ARCHIVE: The one thing you need to invest in (to beat 95% of professional investors)

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25:00I fully subscribe to your narrative of the global index, all of that stuff. What I want to talk about now is other things that people might want to bolt into that. So how do you see bonds fitting into a person's portfolio? Now, I'm really excited about that because I think bonds are sexy and they weren't until recently. The interest rates were zero. Who the hell wants a bond? But now we're talking about 5 % return for almost no risk lending money to the UK government. Better than putting it in a savings account. Yeah. Higher returns or a money market fund, which buys these short-term government bonds and some other fixed income instruments.

25:36Just for the people who don't know, can you just give us a one-liner on what a bond is? So you pay 100 today, you receive a fixed amount, a coupon for a fixed period of time, and then you get your money back. That's the way it works. It's like an IOU. Like an IOU and it's got a maturity date. So you get your money back. When you say maturity, you mean that's the day it ends and you get all your money back. And then it essentially dies and you just get your money back. And the coupons are like interest payments along the way. And they're fixed forever. So once the bond is issued, those coupons never vary.

26:05So what's the example of a money market fund? Well, there's one from Vanguard, for example. There's one from BlackRock. And do they call it, they're just called money market fund? It's called a money market fund. And sometimes it's called a short-term sterling fund. You know, sometimes they call it that. They could call it a short-term or ultra-short guilt fund. How does it work? Well, all they do is they just buy the really short-term government bonds. So let's say you've got a government bond that was issued 20 years ago, and it's only got three months to run. So it's like the last, you know.

26:33Last drags. Last drags from a cigarette. Correct. But that thing, the yield on it currently is around 5%. So you're almost taking no risk lending money to the government by buying this bond. It's going to generate 5 % return. And then when it matures, the fund will just go out and buy another one. So that way, they kind of have a treadmill where they always give you this exposure. And if interest rates are going up, they pick up the higher rates almost immediately. So when the Bank of England hikes, you know, Andrew Bailey, thank you, it's going to give you a higher income so it's not going to help the people who've got a mortgage of course but it's going to help save cash savings and it's giving you a better rate than you get in from a bank account savings banks because they lag they're like three and a half four percent maybe and if it's a call deposit you know if it's just a regular deposit accounts they'll give you almost nothing because from their point of view that's runnable money that's that's what will ultimately potentially kill their bank so you know they'll they'll give you an incentive to lock your money in for two years, three years, and give you a high rate for that.

27:32But for the call deposits, which is just a regular deposit, they'll give you nothing. And people get upset about this. And there's a whole Treasury Select Committee meeting that happened recently where they were slagging off the banks for this. But I think you just don't understand why the banks have these and they're kind of incentives from the bank's point of view. But yeah, so money market funds, very low risk, now a high return. Bonds, if you're about to retire, you probably want to de-risk your portfolio. So this is just watering down your equity, the stock position to reduce the likelihood of falling off a cliff just before you retire.

28:07And also, I mean, if you do these back tests, there are some brilliant websites like portfoliocharts.com where you can go and you can say, look, if I'd have had this portfolio, what returns would I have had over the last 50 years? Or for any 30-year period, what would have been the worst return? And what's surprising about this is even portfolios, which seem to have complete lame ducks in them, do really well. So for example, the permanent portfolio has got gold, it's got long-duration government bonds, it's got short-duration government bonds, which is kind of like cash, money market funds, and it's got stock.

28:42And stock is a fairly small proportion of it, but that actually does pretty well long term because you do get these periods when stocks underperform and by not crashing completely during those periods it does pretty well not as well as single stocks but still it does perform quite well would you go on as i said do you invest in gold i don't um i i haven't in the past i don't really like gold because it's a wasting asset it doesn't give you any kind of doesn't multiply we had that discussion earlier so i was wondering once your your perspective on it And it's kind of like crypto in that sense, because it doesn't do anything useful.

29:20You know, it doesn't produce anything which is useful for anyone. It does have some industrial uses, but it's not income generating. You have to pay money to store it. So it does have a place. I mean, if you look at 2020, it did hold up fairly well. And in the recent crash in 2022, it held its value. So, yeah, I mean, it passes the crash test. When people are scared, they buy gold. But you think something like bonds or money markets would be a bit better? Well, yeah. If it's a return. Yeah, yeah, yeah. Because if you're going to earn 5 % with a government bond for almost no risk, you compare that with gold, which is very volatile itself.

29:57It introduces crashes into your portfolio. And now that interest rates are higher, that's a really toxic environment for gold because of this logic. It doesn't generate an income. It's volatile. why would I buy that rather than government bonds, which very low volatility and guaranteed return almost. There's also the question mark if Bitcoin's eating its lunch a little bit with the younger generations and whether there's going to be outflows from gold into crypto. There's a lot of question marks there, isn't there? For the community, we've got this kind of simple model, which prices gold based on the two things.

30:30One of them is interest rates, real interest rates. The other one is a strength of the dollar because commodities are priced in dollars. and for a long time the value of gold was way below where it should have been based on the fundamental model and a lot of people thought that was the reason it was because people thought crypto is a new gold now less people think that they do call it digital gold yeah yeah similar like you say very similar store of value you know hedging not not limited supply but i think i think a lot of the narrative around crypto i think what's incredible about crypto is narrative changes as people perceive it differently.

31:05So it was seen as an inflation hedge. Nope, it's not because it crashed when inflation was high. It's seen as a good store of value. Nope, it's not. So it's hard to see what it is. They're trying to find a use case. Exactly. You find an AI thing. They attach it to the next bubble. And the new bubble is, of course, AI. Yeah, it was NFTs and websites. NFTs and AI. Yeah, yeah. It's surprising to me. We're going to get back onto portfolio allocation, but want to hear your point on this. And it's surprising to me just how quick people are to jump to the next bubble. So we've fresh out of NFTs. And to me, AI seems very bubbly.

31:40It seems very overhyped. Everyone's chat GPT. Yeah, I use a bit of chat GPT in my workflow and it's great. But people are drinking the Kool-Aid, aren't they, with AI now? What do you think about it? I think like all these things, if you overpay for something, that's the mistake people make. So if you buy NVIDIA now, Well, that's the problem, right? You've overpaid for it. It's a great idea and it has to generate huge returns now in terms of the profits which it generates just to keep up with the price. Because what people forget is that the price of a stock has to keep in line with its profits.

32:19Sometimes it kind of gets ahead of itself like Nvidia, but then ultimately it snaps back to some multiple. And if the earnings don't carry on increasing at an incredible rate now, unless they turn this into something hugely profitable, there's going to be a big correction at some point. So I think that's the problem with these shiny bubble syndromes. And I heard a nice description of this by John Authors, who used to be in the FT. Now he works for Bloomberg. He called it an echo bubble. People just remember all the previous kind of shiny balls. And they don't want to miss out on the new one. They think this is the next thing.

32:53So I think that's the danger. people overpay. But, you know, after a crash, I think that could be an interesting point to invest. If there is a market crash, then yeah, find the themes you like and buy them. But at the moment, you know, my partner, Laura, she just bought Nvidia. So, you know. Oh, really? It was almost like a confession. She said. I did it. Yeah. We have to talk. I've done something. You know, I've got a tattoo on my ass. I need to talk about something. And crypto on my nuts. Yeah, well, right. No, but it was interesting because she thought, well, it's just fun. You know, it's volatile, it's exciting.

33:26And there's the kind of narrative that goes with it. So I think that's why she wanted to buy it. Is she a good investor or a bad investor? Well, she always says she buys things that she feels in her waters. This is so good. So we thought we'd call it the hedge fund. We'd call it Laura's Waters. Yeah. Good chance as any, you know. Yeah, we'll probably beat most of the - That's right. Fundamental analysis, forget it. Yeah, feel it in the waters. With the bonds thing, you're saying that they're now sexy. How do people know when they're not sexy again? Is it solely just interest rates are going up, so the returns on bonds are going up?

34:02If interest rate starts coming down, the return on bonds will go down. It's not that simple because there's an extra dimension with bonds, which is the time that you lock in the rates which are fixed. So if interest rates are increasing, you want short duration. These instruments pick up the higher interest rates really quickly and they don't lose value as much if yields increase. Whereas long duration bonds get completely slaughtered. So in 2022, those long duration gilt funds lost more than they've ever lost, ever. Even if you can do back tests that go back 100 years and simulate them, there's never been a worse fall.

34:39So long duration is not what you want if rates are increasing. You don't want to lock in the rate for a long period of time. But when rates are falling, so let's just think forwards now to something like, I don't know, one year, two years from now. Inflation is going to be falling. Rates will also be falling because it's likely the Bank of England is going to be cutting the short-term interest rates. And if that's the case, you want to lock in those high rates for longer. So suddenly having long duration makes sense. So at that point - It's similar to a mortgage in a way, how people might think about the interest rates on their mortgage.

35:14Yeah, because it's a fixed - It might be comparable, you know, like, should I fix it? Is it variable? Except you're taking the other side of the trade this time around. So if you're receiving income, what you want to do is to lock that in for as long as possible if you think rates are falling. So that's what people would probably do. Certainly the pension crafters are going to do that. So you would go longer on the current rates to lock them in because you think they're probably approaching the peak rates. So instead of a money market fund, which almost immediately pick up the lower interest rates, you'd buy a 10-year bond, a 20-year bond.

35:44Because once you buy one, the coupon's fixed forever for the life of the bond. So that's why they'd become more attractive. So that's what you'd buy. And so it really depends on what you think is going to happen to interest rates and how your thoughts are different from what the market thinks. People don't want to have that decision though, because like a lot of people, you know, we're telling people buy a global index, you don't have to think about it. And then when you talk about bonds, you're predicting interest rates, basically. You do have to think about it. So you do have to have some kind of view.

36:12But for other people, like, let's say that you want to retire, okay? And then you want to buy a car every five years and you want to go on a holiday at this point in time and your daughter's going to get married in a year's time. Okay, so all of these events have cash flows that go with them. Wouldn't it be great if you had something where the money would pay out just in time? You'd know to the penny, to the day, how much you're going to get paid. Oh, that's a government bond. Yeah. So let's say that it's got a 5 % yield. You only have to put 95 pence in for every pound that you receive. So my daughter's wedding is going to cost, I don't know, how much do they cost now?

36:5030 grand? I don't know. you'd only have to put in 95 pence on the pound if the yield is 5%. Yeah. As long as you know when it's going to occur, you can plan almost perfectly. You can get that guaranteed return. Yeah. Yeah. So I think for those planning purposes, it's really useful. And everyone has those. If you're young, you still have to plan for this stuff. You want to buy a fancy car, you want to buy a house, all of this stuff you can plan for. So I think that certainty is invaluable. Because with stocks, you don't know what's going to happen. You know, it's so uncertain. You don't know what cash flows you're going to get.

37:24You don't know what it's going to be worth. It could crash just as you need it. And that uncertainty is a real problem. And a certain 5%, 6 % return is quite a nice return, isn't it? Especially if you're saying I need that in two years and that's money to get married with or whatever. So, you know, frame it in that sense from a portfolio allocation of see the bonds as a sure return and maybe set it towards a shorter-term goal that I need in the future. Maybe you don't need to be predicting interest rates. you just go in, I want 5 % on my 10K in two years. And there's no prediction involved. Yeah.

37:55So I did buy a single gilt about, I think it was in March, and I bought an inflation-linked bond as well, just to show the investors in our community how to do it. And I learned a lot from it. The link has been a wild ride, but the government bond, I know exactly how much I'm going to be paid. And that certainty has been so valuable. I saw the process of you going through it. It was like you had to send smoke signals, basically, didn't you? It was very antiquated. Like you've got a piece of paper and stuff. And this poor lady at the other end of the phone, she had to read out all of the stuff about the trade.

38:26The code that you were giving her. Do you remember? I was like, I couldn't follow it. Like I watched that video. It was really, it just shows how archaic that kind of process is. But I was just listening out for a certain phrase, which she was going to say, which was dirty price. I knew what the dirty price should have been. The dirty price. That sounds interesting. Oh, I thought you liked it. Tell me more about this dirty price. What do you care for this dirty price? But once I heard the dirty price and I knew it was right, I knew that was fine. The dirty price is just what you pay. So there's a clean price, which doesn't have the accrued coupon in it, and there's a dirty price, which it does.

38:56But for bonds, I think there's a whole language that goes with it. And there's this extra dimension, which is a time it's going to lock in the rate for. Where do you buy your bonds? There are certain platforms in the UK where you can, if you buy single bonds. If it's a bond fund, you can buy that pretty much on any platform. There'll be ETFs that give you the exposure. What do you think is better? a bond fund? Obviously not better, but what's the difference, bond fund or individual bonds? The big difference is the loss. So let's say you buy a government bond and you pay a certain amount for it.

39:29You know what it's going to yield if you hold it to maturity. With a bond, you never sell it. You don't have to sell it. You can sell it. You don't have to. You just wait till it matures and you get the money back. That's the beauty. You never face the market again. And that's very different from an equity, which is a perpetual instrument. It never matures. So for the bond, you know what you're going to get, and you have complete control over whether you sell it or not. Compare that with the bond fund, where the manager has a portfolio of bonds. If money comes into the fund, he has to buy more.

40:01If money flows out of the fund, he has to sell them. So you don't have the control over that. So let's say we go back to 2022, when there was the biggest fall ever in bond funds. And if you had a long duration bond fund, you'd have just had to take the hit you know you don't have to sell it but you don't have to mark to market loss for someone who's got a single bond you don't care yeah you don't look at you know you look at it i knew what yield i was locking in maybe it was two percent and it was lousy but am i am i going to have a loss no i just hold this maturity make this two percent reinvested at a higher rate so that's the big difference it's the control could we talk about REITs now as the next component that we could add in because i think you know people go through their investing journey they get the stocks.

40:46They may or may not consider bonds. The next thing is they hear that they can hold property within an ISA. Do you think people should have exposure to REITs? What in the world are REITs and how do you spell it? R-E-I-T, Real Estate Investment Trust. It's a way to buy property or commercial property. I mean, you can buy residential as well, but you basically buy an accommodation that buys lots of property. So you've got like a percentage of the property. I'll let you explain. Well, the way it works, right? I mean, there's kind of tax benefits for REITs, But the deal is, let's say the three of us were going to start a REIT.

41:17We'd get commercial funding. People would give us their money. We'd have maybe, I don't know, 100 million to invest. We'd go out, we'd find a property or a group of properties. We'd buy them. The deal is we'd have to pass on 90 % of the rental income to our investors. And in return for that, we don't pay corporation tax for that income. And there's also a kind of tax benefit for our investors. So it's a really very tax efficient way to siphon rental yield out of property and infrastructure to investors. So that's what a REIT is. But the problems with REITs really are to do with liquidity. Because if you imagine that we've bought, I don't know, three shopping centers, one problem is how much are they worth?

42:01What is a shopping center worth? You don't know, because it doesn't sell. So it's very illiquid. And then let's say that everybody starts pulling money out of our fund. Okay. We're going to have to pay them back. How are we going to do it? Sell the shopping center. We have to sell one shop. Yeah, one shopping center. If we've only got three, then we're stuffed. So that's the problem. It's a very liquid instrument with very illiquid assets. And so a lot of them get gated when there's a crisis, which means they turn around to their investors and they say, nope, you can't take your money out. They hold all the withdrawals.

42:32They go, Neil Woodford on you. Yeah, Neil Woodford. Well, it happened recently with BlackRock, for example, which had one of these REITs, which was a huge one. And there was a crisis and people, it was gated. So that makes a lot of people angry. In a down market, especially, you can see the value dropping and you can't sell it. So just be aware of the liquidity problem. Don't think that it's like fixed income because it pays you a high income because it's not. The volatility is usually like equity, i.e. it's quite crashy. If you don't believe me, just look at Land, which is a UK REIT. And that just crashed hugely in 2008.

43:10So it's very volatile. Usually it's got specific exposure to one country. One type of property. One type of property. It could be office space, for example, which at the moment, clearly not very popular. Just like any other investment. There's no entry levels. You can put a quid in them. As long as you can afford the share price. And now they've got fractional shares. If you rent and you want exposure to property, but you can't afford a deposit, you can get exposure to property and the fluctuations and the ability to rent through a REIT. Do you think people should be thinking about, I own a home that is part of my portfolio.

43:50By buying a REIT, I'm overexposing to property. Do you think people should think about that? Well, domestic property behaves very differently to commercial. Commercial is very cyclical. So let's say you've got exposure to shopping centers in America. If America goes through a recession, you're stuffed. You're going to lose value on the rentals and the price will go down a lot. So I think it's important to know that you can diversify REITs. You can get regional ones. You can get global ones. You can get sectoral ones where you just buy one sector. So just understand what's in it and what you're buying.

44:25And that's not as easy as it sounds. You have to really read in through the documentation for the fund to know what you're buying. Do you have re-reets? I have one, actually, which is Big Box, which is the one that buys these massive - Amazon, like, you know the great boxes on the motorways? Oh, yeah, the big, big ones. That's right. That's right. It's been a catastrophe in terms of investing, but it's giving a pretty high yield. I got a bit of realty income as well, which I think is like the OG, isn't it? The big boy. That makes sense. The big game is like the big one. But yeah, I mean, I'm like you.

44:59I have different portfolios where I experiment and I don't talk about them too much because my job is to talk about this. So it helps for me to have irons in the fire, if that makes sense. So I'll have a dividend portfolio. I'll have some speculative growth just so I can keep a look on the market. And within my dividend portfolio, I think I've got realty income and a few others and it's doing terribly. It's all doing terrible. But usually your house, I mean, if you buy a buy-to-let, a lot of the people I speak to, they have buy-to-let. It behaves kind of like an inflation-lick bond because it provides you an income.

45:32It's fairly safe. You do get some capital growth. Usually it keeps track with inflation, but not a lot more. But that's what it gives you. It's like a bond. So if you do have a big buy-to-let portfolio, it's kind of like you've got your bond allocation already. But of course, it's illiquid, it's expensive to trade, so it has lots of tax inefficiencies. Buy-to-let isn't a kind of no-brainer, I don't think. No, especially not now. But if you do have it, and I speak to people who are retired and they've got a pretty good income that comes from buy-to-lets, then they can take more risk with the rest of their portfolio.

46:06If it covers their income, then yeah, you can buy more equity and maybe leave more for your kids when you pass away. With the REIT thing as well, if you're buying a global index fund, you'll have REITs within that anyway, won't you? Because they're listed. A lot of them have REITs in them. So you're already getting the exposure through the global fund. You would have some. Yeah. And they trade on an exchange just like stocks. So they're very similar in that sense. I want to talk about you in a second because I think you're a bit of an enigma online. Really? Yeah. I just don't think we get to see you in PensionCraft and you do shine your personality through there but I think you know I want to talk about your story and the jump you made because I think you did that well before being a finance YouTuber was a thing that people thought you could do so I want to get into that but the key takeaway for me from this is that you've worked in this industry in the cult of alpha where people spend all their time and effort trying to beat the market and you've come out of that and now you personally just have a global index fund as your base thing and that does everything you need it to do and then everything else is just strapping on complexity and risk or risk of you making a bad decision basically, but you do it for a bit of fun.

47:17Would you say then that that's a good takeaway for someone that a global index can be just enough? Yeah. I mean, I speak to some people who do have like these permanent portfolio where they've got gold, they've got bonds, they've got stocks, because they don't like for crashes. But if you're willing to ride out the crashes, yeah, I think that would work pretty well, just having global equity. And by not riding out the crashes, by reducing them, you are reducing your overall return as well, aren't you? Because you're dampening it. By squashing the volatility, you also squash the total return, I would imagine.

47:47Yeah, but not as much as you'd think. And that's why it's worth looking at portfolio charts. Because one of the portfolios that the guy who creates it has made is called the golden butterfly. Because it's got five allocations. And it looks a little bit like a butterfly when you plot the pie chart. But it does pretty well. And it's got something called an ulcer index, which is how much things crash and how long they stay crashed. So if it crashes for a long time and it crashes a lot, you get a lot of ulcers. and this is really low on the ulcer index because there's always something that doesn't crash in the portfolio so just play around with it i'd say you know just try these different allocations and see which one suits your goals best uh but yeah i think i mean i speak to people in australia for example and they actually warn that the risk of owning bonds long term is that they underperform so that's the risk underperformance not having enough risk yeah long term so if you don't have enough equity, you will underperform probably, but it's not as clear cut as you'd think.

48:50No. That's why the back tests are interesting. Yeah. And, but for someone looking to start today, you can, you can grow into this, can't you? You can get your global index and then over the years, play around with a little bit of bonds or set up your other portfolios. If you're investing for a long period of time, yeah, absolutely. If you're 20, yeah, that makes absolute sense. But everyone has a different horizon. Yeah. So that's the most important thing when you're determining the allocation. And if, you know, if at retirement, say, would there not be an argument to stay 100 % equity if we're going to be living till 90?

49:21Weirdly, no. Again, if you do the back test here, if you imagine the amount of money you have over the course of your life, you know, most people start out with very little and then you kind of build up to a peak and then you retire and then you eat what you've built up and it dies back. It's kind of like a shark's fin. And the point at which you're most sensitive to a crash is when the shark's fin is at its peak. So that's why people de-risk just before retirement, maybe five years before. Because what you don't want, let's say you're 100 % equity. Let's say there's a 50 % crash just before you retire.

49:57Well, you've got to eat, right? You can't go to budget and say, yeah, I'm sorry, can I just defer this? So you have to eat. So what you do is you de-risk just before, maybe five years before. And if you think the crash will last, I don't know, five years at most until equity recovers, then you set aside five years of income and you can live off the low risk stuff. Money market funds, cash, those are the lowest risk, maybe slight duration in your portfolio, seven to 10 year government bonds. and that way by living off the safe stuff first you have have the best returns because what's it called when you're kicking your portfolio when it's down i can't remember the term basically we've crystallized a lot yeah if you take if you take them in that initial period though it's called sequencing risk sequencing risk so what's weird is the same crash and year one of retirement has a much bigger impact on how long your money lasts than say halfway through or towards the end so that's why it's sequencing risk yeah so it's about protecting those first couple of years exactly and could you just do that by having cash reserves yeah i could have three years worth of cash on hand yeah cash work because that is de-risking your you have a portion of your portfolio in cash so having cash like instruments like money market funds or short-term government bonds yeah okay perfect well thank you so much for that i would i'd like to have a brief chat now just about you because i'm fascinated if that's okay really number one number one fan he's got a big post of you honestly he phrased it every night before bed yeah yeah so i i'm a full-time finance youtuber i worked in the finance industry and i left what was a high paying job to to roll the dice but you put the feet in the snow first if that makes sense so i knew that it was possible because of someone like you there's you and then there's probably meaningful money that would say were trailblazers.

51:50I know Pete. Yeah, Pete Matthews is a great guy. I love him. We speak a lot. Yeah, he's a lovely guy. Why? Why? You left the city for, you know, making videos in your spare bedroom. Well, like I say, I was part of the business university when I was in the bank. And, you know, I became a strategist later on and that was great fun and I learned a lot. But the most intense, most enjoyable period was when I was teaching finance. so everybody has an exit plan in investment banking you know you speak to people in the pub and they say I'm going to be a carpenter or you know I'm going to be a singer and they're often really talented people who have these other strings to their bow and I thought that would be my exit plan you know I'd probably go into teaching and creating something like pension craft I thought it would be more geared towards professional investors but as it turned out I think retail investors, the greatest need was there.

52:47But I didn't know it was going to work. And for a long time, it didn't work. And my relationship suffered as a result of that. So it was a very difficult time. You mean you split up with your partner? Yeah, yeah. Because of the channel? Yeah, yeah. I got divorced. And clearly, I went from being an absent dad who'd get up before dawn, get back in bed after dark. Sometimes my partner didn't even see me. I went from that to full-time working at home where it wasn't a proper job, right? I mean, it wasn't seen as a job. And I can see why I'd have been a pain in the ass to live with because there was a lot of stress getting the channel working and getting everything off the ground.

53:27So there was a long period when I just didn't get many views and I just didn't think it was going to work. And I thought, well, I'll just give it a bit more time. So it was like anchoring, right? You think, oh, I'll just let it turn around and it didn't turn around quickly enough for my partner to be kind of happy with sticking with me. Well, look at you now. I was about to say, look at me now, look at me now. Yeah, but there was no ill will, you know, I think it was just, I understand why she wanted to leave, but yeah. And it was interesting because I had a chat with Pete Matthew early on and he said, yeah, great idea, but nobody else has managed to make it pay.

54:05How long were you plugging away for? That was about two years of that? Two years. Before. My second ever video got 400 ,000 views. Yeah. Well, for me, it took a lot longer. It was basically my mum watching the videos initially. I think, did you watch much YouTube prior to it? Not really. I did. And I think there's an element of like knowing the platform. So I knew to do like long tail keyword research and to target investing for beginners UK 2020. I was like, that's an underserved keyword. Like I had that strategy. I've seen you have started to refine your thumbnails recently. yeah because our video editor has started he said oh i could do that for you yeah yeah and they've improved and they are better i mean there was a there was a certain like like charm of your old ones do you know what i mean like they're quite a polite way of saying yeah they were budget i mean we've all been there mine aren't perfect thumbnails are like this constantly moving science i saw that you've you've changed that and i was like oh there we go that's so much there's so much doom porn out there.

55:02You know, people, if you put the word crash or, you know, crisis into the title of the video, everybody clicks on it. But at a certain point, you know, you've got to stop lying because, you know, markets don't crash most of the time and it stops people doing the right thing. So there's a kind of trade-off there. Oh, a hundred percent. And, you know, it would be very easy for me to go full on negative all the time. But I actually think you build the audience that you want in a way. And, you know, your content will attract people over time it might not explode and i think that that can give people these false positives and then before you know it they're pseudo conspiracy channels where everything is awful whereas i've like lent into behavioral finance and no one really does that and i read the academic papers and i say this and over time there's i've grown an audience that like that kind of content so i think you know it's like the hair and the turtle isn't it you might not race out but you'll build an audience of people who are loyal who like the content and you know i love your content well i know when people don't like it.

56:00I heard. You mentioned that a couple of times. It's great. Sometimes, like, I'm about to make a video, I see you, oh, for fuck's sake. He's going to have done it better. I'm just not going to touch that now because people just go, oh, you just copied Roman. I remade the life strategy funds on InvestEngine once and then someone come in and was like, yeah, Roman did this better. They're just deflated. Oh, that's so hard. I gave them, I gave them, like, full-on story and narrative, yeah, and they just didn't want it. They just wanted you going, oh, dear. Yeah, according to graphs, yeah. This graph above my head, yeah.

56:32No, thank you so much. And thanks for sharing about the breakdown of the relationship. I don't think people realize that YouTube is hard. It takes a lot of effort and time. And within a family setting, everybody almost has to sacrifice for the channel because it's all consuming. Well, now we've got the community. It's much harder because you have to kind of service the community as well as servicing the channel, producing new content. I mean, one kind of feeds off the other because the channel, the ideas for the videos comes from the community, the questions they ask, which, you know, I mean, you just had a question and answer session.

57:04It really inspires you to produce, you know, new content, but also to get into the minds of your listeners. So I think having that rapport is good, but it is a lot of work kind of maintaining a community. Yeah, well, I say like my boss is public opinion of me, which is like a very different concept for a lot of people. most people have like one person that they might report to directly and that'll be the person that keeps them up at night whereas we you you feel like responsible to the needs wants and almost the financial success of hundreds of people even though you don't give advice you feel accountable don't you for what you say and what you do and like you say you you talk about something people do it you know and you've got to be so careful like i made a video about money market funds and the risks and a lot of people sent an email to me saying i sold my money market fund i thought no no no that's not what i'm telling you to do that i was just talking about the risks yeah so i think you've got to be so careful but then there are certain times when people feed back how much you've changed their life yeah and it's just one of those groundbreaking moments in your life which gives you goosebumps people recognize you in the street yeah yeah it was so cool because i went out with my partner laura's grandson and uh we were going to pizza express and somebody recognized me they came across the street i think you're a rock star yeah so that's right especially YouTube you know so that was great.

58:24I bet you're really cool to the kid. Until I started tutoring him in maths yeah. I'm not so cool anymore. We talk about trigonometry now. Yeah well so obviously we've mentioned what you do but I just want to mention that you host your own podcast that's excellent. So it's me and Michael Pugh he's my podcast co-host he was a member of our community and now we kind of host it together and a lot of people are surprised. You realise he was smarter than you. We never met him. He is smarter than me. We never met. That's why Damien got me because I'm smarter than him. Yeah, yeah, yeah. But so that's why this is so different.

58:55You know, I've never met him and you two work side by side. Very different. Yeah, that's it. Well, we're old school friends. One of the stipulations was I wanted it in person, mainly so I could meet guests like yourself. And I was like, you're a school friend. Yeah, we went to university together. Went to uni together. So I did my channel alone. That's all just me. And then when Will approached me to do the podcast, they were like, get, you know, a yin to your yang or whatever. This is my yang. We should get a little yin and yang to your shirt. That's cool. Oh, that is cool. Thank you so much for your time today.

59:24Thank you. I really enjoyed speaking to you. No, no, it's our pleasure. Epic.

59:30Please remember, this is not financial advice. Like we say a lot on the podcast, investments can fall and rise. In fact, it's pretty much a guarantee. Past performance is no guarantee of future results. So your money is at risk with investing and other fees may apply. As with everything financial, please do your own research. We really encourage that because no one cares more about your money than you. I'm Damo. I'm T. This was an episode of Making Money from our company Most. It was filmed and edited by the team at Flow Spire, Jack and Ben. It was produced by Ruth Edwards and brought together by Will Stollerman.

1:00:00What about Ruth and Tiffless a dog? Yeah, shout out them too.