Why are we building Inaam? 🎯

Our obsession with helping young Australians learn about how and where to invest their money isn't all that crazy 👀

Lets take a look at the problem we're trying to solve and why its such a big deal 🤷‍♂️ 

Young Aussies aged 18-29 years old are experiencing severe financial stress. We were recently reading an article on a report by NAB (it was long.) but the figures they shared were super alarming 🚨.

57% - thats more than half of young Aussies are experiencing financial hardship.

We couldn't just sit idle after hearing these numbers so we set out with boots on the ground to discover the reality for ourselves. We've since spoken with over 100 young people across Australia to ask where this financial hardship stems from.

We found that systemic factors like poor financial literacy, unemployment, low incomes and poor working culture/environments continue to contribute to personal financial anxiety.

However, of the people we spoke to, a whopping 82% told us that they wanted to learn more about how and where to invest their money. Their financial anxiety sprung from the fact that they did not feel empowered with money that they did have.

Their concern, was that they would not be able to save up for that dream house, or that dream holiday, or repay that large debt because they didn't know how to grow their money.

The most significant insight we found was that 93% of people we spoke to cared deeply about where they would invest their money and the impact that their investment would have on the planet.

This got us thinking around what we can do to help. We can't fix the schooling system that chooses to teach us about Pythagoras 🙄 instead of investing, taxes, and budgeting.

What we CAN do though is build an app with embedded investment literacy with a true learn by doing approach. An app the shows you how to invest your money, tells you exactly where your money is being invested and exactly what impact it is going to have and that is EXACTLY what we are doing at Inaam 🚀.

What happens if we don't try to address this problem?

The main issues resulting from poor financial and investment literacy include (well a long list of bad things 😔) - prolonged debt cycles, bad credit, inability to invest and grow income which inevitably sparks the cycle of poverty, poor mental health and financial duress which leads to toxic familial and work environments and may also encourage crime.

Doesn't sound very encouraging does it? 🥺

Then come the effects on our financial system. These are more long term and more severe.

For example, the Australian population is slowly transitioning from the majority being mature aged to the majority being young people. Young people who aren't aware about how to manage their money or where to invest and thus choose not to, won't invest.

This would lead to a lack of large-scale retail public investment leading potentially to further economic stress. This means businesses trying to make the world a better place wouldn't have free-flowing access to capital and thus well, won't be able to save the planet 🌍. Thanos' line in The Avengers: Endgame movie: "I am inevitable" comes to mind."

While this is a doomsday scenario it is one that stems from a simple lack of financial and investment literacy which is why at Inaam we believe in solving this problem for young people by reinventing investing to change the world.

Quick recap, in case you're asking yourself, WTF is the Inaam Impact Loop? 🤓

Last week we revealed our first 2 Inaam Impact Loop Partners. You might be wondering what was that Loop thing these people were talking about again?

Here's what its about 🔂

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Step 1: Invest

At Inaam we curate custom impact portfolio's based on your profile. What this means is that we create a unique profile for you as an investor on our platform. This profile is informed by attributes that you provide to us to better understand your choices.

Once we've got your unique profile we match the best impact stocks from every stock market on the planet to curate a portfolio of listed impact stocks JUST for you.

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Step 2: Build

These companies help make the world a better place through the work they do and help you track how much impact your portfolio has made on the planet, people and the future!

You might be wondering, okay cool, my money is invested in good companies, they're earning me a decent return, thats great, so what? Well we’re not stopping there.

We charge a fee for curating your portfolio and for ensuring that with the click of a button you can buy shares in all the companies from across the globe in the portfolio we've curated for you. However, the buck doesn’t stop at good investing.

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Step 3: Give back

Our goal within the next 5 years is to reinvest upto 50% of our profits back into the impact ecosystem.

We will use the money we make to reinvest in the empowerment, inclusion and employment of underprivileged, underrepresented and at risk youth across Australia and soon (hopefully) the world.

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Step 4: GROW

These investments will support the community and next generation of leaders by creating employment, developing skills, providing training and better outcomes for young people. This was not an after thought for us, it is the core reason we started Inaam - to make the world a better place. So while we can't start with reinvesting 50% of our profits on Day 1, we can start with 5% and on day 1,825 (5 years) that percentage will become 50%, this is our commitment to the planet.

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Cue, our INAAM IMPACT LOOP PARTNERS - hell yeah!

We spend a lot of time finding work that young people are doing to improve the world, this time, effort and our stringent criteria has yielded us our first 2 impact loop partners whom we introduced you to last week!

We invest in our partners so that we can all contribute to a better tomorrow.

You can read up about them here and how these two young founders are building a better future by creating opportunities for others to shine.

This week's de-jargonising 📲

Ever heard the phrase never put all your 🥚's in one 🧺?

Well people often use this phrase to avoid a potential disastrous outcome - like, someone come up behind you and steals your basket of eggs and makes a run for it 💨. You loose all of them.

Where as if you split the eggs between two baskets, the thief would only get one and you would still have some eggs as opposed to no eggs.

Now, what on earth does this have to do with investing?! Well the word you're looking for is the big D! No, not this 🍆.

DIVERSIFICATION.

Diversification in the investing world, means investing in a portfolio comprised of multiple different assets or different asset classes. At Inaam, we currently focus on one specific asset class - listed stocks so we will stick to that to understand diversification.

Diversification theory suggests that each asset should be uncorrelated to the other. That means if a certain factor affects one asset, it shouldn't affect the other. i.e if one basket of eggs get stolen, it doesn't affect the other basket.

In the investment world diversification refers to how we can dramatically reduce risk (how much money we could lose) without affecting expected return (how much money we're going to make).

Typically higher risks lead to higher rewards 🤓, however spreading 🧈 that risk across multiple avenues allows us to ensure our rewards remain consistent 🎯!

Now, this doesn't mean that we should start roaming the streets with 10 baskets to protect our eggs 🥚, that would be pretty silly.

What it means is that our portfolio should contain more than just one or two stocks. Thats why the portfolio's we curate for you have between 10-15 stocks each. This is so we we can reduce the risk and protect returns!

One of the world's biggest thought leaders on diversification - Ray Dalio explains it the best way. We strongly recommend reading his book 📖 "Principles" he refers to diversification as the Holy Grail of Investing. We recommend you check out the video below from the man who discovered it himself!

In case you're wondering who Dalio is, he's the founder of Bridgewater Associates, which manages ~$154 billion of wealth - they know what they're doing which is why we're inspired by them!

Here's our next stock pick 💡

For this stock pick edition (unpopular opinion) BUT we're going to the only country that can make the amazing matcha KitKat 😍. Yes you guessed it right, we're going to the TSE: Tokyo Stock Exchange in Japan 🇯🇵.

West Holdings Corporation is a global renewable energy pioneer. They current have a market cap of $199 billion.

They've returned investors 805.88% over just the last 5 years.

Now, those are some pretty impressive figures, but here's what they're doing to make the world a better place. West Group Creates, Saves and Supplies renewable energy across Japan and the world.