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Meet Anubhav

What was your relationship with money like growing up?

I had a comfortable upbringing, but there was never really spare money to splurge on things. Mum instilled good values and I knew she was a good saver, but there was never any real understanding of the power of saving and investing.

Coming from a Nepali household, investing in shares was never discussed, not by relatives, friends, or at school. Property and land are king, and the default savings vehicle is gold. Those were the only forms of "investing" I knew existed.

When I came to Australia and started earning my own money, there was a period where I was wasting money without really thinking about it. Looking back, I was in no position to be spending like that, but I simply didn't know any different.

What was your first job? (And how much did you get paid?)

It was at a New Zealand burger franchise with an American muscle car-themed menu that no longer operates in Australia. Kiwi’s will know exactly which one I mean, and yes, the burgers and L&P were as good as advertised. I was earning around $19 an hour, which felt like decent money for an international student just starting out.

How did you first come across investing?

A mate told me about Spaceship and Raiz back in 2018. I opened the accounts but never pulled the trigger. The mental barrier was always the same: I don't have enough spare money to invest. That story I kept telling myself held me on the sidelines for a while.

Then came early 2021. I had a ridiculous amount of commute time and decided to fill it with podcasts. First up was the Firebug Podcast, and second was Equity Mates Investing. I didn't make it past the second episode of Firebug, but I haven't missed a single episode of Equity Mates since. Free brokerage and the ability to buy partial shares with as little as $100 helped kick-start what I hope will be a journey of a lifetime.

Was there a memorable early investment?

My standout pick was the Global X Semiconductor ETF, which I bought into in September 2021, just a few months after its inception. At the time there was a lot of noise about the global semiconductor shortage and how carmakers couldn't produce vehicles without the necessary chips. Lucky for me, that thesis was supercharged further by AI and the insatiable demand that followed. I'll be honest, I got lucky. But I'll take it.

How are you currently investing and can you provide a breakdown of your portfolio?

My investments are made up entirely of ETFs. I like to think of myself as something of an ETF aficionado, but if I'm being honest, I have more ETFs than I need. I seriously need to consolidate and rebalance.

Being in the market for a little over five years, you start to appreciate the KISS principle: Keep It Simple, Stupid. On the automation side, I have transfers set up so that every week, without thinking about it, money is flowing into my bills account, my emergency fund, a splurge account and the rest into my brokerage account like clockwork. In the future I want to take it one step further and automate my ETF purchases as well for my core holdings.

Where do you see investing taking you?

The ultimate goal is to grow the portfolio to a point where I can draw income from it, so that five days of work becomes a choice rather than a necessity. But that's easier said than done. In the nearer term, a realistic goal is using the satellite portion of my portfolio to put a deposit down on a house.

Investing has also made me much more aware of what's happening in the world on a day-to-day basis. It's sparked an interest in global markets, economics and politics, which I previously thought were the most boring things imaginable. Because of that, I don't really see myself ever stopping investing. It's become part of how I understand the world.

What is one super extravagant and outlandish purchase that you hope investing will be able to buy you in the future?

Even though I'm not really a car person, and as a rational accountant I know full well they're depreciating assets, I've had this long-held dream of owning a two-door convertible sports car.

Specifically, a Porsche 911 GT3, or the soft-top 911 Cabriolet. One day. Maybe it goes back to that scene in Friends where Joey pretends to own a "Por-sha".

If you only had 25 words to convince someone to invest, what would you say?

"Compound interest is the eighth wonder of the world. He who understands it earns it; he who doesn't, pays it." - Albert Einstein

And my own addition: "Index ETF and chill." - Anubhav

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Today on Get Started Investing

Bryce and Ren join Jess for the final episode of this season of Get Started Investing. 12 episodes ago, Jess set out to overcome her barriers and get investing. She’s been on a journey speaking to experts and everyday investors as she’s built the knowledge and confidence to get started.

In today’s episode she unpacks what she’s learned and what comes next for her investing journey, and for Get Started Investing. (Spotify | Apple)

Are you ready to get started on your investing journey? 

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Are Overlapping ETFs a Problem for Your Portfolio?

Anubhav was quick to admit he has may have more ETFs than he needs. It is a trap a lot of investors fall into, and it raises a question worth unpacking which we covered in an episode of Equity Mates Investing. (Spotify | Apple | YouTube)

ETF overlap happens when the underlying holdings of multiple ETFs are the same or very similar. The classic example is owning an S&P 500 ETF, a global ETF, and a technology ETF. Looking under the hood and the top positions in all three are likely the same handful of large US tech companies. You feel diversified. But in reality really aren’t.

So is overlap actually a problem? Well it depends.

The fees argument is mostly fine. Management fees are a percentage of assets regardless of how many ETFs you hold, so owning multiple ETFs does not cost you more in that sense.

The real issues are two. First, if you think you are diversified but your entire portfolio is effectively concentrated in the same seven stocks, your risk is higher than you realise. Second, it is often just redundant. If you want global exposure, pick the best global ETF and stick with it. Owning three ETFs that all do roughly the same thing adds complexity without adding value.

Something important to keep in mind is overlap you understand and want is fine. If you deliberately hold both a US ETF and a global ETF knowing there is overlap now, but believing the global ETF will shift toward European or Asian stocks over time, that is a conscious decision. The real problem is unaware overlap, collecting ETFs without knowing what is actually inside them and thinking you are more diversified than you are.

The simplest test: if you could not explain why you own each ETF and what role it plays, that is probably a sign it is time to consolidate.