Glen Hare reveals where he would invest $10k
Where would you invest $10,000? We spoke to eight finance experts to find out what they would do with such a windfall.
"I'll never be able to afford to buy a home," the impeccably dressed millennial sitting in my office chokes back through impending tears.
The young high flyer had recently arrived in Sydney after working their way through an interstate medical system and eventually being put in charge of ours.
For the sake of privacy, we'll call them Jesse.
I'm impressed at how much they've achieved in a short professional life - significantly younger than me and already in charge of the health and wellbeing of thousands of people. They're earning an absolute motza for a 20-something, but seem to have no idea what to do with it.
It's a pattern I see regularly in the industries dominated by millennials and gen Z, primarily tech, creative and healthcare. Big salaries, share compensation packages worth hundreds of thousands and no idea what to do next.
As the demand for all three has surged over the past two years, I've seen a boom in the number of 25- to 45-year-olds reaching out and asking: "So, I've got money now, what next?" Jesse's peers have more potential than they know.
Returning to the scene in my office, tears still threatening, I ask Jesse to explain why a home seems like such an impossible prospect.
"Sydney is too expensive; I'll never be able to afford it!" It's a half-truth; Sydney is ridiculously expensive. But it seems unusual for it to be out of Jesse's reach. After all, those brand-new Gucci sneakers must be worth at least $1000.
We a take a deep dive into the weird, wonderful and wholly excessive world that is Jesse's spending account.
Expensive restaurants, food delivery, bars, designer labels, ridiculously overpriced apartment and, of course, Barry's Bootcamp. All the hallmarks of what I like to call "six-figure insecurity".
I'm loath to outright criticise my generation's addiction to spending and credit. Just as I am loath to claim that boomers had it easier. Times have changed. My parent's generation were never expected to package themselves up into a sellable brand, picture perfect and on display, quite literally, 24/7.
Where my parents had graduated, married and paid off their mortgage on Sydney's northern beaches by age 20, my cohorts are expected to curate a palatable online persona, manage a full-time career and navigate an overpriced social scene in one of the world's most expensive countries. It's not a justification, it's reality, especially for singles.
Jesse and the rest of the Tinder/Grindr generation are just as entitled to financial security as everybody else. For many, though, social pressures and a lack of knowledge are destroying their chance of joining the investor class.
"Take a look here," I tell a refreshed but slightly bewildered Jesse. "This is how much you'd need to save every week for the deposit on a $1.5 million apartment". The total is significantly less than the current "luxury" spend.
"It'll take five years and a momentous shift in spending habits, but it's possible. Even better, if we cut the luxury spend further, you've got the potential to build a meaningful stock portfolio, driving you toward a passive income and financial freedom."
The energy in the room is palpable.
For people in Jesse's situation, discipline and self-worth are the key drivers for security - both financial and otherwise. The pressure to conform and "keep up with the Joneses" is quite literally costing them their sanity and not-insignificant salaries.
It's not all about planning for the future. We want to enjoy life now, but not to the detriment of goals that are truly important. There needs to be more balance. Just a minor shift in mindset, from spender to investor, can mean the difference between distinguished and destitute.
Where I would invest $10k
I'd put it in the BetaShares Global Sustainability Leaders Fund.
I love its index-style approach and "active" ethical overlay, facilitating my desire to invest in a better future. Climate action, animal rights and gender equality are issues that are close to my heart. I'd sleep well at night knowing my money was working in line with those values.
The fund simultaneously divests from companies that choose to pollute, abuse and perpetuate the status quo, while actively investing in their more palatable peers.
Again, I'd sleep well at night knowing my portfolio was enabling the proliferation of clean energy, sustainable infrastructure and social good.
I'm a firm believer that you can invest for good and still generate a solid return: this fund is proof of that, returning a whopping 32.83% in the 12 months to August 31.
Being in my 30s and not afraid of a little risk, I'd invest in the ETF via NAB's Equity Builder, capitalising on low interest rates and the ability to increase my exposure in the fund from $10,000 to $50,000.
It's a calculated risk, but future me would no doubt be ecstatic with the pay-off.
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