Transcrição completa de Democratizing Wealth Management: The Shift to Passive Investing and AI's Impact on Financial Decision-Making Today

32 00:02:14,642 --> 00:02:18,023 So today you've got me, and here it is. This podcast is for information 33 00:02:18,609 --> 00:02:21,895 and entertainment only. Our views are our own, not those of anyone we 34 00:02:22,466 --> 00:02:24,608 work for, and none of it is financial advice. 35 00:02:25,000 --> 00:02:28,286 And fair warning, there is more real investment talk in this one hour 36 00:02:29,615 --> 00:02:32,949 than we usually allow ourselves. So if you take three former Schroders 37 00:02:34,297 --> 00:02:37,916 men pontificating on a podcast and turn that into your own actual portfolio, 38 00:02:39,374 --> 00:02:41,755 that's on you, not us. Stay smart. Now, these two. 39 00:02:42,736 --> 00:02:45,451 I am not going to introduce my two guests the normal way, 40 00:02:46,560 --> 00:02:48,275 because normal would bury the point. 41 00:02:49,000 --> 00:02:52,476 These two men once sat on the same floor as me inside the same old house. 42 00:02:53,473 --> 00:02:56,711 Then they walked out of the same door and turned in exactly opposite 43 00:02:57,643 --> 00:03:00,976 directions. One of them now spends his days telling ordinary people to 44 00:03:01,739 --> 00:03:05,501 ignore men like the other one. The other spends his days being very deliberate, 45 00:03:06,087 --> 00:03:09,468 the man you cannot afford to ignore once your wealth gets large enough. 46 00:03:10,000 --> 00:03:12,143 Tim Phillips, Zal Devitre, welcome to A to Z. 47 00:03:12,866 --> 00:03:13,866 Thanks for having me. 48 00:03:14,237 --> 00:03:15,237 Thank you so much. 49 00:03:15,421 --> 00:03:17,945 Tim, you have a delightfully confusing, uh, passport, 50 00:03:18,786 --> 00:03:22,072 right? So British father, mother from Hong Kong, raised in Hong Kong, 51 00:03:23,148 --> 00:03:26,291 A levels at the Island School in Hong Kong... Mandarin in Beijing. 52 00:03:27,323 --> 00:03:28,942 What was it? Uh, history at Leeds. 53 00:03:29,504 --> 00:03:30,600 History at Leeds, yeah. 54 00:03:31,000 --> 00:03:33,381 ...and then somehow you wash up in Singapore. Zal, 55 00:03:35,290 --> 00:03:37,956 uh, was sort of amazingly may even, uh, top that, right? 56 00:03:40,084 --> 00:03:43,084 So, uh, he comes from a Parsi family, so professional migrants, 57 00:03:45,467 --> 00:03:48,991 uh, unlike amateurs like us. Um, father who had a storied career at Philip 58 00:03:51,776 --> 00:03:55,252 Morris, which meant that you lived in departure lounges around the world. 59 00:03:58,000 --> 00:04:00,524 Um, went to school in Massachusetts, then Georgetown, 60 00:04:02,234 --> 00:04:05,520 then Columbia, and yes, again, here in Singapore, and we all ended up 61 00:04:07,122 --> 00:04:09,551 working for the same firm once upon a time. So Tim, 62 00:04:10,753 --> 00:04:12,991 in your words, what is it that you do nowadays? 63 00:04:14,105 --> 00:04:16,581 I create financial content for educational purposes, 64 00:04:17,805 --> 00:04:21,139 and I think I really identified a gap in the market for just measured, 65 00:04:22,763 --> 00:04:26,287 responsible investing content that really focuses on stuff that is simple. 66 00:04:28,000 --> 00:04:31,524 It's just boring. Investing shouldn't be something that's really exciting, 67 00:04:31,986 --> 00:04:35,366 but all the content out there right now tries to tell you that it needs 68 00:04:35,812 --> 00:04:39,145 to be exciting. It needs to be massive gains. But the slow and steady, 69 00:04:39,585 --> 00:04:42,965 the boring stuff wins. So I wanted to take that message that I had sort 70 00:04:43,411 --> 00:04:46,363 of learnt over the years in finance and try and bring that to, 71 00:04:46,758 --> 00:04:49,616 uh, the mass market, because I think anyone can invest well. 72 00:04:50,000 --> 00:04:52,905 They just need to have the right mindset, the right approach, 73 00:04:54,627 --> 00:04:56,008 and the consistency to do it. 74 00:04:56,866 --> 00:05:00,247 So you're Chasing Boring on the internet. You joined Avestar this year. 75 00:05:02,258 --> 00:05:04,020 Who are they, and what made you join? 76 00:05:05,118 --> 00:05:08,214 Avestar is a global multifamily office headquartered in New York, 77 00:05:10,086 --> 00:05:12,515 and we have offices in India and Singapore as well. 78 00:05:14,000 --> 00:05:17,381 We cater to ultra-high-net-worth individuals who typically have complex 79 00:05:18,829 --> 00:05:21,448 multi-jurisdictional lives, families, money, et cetera. 80 00:05:22,585 --> 00:05:25,823 So we really help them manage their investments across the spectrum, 81 00:05:27,213 --> 00:05:30,499 while also keeping a keen eye on their tax and estate planning needs, 82 00:05:31,909 --> 00:05:34,766 their legacy planning, really the full gamut of their lives. 83 00:05:36,000 --> 00:05:39,714 Awesome. So before we jump into talking about one of the favourite instruments 84 00:05:40,966 --> 00:05:44,490 of modern times, mutual funds, I wanted to just do a quick history lesson, 85 00:05:45,680 --> 00:05:49,156 because we love history on the show almost as much as we love technology, 86 00:05:50,331 --> 00:05:53,046 and I know you do too, Zal. Eighteen sixty-eight, London. 87 00:05:53,977 --> 00:05:56,977 Philip Rose launches the Foreign and Colonial Government Trust. 88 00:05:58,000 --> 00:06:01,333 Straight from the prospectus, "To give the investors of moderate means 89 00:06:02,938 --> 00:06:06,128 the same advantage as the large capitalists." Nineteen twenty-four, 90 00:06:07,810 --> 00:06:11,096 Boston. The Massachusetts Investor Trust makes it tradable every day. 91 00:06:12,826 --> 00:06:15,254 The modern mutual fund is born. Nineteen-seventies, 92 00:06:16,551 --> 00:06:20,123 the pension quietly dies. The risk of your old age slides off your employer 93 00:06:21,997 --> 00:06:24,759 and onto you. You did not get a vote. You got a portfolio. 94 00:06:29,686 --> 00:06:32,781 Nineteen seventy-five, New York. May Day kills

fixed commissions. 95 00:06:39,491 --> 00:06:42,491 Chuck Schwab halves his rates, and the discount broker is born. 96 00:06:49,000 --> 00:06:52,429 Nineteen seventy-six, the next year, Jack Bogle launches the first index 97 00:06:52,479 --> 00:06:55,240 fund to near universal ridicule. Two decades almost later, 98 00:06:55,290 --> 00:06:58,195 nineteen ninety-three, State Street lists SPY, the first ETF. 99 00:06:58,245 --> 00:07:01,102 A fifth of one percent, when active funds charged up to two. 100 00:07:01,152 --> 00:07:04,533 Today, the most traded security on Earth. Two thousand and twenty-four, 101 00:07:04,583 --> 00:07:07,869 the punchline. Passive overtakes active in America for the first time 102 00:07:10,274 --> 00:07:13,464 ever, nearly twenty-one trillion to eighteen. Over the last decade, 103 00:07:16,135 --> 00:07:19,421 only one in ten active US funds beat the dumb machine they were built 104 00:07:19,748 --> 00:07:23,177 to embarrass. One in ten. That is the world the three of us walked into, 105 00:07:23,516 --> 00:07:26,088 and the world we now serve from three different doors. 106 00:07:26,355 --> 00:07:29,593 We grew up in the mutual funds industry, or at least many of us did. 107 00:07:29,916 --> 00:07:31,678 Your reaction to this sort of change? 108 00:07:31,877 --> 00:07:35,258 Well, look, Aman, I mean, I think that the passive wave has really been 109 00:07:35,594 --> 00:07:38,689 irresistible, and I think it's been irresistible for two reasons. 110 00:07:39,000 --> 00:07:42,429 One is, you know, passive vehicles and investment products are typically 111 00:07:44,942 --> 00:07:48,323 lower in cost than actively managed products, and their performance has 112 00:07:50,802 --> 00:07:54,326 been just as good, if not better. So bottom line, net returns from passive 113 00:07:56,907 --> 00:08:00,526 investing have been for the most part better than active in many categories. 114 00:08:03,000 --> 00:08:06,381 Of course, there are exceptions. There are exceptions where active does 115 00:08:07,921 --> 00:08:10,730 outperform, but in many categories passive has done better, 116 00:08:12,022 --> 00:08:14,450 and the money goes where the performance is better. 117 00:08:15,576 --> 00:08:18,766 So we on the show talk about five primitives in financial services, 118 00:08:20,223 --> 00:08:23,461 predominantly in banking. Essentially, banks do five things for you. 119 00:08:24,417 --> 00:08:27,512 They help you see your money, move your money, borrow your money, 120 00:08:28,127 --> 00:08:30,746 and protect your money. But the one thing that they do, 121 00:08:31,275 --> 00:08:33,894 which both of you talk a lot about, is grow your money. 122 00:08:34,423 --> 00:08:37,090 That's sort of the combination of hope and greed, right? 123 00:08:37,627 --> 00:08:40,437 Like the other stuff is just hoping that you don't lose it. 124 00:08:41,000 --> 00:08:44,476 Greed, you guys sort of help people manage what they want to be and where 125 00:08:45,222 --> 00:08:48,841 they want to go. Tim, somebody comes to you with a hundred thousand dollars. 126 00:08:49,616 --> 00:08:52,949 It's half their net worth. And they've been sitting in fixed deposits. 127 00:08:53,667 --> 00:08:57,143 How do you... walk us through how you would explain they go about getting 128 00:08:57,889 --> 00:09:00,698 off that and getting onto presumably a different escalator. 129 00:09:01,885 --> 00:09:05,409 Tim: I think first off you kind of have to establish that every individual 130 00:09:08,033 --> 00:09:11,604 is gonna have a different risk appetite, a different investing time horizon 131 00:09:14,262 --> 00:09:17,786 as well. So if they are going to be investing for the next 20 to 30 years, 132 00:09:18,375 --> 00:09:20,994 that should be going into equities, right, effectively. 133 00:09:21,239 --> 00:09:24,143 But you have to be aware of people who are in their late 40s, 134 00:09:24,409 --> 00:09:27,076 50s approaching retirement and sequence of returns risk, 135 00:09:27,324 --> 00:09:30,133 et cetera, et cetera. There are lots of things to consider. 136 00:09:30,392 --> 00:09:32,773 So I can't just say, "This is a one-size-fits-all. 137 00:09:33,000 --> 00:09:35,524 Just go out and, like, lump sum it and buy, you know, 138 00:09:35,893 --> 00:09:38,321 global equities via an ETF." But for someone young, 139 00:09:38,679 --> 00:09:41,155 that's pretty much what the data says you should do. 140 00:09:41,518 --> 00:09:44,946 Because if you lump sum it, technically that beats dollar cost averaging 141 00:09:45,429 --> 00:09:46,524 two-thirds of the time. 142 00:09:46,714 --> 00:09:47,714 How young is young? 143 00:09:47,786 --> 00:09:51,024 Someone in their mid-20s, 30s. I'd say if you're thinking about your 144 00:09:51,482 --> 00:09:54,863 time horizon, there's never been a negative 20-year return on a rolling 145 00:09:55,339 --> 00:09:58,577 returns basis for the S&P 500. So if you're thinking about the worst 146 00:10:00,000 --> 00:10:03,286 periods, yes, 2000 to 2009 it was negative. In the sort of '80s there 147 00:10:03,784 --> 00:10:07,403 was a negative period. But if you're thinking about 20-year rolling returns, 148 00:10:07,946 --> 00:10:10,755 never been a negative period in the history of the S&P 500. 149 00:10:11,189 --> 00:10:13,618 So you can use global equities as a proxy for that. 150 00:10:14,000 --> 00:10:16,667 It'll be positive. So if you've got at least 20 years... 151 00:10:16,717 --> 00:10:18,240 there've been dry spells, right? 152 00:10:18,290 --> 00:10:20,862 There have been dry spells. There've been flash lines. 153 00:10:20,912 --> 00:10:24,388 Yeah, there have been dry spells, but I think timing the market or trying 154 00:10:24,438 --> 00:10:27,819 to second guess when that dry spell's gonna be is just a fool's errand, 155 00:10:27,869 --> 00:10:30,536 basically. There's no point in anyone trying to do that.

156 00:10:30,586 --> 00:10:33,871 But you have to be responsible in how you approach allocating it when 157 00:10:33,921 --> 00:10:37,160 you're older, because of sequence returns risk. So I think there are 158 00:10:37,210 --> 00:10:40,495 lots of things to consider. But for someone young with 20 years ahead 159 00:10:40,545 --> 00:10:43,974 of them, that really should just go into a global equities low-cost ETF, 160 00:10:44,024 --> 00:10:45,119 and then just leave it. 161 00:10:45,169 --> 00:10:48,693 So, let's take that and let's go to Zal on this. Just asking for a friend, 162 00:10:48,743 --> 00:10:51,171 you know, somebody who comes to you saying they're, 163 00:10:51,605 --> 00:10:54,081 you know, got close to 10 mil. They're in their 50s. 164 00:10:55,613 --> 00:10:58,899 They've been massively, maybe not fixed deposits, they're hugely into 165 00:11:00,621 --> 00:11:03,383 bonds, but they need a little bit more yield. They've not, 166 00:11:03,886 --> 00:11:07,267 they wanna kind of retire in 10 years' time. How do you work with them? 167 00:11:08,795 --> 00:11:12,224 Well, what I'd say, Aman, is first of all, we begin with the first frame 168 00:11:13,773 --> 00:11:17,392 that Tim just talked about. Understand the client's investment time horizon, 169 00:11:19,023 --> 00:11:21,737 understand their risk tolerance, what their goals may be, 170 00:11:22,977 --> 00:11:25,739 what their needs for cash in the next couple years may be. 171 00:11:27,000 --> 00:11:29,714 And once we've done that, we then go to our second layer, 172 00:11:31,031 --> 00:11:34,174 which is really understanding their tax and estate planning needs, 173 00:11:35,688 --> 00:11:38,498 as well as where they are now and how we can optimise that. 174 00:11:39,859 --> 00:11:43,144 So for our strata of clients, that's a very important analysis to do. 175 00:11:44,724 --> 00:11:47,867 Once we understand really where tax and estate planning needs are, 176 00:11:49,381 --> 00:11:52,619 we then establish a plan for you, and only then do we actually place 177 00:11:54,177 --> 00:11:56,749 your assets into the right structures given that plan. 178 00:11:58,000 --> 00:12:01,333 So when we take that multi-stage process to investing for our clients, 179 00:12:01,383 --> 00:12:04,479 we really allow their money to grow well and grow most optimally. 180 00:12:04,529 --> 00:12:07,814 The final step we take is really choosing the actual instruments that 181 00:12:10,048 --> 00:12:12,810 go into each asset class. And here we may use some active, 182 00:12:16,288 --> 00:12:18,812 and we may use some passive, depending on the market. 183 00:12:22,000 --> 00:12:25,381 So, but I mean, if you're in the same situation, but you don't have 10, 184 00:12:26,347 --> 00:12:28,300 you have a million, you're kinda screwed? 185 00:12:28,883 --> 00:12:29,883 No. Not at all. 186 00:12:29,933 --> 00:12:30,933 How would you... 187 00:12:30,983 --> 00:12:33,412 I mean, they're not gonna have access to... I mean, 188 00:12:34,015 --> 00:12:37,110 I like to say this a lot when we talk about ultra-high-net-worth. 189 00:12:38,000 --> 00:12:41,333 I think people in their hundreds of millions, maybe they have a lot of 190 00:12:41,567 --> 00:12:44,996 tax, as Zal was saying, like cross-border issues that they have to think 191 00:12:45,234 --> 00:12:47,901 about. Trust businesses, and cross-border tax liability. 192 00:12:48,098 --> 00:12:51,146 So those are things that I think you really need to think about. 193 00:12:51,364 --> 00:12:53,983 For 99% of the people who have maybe, like, even 5 mil, 194 00:12:54,177 --> 00:12:57,463 10 mil, and they have one tax residency, they don't need to overthink 195 00:12:57,694 --> 00:13:01,122 it and overcomplicate it. I think this is... this is what we'll get onto 196 00:13:02,187 --> 00:13:04,663 later, but a lot of the products that are out there, 197 00:13:04,762 --> 00:13:08,000 they use complexity to disguise high fees. I always like to say this 198 00:13:08,115 --> 00:13:11,258 with investment products: complexity equals high fees in disguise. 199 00:13:11,371 --> 00:13:14,228 That is what it is. Because usually there's a story to tell, 200 00:13:14,335 --> 00:13:17,478 there's a narrative to weave, to tell you, "This is what you need, 201 00:13:17,591 --> 00:13:20,877 and I'm gonna tell you why," and I'm gonna weave a whole story around 202 00:13:20,927 --> 00:13:21,927 it. 203 00:13:21,977 --> 00:13:25,500 But is that true, is that true at the bottom of the pyramid and the middle 204 00:13:25,550 --> 00:13:26,550 of the pyramid? 205 00:13:26,600 --> 00:13:29,981 It's true throughout, I'd say. I mean, if you're an accredited investor 206 00:13:30,031 --> 00:13:32,460 in Singapore, I always say this, don't announce it. 207 00:13:32,510 --> 00:13:36,081 Don't tell people, don't tell your bank that you're an accredited investor, 208 00:13:36,131 --> 00:13:39,560 'cause all you're gonna get pitched to you is worse products than you're 209 00:13:39,610 --> 00:13:43,324 gonna get. Leverage, structured products, things that are not gonna outperform 210 00:13:43,374 --> 00:13:45,755 a global equities index tracker over 10, 20 years, 211 00:13:45,805 --> 00:13:49,281 pretty much. And so for me it's always simplicity equals optimal returns. 212 00:13:49,331 --> 00:13:52,760 But is that true? Like, I'll give you an example. Right now there's this 213 00:13:52,810 --> 00:13:56,381 trade, they're calling it the Indian carry trade. You know what I'm talking 214 00:13:56,431 --> 00:13:57,431 about? 215 00:13:57,481 --> 00:13:58,481 That's right. 216 00:13:58,531 --> 00:14:00,627 So, essentially, are you familiar with this? 217 00:14:01,191 --> 00:14:03,763 No, but tell me the story. I wanna hear the narrative. 218 00:14:03,813 --> 00:14:06,003 So actually, why don't you explain what the... 219 00:14:06,053 --> 00:14:09,053 Okay, look, from time to

time, you know, the Indian government, 220 00:14:09,103 --> 00:14:12,580 the Reserve Bank of India, feels that the country needs foreign exchange, 221 00:14:12,630 --> 00:14:15,963 and there are episodic periods during which, because they need foreign 222 00:14:16,013 --> 00:14:19,537 exchange, they actually give very attractive deposit rates to non-resident 223 00:14:19,587 --> 00:14:22,206 Indians. These may be Indians living abroad, et cetera. 224 00:14:23,047 --> 00:14:26,333 And these are actually not bonds, these are literally fixed deposits. 225 00:14:30,564 --> 00:14:31,754 Like 6% on the US dollar. 226 00:14:33,356 --> 00:14:35,737 Yeah. It's like the yen-dollar carry trade, right? 227 00:14:36,183 --> 00:14:39,469 Pretty much. It's just... with Indian money, and you can lock in your 228 00:14:39,578 --> 00:14:42,959 tenure, and you can actually get pretty attractive leverage from banks, 229 00:14:43,071 --> 00:14:45,642 because they understand, look, these are Indian banks, 230 00:14:45,739 --> 00:14:46,929 these are fixed deposits. 231 00:14:47,000 --> 00:14:50,524 Up to nine times, to give you, like, a 15% yield from what somebody was... 232 00:14:50,574 --> 00:14:53,955 What's the incentive? What's the incentive from the bank's perspective? 233 00:14:54,005 --> 00:14:57,243 For the bank it's a bit of a foolproof deal, because it's government 234 00:15:04,510 --> 00:15:07,938 backed. But I'm saying what is the fee incentive? This is something that 235 00:15:07,988 --> 00:15:10,369 we never talk about from the consumer perspective. 236 00:15:10,419 --> 00:15:13,181 Actually, in this case, is there... there is minimal fees. 237 00:15:13,231 --> 00:15:15,707 What the banks, again, correct me if I'm wrong, and, 238 00:15:15,757 --> 00:15:18,519 like, we're ganging up on you, like, bank gang. But the... 239 00:15:18,569 --> 00:15:22,045 I mean, they're getting deposits, right? They're getting tier one capital 240 00:15:22,095 --> 00:15:23,095 into... 241 00:15:23,145 --> 00:15:26,622 But if they're selling you leverage, really they're getting you something 242 00:15:26,672 --> 00:15:27,767 from that, aren't they? 243 00:15:27,817 --> 00:15:30,817 I think this is a very episodic case. And I think that every... 244 00:15:30,867 --> 00:15:33,438 this is a case where pretty much everyone makes money. 245 00:15:33,488 --> 00:15:36,107 And it's a case where the risk is relatively mitigated. 246 00:15:36,157 --> 00:15:39,395 You can never say there's no risk. In this case, the banks will make 247 00:15:39,445 --> 00:15:41,969 money on their lending spread. The clients will make, 248 00:15:42,019 --> 00:15:45,114 if they hold onto this for three years, a pretty handsome return. 249 00:15:45,164 --> 00:15:47,926 And, you know, the Indian banks will get foreign exchange. 250 00:15:47,976 --> 00:15:50,691 But this is a pretty unique scenario you've just painted. 251 00:15:50,741 --> 00:15:54,122 I digress. But let me come back. So Tim, let me ask you a really direct 252 00:16:00,874 --> 00:16:03,446 question, right, on this one, which is that, you know, 253 00:16:03,496 --> 00:16:06,829 if in gene sequencing nowadays you can edit a gene and you can sort of 254 00:16:06,879 --> 00:16:09,213 stop a behaviour, like, you know, diabetes off... 255 00:16:09,263 --> 00:16:11,453 Not yet there. I'll take that up when it does. 256 00:16:11,503 --> 00:16:14,741 But if you had to go to the banking gene and say, "Stop selling that 257 00:16:18,857 --> 00:16:21,429 product," what's the... I'll come to you on that, Zal, 258 00:16:26,714 --> 00:16:29,952 too, I promise. What's the one product you would say take it off the 259 00:16:33,291 --> 00:16:34,291 shelves? 260 00:16:34,341 --> 00:16:37,770 Structured products, structured notes. So I think basically what private 261 00:16:39,931 --> 00:16:43,217 banks hawk a lot of. I've seen a lot of people lose a lot of money in 262 00:16:45,599 --> 00:16:49,266 structured notes, in structured products. Sure, there may be niche situations 263 00:16:50,565 --> 00:16:53,041 where it can serve a purpose for hedging, et cetera, 264 00:16:53,091 --> 00:16:56,330 et cetera. But on the whole, I come back to the great Charlie Munger 265 00:16:56,380 --> 00:16:59,999 quote, "Show me the incentive, and I will show you the outcome." In banking, 266 00:17:00,049 --> 00:17:02,715 in the investment industry, it comes down to that quote. 267 00:17:02,765 --> 00:17:06,051 That's pretty much what it comes down to. Show me the incentive and I 268 00:17:06,101 --> 00:17:08,291 will show you the outcome. So things get sold. 269 00:17:08,341 --> 00:17:09,341 Why? 270 00:17:09,391 --> 00:17:10,391 Pricing. 271 00:17:10,441 --> 00:17:13,013 Got it. Fees. That's the one you would take off. Okay, 272 00:17:13,063 --> 00:17:14,063 Zal? 273 00:17:14,113 --> 00:17:17,827 Look, having spent quite a few years in the retail banking space in Singapore, 274 00:17:17,877 --> 00:17:20,306 I actually agree very much with what Tim just said. 275 00:17:20,356 --> 00:17:22,737 The product I'd choose is a dual currency account, 276 00:17:23,639 --> 00:17:27,210 or premium accounts, as they're often known. These are essentially accounts 277 00:17:29,875 --> 00:17:33,304 which have options embedded in them, which then give you enhanced yield, 278 00:17:34,292 --> 00:17:36,911 and you may then get delivered an alternative currency. 279 00:17:37,680 --> 00:17:40,632 I've watched clients invest in these sort of across the cycle, 280 00:17:41,491 --> 00:17:44,205 and invariably they lose or make very, very little money. 281 00:17:45,000 --> 00:17:48,095 So, in some respects, what you're saying is that actually it gets 282 00:17:50,103 --> 00:17:52,532 overcomplicated, but if they've got a good advisor, 283 00:17:54,124 --> 00:17:57,457 they can actually... it's a bit better. But what you're saying is that 284 00:17:59,613 --> 00:18:03,042 your

individual investor really doesn't have anybody who's incentivised. 285 00:18:03,092 --> 00:18:06,425 In your case, at the top end of the customer, they are actually paying 286 00:18:06,475 --> 00:18:08,999 for advice, and it's a clearer, cleaner relationship? 287 00:18:09,049 --> 00:18:12,335 No, I think what I was saying, Aman, is there are some products that, 288 00:18:12,385 --> 00:18:14,813 for the most part, I would avoid. And in this case, 289 00:18:14,863 --> 00:18:17,530 I actually would almost invariably, almost all the time, 290 00:18:17,580 --> 00:18:20,723 avoid a dual currency investing. Once in a while, once in a while, 291 00:18:21,545 --> 00:18:24,545 it may be appropriate, because you may actually want to take... 292 00:18:26,748 --> 00:18:28,605 but the problem is knowing when that... 293 00:18:30,000 --> 00:18:33,000 Exactly. And the problem is doing it episodically and stopping. 294 00:18:33,413 --> 00:18:36,747 And that brings... so this brings me to the next area that I wanna go, 295 00:18:37,200 --> 00:18:40,438 'cause I'm sort of raring to go there, is that I've worked in retail 296 00:18:40,880 --> 00:18:43,356 banking, private banking, and then asset management. 297 00:18:43,707 --> 00:18:46,278 And one of the challenges I have, and is, as you said, 298 00:18:46,640 --> 00:18:49,592 Tim, the incentives. I mean, they're good people running this. 299 00:18:50,000 --> 00:18:52,429 I was literally in a retail bank in India recently, 300 00:19:00,964 --> 00:19:04,202 and I was walking out, and the person literally came to me and said, 301 00:19:05,120 --> 00:19:08,501 "You know, sir, could you buy a mutual fund? I need to meet my year-end 302 00:19:09,458 --> 00:19:12,982 target." It's like... I'm sticking with India, but this is true elsewhere. 303 00:19:15,191 --> 00:19:17,762 There is, you know, people going to elderly parents... 304 00:19:19,517 --> 00:19:22,945 before this call, we had my mom calling me, telling me that there's this 305 00:19:25,258 --> 00:19:28,497 RM telling her to invest in something because somebody else is doing 306 00:19:30,685 --> 00:19:33,066 it. How do we fix that? How do we fix that system? 307 00:19:34,048 --> 00:19:37,429 Because you can't have access to sort of like Zal until you've made it, 308 00:19:38,717 --> 00:19:42,002 unless you become his friend, which kind of works out for some of us. 309 00:19:43,256 --> 00:19:44,494 How do you reconcile that? 310 00:19:45,007 --> 00:19:48,245 I think it's education. I think first off you have to establish that 311 00:19:49,481 --> 00:19:52,434 in Asia the distribution model is really focused around banks. 312 00:19:55,140 --> 00:19:58,807 Like, they distribute the products, and it's a very product-centric ecosystem 313 00:20:01,022 --> 00:20:03,832 in Asia, and I think that's just the history of the market. 314 00:20:03,882 --> 00:20:04,930 Isn't the US the same? 315 00:20:04,980 --> 00:20:08,218 I think the US does

a lot more RIAs, registered investment advisors, 316 00:20:08,268 --> 00:20:10,744 who have fiduciary duty to give you the best advice, 317 00:20:10,794 --> 00:20:14,365 et cetera, et cetera. And it's not really driven by commissions and trailer 318 00:20:14,415 --> 00:20:17,653 fees, but I think in Asia the ecosystem is very much driven by that, 319 00:20:17,703 --> 00:20:20,989 and that's just the way that it's set up. So I think trying to change 320 00:20:21,039 --> 00:20:24,563 that, and trying to get it through the regulatory system and the political 321 00:20:24,613 --> 00:20:27,946 capital required to do that, is just... there's a much bigger question 322 00:20:27,996 --> 00:20:28,996 to ask, right? 323 00:20:29,046 --> 00:20:31,856 'Cause whenever I talk to people in the industry they said, 324 00:20:31,906 --> 00:20:35,239 "People in Asia don't wanna pay for advice." That's something you hear 325 00:20:36,606 --> 00:20:39,035 again and again. So like, lie to me about the fees, 326 00:20:39,819 --> 00:20:42,104 but don't tell me that you're charging it to me. 327 00:20:42,846 --> 00:20:46,084 But, thinking it from a government perspective, how are you going to 328 00:20:47,108 --> 00:20:50,060 transition from a commission trailer-driven model to fee only, 329 00:20:51,000 --> 00:20:54,524 and have a lot of people still employed? It's a very difficult transition. 330 00:20:54,574 --> 00:20:57,098 So I think that's a really difficult question to ask. 331 00:20:57,148 --> 00:21:00,576 So I think for consumers, the best you can do is really educate yourself 332 00:21:00,626 --> 00:21:03,245 on the options, which is part of what I'm trying to do, 333 00:21:03,295 --> 00:21:06,724 is just say, if you wanna go to the bank and see an ILP in front of you, 334 00:21:06,774 --> 00:21:09,155 or whatever products in front of you, that's fine. 335 00:21:12,000 --> 00:21:15,476 They give you their pitch, but I wanna give you the pitch of the low-cost 336 00:21:15,544 --> 00:21:18,782 pitch, the investing pitch for ETFs, because no one talks about that 337 00:21:18,848 --> 00:21:22,229 stuff, because it doesn't make any money. If, unless you're an iShares, 338 00:21:22,296 --> 00:21:25,629 a Vanguard, a Spider, a State Street, you're the ones who can make it, 339 00:21:25,696 --> 00:21:28,934 because you have 10 trillion AUM and you're earning 10 basis points. 340 00:21:29,000 --> 00:21:31,571 Everyone else, they don't make money from that system. 341 00:21:31,913 --> 00:21:35,151 So I think for me it's more about education. Be aware of the choices 342 00:21:35,567 --> 00:21:38,329 that are out there. Look at the data, look at the history. 343 00:21:38,692 --> 00:21:41,215 I'm a history guy, but I'm a data-driven guy as well. 344 00:21:41,551 --> 00:21:44,075 I want to understand the data behind the performance. 345 00:21:44,411 --> 00:21:47,649 I don't wanna hear the story. I wanna understand what the data tells 346 00:21:47,699 --> 00:21:51,033 me. You're telling me, "This is a great story," but what does the data 347 00:21:51,083 --> 00:21:53,559 show me? Net of fees, what am I getting back, right? 348 00:21:53,609 --> 00:21:56,895 So, is... I mean, we've worked in the industry, are mutual funds like 349 00:21:56,945 --> 00:22:00,373 a no-no for all of you? Neither of you said mutual funds when you talked 350 00:22:00,423 --> 00:22:03,852 about a product you would take off the shelves, but you're sounding like 351 00:22:03,902 --> 00:22:07,283 it. Would you take a mutual fund off the shelf, or is there a situation 352 00:22:10,037 --> 00:22:12,466 where mutual funds make total sense? What are they, 353 00:22:14,654 --> 00:22:15,654 Zal? 354 00:22:15,704 --> 00:22:18,323 In my view, in my company's view, and in my experience, 355 00:22:20,070 --> 00:22:23,451 markets that are very efficient, look at the US large cap equity space, 356 00:22:25,836 --> 00:22:29,360 for instance, it's very difficult for active managers to outperform market 357 00:22:31,291 --> 00:22:34,529 beta, market ETFs, because they're very low cost, and it's just very 358 00:22:36,309 --> 00:22:37,309 difficult. 359 00:22:37,359 --> 00:22:39,978 And with super tight, well, for the moment, governance, 360 00:22:41,182 --> 00:22:42,182 so no edge. 361 00:22:42,232 --> 00:22:45,708 No edge. Now, there are markets, whether they be geographic markets where 362 00:22:47,513 --> 00:22:50,751 investing may not be as efficient, where there may still be edge for 363 00:22:53,414 --> 00:22:55,843 active management. I'll think of an India, a China. 364 00:22:57,862 --> 00:22:59,005 Indonesia on a good day. 365 00:23:00,000 --> 00:23:03,333 So typically we look at markets like that, or we may look at some very 366 00:23:03,383 --> 00:23:06,669 esoteric investment kind of strategies and asset classes where active 367 00:23:06,719 --> 00:23:10,100 also does make sense. But I agree with Tim, and frankly we embrace this 368 00:23:10,150 --> 00:23:13,055 philosophy ourselves, that for super efficient asset classes, 369 00:23:13,105 --> 00:23:16,390 we actually use ETFs and market beta, because that's the most optimal 370 00:23:23,101 --> 00:23:25,339 way for our clients to access that asset class. 371 00:23:31,000 --> 00:23:34,333 'Cause I found it really interesting in my one-year cameo at Schroders 372 00:23:36,845 --> 00:23:40,130 to realise that actually most mutual funds comprise of a large number 373 00:23:42,607 --> 00:23:45,321 of ETFs. It was sort of like a mixologist with your ETFs, 374 00:23:47,381 --> 00:23:50,762 and as we said at the top of the show, not only are they sort of mixing 375 00:23:53,308 --> 00:23:55,975 the drinks with it, they're chugging it, in many places. 376 00:23:58,000 --> 00:24:01,476 Zal, talk to me about private banking. You were in the wealth and private 377 00:24:01,526 --> 00:24:04,479 banking space prior to Schroders, with a fairly

storied brand. 378 00:24:04,529 --> 00:24:07,100 How is private banking any different from a retail RM? 379 00:24:07,150 --> 00:24:10,674 Are they just a better paid retail RM who serves you truffle oil to virtue 380 00:24:15,889 --> 00:24:19,222 signal instead of, like, taking you for a burger, and gets you tickets 381 00:24:23,090 --> 00:24:24,090 to the F1 race? 382 00:24:24,140 --> 00:24:27,092 Yeah, I mean, but again, going back to that lie-to-me thing... 383 00:24:27,190 --> 00:24:30,095 okay, so jokes aside, let's step back and take a big picture. 384 00:24:30,408 --> 00:24:34,027 I think if you look at the private banking model, it has been under pressure 385 00:24:34,405 --> 00:24:37,738 and ongoing pressure. Margins are being squeezed. The proposition that 386 00:24:39,333 --> 00:24:42,619 private banks could get access to very rarefied and exclusive product 387 00:24:47,111 --> 00:24:50,397 is no longer really the case, because there really is democratisation 388 00:24:54,889 --> 00:24:58,127 of access to even specialised private assets. The cost to serve that 389 00:25:00,307 --> 00:25:02,735 private banks have as well are very high, you know? 390 00:25:02,785 --> 00:25:05,404 So if you add all that up, the model is under pressure. 391 00:25:05,988 --> 00:25:09,559 Having said that, there are plenty of clients who actually still do benefit 392 00:25:12,757 --> 00:25:16,138 from private banks. However, I think that those that benefit again have 393 00:25:19,170 --> 00:25:22,170 to have specific needs that are being met. Needs, for instance, 394 00:25:24,669 --> 00:25:28,098 in the tax planning and structuring space, or even frankly needs to just 395 00:25:30,473 --> 00:25:32,520 control their worst impulses and instincts. 396 00:25:33,971 --> 00:25:34,971 And their children? 397 00:25:35,561 --> 00:25:38,846 Which would then benefit their children, because the money can last a 398 00:25:41,126 --> 00:25:42,126 long time. 399 00:25:42,176 --> 00:25:45,461 Yeah, I find that sort of the best private bankers seem to sort of be 400 00:25:46,961 --> 00:25:50,389 like counsellors to the family. You know, when you think about the Swiss 401 00:25:52,134 --> 00:25:54,753 names, they've been there for as long as the kids have. 402 00:25:56,102 --> 00:25:58,674 Absolutely. I would say it's very relationship driven. 403 00:26:00,000 --> 00:26:03,286 I think I've spoken to a lot of wealth managers who say that actually 404 00:26:03,336 --> 00:26:06,955 the investment performance, returns rather, are actually not that important, 405 00:26:07,005 --> 00:26:09,576 because I think once you get to like 100, 200 million, 406 00:26:09,626 --> 00:26:12,388 you're in a wealth preservation sort of mindset typically, 407 00:26:12,438 --> 00:26:15,819 unless you're really shooting for the stars, which you probably aren't. 408 00:26:16,000 --> 00:26:19,524 But if you've got 100,000 or a million, you're still gonna be accumulating

409 00:26:20,545 --> 00:26:23,784 wealth. So I think the mindset definitely does shift the further you 410 00:26:24,727 --> 00:26:27,394 go up the spectrum. I mean, if you're worth 100 million, 411 00:26:28,182 --> 00:26:30,896 you could put it into T-bills and live perfectly happily. 412 00:26:31,697 --> 00:26:35,030 You don't need to take on risk. So I think that's the key distinction. 413 00:26:36,000 --> 00:26:38,857 So, a lot of people who leave and then become family office, 414 00:26:40,331 --> 00:26:43,665 run family office or multifamily offices, you kind of did a little bit 415 00:26:45,373 --> 00:26:48,087 of that as well, right, and then you joined a larger one. 416 00:26:49,491 --> 00:26:52,063 Can you talk a little bit about the flip side of that, 417 00:26:53,396 --> 00:26:56,635 which is sort of like the private banker of one, and why that makes, 418 00:26:58,296 --> 00:26:59,391 or doesn't make, sense? 419 00:27:00,000 --> 00:27:03,238 Sure. First of all, I think you do see a general direction of travel 420 00:27:03,288 --> 00:27:06,907 of many people who may have previously been in the private banking industry, 421 00:27:06,957 --> 00:27:10,386 having moved on to either being, working at multifamily offices or RIAs, 422 00:27:10,436 --> 00:27:13,817 or as external asset managers. And usually what you do see is these new 423 00:27:13,867 --> 00:27:17,343 models embrace a few characteristics that are differentiated from private 424 00:27:17,583 --> 00:27:20,583 banks. Typically more transparency in terms of a fee structure. 425 00:27:22,917 --> 00:27:26,393 Typically more alignment with the client in terms of how money is charged 426 00:27:29,083 --> 00:27:30,702 and how client assets are managed. 427 00:27:32,000 --> 00:27:35,238 So, are you talking about the mid ones, or are you talking about the 428 00:27:41,124 --> 00:27:43,553 private bankers who leave and start their own shop? 429 00:27:48,000 --> 00:27:51,333 What I personally experienced was that trying to do a one-man show was 430 00:27:51,383 --> 00:27:54,621 a bit tough, because you do need the resources of a firm behind you. 431 00:27:54,671 --> 00:27:57,576 You need custody, you need due diligence, you need brokerage. 432 00:27:57,626 --> 00:28:00,388 A lot of things that are just difficult to do on your own, 433 00:28:00,438 --> 00:28:03,152 despite the fact that in this modern day and age you can. 434 00:28:03,202 --> 00:28:06,774 You need the sausage-making machine. Much more helpful to have that within. 435 00:28:06,824 --> 00:28:09,252 You can offer all the transparency with no machine, 436 00:28:09,302 --> 00:28:10,636 and then there's no sausage. 437 00:28:10,686 --> 00:28:14,114 So my experience, go to a smaller firm that's still very client-focused, 438 00:28:15,604 --> 00:28:18,080 entrepreneurial in spirit, but aligned with clients, 439 00:28:21,114 --> 00:28:23,304 is where I've landed now, and where I'm happy. 440 00:28:26,000 --> 00:28:29,143 Okay. Tim, the industry that you're in is right now going through, 441 00:28:29,609 --> 00:28:32,990 it's breaking through, right? You just have to go to your YouTube site, 442 00:28:33,488 --> 00:28:36,822 and anybody who's in the podcasting business would be green with envy, 443 00:28:37,313 --> 00:28:40,218 hypothetically. But you're doing, you know, it's going great. 444 00:28:40,653 --> 00:28:43,891 Congratulations on that. There's some people who are massive in this 445 00:28:46,500 --> 00:28:48,976 space and are starting to get called out on sort of, 446 00:28:51,920 --> 00:28:54,873 calling their own book, giving advice that is not necessarily, 447 00:28:58,364 --> 00:29:01,792 you know, good, and at scale, and unregulated. Is this sort of financial 448 00:29:02,218 --> 00:29:04,980 advisor on tap on the internet the next vice, if you like? 449 00:29:05,030 --> 00:29:08,268 Are you gonna become the... in 10 years' time, are people gonna look 450 00:29:08,318 --> 00:29:11,699 at your cohort and say, "Christ, these guys are as bad as the bankers"? 451 00:29:11,749 --> 00:29:15,177 I hope not, but I think, just like any tool, I think it needs to be used 452 00:29:15,227 --> 00:29:18,513 responsibly. You need to really take it at face value and then go and 453 00:29:19,828 --> 00:29:22,876 do your own research. So even if an advisor tells you something, 454 00:29:24,296 --> 00:29:27,724 you also need to go and educate yourself on the matter before you invest 455 00:29:29,313 --> 00:29:32,646 anything. You really need to understand what you're putting your money 456 00:29:35,368 --> 00:29:38,558 into, right? So I think, me personally, I am trying to be a reason, 457 00:29:41,352 --> 00:29:44,781 a voice of reason out there. Something that is really just talking about 458 00:29:47,776 --> 00:29:50,824 simplicity equals compounding, and it's boring. Because I think, 459 00:29:52,474 --> 00:29:55,712 coming from the investment industry, all three of us probably agree, 460 00:29:55,762 --> 00:29:59,238 there are lots of people who talk about, "You need to know this company's 461 00:29:59,288 --> 00:30:02,574 got this amount of operating cash flow, and it's trading at a 12-time 462 00:30:02,624 --> 00:30:05,291 valuation." But I keep saying to people, in my industry, 463 00:30:05,341 --> 00:30:08,007 99% of people out there don't care about free cash flow, 464 00:30:08,057 --> 00:30:11,391 they don't care about operating cash flow, they just wanna make money. 465 00:30:12,000 --> 00:30:15,381 They want to grow their wealth. And the best, most reliable way to grow 466 00:30:16,403 --> 00:30:19,498 wealth is in low-cost ETFs. That is just what the data tells you, 467 00:30:20,439 --> 00:30:21,867 'cause 90% of the large cap... 468 00:30:22,335 --> 00:30:23,906 I think you've said that already. 469 00:30:24,414 --> 00:30:26,795 Yeah, 90%. And I'm gonna keep banging on about it. 470

00:30:27,532 --> 00:30:28,628 Let's bang on about it. 471 00:30:29,000 --> 00:30:32,048 No, I'm... 'cause you keep challenging me, so let's get into it. 472 00:30:37,193 --> 00:30:39,717 Just for the record, I'm a faithful customer of IBKR. 473 00:30:44,000 --> 00:30:47,048 You own ETFs. They're not sponsoring this show. I don't think... 474 00:30:47,260 --> 00:30:49,689 yeah, I own some stocks, but most of them are ETFs. 475 00:30:49,868 --> 00:30:53,202 No, I mean, I'm just... I wanna go out there and just get that message 476 00:30:53,429 --> 00:30:56,858 out there to people, as many people as I can. And also because financial 477 00:30:57,091 --> 00:31:00,329 influencers in the US, it's all very US-centric. It's all Roth IRAs, 478 00:31:00,892 --> 00:31:03,320 401ks, and invest in VOO. No, do not invest in VOO. 479 00:31:05,304 --> 00:31:07,970 If you're not American, do not put your money into that. 480 00:31:10,354 --> 00:31:13,688 This is because you don't like anything that doesn't have UCITS before 481 00:31:16,646 --> 00:31:17,646 it? 482 00:31:17,696 --> 00:31:20,981 If it doesn't have UCITS before it, no, it does not deserve to belong 483 00:31:21,031 --> 00:31:23,936 in your portfolio if you're not American. If you're American, 484 00:31:23,986 --> 00:31:25,557 go for it. Go out all out on VOO. 485 00:31:25,607 --> 00:31:27,465 So what do you do if you don't buy VOO? 486 00:31:27,515 --> 00:31:30,896 You're buying UCITS European regulated ETFs, which give you a much more 487 00:31:30,946 --> 00:31:34,327 tax efficient structure to invest, and I don't care whether you're from 488 00:31:34,377 --> 00:31:35,377 Singapore... 489 00:31:35,427 --> 00:31:37,474 Well, they give you the same access as VOO? 490 00:31:37,524 --> 00:31:40,477 They give you the same access. All the underlying is the same. 491 00:31:40,527 --> 00:31:41,622 It's just structured... 492 00:31:41,672 --> 00:31:42,767 What, like VWRA, or...? 493 00:31:44,000 --> 00:31:47,190 VWRA, you know, or CSPX, SPYL. It's all structured tax efficiently. 494 00:31:47,240 --> 00:31:50,098 So whether you're from Singapore, whether you're from China, 495 00:31:50,148 --> 00:31:51,529 whether you're from the UK... 496 00:31:51,579 --> 00:31:53,388 See, and this is the challenge, right? 497 00:31:53,438 --> 00:31:56,200 This is the challenge, this is what you need to invest in. 498 00:31:56,250 --> 00:31:57,821 The world needs more people to... 499 00:31:57,871 --> 00:32:00,919 I'm glad to have you talking about this stuff. Because actually, 500 00:32:00,969 --> 00:32:03,493 you know, my retail banking RM never talked about it. 501 00:32:03,543 --> 00:32:06,781 When I moonlighted with a private banking RM, they didn't talk about 502 00:32:06,831 --> 00:32:09,164 it, they talked about the truffle oil and the F1. 503 00:32:09,214 --> 00:32:10,214 Incentive. 504 00:32:10,264 --> 00:32:13,407 Well, show me the incentive. That's why I keep coming back to you. 505 00:32:13,457 --> 00:32:15,981 This is why... or just get good friends, right? Aman: 506 00:32:16,031 --> 00:32:18,698 Let's talk a little bit about money, wealth, and advice, 507 00:32:18,748 --> 00:32:22,462 good and bad. Zal, what is rich? I'll... it's... this sounds like a statement, 508 00:32:23,354 --> 00:32:26,783 it's a question. I was sitting down yesterday prepping for the show with 509 00:32:28,376 --> 00:32:31,566 a friend of mine, ex-Googler, went to a big name in Southeast Asia. 510 00:32:33,053 --> 00:32:36,291 They IPO'd, and, you know, on paper they were doing incredibly well, 511 00:32:37,799 --> 00:32:40,370 and they've sort of gone south. He defined this to me. 512 00:32:41,286 --> 00:32:44,381 He said there are three kinds of wealth, I'm gonna read this out. 513 00:32:44,977 --> 00:32:48,263 There's life-changing wealth, or what is popularly known as FU money. 514 00:32:48,891 --> 00:32:52,225 That applies to you, as in it frees you up to do whatever you want to. 515 00:32:52,862 --> 00:32:55,243 I can fly business class, go to the Michelin Star, 516 00:32:55,714 --> 00:32:58,190 whatever I want to do. There is generational wealth, 517 00:32:58,240 --> 00:33:01,764 which is like I can do that and my kid can become a ballerina or something 518 00:33:01,814 --> 00:33:04,338 else, whatever, not that ballerinas don't make money, 519 00:33:04,388 --> 00:33:06,864 but last I checked, or fashion designers in my case. 520 00:33:06,914 --> 00:33:10,009 And then there's the third, which is like society-changing money, 521 00:33:19,000 --> 00:33:21,524 which is sort of stuff that Gates or Peter Thiel has, 522 00:33:22,843 --> 00:33:25,319 and you could argue and debate on how they use that, 523 00:33:26,614 --> 00:33:30,043 right. Is that the three definitions for you? How would you define rich? 524 00:33:31,809 --> 00:33:35,142 Well, I think I know what you may be alluding to, the other day on the 525 00:33:36,861 --> 00:33:39,671 All In podcast, they were sort of discussing the same lens. 526 00:33:46,911 --> 00:33:48,530 I may have heard it there as well. 527 00:33:54,000 --> 00:33:56,857 Let me say a couple things. I think that the ability to say, 528 00:33:56,907 --> 00:33:59,955 "Look, for the rest of my life, this is the lifestyle my family, 529 00:34:00,005 --> 00:34:03,243 I'd like my family to live with, and I want to have enough financial 530 00:34:03,293 --> 00:34:06,912 resources to make sure that lifestyle is covered." I think that's a terrific 531 00:34:06,962 --> 00:34:09,819 goal, and many clients who are engaged would say this to us. 532 00:34:09,869 --> 00:34:13,155 And certainly, I enjoy working in this industry, because I can say to 533 00:34:13,205 --> 00:34:16,300 clients, "Look, this is what you have to do to achieve that goal. 534 00:34:16,350 --> 00:34:19,731 This is what you have to do to maybe save enough and protect enough for 535 00:34:22,977 --> 00:34:25,453 your kids

to be able to have that flexibility." Now, 536 00:34:28,112 --> 00:34:31,493 that amount will differ greatly if you're in Singapore or Sierra Leone, 537 00:34:35,089 --> 00:34:37,946 and whether you are paying US taxes on capital gains or not. 538 00:34:41,000 --> 00:34:44,238 So for each woman or man, that amount is gonna be a different level, 539 00:34:45,009 --> 00:34:48,057 and at different stages in their life will have different needs. 540 00:34:48,786 --> 00:34:52,072 But I think the important thing is to go in with your eyes wide open, 541 00:34:52,853 --> 00:34:55,472 and to be able to say, "This is what I want to achieve. 542 00:34:56,107 --> 00:34:59,250 This is how much money I'd like to have, given my lifestyle needs, 543 00:35:00,000 --> 00:35:02,619 or given my legacy plans, and therefore I have to do X, 544 00:35:03,907 --> 00:35:05,526 Y, and Z to try to hit that goal." 545 00:35:06,349 --> 00:35:09,254 See, this sounds like a very sensible answer. I got 10 bucks, 546 00:35:10,674 --> 00:35:13,151 100 bucks, and a billion, were the three thresholds. 547 00:35:14,372 --> 00:35:17,848 But that's a hard and fast rule, and I'm presuming this is not the market 548 00:35:19,535 --> 00:35:21,106 segmentation strategy at Avestar? 549 00:35:21,907 --> 00:35:23,288 I think that'd be a good bet. 550 00:35:24,000 --> 00:35:26,476 Tim, if we look at money from the other angle of it, 551 00:35:28,661 --> 00:35:31,328 in the world the Gini coefficient seems to be expanding, 552 00:35:33,674 --> 00:35:36,912 it's becoming harder to make ends meet. As you study the mass end of 553 00:35:39,743 --> 00:35:42,219 the market, what's the point at which people feel... 554 00:35:44,404 --> 00:35:47,642 I was half joking with Zal about this as sort of like the high water 555 00:35:50,472 --> 00:35:53,091 mark, but where do we go from where you're like, "Okay, 556 00:35:53,141 --> 00:35:56,379 I'm financially all right"? Where do they start feeling comfortable? 557 00:35:56,429 --> 00:35:59,715 What are the sort of benchmarks that you wanna make sure that you are 558 00:35:59,765 --> 00:36:01,289 hitting, or are working towards? 559 00:36:01,339 --> 00:36:04,815 I think for Singapore, a lot of people in their 20s now talk about having 560 00:36:04,865 --> 00:36:07,008 100,000 by 30, right, and certain benchmarks. 561 00:36:11,959 --> 00:36:13,245 Is this the FIRE community? 562 00:36:13,301 --> 00:36:16,682 No, I think just generally when you're young, because you start out and 563 00:36:16,753 --> 00:36:19,372 you don't earn much money, and by the time you're 30... 564 00:36:19,438 --> 00:36:22,010 but even talking about having a million by retirement, 565 00:36:22,075 --> 00:36:25,361 and that's not people just saying, "Can I retire with that?" And so I 566 00:36:25,728 --> 00:36:29,157 think there's a lot of maybe worry about the cost of living in Singapore 567 00:36:31,636 --> 00:36:35,064 and housing, and just pricing

generally. But I think for a lot of people 568 00:36:37,543 --> 00:36:40,067 what gets overlooked, maybe in the Singapore context, 569 00:36:41,913 --> 00:36:44,580 is CPF Life, which I've done a video on this previously. 570 00:36:46,526 --> 00:36:49,145 If you have CPF Life up to the enhanced retirement sum, 571 00:36:51,058 --> 00:36:53,915 which is something like 450,000 or 400-odd thousand dollars, 572 00:36:54,693 --> 00:36:57,788 it pays you a set income for life from 65, at like 3,400 a month. 573 00:36:57,838 --> 00:37:00,743 And to meet a comfortable or aspirational tier of retirement, 574 00:37:01,300 --> 00:37:04,490 where you're talking maybe 5,000 per month or 8,000 plus per month, 575 00:37:08,667 --> 00:37:10,524 you only have to invest maybe 2, 300... 576 00:37:13,000 --> 00:37:16,476 But I want to just press there for a second, and also widen the aperture. 577 00:37:16,639 --> 00:37:19,877 Singapore is super interesting, we're here. I've heard this term CPF 578 00:37:20,033 --> 00:37:23,319 millionaires, where you start off early enough, you can in fact start 579 00:37:23,475 --> 00:37:27,142 investing for your kids and then you can set them up to be a CPF millionaire. 580 00:37:27,311 --> 00:37:30,645 Is that a thing, or was I half asleep in my TikTok stream and imagined 581 00:37:30,803 --> 00:37:31,803 it? 582 00:37:31,853 --> 00:37:34,615 I think there's a lot of takes on how you should allocate, 583 00:37:35,000 --> 00:37:37,857 I think, when you're in your 20s and 30s, into CPF and cash, 584 00:37:39,136 --> 00:37:42,231 and even SRS, you know, it doesn't make sense at a certain point, 585 00:37:43,610 --> 00:37:46,991 with SRS, like a supplementary retirement scheme. But I think if you're 586 00:37:48,294 --> 00:37:51,485 looking at the CPF and you're looking at the special account at 4%, 587 00:37:52,294 --> 00:37:55,104 and you've got a 30-year runway in your 20s to invest cash, 588 00:37:55,824 --> 00:37:58,824 right, should you be topping up your CPF special account at 4%? 589 00:37:59,588 --> 00:38:03,017 What's the opportunity cost of 30 years of that delta between 4 and sort 590 00:38:04,318 --> 00:38:07,746 of the average of 8% of global equities, nominal. That's gonna be a lot. 591 00:38:08,524 --> 00:38:10,952 So it really makes sense on when you're topping up, 592 00:38:11,002 --> 00:38:14,479 and maybe it makes sense when you've got, you're in a higher tax bracket, 593 00:38:14,529 --> 00:38:17,957 you've got more incentive to top up that 8,000 or whatever it is to your 594 00:38:18,007 --> 00:38:20,960 special account, and then you can top it up to higher amounts. 595 00:38:21,010 --> 00:38:24,486 So I think it's more about allocating properly and responsibly your asset 596 00:38:25,000 --> 00:38:28,286 allocation in your 20s and 30s as you scale your income into your 30s 597 00:38:28,784 --> 00:38:29,784 and 40s. 598 00:38:29,834 --> 00:38:32,262 But, we'll take every Singaporean viewer we've got, 599 00:38:32,312 --> 00:38:34,979 but internationally, when your country doesn't help you, 600 00:38:35,162 --> 00:38:38,495 if you don't have a retirement, when you're a kid in India or China... 601 00:38:39,000 --> 00:38:42,333 A kid in India? Then go and try and put away $100 a month into a UCITS 602 00:38:53,639 --> 00:38:54,830 ETF, into a low-cost ETF. 603 00:38:59,000 --> 00:39:00,190 I thought you'd say that. 604 00:39:00,240 --> 00:39:02,669 The product set, again, as I said, it's very basic. 605 00:39:02,719 --> 00:39:05,052 You don't need to be worth 10 billion to do well. 606 00:39:05,102 --> 00:39:08,436 Do I need to tell you again? No, but we'll ask you again in about five 607 00:39:08,486 --> 00:39:09,486 minutes' time. 608 00:39:09,536 --> 00:39:12,012 I'm gonna drive it into you every chance I get, man. 609 00:39:12,203 --> 00:39:15,489 Amazing. Let's talk a little bit about, again, just sticking with the 610 00:39:16,434 --> 00:39:19,672 two ends of the spectrum, what are two or three common mistakes that 611 00:39:20,604 --> 00:39:23,985 you see people make at the top end of the pyramid in terms of investing 612 00:39:24,956 --> 00:39:28,670 mistakes? You talked about a really non-obvious one I thought was interesting, 613 00:39:29,731 --> 00:39:30,731 about risk appetite. 614 00:39:31,000 --> 00:39:33,667 I'd say three, Aman. The first two are on risk appetite, 615 00:39:36,005 --> 00:39:38,624 and on people being on either extreme of that spectrum. 616 00:39:40,922 --> 00:39:43,874 So the first is, "I've made my money, I just wanna protect it, 617 00:39:46,454 --> 00:39:49,835 let's be very conservative." And sometimes my returns may not even keep 618 00:39:52,174 --> 00:39:54,746 up with inflation. So that's a big mistake in my mind, 619 00:39:56,235 --> 00:39:58,616 right, because although that's a natural instinct, 620 00:40:00,000 --> 00:40:03,381 you're really hindering the growth of your money, especially if there's 621 00:40:09,249 --> 00:40:11,773 an inflationary environment in which you're existing. 622 00:40:12,315 --> 00:40:14,839 And some people have that outlook. Others say, "Look, 623 00:40:15,382 --> 00:40:17,763 I wanna take a lot of risk. I made a lot of money. 624 00:40:18,278 --> 00:40:21,611 Let's take risks. Let's buy SpaceX. Let's put a lot of money into this 625 00:40:22,309 --> 00:40:25,357 venture that my friend is doing in Papua New Guinea," et cetera. 626 00:40:26,000 --> 00:40:28,905 So I think going too far out on either side can be a mistake. 627 00:40:28,955 --> 00:40:32,479 I think a measured approach where you understand your risk-adjusted return 628 00:40:32,529 --> 00:40:35,243 and your needs, et cetera, are very important. The third, 629 00:40:35,293 --> 00:40:38,055 I would say, is when you get up into that wealth spectrum, 630 00:40:38,105 --> 00:40:41,533 you do wanna worry about how you're planning your taxes and your estate,

631 00:40:41,583 --> 00:40:44,298 because that can take a massive chunk out of your wealth. 632 00:40:44,348 --> 00:40:45,919 And that's why you need you guys. 633 00:40:45,969 --> 00:40:47,255 We'd like to think so, yes. 634 00:40:47,305 --> 00:40:50,924 How about you? For the people who don't have, who have your YouTube account, 635 00:40:59,160 --> 00:41:01,113 and a couple of hundred thousand dollars? 636 00:41:01,163 --> 00:41:04,401 I heard a really great quote from Morgan Housel a few weeks ago on a 637 00:41:04,451 --> 00:41:07,784 podcast. The one thing that's gonna make sure that you build wealth is 638 00:41:07,834 --> 00:41:11,120 not having FOMO, is the first one, because that is going to destroy a 639 00:41:11,170 --> 00:41:13,599 lot of capital throughout your life if you have it. 640 00:41:13,649 --> 00:41:16,410 Second is this need to do something when markets are down, 641 00:41:18,820 --> 00:41:21,581 or when people are shouting, when you're seeing headlines. 642 00:41:24,000 --> 00:41:27,333 I've learnt through 20-odd years of investing, doing nothing typically 643 00:41:27,760 --> 00:41:30,665 leads to a lot better results. Staying put, staying invested, 644 00:41:31,044 --> 00:41:34,329 not churning. People churn way too much, go through too much garbage, 645 00:41:34,751 --> 00:41:37,179 churn into the next product, recycle into whatever, 646 00:41:37,505 --> 00:41:40,600 and then again, show me the incentive, I'll show you the outcome. 647 00:41:41,000 --> 00:41:43,810 So wait, why do they churn? So hang on, I want to say this, 648 00:41:43,860 --> 00:41:46,431 you both said the same thing with one thing different. 649 00:41:46,481 --> 00:41:49,005 You both talked about fear and greed, FOMO and greed. 650 00:41:49,055 --> 00:41:51,388 Yeah, because everyone's the same. They're human. 651 00:41:51,438 --> 00:41:54,581 But the thing that you're saying is get advice, look at incentive. 652 00:41:54,631 --> 00:41:57,631 It doesn't matter whether they're worth 100 million or 100,000. 653 00:41:57,681 --> 00:42:00,729 People have the same emotions, and it's very emotionally driven. 654 00:42:00,779 --> 00:42:03,302 I'm just... actually, that you're 100% right on that, 655 00:42:03,352 --> 00:42:06,162 but I think that's the difference, what I'm seeing is that, 656 00:42:06,212 --> 00:42:07,688 you know, actually with your... 657 00:42:07,738 --> 00:42:11,119 Again, I'm gonna put words in your mouth, and you can disagree with me. 658 00:42:11,169 --> 00:42:14,455 You're saying it's very unlikely you're gonna get good advice at your 659 00:42:14,505 --> 00:42:15,505 level, so... 660 00:42:15,555 --> 00:42:17,507 No, not at that level. I never said that. 661 00:42:17,848 --> 00:42:19,372 So where do you get good advice? 662 00:42:20,000 --> 00:42:22,619 You go out and learn it. Because anyone can do it well. 663 00:42:23,474 --> 00:42:26,808 There's this perception because the finance industry puts

it out there 664 00:42:27,880 --> 00:42:31,213 that you can only invest well if you have some inside knowledge or you 665 00:42:32,285 --> 00:42:35,285 have someone with access, and that's the biggest lie out there. 666 00:42:36,255 --> 00:42:38,684 It's a lie. It's not true, because you can do well. 667 00:42:39,062 --> 00:42:41,443 But again, selling ETFs, I'm gonna keep saying it, 668 00:42:41,691 --> 00:42:44,405 it's not profitable. And it's just not. It's just a fact. 669 00:42:44,680 --> 00:42:48,014 It's the data. So I'm just telling you out there, that's how I've come 670 00:42:48,340 --> 00:42:51,674 to realise, and I want that message to get out there to more people... 671 00:42:52,000 --> 00:42:54,667 you can do well, you just have to control your emotions. 672 00:42:54,832 --> 00:42:57,404 You have to keep it simple. You have to be consistent. 673 00:42:57,565 --> 00:43:00,613 You have to be disciplined. Do all those things, you'll beat 95, 674 00:43:01,156 --> 00:43:02,298 99% of people out there. 675 00:43:02,961 --> 00:43:06,294 So, staying with this fear and greed theme, let's shift gears and talk 676 00:43:08,089 --> 00:43:11,279 a little bit about the age of AI and everything that comes with it. 677 00:43:13,000 --> 00:43:15,762 I think last week... something, I forget which day it was. 678 00:43:18,257 --> 00:43:21,686 It was four days ago, last Friday, right? Something incredible happened, 679 00:43:24,762 --> 00:43:27,286 right? A company IPO'd, went straight to $2 trillion, 680 00:43:29,574 --> 00:43:32,050 created SpaceX, they created the first trillionaire, 681 00:43:33,675 --> 00:43:36,960 in Elon Musk, who himself said that if you had told him that would be 682 00:43:38,735 --> 00:43:41,544 the outcome, he'd tell you that you were smoking something. 683 00:43:43,072 --> 00:43:46,358 That's his words, not mine. And he can say it, and we can imagine him 684 00:43:48,133 --> 00:43:50,752 doing that. He's got society-changing money now, right? 685 00:43:53,889 --> 00:43:56,460 But this is a company that has got, if you believe it, 686 00:44:00,000 --> 00:44:03,571 you've got all the biggest brands and leaders in financial services talking 687 00:44:05,874 --> 00:44:09,112 about it. It's a $28 trillion opportunity if you believe everything, 688 00:44:11,208 --> 00:44:13,779 but it's also a company that makes $5 billion in loss, 689 00:44:15,459 --> 00:44:18,888 right? Is this the classic example? What do you tell your customers when 690 00:44:20,207 --> 00:44:22,683 they're saying that FOMO's kicking in, saying, "Hey, 691 00:44:23,586 --> 00:44:26,443 my mate got in early." Do you get them... what's the answer? 692 00:44:27,474 --> 00:44:30,331 Get them early into SpaceX? Don't get into SpaceX right now? 693 00:44:31,363 --> 00:44:32,363 What's... 694 00:44:32,413 --> 00:44:35,222 Okay, so you've just asked a couple of different questions, 695 00:44:35,714 --> 00:44:37,048 and I'll try to answer them. 696 00:44:37,510 --> 00:44:40,795 Could you just wrap up the whole economic future and investing and do 697 00:44:41,843 --> 00:44:44,224 that in like two minutes? Just kidding, I'm sorry. 698 00:44:45,000 --> 00:44:48,143 We do our best to get access to our clients to interesting private 699 00:44:48,836 --> 00:44:52,217 opportunities. And that's something we try to do. You can't always tell 700 00:44:52,958 --> 00:44:55,482 whether those opportunities are gonna pan out or not, 701 00:44:56,050 --> 00:44:59,288 or whether you get the allocation. I'm not at liberty to say whether 702 00:45:00,000 --> 00:45:03,333 we're actually active in the SpaceX deal itself, but we've been active 703 00:45:05,325 --> 00:45:06,325 of late. 704 00:45:06,375 --> 00:45:07,804 Were you in Texas last Friday? 705 00:45:08,182 --> 00:45:09,182 No, sorry. 706 00:45:09,232 --> 00:45:12,470 What do you say to someone if they say, "Hey, SpaceX is a great deal 707 00:45:13,812 --> 00:45:14,812 at $2 trillion"? 708 00:45:15,009 --> 00:45:17,628 I don't know, and I think we'll find out in the future. 709 00:45:18,950 --> 00:45:22,236 Now, one reality is that SpaceX and all these large companies will be 710 00:45:23,877 --> 00:45:27,163 part of indices, and we will get access to them when we invest in our 711 00:45:28,804 --> 00:45:32,184 ETFs, et cetera. So from a certain perspective, you don't need to chase 712 00:45:32,940 --> 00:45:36,464 the individual name, because it will in all likelihood be part of a global 713 00:45:36,950 --> 00:45:40,521 index, a US index, et cetera, and you'll get exposure to it as an investor. 714 00:45:41,013 --> 00:45:44,394 So what you're saying is my VOO that he hates has SpaceX in it already, 715 00:45:44,862 --> 00:45:45,862 or will do soon? 716 00:45:45,912 --> 00:45:46,959 It will at some point. 717 00:45:47,009 --> 00:45:48,009 And the UCITS do too? 718 00:45:48,529 --> 00:45:49,529 Yeah. 719 00:45:49,579 --> 00:45:51,484 But what's your take on it when, like... 720 00:45:51,797 --> 00:45:54,178 I agree with Zal, the get-rich-quick kind of idea, 721 00:45:55,342 --> 00:45:58,009 when people come to you with that... well, it's rubbish, 722 00:45:59,305 --> 00:46:02,829 isn't it? I mean, get-rich-quick thing, that's not the way that you should 723 00:46:02,879 --> 00:46:04,783 be thinking about growing wealth, right? 724 00:46:04,833 --> 00:46:06,262 But Zal's right in terms of... 725 00:46:06,312 --> 00:46:09,169 But the crypto bros will tell you that... these crypto bros, 726 00:46:09,219 --> 00:46:12,457 they just put their money in Bitcoin, and then it seems like they're 727 00:46:12,507 --> 00:46:15,412 geniuses. I don't know, I just don't find that so compelling. 728 00:46:15,462 --> 00:46:18,748 I don't think they've done anything super smart. They've just managed 729 00:46:19,414 --> 00:46:22,414 to put their money into a coin that's done well. Good for them, 730 00:46:23,450 -->

00:46:26,689 but don't try and make it out as though you've done something really 731 00:46:27,802 --> 00:46:31,088 special, you know? So, I mean, I think personally I agree with Zal in 732 00:46:33,156 --> 00:46:36,632 terms of, you're gonna get exposure to it anyway in an ETF at some point. 733 00:46:39,185 --> 00:46:42,519 I've done a video on this recently, actually. I think sort of like 10, 734 00:46:44,970 --> 00:46:47,828 15 days off the bat you're gonna be only exposed about 0.05, 735 00:46:49,941 --> 00:46:52,750 0.6%, 0.06%. So less than 0.1% in a global sort of tracker, 736 00:46:53,595 --> 00:46:56,833 like VWRA. And S&P won't allow it to go into the index until the end 737 00:46:57,405 --> 00:46:59,595 of 2027, or, sorry, the earliest in June 2027. 738 00:47:00,000 --> 00:47:03,429 But for investors, the private placement and... what I love about public 739 00:47:03,776 --> 00:47:07,014 markets is you are on the same playing field, whether you're Temasek 740 00:47:07,345 --> 00:47:10,773 or just a guy who earns $3,000 a month, because you are buying the exact 741 00:47:11,121 --> 00:47:13,787 same underlying. What I don't like about private assets, 742 00:47:14,640 --> 00:47:17,925 'cause I see private assets being hawked a lot, is that there's gonna 743 00:47:19,259 --> 00:47:21,783 be preferential access. They might get an allocation, 744 00:47:22,822 --> 00:47:24,346 you might not get an allocation. 745 00:47:25,000 --> 00:47:28,048 So this is a beautiful segue to the next question I had for you. 746 00:47:28,523 --> 00:47:31,571 That's changing, right? Tokenisation, miniaturisation is coming. 747 00:47:32,046 --> 00:47:35,094 You could buy access to the Carlyle Group now. Once upon a time, 748 00:47:35,569 --> 00:47:38,950 the reason I told you the story about mutual funds is that mutual funds 749 00:47:39,472 --> 00:47:42,043 had a very exclusionary criteria of $200,000 and more. 750 00:47:42,453 --> 00:47:45,834 Then came ETFs and took the floor out of that. That's happening in your 751 00:47:46,697 --> 00:47:49,649 field, the field you play in. So two questions to both of you, 752 00:47:50,973 --> 00:47:54,068 I'd love to get your views on tokenisation. Does that excite you? 753 00:47:55,452 --> 00:47:58,595 Does that say that's more instruments that can give people access? 754 00:48:00,000 --> 00:48:02,381 And then does that worry you, because you're like, 755 00:48:05,016 --> 00:48:08,350 "Oh my God," the one bastion that we had is sort of getting blown out? 756 00:48:12,000 --> 00:48:15,238 I personally, it scares me. If you're talking about a liquid vehicle 757 00:48:16,617 --> 00:48:19,950 backed by illiquid assets, I couldn't think of a worse recipe in terms 758 00:48:21,368 --> 00:48:23,797 of an investment proposal for the average investor. 759 00:48:24,848 --> 00:48:28,181 So in that perspective, it's something I wouldn't touch with a 10-foot 760 00:48:29,599 --> 00:48:32,837 pole. That's

my, me personally. So I think it depends on what people 761 00:48:33,673 --> 00:48:34,673 would like to... 762 00:48:34,723 --> 00:48:38,343 But Zal, doesn't it, going back to your question, is it about risk appetite? 763 00:48:39,155 --> 00:48:42,440 If you've got $10,000 of spare cash versus $10 million of spare cash, 764 00:48:43,236 --> 00:48:46,427 does that change things? Sorry, I just asked you a second question, 765 00:48:47,201 --> 00:48:49,439 but you might wanna answer the first one first. 766 00:48:50,000 --> 00:48:53,714 Very quickly, answer the first question: do I like the idea of democratisation 767 00:48:53,950 --> 00:48:57,331 of private assets, that the little guy can get access to something that 768 00:48:57,550 --> 00:49:00,407 heretofore only the big guy could get access to? Absolutely, 769 00:49:00,457 --> 00:49:03,790 I like that idea. Now, are you gonna execute that in a way that's fair 770 00:49:03,840 --> 00:49:07,460 and transparent? That's another question. Tim just pointed out this mismatch 771 00:49:07,510 --> 00:49:10,510 sometimes between liquidity reality and liquidity expectations. 772 00:49:10,560 --> 00:49:13,893 We saw that recently in the private credit space. People thought these 773 00:49:13,943 --> 00:49:17,276 semi-liquid funds were essentially pretty liquid. They didn't focus on 774 00:49:29,284 --> 00:49:31,808 the semi part of that phrase, and they realised that, 775 00:49:34,211 --> 00:49:37,734 "Oh my gosh, there are gates." So this was an example of maybe mis-selling 776 00:49:41,053 --> 00:49:44,338 or mismatched expectations. But I like the idea of democratisation of 777 00:49:47,439 --> 00:49:49,772 private assets in general, if it's done properly. 778 00:49:52,000 --> 00:49:54,476 So I did an exercise recently, and I wrote about it, 779 00:49:54,526 --> 00:49:57,288 I took my... I have most of my stock on IBKR. So I put it, 780 00:49:57,338 --> 00:50:00,386 I gave it to Claude, and I said... I also give it my blood work, 781 00:50:00,436 --> 00:50:03,102 different story... but I'm all in on AI, as you can see. 782 00:50:03,152 --> 00:50:05,724 But I gave it to them, and it came back with a really, 783 00:50:07,154 --> 00:50:10,249 actually quite an intelligent view of my... not entirely correct, 784 00:50:12,231 --> 00:50:14,755 but, you know, almost 90% accurate. And it gave me... 785 00:50:16,173 --> 00:50:19,315 so there are people who are today going and just swearing by that. 786 00:50:20,537 --> 00:50:23,823 That worries me. But for me, in that situation, it gave me a bunch of 787 00:50:25,098 --> 00:50:27,717 questions to ask my financial advisor, whoever that is, 788 00:50:28,746 --> 00:50:32,079 whether it's talking to you guys, talking to the actual people who are 789 00:50:33,371 --> 00:50:36,800 paid to sort of do that. Are we heading to a situation where people come 790 00:50:38,840 --> 00:50:42,078 in like annoying doctors and have self-diagnosed themselves a little 791 00:50:44,360 --> 00:50:47,550 bit? That in this case could be a good thing. Let's start with you, 792 00:50:49,800 --> 00:50:51,657 Tim, and then how that works for the... 793 00:50:53,000 --> 00:50:56,238 Yeah, I mean, I think it's a great tool. Again, it's how you use AI, 794 00:50:56,288 --> 00:50:59,812 right? I mean, I think there are so many cases where people just outsource 795 00:50:59,862 --> 00:51:03,338 their brains to it. Whether it's investing, whether it's self-diagnosing, 796 00:51:03,388 --> 00:51:06,436 whether it's how to write something and then just sending out... 797 00:51:06,486 --> 00:51:09,771 I've seen emails where it's, you've got the next prompt in the email, 798 00:51:09,821 --> 00:51:13,155 and you're like, "Geez, come on, could you not at least have proofread 799 00:51:13,205 --> 00:51:16,443 that email before you sent it?" But, you know, that kind of example, 800 00:51:16,493 --> 00:51:19,302 it's just almost... AI's making people lazy, I have to say. 801 00:51:19,438 --> 00:51:22,866 So it's almost like, don't outsource your brain, and proof-check things. 802 00:51:24,000 --> 00:51:26,857 Make sure you double-check the data, make sure it's correct. 803 00:51:30,250 --> 00:51:33,250 And I think if you do that, it's a great tool to save you time, 804 00:51:36,807 --> 00:51:40,093 and it can help explain concepts from the investment perspective in a 805 00:51:43,980 --> 00:51:47,027 much more easy-to-understand, digestible format. So I would say, 806 00:51:49,545 --> 00:51:52,450 yeah, it's great, but when it comes to your asset allocation, 807 00:51:52,500 --> 00:51:55,833 your goals, all these other things that it needs to take into account, 808 00:51:55,883 --> 00:51:59,312 I think there is still a value-add to a human element and a relationship 809 00:51:59,362 --> 00:52:00,362 there. 810 00:52:00,412 --> 00:52:01,412 Totally agree. 811 00:52:01,462 --> 00:52:04,700 Which one? With Tim? We are gonna be... either you're getting tired, 812 00:52:04,750 --> 00:52:05,940 or you're getting honest. 813 00:52:05,990 --> 00:52:09,228 I don't know which one it is. We're gonna be using AI more and more, 814 00:52:09,278 --> 00:52:12,135 whether that be companies using AI to become more efficient, 815 00:52:12,185 --> 00:52:15,471 individual end consumers, or consuming companies using AI to optimise 816 00:52:17,754 --> 00:52:21,516 and understand their product set, and therefore be able to ask more intelligent 817 00:52:25,882 --> 00:52:29,263 questions. Those are realities that are sweeping across all industries, 818 00:52:31,080 --> 00:52:34,365 and I don't think financial services are going to be any different or 819 00:52:35,761 --> 00:52:38,714 exempt from that. So that's a reality that we're dealing with. 820 00:52:39,975 --> 00:52:43,308 And I think that AI, it's gonna be... intelligent firms and firms that 821 00:52:44,723 --> 00:52:48,056 are farsighted are

gonna harness it effectively, but continue to build 822 00:52:49,899 --> 00:52:51,947 on what humans can do that machines cannot. 823 00:52:53,698 --> 00:52:56,936 I believe it. I think that's a whole other topic for us to come back 824 00:52:59,655 --> 00:53:02,226 on. Listen, I wanted to do something a little bit fun, 825 00:53:02,276 --> 00:53:05,609 as we come to the wrap on this thing. I want to play a quick game with 826 00:53:05,659 --> 00:53:08,326 you, it's a sort of first for us, a rapid fire question. 827 00:53:08,376 --> 00:53:11,805 You guys have given... we kept it pretty tight. But here is where I need 828 00:53:11,855 --> 00:53:14,664 monosyllabic answers, and not grunts. So I'm gonna ask you, 829 00:53:14,714 --> 00:53:17,809 like, 10 questions, and I'd love to get your quick takes on them. 830 00:53:19,877 --> 00:53:23,068 You can go in... how do we wanna do this? We could go in any order, 831 00:53:29,055 --> 00:53:31,674 right? Fastest finger first. Go in any order. One word, 832 00:53:35,493 --> 00:53:36,731 is now a good time to buy? 833 00:53:38,520 --> 00:53:39,520 Always. 834 00:53:39,570 --> 00:53:40,570 Yes. 835 00:53:40,620 --> 00:53:42,287 Buffett or Jim Simons, Renaissance? 836 00:53:44,013 --> 00:53:45,680 Buffett 50 years ago, Simons today. 837 00:53:48,049 --> 00:53:49,049 Buffett. 838 00:53:49,099 --> 00:53:50,718 And in terms of Buffett or Ackman? 839 00:53:52,982 --> 00:53:53,982 Buffett. 840 00:53:54,032 --> 00:53:55,032 Buffett. 841 00:53:55,082 --> 00:53:58,320 Would love to have a follow-up question, but I'll break my own rule. 842 00:53:58,370 --> 00:54:00,894 The best piece of investing wisdom ever written, Zal? 843 00:54:00,944 --> 00:54:01,992 Start investing early. 844 00:54:02,220 --> 00:54:03,220 Stay invested. 845 00:54:03,668 --> 00:54:05,668 Gold, ancient relic, or honest money, Tim? 846 00:54:07,819 --> 00:54:08,819 Honest money. 847 00:54:09,170 --> 00:54:10,170 Honest money. 848 00:54:10,521 --> 00:54:12,759 Bitcoin in a serious portfolio, yes or no, Zal? 849 00:54:15,154 --> 00:54:16,631 Is your question, is Bitcoin... 850 00:54:18,243 --> 00:54:21,148 I'll read the question again. Bitcoin in a serious portfolio? 851 00:54:24,228 --> 00:54:25,228 Can be. 852 00:54:25,278 --> 00:54:27,849 Can be, again, sizing. If it's 100%, no. If it's 0.5%, 853 00:54:31,089 --> 00:54:32,089 yes. 854 00:54:32,139 --> 00:54:35,186 Ooh, you're softening up, too. Yeah, I know. At the end of this, 855 00:54:38,838 --> 00:54:41,790 he'll sell a mutual fund. Never, never. Schroders growth fund. 856 00:54:45,812 --> 00:54:49,478 You wanna add something right now, Tim? The most overrated word in investing, 857 00:54:54,446 --> 00:54:55,446 Tim? 858 00:54:55,496 --> 00:54:56,496 Alpha. 859 00:54:56,546 --> 00:55:00,070 I wonder how many people in asset management have their dogs called Alpha. 860 00:55:04,931 --> 00:55:05,931 Zal? 861 00:55:05,981 --> 00:55:06,981 Risk-adjusted return. 862 00:55:07,266 --> 00:55:08,790 Renting versus owning your home? 863 00:55:10,121 --> 00:55:12,502 Owning, because it's gonna give you peace of mind. 864 00:55:14,533 --> 00:55:16,914 I'd say owning, but not property as an investment. 865 00:55:18,945 --> 00:55:22,230 The one asset, Tim, you would hold for 100 years and never look back? 866 00:55:25,000 --> 00:55:26,000 Equities. 867 00:55:26,627 --> 00:55:29,769 Okay. And I think I know the answer to this, but wait for the dip, 868 00:55:37,524 --> 00:55:38,524 yes or no, Zal? 869 00:55:40,127 --> 00:55:42,507 No, just buy today if you're a long-term investor. 870 00:55:48,422 --> 00:55:49,422 Agree. No, buy today. 871 00:55:52,000 --> 00:55:54,905 On that note of dollar cost averaging your way to the future, 872 00:55:54,955 --> 00:55:58,383 I wanna thank both of you. This has been, I think you've been more brave 873 00:55:58,433 --> 00:56:01,814 than I imagined. I really appreciate the candour, I appreciate the flex 874 00:56:01,864 --> 00:56:03,912 on timing and sort of making this all work. 875 00:56:03,962 --> 00:56:05,010 It's great being here. 876 00:56:05,060 --> 00:56:07,536 Yeah, thank you for having, thank you for having us. 877 00:56:11,013 --> 00:56:12,108 This is A to Z Fintech. 878 00:56:16,000 --> 00:56:18,810 One more thought, a day after this conversation took place, 879 00:56:20,823 --> 00:56:24,299 and having had time to reflect on it. I started with a room full of hands 880 00:56:26,771 --> 00:56:30,009 that would not go down. Men who sold the world one thing and quietly 881 00:56:32,317 --> 00:56:35,555 bought themselves another. I have spent 10 years wondering what that 882 00:56:37,863 --> 00:56:40,339 really meant, and I think it is this: for 200 years, 883 00:56:42,123 --> 00:56:44,980 money had a home, a country, a currency, a name on the door, 884 00:56:47,026 --> 00:56:50,264 a vault in a city you could walk to. The whole business the three of 885 00:56:52,623 --> 00:56:55,909 us grew up in was built on the idea that your wealth lived somewhere, 886 00:56:58,361 --> 00:57:01,123 and you went to it. That money is dead. We watched it die. 887 00:57:03,280 --> 00:57:05,661 Now money moves like the three of us in this room. 888 00:57:07,570 --> 00:57:10,189 Born in one place, raised in another, loyal to nowhere, 889 00:57:12,280 --> 00:57:15,471 fluent everywhere, carrying a passport that is really just a login. 890 00:57:18,000 --> 00:57:20,619 Money has become a third culture kid. No fixed address. 891 00:57:22,473 --> 00:57:25,140 And that is why grow is the hard one. See, move, borrow, 892 00:57:27,027 --> 00:57:30,408 and protect are things you do to your money. Grow is the one thing that 893 00:57:32,778 --> 00:57:36,159 money does to you, and you do not reach the end of your life of growing 894 00:57:38,530 --> 00:57:41,815 wealth and find a number. You find out who you were willing to become 895 00:57:44,121 --> 00:57:47,359 to get it. The index will not tell you that. Neither will the family 896 00:57:49,633 --> 00:57:51,347 office. That part you grow yourself.