Every great epic has an origin story. And my story, while neither great nor epic, also has an origin story.
It was the time of the GFC, and everything was doom and gloom. I was working in my first "real" job out of uni, government department based out of Canberra. For those non-Aussies, that's about 3 hours drive from Sydney, my home town. The unfortunate thing about this set up is that Canberra is just not far enough from Sydney, meaning that I was never forced to fully commit to Canberra. Every Friday after work I would make the 3 hour trip and spend the weekend in Sydney, and then travel back to Canberra on Sunday night.
There were many young grads like me from all around the country that never really liked it there in Canberra, and were constantly looking to leave as soon as they got a couple of years experience under their belt. For me though, I actually didn't mind Canberra too much, but my family and friends were all in Sydney and it was close enough to (be a rather long) commute... (and petrol wasn't as expensive back then!!)
Besides, as I said, it was the GFC and, as a totally green uni grad, I was fortunate to have a job (well not totally green, I was employed to man a tech help desk for the majority of my time as a uni student). For my age (mid 20s), I was even pretty well off, having a manageable mortgage and some equity to my name.
In fact, now that I had a stable job, I decided I needed to be more efficient with my money, so I went to get my mortgage refinanced to unlock the equity. That went reasonably smoothly and now I had a chunk of cash burning a massive hole in my offset account. The problem was, what should I do with it now?
My parents ran a couple of restaurants when I was a kid, and I always thought I was born to be an entrepreneur just like them. In later posts I might talk about some of the adventures I had setting up various businesses but for now, being an entrepreneur was one of my options. But I had just started my career not long ago, after several long years doing an undergrad and even committing to postgrad studies upon getting my new job. I didn't want to quit so soon and besides, if I did how would I pay the mortgage? I concluded this was not the smart move. One day, but not now.
I also recognised it was the GFC and so asset prices were cheap. That meant real estate or shares. I didn't really have enough for property and besides I'd already maxxed out what I could borrow on my meagre grad's salary. So that left shares, right? I took my time to read and research but realistically I was not game enough to commit and was still very much undecided. I didn't waste that time however and set about setting up various brokerage accounts including, rather fortuitously as I will explain below, a brokerage account with E*Trade in the US.
It came to Friday and as usual I packed my stuff after work and hopped straight onto the Federal Highway to head back to Sydney. Australia by and large is a sparsely populated country and there's not really a lot of infrastructure between Sydney and Canberra. There's patchy mobile reception (still 2G in those days) and even limited radio stations available. Generally the station with the most reliable signal was the national broadcaster, the ABC, because it uses a mix of various local FM and AM frequencies. Being a national broadcaster it was, of course, news focused rather than entertainment. In those days, I probably would have won any trivia competition due to my extended sessions listening to current affairs on the ABC.
Memory is a funny thing. Most of the incidents around that time are a little hazy. I remember them, but not in great detail. But this particular incident I remember as if it was yesterday. I was about a quarter way into my journey to Sydney, and I recall listening to the finance section of the broadcast. The announcer was talking about the unprecedented level of the exchange rate. The AUD actually hit parity with the USD. To put that into perspective the long term average is around AUD$1 to about USD$0.70 - $0.75, so basically USD was 25-30% "undervalued". I was shocked, never expecting it to hit and even surpass parity...
For the next half an hour during that drive I just kept thinking to myself, surely this is a once in a lifetime opportunity. Surely this will never happen again. I should be able to profit from this. I MUST profit from this.
At this point, still lost in my thoughts, I was approaching the half way point of the journey. Then, lo and behold I spotted ol' faithful. The cornerstone of any great road trip. The golden arches. Maccas. Something snapped in my mind and I quickly took the exit.
I parked the car and absentmindedly ordered some dinner. Scoffing down the burger, the same thoughts kept swirling around my head. By the time I finished my dinner I had decided. I knew I I wasn't ready for other assets, but I reasoned that USD was still cold hard cash. And cash was cash, not an asset…
I ran back to the car to grab the laptop, went back inside Maccas, sat down, connected to the Macca's Wi-Fi and logged into my offset account. Then I found the details of my newly set up E*Trade account and wired the whole lot over. Every. Last. Cent. My entire net worth, transferred at the push of a button. In those days, cyber security wasn't really a thing yet. Or maybe it was, but I was just too young and dumb realise. Thinking back on it now, transferring a six figure sum to a newly created brokerage account in a foreign country over public Wi-Fi… Come to think of it, with all the KYC measures in place nowadays, it's probably not even possible…
Satisfied, I packed up my stuff and continued on my way to Sydney…
Needless to say, that moment of recklessness paid off for me. As of this post, AUD$1 is only buying USD$0.66. But as noted above, this is just the origin story. My decision on that day set the foundation for what was to come.
Till next time then…
SSM
