EP22: Brendan Malone - "Raiz Your Game"

Speaker A: Brennan, 10 years ago, you guys launched Raise. Do you think it would be where it is today?

Speaker B: Uh, that's a good question, mate. I think, um, yes and no. I know it's a sitting on the fence kind of answer, but yeah, 10 years ago or 11 years ago, when we sent it out, we've been operating for 10 years. I wanted Raise to be a household brand. You know, back in the day, it was an A and P, or is it a colonial first state? I wanted to be a household brand. When we look back and reflect on the numbers for the last 10 years, you know, we've saved and invested over $5 billion for everyday Australians. We've reinvested $230 million worth of dividends. And the important part about that is the impact a lot of the Australians over that period would be the first ever time they've received dividend outside of something like their superannuation. So the impact that we've made is. I'm very happy where we are, but there is still more to go.

Speaker A: Yeah, Uh, I figured you already know

Speaker B: a couple of my head.

Speaker A: Okay, so what was the original mission of Raise? Talk about impact. What was the original mission?

Speaker B: Yeah, the plan was to solve a problem. You know, it's like any fintech, any business that you do, you've gotta be able to. You create a business to solve a problem. And that problem that we tried to solve was breaking down the barriers to saving and investing. You know, people, back in the day when I, you know, I remember my first shares when I was about 16 or 17 through the old E trade platform, and it was a minimum investment of a thousand dollars. Um, that's a barrier for people to get into. So we broke down the barriers to allow everybody to get into the stock market to get hands on or Palm in the. In the palm experience. In the palm of their hands on the stock market.

Speaker A: Yeah. Yeah. Okay.

Speaker B: And then the second one, the two. The two core principles we built business on is solving that problem, breaking down the barriers. And so small amounts consistently add up over time. And we've got over $2.1 billion of funds under management now. Yeah, that's a big number.

Speaker A: 2.1 million. Billion. Billion, yeah, yeah.

Speaker B: Uh, and the second one was leveraging technology to make everybody's life easier. You know, we had a conversation before this about how hectic schedules are and things like that, but if you had to log in every time to deposit five or $10, you know, you wouldn't find the time. And people will always say, I'll come back and do it. 70% of people don't come back and do it. So by having leveraging technology to make everyone's life easier, reoccurring deposits, $5 a day, $5 a week, $5 a month. Just have that set and forget mentality.

Speaker A: Yeah, yeah. I think like um, if I were to go back in time to when they first launched, um, so that explosion of the iPhone as well would have been a huge uptick for you guys. Absolutely.

Speaker B: Digital. It's in the palm of the hand and we are, you know, we pride ourselves on being a mobile first application because it's everyone's life's on their phones these days.

Speaker A: Yeah, yeah, fair enough. Um, so originally though it wasn't called Race when I first signed up, it was called Acorns. What's the story behind.

Speaker B: So in March 2015 we uh, signed a joint venture agreement to bring Acorns Grove from Newport Beach, California out to Australia. Um, and so that's, that's when we, that's when we incorporated the company, et cetera. Um, and that was March 2015. And we launched in February 16th. So last month, February, last month was. That was our 10 year anniversary. And then um, the sort of businesses sort of diverted in the separate ways from what they wanted to do and what we wanted to do and where we were going. So in The January of 18, um, we raised some money, bought them out of the JV, et cetera, changed the name in the April of 18. Um, and then listed on the ASX under the name Raise, Invest, Limit, um, in the June of 2018.

Speaker A: Yeah. What were the reasons for IPO?

Speaker B: Good, uh, question. And it's funny enough mate. M. I've had a lot of people say, would you do it again?

Speaker A: Yeah,

Speaker B: 10 years breaking out extra weight here or there. Um, there's a few reasons. Um, uh, probably one of the biggest one was we raised $15 million to super boost our war chest to bring better, quicker, faster, innovative products. But also, um, we used that money to go offshore. Um, we know what happens up in Asia with technology and we sort of, we wanted to get in there first because if we don't they'll copy it and own it. So, um, we raised the money. Um, our first country. Um, we've stopped all those operations now because we're focusing, we've brought the attention back to focus on the Australian business. But we launched in Indonesia.

Speaker A: Yeah, I remember it was in Indonesia.

Speaker B: Um, and you think about what Ray's business model is. It's a scale game. Ah, we want the number of users. We're not a typical funds under management or an asset management business where we get performance fees on the funds and things like that. It is a set back in the day, we launched at $1.25 a month. There's a product now, our light plan, that is $2.50 per month. So it's all about the number of people on it. So when you're going into somewhere like, um, Ind that's got population 279, 280 million people, you know, there's only a fraction of the customers that you need compared to a 25, $26 million range. Yeah, population. So we did Indonesia, we did Malaysia. We had licenses setting up in Thailand and Vietnam as well, um, through Covid and et cetera. And that things got a bit tough, cash got a bit tight. So we, uh, as a board, we're ASX listed. We have an independent board. Uh, we came together and made the decision to close down the, uh, into all the Southeast Asia operations, focus on the Australian business.

Speaker A: Okay. Okay. What were the reasons behind that?

Speaker B: It just, um, it was more of a. They were burning cash. So, you know, I didn't. We didn't want to burn all the cash there, which would suffer the Australian business. And Australia business was going well, um, because, you know, we have $14 million of cash on the balance sheet at the moment, but we have to ring fence 5 million of that for regulatory reasons here in Australia. So we just didn't want to get too skinny and.

Speaker A: Yeah, I see. So was it just, uh, the adoption of people in the market in Indonesia for.

Speaker B: It was a combination of different things. I think, um, one of them was the banking system in Indonesia. We came out of acorns, US their banking system versus the Australian banking system. It was very easy to get in and get that organized from how operationally the app works. But in Indonesia, there's different banks, there's different banking backbones, There's e wallets and things like that. It was very hard to get that adoption taken up.

Speaker A: Yeah.

Speaker B: Uh, and even something like, um, the crypto came out around the same time, and everybody was on the hype of that. So the Indonesian market doesn't have an ETF or a stock exchange like we have here. Um, so we're going to mutual funds over there. But the young Indonesians were more excited about the crypto volatility and the instant gratification or the return that can bring versus a mutual fund. So there's a combination of. Of different things. Yeah.

Speaker A: Yeah.

Speaker B: Okay.

Speaker A: Okay, Fair enough. Um, Thing I loved about it from the start. So I've been pretty, um, I went through a journey. I think it came out in my early 30s and then I, I had it when it was acorns and then migrated terrain. So pretty early adopter for your platform. But the way I, I kind of, it's kind of like an entry, like a gateway drug to financial investment.

Speaker B: Right.

Speaker A: And it was like the first time was like gang flying it, you know, and cool colors and the visual representation as well. And that's what I actually did a post about like linking. And it's literally one of the financial, like one of the, um, you guys Australian tech company that's actually changed my life in terms of giving me that exposure to it.

Speaker B: But we looked at that and as I said, that's great to hear and I thank you. And I remember talking to you back in the 16, 17 years, uh, again, a lot more brave.

Speaker A: Yeah, I know you're a bit slimmer back.

Speaker B: It's um, yeah, because we just had our 10th birthday last month and we did a little 10th birthday post on LinkedIn and send it out to our weekly newsletter to um, see the impact that it has had. Um, and there's something about Race Central, it's a, um, uh, group on Facebook. And I get on there every day and I listen, I read and I watch what people are commenting on. And you know, somebody saved up for their first house or someone saved up to pay off the house somewhere, somewhere to see the impact that it has made because. And you know, I speak to people all the time. And I was at the beach the other day and I had my raise hat on and the lady said, oh, what's that? And I explained it to her. She goes, oh, that sounds good. I'll check it out later. I'm like, no, you won't get it. You've got to give it a go. You know, as the buffet, the Mungers say, the best time to start investing was yesterday. And X best times m today.

Speaker A: Well, 20 years ago. Yeah.

Speaker B: Yeah. It's kind of like you got to give it a go. And what we've done to democratize. That's a big word, democratize. Saving and investing is for as little as $5. And the typical customer. Um, I say it's a typical customer, but we see customers deposit $10 and obviously on the ASX, it takes two days for the shares to settle, et cetera. When it settles, they withdraw $10 and they get it back and they go, cool. It does what it says on the Tin. And that's what particularly the customer support team. But the team as a whole with Raises, we do what we say that we will do. It's, uh, ethical issue for all of us to say, if I say I'm going to do something, we'll do it. So y deposit $10. Yes. You withdraw $10 and then, then they will deposit. Yeah, they'll lump some of 50 or 100 and then set up the reoccurring side. So from a customer point of view, do what you say you can do and I'll stick by you.

Speaker A: Yeah, yeah. Okay. Um, how has Raise evolved from its original product to where it is today?

Speaker B: Well, that's a good question. It's um. So when we first launched, uh, the principle's always been the same. It is democratizing, getting that automated, using technology to make people's life easier, um, with the financial education experience. But when we first, I think the biggest change since we, um, since we launched was we always had vision, we always had a North Star that we wanted to take the product through. And um, I see Raise as a cradle to grade exercise. I want people to be in the, you know, raise kids and I want, and there's no reason why they can't have, have one of our product offerings in the grave. So it's a full lifestyle journey. And the way I've mapped it out, uh, is in an Excel spreadsheet, I've got the ages across the top and I've got what financial products does an individual need down the, down the left hand side of the rows and you can sort of chart, gray it out and go, yeah, okay, cool. They need a bank account. You know, they only might need a credit card at this age. They obviously got a superannuation product from sort of 16 or whenever they get their first job right the way through to retirement. Uh, so we built the product on that. So we started with five portfolios. Six months afterwards, our customers said, hey, um, and this is the cohort that are in there. We want to invest in what we believe in many the socially responsible portfolio. So we built the Emerald portfolio. So now then we offered six portfolios. Then, um, they've said to us, well, what's this thing called? Crypto.

Speaker A: Yeah.

Speaker B: And you know, one of my core principles is, you know, I never invest in something I don't understand. I don't know either. So we did some work and, um, spoke to the regulator and got a 5% allocation to Bitcoin so people could understand it. Um, and so they're asking us what is this thing called crypto. Can you give us a note? So can you give us an exposure to it so we can understand it Then? The same thing with the property market. We, um, created the Raise property fund where we now own 13 residential properties because young people can't get on the property ladder, but they've got exposure to that asset class now through Raise. Uh, so we built the products up as we're going as an individual learns more, wants more, experiences more. In the January of, I think it was January 2023, we had some guys, some customers roll out their, um, retail, their money. One was 32, one was 36, one was about 42. So I rang him and said, you know, hey, why'd you roll out your 32 grand? Oh, I'm going across to a. And it was a comsec or an IB or one of the broking House, because you've told me what to do with the training wheels on that. Thank you, but I'm going to go do it myself now. It's a bit like a, um, they think they could time the market, not time the market, et cetera. We laugh at that when we see that in all people's comments. But it is, uh, why are they going off there? We've had them, we've nurtured them. How can we build it? So that was January 23rd. On the 1st of August 23rd, we released what we call our plus portfolio. So it's got the ASX 100 listed stocks in there, it's got 58 ETFs, it's got Bitcoin to a maximum of 5% and it's got our property fund maximum. The 30% of your holdings can go into that. So customers can wait and create their own portfolio employees. All right, so we, and if we launched that product five years earlier or 10 years earlier, we wouldn't have had the adoption we've got because we want to take them on the journey of financial education, open up the asset classes and experience to them. And we had a chat earlier and said, I got an email. We got an email from customers the other day and they've been with us 10 years and they're saying, hey, I was just reading something and I should have 1 or 2% of my portfolio, um, into, um, exposure to FX. Yeah, can you do that, Ralph? Yeah, these guys are being educated. And I was at a conference, an asset allocation conference on Tuesday, and I was talking to some guys and I said, guys, what you don't realize is 10 years ago, 340,000 Australians were not investing anywhere. 340,000 customers are investing with us on a monthly basis and that $2.2 billion that we have was sitting on the sidelines. It's now in the market. There's a massive opportunity and as we, as they get educated, as they get more financially confident, we want them to get to go into bigger and better products. So it's gone from the five portfolios to nine portfolios since we launched. Um, it was just about retail money. We now have superannuation account. So Raise pays my super guarantee into that. So we offer Raise. Super. Um, one thing that a lot of people don't realise and the lady at the beach who's been using it for three years. Because I didn't realise you had raise rewards. Ye, yeah. It's a cashback offer.

Speaker A: Yeah.

Speaker B: Uh, and, you know, just because I know stats off the top of my head about 10th birthday, we've reinvested $9 million into people's accounts from our cashback.

Speaker A: Yeah, yeah, yeah.

Speaker B: You know, you're going to buy the dog food, you might as well use it to raise your rewards and get cash back.

Speaker A: Oh, um, man, I think you guys are skinny. Beat them. Because, like, I always forget and I'm like, I booked a whole, then you guys had booking on there and I booked a holiday once through it, but then I forgot. You can do it again. Yeah, yeah, yeah. Uh, it's not on there anymore. So if you want to buy something through iconic, you'll get 3.5% back. There's some incredible stuff in about 300 bucks from just.

Speaker B: We're going as on family holiday, uh, in July and Expedia have a deal going on at the moment and don't quote me, but it's about 11.3% cash back. Oh, no. On your flights and your accommodation. Yeah, you know, you'd get your cash back would be enough for a free night's accommodation or something like that. You know, it's, you know, I've got the dog food on there because the dog's got away and we get, I get a six week delivery from Pet Circle and I get about $12.13 reinvested every six weeks.

Speaker A: Yeah, but the thing about that is without, uh, you know, normal cashback offers, it goes back into spending.

Speaker B: Right, yeah.

Speaker A: Not spending your investment.

Speaker B: Yeah, exactly. And I don't want points.

Speaker A: Yeah.

Speaker B: You know, Qantas points are great but you can't use them. So don't offer a point system. Put cash back. So in your raise app it says, but mine Will say Expedia has invested in you. Yeah, uh, yeah, we had to. I nearly forgot the other day because my son's got his first school camp, so it's kind of. You need slim mate.

Speaker A: Oh, yeah.

Speaker B: So, yeah, yeah, exactly. So I was at the store and I went, hang on there. So I did my homework in the store and I got $9.64 cash back. Yeah, you're gonna spend it.

Speaker A: Exactly. Might as well spend it on yourself,

Speaker B: on your future, you and what we're doing with that. And, uh, because people do forget and we don't, we wanna. We want it to be done in the background of life. So we've partnered with another fintech here called Further to do automated rewards because we've got transactional data for your roundup functionality. You know, you buy a coffee downstairs at the coffee shop for, I used to say 350, because the coffee was worth 350 back years ago when we started. Um. Yeah, exactly. You buy one for 5.50. We see that transaction, we round it to, um, $6 and we put that 50 cents in the market for you. So we've got your transactional data anyway. And what the banks can do, they reward customers on just in the background of life spending. Um, so my wife did. We had chemist warehouse and for, uh, automated rewards. And she rang me and said, oh, can you pick up some nappies and some other stuff on the way home? Sure, I'll do it. She rang me two or three hours later and said, look, I was going past the chemist, there was a parking spot. So I got in dirt, you don't need to do it. But I received the notification on my watch. I'm like, what are you talking about? And she said, I used the debit card that was linked to her raise account. We saw that the, um, I'll call it AI. But the machine saw their transaction and reward. So you're getting a reward. So my ideal rewards program would be I go in Woolworths on a Thursday, remembers it.

Speaker A: Yeah, yeah.

Speaker B: And it goes, I buy mistake and all my sausages on a Thursday night. I get all my cash back on that. Because, um, let me feel the organic sort of vws. Buy a beer, buy bottle wine. I want that cash back.

Speaker A: Yeah, of course.

Speaker B: People say to me, why, why, why are the merchants doing this? Well, the biggest problem with you, take the chemists, they're competing for loyalty. The big ones, the supermarkets, Coles, Woolies, audi, Paris Farm, etc. They're all competing for loyalty. So. But instead of putting a Massive billboard up at the, at the airport that says, hey, Woolworths, whatever that costs the money. And like, how do you measure that? Yeah, things are going to be measurable. So instead of putting up a billboard there, give away some of the margin that they have, uh, in a cashback program and it creates loyalty. You know, they might pay 1%, you know, milk runs on there. And, uh, milk run had in the raise out at a special a couple weeks ago. It was a 10% cashback.

Speaker A: Right.

Speaker B: And you know, milk run, I can do my full grocery shop. And yeah, so we did it. We usually shop once a week. We did two in the week because it was all week special. And um, it's, uh, instead of paying a billboard for advertising, they're paying away on the margin on a guaranteed sa. So the merchant's like, yeah, it makes complete sense for them.

Speaker A: Yeah, yeah, yeah, yeah. That automatic, um, reward program is actually. There's something there because I forget to go back into it. So if I've done it once, it'll remember it.

Speaker B: Yeah. We do have a, um, browser extension.

Speaker A: Oh, yeah.

Speaker B: So if you download that onto your phone or to your laptop when you go. So I can go, I'll get on my Apple and I'll go, uh, Sam's birthday next week, he wants a pair of blue Speedos.

Speaker A: Oh, yeah.

Speaker B: So I'll come in, you know, Speedos,

Speaker A: it'd be scalable,

Speaker B: but it will put the raise logo and the discount or the cash back that you get on all the providers. Uh, so that reminds you to do it.

Speaker A: Yeah, yeah, yeah.

Speaker B: You know, we did it for ugly bits of Christmas time and then whatever it came up, we'll go iconic. Yeah, you can get everything on the iconic.

Speaker A: Um, so you got 340,000 users monthly users. Yeah, yeah. Fantastic. And from what you said before, are you telling me you guys invested in, had a crypto fund before you had property?

Speaker B: I think it did, yeah.

Speaker A: Wow. It's probably one of the first Australian fintechs to do that for sure.

Speaker B: Yeah, I think, yeah, it was, yeah.

Speaker A: Ah, yeah. Because of the hop around crypto at the time.

Speaker B: Bitcoin and mate, I love the hype and it took us a long time to get it approved and get it in there. Um, but because we are limited, 5%, I think it was May 20, January 20, and everybody was posting that little rocket emoji on Twitter saying bitcoin's going to be and stuff like that. We had this guy and I can't remember his username or Panda or whatever it's called on, um, Twitter back then, Netflix now, and it said, raise, raise. Why do you only allow 5% of my portfolio to go to crypto? The same bloke in May put on it goes, thank you. Raise. Now I know why you live in. Because of him. And to watch that educational learning. I made the hairs on the back of the neck sound.

Speaker A: Yeah, boy. Yeah, fair enough.

Speaker B: But I think it was before. If it wasn't before, it was very close to. That was when I was 18. No. Yeah, I can't remember. It was very close.

Speaker A: Yeah, fair enough. Yeah, yeah. What's your favorite part about race, mate?

Speaker B: I can sit there and say the returns, things like that, but it's not about the returns, it's about to me. And I know it sounds weird, but I've been put on this earth for something bigger and better than what I've achieved today. It's my personal mantra. Um, financial education.

Speaker A: Yeah.

Speaker B: You know, the reason that, um, I got attracted to it, it just fortuitously. And maybe it's a sign. Uh, a mate in Newcastle's. Unfortunately, his mother had passed away and this was back in 2015, January 25, February of 2015. And he rang me and he said, oh, because I worked for Broadband Scotland. Yeah, it's amazing how many. And people go, oh, you work for a bank. Can you open my bank account for me? Oh, you work for a bank. You must know about markets. Yeah, sure. Uh, and he said to me, mate, I've got 15 grand. What stock should I buy? I said, what are you talking about, man? And he goes, you know, stocks should be bhp, cba, westpac. You know, I've never had a share. Should I do it? And I know that's not how it works. You know, you don't put 15k into one one stock. And he's a builder, mate. Diversification, etc. What are you talking about? Just tell me what stuff to buy, Brendan.

Speaker A: Yeah.

Speaker B: Um, and we hung up. And then the opportunity to kick off and sort of startup Acorns out here in Australia came up and I went, that. That's the financial education. Because they don't teach at schools.

Speaker A: Um, exactly.

Speaker B: Yeah. My son's or my. Same as. You've got young kids, 7 and 5. You know, they're very excited when the tooth fairy comes because it's the first time they see money. Yeah, we don't see the cash and the coins and things that we used to do. So to me, I, you know, I love the product, I love the ease, I love the, the automated functionality of it. All but the underlying goal for me, uh, is to get everybody financially literate. Financial education.

Speaker A: Yeah. Okay. Um, so I saw you about financial education. I saw your recent post, um, uh, that either you posted or raised it from the business about Trump accounts. And when I read, I was like, oh yeah, Trump's just, you know, pulling, you know, the train, like trying to get more votes and stuff like that. But looking into, looked quite good what the US government was actually doing, giving $5,000 away, um, that has to go into this ETF diversified account, kind of like a guarantee super thing. Or they got the 401k back in there for your kids you can't touch until they're 18. I think that was one of the rules. You can invest up to a certain amount tax free and then that compounds at a times. But I think even if they did nothing, it would be like, you know, uh, I think 18 grand had all the calculations very well visually explained, which is what I loved about it. What are your thoughts on what you think the Australian government needs to do to improve the financial health of our citizens?

Speaker B: The post was from me, not from Ray. For certain parties out there, guys, this is what we should be looking at. And uh, to be honest, I did speak to, uh, both parties, both the bigger parties prior to Trump. Before this post, it was January last year before the elections. And I'm like, guys, you're not, you're not hitting the right. You know, this is, this is core. Every government has a mandate or should have a mandate. And I've seen it through the Asia Pacific countries to financially include financially literate financial education, the masses and the people. So I went to and said, guys, you should be giving m everybody a raise account. Forget tearing up hecs debts and things like that, that's great, but it's costing the country, costing Australia. Give them this. You know, it goes back to, you know, don't keep fishing. Teach a man to fish and you can look after himself. This, this is where. This is why I want it to be a cradle to grave ex. So if we can educate them here on wealth creation and to me and uh, particularly to our board and our staff, wealth management or wealth creations, it's not a right, it's a privilege. You know, and that's it. Sorry. It should be a right, not a privilege. People think it's a privilege. No, no. Get it down to the grassroots, get it down to every Australians. And I said to the parties, I said, how did Trump win? And this is before he did the, did the accounts. He got out and he spoke to the middle class and the masses.

Speaker A: He's very good at that.

Speaker B: Uh, he's very good at that. Um, I uh, think it was Jo Rogan and he's, he's.

Speaker A: That was the second time, Second time. Even before that when he was going against Hillary Clinton. His whole message was to the middle uh, class. We're going to make America great.

Speaker B: All of that and our parties don't do that.

Speaker A: No, no.

Speaker B: And so yeah I got a bit of grace.

Speaker A: They tried to, tried to.

Speaker B: Yeah. No it's very unsuccessful. So I got, I got a bit of direct messaging on um, off the back of my LinkedIn saying I've got. So now we should be. Let's bring it to the forefront. Let's make sure that all our generations are financial education. You know I was fortunate enough that my dad taught me M something now but so I built on that and with the likes of Ray's, you know Tom, my seven year old will be better financially educated than I was so I wanted to be intergenerational and the next generation coming up, you know I'd love to get into. And uh, I've approached so many schools, the government's um, schooling programs, whatever they're called. Um, but they all think it's just too hard. It's not too hard. There's plenty of organisations out there that are trying to do what we do and get into the skills for financial education. It's just got to take it seriously.

Speaker A: Yeah.

Speaker B: And it will make a hell of a difference. You know the whole reason we've got, I think a stat that I saw the other day was our pension scheme or superannuation scheme. It's the fifth largest in the world but we're the 55th largest country by population because super does the thing that needs to do. You know the government can't continue to pay pensions and things forever.

Speaker A: Yeah.

Speaker B: Or uh, and get help but we've got to do it ourselves. You know. So that's the mentality, it's a proven track record that it works. That's the reason we created raise kids when my son was born. So let's put. So I put 50 bucks a week into Tom's account. So when he's 18 if the market does and past performance isn't an indicator of future performances. Vitalix Asterisk stars uh but if the market does what Michael should do over the 18 years of Tom's life that'll be 120 grand. Now I'm on 120 grand cash. Trust me. So I'm not going to give a young 18 year old 120 grand. But it's there, you know, it's doing what it should be doing in the background of life compounding, you know, what is it the 8th or 12th wonder of the world. It will do what it needs to do by the time he's 18.

Speaker A: Yeah, yeah.

Speaker B: Why can't we all do that?

Speaker A: Yeah, exactly. Um, and I think it's such a powerful tool that you don't get exposure to um, unless it's talked about in your family as well. Um, and I think like you know the, from my personal experiences, a lot of the financial education I had was around how your parents talk about money and around that psychology around it if you grew up. So my dad was um, an entrepreneur or had his own construction business collapsed in the 90s. Right.

Speaker B: Yeah.

Speaker A: So we had a lot of. We had a big house in Bondi, don't remember we had to sell it. Started ah, renting in Maroubra, then moved down to Nyara later on. Uh, so we had a bit of a rise in fall that slowly moved to his company again a different one. Um, but that whole experience around mindset, um, and like, sort of like all right, the reason why I started running my own business is because I saw that happen and I was like if that could happen to my dad's company, it could happen to any company. So I've got to be able to provide for myself, my own family. I want to go start my own business. Right. Um, but I don't think if I didn't have that experience as a kid I would have approached the idea of, of having a company and a business and people work to put it completely different. So we'll talk a bit more about that as well and I think um, so I want a bit of a tangent then. But the idea of like yeah, financial education. I didn't know um, about investing until later on. It was always like put your money in the bank, get that interest, save it as well. It's just like it's not going to do anything, you know like what's. And then when I'm in my early 20s I knew about like investing in stock market and stuff but I didn't know what sorts of people. And the idea of putting a fund

Speaker B: wasn't accessible because it was like ten grand. It was three year lockup.

Speaker A: Exactly. Yeah, yeah, yeah. So that was always me and so it was really refreshing when product like it was coming to market. Yeah.

Speaker B: I mean you talk about it like my dad Let me buy my first share.

Speaker A: Yeah.

Speaker B: And I. I still remember in the old place and the old study, it was on the old big computer screen. I said, yeah, I'm going to buy Fosters because why is it. Because I want big. Yeah, okay, mate. I think I got in at three bucks and had to get out $8. He knew it. And that was a lesson that I.

Speaker A: Yeah, that's a lesson. Yeah. And you should learn those lessons, though, like. Yeah. First off. And yeah, you do go through those lessons, but it is.

Speaker B: It's your mates. And. Yeah. Uh, fortunately, something like raising. One of our biggest acquisition channels for customers is referrals because they've had a good experience, they've broken down. You and I meet each other at the pub on Friday afternoon. I'm like, oh, man, you've seen this thing?

Speaker A: Yeah.

Speaker B: You know, we've had testimonials from, um, young people saying, oh, cool, you introduced me to my girlfriend, you helped me get it. And we're like, why did I, you know, I was dropping bonds and ETFs and made me look smart,

Speaker A: Forget, you know, get on Raise. You gotta get away. Your future partner.

Speaker B: Cool, mate.

Speaker A: That's awesome. That's really. Um. So on one of your first podcasts with Raise your game podcast, he interviewed a guy called Ben Nash. Yeah, Ms. Nash. I met Ben probably about eight years ago. Um, really good guy, very passionate guy. He gave a presentation at, um, a group of. At our business. We had like a sort of a franchise business model for recruitment back in the day. And he gave a presentation, um, to us about. And I think he called it like the future state graph. So there's my little guy. It stuck with me. Right. And I'm just gonna put that in there. There. Um, and it was basically like the idea of where you're at now at any given point of the life and where you want to be in the future. And, like, the decisions that you. You make can get you there. And, like, it's all these little decisions. Uh, so if you do nothing and keep going, you might stay in a single line, but that single line actually goes down because inflation goes up, goes up, everything like that. So you actually were costing. Yeah. So you got to make decisions along the way. Now whatever your decisions are, you're either going to go up or down. Could be good, but quitting drinking, you know, change your lifestyle, um, doing something unethical, that'll, you know, they're bad things. You want to avoid the bad things and maximize the good things. Right. And then. But over Time, those things compound and change. So if you want to get to here, you've got to make the decisions here. And then they compound and change. And so that like, that was super powerful for me. Like I just remember that I was eight years ago, super easy graph. And that's just something I wish I got shown because I've been a very visual person when I was a kid. And you can apply that to anything in life. Like it doesn't have to be investing. It could be, uh, it could be plain sport. It could be.

Speaker B: That's why I say people, what people don't realize is that small amounts consistently add up. Now that's. I use that in the concept of raise. And that's why we've got $2.2 billion of funds. But what's an athlete do you. And they get better. What do you do with your education at school? Not just financial education. You learn and you do. So why can't we do that with our money? Yeah, why can't we do that? And I have great conversations with Benny. And you know, one thing that I remember talking to him about is the decision to not make a decision is

Speaker A: a decision that is a decision.

Speaker B: No, no, no. You chose not to do something that is a decision.

Speaker A: Yeah.

Speaker B: That decision again stays flat. It'll cost you.

Speaker A: Yeah, that's right. I think like what the thing is, is what most people, when you see that graph is you see like a linear line and it goes. Or like an um, or so linear line or exponential line. Right. And a lot of people when you think they think it's like a straight line but think about investing and anything in life I think as well is it's not. You might go up a little bit then come down. You might get injured in sport. Stop complain. It might come down. You might have to take some time away because something happens to you or whatever that might be. But um, over time m, it goes up and like that's what that graph looks like. And you've got to be able to weather those bad moments.

Speaker B: Like the stock market, the property market.

Speaker A: Exactly. It will happen.

Speaker B: And you can't focus in on the one section. You look at it at a whole thing. One of the lessons we've learned in raise is that if a customer's in there for three months, they're in there for longer. It's that first three months. Because in any three month period, usually especially over the last couple of years, there'll be a down day in the market. And if they can understand the down and uh, say that it'll go back up. Then they start, um, it's a bit disappointing because everybody's got news, resolutions, get fit, save money. Even funny, because we asked the questions pre Covid, it was get fit, save money. Everyone's got three new resolutions now. Get fit, save money, travel more, job.

Speaker A: Yeah, right. Is that what you've been picking up?

Speaker B: Yeah, yeah, yeah. And, um, so we, uh, because of

Speaker A: COVID they couldn't travel.

Speaker B: So they want to. They want to travel more. But, you know, it's unfortunate with what's happening with the market at the moment and Donald and. Yeah, it's, um, you know, people that did join and get excited about in January going. Right. Because January is always a good acquisition month for us, because people do do that, and we give it a go. Um, with what's happening in the market now, there will be, um, people freaking out. Yeah, it's kind of. Let's just stay calm. And I remember back in the day when I was answering phones, our customer would ring up and say, oh, he's a builder. And he said, oh, front page of the telly. And the boys on the side are saying that the market's down. Uh, what about me? What have I done? I said, well, mate, have you opened up the app? And he opened up the app and he put in 20 bucks, and it was $19.96. You know, the market had moved in. A whole market. It's a big thing, but depending on the diversification in his portfolio. So 4 cents. I'm not worried about 4 cents, mate. Okay, bye.

Speaker A: Yeah, exactly.

Speaker B: Because they panic, they understand. Well, now, what does it mean for you? Um, you know, if the market comes off and you don't need the money, And I absolutely believe that. Um, and what raise does is, you know, you push the withdrawal button and the money's back in. After the T2 settlement of the AC, if you don't. If you can afford to stay in, you don't need the money. But people do need the money. They might have an accident, you know, of course, do an ACL or something.

Speaker A: And I use my as you can to pay for my ACLs.

Speaker B: Yeah, it's profits as well. Yeah, yeah. And so if they have to withdraw, get it. But, you know, especially when Covid. You know, I've read stories, I've spoken to people that panicked and sold and took. You know, once you crystallize that loss, it's not cool. If you can write it out, write it down.

Speaker A: Yeah, yeah, we're talking about that. And, um, my brother took. We I had 30 grand, my rates at the time, and my brother took it out and he's like, I'm taking out. Mike's gonna take. Or it's tanking at the moment. All right, cool. I just forgot. And then I went to have a look and take some out, but then I had the T2. I was like, ah, oh, just leave it in there. I don't need the money. And then, uh, after about a couple of months, it started going up again. Market returns. And then since then, I think it's been up since I started. I think I've done 30% increase. Yeah, yeah. Just you can see the performance.

Speaker B: Yeah. Awesome.

Speaker A: Yeah, yeah, yeah. What do you think the number one thing is that holds people back from improving their financial health or education?

Speaker B: I still think there's a, um, cohort out there or a generational thing out there that think it's too hard.

Speaker A: Yeah, yeah.

Speaker B: They go, oh, I don't know where to start. And they panic or. And like everything. Yeah, I'll do it later. Yeah, I still have a pain at the back fence. You know, I should have got in and done it, but I'll do it later. People don't. Yes. I think there's a stat. About 78% of people say, I'll do it, but, uh, don't come back and finish the application or whatever it is. You just got to give it a go. And that's what we want to do. We want to, we want to break down the barriers and say, put your five bucks in because it's a minimum investment and see how it goes. Yeah, yeah. We've got a campaign, we've got a messaging system that says, hey, Sarah, you're putting $5, you're on the 5.50amonth plan. You're not using it, mate. We suggest you close your account.

Speaker A: Yeah, uh, well, you're losing 50 cents.

Speaker B: Yeah, exactly. It's kind of like that. That's not cool. So if you're not using the functionality, ever close your account. But it is just got to give it a go. Yeah.

Speaker A: So is it a mindset then, or is it a behavior?

Speaker B: I think it's a combination of both. I think the older generation, uh, you know, and we've seen, you know, I've speaking. I've spoken to a lot of people out on the road and they say, oh, I spoke to my granddad, my dad, my accountant, my boyfriend, my girlfriend, my uncle Marnie about Ray's super, and they said, just go with host plus go with rest, because that's the mindset that they're all used to those big industry funds. It's like, oh no, they don't know about race. So they, that generational um, knowledge or passing down is different. You know, they're happy. Like you wouldn't tell your dad that you're putting $5 into raise, but you might go and speak to your dad, your uncle, your auntie. If you're rolling over a $25,000 super account. What do you think of raise Super. So again, bigger the amount, bigger the conversation, the hesitation, whatever. So my goal is just get Everybody on that $5 to understand it, build the confidence, build your knowledge and then. Yeah, then you go. So yeah, I think it's a mindset and a behavior.

Speaker A: Yeah. And yeah, so you've done a lot around reducing that friction to open up my doors to make those a lot easier. Yeah. But I think we're talking about going back and you brought up raised kids and I think about my own financial um, education I guess what I learned at school. Right. And I. The way comprehend interest was explained to me back then was pretty like what was kind of cool is it's like it compounds over time. So every year it's compounded not just on the principal but the total amount. And I got that in my head. But I think the way and things have probably changed a lot then. I hope they have anyway. But it wasn't explained in terms of like a visual thing. And I did. I know you were talking about your kids, how you were done. 50 bucks a week. Good on you to be able to do that. I can't do that much. I do 30 bucks a month for both my kids.

Speaker B: Right.

Speaker A: Um, which is. Yeah, exactly.

Speaker B: It's a going up, it's a goal. Like a hell of a difference.

Speaker A: It's a dollar a day. Right? Yeah. So both of them sitting about a ah, thousand something at the moment. But um, you know at the time when they're 18 it's going to be $18,999. Um, but the, the interest and I just did this little graph is like compound interest on that but the interest is going to make up like 60% of that. So it's just like the hard moving, the heavy work. And I think that just a simple visual graph of what compound interest works is like. So it's the time of doing the repetitive behavior uh, that makes the biggest difference. Yeah.

Speaker B: I was being a young fellow last weekend at the beach actually and the banks do very well or education does very well on mortgages if you pay it back on a monthly basis and you pay it back on a weekly basis, you'll shave three years off your mortgage. Well, that works for investing as well. I like the dollar a day, whatever. Because you're getting your compound on today, on tomorrow's money. Not here. And the whole mentality about saving and investing years ago is whatever you've got left over at the end of the month, invest or raise. And they're automated reoccurring, uh, the roundups functionality is doing it as you, as you go.

Speaker A: Yeah, yeah. And I think that a lot of that, uh, financial books that I read are things like the richest men in Babylon something. It's like the idea of paying yourself first as soon as that money hits. You can do that. Yeah.

Speaker B: And that's one of the other mindsets to our previous conversation. Individuals have an issue with, if it's come out of my bank account, it's an expense. Oh, okay. Yeah. And this is what our research has shown us a bit. But don't forget that $10 is an investment. But they think when it's there, their mentality is, it's out of my bank account, it's an expense, it's gone. No, no, it's an investment over here. And we make it very easy to withdraw because life happens and you need to borrow. I mean, just on the kids. When I, Tom and I were, uh.

Speaker A: Is that your son?

Speaker B: Tom? Yeah, Tom, yeah. He goes, um, I'm getting him in this. And because he was born before Izzy, he's seven and Izzy's five, so he's got a bigger balance. And it was Christmas time and I was, was, I was naughty. I borrowed some money out of his kids account to pay the title.

Speaker A: To pay what?

Speaker B: To pay the title.

Speaker A: Oh, right.

Speaker B: Yeah. And I'm like, do I sell shares over here? On. I, I just have time for it. I feel bad. And um, he just happened to say, oh, can you show me my raise balance? And I didn't think of anything. So I've logged in. I'm like, yeah. He goes, that was eight grand last week. Now it's six grand. And I'm like, that's market movement, mate. Uh, I put it back at. Yeah, it was December. Put it back in. I completely forgot about. And the, um, honesty on his face was like. But it was all right. Think quick, think Mark and Hoover.

Speaker A: That's. Oh, that's so good. Um, what do you think? What's, um, what are the three most important things that you're teaching your children about Financial, um, education.

Speaker B: Let's Just say that, uh, my young fellow's in year three. I had some year three maths homework the other day, and I think he was teaching me.

Speaker A: Yeah.

Speaker B: The long divisions and the ones that's hard,

Speaker A: divided up one by 30.

Speaker B: It was three different. Like, there was 800.

Speaker A: Do they still do the same where you do like that? L like the sideways L. And you do it.

Speaker B: No, I don't. It's on a worksheet. No, you have to use clock. I could do it in my head.

Speaker A: Yeah.

Speaker B: But he had to show the workings of the three strategies learned. That was the question. I'm like, what are the three strategies learned? Uh, so he tried to explain it to us, and I thrown it into Claude to get an answer. And then. So then I had to explain to him the three strategies verbally. And then we worked through them. So I think he's teaching.

Speaker A: Thank you, Claudo.

Speaker B: He's teaching me a little bit. Um, but it's, um. What I like about it, that teaching, especially 5%, is brilliant. You know, if these tools were available when I was that age, you know, I'd be in a different state today.

Speaker A: Yeah, sure.

Speaker B: But, uh, it's the value of money.

Speaker A: Okay.

Speaker B: Because they see it on the tap and go, car. They don't see the cash.

Speaker A: Even myself has lost money. I think a lot of us, everyone knows. Yeah.

Speaker B: Yeah. And to get them. And it sounds basic. Um, but get them to do their chores, and they get a dollar. Um, and then. And if you don't get your chores, you don't get a dollar. And so Tom will get a dollar an easy way, or vice versa. But then. So that's it. And then you go to the store. We go to Kmart. Uh, and Izzy wants some. I say, you can take it out of your pocket money. And then when we get home, I'm like, oh, let's see who's got the most money. And Izzy's got this little squishy thing. Tom's got more money. And you could see the look on her face to go. I had to do all that hard work to buy this. Tom's got more money. Is it worth it?

Speaker A: Yeah.

Speaker B: Is it worth it?

Speaker A: Yeah.

Speaker B: Ah. And that's. That's what I'm trying to teach them to go. Yeah, you work hard for your money is. Is what you're spending it on. And these bloody, um, roadblocks and blocks or whatever road, you know, that's just wasted money. It drives me nuts. And I've got a lot of mates with kids, and they're like, oh, Sam wanted another 20 on his roadblocks. I'm like, no, no, I'm teaching. I want to teach. And Belinda and I are very good at teaching them the value of money.

Speaker A: Yeah.

Speaker B: You learn how to get it. Is it really worth what you want to do? And I hate Clara Jungle.

Speaker A: Are you. Are you doing it with the physical? So, like, I. I'm, um, big with three jars. So let's say give and change just so they can see money.

Speaker B: Yeah, exactly. So we. We use physical dollars.

Speaker A: Yeah, yeah, yeah.

Speaker B: We got caught out the other night because the tooth fairy had to come.

Speaker A: Oh, no. It had all like one of my sons. I learned the first time that I was not going to fall out. Fell out. We haven't going to get money for. Yeah, yeah. And then it's just like, yeah, I got. I can only. I got to go to get to ATM or I can't get, like, cash out on the dollar. So. $20.

Speaker B: Yeah.

Speaker A: Then you got to go buy something.

Speaker B: Break it.

Speaker A: Yeah, yeah, exactly.

Speaker B: Yeah, yeah. I think the first one we did. We did. We had a fight all night.

Speaker A: What are you giving your kids? What's the two Food, I think.

Speaker B: Yeah. Buna and I. Just to be honest. Yeah. I think it was 20 cents or night. And I was thinking 50 cents. And talk about inflation and CPI since my day.

Speaker A: Inflation.

Speaker B: So we got caught out. And the furry first one for Tom was a tenner. No. Uh, we had no ide. So then we had to scale it back. So it's a gold coin.

Speaker A: Oh, man. So I. I was like, I'm. I'm going to give him $1 and st. Like, you got to give him two. Come on. And kids are getting fired these days. Then I go to soccer one day and I was talking. This conversation came out with parents and he goes, the other day, um, my son lost his tooth and we're at Montu's house. We didn't have any money. Yeah. So my uncle came 100. 100. What? I was like, no, there's no. There's no. What the hell was it? The big one wasn't the big tooth, you know, m. A mo.

Speaker B: Uh, you're a mountain. You be expecting to he lose all of his teeth.

Speaker A: Yeah. Oh, good, good, good. Um, speaking of raise kids, what are the. Are the tax implications around that? Like, how does that sort of work?

Speaker B: No. So look, we. It's at the end of the day, it's my account, so I've got to my raise account. I'm a perfect user because I'VE got multiple things. I've got Brendan, Brendan's got an account. Brendan's got a couple of jars set up for his US holiday, school fees and whatever. But then I have a Thomas account and an Isabel account. So each one of those jars and portfolios can be in jars. Uh, and kids accounts can be in different underlying investment portfolios. So I'm in A plus. I think Tom chose, um, Sapphire because he understands what Bitcoin is and got excited about that, but Isabelle chose the emerald. Socially responsible portfolio. I won't say because it's socially responsible, because it's got an emerald as a symbol and it's nice, pretty and green, so she chose that. So you get those underlying ones, but at the end of the day, they roll up to random. Yeah. So at the end of the day, if you. If you buy, if you deposit $10 into any one of those, you'll get a contract note at the end of the day to say your $10 was split up to you.

Speaker A: So you still pay the tax on the dividend?

Speaker B: Yeah. So at the end of the year, I get a tax statement, uh, client tax statement that says you've received frank dividends. So this is a combination of a book. So when Tom turns. So you set up an account, you put in Tom, uh, ninth Faithful. And when. When it gets. When it gets to 18, I'll get a message because it's under my email. Hey, look, Tom Vadim, Would you like to convert this?

Speaker A: Yeah. Yeah, all right. I think that's, uh, that's a good spot to end it on. I think we should end it on the Tooth Fairy, actually.