Taking a ‘learn by doing’ approach to investing, Christine is on a mission to grow her portfolio one index fund at a time. Working towards financial freedom (aren’t we all?!), she’s a lazy, smart investor who focuses her energy where it matters. In other words, not picking stocks.
Her investment journey started young…ish
At the ripe old age of 23, Christine started investing through an investment platform when she started working in the Fintech space. She learnt about investing through osmosis and ‘learning by doing’ or maybe that’s “playing”.
Christine started with a small sum – $200 – and invested in two individual stocks to get a feel for what it was all about. Once she got the hang of it, little by little she added more money to her portfolio. When thinking about it, it wasn’t until roughly a year and a half later that her financial education and ‘serious’ investing actually began…when she started working at Kernel.
Growing up, money and investing wasn’t talked about at home. It wasn’t something her family spoke about, rather stressed about. That said, there was a general consensus that there will always be enough money to do the things she wanted – a money belief that has served her well.
So, what’s the goal?
Christine’s main reason for investing is to achieve financial freedom. For her this means having her dream lifestyle – a house by the beach and not needing to stress about where the next pay cheque is coming from. She’s also investing to buy more time to do the things she loves – a resource we can’t get more of.
Other short to medium term goals look like saving up to move overseas in a few years and buying a first home with her partner. In her words: “but not one of those barely insulated, falling apart villas. Instead, one that is warm and doesn’t require any DIY’ing.” Let’s just say she has a wee way to go before she gets there.
Christine’s love for Kernel grew when she stopped picking stocks
Naturally, Christine started investing in Kernel funds when she started working for us (full disclosure). Her love for Kernel’s unlisted index funds grew when the choice overload and decision fatigue of picking individual stocks kicked in. She decided it was smart to spend less time researching individual companies, more time doing the things she loves.
Then as she learnt more about great investing behaviours and which investment options were most suitable for NZ investors, she moved a larger portion of her investment portfolio over to Kernel.
“I love how easy it is to invest in Kernel. Once you decide which funds are suitable for your goals and investment horizon, make that first investment and set up an automatic payment coupled with an auto-invest, you’re sorted. It’s a win win. Minimal effort for maximum results.” – her words, not ours.
How a core-satellite investing strategy comes into play
For those who aren’t aware, a core-satellite investing strategy is where 80-90% of your portfolio is invested in broadly diversified low-cost index funds – the “core”. The other 10-20% is invested in “satellites” which can be more speculative investments, such as individual stocks, thematic funds and more.
This is Christine’s investing strategy of choice, mostly because it’s simple and straight forward but also because it allows her to have higher growth assets outside of her ‘core’. Currently, she has the bulk of her portfolio invested in Kernel index funds, and the rest is made up of a few individual stocks and a dash of cryptocurrency.
What kind of investor does that make her?
“Lazy and smart”, she says. “Lazy” in that she takes a low maintenance, set and forget approach when investing her money to free up time for things that she can control or influence. “Smart” because she Pays Herself First by automatic payment, automates the investing process and chooses what she believes are the best investment options available.
She’s picked up a few lessons along the way
While she doesn’t consider herself an expert, Christine has a few great investing lessons to share:
Master your mindset and you’ll master your money. Once you can understand what has influenced your relationship with money to date and the beliefs that drive this then you can learn to shift from scarcity to abundance mindset. I.e. not emotionally reacting to market movements because you’re so scared of losing money, and instead focussing on the life you want to create long-term and zooming out, taking a holistic view.
ETFs aren’t as suitable for NZ investors as you might think. Because of the fees, tax inefficiencies and dividend drag, ETFs can actually have significantly worse outcomes in the long-term relative to index funds. More on this here.
Be careful who you learn from – often the personal finance resources we consume are written overseas and not applicable for New Zealand based investors (hello Rich Dad Poor Dad), so it’s important to investigate investment options that are most suitable for your situation. There is also a lot of misinformation out there, do your due diligence before taking action based on tips or insights given from various sources.
And for new investors, her tip is to just get started
It can be easy to get stuck in analysis paralysis, then never get started. Yes, it’s important to understand a few basic personal finance concepts and how any specific investment works, but don’t get caught up in knowing absolutely everything. The longer you leave your money standing still (in today’s environment), the worse off you could be…in Christine’s opinion.