How to start investing—responsibly | Thomas Kehl | TEDxHSGSalon

Summary

The speaker contrasts their father's era of limited financial knowledge and costly investment advice with today's accessibility of financial education and low-cost investment tools. They emphasize the importance of self-education, skepticism towards financial offers, and learning from others' experiences to manage personal finances wisely. The speaker encourages embracing DIY money management, starting small, and applying knowledge to avoid common financial pitfalls.

Takeaways

• 💼 The speaker's father's first encounter with personal finance and investing was at 50, after which he made the mistake of investing in mutual funds with borrowed money, leading to significant losses.
• 🌐 The accessibility of the stock market for wealth creation is not limited to the ultra-wealthy; ordinary people can also participate and grow their wealth.
• 💡 The importance of financial education is highlighted, as the lack of it can lead to trusting faulty advice and making poor financial decisions.
• 📈 The speaker emphasizes that the best money manager is often the individual themselves, by making simple but smart financial decisions.
• 📚 A significant shift has occurred from relying on expensive seminars and gurus to freely available online resources and communities for financial education.
• 🌟 The Covid pandemic has catalyzed a new generation of young investors who are taking control of their personal finances and investing during market downturns.
• 💭 The speaker suggests that by following money trails and being skeptical of offers that seem too good to be true, individuals can avoid falling into financial traps.
• 🏦 The cost of financial products and services has significantly decreased, making it easier for individuals to start investing with small budgets.
• 🚀 The rise of ETFs and other low-cost investment vehicles has made market participation more accessible and cost-effective for individual investors.
• 💪 Encouragement is given to learn from mistakes in finance, as it is a natural part of the learning process and applying knowledge is key to improving financial literacy.

Q & A

What was the speaker's father's first experience with personal finance and investing?

The speaker's father's first experience with personal finance and investing was at the age of 50 when he attended an expensive money guru seminar and learned about investing in mutual funds.

Why did the speaker's father decide to invest in mutual funds?

The speaker's father decided to invest in mutual funds after being told at a seminar that even as a simple employee, he could become rich by investing in them, despite the high costs and often lacking promise of superior returns.

What financial disaster occurred due to the speaker's father's investment decision?

The speaker's father faced a financial disaster when he borrowed money against his parents' house to invest in mutual funds, and shortly after, the dot-com market bubble burst, causing his funds to lose value and forcing him to sell at a loss.

What questions does the speaker suggest people should ask themselves about their finances?

The speaker suggests people should ask themselves questions like: 'Where do I start with my finances?', 'Who's a trustworthy advisor?', 'How do I not lose money on the stock market?', 'How do I make my savings grow to close my pension gap?', 'How do I not mess it up?', and 'Is it even possible?'

How did the speaker's experience during the 2008 financial crisis differ from their experience during the Covid pandemic?

During the 2008 financial crisis, the speaker was watching the market crash on TV without any support or knowledge of how to behave in such a situation. In contrast, during the Covid pandemic, the speaker had a community and was actively producing content to educate and support others, and young people were seizing the opportunity to invest during the market drop.

What significant shift has occurred between the speaker's father's era and the post-Covid world regarding personal finance?

The significant shift is the rise of do-it-yourself money managers, where information is freely available, replacing costly seminars, and communities have stepped up where gurus once stood.

How has the accessibility of financial knowledge changed according to the speaker?

According to the speaker, financial knowledge is now freely accessible through platforms like YouTube, Spotify, and various educational content, making it easier for anyone to learn about finance.

What advice does the speaker give on how to avoid making financial mistakes?

The speaker advises to learn the basics, use available tools to get information, follow the money to unveil conflicts of interest, exercise skepticism, especially with offers that seem too good to be true, and not be afraid of making mistakes, applying what you've learned and starting with smaller budgets if needed.

Why does the speaker believe that the best money manager is the individual themselves?

The speaker believes that the best money manager is the individual because they can learn how to manage their finances themselves by following simple but smart decisions, utilizing the vast resources, abundant knowledge, and supportive communities available today.

What is the role of communities and platforms like Reddit, YouTube, and Discord in personal finance education according to the speaker?

According to the speaker, communities and platforms like Reddit, YouTube, and Discord play a crucial role in personal finance education by providing a space for sharing stories, experience reports, and case studies, allowing individuals to learn from others' mistakes and successes.