How to Get Investor Fit

There is a $13Trillion dollar lie the financial industry holds. 

And it's one of the biggest myths that cost investors AND stop investors from starting their financial freedom path sooner. 

This episodes breaks down the myths and gives you an inside look in to the industry, how it works, and how you can win!

xo
Simone

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If you want to keep on earn more and make more money you're in the right place. I spent over 10 years learning from the most brilliant minds in money, wealth, and investing to take myself from 20 K in debt to a seven figure investment portfolio. Join in. As I share the secrets towards growth, money investing and ultimately freedom. My name is Simone, miss Huggins, and welcome to ms. Wealthy's. Kiss my money podcast.

Hello, babe. Welcome back to the kiss, my money podcast. I am so glad you're here. I'm going to talk about today. Something I am as you know, super passionate about, because this is going to debunk one of the major, major myths when it comes to investing. And this is also something that I used to think as well before I even started. And I think that it's so important to talk about because it's a myth that is so ingrained into so many beliefs. And it's honestly just because, um, it's, it's, it's a trillion, it's a multi trillion dollar Y. And if you have read money master the game or their followup unshakeable, both books by Tony Robbins, both are about, uh, creating financial wealth, you know, like wealth building strategies, understanding the background behind the financial industry. Uh, I highly recommend both books. They are, they're both pretty big and pretty deep, uh, but they're fantastic to properly understand how, how the industry works and like the behind the scenes on, uh, and breaking down so many of these lies.

And if you hear me flicking through in the book, I actually have in front of me, um, it's because I want to give you some of the nuggets from one of the biggest myths, which I'm gonna talk about today, uh, and deliver that to you. So you get all of the info in bite size pieces so that you can run with it and like set yourself up for success. Cause honestly, I wish like this book didn't come out until like a couple of years ago, maybe a few years ago. And then the follow on was like maybe one or two years after. And, um, I honestly wish books like this were out when I started and it, it wasn't. And I had to kind of like, I had to find out the hard way, find out on my own. Um, and I used to think things like, you know, because I didn't know what to buy or how to invest or how to start, like how to start my wealth journey, how to start my financial freedom journey that because I didn't know, therefore it meant that I couldn't do it myself and I found it also overwhelming, but anything new is overwhelming.

Like I remember learning to drive, like trying to like understand the, you know, go versus stop versus change gears and like the clutch. And, uh, even though I actually even failed my first driving test, cause I completely bummed it up entering a roundabout and I still can't really stand, stand roundabouts to this day, to be honest. Um, and yeah, just like took the wrong turn and like freaked out and had to change gears mid roundabout. And it was like just horrible. But you know, now obviously we all think about driving like basically nil, right? We don't think about driving. We just get in the car and it's so on autopilot. But like you remember when you were first getting your L plates, like how scary it was. And like one, I was used to think that when I was in a highway or freeway that I was going to like accidentally veer into the other lane, like anyway.

So when it came to something new meaning investing, it was, it was again overwhelming for me because I didn't know, I just didn't have the information and that's all it is. It's only overwhelming because it seems like this is like really big thing. And honestly, a lot of it is hidden. Um, and I used to think that because it was overwhelming and I didn't know a lot that therefore it was hard or like complicated or complex. And I had to have like a master degree and, um, and that I wasn't good enough and that, you know, Oh my God, an expert would have to obviously know and have all the answers and I couldn't possibly do it myself. And so, um, anyway, money must be game and unshakable and even rich dad, poor dad to a degree does debunk some of the myths. Um, certainly money must.

The game goes into it in a lot more detail about the industry, which I'm going to, I'm going to tell you about right now, uh, because I want the moment that you can get over this belief, this false belief, this absolute bullshit lie that the experts know better than you on how to manage your money. Uh, this will actually help you to step into your power around taking control of your wealth and taking control of your financial freedom and your future. Meaning knowing that you can step into it right now and start it right now. So, uh, chapter two, literally in the book talks about the $13 trillion lie and the literally the title of that chapter is called invest with us. We'll beat the market. And so I want to talk just briefly about the difference between fund managers. So like if you went to a financial advisor planner or in some countries that call the money manager, uh, then there are different, there are different levels, right?

And honestly, like I have probably shied away from talking about this in a lot of depth before, because I was honestly completely transparently. And honestly with you, I used to think that, Oh my God, it's, you know, as, as this podcast keeps growing, it really does. I used to think, Oh my God, the financial advisors or planners are gonna like, listen, and they're gonna like get angry at me and like send me cranky emails and you know, what, whatever, like if they do, they do. And, but like, I want to give you the empowering knowledge and I need to completely stop worrying about being judged or called out because I'm calling, you know, the ridiculous industry out. So that's why I haven't spoken about it a lot in depth. Um, but that stops now. So I'm going to just not give a crap about, about worrying about other people criticizing me because that doesn't help you.

And so anyway, this book talks about, and I want to kind of give you like the key points so that you also know that I'm not pulling this information out of thin air. You can go and research it yourself. And so that you know, that this is like backed up. You guys backed up by the best of the best in the industry. And, um, Tony Robbins spends a lot of time talking and interviewing and getting all the research and data from Carl Icahn, who is a billion dollar hedge fund manager. And even he says that this is true. Meaning the $13 trillion Y with the different levels, with financial advisors, planners, fund managers, money managers, whatever you call them. And that's also why it's so confusing because there's so many different names for, uh, you know, these people that quote unquote, manage your money, meaning invest your money.

So, and there's also different names that don't necessarily translate internationally. So you, when you read books like this, it doesn't actually look the laws and the regulations around what people are allowed to call themselves in the industry change from country to country. So it doesn't, it doesn't always translate. So anyway, you get different money managers or fund managers at different levels. So the most that the biggest difference is that you have an active investor manager. So like they actively go and select the actual stocks or shares to pick there. They're essentially a stock picker share picker. Um, and the difference between them versus just someone else who selects a diversified portfolio for you. And so I'm going to talk about the difference between the two, um, and tell you why you don't need either. And so the first one is an active manager, an active means.

They are literally their entire job aside from, you know, getting on new clients and whatever else their entire job is to go and select the right companies and, you know, select what they think is going to be the next big company so that they can select a portfolio based on these companies that they think are going to be the next unicorn. Uh, so that, you know, that's gonna, hopefully, I guess in their mind outperform the market, here's the lie that you need to understand. 96% of active fund managers do not beat the market, 96% you guys. And when I say the market, I mean the, when I talk about the market, I mean, not like a diversified portfolio, meaning like an index tracker 96%, Holy crap. So you might get a fund manager, active manager that will beat it one year. And you know, you can probably go and find a bunch of them that have beat at one year.

But what is the key? And as you know, if you've been listening for a while, as you know, anything, even just the slightest thing about investing, you don't go in it for one year, right? This is a longterm thing that the longer you're in it, the more you put into it, the more you let your money compound and grow the richer you become like quite literally. And so you're not going to invest for a year, you know, buy a house for one year, unless you're flipping it. Like you go in and invest for the long term, because that is the key to true wealth and letting it grow right. So 96% over a period of time, don't beat the market. And so when it comes to active managers, most of the time, the active managers, other ones that you pay a premium for, and this is true, wherever you go, you can go online and you can even buy ETFs exchange, traded funds and different portfolios and different diversified funds that are actively managed.

And the fees are always higher. Often they're in percentages and they're always high out because why, well, you're paying for a human being to literally be like, be full time, but they don't get any extra money for you. They don't beat the market. So considering that they don't work and you're paying more money for it, it is mind blowing. How many people actually fall into this trap? And it's what breaks my as well is that, so there, there's a really large population of the elder demo, older donor demographic who have built a relationship and are a little bit more old school. So I have built this relationship with like, you know, their financial advisor or planner or whatever, over a period of time. And they think that, you know, they're like the family planner or whatever it is. And so they think that therefore, because they know them well, they're going to like look after their money and what honestly breaks my heart and makes me so angry because my grandma, my mom's mom literally came to me, sent me the like full contract from her planner.

And I went through it and I had to explain to her how insane it was, the fees that she was paying, because she didn't like she didn't look at it. And most people and most people don't, it's just the truth of it. And this is why it's a $13 trillion lie because $13 trillion just like, think about that for a moment. 13 trillion is a heck ton of money for it to be going to these active quote unquote managers that are literally burning holes in pockets and keeping money and taking money from people who could invest it better if they just didn't use someone that was an active manager and that if they just put it into a, an automatic diversified portfolio. So like that literally just grows over time. And isn't someone that's trying to pick the next best thing. Right. Uh, so that's what you need to know.

Like, you need to know that the, when someone says that they're an expert, you need to understand that it's massive, massive fades. And I used my last job before I fully went full time into ms. Wealthy. My last drug was actually at F financial services firm, and we would have these, um, active, fun, active managers come in from all of these investment firms and hedge fund firms, uh, come into the company that I worked at and have these meetings with the CFO, the chief financial officer and the CEO. And, you know, they would sit and talk to these investment managers and talk about their perspectives and talk about like, what was coming up over the next six to 12 months and how are they going to make a lot of money? And the company is going to grow. And so the active, you know, these managers from these investment firms would like sit in these meetings, being like whatever, that was the degree of what they believed that the board would say the CEO and the CFO would say determined whether they thought that that company was going to grow and that might be the next unicorn, but it's also up to the CFO and the CEO to like, kind of, you know, exaggerate a little bit, like, of course they gonna talk big about their company and they don't, they're not going to tell you all of the bad things about what's going on internally.

They're only going to talk about what they think they're going to achieve. And so this is why 96% don't beat the market because they're getting information from other companies and they're doing this research and it's all speculating is honestly is speculating. And I know that so many people want to be the next Warren buffet and they want to be the next stock picker and they want it. They want to be like him. And he is a unicorn, but you also need to understand that he has been doing it for like say like decades and decades and decades. And he only had, he had only a mast 1% of his wealth that he has now, Warren buffet, when he was 50, he only had 1% of what he currently has now. Like that is, and yes, he's a billionaire now, but the majority of his wealth, the large majority came after 50 because everything that he put in place in his twenties, thirties, forties, fifties, actually started coming to fruition and amassing off to, he was 50.

You also need to know that Warren Buffett spends 80% of his day reading, literally you guys. And he really is a unicorn. So anyway, that's a little bit of a breakdown of active managers. Then there's this other term called a fiduciary. And this is like, it's a, it's a more relevant term in the U S sometimes it is thrown around in the UK and Australia as well. And it essentially means that fiduciary just means that by law legally, uh, any fund manager or planner is meant to have your better, best interests at heart. Um, but it's a, it's a really big gray area. It's a massive gray area. And this is why we have Royal commission investigations into fund managers and banks in the financial services industry. And this is why it gets brought to its knees every five to 10 years, because this gray area has always taken to the end like lengths, right?

We had a recent one in Australia, a Royal commission and the entire industry has been completely overhauled. And in process of being overhauled banks were fined millions of millions of dollars, uh, for the financial service planning, you know, um, F ups essentially. And it happens in every country around the world. And so I talk about this also in my, in my investing masterclass, that on average, you will spend any, any average person will spend at least at least a few thousand dollars per year on a financial planner, a few thousand dollars per year. And that is also for things like life insurance and different stuff. This is not even tax. Like if you want to enter the world of text, get a good tax accountant, financial planners, don't do that. Um, I also talk about in the, my, in my investing masterclass, that the impact of having someone that, you know, costs you in 2% in fees versus half a percent in fees.

And even though it seems so tiny, it seems like ridiculous. Like, why are we even analyzing, you know, point of a percent, right? But the difference over like 20 years when you have money invested, because what happens that money invested grows, and it becomes 10 K it comes 50 K comes a hundred care, becomes, you know, 500 K over 20 years, literally a difference between 2% and half a percent is over $120,000 in fees over 120,000. Isn't that insane? Like, honestly, when I first kind of started finding out about this, I actually couldn't believe it. I was like, no, that's too much. And it's because like, in the initial days you're only paying, you know, maybe two to $3,000, um, per year, or maybe you're only paying like one to $2,000 per year, but then as your portfolio grows, because it's a percentage like once it gets to a hundred thousand dollars, like once it gets to $200,000 and you're paying 2%, it's all of a sudden like, Holy crap, it makes so much more sense, right? Like once it gets to that amount, you're paying four or five, $6,000 every single year, uh, when 96% don't even beat the market. Whew, insane. So then the other side, the flip side is a plan is that invest in a portfolio

Like a portfolio, a diversified portfolio fund, and here's

Is where it gets industry. Like, that is a good thing because that is where you want your money. And that is where, you know, it's,

It's helpful for you to have like, it's

That for you, like in a risk tolerance, point of view,

Vest for yours,

The risk, but here's the thing. And this is true

Also for robo advisors. So rubber advisors,

Like betterment or wealth front, or, um, even a raise or acorns, they are

All right. Bow advisers. So

That kind of like the, in between you doing it yourself and you go into financial planner, but they still, so they still have fees to do it. Right. Um, and most of the time it's double the phase if you were to do it yourself. So there are some fees involved when you do it yourself, what is it? There's the broker fee, right? When you actually go and buy. And then when you buy funds that are automatically diversified for you, remember not active when you buy funds. Uh, there's also like a management fee from the, the actual overarching company that puts together these automatically diversified funds. Cause there's, you know, just like some admin and whatever involves, but it's not actual people sitting at a desk all day every day, speculating about what might be the next unicorn it's based on numerous numerical data. So the top performing companies, it's based on percentage of growth, it's based on market capitalization.

So how big these companies are. Uh, and the, basically the top ones just always sit in the fund. And if the next quarter, when it comes to it, that they, you know, do a master review. Um, and again, it's not a, it's not a person doing this. This is all numbers based. So it's computers that like literally check in with everything and how it's going. Then the next quarter, what happens? Well, if that company isn't performing, it falls out of the top 50 of the top hundred, the top 200. And so this continues every single quarter, every single six months, depending on the fund. And so it always holds the top performing companies. Isn't that amazing? Yeah. And this is why active fund managers cannot beat the market beat these funds that consistently have the top performance, because how could a human being always be 100% right.

About what is the best company, every single quarter, every single six months, every single year ongoing. And so obviously there is a select few, 4% on average, 4% of fund managers, but these are the kind of guys that are the unicorns, the 4% that do beat the market, uh, often hedge fund managers or, uh, the top, top, top performers, like call icon and often the buy-in to have, uh, uh, an investment fund manager like that manage your money for you and invest your money for you. Often the in is like at least one to 200 K often it's half a male. Sometimes it's one male and the fees are also pretty high, but often they have a guarantee of what they will like what they'll get for you, like in terms of market return. Um, so most of you listening, I know I'm not at that point where you have a hundred, two K uh, to just show into a fund and have someone else manage it for you.

And so here's the good news. You can buy these funds that automatically are invested for diversified for you yourself. You can buy them yourself. You don't need to pay someone else to do the exact thing that you can just do yourself. Um, and that is why I teach what I teach. That is why I have investing bootcamp to show you some of you already do this. There are, I know that some listeners that have come to me and say that they have already mapped out everything that are also investors that are in the program that have already done that, but they don't actually know if they've selected the right bunch of funds for them. And they don't know if they've selected the right ones ongoing or how to manage an ongoing portfolio or how to continuously invest or what to do outside of your home country.

So if you're in Australia or you invest in Australia, then how do you pick a different funds around the world? And I always do say, I think it's a great idea to invest in international markets as well, particularly, uh, the big, like big primary markets, like for example, the U S and if you're in the U S it's great to invest in other markets around the world, because different countries around the world perform differently, you can invest in emerging markets, meaning like the countries that are in rapid growth right now, because we're seeing like that they perform incredibly. Right. Uh, and so it can also be super confusing, like, well, what funds do you actually buy? Because there are thousands of them, literally thousands. And so that is why I have investing bootcamp so that you can learn the exact tools that you need to know so that you don't have to pay fees like two or three or $4,000 every single year for the rest of your life, just to have your money invested.

Uh, and so that's why I teach this stuff. You guys like, this is why it's so damn important that you know, the inside out of how the financial market and the financial industry works. Um, I actually had a shocking encounter with a financial planner initially, and it, it, it massively, it was a really good thing, but at the time I was, I went to a financial planner. Like this is way before, you know, I realized I could do it myself. And it was the catalyst for me wanting to do it myself, because I walked into that meeting. It was, of course, you know, just a bunch of guys in suits, talking to me in this super intimidating, patronizing way. All they spoke about were like all these fees and how I need to have like life insurance. And didn't actually like, explain to me how everything worked.

And then just, it was just, it was so ridiculous how patronizing they were and how expensive they were and how they just did not listen at all to what I wanted to do. And I realized when I left just thinking that I would have no control myself, because I didn't have total transparency and I didn't want to hand my power over. So this is like ms. Wealthy, and this company, this business, and me teaching you and everyone that comes into my sphere, all I I'm feeling and finding are also in this same path of realizing that it's now time for you to take your power back. It's now time for you to like, literally take your money back, take your control back and realize that you're like, you're incredible. Every single woman here listening right now can do it themselves. Like we can like, literally grow a human. All it takes is like learning the right way, learning the system, learning the path. Cause it works, the path works. Um, and I have total confidence that I can get you, you to your first hundred K and I can get you to your first million. Like we can do it with, I can do it with my eyes shot. So the path works and that is why investing bootcamp is there. Right. To show you exactly

The way. Whew.

That was a lot. Was that a lot? I hope, I hope that wasn't like too overwhelming with like inside info of like how it works. And I swear, like I'm not even kidding when I say I have literally gone through like maybe a couple of pages I'm just flicking through now and like looking to see, just to check that I haven't like missed anything major. Um, Oh, I talks about myths too, about how fees are only a small price to pay, um, and how the industry is now the LOD, the world's largest skimming operation from which fund managers, brokers, and insiders are steadily siphoning off an excessive slice of the nation's household college and retirement savings. Yup. Um, and just like, just think about also, if you're currently thinking, you know what, but I'm not, I'm not currently an investor. I got a news flash for you, babe.

If you have a super fund or a 401k or a Roth IRA or a pension fund, you are an investor. And the reality is the power is handed to you when you have one of those things. So if you have a fund, if you have a Superfund for Onk, a pension fund, you have the control. You currently are an investor. You currently have the power right now. And in those retirement accounts, you have selected our fund. Sometimes it's called balanced or moderate or growth, or like, you know, regressive or like whatever they're called different things. But inside that there is a fund that's chosen. And often the default finder's just like balanced, but you really, you need to understand these basics so that you can also control the money in your retirement accounts, because this also applies to them. You can also select active funds, active fund managers, active accounts.

You can also select them inside your retirement account. And this is also happening inside there. Like it makes me so angry that honestly, there's a trillion, multi trillion dollar industry that is skimming the fees from people like you and I, and when you actually get the proper knowledge of how it works and understanding it, whew, like you can also control everything you do in there. And so when people say to me, Oh, I bet I didn't have any money to invest or, Oh, I'm not currently an investor. And so like, do I really need to know this? Like right now? It's like, well, yeah, you do. Because unfortunately you already own investor. Well rather, fortunately, you already are an investor. And so my goal is to help you get to financial freedom faster and all of these things add up and all of these tiny, tiny things, even though they seem minor at op and even you starting with a hundred dollars a month, so many people don't start because they think it's too small.

And yet the biggest thing, the biggest thing. And if there was one thing that I only, like, one thing that I leave you with, it's understanding this, the biggest thing between where you are now and where you want to be and your financial freedom it's starting and it's taking action. It is the only thing. And the sooner you start the better like that is it, babe. I promise you that the difference that makes is insane when you actually just start where you are, like screw this whole perfectionist stuff. It doesn't need to be that. So I hope that that is the catalyst for you to start now and start that journey and start building your financial future and fund it to freedom fund so that we can get you richer faster. Alright, babe, that's it for today? I feel like I have totally rambled enough on the subject, but I hope it's given you some insight and empowerment. See you next weekend.