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Dentists Who Invest

Podcast Episode

Full Transcript

Dr James : 

Alright, then, good stuff. So let me go ahead and put you on full screen, and actually what I’ll do is I’ll just change the settings so that you can share your screen as well, andrew, yes, cool, so there you go.

Andrew: 

Okay.

Dr James : 

So, mike, can you see the room? Can you see the room?

Andrew: 

Because I think it’s very nice that you can see everybody. Yeah, I can.

Dr James : 

It definitely helps there we are Right, lovely stuff, lovely stuff, lovely stuff.

Andrew: 

Lovely stuff. Right, let me just share screen, and then we need to do that. Can everybody see that? Yes, and everyone can hear me. Yes, fantastic. Well, look, thanks a lot, james. I don’t know if you want to give any kind of preamble about what you know, the group, what everybody wants to achieve, but I mean I prepared a very first principles deck about, you know, our views on investment and the real kind of fundamentals around investment and what I often describe as the most important investment theme in the whole of human history, which is human progress, and so that’s what I’ve put up here on screen. It’s about I think it’s about 20 slides long. I can do it in about 20 to 30 minutes. I’m very happy to keep this as informal as you like. So if you have any questions, please just jump in and ask them whenever you like. But, james, I don’t know. You know, obviously I’m not. I know the audience are all in a certain industry, but I want to be kept. I want it would be useful perhaps to sort of understand the level of. You know, I’m assuming that everybody’s actually quite sophisticated when it comes to investment. But you know, either way I’ll always want to go back to, or is that not a safe assumption?

Dr James : 

A lot of people have read your book. Andrew and also as well as a lot of the stuff that we talk about on this program is centered around your book, so there is definitely a good level of pre-understand. And there I added put it like this I looked at the deck that you sent me last night and it was perfect. So what? You have a spot on.

Andrew: 

Okay, great, well, I’ll just chop through it and just sort of preempt, to apologies, because people who have read the book, or maybe, if you’ve seen me speak before and of course James interviewed me for Dentist Invest a while ago and I do use a lot of the same themes again and again and again, but I use this slightly cheesy Latin phrase, repetitio Martis Studiorum est, which means, you know, learning is the sorry, repetition is the mother of learning, right? So I think what it’s very easy in life generally to learn stuff and then not actually apply it. And so part of the reason that we repeat our message a lot across lots of different sort of media channels and stuff and obviously through my books, is because understanding what I’m about to present is only sort of probably a third of the battle. Two thirds of the battle is reiterating it and getting to the point where we actually take action and it changes your life. So here you go. So I’m going to talk about owning the world and, as I say, the importance of human progress and, as I say, please do leap in, because we’re FCA regulated, I’m obliged to put up nights, so give me a show of hands when you’ve all read it. So I’m only joking, you don’t have to read it. It’s there because it’s supposed to be by law, so you know, just to kick off big picture. So why does our company playing with finance exist? Why do we have this? Why do I do what I want to do? And it’s a little bit sort of a Californian and West Coast Americans have a kind of mission statement about what you do, but we mean it and we’ve been walking this walk for the best part of a decade now. So everything we do is about improving the financial affairs of as many people as possible and basically the vector through which we want to do that. I can now see James’s head.

Dr James : 

What a beautiful sight I’m seeing. If I can make this screen any bigger, but I think that’s as big as it gets, okay.

Andrew: 

Well, I can share the PDF of this afterwards.

Dr James : 

by the way, I’ve actually just made it bigger there. So we’re good, Just to help you.

Andrew: 

Cool. So how do you make people’s financial affairs better? Well, the number one vector for that is it’s all about financial literacy. This seems like quite an obvious statement that the financial literacy is very, very poor even in the developed world, where we have isas and pensions and all that, but throughout the whole world it’s really, really bad and that has serious ramifications for society and for individuals, and so our mission is to improve that. And so I was very lucky to meet this guy, actually Mark Shipman, the guy I’ve put a quote here. I met him at a U2 concert of all places a few years ago, which is quite by chance, and I realized he said my name’s Mark, and his friend said I’m a financial author, and I said you’re not Mark Shipman, are you? Which was quite a nice moment because I’d quoted him at the beginning of my book. But this quote, I think it’s a really instructive one. He says there’s an essential skill, life skill that’s never been and still isn’t taught to the masses how to manage, control and invest money to protect and provide for your financial future. And I know that James and I are very sort of aligned in that kind of statement. Does that resonate with people, whether it’s from school, or even you can get I’ve got an economics degree from a good British university and that gives you no practical knowledge of any of this stuff around actually the nuts and bolts of investment. So why is it important? Well, I would consent parking Ukraine or the cost of living crisis, which is part of this problem in many ways. Poor financial literacy is nothing less than one of the world’s very biggest problems, because it’s the reason that so many people struggle financially. And you know, the reason that so many people struggle financially again, it seems really obvious is because they’ve never learned enough or in many cases for a large percent of the population, anything at all about financial markets. And that’s a tragedy, because people on even only average incomes who understand financial markets can realistically aspire to become millionaires over time, and an awful lot do. And there’s a really famous book which I’m sure some of you with a read or be aware of, called the Millionaire Next Door, which is in a very American centric book, but it basically it shows empirically that the very significant majority of millionaires in America are not people who’ve had enormously high incomes or pop stars all of our else movie stars they’re just normal people who know about financial markets, and particularly property and the stock market, right. And then the other end of the spectrum, as an example of how this is all about financial literacy the examples of people who’ve been on huge incomes or, you know, earned a vast amount of money, who are bankrupt or otherwise really significantly challenged financially is our legion. There are. There is very, very easy to find examples. So 70% of people who win the lottery are bankrupt within five years of winning the lottery, which I always think is just an astonishing stat. How can you win $50 million or 50 million euros or pounds or whatever, and then be bankrupt five years later because you’re financially illiterate and you know, if you win that kind of sum, or ever make that kind of sum, you should be set for life, indeed, with a much lower sum. And a couple of other examples you know, 150x Premiership footballers are in prison, most of them because they turn to crime to sustain the earnings and the lifestyle that they had as a Premiership footballer when they were forced you know, forced to retire at a relatively young age, and that’s tragic because so many of them make such poor decisions about investment and finance at a time in their lives when they’re making 50 grand a week maybe. In America the average NFL player makes $750,000 a year. The average NFL player quarterbacks obviously make a lot more. But 80% of retired NFL players are broke, go bankrupt, which is just, you know. And then loads of Spanger of Celebs Karen Millen, you know, boris Becker was bankrupt and then lied about it and is in prison. You know, having won tens of millions of prize money in his life George Best and his son Callum Best so that’s a good example of how these things run in families. You know you can run financial literacy in families or you can run financial illiteracy in families and lots of other examples, including, you know, sarah Ferguson, who’s part of the Royal Family. So even royalty is not immune. And so the point on that side is really just truly wealth is so much more about knowledge and habit and not necessarily about income. But obviously this audience you have a very particular advantage because your incomes, all other things being equal, are quite a lot higher than the average in the UK population, and that’s our key focus. But so if I, james, knows I can be a bit messianic and sort of, you know, get on my soapbox about our message, but and that’s because actually okay, so that’s great. It’s great for the individual If you become financially illiterate, you massively increase your chance of being wealthy. But far more important than that per individual because we all want to live in a nice society is what happens at the societal level, and certainly what could happen at the societal level if this stuff is widespread, because every single person who can take care of their personal finances obviously that’s great for them. But it’s great for the state because it means that there are, you know, there are fewer dependents on the state, there’s a bigger tax base Really important and I know this first time because I spent the last eight years working with life sciences companies, biotechnology companies that those companies are really challenged in terms of raising money to do things like try to cure cancer, you know, run clinical trials, develop medical technologies, medical diagnostics. It’s very, very hard to raise money for all sorts of innovative companies and it always has been, particularly in the UK. The Americans are a bit better than we are, but if you had more people who are financially illiterate, more people who are investors, there’d be more capital available for those sorts of companies and for, you know, indie companies that are doing anything that’s of use and utility to humanity and and very pros and cons. But totally valid in my opinion is that you know money problems cause stress and divorce and people falling out arguments. You know 50% of divorces cite money as the prime cause of the divorce and so financially literate people are happier people. They’re less stressed people. So if you add all of those things up, that getting this, you know if we can in our small way make a million more people in the UK actually truly financially literate, that could make pay huge dividends for British society. And you know the same can be said all over the world. All over the world. And that’s why we genuinely have a real sense of mission about this and why I’m willing to, you know, do calls like this at 10 o’clock on a Saturday morning. Obviously it’s about a lot more than just money and just quickly. You know how do we deliver that mission. I think most of you know this through my two books, particularly the first one, because the second one is much more of a workbook. And then, excitingly, part of the reason I was able to go full time on playing with finance a year ago is because I got a two book deal from our big publisher and we’re going to produce a teenager and young adult focused version of how to own the world, because so many people have asked for it. You know school teachers and university lecturers and uncles and aunts and grandparents have said you know your books. I really like your book, but it’s a bit inaccessible for my 16 year old daughter or whatever. Could you write one for them? So we’re doing that. And then I’m also just about put together 115,000 words on a book called Our Future is Biotech, which goes to what I said in the last slide, because I spent eight years working with biotech companies and I think we’re fighting with one hand behind our back with these companies. They could be genuinely. These are technologies that could be changing the world, and I would assume that many of you guys are more conversant with those sorts of. You know any medical technologies, all the other things being called the many, because you’ve got the, you know, you’ve got the understanding to be. But I believe we’re on the coal face of biotech and life sciences delivering some really amazing things, but the funding environment is really challenged. So I wanted to write a book about that, to sort of set out in plain English finance, how exciting that sector is, and so you know I think you know the rest of this. We’ve got a website, we’ve got an online community, we’ve got a very defensive fund which is a global multi asset fund, and we’re teaching on the brink of floating a company on the London stock market to invest in the biotech space, which is hopefully only a few days away from launching. So, as I say, I’ve only about another 10, 12 slides and I’ll chop through them, but just to unpack what my key focus is going to be in these slides is the fact that we’re all about investing and not trading, and just how important a distinction that is, because I think investing is for everyone and trading actually for a very small minority of people, and I’ll explain why I believe that. And a related corollary to that is we’re all about ignoring the news. You know one of the biggest rookie mistakes you can spot an amateur investor in my way when they’re constantly obsessed with what’s in the news every day and how that may or may not impact their investments. There is very little correlation between the news and financial market performance, and one of the biggest rookie mistakes amateur mistakes is constantly focusing on what what financial indicators doing, what the economy is doing, whether there’s going to be a recession. You actually don’t really need to think about any of that, and investment returns are negatively correlated with that. The more you think about that, the lower your investment returns are likely to be. And I’ll explain that in a bit of detail. And as a sort of underpinning to all of that, human progress is the most important investment theme of all and you know, if you like technological development, I’ll explain that in some detail. But just to set the scene, firstly, what I tend to do is ask some key questions and then talk about some really important bad news and then some countervailing good news. This is just what I tend to do in these presentations. So, but happy to. I’m not sure I’ll be able to hear you, but you can. You know what does it. I guess this room, most of you, will know what the average British salary is. Roughly Does that mean? No, it’s usually about 30 grand, depending on who you are. Now, this is a bit of a moveable fees, because it kind of defends where interest rates and annuity rates are. But how much money do you need in your retirement pot to earn that? Let’s call it 30 grand a year, risk-free from a cash or a bond product that’s paying you a yield with 30 grand To keep the massive. If interest rates are 1%, then every million pounds creates 10 grand of income. So actually, if interest rates are 1%, then, risk-free, you’d need 3 million pounds to generate 30 grand a year of income. Now, obviously that’s slightly disingenuous because interest rates are higher and annuity rates are higher, but broadly you’re talking about a large six-figure sum is what everybody in this country needs in order to be able to reliably pay themselves just the average income per annum in retirement. Now let’s be clear if you don’t want to touch the capital, you’ve probably heard of a thing called drawdown, which means that if you do have a million pounds by the time you’re 60, you can divide that. If you assume you live 40 years, you can divide it and take some money out to run it down to zero. But the far preferable thing to be in a position to do is to live on the money from your capital rather than destroy your capital. And then, if you have children, for example, leave the capital to them and so okay. So let’s just say, for the sake of my mind, you need a large six-figure sum to be able to do that. How much does the average British person actually have at retirement nowadays, not including their house, like pension and liquid assets? Don’t really know the answer to that, james. So the answer is £50,000. And generally it’s about 70 grand the average man has and about 10 grand the average woman has still today, even now, obviously, because in a lot of families and a lot of couples sort of traditionally men have run the money and that’s why women often, if they lose a husband or they, can end up in that terrible situation. So this is why this is one of the biggest problems in the world, if you ask me, and certainly in British society, is the disparity between what somebody needs to live a good retirement on and what the average person actually has. And this is really. This is going to come home to roost in a horrible demographic bulge in the years ahead. And why should you care about that? Well, because of the bad news. Because quite often I did a speaking event at Birmingham uni a few months ago and some of the students said to me well, you know the government papers, there’s a government pension and you know, unfortunately, with the lesson of the last decade two, three decades already is that the government cannot afford to pay a living income to all of its retired population for a whole series of demographic reasons which actually have nothing to do with politics, and it won’t matter whether it’s the Tories or Labour, it’s just a mathematical inevitability. Because we were very enlightened. Britain introduced a pension system in 1909, we were the second country in the world to do that, after the Germans. It was kind of our idea and their idea, and the Dutch as well, and it was for over 70s, at a time where average life expectancy was 47. Now that number is skewed by infant mortality, but not that many people actually lived through two or three 70 years old, only a handful of kind of you know pampered aristocrats, working class people didn’t make it anywhere near 70, particularly those who spent a life working down the mines or on farms, and so we introduced a pension in 1909 for over 70s, when that meant that there were an awful lot of workers paying into the system and very, very few over 70s taking out of the system, which was a great idea. But in this day and age, life expectancy for most people born today is probably going to be 100 or north of 100, and certainly 80 or 90. We’ve already seen that happen in the last 40 years, and so if you want to retire at 60 or, dare we even hope, 50 or 55, you need to have enough to fund four decades of your life and, sadly, governments literally can’t afford that. It doesn’t matter what your political position is, it’s just an inevitability. Japan is a really robust example of this, because when they put their social security system in place at the end of the Second World War, there was something like 35 workers for every retiree, and already in Japan there are now only two workers for every retiree. So this is a really, really bad thing. This is why I call it the bad news. I think this is a much, much bigger societal problem which is going to cause far more misery than COVID did or Ukraine will, unless it goes nuclear, unless prayer doesn’t, and it’s far, far too little talked about in the mainstream press and by people, but it’s coming down the pipe and it’s going to make life for millions and millions of people really really horrible and impoverished, truly, which is why we’re very mission driven because this story needs to be told. But thankfully, truly, there is some countervailing good news that can kind of rescue us, and I spit that into three parts. So, again, I think James talks about this stuff. Many of you will be familiar with this. But even if you are familiar with it, people don’t really understand the sheer power of compounding compounding financially and also compounding in life. Just getting better at things gradually over time and how two friends in their early twenties who leave university with the same skills and earning potential and work ethic and fitness and diet habits, if one of them gets 1% better every month and the other doesn’t, and just stays the same by the time they’re 30 years old, you won’t really notice much of a difference. One of them will have a slightly better job, might be slightly slimmer, but by the time they’re 60, truly, one of them will be a millionaire and set for life and the other one will probably be in financial trouble and that’s really insidious and sneaks up on you. But if you make use of compounding, it’s transformational and that’s why we talk this story so often. And when I’m doing journalist interviews or speaking to the general public, who perhaps aren’t quite as sophisticated as this audience, one of the powerful ways I try to use to explain the sheer power of compounding, the impact of compounding, is imagine that you can invest £5,000 the day your child is born, or your parents could, or a wealthy relative just that you can put £5,000 into something the day your child is born and just imagine that that returns 10% a year. Now we can you know people can scoff at that number will come on to justification for why 10% is not an unrealistic number. Well, how much would your child have on their 55th birthday with no further investment? So that’s just £5,000 invested once by the time they can first legally retire at 55. And the answer to that question is £945,000 compounding at 10% a year, or £1.2 million compounding at 0.83% a month, which is 10% divided by 12. So you know, because it’s 5,000, 6,150 and so on and so on, over 55 years, with no further investment. So compounding, you know, compounding of very small amounts of money over very large amounts of time can make us all millionaires. And so then, to come on to so you know, why do we have a pensions crisis? Why are so many people in poverty? Why is the average person in Britain only have £50,000? It’s a problem of knowledge and habit, not really a problem of investing, and the reason that 10% is actually not entirely ridiculous and unrealistic I’ve put on this slide. So you know, 10% will make us all millionaires. And how do you achieve that? Well, because of, as I said earlier, the most important investment theme in human history is human progress. And the American stock market, from the 1st of January 1872, until the 31st of December last year, averaged 9.23% per annum. So if you’re just an investor in US shares as simple as that, buying the market every month regularly, you have a chance of being at or around those sorts of levels. And if you’re lucky and you go through a period like the last 15 years, you’ll do quite a lot better than that. You might be at 11% or 12%, and if you’re unlucky and you might do one or two percent. Learn that, if you know, depending on what’s happening historically, but broadly, you can aspire to high single digit or low, double digit annual returns. So that’s that 10% I talked about, and that is a function of technological progress and population growth. And you know the last century has been all about tech and physics, if you like. So automotive, aviation, energy, you know steel, shipping containers, shipping, building and obviously, most recently, the internet silicon. You know semiconductors, semiconductor industry, smartphones, mobile internet, et cetera, et cetera. And that is what has fundamentally underpinned real wealth creation and equity returns knocking on 10% for the last 100 plus years and, I think, the next century. I think it’s very easy to evidence the fact that the next century is going to be about biotech and will sustain or improve those double digit, like the likelihood that the world’s progress in terms of financial market progress will be 9, 10, 11, 12, even better percent, because actually biotech exponentials are even more exponential than tech exponentials. So there’s a there’s a weak that you can believe that wealth creation could actually now be going to get better than it’s been in the last century, and the reason for that is because you create real economic value. This is where finance is very real and the upside is very real. You create economic value by solving problems, solving humanities problems. That’s how we create any value ultimately, when you boil it down, and most of our remaining problems as a species are problems of biological systems. So most obviously that’s in the therapeutic setting, whether that’s curing cancer or dementia or autism or obesity or diabetes or whatever else. But actually biotech is where the most exponential and interesting technology is coming from that will revolutionise and significantly improve our clean power generation technologies. So bio-coated photovoltaic cells, for example, alga culture being able to make aviation an automotive fuel, from just adding enzymes to algae that we can go in great fields out in the middle of the oceans. These things will revolutionise the way we use fossil fuels and also revolutionising agricultural productivity. Biodegradable packaging instead of plastics and single-use plastic bottles All of those solutions to those problems are going to come from the biotech industry, in my considered opinion, having researched this for a while, and even improving processing power. So computers are binary computers. Still to this day, all of our chips are zeros and ones, and that’s been the technological paradigm for the last century, and we’re bumping up at the limits of physics in terms of our ability to make chips more powerful, and the solution for that is biological computers, dna-based computers, and indeed you’ll have heard of quantum computers, which is kind of related to that, but that could be a step change in the intelligence and processing power of our computers and that will generate real wealth. And then the final bit, the third piece of good news, which sort of is the antidote to the bad news about how screwed government finances are and how poorly most people legislate for their financial future, is that this isn’t that hard, and this is why I’m going to come on to the investing versus trading piece. Investing is not that hard and I always say that investing is no harder than learning how to drive a car. And it’s crazy that you go to the average person and say should most people learn how to drive a car? Is it normal to learn how to drive a car? I mean, what does everybody in the room think? 90% plus percent of people will say yes, right, it’s a pretty normal thing to learn how to drive a car. It takes no longer to learn how to drive your finances in terms of being an effective investor and making those sorts of high single-digit or low double-digit returns I talked about on the last couple of slides. But nobody does it. And people say well, you know, financial markets, that’s for rich people and that gets correlation and causality the wrong way around, because financial markets are not for rich people. It’s just that people who learn about financial markets are much, much more likely to be rich. You know, the richest 1% of people in the world nowadays are, in the main, the most financially literate 1% of people in the world, and that’s in large part to do with compounding. So all you need to do to achieve that is to own the world, which is why my book is called how to Own the World, to capture that human progress and be as close to that 9%, 10%, whatever percent you can each year, and in this era of inflation, because of all the money creation which are the last five decades, to own inflation. And there are ways that you can benefit from the fact that we are in inflation in the era and do better than other people, whether that’s property or, potentially, crypto or gold, which I’d say because I think it’s the easiest thing. And then the only other thing you need to think about in terms of a very elegant approach to investing, to make investing easy and automated, is that you need to be conscious of your age and stage, because and so we talk about 100 minus your age so if 100 minus your age just tells you, if you subject your age from 100, it tells you what percentage of your monthly investments should be in notionally risky things and what percentage should be in defensive things, but where risky might mean equities, for example, rather than cash or bond or gold. And so you know, if you’re 30, you should probably have 70% in the market and 30% in defensive stuff, and if you’re 70, you should probably have 70% in defensive stuff and 30% in aggressive stuff. And the reason for that is because you feel 30 and you’ve got 10,000 pounds because you’ve saved a few quid in your 20s working in a bar or whatever you might be doing, and there’s a 50% correction in volatile assets like the stock market, which happens every 10 years or so. In the stock market, you’ve gone from 10 grand to 5 grand, which is annoying, but you have the rest of your life to benefit from those returns the stock market affords and build back up, and you know 5 grand isn’t actually that much in the grand scheme of things. Whereas if you’re 60 and you’ve done this for a lifetime and you’ve got to, let’s say, a million pounds because you’re well, you know, you’re a dentist, for example, and you’ve been sensible and you’ve invested each month into sensible things if you lose 50% in the same, in exactly the same market crash scenario of a 50% correction and this is what happened in 070809 and 9900, the 30 year old goes from 10 grand to 5 grand, you go from a million to 500 grand and obviously that is a very, very different problem, with very different consequences for your life, than the 30 year old losing 50%. So that’s why you need to think about 100 minus your age and, if you like, if there’s a one size fits all panacea approach to investment, it’s just to understand all this stuff and think about your age. And I do that in five year chunks because you don’t need to finesse it anymore than that. You could probably do it in 10 year chunks, to be honest, and you know it’s quite easy to do this and it’s quite easy to build very significant sums and sums that are big enough to have a very comfortable life and a comfortable retirement. But nobody’s doing it because the very, very small minority people care about this stuff, think about this stuff, learn about anything that we’ve just covered in the last few slides, and I think that that is quite literally one of the greatest tragedies of our time, and I’ve said it’s probably one of the biggest problems of our time in terms of the aggregate human misery caused both for individuals and for innovative companies who can do all these wonderful, innovative things, and for society as a whole. And so, taking all of that on board, you know, I think it’s worth just taking a step back and saying what’s the what is all the point of me bleeding away? What’s the point of all of this. It’s very simply to get to the point where, if you take this information on board, start with the end of mind, you can live well on the returns generated by your money, not the returns generated by your work. So you know, and your money is infinitely more scalable than the hours you have in any given day, week, month, whatever. And I think it’s you know, it’s we too sell them in our society. Take a step back and think just how empowering an idea it is that that is even possible, because 99% plus of the human beings ever born in history it wasn’t possible for them to do that because the fundamental technology of financial markets didn’t exist. You couldn’t aspire to just stop working and live on financial markets and on your investments and dividends and whatever else. And you know Thomas Hobbs, a British political philosopher, famously in his book Leviathan described most human existence as solitary, poor, nasty, brutish and short. And the financial markets and knowledge of investment can turn that on its head and actually make life really secure and abundant for billions of people. So but you know, as I say, for those who are willing to engage and learn and become confident in understanding financial markets, which too few people do and you know we’re very mission-driven to try and because I genuinely see this as a silver bullet for the humanity I mean you could say society, but actually it’s much bigger than that. The more people understand this stuff, the better a society will live in, the happier and wealthier and more secure and abundant more people will be. So it’s all about you know. What do you actually do? You brass tax? Well, what is owning the world? The richest and smartest people have done this for centuries, and that includes the Rothschild family, harvard University, yale you know all the Ivy League colleges in America, all their endowments, oxford University, cambridge University and what is that? Well, it’s actually really simple, and this is when I talk about investing. Being simple, it just means you need to own, ensure that you own, most major asset classes, and so you know, the simplest ones are those of cash or bonds, property, real estate, shares and commodities and, if you like, crypto, and we can perhaps have a Q&A about my thoughts on crypto. But I just think crypto is sort of unproven at the moment and there’s a lot more water under the bridge and it to me it looks a lot like the dot com boom in 99. Everybody knew the internet was going to change the world, but that didn’t start. Stop 90% of internet companies that existed in 99 going to zero. And you know, maybe crypto and blockchain is going to change the world. But for all we know, bitcoin could be the next Nokia. You know, nokia was a $200 billion company in 2000, and then it got destroyed by Apple, and so was Motorola, siemens, and so was Eric Jackson, and now they’re all tiny companies and that could. The same might be true of Bitcoin and Ethereum. I just think we’re too early in the cycle to have any confidence about what crypto might do. But that doesn’t mean you shouldn’t at least contemplate it as one of those major asset classes, for sure, just with a weather eye on the fact that it’s fundamentally riskier than the other ones, in my opinion. And then so it’s owned. All major asset classes in almost geographical regions, and the easiest thing to think about there is just the US, europe and Asia, which is pretty easy to do and, crucially, invest every month from as soon as you can afford to do that until the day you have enough to live on, which actually can happen. Best case, that’ll take 20 years if you’re quite a high earner, but it’s amazing how quickly I’m 47 now. So 22 years ago I was 25. I guess I probably started investing when I was 23. So it’s more than 20 years now I’ve been investing and it’s amazing, if you actually do that, how those years just go by very quickly and you get a great result and then, as I said earlier, ignore the news. So we’re just going to talk about investing what I mean by investing versus trading and ignoring the news on the next couple of slides. So you know I have this a lot. One of my great frustrations about what I do is that and this is particularly true of millennials at the moment, particularly true of what, given what’s going on crypto is how many people who’ve never thought about investment. They don’t know what an ICER is. They’d never engage with what their pension has. You know, they’ve just been like boring, boring finance, no, not interested, not interested in finance at all. And then they wake up one day and get really, really excited about Forex trading or binary options trading or crypto trading, and they go from To me that’s like, that’s like somebody, a white belt in karate or judo going and fighting black belts the first time they go to karate or judo lesson and it’s just it’s maddening and all in its particularly prevenant in young people who bypass All the key products that have got two centuries of track record of wealth generation To the most dangerous and risky approach to finance. Because trading is no matter what anybody tells you, it’s extremely hard to do it Well. It takes years to become good, it takes many hours a week to do it properly. You know, and people who say, oh you can, I can teach you how to trade in five minutes a day, they can treat trade in five minutes a day because they’ve been doing it for 20 years on practicing or at least you hope they have. But anybody just starting off will not be able to do it in five minutes a day because it’s you know You’re learning the ropes on something that’s quite difficult. I mean, I always say the trading is roughly, it’s certainly an a levels worth of work and to do it really well it’s probably a degrees worth of work and so, and it’s often quite stressful, you know, even if you know what you’re doing, you know you stop losses, it’s time-consuming, stressful and finally it’s you know. This is why I feel particularly strongly about sort of 30 year olds who might have three grand of savings, spending two grand on some crypto or trading guru to teach them how to trade, because the key thing about trading what really makes trading successful in absolute terms is trading quite a large amount of capital with a low risk. So if you’ve got a hundred thousand pounds and you want to want to make two or three percent a month by using various trading techniques, you’ll at least be making two or three grand a month and compounding up. But if you’ve got two grand, you’d probably better off spending your time on any number of other things which would be more valuable to you than stealing around staring at Screens and I feel, as you can probably tell, I feel quite strongly about that and, as I say, don’t be a white belt, floating black belts and what we’re all about, what our business is all about it with. You know trading. It don’t get me wrong. If you are wealthy, you’ve got time on your hands, you’re willing to engage or spend time on it. Trading is can be very good. I’ve done lots of trading in my life. I don’t know the moment I’m too busy, but but it’s not something that you know 28 year olds should be doing before they’ve done. Investing Trading is for a small minority people. Investing is for everyone and it’s a tragedy that Relatively few people invest too few people in my opinion because it’s much simpler. He has a much higher probability of long-run success and I’ve been making you a significant amount of money by the time you want to retire, and that not that time can be quite early if you do it well. It’s Probably 90% admin and 10% asset selection. You know, once you’ve got the habit of investing every month into something sensible, it almost doesn’t matter what you buy within reason, I mean, obviously it does, but it’s much more important that you form the habit and actually Taken the bull by the horns and sorted this out. And, crucially, a Global multi asset approach to investing, and only the world approach. Investment Means you can sleep at night and you can have real confidence that what you’re doing is the right thing, rather than having this. There’s so many people do you know finances, this horrible job that hangs over them for years and they stress about it. They didn’t want to do and they didn’t engage with it. This approach removes all of that and makes it very low stress, and they’re just that. There’s a quote there on the right hand side from John Steppeck, who Used to be the editor of money we can. He’s moved to Bloomberg now, saying there are many roads to ruin in the market some of the Long and others but one that basically a surefire way to have low returns is to set out as a buy-and-hold investor I In an investor and then try to turn into a market timer at times like these. That’s how. That’s how you’ll have lower returns. And just to um. I’ll unpack that on the next slide, but just before we do so, why is it really important to ignore the news, which is all part of my point about investing? Investing is something you do regularly, every month. It’s about admin. You do it every long period time and you’ll have a large amount of money, and in doing that, you must ignore the news, as I said at the beginning of the presentation. And why is that? Because of a thing called the availability heuristic, and that is a cognitive bias established by, you know, psychologists. And so, basically, news is about things that happen, not things that don’t happen. Human beings focus on Things that happen, not things that don’t happen, and that sounds a bit ridiculous. But it’s important because it’s not newsworthy that the world economy has grown from kind of 35 trillion US dollars of aggregate GDP to 100 trillion of aggregate GDP in the last 20 or 30 years, because it’s gradual and it happens over time. That’s that’s not a news story. A Crash, a stock market crash, is a news story and you know so. In the last three years, there’s been endless coverage of COVID and endless coverage of Ukraine this year, but there’s never a headline that says that the UK stock market has created a trillion pounds of value in the last one since 2009, or, as I say, the world economies grown massively in the last 15, 20 years. Because the availability heuristic and because Editors like to say if it bleeds, it leads, our media Truly focus 99 plus percent of their attention on the naught point, one percent of bad things that happen in the world. And that’s really relevant to investment. Because I mean, if you go to the pub this afternoon and talk to some random people in a pub that you might meet and say, what are your, what’s your first thoughts on the stock market, the, the word that most people commonly associate with stock market is that it’s risky, and the reason that they think that they think stock market investment Is risky is because of this, because the the only time the newspapers ever, ever talk about the stock market is when it crashes, and that gives everybody a very, very full sense of the merit of long-run investment. And then a couple of quotes on the right-hand side there. But you know, basically making that point, particularly Bill Clinton saying follow the trend lines, not the headlines, and the trend line, the most important trend on his human progress and the fact that will deliver you really good returns. So you’ll be relieved to hear I’m two slides from the end now, guys. So you can, you can have a break from me bleating away very shortly. But, um, so what does all that mean for investment? Well, as I said earlier, you know, from 1872 until December of last year, the S&P the biggest in, you know, stock market index of the world’s done north of 9% and that would be enough to make you a millionaire. Over 20 to 40 years of steady investing, with pretty small numbers actually and I can’t remember the stats, but a couple maxing their ice, that can become a millionaire at those sorts of rates of return in it’s eight or nine or ten years. It’s not very long actually. Um, I’m not sure if you can see that in the video, but I’m not sure. I’m just wondering if you can see that in the video, but nobody’s making those returns. Because of the invest, investing and trading and ignoring the news points I made, most investors are making about 5%. The reason is that because they don’t ignore the news, they don’t automate, they don’t stick to their guns. They sell at bottoms and they buy at tops because they’re always constantly trying to time the market. And if you time the market, you reduce on average, your potential annual returns by about 4% and over a lifetime of investing that has a massive impact on your ability to become wealthy, which is why I’m really really stressed this point about ignoring the news and regular investment over a lifetime. And then the other point is that so that’s investors, but actually a very small percentage of the population are investors. Something like only 10% of people knowingly invest in the stock market without you know every. A lot of people are invested in the stock market through their pension, but very few people actually knowingly do it thoughtfully. So most people particularly in Britain, where financial literacy is particularly bad and most people never learn about it and stuff most people are making as little as 2% because they’re in a cash isa. They’re so frightened because of the news and because of listening to the news and, oh, you know, everybody always comes on to me and says you know I loved your book, it’s great, and wanting to invest is now a good time. Because of Ukraine, covid, libyan refugee crisis, you know Syria. There is always a reason for people to want to not invest and the answer is always ignore that and invest from. The best time to invest is always right now and for the rest of your life, and ignore all that nonsense. And so most people don’t do that. Most people are in cash, in a cash isa or whatever, because they’re so fearful of investment. They only have a whole cash and particularly with interest. With inflation at 10%, you know you’re real. You are. If inflation is at 10% and interest rates at 2%, you’re losing 8% of real wealth every year, and that’s the position that so many people are in, which is why so many people are struggling cost of living crisis, finding it difficult financially without really understanding why. Because, as John Maynard Cain said, not one man in a million truly understands inflation. I think that’s probably a little bit punchy is probably more than 66 people in this country understand inflation, but not that many. He really understand it properly and really think in this way, and you know, very few of our politicians for sure, certainly not Liz Trasse has demonstrated in the last few weeks. But you know, neither did Gordon Brown. Gordon Brown sold our gold reserves at an all time low. You know, it doesn’t matter what stripe of government there, most politicians are very, very financially literate, and indeed so are most of our, many of our mainstream journalists, because I very seldom see this stuff discussed in the press. But you know, the antidote to that is to know that investing is crucial for everyone, and investing regularly, each month, over time, will get you a great result. So just to summarize, I love that quote on the right hand side, which is blocked by this little window, but it’s in terms of this idea about human progress. Thomas Babington Macaulay, a Victorian political philosopher, said by what principle is it that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us? And so you know, if you, if you believe in human progress, you believe we’re going to carry on getting wealthier. And you know, innovating and having magnificent new products and and actually a lot of that innovation is going to roll back environmental degradation and really sort out the world and sort of sort, all of our big intractable problems, because I think we have exponential problems, but exponential problems have exponential solutions. A wide, a good variety of most major assets in most major geographical regions. Focus on investing, invest direct debit each month from the minute you can until the minute you’ve got a lot of money, and be patient, ignore, believe in human progress, ignore the news and that fundamental approach to such things, unlike many others. Crucially, it means you can be very relaxed about life and get a good night’s sleep and have confidence in your future, and that you’ll be delighted to hear. Sorry, it’s slightly longer than I said, but that’s there you go. That’s what I wanted to say and I’m delighted to be challenged and told I’m speaking nonsense and answer any questions you might have.

Dr James : 

Thank you so much, andrew. That was extremely enlightening and I think we all go, andrew, run for pause. Thanks for turning up despite repeating my friends.

Andrew: 

Actually, james, I forgot to say I meant to say at the beginning and I forgot. I’m really sorry I’m not in there in person, because it is much better in person, but I’ll show you, just for amusement. I got back to my train station, my local train station, tuesday night ago, actually, after a day where James and I had seen each other this entrepreneur’s, a Brent in London and the train, as the staff at my local station had managed to lock all of the exits from my train today. So I was like everybody was meeling around trying to find a member of staff to unlock the side gate and let us out, and I was. Basically I thought I can jump over the fence, which I could do when I was 17 and 27, but apparently I can’t do now. I’m 47. It’s quite a painful weekend last weekend, but anyway, that’s why I’m not there, with apologies.

Dr James : 

I’m super appreciate it that you can come today virtually and give them what happened. Let me thank you for that presentation and, yeah, all of the stuff aligned with what we talked about on the finance, and you can tell that Andrew is on the inspirations for me for the course. It was absolutely very first book I read on finance. Everybody read it.

Andrew: 

Oh, wow, so you didn’t need me to just waste 40 minutes of your time.

Dr James : 

I can imagine that. Anyway, does anyone have any questions that they’d like to ask?

Speaker 1: 

When do you have teams with one?

Dr James : 

station.

Andrew: 

The teams. Hang on. Sorry, I can’t see the question at all here, just getting this microphone.

Speaker 1: 

This is a small question there.

Dr James : 

Can you hear it already?

Andrew: 

We haven’t delivered it to the publisher yet, so it’ll be published. I hope it will be published about halfway through next year, but it’s quite exciting. So I’ve written it with a seven. Well sorry, they were 17 and 15 when we 16 and 14 when we started on the journey and they’re now 18 and 16. It’s been a while, and guys going off to university in the States and Yanni’s actually just got a contact with the premiership football team, so that could be quite interesting. But yeah, I’ve written it with two teams and it will be published next year, hopefully with some fanfare. And you know we’ve got a cartoonist drawing but it’s quite difficult. We’re hoping it will be really palatable for teenagers and young adults because it’s got lots of breakout boxes and explanations and definitions and sort of cartoons as well, or cool hieroglyphics and pictures, rather than the rather dry version that you’ve all endured for adults. So sorry, that’s a very long answer. Next year. Basically, give us six months.

Dr James : 

Awesome. Thank you so much, Gareth. Thanks for that. A lot of these options in these things are based on population growth continuing.

Andrew: 

I do think it’s a whisper into the slowdown in the rate of population growth. Does that concern you in?

Dr James : 

our lifetime, or is that?

Andrew: 

something way off of no, no, because it’s you’re right, it will be one. You know, what would be lovely is if I mean you obviously will be aware, because it’s interesting A lot of people worry that population growth is going to explode upwards and just you know that’s going to cause the end of the world and environmental degradation and war, famine and pestilence and the fall horseman of the apocalypse. But actually the smartest thinkers in the world, people like Kevin Kelly, who founded Wired magazine, and lots of, lots of others, have identified that actually one of our challenges economically will be a decline in population, probably, probably from about 2040 onwards. It’s very hard to predict these things. I don’t worry about that in terms of the economic paradigm, because why it hopefully means is roughly now the average person in the world, very, very, very, very roughly and these numbers are hard to get accurately but has about 10,000 US dollars a year. So in the developed, in the wealthiest countries in the world, like Singapore or Switzerland, you know it’s 60 or $70,000 a year GDP per capita. In the poorest countries in the world, like Chad, or you know Paraguay, it’s kind of between 500 and 1000 US dollars a year, but across the whole world it’s about? It’s about $10,000. And that numbers been going up fabulously because of, you know, china and Indonesia and all these places that have been developing economically since the second war. Or, in particular, wouldn’t it be marvelous if, 50 years from now, there are 4 billion people in the world, and not because there’s been a massive apocalypse, to be clear, just because there’s been a gradual, you know, the replacement rate of children has not exceeded what you know. We’re not growing exponentially and more, and those 4 billion people will have a $250,000 a year lifestyle. So so you know that that is a future that I think is eminently possible. I talk about being a race between Mad Max and Star Trek quite a lot, and to me that’s a Star Trek outcome. You know, the Mad Max outcome is a dystopian horror show where we’re all fighting over scarce water and riding around in souped up cars with, you know, whacking each other with chainsaws, but I think the much more. I genuinely believe that population growth will start tailing off, which will be marvelous for fish consumption, agricultural degradation, you know, the Amazon, etc. Etc. But that we will get better as a society, allocating and allocating on merit wealth, creating wealth and allocating wealth, and we’ll all have a smaller population of much wealthier people and I think that will happen. So I hope that answers your question.

Speaker 1: 

Thank you, Sorry, you’re back to me. What do you think about the risk of actually the government waiting inheriting tax and pensions?

Andrew: 

Sorry, I’m struggling with the government being able to tax.

Speaker 1: 

Inheriting tax and pensions.

Andrew: 

Well, I’m a small government libertarian, so my basic position on all such things is the government do most things really badly and probably should do as few things as possible as a society. But unfortunately our political system is like Winston Churchill said, that democracy is the worst form of government ever invented, apart from all of the other ones, which I always thought was quite amazing. But I mean, yeah, I think there’s a risk that you probably know, Argentina nationalized private pensions in 2008. And actually that struck quite close to home to me because I’ve got quite a few kind of middle class Argentinian friends just from when I lived in New York and they lived near me in New York and we all became mates and you know their parents and they had spent years diligently saving into private pension schemes and overnight the government just took all the money. Can you imagine what that must feel like? I mean, just, you know, after 30 years and they would date the government said that was for the greater good. Now, will that ever happen in Britain? Let’s hope not. But you know, the bigger the more, the more tricky the state of the government’s finances, the more there is a risk that those sorts of policies happen. So, yeah, sorry, I’m probably not answering your question very well, but I think the less government takes from its populace the better, because the private sector tends to drive far better outcomes and far more effective outcomes than the public sector, In my case, based on the evidence of, I think, a couple of centuries of history, with exceptions. The government has to do law and order and the government has to do the defense of the realm, obviously, but to protect yourself against the risk that a future government, of whichever stripe, might either nationalise pensions or at least tax them much more heavily again. That’s why I think you just have to be financially literate and make sure that you have a good mix of things in a good mix of places, so that you, you know unlike a couple of my Argentinian friends, parents who literally just lost their life, their life’s work, overnight and have really struggled since you know you have some stuff, you have different things in different places and you don’t have all your eggs in one basket. That’s at risk of the government nicking it. Was I answering your question there or was I answering the question I chose to her here?

Speaker 1: 

Oh, yes, yes.

Dr James : 

Thank you.

Speaker 1: 

Question for here.

Andrew: 

You talked about your new biotech portfolio that you’ve been going online to. If you were to want to invest in the over the worlds and biotech, what sort of, what sort of split between the two of those would you think would be ideal? Sadly, I genuinely can’t answer that question because it’s the so personal financial. In order to answer that question, I’d need to know how big your mortgage is, how much debt you’ve got, what your attitude to risk is, whether you’ve got any kids, how much you earn, what your plans are when you want to retire, how much you know it’s never appropriate If anybody, if anybody else tells you you know, if you say to somebody I’ve got 100 grand and they tell you what to do with it, you should run a mile Because they, you know, you have to know the granular detail of somebody’s personal circumstances. And then I was going to say can I give you? No, I wish I could. I mean you know the the on you, on you, it we’re floating company on the London stock market is an investment company, so obviously all the money goes into the company then that all that money goes out to be invested in. So it’s like, like Scottish mortgage is investment trust, which many of you know, and it is going to be a risk factor, five out of seven. So it’s, it’s, it is notionary, a risky product. So you know it’s certainly don’t put all of your money in it, that’s for sure. But but you know that those decisions about whether you think it’s x percent or more than x percent, I’m afraid I can’t, I can’t give a steer on, obviously, you know, do please. So the website is going to be CLSC, clsc, dot UK, not dot code UK, just dot UK, and it will hopefully be up in lights in the next few days and it will. It has everything prospectus, key investor document, like all the legal documents and everything, all the risk factor saying run a mile, don’t invest in this which the government forces you to put on things like this. I’m super. Yeah, do you have a look? Thank you for the question, by the way. Thank you, thank you, any more questions.

Dr James : 

Yeah, thanks, thank you.

Speaker 1: 

Thank you so much. I just wanted to say a big thing what you’re saying. It is really simple Don’t listen to the news, just automate it and invest and forget about it, and I think that’s really some advice, but it’s really hard to do. It’s the latest book about the entry into the art too, but something that I’ve wanted to make it into migrants, really financially illiterate, and as soon as I started to learn about finance, it really opened my mind and I was like why the fuck did I never talk about this? So I’ve come 40 this year and it’s only during the last four or five years I’ve come into money and sort of had that willingness to learn. And my question really is and it’s great to hear that you’re coming out with a book for children and teenagers, because that’s where the education should be tried to educate our youngsters so they grow all better. So how do you see we can be better at educating our youngsters? Hopefully I’ll be able to educate my kids, but how can we get into schools, educate them more publicly about the importance of saving and understanding the beauty and the wonder of company?

Andrew: 

Yeah, well, that’s a great question and it is genuinely a mission of ours. I mean, in a small way, I went to Birmingham University, right, and I went back to Birmingham University in February and March of this year and presented to quite a big group of students in the old big hall in Birmingham. And I hope that I’ll go back next year and present it even more, because I was a bit of an unknown about who’s this boring bloke from the city who’s coming back, who was here before I was born. It was a bit freaky to realize it wasn’t quite, but you know, 97, I left Birmingham and I’ve done a bunch of secondary school assemblies, and so for my, the question, for my own part, is if I do things right and things go well and my profile raises off the back of this IPO. We’re doing anything else, you can be assured, and obviously, with the publication of the book for teenagers next year, we’re hoping that there’s a chance of a collaboration with the Premier League, because you know, yeah, the teenager who helped co-writer is, I don’t know. He’s got a what’s it called a academy contract where one of the premiership seems, but he may become a fully fledged player and they’re very concerned about financial literacy amongst their players, for the reasons I talked about earlier and lots of young players earning far too much money and not doing the right thing with it. And we’ve also got potentially got a collaboration with the FTSE, the Financial Times Financial Literacy Inclusion Campaign, the FT Flick, f-l-i-c, which is worth a look, and the FT are putting a lot of money into that and trying to spread. You know, spreading financial literacy amongst younger folks, secondary school kids in particular, is one of their core focuses. And I just think you know, over time, you know we’re a small stone in the pond, right, our business, and we’ve got an audience of X. You know it’s well, it’s about 14,000 in our email list and a bit more on social and whatever else, and that’s growing and we’re about to start spending money on advertising. But I do think that these, I like to think that a lot of these ideas are so kind of compelling. I mean, you guys are all sitting here on a Saturday morning and we’re having this conversation, right. I think there’s a lot more of it. There are a lot of groups out there in the world. It’s becoming more ubiquitous. People are more interested, millennials are more interested and in terms of how you actually talk to your kids. I think I think the key thing, really beyond everything else, is just say look, because I think one of the biggest problems with kids is they get really excited about like crypto. They want to mine crypto and they want to do trendy stuff. They want to play. They want to get paid for playing video games right, they don’t want to invest in, like the S&P 500. What’s that, dad? That’s boring, right. But if you could, just if all of us can somehow just explain to our kids well, just do this thing, this really boring simple thing, with this small amount of your money forever from now, and just trust me, just do that, then you can do whatever you want with the crypto and the whiz bang and the whatever with the rest of what you do, and do this little small thing with 5% of your money from now and do that for the rest of your life. And if we can all convince our kids to do that and you know, indeed, I mean obviously I put money into my kids junior ISAs every year, right, and I mean one of my friends, a fund manager, and he’s quite a clever guy he’s been putting the max of the junior ISAs into his kids ISAs and they are 6 and 3. And between them they’ve got something like literally like a large six-figure sum in their ISAs because he’s bought like two or three companies that are up like 20X. I mean, he’s like he’s complete luck and he smashed the lights out. But you know, those kids are going to wake up on their 18th birthday and have, like I don’t know, by then, 300 or 400 grand in their junior ISAs and, to be clear, he’s only investing nine grand a year or whatever. It used to be four and a bit grand a year for the first year or whatever. So that’s a bit of a spurious example. But I think if we, if we all invest a little bit for our kids every month even the market rates of return I contributed an article to the mirror a few years ago called how to Give your 18 Year Old 200,000 Pounds on their 18th Birthday, and the argument there was just like you max their junior ISAs every year and you make market returns in a bit and they might have 200 grand on their 18th birthday, of course then you’ve got to stop them from spending on whatever 18 year olds want to spend it on Cars, clothes, whatever. But anyway, sorry that was a typically long and rambly answer by. I hope it’s fading.

Dr James : 

That’s cool. Thanks so much, andrew Guys. Super, super, super grateful that Andrew can join us today. A massive round of applause.

Andrew: 

A massive honour to be asked, mate. Thank you very much. I look forward to seeing you soon. No other questions.

Dr James : 

One more sorry. Thank you again for your presentation.

Speaker 1: 

This is a somebody who knows it’s important to be financially literate, but not quite there yet.

Dr James : 

So in the past I’ve looked at investing in.

Speaker 1: 

You know human progress, but I’ve done it to provide shares in my trading ISA account, whereas you mentioned investing in assets and not trading. What’s the difference in? What am I doing there? I was in this company, but I’m actually I’m just trying to share it and we can do trading and it does better. I want to sell.

Andrew: 

So wait, did you invest in single shares, Like did you choose to invest in Apple, or how did? What were you investing in? You know about the technology yes, but yeah, so it’s all about pots, and everything I’ve talked about today is the first, most fundamental pot, which, let’s say, you can save and invest 10% of what you earn every month. Right, that’s the most important part that if everybody does a half decent job with that from the age of 30 to the age of 60, they will do very well, right, just trying to make close to market returns and save 10% of your income every month, particularly if you’re a professional where your income might be 30 grand at 30 and 100 grand at 60, right, or whatever, and you’re on a journey, a trajectory, where your income goes up. So what I’m talking about here is the pot that’s not about single stocks and is the invest, not trade, side of things. Because, to be clear, I think single stock investment, choosing single companies, is basically a trading activity, not an investing activity, because to do that successfully, you have to really understand what an EV EBITDA ratio is, or a PE ratio, or a Return on Capital Employed or Return on Invested Capital, or you need to know what the management of you, you need to know whether the hedge funds are shorting the shares. In my second book, I produced a big, long laundry list of things you should know and understand before you ever invest in a single share Right. What I’m talking about in terms of owning human progress, which I’ve written in my second book in Live on Less Investor Rest, is all you need to do is own a big index and whether that’s the S&P 500, which is the big American one, or probably more helpfully, for the next 20 or 30 years, because, who knows, america’s been the dominant hegemonic power for the last 80 years since the end of the Second World War. We don’t know whether that will continue, so it’s probably easier to own something called the MSCI world if you want to own the world, that’s the 1600 biggest companies in the developed world. There’s the MSCI All World, which is 3000 plus companies, which includes a lot of developing world companies. And you know, we don’t know the next Apple might be a Brazilian company or an Indian company or an Australian company. We don’t know whether that American exceptionalism will continue. But that having been said, the S&P 500, a lot of the earnings of companies in the S&P 500, are global right, because Apple obviously sells a lot of iPhones outside of the States and Exxon sells a lot of oil outside of the States and Ford sells a lot of cars outside of the States. So the S&P 500 or the MSCI world give you the equity exposure to owning the world and you’re the proud owner of hundreds of companies if you buy either of those things, right, so you don’t have to think about it. You don’t have to think about will this company, will Apple, go up or down sideways. You just own the market which, as I said, is making 9% this year for the last 130 years or whatever. It is More than that 150 years. But then the point. So that’s the equities bit. But then it’s really important to understand what to do about the real estate, the commodities, the cash and the bond bit and the right ratios between those. But that’s not as difficult as it sounds. And if you want to unpack it a bit more, have a look at my second book, live Unless Invest the Rest, which gives some sort of tangible ideas about how you think about that, particularly with that idea of 100 minus your age, but a lot of very wealthy people. If you’re lucky enough to figure this stuff out when you’re young and you have time on your side, there is a very purest school of thought that just says all you ever need to do is buy the S&P 500 or the MSCI or the market. You don’t need to worry about commodities or because of equity drawdown. If you get to a point where you’ve got quite a few million of dollars, pounds, euros, whatever by the time you say 60 and you stop working, even if there’s a 50% correction, let’s say you have $4 million now you have $2 million, but your life costs you $100,000 a year, let’s say it doesn’t matter, in the next few years it will bounce. So for very wealthy people you can just be an equity purist. But that’s actually relevant to relatively few people, because if you get to a million, let’s say in a 50% correction of your 63, and then one year you’ve got a million and the next year you’ve got half a million, that’s very stressful and you’re going to think, oh my God, how am I going to fund the rest of my life and my dependence and everything else when I’ve just I’m down half a million? So that’s why it’s really important to have this weather on 100 minus your age, to ensure that the closer you get to retirement, the more risk off you are. But the younger you are, the more risk on you are. So sorry, it’s all explained in my book and it sounds a bit complex and nuanced, but it’s not that difficult and it’s quite an elegant approach, I think. Thank you, I hope that helps.

Dr James : 

It certainly does, Andrew. Once again, thanks for joining us today.

Andrew: 

Thanks guys, I’ll ring off then. Thanks, James.

Speaker 1: 

Thanks for your time good to see you Speedy recovery, get here in the flesh this time, yeah.

Dr James : 

All right, bye guys, In a bit, my friends, See you soon. Yeah, that’s good. So these things happen since Andrew’s on the screen you’re there, Andrew’s on the screen. We’re joined by Andrew. We’re going to be assisting Andrew. What happened?

Speaker 1: 

Andrew was on screen for a while and it’s a bit complicated. Yeah, what can I say? I forgot my cover is Andrew. What are you looking forward to today? So my name is Andrew and.

Andrew: 

I was a friend today at an associate’s group, so quite kind of big, kind of.