonna take some of that money and buy a house because now i really want one you're okay the only question if you'd really ask in that context is do you think you'll end up creating more value investing in shares slash etfs the share market or the property it's kind of all you need to really work out because as long as you're doing as well or better in shares than property, you can cash that out at any point you want.

54:43And as long as the share's gone up by more than the property, you can cash it out and be ahead and then make that decision if you should choose. So I wouldn't, if your family and friends are telling you and you're convinced by the argument that, and do this, get your boss to sit down with you and do a spreadsheet, right? And work out what a property would cost. If you bought the property and you're going to save some rent, that matters, right? So you're paying rent, I suspect, or maybe you're living at home, in which case, stay at home, save the money. Do the maths. I really wanted to buy an investment property a couple of years ago now, I think it was.

55:16Why? Because I thought, well, I can borrow the money, use the leverage. That sounds pretty attractive. I'll see if I can make it work. I just couldn't. By the time you say, here's what I got to pay. Here's the stamp duty. Here's the agent's commission. Okay, I've got all that. Here's the rent I'd get. Now, you're talking about your own home here. It's a different thing, but again, here's the rent I'd get. Here's how much I have to pay over above the rent. Here's the agent's commission. If I put aside some money for regular repairs and maintenance, blah, blah, blah, did a lot of numbers, I couldn't.

55:44The assumption I had to make, if I think they're marketing up at 9 % a year, which we just talked about, I used 10%, but, you know, whatever. What would probably have to do to go up by enough by that to cover not just the growth but the costs of that growth, the interest you pay and everything else, I just couldn't make it work. And I wanted to. No, I wouldn't say I wanted to. I was really open to it. I was like, oh, maybe we should. Maybe we should. I've talked in the past I've done it for a while and I make a big deal about it about whether my wife and I should buy an investment property that we can at least let our kids have access to as kind of rising market lifts or boats so they're not locked out of the market was kind of the idea that was actually what it was about I was like should I do that I just did the numbers I was like I just can't make it work I can't get the numbers to work so in my view that's why I don't have an investment property in my view of the world if I was 22 I'd do a lot of things but I would invest in shares hoping believing assuming that I would get a better return than that.

56:36And by the way, you're both already, Cheeseman. So to Ram's point, why not both is perfectly valid. I would put the money in shares. And then if Mrs. Phillips came along, we said, I really want a house right now. Well, I can raid the ETF fund if I want to, if that's the most value to me. Because I've actually compounded that number at a faster rate than if I bought the house earlier. So I kind of feel like I'm ahead in either scenario. So that's what I would do. Everyone's different. Everyone's going to make their own decisions. End of the day. The other thing, by the way, we said live your life.

57:01The other thing is when you do make that decision, Make a lifestyle decision, not a financial decision. Decide for yourself and the missus when you have one. Is this what we want for our family? Is the residence and a permanent shelter more important to us than growing our wealth a little bit faster? The answer is yes, do it. Don't let the numbers drive your decisions. Let the numbers – make money your servant, not your master. And so make the decision that's right at that point. But for now, if you don't want to buy a house and you think your shares will do better than your property, then I think you're probably in the right space.

57:31Yep. One little nuance as well is math is always fun, but we make this point all the time, but it just, because we all rationalize our way into it with good reason, good rationality. It's like, well, if I can do that and I do that for 30 years, I'll be better off. But of course, the market never goes up at 10 % every year. It's down 30%, it's up 80%. So what you see happens is people get in for the right reasons, using very reasonable assumptions, forgetting that they're the average experience extended over a very long period of time. The market trips over itself, it drops 30%. You go, what? This wasn't part of the plan.

58:08This is ridiculous. I'm out. And you sell at the worst possible time only to be lured back in when the bulls are running and valuations are at nosebleed levels. And it's kind of like, that's what's going to undo you more than anything else. Can you save? Yep. Can you diligently invest it? Yep. That's not that. Well, I was going to say not that. It's actually hard. It's hard to do. behaviorally, but staying the course is even harder. And it's because of that volatility that it's hard. So it's the person who actually continues to do that throughout the bear periods, maybe even invest a little bit more throughout those periods.

58:47That's how you separate those that actually deliver on the promise of multi-decade compounding and those that don't, because they just don't get shaken out. They don't get shaken out and they make lots of mistakes and They have lots of crappy years. I said the other day on a blog post I was sort of writing, it's like it's only in this game where I can be, you know, twice as rich as I was five years ago and half as rich as I was last summer and be happy about it. Like it's just like it's such a weird mind F to, you know, like it's just going to screw with your brain that that's like because you're always going to measure from the high watermark and you're going to feel depressed.

59:20You go, well, wait a second. Look where I am now compared to five years ago. Don't measure from the high watermark. Like you're only there for the briefest of most exhilarating periods and most of the time you'll send below a previous high. But if you're not careful and you just think, again, you'll be 78, you're going, I can't believe I'm only worth$28 million when last year I was worth$37 million. Like it'll be something crazy like that, which is wild when you think about it. But that is so psychologically tough to do that most can't do it. And even when they sort of acknowledge that it's still better off longer term, I still just don't want to experience, which is perfectly normal too, right?

1:00:03I don't like that. That does not sound fun to me. You're telling me I can be twice as rich as I am now in five years' time, but half as rich as I will be in four years' time. That doesn't sound great. I will prefer a lower rate of return as long as I never go backwards along the way. And that's how most people think. And that is why there is an edge. Even in this AI world of ours, I think if you can be the person who goes, no, volatility is my friend. It's not risk. I can lean into that. You've got a superpower and you'll do much, much, much, much better than most people. I love that, mate. I think that's such an important point because, you know, the maths only works as you say if you let it do its thing.

1:00:39Manga's quite about not interrupting, compounding unnecessarily. There's a manga quote to go with the Buffett quote so we've hit our quote and we can finish the episode. It's, yeah. So look, and here's the thing. You've been well taught, Cheez Man. You're on the right track. You're doing the right thing. the best thing i can we talked on friday about the vanguard index chart and so i'm not gonna i'm not gonna redo it i'm just gonna point you back there and say put that get use your boss's printer at work sorry boss uh print it out stick it on the on the workshop wall at work whack it in front of your computer at home uh put it on the wall if that's your thing uh because when to ram's point the the it's not just knowing and and really internalizing are two very different things I know I should stick it out versus I'm definitely going to stick it out are two very different things feel the same and they will be the same until they're not so I'm not going to labour the point we talked about it on Friday you made the point beautifully just expect those things and tell yourself what's going to happen when it happens tell yourself you're going to feel like crap tell yourself it's going to be awful don't tell yourself now I'll be fine because I'll be I know what's going to happen tell yourself how bad it's going to feel and earn that it's going to be awful so live with that The real opportunity is by making you peace with what's going to happen and say, right, when that happens, I will feel crap and then I will do this.

1:02:00And that's how you make that difference. In my opinion, that's probably your best way of getting ahead of that one. I'll give you a nice little example. I can so find a million, so easy to find lots of examples for this, but a recent one. Can you imagine being the poor schmo that on the day before, the start of 2020, right, there were murmurings Murmurings of a virus emanating from a wet market in China, right? But the bulls are running. Things are looking pretty good. Nothing's happening here. There's always some virus devastating some other part of the world. Not my concern. Boom, boom, boom, boom, boom.

1:02:30And then you put all your money in the market and you wake up a month or two later. It's like, oh, I have made a terrible mistake. And yeah, it's going to feel pretty bad. And most people would have panicked. It would have taken you a good year and a half from that initial January 2020 start to get break even. But today you're up about 40%. And that's with all the stuff going on in the world now, right? Is that just price too, mate? Not dividends? That's not even dividends. Right, right, right. It's not even dividends. And that's just the ASX 200. Like it's just the most boring of the boring kind of thing.

1:03:01And it's just, I mean boring in a good way. Yeah, yeah, yeah. Boring is beautiful when it comes to investments. Nothing so hard to happen for that return to come through. that was just plain vanilla. You sat around and it turned out. You know, and that's the story. That's just the story again and again and again and again and again and again. And all you can do is just, someone I used to know used to say it's like shaving. It doesn't matter how well you do it. Got to do it again the next day, right? Exactly, exactly. Well done. All right, I think we're done here. Cheese man, well done. Keep it up, mate.

1:03:30Write us back in 15 years time and tell us how amazingly well you're doing, mate. Make your story. 1 % commission is very appropriate for the incredible advice that we've given you. so just keep us in mind don't be unreasonable half a percent is fine half a percent will do we're not greedy we're not greedy people half a percent each yeah yeah correct I'm not sharing my half a percent alright thanks for listening we appreciate you being with us hey go to strawman.com check out Australia's premier online investment club also follow Ram at sage underscore simeon on twitter give him some stuff to rant about because god knows he needs some help or at strawman invest hey I'm on the tiktoks now hey I'm on the tiktoks keeping up with the cool kids AI is doing amazing things with videos, which I will bore you with another day.

1:04:11But I am on the TikTok. So get me on Facebook or TikTok, sorry, at Scott Phillips Money, or on Insta or Twitter at TMF Scott P. Yeah, do those things. Have a great weekend. Enjoy the POS Land Cruiser. Cheers, man. And full on. Cheers. The Motley Fool and people appearing in this program may have positions in the companies mentioned. General advice only. Please speak to your financial professional to understand how it may pertain to your situation. Subscribe to the free newsletter at fool.com.au forward slash listener. The Motley Fool operates under Financial Services Licence 400691.