I’ve offered to give my nieces $1k to start investing and they won’t do it

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Welcome to Money Confessions, where You’re in Good Company community members submit the money dilemmas that oh so many of us are experiencing, yet struggling to talk about.

This week, we’re discussing the best ways to bring up a conversation about investing with family or friends, so we can all be more financially empowered.

If you’ve got a money dilemma, we’d love to hear from you! Just hit reply to this email or DM us at @yigcpodcast on IG or TikTok and you may just find your dilemma featuring in a future newsletters (anonymously of course).

Hi Maddy and Sophie,

I really enjoy your podcast, even though I am probably quite a bit older than your average listener. However, I am hoping you can provide some advice regarding tricky money conversations with my nieces and nephews.

Two Christmases ago, my husband and I offered $1,000 to each of our nieces and nephews for them to open a brokerage account and after reading the first Equity Mates book. Both my nephews did and we transferred the money, but neither of my nieces have. Over the period I've sent my Stake referral code, linked some podcast episodes, and made some vague comments in our group chat, but nothing.

I'd like to do two things, but am not sure how to bring it up…

1. Get my nieces to open a brokerage account so I can give them money!
2. Follow up with my nephews to see how their $ are going

I'm not sure how to start either of these conversations - advice welcome!
For context, we live interstate, so face to face isn't an option. They are all in their early 20's and we are mid-late 40's.

Thanks so much!
Just-Want-To-Help xx

This has to be one of our favourite money dilemmas to date!

When we started You’re in Good Company, we were on a mission to help more young people, particularly women, to learn to invest. We started building this community by having conversations about investing that felt both relevant and relatable to women in their twenties - aka your nieces!

The thing is, finance has traditionally been a male-dominated industry, and still is today. So if we have generations where women are under-represented in the finance industry, then it’s only natural that a lot of us are going to feel less than comfortable having conversations about money.

On top of this, investing is often presented in the media in a way that seems confusing and intimidating - there are loads of numbers and graphs, let alone the endless jargon! It can seem like a new language entirely, which hardly seems like something you’d want to get involved in.

In our experience, step number one is to help your nieces to see investing as something they can get interested in… Chat to them about companies they interact with in their daily lives, whether it be the iPhone from Apple, the skincare from Adore Beauty, or maybe even their favourite Moet champagne by LVMH (if they’re lucky!!)… Investing can seem like a dull topic until you realise that you actually get to invest in companies you interact with on a daily basis.

Step number two is to help your nieces believe that investing is something they can do, by helping them to understand the basics.

For more on this, we asked Molly Benjamin, founder of Ladies Finance Club and author of Girls Just Wanna Have Funds for her tips and tricks…

Explain Compounding Returns:
Get them excited by describing how their money can grow over time using the concept of compounding returns. For example, if they invest $1,000 and it grows by 10% in a year, they’d have $1,100. The next year, if it grows by another 10%, it’s not just 10% of the initial $1,000 but of the new amount, $1,100. Over time, this compounding effect can significantly increase their investment. Show them real examples using a compounding calculator to illustrate the long-term benefits.

Maddy & Soph interrupting here… If they won’t look at the compound calculator, we usually find this is pretty persuasive! 🙂 

Diversify Investments:
Teach them the importance of not putting all their eggs in one basket. Use my favourite analogy of a mixed box of chocolates – having a variety of different chocolates means you’re not stuck if you don’t like one flavour. Similarly, with ETFs, you don't just buy all Apple or all Moet; you get a whole mix of different types of companies in one box! So she can own a little bit of the top companies in Australia, the USA, or even the world!

Understand Risk and Reward:
Explain the concept of risk and reward. Generally, higher potential returns come with higher risks. Encourage them to think about their risk tolerance. For younger investors with a longer time horizon, they might be able to take on more risk. Conversely, for short-term goals, safer investments might be more appropriate.

And when it comes to your nephews, we’ve found that the best way to start a conversation about investing is by sharing something yourself… This might be chatting to them about how your investments are going at the moment, or asking for their thoughts on a new company you've been thinking about investing in. By sharing yourself, you open up the conversation for them to do the same in return.

A big thank you to our YIGC community member for sharing this dilemma… It was nice returning to our investing roots.

Tune into tomorrow’s episode on the bank of mum and dad with none other than out parents themselves!! Exposing, we know.

Until next week,
Maddy and Soph x