← the bossbabe podcast
the bossbabe podcast
475: Simran (Friends That Invest): The Investment Mistake 70% of Women Make (Do This Instead)
00:42:23
Loading summary
Transcript60 lines
- [00:08]
Natalie
Welcome to the podcast. I'm so excited that we're doing this.
- [00:10]
Simran Kaur
Thank you for having me.
- [00:12]
Natalie
So, for anyone that hasn't heard of you, which I'm sure almost all of our community will have, can you give me a elevator pitch on what you do?
- [00:22]
Simran Kaur
Of course. My name is Simran Kaur. I'm the founder of Girls that Invest. We're one of the world's largest investing education companies for women. And we do that through our newsletter. We have over 100,000 newsletter subscribers. Our podcast, we recently hit 10 million downloads social content. We're at around 5 or 600,000 on Instagram. And then that all leads to our investing masterclass, which is our one paid product. And we've had 10,000 women around the world join in and become a student. And I guess the main mission, the main why. I recently read Simon Sinek's book Start with why. Loved it.
- [00:54]
Natalie
So, so good.
- [00:55]
Simran Kaur
So good. Really helped me hone in what I wanted to say. This is not an elevator pitch anymore, is it? I'm like, let me tell you about a book I read. The one thing in the book I really took away was, why are you doing this? What's your point? And you know, for me, money. I grew up in a South Asian family. Money was like equal to control. It was equal to freedom. If I didn't have money, it was very clear that I'd probably have an arranged marriage and be someone's personal cook and cleaner. And that wasn't really my vibe. I used to tell my mom, when I grow up, I'm going to be so rich. I mean, I have someone help me cook and clean. So that was a strong why. And I think it has worked out well where I have been able to choose my partner. I do cook, but I don't clean. So, you know, we found a middle ground.
- [01:36]
Natalie
I love this. And I also really love how simple your business is where you have the media platform side, where you are on a bunch of different platforms, but it all drives into one place. And is the master class around $287?
- [01:49]
Simran Kaur
Yes. $299. So around 300. And it's our one paid product. It's the only thing we charge for. And I love it because you give all this free content, podcast, newsletter, Instagram, we do YouTube and we do a lot of webinars. And then if someone's like, hey, okay, I've done everything. I've read the book, I'm up to speed. What's next? It's quite nice to be like, well, you know, this is a little bit more in depth for you.
- [02:12]
Natalie
And what was your decision to decide? You know what? This is the one thing that I'm doing. This is the model that I want to run. This is how I want to monetize. How did you make that decision? Cause I feel like for most people listening, they probably have way more complicated businesses. And I know a lot of them listening because they're like, we really need to simplify. So I'm just curious what that process was like for you.
- [02:30]
Simran Kaur
I think it was not as strategic. I wish I could be like, yeah, I really knew what I was doing. But I think instead of that, it was more what is just the easiest way to run a business that really works for me. And so I made an upside down triangle. And I was like, well, where would people find us? It'd be back in 2020 when we started. It's like, we're women on Instagram and Facebook back then. So that was where we started. We had a Facebook group then it was like, where can they actually learn information from us? And I was like, well, that's a podcast, so we'll start the podcast. And then it was like, well, what's the one offering that someone could, you know, like, you kind of. I later learned that's called a funnel, but you funnel it down. And it's like, well, what's the one thing I can give you that you're known for? So I think that's where it came from. And I'm a very lazy person. I like that. That's that saying, kiss. Keep it simple, stupid. That's my life motto.
- [03:19]
Natalie
And how do you deal with. Maybe you don't even face this, but how do you deal with shiny object syndrome? Because I'm. There are so many people coming to you constantly with the quote that drives me insane. You're leaving so much money on the table. How do you deal with that?
- [03:33]
Simran Kaur
Okay, we're very similar. I hate that. I hate that so much. My actual least favorite is what's next? And I'm like, yeah, this is working. What do you mean, what's next? Like, where am I going to take this? I always say, like, I'm just doubling down on what we do. I definitely get shiny object syndrome by. No. Like, you know, before Girls that invest, I had a large Instagram community called the Indian Feminist I. Back in 2016, I grew it to about 300,000 followers. Krinka Chopra followed us. Mindy Kaling followed us. This was back in the day. So, like, real econ Founded T shirts and tote bags and die cut stickers and I was shipping them all from New Zealand and my dad was like, who's buying stickers from you? And I was like, people all around the world, dad, you don't get. I absolutely do get shiny object syndrome. You just learn that the people that do the same thing over and over again. I think you're a really great example of that. Like just sticking to. We are the go to place to learn business. We are the go to place place to feel like a boss and to become a boss and to have the resources. And I think that has stood the test of time. So actually, in a way, something that's inspired me to not get shiny object syndrome. But yeah, someone once said to me, they were like, do you want to start a fund? And I was like, I am a 26 year old child. Like, I'm not starting a fund. I'm very happy where I am.
- [04:46]
Natalie
There's so many times people will pitch me an idea and I'm like, like, wouldn't this be great? I'm like, yeah, for you, I am absolutely not doing that. Like, I really do think there is something to that. The people that can go the distance with their project, with their business have to have the most discipline around shiny object syndrome. Because I actually feel like it takes more discipline to stick with a simple business model that you're scaling than to spread yourself so thin and launch something every time you get a burst of inspiration. Like for me, I've had to find other ways to channel my creativity in ways that, you know, one thing that we're doing this summer is like something really fun, a really fun activation which will drive people into our membership. But I have to drive my creativity in that direction so I don't just create more products which ultimately dilutes everything that we do.
- [05:34]
Simran Kaur
I completely agree. I would even say I had a mentor once say to me, more, better, new. I was like, what does that mean? And they're like, if you are wanting to increase the revenue of your business, first just do more of what's working. Like, okay, you've got a masterclass. Sell more of that masterclass. You've got a membership, sell more of that membership. Just double down on that. Make it the best it can be, then just make it better so that there's even more people interested. And once you've honed into that and you're like, there's literally not one more person that could benefit from this, this, then you can do something new.
- [06:03]
Natalie
I love that. So Much. Okay, so pivoting slightly because the real reason I wanted to have you on here is we can all admit the economy right now is, especially in America, insane. But I think most of the world are feeling it. I know back in the uk, people are definitely feeling it and it can feel really scary. And I really wanted to have this conversation with you because I think we do have an opportunity to look at things differently and help women take their power back when it comes to finances and feel like instead of being dragged through difficult economy, they actually can choose how they navigate it. And so I'm just firstly curious to get your take on what the F is happening in the world financially right now.
- [06:47]
Simran Kaur
Oh, that is a really good question. I think if I was to put myself in the shoes of someone that's like, look, I've got my business, or I'm, I'm just getting started, I have these ambitions and great, the world is imposing tariffs, like now. Everything's going to crap. Like, you know, we had a unprecedented time in 2020. Why are we having one like five years later? They meant to happen like every 20 years, not every five. It doesn't feel good, especially for our millennial friends. And, you know, Gen Z's just getting started as well. It's hard to. It's very difficult. And I just wanted to start with the acknowledgment of, like, if you're feeling that pressure, if you're feeling that fear, just know we all are. Not a lot of us want to talk about money, so we don't really share our own personal fears. But I promise you, the friends around you, the people in from all different financial backgrounds, we are all sitting here and going, oh, what on earth am I going to do? And why now? And why me? I want to put that out there first, I guess, like, imagine the recession or the economy as like a kind of war that's going to happen and think, oh, that's a bit aggressive, isn't it? And think of what you need to do as, like, filling up your own, like, war pantry. Like, we are going to put lots of cans of beans, baked beans, goods. In New Zealand, we had Anzac biscuits. Was that a thing in the uk?
- [08:03]
Natalie
No, but I'm. My brain went to toilet paper. Let's get stuff. Power.
- [08:09]
Simran Kaur
If you're Natalie, we're getting toilet paper. You know, like, we're all, we're all getting everything we need. We're stocking up. And then if the economy gets worse, we can be fed. We will be okay. And look, if it's not as bad as we think. No one's ever been upset about extra toilet paper. And so I'm really happy to talk about, you know, what those steps are, what we can do. But there's two ways of having action with your money. One is being a very proactive. Usually talk about proactive investors, but just a proactive person with your money, getting it all set up, being like, okay, what do I need in my bunker? What do I need in my pantry? We were talking earlier off camera about how a lot of billionaires in America have these bunkers. In New Zealand, in Queenstown, we've got like some of the sort of main tech founders and they're set up for World War whatever. I don't know how many they're predicting but they've got their bunkers, they're not here now. So that's probably a good recession indicator. But so you can be proactive or you can be reactive. And reactive is not the place we want to be. That's where our cortisol levels are high, that's where we're worried, that's where we're stressed and that's where we're going. What do I make for dinner tonight? Every night during the war and you're worried about how much you have and it's hard to make a decision about dinner on a normal day, let alone one of those hard ones.
- [09:17]
Natalie
So where do you start then? For the woman that's like okay, proactive sounds really good. But I'm also not super confident with where and how to start doing that.
- [09:27]
Simran Kaur
I personally feel a lot of power when I understand what's going on in the market or I understand like people throw these words around. Like my sister in law, she was like, what is a tariff? And before any of the men jumped in to try like over explain, I was like, here I am right here. Let me explain it. It's really, really simple. A tariff can be described as like a tax or a annoying barrier that another country has put up to encourage or discourage goods and services from other countries. So for example in India they have high tariff on dairy products from New Zealand. Dairy is one of New Zealand's largest exports. We do a lot of, for example baby powder. We do heaps of baby powder to China. But India prefers to keep their own farmers fed and, and paid. So they say, hey New Zealand, yeah sure like importers can bring dairy products from New Zealand over, but those importers have to pay a 44% tax. So it's kind of like a friendly way of Saying you can come, we're not banning you. But it would make no financial sense too. So they're not a bad thing. But then when you have a government or you know, a leader that's using them as a tactic, sometimes that works, but not so aggressively. And that sort of yo yoing of we're going to do tariffs, we're not, we might do them, we pause for 90 days. Just that fluctuation is causing the markets to be confused because, you know, as a lot of business owners here understand, if you don't know what your cash flow is going to be in the next 90 days, the next year, the next five years, like, you just feel a bit uncertain. And you know, we've seen some amazing brands like Tala even having to say, hey, we're gonna have to pause shipping our products to the US because we just don't know what's going to happen. So there's that side of it. But it's actually not that hard to understand.
- [11:05]
Natalie
That makes total sense. Even with my product based company, we're seeing it and it's just so much of a question mark right now of, of where we're going. So then aside from the business context, how do you think about your own personal finances in times like this?
- [11:21]
Simran Kaur
There is a saying cash is king. And I didn't really understand it growing up. My parents are really good savers. They're very like frugal. And I grew up thinking we were very, very poor. It turns out my dad was a software engineer in the 90s, so we were doing okay. Probably more than okay.
- [11:37]
Natalie
Probably really well.
- [11:38]
Simran Kaur
Probably really well. But if you came to our house, like there was plastic chairs instead of couches, there was mattresses on the floor. No, like, I guess like a bed frame. That was a luxury. Apparently took us two years to get a printer. So I grew up being really good at thinking the world is going to end and we should save and scurry it away. I understand that that's not how everyone's grown up. You've probably had more, you know, different RA childhoods. And a lot of our way that we deal with money reflects in our money story. But what is really, really important and what has given me a lot of peace with my personal finances is this idea of having three to six months of life savings just put somewhere aside. Not in like a stock market fund, not in real estate, not in something that's growing like that money is there not to grow but to like cover my backside if anything happens. So what I did is I Figured out what is my mortgage of my house, how much do I spend on food, what keeps the lights on, you know, electricity, like what's just the bare minimum that if I lost my job or if my business failed and I was not making a single dollar, I can figure something out in six months. I know that about myself. You got to trust your own self. So let me just save up six months of living expenses so I don't have to worry about selling the house or moving back in with my parents, or eating two minute noodles for six months as I try and get a new job or try and start another business. Having that fund or saving is really important. And it doesn't have to be six months of your salary. I think people get that confused. Six months of what you would spend, your kind of burn rate, your personal burn rate as an individual rather than as a company.
- [13:09]
Natalie
I think that's so smart. And one thing me, my husband did a couple of years ago was actually create a spreadsheet of our burn rate. And we've kept that updated our entire marriage. And it's always been really great to look at for multiple reasons. It's really good to see what your burn rate is so you can make those decisions. How much do we have to invest, how much do we have to play with? But also a big thing that you can do when you pay attention to that is avoid lifestyle creep, which I think is such a big thing to look at when you are, especially if you're an entrepreneur, especially if you're in our industry and you might be in a really fast growing business. I've seen lifestyle creep be the reason that people have these amazing businesses on paper and nothing in the bank. And so it's been really good for us just starting a simple spreadsheet where we look at it probably now once every six months because not much is changing. But we take a look and it's been really good to notice. Oh, things aren't really. We're certainly not increasingly spending as we're increasing income and that's a really good place to be and can we set goals. And that awareness has been powerful because I know for me, 10 years ago I didn't know anything about my finances because I really didn't have a lot of money. I didn't want to look and I would avoid it like the plague. And actually coming out of that habit, which we started doing regularly eight years ago, has just been so incredible for talking about money, confidence about money, managing money, being mindful of money, it's been.
- [14:29]
Simran Kaur
Incredible I love that. My fiance and I do the exact same. We look at our net worth because we find that if we look at every single thing that we spend over the course of, you know, a month, it's like, oh, I don't want to know that. But as long as our net worth is increasing, we're going, okay. We're spending less than we earn, and we're investing the difference. And that's like the holy grail for me, I have to say. Like, if you measure something, you will get better at it. And if you can't measure it, you kind of want to keep your head in the sand. Like, if I don't look at a bill, it just doesn't get paid until it's, like, on my desk in front of me. And I'm like, okay, so I just. I need to sit down. I need to pay this parking fine. Like, just get it done.
- [15:07]
Natalie
So true. So when you're saying, okay, we're gonna invest the rest, one thing that we hear a lot is the term millionaires are made in recessions and that this can be a really great time to actually be investing. Do you agree? And if so, what's your approach there?
- [15:23]
Simran Kaur
I completely agree. I think I agree. And I know that sometimes it's like a spectrum. Like, sometimes you can hear that phrase, and it's a little. It feels a bit scammy or a bit like, it feels like you're taking advantage of a time that everyone else is struggling in, and that doesn't feel very nice. And I think there is a way to talk about it or look at it as a positive way of growing your wealth that a lot of wealthier people are doing. It's not like, yay, there's a recession. Yay, people are starving. Let me make money. It's okay. Things are cheaper. But the principles are the same when it comes to investing. And now is not the time to invest to sell all my shares. Now is not the time to get out of the stock market. Now is the time just to keep doing what I'm normally doing in my book. I showed a photo. There was a photo of a guy from a big crash that had happened. It was many years ago. It was a black and white photo. And this guy, like, you know, Black Monday with the stock market crash, and he had this sign, and he was on Wall street and he said, like, lost everything in stocks, selling car for, like, you know, $2,000. And everyone on Wall street was, like, looking at him. And I actually debunked that in the Book actually did not end up selling his shares. He just left his shares in the market. Thankfully his shares value were down, but beyond 100 shares he still owned 100 shares. Maybe they were $1 now rather than $10 a share. And his shares completely recovered after five or 10 years. And he ended up creating a agency, one of America's like biggest growing marketing agencies where they like really leveraged the pinup doll model. So he ended up doing really well for himself. He had all the success, success. But when you're in a low market, you've got to remember, don't panic, don't sell. Just keep investing as if it was a normal day and eventually the market recovered. The people that sell their shares when they're scared, if you're like Sim, I've invested in a index fund in a basket filled with lots of different companies. It's called the S&P 500. And I know that it's usually stable but right now it's a bit down because of the market, because of what's going on in the us. I want to sell my shares. You've got to think when you sell your shares, who's on the other side buying them? And that's usually people that understand right now this is a good deal. Usually a share would be like 300. Right now it's 150. Like let me buy that. Because if I believe that fund, that economy or that company or industry is going to do well in 10, 20 years, that's what I'm investing for. So in my personal opinion, when the tariffs drama started, I was like, oh well, this is a policy change that is affecting the markets and policies are not going to be aggressive tariffs for the next 20 years. So I continue to invest and I had a bit of extra cash on the side so I put that in during the bottom of the market. And it's not a quick sale, I'm not going to sell it and you know, go on a nice holiday. As much as that would be nice, it's more about how does Sim retire early in the next 10, 20 years.
- [18:14]
Natalie
So is that your plan? Retire early? What is your financial plan like that?
- [18:18]
Simran Kaur
My financial plan, I tell everyone this and they have the same answer. So I'd love to know your thought. I go, look, I just want to build as much of my portfolio as possible, not have a lot of lifestyle creep, you know, the home I have is by no means very fancy or bougie, but have a lot more invested and I'm very open with sharing those numbers. Like, I have 1.5 million in the share market. I've got 1.2 million in equity across three properties. And I include my Birkin, as you.
- [18:45]
Natalie
Should, as an asset.
- [18:47]
Simran Kaur
It has gone up in value. The Birkin's on the spreadsheet. It's a black 30 gold hardware. Like, it's not going anywhere.
- [18:53]
Natalie
No, that deserves a nice place on the spreadsheet.
- [18:55]
Simran Kaur
I just said I don't fall into lifestyle creep and then I mentioned my Birkin. So maybe, maybe I need to work on that. But. But the idea is for me grow up enough of a portfolio where I reach $5 million invested, that to me is a $200,000 drawdown rate. So that means every year for the rest of my life, I would have created like my own trust fund. And every year I take a $200,000 salary. And that for me is my enough number. Everyone that I talk to, though, says, sim, once you reach that, you're not going to just stop working. I was like, no, I'm going to go to a beach and I'm going to relax forever. They're like, no, you're not. So we'll see.
- [19:28]
Natalie
See, I love that we kind of have a similar plan. Like, we have a number in mind and the goal is we get there and then we just see how we feel. It's like we don't really know, but for me it's definitely been, Let me just be really smart with where I put my money. We are very similar. We intentionally wanted a big, beautiful house, but I didn't want to be. I didn't want a house that I was like, really in debt for. And that was way above our means. And so we moved into the suburbs. We moved from LA to Austin. And, you know, our house is such a. A small amount of our net worth and we invest most of our money. It feels really good on my nervous system. And that's the main thing is like, you know, do I have freedom of choice? Working right now is optional. It's not. I'm sure it's not optional for the rest of my life, but it's optional. I have that freedom of choice. It's very calming to the nervous system to have that. And it's been made through just a series of choices of. Yeah, we've hit all of these financial milestones, but no, I'm not upgrading my car. I've had the same car for the last five years. I have no plans to upgrade. No, I'm not upgrading my home just because we can can. But again, it's having that intention and knowing what your bigger shared vision or goal is and sticking to that. Something you mentioned, which I think a lot of people struggle to understand, is drawdown rate. Can you go into a bit more detail of that? Because one question that I've had come up when I've had people on the podcast talking about money is you keep talking about making your money work for you or, you know, being able to live on passive income. And one thing I'll always say, and I will die on this hill, is I do not think an education business is passive income. I really do not. Like, you are. And I make money in our sleep. But that's not passive to me. Like, we're making social posts, we're sending emails, we're running ads like there's actual work going into it. But when your money is making you money, I do think that you can count that as passive because it's. You literally have to do nothing for it. So can you explain your perception of passive and then the concept of drawdown rate and how that works?
- [21:24]
Simran Kaur
I completely agree with you. The only true form of passive income is through shares. I don't even consider the rental properties passive income. So there's two of them. Them, they're one in front of the other. I have a manager. What do you look like a property manager that manages them. But like every now and again, like, I just got an email the other day, she was like, the gutters need to be fixed. Like, here's the invoice. The tenants need this. And obviously I'm not going to say no. So but there's, you know, there's time and money and effort put into that. Agreed with the business. Like, if I go on, I really believe in going on holidays. I really believe in like taking breaks. And I will notice that if I take a break, even if the team who are so good at what they do, manage, like social posts and manage content while I'm away, it's good. But we see the dip and it's like so disheartening to be like, oh, I really need to be a part of this business for it to run. And I truly believe shares is that true passive income for me. So when I talk about drawdown rate, it was a study that was done and it spoke about this idea, this mathematician had this crazy idea. He was like, how much money can I pull out of a share market portfolio where the share market portfolio continues to grow and so it turns into this never ending bottomless pot of cash. And he found that he Kind of did some maths. And he was like, okay, S&P5, which is that fund filled with the top 500 companies in the U.S. like, think Apple, Google, Microsoft, Tesla, like all the companies that you kind of know. And if I look at that, on average it goes up 7% a year. Sometimes it goes up 20%, sometimes it's down 10%. But if you analyze it over 40 years, about 7% a year. And he goes, okay, well then accounting for maybe 2% inflation. So that kind of leaves me down. So it goes up 7%, maybe it drops off 2% with inflation. So we're at 5%. So if I draw down 4% of my portfolio every year, I have a 1% buffer. If I draw down 3%, that's even better, more conservative. But once I reach my number, I can stop working. And there was a blogger many years ago who kind of like looked into this and was like, wait, this is actually really valuable. And he's called Mr. Money Mustache. He's very popular in the financial independence, retire early community. So he was like, I think this is actually doable. And he did it and he documented it. And it really made a lot of people realize like, oh, when people talk about having trust funds, this is what they mean. You can create your own trust fund. And it doesn't mean you have to start working, but it means like you've almost like self insured your income. And so if you, you know, touch wood, God forbid, get sick or can't work anymore or get laid off, it's a choice. And we have a lot of women that come on the podcast that have worked nine to five jobs and have invested heavily on the side. And so they're working. But if they get bored of work or they get laid off, their lifestyle still continues because they know that they'll have a hundred thousand or, you know, $150,000 coming every year until they, you know, can't, how do you say, pass away nicely.
- [24:15]
Natalie
I love that concept, the idea of creating your own trust fund. I am so here for that. So for the listener who was like, okay, Sim, Natalie, you're convincing me. I need to start looking at my bank accounts. I need to start paying attention to my finances. But where do I even begin with this concept of creating my own trust fund? I have no idea where I would even go to invest. Invest. What do we do?
- [24:36]
Simran Kaur
It's really scary, isn't it? Because if you, like most people, you don't grow up with someone that is like, okay, sit down, sit down, Sim, sit Down, Natalie, this is exactly what you're going to do, especially if you have parents that are like, save, save, save. Like, what do you mean, invest? What do you mean? Like, put your money away, like, save. And I think a lot of us have quickly realized that, you know, you study hard, you go to university, or you get a job, you work up the corporate ladder, you get a higher salary, and you're like, okay, where is the house? Where is the car? Like, where are all these things I was promised? And it's because we're saving. In fact, around 69% of women's wealth, almost 70% is kept in cash. And that's not necessarily a bad thing. But then we have inflation, which chips away at cash. And so if you only keep your money in cash, it's actually losing value. But you can buy with $100 drops every year. We've seen that time and time again. So businesses keep upping their prices. And so the first thing that you want to do is protect yourself, do have a little bit of cash. That's the emergency fund. We've got six months of our living expenses saved. I hear sometimes other financial professionals will say three months, three to six months. But I think a lot of the listeners here are often business owners or women that are quite willing to take on more risk. So you want to be able to say six months. Because for us, our turbulence of work can, you know, sometimes vary. You've got your six months saved. You're like, okay, good. Tick. The next thing you want to do is if I asked you, how much do you make? You probably know the answer to that. If you don't, that's, you know, the next step. But I also want to ask, how much do you spend a month? And that's that burn rate we were talking about. Not a lot of people know that. And so sitting down with yourself, sitting down with your partner and just going, what do we spend per month? And where can we maybe cut down on just a little bit without affecting our lifestyle? I'm not saying, like, hey, honey, you know, you're taking the bus now and we're selling the car. Like, that's. That's maybe a little too far. And there's a bottom to. There's a flaw to how much you can save. I tried that. I did a whole year when had graduated university. I was working before I studied finance. I had a very different career, so I was an optometrist. So I was doing that working, spending none of my money. I had flatmates. We would go to get ice cream. And they would buy ice cream and I just wouldn't because I was like, I don't want to spend $4. And my friends, they were still studying, they were medical students. They were like, so we still think about that time that you would just watch us eating ice cream. Oh my God.
- [27:03]
Natalie
Sorry.
- [27:04]
Simran Kaur
I'm like crying last morning right now. But I didn't realize.
- [27:08]
Natalie
I could just see you sitting there just looking at everyone with the $4 ice cream just like, it must be nice. No, no, no.
- [27:15]
Simran Kaur
I'm lactose intolerant. Don't worry about me. And so that was the journey. But that doesn't work as much as increasing your income work. So that's the next step. You know, you, you figure out what you want to save in. Maybe you realize there's a few subscriptions you have that you didn't really realize. Or you try skills that you can, but don't put all your time into trying to scrimp and save. As long as you're focused on not having lifestyle creep. Like, I think you're such a good example of that where if your income increases, that's so exciting. Celebrate with a dinner, celebrate with something nice. But don't celebrate with the new upgrade to your lifestyle that's going to then cost you the same amount. Because if you earn more and then you spend more, you earn more, you get a nicer house, you earn more, you start going to the bougie grocery store, then you're not saving anything. And so you'll find that there are people that you know. Some people are surprised to hear this, but I think you and me know people like this. They make $500,000 a year, they spend $500,000 a year. And from the outside, what a life. Like how beautiful, all this travel. But they're worse off than the person making $100,000 a year that's only spending 50,000 and you know, putting $50,000 into the share market every year or saving that money every year. Because when recessions happen, who's going to be the one that doesn't lose their house? Who's going to be the one that doesn't feel that shame of like, oh my God, did downgraded her car. Did you see that? They're to sell the house. You don't want to be in that position. So don't let yourself get there.
- [28:44]
Natalie
I just want to like really highlight this. I grew up with no money at all. And so when I first came into real wealth, it was so exciting and I wanted to Spend on all of the really lavish things and I wanted to see how it felt. And then it very quickly for me personally just lost its lure and I started to really feel like, you know, my cover values is freedom and so what does that look like? And it would feel a lot better to save. And there are times where in my head I'm like, you know, maybe we should move to here, maybe we should do X, Y, Z. But as soon as I look at that and compare it with my values, it just never feels worth it. And like you say, I would rather be the person that just has that nervous system regulation in those more challenging times because it isn't necessarily what you earn, it is how you manage. Manage that. For someone that is listening and they really want to get into investing, what is the path? Should they be learning how to do it themselves? Should they be bringing on a financial advisor to do it for them? Is there a best way, a best practice?
- [29:44]
Simran Kaur
The two main strategies of investing are considered like the Apple and the Android of investing. And there's like so much, you know, they're like some die hard people that are like Android all the way, like why would you even buy an Apple iPhone? Like it's, you don't even get to customize it. And then there's other people like myself and they're like, I just like the look of it and it's pretty and it does the job and I like my iPhone and both sides are like, my side is better. There's two sides to investing and they are the exact same passive investing and active investing. And there's no real consent. Like there will be, this is how nerdy I am in this industry. There will be like conferences where you'll have like two panelists that are like battling out like active investing. I think you've got to come along with me next time. There's, you know, there'll be like active investing which is choosing companies and going, okay, I want to pick. I'm going to do all of market research. I'm going to figure out, you know, maybe I think AI is the next big thing. And therefore I believe the things that make AI like chips are really important. And who's got a big monopoly on chips? The company Nvidia. So maybe I'm going to invest in that. So that's actively choosing and there's pros to that. You get to have much bigger returns. Nvidia's returns, you know, over a thousand percent to some investors. If you've invested early on, then you also have stocks that do really poorly. And then, you know, you have people that go, Tesla, maybe 10 years ago, they're like, tesla's going to do really well. They invest in that. And then what I found, founder does, relates very heavily to the stock price. And so if they kind of focus on other things, share prices go down. And so Tesla shares have really dropped. So there's that side of investing, the active, and some people swear by it. Then there's passive investing, which is where I sit more of. I'm more like 80% passive, 20% active. And so that's the belief that, hey, I can't pick and choose what's going to do well in the market. I know that studies have found that 92 to 94% of active investors, professional active investors, do not beat the market. And so these are people that spend their whole days, they have Ivy League degrees. They're spending all their time trying to find the best next thing. The truth is not a single person, not Warren Buffett, like, no one knows what a share price will do tomorrow. And so we can only guesstimate at best or speculate at worst. And so rather than trying to pick and choose, why not invest in the whole market? S and P500, a fund that I keep talking about, is the most popular fund in the US it's one of the largest funds around the world and one of the most known funds, and that's why lot of people start with it. But you're saying if I've got $10,000 or if I've got $1,000 or even $100, if I put that into that fund, my $1,000 is spread across all 500 companies, large and midsize. And so if it's Covid, oh, my God, my, like, alien shares are dropping in that fund. My hotel shares are dropping in that fund. But wait, there's this new company called Zoom, and that is skyrocketing. And so that's balancing out, you know, the losses. And so you have a little bit more of a. I think we're quite similar. I like to go to sleep at night and be. Be at peace and be rested. I think most people are. But I don't want to worry about my stocks. I don't want my, like, heart rate elevated. So investing that way helps me sleep easy at night. Of course, I'm just, you know, a very curious person. So I also enjoy investing a little bit on the other side where I'm picking and choosing, but I don't let that be a lot of my portfolio. And so some did really well, some might not. That's okay. Most of my money is in index funds anyway.
- [33:04]
Natalie
So would you say that 80% of your investment money is in the S&P 500? Is that the way that you think about it?
- [33:12]
Simran Kaur
Yeah, I like to think of my investments as maybe rather I'd say 80% are in index funds. S&P 500 is one of the larger funds I have. I have also some money in a total world fund. So that's an index fund, but rather than just US share market, it also invests in global markets, like emerging markets. So, you know, I believe that countries like India and China and Taiwan and especially Korea and Japan right now are doing amazing things. Warren Buffett has himself said that one of his key interests right now is investing in the Japanese market. And whilst I don't believe in just being like one country, I think it's really nice to have exposure to what you believe in. I think that's the best part about investing. If you're like, hey, I really believe like clean energy is the future, then you can invest a bit of extra money into that alongside your main, you know, S&P 500 investments. If you're like, hey, I really believe in, like investing in female founded companies, I think a lot of us do, then you can add those. There's even a portfolio called she S H E. That's the stock stock ticker. And it invests in companies that have either majority or a large female, you know, executive team. And there's just lots of different creative ways to say, how do I make my money? Vote for the life that I want to see or the world that I want to see.
- [34:23]
Natalie
I love that so much. And how do you think about learning this yourself and being able to passively invest yourself versus paying an advisor or an investor to do it on your behalf, like where you pay them a percentage of your portfolio.
- [34:37]
Simran Kaur
I used to have a very strong opinion on this when I was younger. And I think that's because when I was younger I had obviously a lot less money. When I first started Girls that Invest, I was of the view that like passively invest. Why would you give an advisor like, you know, if you invest in a Vanguard S&P 500 fund. Vanguard was created by John Bogle, who invented index funds. Like, this man is so important to the investing world. And the fund fee on that is for every dollar you invest, the fund takes 0.03%. I can live with that. And if you invest a dollar with a professional financial advisor, they often have a 1 to 2% management fee which doesn't sound like a lot on a dollar but if you've got a million dollars invested, 2% is money they take out every year regardless of how your portfolio does. And so initially I was like why on earth would you give that to a fund manager? Like that money really adds up if someone's taking a 2% clipping year. You know, that really does eat into your portfolio over time. But the more I've spoken and met with high net worth women that have sold their companies have had like you know, 10 million, 20 million, $50 million exits for them. They don't mind that high percentage because they enjoy that peace of mind of like someone else is managing it. I've worked so hard, I don't want to be sitting here learning how to invest. They've also made mistakes though. I will say one of those friends that had tried to invest, invest herself, put a million dollars into one company that went down quite fast and she lost most of it. Thankfully she's got quite a few more millions social live. It was a good lesson for her. And there was the CEO of 00 is a New Zealand, what do you call accounting software? She's an American, she lives in Silicon Valley. I was on a panel with her and she was saying that she made quite a bit of money in Silicon Valley. She like worked at a lot of famous companies that we now know and love and she had all these company shares that she cashed out. It was a lot of money for her. In her twenties she gave it to a broker and the broker was like we should put all this money into one company and it's going to do really, really well. Everything's exploding like you're going to be really lucky. And this was in 2001 when there was the dot com bubble. Lots of tech companies were growing. Anything with an Internet like pets.com, anything.com was like skyrocketing. So she put all her money into that and she lost it all.
- [36:55]
Natalie
Oh God, my goodness.
- [36:56]
Simran Kaur
And so she had to start again like she could have retired, you know, in her 20s. And she was like, I just wish I never listened to that advisor. So it's like a hit or miss. There's definitely people worth their money and there's also people that, you know, promise things and take a high cut. I just prefer, I like doing things myself. I'm scrappy, I always will be. So I liked the self learning route, especially when it's backed by data backed by studies. But I'm not So hard and fast on the, you know, I don't put my nose up to people that have fund managers.
- [37:26]
Natalie
Yeah, that makes total sense. Well, I'm so grateful that we got to have this conversation and hopefully it's inspired some women listening to just have a bit more intention with their finances if they don't already or if they've been in a pattern of being fearful or avoidant with finances. Would you say that if they're really serious about learning, the next best step would be your masterclass?
- [37:44]
Simran Kaur
I think so. If you're at the start of your journey and you're like, okay, I want to invest, but like, it seems really complicated. I don't know when the best time is. We have the stock Market T newsletter. We are the world's largest investing newsletter for women. We have over 100,000 subscribers. So if you go to girls that invest.com and click newsletter, you can join. And every week we do it in a T format. We're like, oh my God, did you see what Apple did? Well like that's embarrassing for Tesla this week. It's usually every week. Yeah, so we do that. But it's also got a lot of analyses. It's got like the fear and greed index. We do like sector analysis and then like a stock market term of the week. And then when we open up our masterclass enrollments four times a year, you just see that in the weekly newsletter. But we get feedback every single week. People like, I love it. It's clean, it's short, it's snappy. So head over to girls.com that's probably the best place to find us.
- [38:34]
Natalie
And I love that you open four times a year. So the masterclass isn't available constantly. It's four times a year. And do you just prep your list that you're going to open it and then you launch it?
- [38:43]
Simran Kaur
Yes, exactly. So it's just, it allows for us to, when we do it, we are really big on like customer service because it's a scary topic. So people have a lot of questions. They're like, ah, like you're saying this but like I'm, I'm really scared. So to have that touch point to be like, of course if you, you email us, like you will get a reply. If you message the Facebook group or you know, the community group, like we will be there helping you to do that really well because we have thousands of students per cohort. It just allows us to do it and then people are learning together. So we've noticed, I don't know this is a good thing or not, but we've noticed that people will be like, hey, I'm from the UK. I've started a UK Girls that Invest WhatsApp group. If you're a part of the master class, like, come join so they spin off without us.
- [39:24]
Natalie
I love, love that. That's so good. Well, congratulations on everything. I love your business model and I love everything that you do and what you stand for. And I'm so grateful that we got to have this conversation.
- [39:33]
Simran Kaur
Thank you for having me. I'm so excited. And please let me know if there's anything I can do to help in the future. I think what you've created at Boss Babe, I didn't even get to say this at the start, so I'd love to share it now, is just like inspired me so much. When you see someone that has a similar journey to you or looks like you, is just another, you know, young woman in the space going, hey, let me build an education in business that just helps encourage, inspire and give actionable steps. Like, you know, I've listened to so many Boss Babe episodes to help grow myself. I'm part of the society. Like, I just think it's really important the work you're doing.
- [40:08]
Natalie
So thank you, thank you so, so much. That means the absolute world. Wait, wait, wait. Before you go, I would love to.
- [40:19]
Boss Babe Host
Send you you my seven figure CEO operating system completely free as a gift. All you've got to do is leave us a review on this podcast because it really supports the growth of this show. This is my digital masterclass where I'll show you what my freedom based daily, weekly and monthly schedule looks like as an eight figure CEO mama and high performer. And I'll walk you through step by step how to create this for yourself. It includes a full video training from me and a plug and play spreadsheet to literally create your own operating system. It's one of our best trainings and that's worth $1,997. But I will unlock access for you for free when you leave us a review. I know, wild, right? All you have to do is leave your review on the podcast, take a screenshot of it, and then head over to bossbab.comreview to upload it and then you'll get instant access to the seven figure CEO operating system. Again, head over to BossBab.comreview to upload.
- [41:16]
Natalie
Your screenshot and get access.
- [41:18]
Boss Babe Host
We are so, so grateful for all of your support and can't wait to hear how the podcast has supported you.