First off, a big thank you for all the feedback you sent through. There were some very kind words in there, and I showed my mum. She was stoked.

Today, I thought we would take a step back from the news and answer some of your questions. There were lots about the share market and inflation, so this week we have a mini crash course on these topics.

Without further ado, let’s go!

Dear questioner, you are not alone in needing this. Let’s walk through it step-by-step.

Imagine you want to start a business selling coffee with your friend, Zara. Under Australian law, you have a few options: be a sole trader (just you), set up a partnership (like a law firm), or start a company.

Let’s say you go with a company. In Australia, all companies must register with ASIC - the Australian Securities and Investments Commission. When registering, you have to list who owns the company. These owners are called shareholders and they each own a slice of the company, called shares.

So, you register your coffee company and list yourself and Zara as shareholders, give yourself 1 share each, and now you each own 50% of the company.

Let’s say the company is growing quickly, and you want to open more stores, but you don’t have the cash. What do you do? You have two options:

Let’s say you go with option 2 - selling shares. Where do you find the buyers?

At first, you might do it privately. You pitch your business to friends, investors, or venture capitalists. This is called raising private capital (in this context, capital = money), and the shares are bought and sold behind closed doors.

But as your company grows, you might want to access more investors. That’s when you “go public” and list your company on a public sharemarket, like the ASX - Australian Stock Exchange. This is called raising public capital. Now, anyone and everyone can buy your shares.

The big four banks all offer platforms where you can buy and sell shares. These platforms let you trade shares on the ASX, and they can link to your bank account for easy transfers. There are also non-bank affiliated platforms, such as SelfWealth, Superhero, and others. These are often called online brokerage accounts.

Because they want to grow their money. If you buy a share in a company and that company does well, then your little slice becomes more valuable. You can sell it later for a higher price (that’s a capital gain), or sometimes the company gives you a share of its profits directly (that’s a dividend). Either way, the idea is, invest now and hopefully earn more later.

Well, they don’t really know, not for sure. But people take different approaches to try and make money:

One important thing to keep in mind: what people buy often depends on how much risk they’re comfortable with. Active investing can be riskier because you're betting on a small number of companies — and if one of them crashes, so does your investment. But with passive investing, you usually spread your money across lots of companies at once, so if a few do badly, the others can help balance it out.

That spreading out of risk is called diversification, and it’s one strategy investors can use to protect themselves. But there are also some risks, like random shocks that affect the whole economy e.g. pandemics, and that cannot be diversified away.

It’s a beast of a topic, so let me know what else you are keen to learn about the share market!

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Great question. I’ll get to the answer, but let me start with some background. Last week, the Australian Bureau of Statistics (ABS) announced that inflation was 2.4% in April. What does that actually mean?

Inflation is a concept in economics that refers to the rate at which prices are rising across the economy.

Imagine an economy where the only thing for sale was a Taylor Swift t-shirt. Let’s call this economy “Taylor Mania”. In January 2025, the t-shirt cost $100. But in January 2026, it cost $110. The price of the t-shirt increased by $10 over a year. So we would say the rate of inflation in Taylor Mania is $10 per year. Or, to express it as a percentage increase from the original price, $10 divided by $100 = 10%. So inflation in Taylor Mania in January 2026 is 10%.

This is the basic idea behind how the ABS calculates inflation in Australia, but it’s slightly more complicated when you add multiple items.

Here is a useful infographic from the RBA on what items are included in the CPI basket and what their weights are:

The Reserve Bank of Australia strives for low and stable inflation.

Here’s why. If inflation is too low, or prices start falling, people might wait to buy goods and services, hoping they’ll be cheaper later. But if everyone waits, shops don’t make money and might have to fire workers. Then those workers can’t afford to buy things either, and the whole economy slows down, leaving everyone worse off.

If inflation is too high, prices go up faster than your pay. You can’t buy as much, so you ask for a raise. Your boss gives it to you, but then has to raise prices to afford your higher pay. Other workers do the same, and prices keep rising across the whole economy faster than everyone’s pay, leaving everyone worse off.

However, when inflation is low and stable, price changes are predictable, and households and businesses can plan their finances. As a result, we avoid price spirals - both up and down. That’s why the RBA targets 2-3% inflation.

The causes of inflation can be put into 3 categories.

The main tool for controlling inflation is the cash rate.

Last week, we talked about why the RBA changes the cash rate:

By incentivising saving and making borrowing expensive, the RBA lowers the level of demand for goods and services. This directly addresses the excess demand that may have been pulling inflation higher in the first place.

This might seem like an easy fix - if things are getting more expensive because of excess demand, why don’t we just give everyone more money. Why muck around with incentivising saving or making borrowing more expensive?

Here’s why that doesn’t work — and let’s look at a real-life example. In the 2000s, the government of Zimbabwe started printing huge amounts of money to try to fix problems like poverty and debt. And at first, it felt like a relief. Wages were paid and people had more cash in their wallets.

But here’s the problem: the amount of stuff in the shops - like bread, petrol and clothes - didn’t increase. There was more money, but not more things to buy.

So what happened? People had more money and wanted to buy more. But because there wasn’t more stuff, shops just raised their prices. And people still paid, because they had more cash. And then when they ran out of cash, they just printed more. And the cycle repeated, until eventually a loaf of bread ended up costing millions.

The key idea? Printing money doesn’t create more stuff, it just means there’s more money chasing the same amount of stuff. This pushes prices higher and makes money lose its value.

Last week, Hailey Bieber sold her skincare company, Rhode, in a deal valued up to $US1 billion. The buyer was another beauty company, e.l.f. Beauty. In the deal, Bieber and her co-founders, Michael and Lauren Ratner, will receive $US600 million in cash, $US200 million worth of stock in e.l.f Beauty, and the right to receive another $US200 million in payouts if the Rhode team hits certain sales targets.

It’s prompted some interesting discussions online about the role of influencers in building the companies of tomorrow. If you’re looking for an interesting read on this topic, I’d recommend this Wall Street Journal profile on Alix Earle, an influencer-turned-business investor.