Tuesday, October 7, 2025

Ghost Stories #74: Start young, stay invested – and use the digital tools at your disposal (with Lauren Jacobs of Satrix)

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The digital generation has access to more information and tools than ever before. But the more things change, the more they stay the same: one of the most powerful tools of all remains the benefit of starting young and entrenching the right money habits from as early as possible in your life.

And yes, this includes investing on behalf of your children!

In this episode of Ghost Stories, Lauren Jacobs (Senior Portfolio Manager at Satrix) joined me for a candid discussion about her approach to entrenching the right financial behaviours from early in her career and the journey of investing for her family.

We also talked about the value of learning by doing, which means testing out the market and banking the hard lessons sooner rather than later!

The concept of “time in the market” is one of the most powerful wealth creation strategies of them all. If you are looking for the inspiration to just start, or a refresher on why those tough-to-form habits are so worthwhile, then you’ll love this discussion.

This podcast was first published here.

For more information, visit https://satrix.co.za/products

*Satrix is a division of Sanlam Investment Management.

Disclaimer:
Satrix Investments (Pty) Ltd & Satrix Managers (RF) (Pty) Ltd is an authorised financial services provider. The information does not constitute advice as contemplated in FAIS. Use or rely on this information at your own risk. While every effort has been made to ensure the reasonableness and accuracy of the information contained in this document (“the information”), the FSP’s, its shareholders, subsidiaries, clients, agents, officers and employees do not make any representations or warranties regarding the accuracy or suitability of the information and shall not be held responsible and disclaims all liability for any loss, liability and damage whatsoever suffered as a result of or which may be attributable, directly or indirectly, to any use of or reliance upon the information. Consult your financial advisor before making an investment decision. Tax Free Savings Accounts: Annual limit of R36000, lifetime limit of R500 000, 40% tax penalty applicable for contributions above the limit, per individual.

Full Transcript:

The Finance Ghost: Welcome to this episode

 The Finance Ghost: Welcome to this episode of the Ghost Stories podcast featuring the team from Satrix and this time around I get to speak with Lauren Jacobs again. She is a Senior Portfolio Manager at Satrix.

Lauren and I had a fantastic discussion earlier this year where we really got to understand so much about the nuts and bolts of Exchange Traded Funds or ETFs. I think the TL;DR of that conversation was that it might be a nice passive buy-and-hold investment for investors, but there’s nothing passive about what happens in the back-end for Lauren and her team – there is a lot to do all the time.

Fresh from another index balancing, Lauren, thank you for making time for doing this podcast. I know it’s been a busy time for you.

Lauren Jacobs: It’s good to be back again, Ghost. Thanks for having me. Yeah, we did have quite a hectic week last week, but we’re back in action on all the other things. So yeah, happy to be here.

The Finance Ghost: Yeah, fantastic. Another one under your belt there. Today we’re going to be talking about a couple of things, but the overarching principle of this podcast is around the importance of digital tools, not just for younger investors, but also for any investor, really. It’s just obviously younger generations of investors tend to be a little bit more familiar with some of the digital tools that are out there.

We’ll also just be talking about the importance of an early start and some of that as well.

And I think, Lauren, what’s going to make it extra fun is we’ll kind of be asking each other a few questions because I think you’re probably going to ask me a few about some of the tools that I use as well. So I’m looking forward to a nice dynamic conversation.

I think let’s jump straight into it and start with really the key principle here, which is that old story of: is it ever too early to start or is it always good to just start as early as possible in the market and why?

Lauren Jacobs: Yeah, Ghost, I think it’s really important to just start and whenever that is, whether it’s as a parent for your kids or as a young person, if you have a job but you earn some money and want to put some money away, it really is important to start early. And the really powerful concept here that we want to keep in mind is compound interest. Because when you invest, your money earns returns and then those returns earn returns and those returns earn returns, and it just snowballs. And obviously the longer you have to earn those returns, the larger your investment could be over time. It’s not just about the numbers – it’s also the fact that when you are young, you can take more risks, you have more time to recover from market dips and also you learn from an early point in your life, whether that’s age or just in terms of point in your life, you really learn to build financial discipline, which is important for anybody to learn.

The Finance Ghost: Yeah, absolutely. I mean, the benefit of doing this younger is that a market crash – maybe that sounds a bit harsh – but a market dip, whatever the case may be, almost becomes an opportunity rather than something else. You only have to look historically, long-term returns on the big market indices, the big equity indices specifically, it recovers every time, it takes time – not at individual stock level – but at market level.

And that’s the benefit of ETFs, right?

Lauren Jacobs: So when you’re young, you have this major advantage of time. And time allows you to take on more financial risk because you have these years, even decades, to recover from those market downturns. And markets go up and down, like you said, I mean, it’s normal. One day it’s up, one day it’s down. Maybe it’s down for a significant number of months.

But if you start investing early, you can ride out those dips. You don’t need to panic when the market drops 10%, 20% because you’re not planning to take your cash out next year. You’re investing for the long-term.

In that regard, what does risk really mean? It’s not gambling or chasing the hype or whatever that you think, oh, risks, it’s dangerous. But it really means that it gives you the opportunity first of all to have a higher equity exposure in your portfolio because you’ve got this long-term view. You can invest more in growth focused, maybe ETFs or things like emerging markets or thematic funds, because you just have time to feel out the market and to really ride out all those dips and also to ride out all the gains. So just thinking around, “I can take more risk,” which as you and I know because we’ve been in the game for a long time, also talks to higher return.

Time in the market is what is the most important thing when it comes to investing and investing from an early age.

The Finance Ghost: And I think there’s risk in not taking risk. That’s something that people don’t always realise, is if you’re sitting in an economy with high inflation and you think you’re playing a smart game and you’re just keeping your money locked up in the bank and you’re earning a couple of percent, the reality is that actually you’re hurting yourself, specifically if you’re young. I always personally get frustrated when I see stuff like someone who’s young doing their tax-free savings allocation into a bank interest-paying account. Number one, a big portion of your interest every year is already not taxed, let’s just start there. You’ve got to have quite a lot invested before it gets taxed. Number two, the tax-free savings account benefit is that your gains are not taxed – so my approach is to go and invest in stuff that has the maximum possible gain so that I get the maximum possible tax benefit from my tax-free savings account.

So it all dovetails, right? This stuff all works together at the end of the day.

Lauren Jacobs: It does. I think, exactly what you said – what’s the point in putting it in money market if in the money market you’re already getting your interest tax-free, basically. I talk a lot to young adults, university students and so on, and we talk about taking the risk. If you get a SatrixNOW voucher, for example, you know it’s a R100 voucher, go buy 10 different ETFs, because you can invest R10 in each of those ETFs.

Just see what the market is like, see what risk really means and see how when things go up, they can also go down. When things go down, they then go up. And it’s just really learning and interacting with the market. So that also builds your financial education over time.

And risks are there not only to improve your return over time, but you also need to manage your risks. In the future, maybe when you’re older, then you can understand, okay, I took all this risk when I was young, but now I’m in a period of curtailing that risk, planning for marriage, weddings, children, whatever it is, but you learn over time how these things move. And it’s a great exercise in just educating yourself. Because if you start early, you are also taking the time to educate yourself around what do markets do? What is investment? What is the difference between investing and just saving in a bank account?

Just taking that “just start” stance and investing the money and keeping it in the market, so spending that time in the market, all of those things talk to – whether you start early or start a bit later – as long as you just start. That’s the important part.

The Finance Ghost: I think you’ve raised such an important point there around the value of learning as young as you can. Because then you can make mistakes with relatively small amounts of money versus your long-term wealth, hopefully, obviously assuming everything goes well.

Because there will be mistakes, there will be the temptations to go and do things in the market that maybe aren’t necessarily great. You’re going to do that thing where you panic-sell a dip and then watch it merrily come back without you. It’s a lot cheaper to panic-sell that dip and lose R500 than it is to lose R5,000 or R50,000 or more, depending on how much money you make one day.

And also buying right at the top, buying into the hype, that’s the other big mistake that people make. Again, rather make that mistake with a few hundred bucks. Start young, start slowly, build up the confidence. Especially I think when you’re doing single stocks, which is obviously outside of the ambit of Satrix, which is an ETF house, and such a useful way to just build that broad market exposure – but the start young lessons are equally applicable. A Satrix Top 40 ETF was the first thing I ever bought in the market all those years ago, I remember, and it really just felt very cool to be like, hang on, I actually have this basket of stocks. It’s the JSE Top 40. It’s in one investment. It was such a great thing to learn about at the time. It’s still such a good memory.

Lauren Jacobs: And I think what you just spoke about, riding out those waves and not selling at the low because you’re scared, it really talks to financial discipline. Because when you start young, you learn how the market moves and knowing that you don’t have to sell when the market is in a dip. You’re training yourself to delay gratification, to learn long-term thinking and also you’re learning to pay yourself first because you’re really paying your future self when you invest, when you start investing young and also when you invest consistently.

And these habits, they spill over into other areas of your financial life. As you learn and grow, you become more intentional with your spending, you’re more aware of what your financial goals are and what the risks are. And you know, risk is a double-edged sword. It’s your risk tolerance but also your risk capacity. So if you have R500 and you need to spend R400 on something specific but you have R100, that’s your capacity of what risk can I take off what income I have.

And also it makes you more confident in your money-making decisions in the future. I think it’s not just about the money you invest, but it’s also the mindset that you develop over time. That’s quite important when you start investing young.

The Finance Ghost: Absolutely. And you can easily get to a dangerous space where you say to yourself, well, I can only invest R500 a month, what’s the point of that long-term, I’ll catch up one day when I earn more. The reality is that is very dangerous thinking because your overheads go up as you get older, on average, for a lot of people. If you don’t learn how to save what you can save when you start doing that, then those bad habits are going to follow you forever. It’s going to always be oh well, I’ll catch up, I’ll catch up, I’ll catch up. And actually, if you wait too long, you can’t catch up, because now you are on the wrong side of compound returns versus someone who actually started young and was consistent and allowed their money to just keep on growing. That’s the point – it’s building balance sheet over time, using your income to build a balance sheet.

It’s like treating yourself like a little company. You have your own income statement, you have a salary and expenses, you build your balance sheet with the profit and if you spend everything, there is no profit and you are not going to build your balance sheet – you’re living hand-to-mouth for the rest of your life. That is not particularly where you want to be.

Lauren Jacobs: And I think what we tend to see where you’ve started investing young, you see that people then tend to save more over their lifetime because they know – like you talk about your income statement, balance sheet – I pay myself first and then I pay all the other things that I want or need and so on. So they tend to save more over their lifetime.

They also, I think, tend to avoid higher interest rate debt because they have this concept of saving. So if you’re paying away more, I think there’s an education thing there around “Actually I want to save more, so why would I take on more debt?” These kind of things could manifest from investing young and also thinking about lifestyle choices. Like you said that bank balance sheet, income statement, how do they manage their financial life around investing and debt and future aspirations and really just staying calm during market volatility.

That discipline of “Even if the market is down, I’m still going to invest my money because I know over time, the market does rebound.” And you think about it like going to the gym, right?  You start early, and then the stronger your financial muscles become, it’s just like physical fitness. As long as you’re consistent in your fitness, you know that that consistency is really key.

So even if you start with, like you say, R500, R100, on SatrixNOW it’s R50, you’re just building that habit that can really shape your financial future.

The Finance Ghost: It’s actually such a good analogy because your financial journey is so much like your health. If you drop the ball badly enough and you let it go too far, you may never get it back to where it started or where it could have been. You kind of fall off a certain trajectory and you cannot get back on it.

So that’s actually a great analogy. It really works very well. So, yeah, I like that, I must say.

Lauren Jacobs: And the other thing that I learned specifically when I started investing, it was also around your annual increase. If you are investing R100 a month or whatever that number is, next year, maybe you work in a corporate, you get an increase and it’s 5% more than what you were earning last year, you need to increase that R100 a month by 5% as well.

Because again, it’s in that balance sheet and income statement – you need to do it consistently across everything, from your investing to whatever else you’re planning to do with your finances, you just need to be consistent. Instead of spending that extra 5% on something that doesn’t have future value, spend it on yourself, spend it on your future, your future self.

The Finance Ghost: Yeah. And I think one of the most damaging behaviours that people do when they’re in a corporate environment, specifically two things, actually. One, they assume their salary will be there forever. You only need to have been exposed once to some kind of retrenchment program, whether it affected you or not, but it affects your peers around you. And you see people who just assumed their salary would be there forever and they didn’t need to save anything excess, and they could just kind of bring their overheads up every time their salary went up. And then you get this rug-pull, and now you’ve got to go and potentially find a new job in a country where it’s not easy, etc. etc. – and that can be really bad.

So what that drives is that salary sometimes drives bad behaviour around just this overarching assumption that it will always be there. So, interestingly enough, entrepreneurs often manage their money better because we know that it’s not guaranteed. You’ve kind of got this business where you have to work so hard for everything that comes in, and your income varies so much, that you end up living your lifestyle to one of your lower income months, or that’s what you should do, at least. When you have the high months, it’s like, thank you very much, that goes into the balance sheet. That’s the little nest egg!  And so that’s one of the dangers of having a salary is it can actually become this quite dangerous thing that you rely on.

And the other thing that I’ve seen people do is they also spend basically their whole salary and they save their bonus, in theory, which assumes of course, they will get a bonus. And, you know, the word tells you everything – a bonus is discretionary! Like, there’s no guarantee. Have a bad year…

Lauren Jacobs: …do not lay all your eggs on that bonus being paid.

The Finance Ghost:  No.

Lauren Jacobs: It’s discretionary.

The Finance Ghost: And look, obviously it sounds very preachy and it’s not meant to because I equally understand, particularly when it’s like school fees, etc. there’s that crunch time in your life where you’ve now started a family and you’re trying to pay off a bond, potentially, if you bought a house, it’s the expensive part of your bond, it’s the worst part of it before your salary increases over many years go up and make your bond so much more affordable, it’s the school fees. It’s that absolute crunch time and for so many of us at an age then where parents sometimes need help as well, there’s a whole generational vibe going on there. So it’s difficult.

There are eras of your life where you are probably not going to save as much as you want to. And then it goes back to the point of this whole podcast, which is if you didn’t start young, when you could save, if you kind of just YOLO’d absolutely all your money, in your 20’s, in the hope that you’ll catch up in your 30’s, I’ve got some really bad news for you about what life looks like in your 30’s, then you’re in your 40’s, and now you’re 20 years out of retirement and you’ve got nothing saved.

That is an ugly trajectory. All the fun you had in your 20’s is going to hurt you later on.

Lauren Jacobs: It’s scary. And I think again, when you talk about “Maybe this month, I can’t put R500 away,” but what a platform like SatrixNOW or EasyEquities or any of those platforms where you can invest as little as whatever the number is – yes, you want to do a debit order, that’s always going to be your first port of call, but the point is that you have the opportunity to invest today, you can invest tomorrow, but you can skip next week and you can skip the week after that but then, when you have another R500, you say, “Okay, wait, I can quickly put this one away.”

So it just gives you that flexibility – as long as you remain consistent, I think that is really the key about building that confidence and that consistency in putting away money that will really set you up for the future. And like you say, investing in your 20’s is almost maybe going to help you in your 30’s because you have that little bit of a cushion to say, okay, I can maybe send my kid to a more expensive school because I have this little bit extra from my 20’s saved up. It affords you also opportunities to enhance your lifestyle in the future.

The Finance Ghost: Yeah, and your money then sits and compounds in the background. Even if you – I mean I’ve seen some of these calcs before where people show the value of saving really hard in your 20’s and like early 30’s and then saving nothing, at all, just letting it compound versus someone who started really late. And the numbers are really scary.

Having said all of that, of course, and this is definitely an important point because I sometimes see you get these, I’m trying to remember what it stands for – it’s FIRE, it’s “something, something, retire early” – basically the principle is save everything and just retire as early as possible.

I also think that’s really crummy advice because you’re also only young once and also – what are you going to do with all your time? In reality your best source of financial wellbeing is having an income and then making sure that you invest a piece of it as well as you can. So you’ve got to make sure you’re looking after yourself. You’re not burning out, you’re living your life, you’re having fun, you’re staying motivated. All of that is absolutely key, but just try and avoid the overly damaging financial choices, especially when you’re young.

I cringe when I see someone doing stuff like financing an R800,000 or R1 million car in your 20’s. I’m like, do the maths on where this ends for you. It’s just horrible and people still do it. They still do it. And this is maybe where the digital tools are so valuable. It’s all out there. You have access to a zillion articles and podcasts that will talk you through why this is or isn’t a good idea. You’ve got access to all of the interest calculators online to go and show what the true cost of this debt actually is. You can go and do all the research on almost anything you can think of and you’ve got access to the budgeting tools to make it as easy as humanly possible to track your spending and see how much you can save at the end of the month. There’s all this stuff that can read your bank statements, read your credit card statements. Generations before us never had this stuff, so use it. It’s there.

Lauren Jacobs: You have no excuse, you really have no excuse to say, “Oh, I didn’t save in my 20’s, or I don’t know how to save,” because the plethora of information and tools that are available online is just incredible. We didn’t have that opportunity when we were younger, so we had to figure it out.

And maybe just to step back into just one more thing on the savings before we talk a little bit about the tools and that – the other thing, obviously, as you get a little bit older, you start thinking about retirement. And one of the big things that impacted me when I started working, few years into work, and the person that I worked for at the time, she said to me, “What you actually need to do when you are not earning an extravagant salary, is start putting away the most that you can for your retirement.” So that’s the 27.5%, right? Because as your salary increases, it becomes more and more difficult to now put away 27.5%. But if you’ve been doing that consistently from the time you start working, it doesn’t affect you because your income after tax is not affected when you now change from 20% to 27.5%. So that’s just something that really stuck with me.

And I talk a lot to new people coming into the business or younger people coming into the business just around considering putting away the most for your retirement from the beginning. So it continues, as your salary grows, so does that 27.5% and you don’t, at some point, need to switch from like a 21% to a 27.5%. And you don’t want that also to be when you’re 45, 50, because it’s not going to be enough at that point. So that’s just something around retirement that was important for me and my financial goals.

The Finance Ghost: Yeah, absolutely. So maybe something just personal about me from that. Obviously I run my own business, so income is variable. But I’ve learned a lot where it ends up and how to get there and everything else. So I generally run my life in such a way that I take a salary based on the lowest amount the business earns and then I save – it is about 20% actually of that salary now that I think about it – and then obviously in a month that’s better, that’s just gravy that goes to the nest egg, literally because you just never know. You never know when you run your own business and I wish more people who earn salaries would also take a “you never know” approach because they don’t actually know. They just like to think that they will have this lovely salary forever and ever and AI won’t take their jobs and they’ll never be retrenched and nothing will ever go wrong. Unfortunately, life is not – adulting is not called adulting for nothing.

Lauren Jacobs: Not for the faint hearted.

The Finance Ghost: No, it’s not for the faint hearted at all. I guess before “adulting” there’s obviously “kidding” which is particularly lovely for the little ones. And maybe that’s something to chat about now as well.

Is it is actually possible to invest when you’re a kid? But it needs to be, I would imagine your parents opening an account on your behalf and I guess there are pros and cons to that. So what’s the story with that?

Lauren Jacobs: As a parent I’ve tried to be consistent to save for my kids and to show them what it means to save and how instead of just using all your money, you can use it to enhance or to create value from that money. And I think it’s important that not only as a parent, but maybe as an aunt, an uncle or seeing your other friends’ kids, it’s important to also bestow that on them. So with SatrixNOW you can invest for your minor child. You have to be the legal parent or guardian in order to open that account. You, as a parent, have to have a registered account with SatrixNOW before you can then add your minor child to the account. For the minor account, obviously they would then have to verify the minor as well with a birth certificate and then a clarification through you as a parent, on the birth certificate is your name.

But generally it’s quite easy as long as you are a registered account holder. If you go onto SatrixNOW, where your account information is at the bottom there is a little tab that says add minor account. And then there they will ask you for all the information they require and the team will come back to you.

Once the account is opened, your child will have their own username and then you would create a password and then from there you can obviously use the tax-free savings account as well. It just means that you have more time to save and you have that tax relief over time. Again talking about taking more risk in the portfolio, it is quite easy actually to do that.

Then if someone else wanted to invest on behalf of your child, we have options in SatrixNOW of vouchers. You can have a debit order where someone else is doing a debit order into your child’s account as well. There are obviously a few forms that you just have to get signed off by that account holder. But there are very many options to then allow your child to get money from other people. You can also give them the account details of the SatrixNOW account, so for birthdays you maybe ask instead of gifts, they can pay into the SatrixNOW account.

So it’s pretty easy and it also then helps you to show your child. One of the things that I did with my child, he had a school trip coming up and I showed him, well, you’ve got a little bit of money, let’s put some of that into your SatrixNOW account and you can see how it grows over time. You have 3, 6 months to save a little bit of extra spending money for your trip. So over time, until it was time for him to leave, we actually said these were the number of units he bought with his money and this is how it moved over time.

And we could see in that time, it grew a little bit, which was great for him to also experience because sometimes we’re investing on behalf of our kids, they don’t really know what’s happening or where the money’s going. They only see later on in life when we give it to them as a gift or if we need to use it for something. But yeah, I think that was quite a great experience to show your child specifically how this number has grown over time or if it went down at a certain time you could also see that. So that was quite interesting from a minor’s perspective.

The Finance Ghost: Yeah, that is super interesting. I guess the con – and  I guess it really does come down to the kid and I mean there’s a broader discussion here around parenting – the con is that when your kid turns 18, that child would then have access to that money, right? So if you’ve actually maxed out their tax-free savings account, technically speaking, on their 18th birthday, they could hold the keys to half a million rand, which – even the best 18-year-olds are probably not going to make amazing financial decisions like that.

But yeah, what are your thoughts on that? That’s probably something you’ve considered for your own kids.

Lauren Jacobs: So that is the situation that I sit with now because my kid turned 18 last year. So we’ve had to have very serious conversations like this, it is a large sum of money you need to actually be very conscious of. This is not here to do whatever you want with it. It’s for big financial decisions and we’ve asked that any of those decisions are talked about. We are considered in those decisions that we can then discuss it and see whether those financial decisions are the right ones for that amount of money.

The other discussion also that I think a lot of people should have beforehand is, “Am I actually saving this for your education?” Because education is expensive, tertiary education is expensive. If you are using that, also, maybe just you say: “Why are we saving this money?” We’re saying when you want to go and study, or you want to go and work overseas, or whatever that is, this is there as your nest egg for that. So it’s really a conversation that you have to have as your child gets older. When they become 18, just around what is this really for? It’s not just some fun gift. It’s really a big deal.

The Finance Ghost: Yeah, I think that’s probably the best way to do it because if you then also cover all of the studying fees and everything else, it starts to become, it’s almost just – even if you’re in a position to do so, it’s a lot of money to have responsibility over at a super young age. It really is. So very interesting stuff – it’s such an emotive thing, right? Because any parent knows this – it’s your child and you always want the best for your child and you always have that little fear in your heart as well of: what is the best? Is the best to just give stuff? Is the best to teach them? Obviously it’s to teach them the value of it and to make sure that they can make good decisions.

It’s all very interesting, and I think anyone who goes through the emotional pain almost of thinking through it is already doing the right thing, you’re already a good parent. If it’s hard, you’re doing the right thing. That’s always what I seem to remind myself. It makes me feel better sometimes as a parent.

Maybe let’s chat through some of these digital tools as well. I mean, we’ve had such a cool conversation about just the benefits of starting young, obviously thinking about doing it for your kids, pros and cons, etc. Let’s talk about some of the digital tools, maybe for just a few minutes.

In your world specifically actually, I’m curious about what’s happening there. Obviously, the nuts and bolts of ETFs, a lot of that is very operational processes, etc. Your world, just to be clear to listeners who maybe haven’t listened to the first podcast we did earlier this year, you’re not picking stocks, you’re not doing the asset management of these things. You are making sure that these ETFs do what they say on the tin, which is track the indices that they promised to track. And I would imagine that in your world there’s been quite a few digital tools coming through. So to the extent you can talk through one or two of them or just give any insight, just how rapidly are things changing for you?

Lauren Jacobs: Yeah. So just to put it in context for anyone who didn’t listen before, I’ve been at Satrix for 11 years, and when I started at Satrix, there were spreadsheets. Basically, we had to source data, put it into a spreadsheet, use that data in a spreadsheet.

The Finance Ghost: Good old Excel.

Lauren Jacobs: Good old Excel!

The Finance Ghost: Leading to that lifelong dating advice: don’t hook up where you Vlookup! This was an excellent piece of corporate advice given to us all in our 20’s. Anyway.

Lauren Jacobs: Oh, gosh, yeah. And I’ve seen such a huge change since I’ve started to where we are now because, as you can imagine, the volume of trades that we do on a rebalance on a daily basis is quite intense. It’s lines and lines and lines of trades, and it’s also the number of indices we track.

So we track almost 50 different indices, which means there’s two sets of data in index tracking. One is your index data and one is your portfolio data. And that’s your main sources of how you’re tracking an index or how you’re managing your portfolio. So when it comes to index data, you’ve got this constant – you have to know what is in the index at a point in time, you have to know what the price is, you have to know what corporate actions are upcoming, index reviews are upcoming, and that is all data.

When we look at how do we best execute to reduce tracking error, it’s about using the data as efficiently as we can. And over time, we’ve worked quite closely with a number of index providers where we get the data through FTP sites and then we have internal systems that then route that data into a user-friendly front-end. So we are no longer copying and pasting data from an email into Excel. We’re using all of these options around FTP sites and using scripts internally and certain systems that have been developed specifically for Satrix. So we’ve got a lot of proprietary systems that we use where we then can use all that data from the index providers and then we get all of our data from our portfolios, from our administrators – and how do we match it? We then have a specific system, a proprietary system that we use that’s really developed over time and is constantly developing because it’s changing all the time – the indices change, the types of portfolios that clients want also change.

So it’s a constant enhancement of these internal systems, and it’s just a marrying of your index data and your portfolio data. I’m making it quite simple, but it’s a lot of data. So we’ve got this big data issue that we try and streamline through different systems so that when I open my portfolio, I can see my portfolio, my index, and it’s quite clear what needs to be done. But we’ve just used technology to enhance that big data and how we use it internally. So that’s been the biggest stride for us in terms of using technology internally.

The Finance Ghost: It’s super interesting. I mean what it talks to as well – and again it goes back to that importance of just starting to invest young, etc. – is the world is changing, careers are rapidly changing. You either need to make sure that you are someone who gets to the level of being an expert with what the technology can do for you. So in other words, you’re the person who is using the end product, is driving the need for it, is actually understanding the real world application properly, or the person who’s creating the technology. Those are kind of your two choices right now in the world actually from a career perspective, outside of the obvious stuff that doesn’t apply there.

But I’m talking particularly in a professional services environment, those are your choices right now. And it’s an interesting time to be a young person. The world is rapidly changing. The technology is really coming through hard. You got to try and find some space to save. You’ve got to obviously try and think, well, what direction is my career going? It’s not easy and it’s not made easier by putting yourself under financial strain as well. So I think it just all ties together at the end of the day into the stuff you need to be thinking about relatively early in your life, right?

Lauren Jacobs: Yeah. And the thing is with technology and with these different apps and tools, it makes it more transparent. You’re not wondering, “Should I be saving this or should I be doing this?” There’s all these tools and these YouTube channels and these podcasts like this, where people talk about how you should think about your finances and pay yourself and start. Young people nowadays have such, just compared to when we were young, they have such a huge opportunity to really learn and invest and be consistent over time. Whereas for us, it was a little bit of a black box. We didn’t really know and for our parents, it was very different. There really is an opportunity because of the wealth of information that’s available to them. And it’s not only apps like SatrixNOW. Even on your normal banking app, most banks have a money market or other sort of investments that you can also invest in. There’s just an opportunity there to invest. Even if it’s just doing like a little bit every month, just your banks even have those opportunities for you to put something away.

The Finance Ghost: Yeah, it’s like layers of a cake, right? There’s a money market layer, there’s the ETF layer, there’s if you want to do a little bit of stock picking, there’s all of these different layers in the cake and it’s a nice way to think about it.

Lauren Jacobs: So, Ghost, I mean, I’ve talked quite a bit about index tracking and how easy it is to – well, how easy everybody thinks it is for us to match an index. But I’m sure in your line of work, you have to use some sort of tools or how do you look at different stocks and through research, have you found any applications or online tools to help you with specifically stock picking?

The Finance Ghost: Yeah, absolutely. So there’s a lot out there. There’s a lot of free stuff and the free thing is called reading, which means go and find as many of the investor presentations and earnings transcripts that you can, all of which is available on this wonderful thing called the internet, and then read them! You will be amazed how much you learn from that.

If you are someone who wants to take your stock picking more seriously and maybe you’ve got a bit more money that you are investing in the market that makes it worthwhile, you can then consider some of the platforms that are aimed at retail investors, like TIKR is the one that I use. It’s like a Bloomberg- or Capital IQ-lite, very lite, but good enough so you can do stuff like chart over multiple years what the valuation multiples of a company have done and that lets you very quickly visually see, okay, is this thing relatively expensive or relatively cheap to where it has been? Without something like that, it’s actually quite difficult to really make a success of stock picking specifically.

There are other ways to do it. I haven’t looked in a while, but I remember at one point on Yahoo Finance, you could actually export quite a lot of data into Excel, your old platform there Lauren, do the spreadsheets, do the hard yards, go and build out the stuff. But that is a slog. If you’re someone who really wants to get quite serious about your stock picking, then I think some of those platforms are a very worthwhile investment.

And there are others – there are share trading platforms that allow access to some of this stuff. There are data platforms that allow you to get your hands on this stuff as well.

And then in terms of AI, which I think is obviously on everyone’s lips at the moment, I’m getting very mixed results using something like Copilot, for example. Google AI I do not trust – Google AI is about as reliable as my 3-year-old when it comes to telling stories. Incredible amounts of confidence, low levels of credibility has been my experience with that. Copilot has been a little bit better, but still it’s very limited. I find it’s better for narrative-type stuff. If you actually ask it for “give me a bull case for XYZ stock, give me a bear case” – it’ll give you some generic rubbish every time, but it’ll also probably give you some quite good stuff. It’s got a lot of thinking in the back-end around in the bear case, it will go and see if there’s any major legislative risks or that kind of thing. Again, it works a little bit better on international stuff, but it is something to keep in mind.

So there’s an example of a digital tool that does help, but certainly just reading as much as you can and going and looking at charts. I think people who pick stocks are sometimes – they believe too much that it’s not what they pay for the stock, it’s just whether or not it’s a good company. Unfortunately, that’s not how investing works. You can buy the best company in the world, if you overpay for it, you’re going to have a bad time. Ironically, or conversely, you can also buy a really bad company, but if you pay a really amazing price, you can end up with much better returns than your friend who bought the market leader and can’t understand why they’re 10% in the red.

So those are some of the digital tools, as I say, for those who want to take it a bit more seriously, or quite a bit more seriously, you can look at something like TIKR, you can look at some of the trading platforms out there, see what they can offer you. And I really do believe the key is to be able to draw charts of multiples over time, how the valuation has moved over time, so you can see those averages, you can see the trend. That’s the key piece that you’re not going to get by reading annual reports, reading earnings transcripts. You need a system that’s doing the maths for you.

So, yeah, that’s the world of stock picking. Not quite the big data, data matching – it’s two very different worlds, right? I mean, that’s the beauty of the markets is we both have such different lives, actually, but both in the markets!

Lauren Jacobs: And talking about charting. Maybe just to chat a little bit about charting, even on SatrixNOW, if you go into SatrixNOW, if you’ve made an investment or if you just tap into one of the ETFs, there are charts in there. So it’s quite great that you can see how the market has done over that time.

The Finance Ghost: Absolutely.

Lauren Jacobs: In an ETF, you’re buying the market. So you can go to a Satrix 40 and you can get, since inception, a chart, or you can get for the past three years, a chart. So that’s also quite cool on SatrixNOW that you can then look at what your stock’s doing, look at what the market’s doing, and measure it that way.

The Finance Ghost: And you can learn a lot from fact sheets as well. So the last Satrix podcast that I did was with Siya and we talked a lot about “ETFs like a box of biscuits” and the fact sheet will tell you what’s inside.

And again, it’s very true – I think the overarching point here is just the younger you can expose yourself and your money to the markets, the better. The earlier you can teach yourself good financial habits. The stuff sounds so obvious, but people hear it and it’s almost in one ear and straight out the other again because then they see a brochure for a nice shiny car with a 40% balloon payment and prime less 4%, which is literally financial suicide. But there’s only one way some people learn this, and that’s by going and doing it and then crying the whole way through their 30’s as they recover from that. It is what it is. I’m almost tired of talking about what a bad idea it is because some people just don’t want to hear it.

But anyway, yeah, use the digital tools that are out there. I think if you can turn investing into something you are passionate about, then it will make a gigantic difference because not only are you then doing the right thing for yourself, you’re also enjoying it, which is just a fantastic Venn diagram. That’s the key to success.

So, Lauren, I think we can probably leave it there. Thank you so much for your time. Again it’s been so lovely to chat to you once again. And I would say for listeners who have enjoyed this chat, if you’d like to maybe hear more from Lauren, and if you’d like to learn more about how ETFs actually work in the back-end, go and find the previous Ghost Stories podcast with Lauren. There is only one other one so you can’t get it wrong, and that talks all about the nuts and bolts of ETFs and how they actually work in the background, how they do the index tracking. It’s super fascinating. It was a very popular podcast, so if you haven’t listened to it, go and check it out. Otherwise, Lauren, all the best for the rest of this year. I don’t think we have another one scheduled this year, but hopefully we’ll get you back on in 2026. And yeah, just all the best for the end of 2025.

Lauren Jacobs: Thanks so much for having me Ghost. It’s been lovely chatting to you. Have a good rest of the year to you too.

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