⁠I Was 100% in a Global Index Fund Until I Realised This

32:09Long-duration bonds, they are all over the place. The volatility is like equity. So in the UK, my community always jokes that TR73, which is like this 2073 maturing bond, it's got this incredible volatility. And we call it old man's crypto. Because if you want to take a punt on rates, you buy TR73. If you think rates are going to go down, you buy TR73. You can't short it. But if rates are falling, that's what you do. But that's really sensitive. Rates increase, that thing tanks. So in 2022, 23, they looked like meme stocks selling off. You know, they fell about 80%. But now, you know, the yields are higher.

32:51So I think those kind of crashes are less likely. But I didn't want to take that risk. I was taking risk off the table. I knew I couldn't call which way yields would go because there was a lot of uncertainty with Trump as president, new government in the UK at that time. So for me, I just went for a money market fund. And at that point, short term bonds were giving you more income than long term bonds, which was weird. The curve was inverted. Since then, the curve has now turned back to being normally upward sloping. And since the war with Iran, what's happened is the whole curve has shifted up.

33:29So now it is the case that you'd be better off with a gilt than you would with a money market fund. So money market funds earn roughly the SONIA rate, the sterling overnight index average rate, which is currently roughly bank rate, which was falling, but now looks like it may not be falling, again, due to the inflation shock. So, you know, you're earning pretty good money with it. It's very, very, very low risk, because they only buy very, very, very safe things. It's very boring, which is what I want. so that's what i've got no duration risk very little credit risk very little income but a reasonable income are there not bonds that track the rate of inflation when i make that linkers yeah yeah wouldn't that be something if in your 60 40 portfolio then if the inflation goes up then your bond your returns give me the bottom oh mate break yourself you thought you dug him off on you okay you sitting comfortably no i mean i bought some linkers for this very reason but what's weird about linkers is they bake in an expected rate of inflation it's called a break even so let's say you're going to be investing money for five years you think inflation is going to be three percent okay well if that's the case then what's the break-even rate for the linker if it's four percent then inflation in your belief system is not going to be high enough to pay for the inflation linker so that's that's the problem you've got to understand a shock to the upside you need to think it's going to be more than they expect it to be in order for the link even yeah and the break even will be based on a forecast of whatever it they think it should be or is it just based on market dynamics it could just be that people don't want to buy linkers you know or a big part of the linker market step back like insurance companies supply and demand exactly but it is you i mean people say that it's the expect the market expectation about inflation whether that's true or not is kind of irrelevant it's just based on what you believe right anyway my belief was wrong for my linker i thought i was earn about seven percent when i actually bought it it was just on the kind of tail end of the very high inflation period i thought it would be stickier than it was i was wrong and the market told me i was wrong by making less money than i thought so i made about six i thought i'd make about seven so you've got to be right right you've got to be right and you've got to know what's baked in so inflation linked bonds protect you against unexpected inflation normal government bonds protect you to against inflation that's expected so there's some of that baked into those two and equity is the best uh hedge against inflation longer term because businesses have pricing power exactly they can put their prices until it reaches about five percent inflation at which point they they derate so they provide you with limited uh inflation protection but beyond that five percent six percent inflation equities start to suffer as well usually is that everybody hurts at that point is it like a five six percent or above there's nowhere really to hide the linker would have done okay exactly because they wouldn't have but it's only you can't buy a linker after the event or you can buy the source of the inflation so if the source of the inflation was oil you could buy oil exposure if it was industrial metals it could but you could buy those you know i mean there are various ways you can hedge for that and you know commodities are one way to do that you can get commodity exposure which limits the damage to your portfolio so that's another way to do this is to hedge via commodities but you don't have any commodities in your not in the core no but i've been experimenting with that yeah this is what you do you say i'm 100 equity so i've just got a million experiments a bit of gold a bit of crypto i've got this i've got that it's just an experiment is there a circumstance that would make you change the bond allocation, as in move away from the money market fund into a gilt or something?

37:31Oh, yeah, yeah. I mean, we're in there now. I mean, that's why I think this yield curve tool is cool, because you can see that it's a living thing. It changes day to day. And if there's a bond sell-off, then yields get higher, right? And then suddenly, all of those bonds are above the dashed line on my graph for what you earn with a money market fund. So at that point, you're better off switching into gilts. So we're kind of there now. And I am tempted to switch. I think it could get even higher on the yields. For example, if there's a political change in the UK, but let's say there was a change in government, well, eventually there's going to be a change.

38:06And the government is much more spendy. In other words, they say, oh, you know, this debt to GDP thing, that was just made up anyway. You know, we're just going to carry on to 120%, 150%. It'll be fine. well if that happens well the yields then would you know they'd go up a lot so that could be another a point at which to get more exposure so there are lots of reasons why i might switch and at the moment we're kind of reaching the point where i'm thinking yeah there are quite a few guilts now where i'd be better off than you know getting a money market fund why would you be better off with the guilt just a higher return higher return so let's say you buy it today you lock in 4.5%, say, for the next two years.

38:50Whereas with a money market fund, it just picks up whatever rate the Monetary Policy Committee thinks up that week. And that can change over time. So you earn a variable rate. Do you think, for someone who's not into the bonds as you, do you think a money market fund could just suffice if they would get a good enough return on that long term to have that as the component. Yeah. I mean, in the UK, we're kind of blessed in the sense that we have a high short-term interest rate. A lot of people say it's bad, and it is for the government because they have to borrow at that rate. But for us, it's great.

39:24You know, I speak to people in Europe where the rate's 2 % rather than 4%, you know, in the UK, 3.75. So yeah, I think we're in a situation now where a money market fund's pretty good, simple, they're very cheap, the fees are about 0.1 for the cheapest and so simple right you just put your money and that's it if you go for the income version it's always worth a quid it just throws out cash flows every so often if you buy the accumulation version it just looks like a bank account where it just trundles upwards yeah mine goes up and then drops and you get like a dividend if it's a rampy one yeah that's the income version yeah yeah yeah i love it it builds up like a ski slope and then just drops and then a few days later you get your payment and that's yeah it's i think it'd be a bit unnerving for someone if they weren't expecting it because it just suddenly disappears the value i've had people call me and say what the hell's happened you know i thought this was safe but then you actually look zoom out on the y-axis it's just loads of those it's literally going reflective of the rates it's like a penny above one yeah one pound or yeah yeah but you see like a little movement in the past and then from 2020 it's like oh yeah because of the rates went high when the rates were low it was hardly visible wasn't it it's like a heartbeat suddenly kicking out yeah yeah no i mean i look you put you kind of got me into them which i'm sorry no no i mean it's it's a really good way to park business funds um at a good rate as well we do that you know or to have a bit of kind of like emergency funds and things you know i separate money in different places i put tax money i don't want my tax money anywhere near my business money but i need places to keep capital and the money market funds are really good for that i think and you know when it's business cash it can be it can be quite a lot of money you know where that falls in every quarter or whatever um so yeah and you can sell at any time and you're just up that slope so you've generated your return it's something like you're missing out that's right i mean you don't miss out it's just kind of accumulated income i do think they're a bit counterintuitive because to people they look like a stock like the charts and stuff so i think people need to wrap their heads around what what the version is they're buying and what that will look like on the chart before they go into it otherwise you might get a shock yeah the rampy ones are the income ones and the accumulation ones are the slowly upward moving ones yeah so would this would the slowly upward moving ones have gone steeper at the time the rate so it would have looked like a more aggressive climb that's right that's right so when interest rates were zero it's just flatlining and you just think why would i buy something like that and there isn't a good reason other than capital preservation but then when income rates are higher then yeah the slope is just high yeah so for our audience where do you get a money market fund and where do you get a bond well a lot of the platforms now offer gilts uh so for example hargroves has them interactive investor has them free trade now offers them free trade offers them trading 212 no no free trade are the first of like the neo kind of newish brokers the discount brokers they offer all of them i think at the moment it's just liquid ones uh but interactive investor gives you all of them and you can trade them electronically so once you know the ticker tr73 whatever that's the old man's crypto yeah but you get the shorter ones like uh tn28 whatever uh you just type in the ticker and you just buy it like you would with the stock and they trade on the london stock exchange so you can check out the prices if you want to uh you just search for the ticker again so it's pretty easy and money market funds are just like buying a normal fund you buy them on a broker most brokers have some on their different ones yeah vanguard's got two uh which are oeic's so if you're on an etf only platform you can't buy vanguards a lot of people buy ic open-ended investment company so it's just a fund an oik yeah i mean it's just a fund uh and some platforms have them some don't if it's etf only you can't buy oiks but erns is it erns is another one that's the one i think that one has a bit of duration in it okay so yeah but csh2 is the etf that a lot of people buy that's from a mundi it's a smart cash fund but that's an accumulation one yeah so that's that's that's a frequently used one raw london has one which is again a fee of about 0.1 percent the fees tend to be very low because the income's low what would they be described as if you were reading them sometimes it's under fixed income sometimes like on vanguard's platform there's only one money market fund so if you tick that category it's like one fund that pops up and they've got both flavors income and accumulation um both flavors yeah it's 0.1 a good fee yeah i think 0.1 is the lowest i know of royal london's is 0.1 csh2 i think is 0.1 or 0.12 so yeah generally the fees tend to be quite low you wouldn't pay a lot for that because it's such a simple product awesome uh a lot of our audience would have heard about the 100 minus your age rule.

44:11So, I mean, I'm 25. So if we did 100 minus my age, it would be 75. So 75 % in equities, 25 % in bonds or safer assets. How do you feel about that rule? I'm not actually 25. I'm 26. Oh my God. How do you feel about that rule? I'm disgusted you're so young. I'm not. I'm 38. Okay. I could have passed for 25. I'm glad that you believe me. See, this way you're getting back on. I wasn't going to say anything. I can see the gray hair, mate. Do you know how many of them I snipped out and got my missus to snip out this morning and you can still see them? So getting to be a full-time job for her. She's like, I need a salary to cut out all these grades.

44:49But I think, yeah, the rules that people come up with, yeah, okay, you want to take less risk just before you retire. I think that's a given. There's something called sequencing risk where if you're just about to start drawing on the money, so you have to sell stuff in order to eat, well, you don't want to have to sell things after they've crashed. So at that point, you want things which don't crash, which would be things like cash, money market funds, shorter duration gilts, maybe even global bond funds, you know, non-crashy things. Because then if equity markets fall 40%, well, you can eat the safe stuff until equity markets recover.

45:27So you can avoid the sequencing risk. The way to think of it is you're kind of scooping off a fixed amount of stuff, right? So if you're taking, say,£40 ,000 every year is what you're selling from your portfolio. If the size of your portfolio is halved, then the percentage you're withdrawing that year is going to be higher than it was before it shrank. So that means you're depleting the portfolio much more quickly. So that's why you want stuff where it doesn't shrink, so you can allow equity to snap back up. But if you are starting out your investing journey, say you're 20, and I mean do you think 20 years should be 80 % in equities you I mean you've just gone from 100 % equities recently and you're not 20 so do you think 20 years should be even do you need to be 20 % in in bonds it depends I mean it's some people I speak to they're very nervous so for them they probably wouldn't want to be 100 % equity because they will see a 40 % peak to trough fall at some point and they could be a nervous wreck if that happens or they may even sell you know the worst possible thing you can do.

46:30So I think that's really important. It's about risk appetite as well as risk capacity. So your risk capacity is very high because if the portfolio went to zero tomorrow, it wouldn't affect your ability to live, your quality of life, where you shop. But it would affect your ability to sleep, perhaps, because you'd be really upset. So I think the emotional side of it shouldn't be underestimated. So I think you could be 20 and have 50 % equity, 40 % equity. It really depends on the person. Really, it's about finding a portfolio you can live with. And for different people, I think, they have different levels of risk that they can stomach.

47:09But if you went back and you were 20, would you be 100 % equities? I think so, yeah, knowing what I know. Yeah, knowing what you know and being comfortable and having all the knowledge. I think rules sell books, don't they? So like, you know, the X, Y, Z rule, people are, oh, what is it? I'll click on that, I'll watch that, I'll consume that. I think, you know, 100 minus your age, the idea that every year you die at one point is probably a bit broad. And I think for a lot of people, so for example, me, in my early 20s, I probably would have been quite risk averse because I would have thought, I'm just going to mess this up.

47:40So I might have had a higher exposure to bonds then. But then in my mid 30s now, I'm like pretty comfortable in my view. I've been around the mill and I know that I can earn money. So I'm like 100 % equity. So you might - And you've got your kid, I assume, in 100 % equities. Yeah, I have. Yeah, yeah. Yeah, because he's got the longest time horizon. Yeah, but he might then take it over at 18 and be like, I don't want to lose this money. There's a bit of money here, but I don't want to lose it. So the 100 minus your age thing doesn't really work in that capacity. And would my son's point of birth be 99 % equities, 1 % bonds?

48:11Like, why? Yeah, why? It's just an odd. So I do think that rules of thumb are good, like the 4 % rule, but they don't normally survive a landing, do they, when they're in the real world. And it depends on rates as well. like in the 19th century, rates were really good. So if you'd have bought fixed income in the 1800s, actually it wouldn't have been a bad allocation at all. So it just depends on markets and where we are with yields. It depends on lots of things. But I think risk appetite is a really important one. And I think some people do some crazy stuff. Like, for example, there's the idea of the reverse glide path.

48:44Have you come across this? Where instead of ramping down the equities, you get older, you start off with very low risk. So you start off with 20 % just as you retire to avoid the sequencing risk. And then you re-risk. So you start increasing your risk as you get older. And actually, the back test shows that that works very well. I like that. I like it. So at the point of a time when you have 20 % equities, and then you start. Well, I mean, I'm just pulling a number out of the end. And then you start every year. So you avoid that taking a bite of the apple as it shrinks thing. But then you dial it back up because then you might be retired for 30 years, It's 40 years.

49:22So that's actually quite a long investing time horizon. So you want that equity exposure. I've never heard that one before. Yeah, you live to 125 and you're like, Jesus. Yeah, no, I sit here often think I would like to be quite high equity exposure in retirement. But then as you say, if you've got enough, why bother? Because it might mean that you don't sleep at night. Because on paper, it works if you get the average return of the market. but the year that it drops 30 40 percent and that stays down for three years you might then have three years of your precious retirement where you can't do anything and you're stressed and that's not a time you want to be stressed now the yields are higher you know four or five percent for a guilt which is very low risk i mean the risk of default is very low and if you hold them to maturity you don't worry about yield curve movements because you've locked in the rate of return your real worry i think is inflation because that can eat away in which case you buy linkers you know so some of the people buy inflation linked bonds some of our community have got like huge inflation linked bond portfolios because they're really you know kind of like inflation isters they really believe it's going to kick off those are linkers yeah those are linkers yeah do you um do you have any anything else outside the core portfolio allocation do you have a cash buffer like emergency funds anything like that um i do have a little bit yeah i mean just sitting in a in a bank account.

50:43And, you know, sometimes I put stuff into cash savings. But usually that's fairly minimal. You know, that wouldn't tide me over for that long. Maybe, you know, six months, something like that. But there is some buffer. But you're not in drawdown, are you? So when you, at the point you hit drawdown, where you start spending the money, how are you going to approach it then? Well, I think the way people usually do it, and the way I'll probably do it, is, you know, you set aside a certain amount of money for that year so you kind of locked in whatever it is you're going to get and then you withdraw that as you need it as an income um so that's probably the way i'll do it and a lot of a lot of these platforms that's the way it's worked out you've got a separate account a drawdown account like physically it's another account or virtually you know you just tag this as drawdown and then that's what you withdraw that year yeah most of miloski we had it on and i talked to him about a three-year waterfall strategy or whatever.

51:40And he was like, yeah, it's a placebo. Yeah, he's like, yeah, no. It'll survive. 90 % of times it won't work, but you go for that, Damien. You're like, oh. Yeah, he was more into the products where they basically cap your upside, ETFs with a capped upside, but a capped downside. And he said that these are much better products for dealing with sequencing risk. Oh, interesting. So capped and flawed. Yeah, so, you know, it can only ever go up by a max of 10%, but it can only ever drop by a max of 10%, say. So you give up the upside in years when it goes up 20%, but you don't feel the full downwards force.

52:18But, I mean, he was very bullish on these products, but I looked at them, and they're not very widely available in the UK, and they're quite expensive, and they're quite niche. They're very profitable for investment banks. I can imagine. I can imagine. I mean, whenever I hear about this financial engineering stuff, I'm always a bit wary. I just try to keep it vanilla, simple. As long as you understand the risks, I think that's probably best. I'd rather keep the upside. I kind of like that, that you can have up crashes. Because if you're going to be taking the risk, I want the up crashes, right?

52:50Yeah. I mean, over a 30, 40-year period, you're going to get some years where it's up 20 % because that's what tends to happen. The variance of returns is wild. the average rate of return of 10 % occurs hardly ever. You get these plus 20s. The next year you're going to be like, we're going to have a great year this year because we've just made 20%. My mom constantly tells me my pension is more now than it was when I started and we've been living off it and stuff. It's like a magic pot. Yeah, a magic money machine. Yeah, the government should get one of them. Yeah, so, okay, what have we got next, T?

53:23Okay, yeah, yeah. So I've changed my opinion probably over the period I've been making content. I was very much, I'll probably stay 100 % equities the whole life and I'll have a cash buffer. I now concede that if I got to enough and I've spoken to enough people that are older than me with wisdom of, you don't really want to be dicing with it when you've got enough. Why bother? Do you think people like me and the wider personal finance community focus too much on the equity side and not enough on the safe stuff. Safe. Yes. It's just unbelievable how little content there is on bonds. I mean, you look on YouTube, nothing.

54:04I mean, I'm a sole voice, right, talking about guilt. Why is that? I mean, it's not because it's a bad investment. You never learn about them in school. You know, stocks are kind of understandable. A little slice of a company, you get all the upside. It's a perpetual instrument. and yet bonds so useful nobody understands them you know everyone thinks they understand stocks i don't i'm still on to three years in i'm still trying to figure out figure it all out but it is complex right i don't think people do truly it's definitely simpler than bonds i think yeah but it shouldn't be because bonds in theory are simple it's a bit more tangible i think you know you see the we even though i'd actually say a stock is almost more abstract than a bond you have like the personalities and people and the talk that goes around the stock market that means like people can see a share of tesla and they see elon musk and they can draw a line between that a bond feels a little bit more abstract you see i'd push back on that with a bond you know what you're going to get you know on this date i'll receive this cash flow you know on this date i'll get my money back now that is incredible i think that's pretty tangible with an equity you've got no idea what you're going to get you don't know if it's going to exist as a company in 10 years time with a bond it's set in law that you get paid those yeah but you get like yield curbs and coupon rates and i think these yes yeah you just get excited i think people just then go like i don't know what what what's going on here and the fact that you can have a certain return if you hold it to maturity but in between that point it can be all over the place and that can probably feel not as safe as you say and it doesn't feel as isn't as liquid as stocks right depends i mean for gilts for gilts they're very liquid for corporate bonds yeah i mean where bonds are issued by companies yeah that's less liquid there was a video on youtube called if you don't understand bonds you don't understand money and it was like a young bloke who sat there and said basically all of you were obsessed with the stock market i'm going to explain why bonds are the most important financial instrument on the planet and he just breaks it all down in a really good way so maybe check that out i will um and because i think that that got like a lot of views i think a couple million views um so there are people fighting the bond fight with you it's not just you on a hill you've got you've got a partner in crime there but yeah i i don't know i don't know what it is why maybe it's because like we kind of internalize the thing that you're seeking a return and you want to grow your money and the stock market has the best chance of growing your money and when you describe a bond people probably just think oh it's a bit like a savings account or something so i'll just use one of those or i don't know why they don't have the same sexy sexy like oh i can't get rich off bonds but i could get rich off the stock market kind of some bond trained traders get very rich off bonds but they can do tricks that other people can't it's funny i was listening to the ft podcast one that was just launched it was interesting they were talking about turner you know the artist yes and he was a bond arbitrageur really he did bond arbitrage in the i don't know 1800s i guess maybe even earlier but he realized that there was a risk-free profit you could make from government bonds and you can make almost like i think it was three and a half percent difference between two different instruments so you know you buy one you swap it for another and it's risk-free but people didn't do it because they thought it wasn't a gentlemanly thing to do so he didn't think that he just did it he made a lot of money doing it do you do you think you were born 150 years too late you would have just been absolutely finessing the market in the previous life i would have loved to be able to do that but interesting right an artist who's into bond arbitrage who knew it's probably a bond arbitrage who got into art because he was so rich you know he could i mean was he successful in his while he was alive as i think he was successful as an artist but he wasn't born into wealth and a lot of the other artists thought it was quite ungentlemanly because they were all rich anyway that's right yeah whereas he taught he talked about it as well which uh which was uncouth apparently yeah i mean he found a money machine if you've got if you can just farm a safe three percent yeah nice you you mentioned before about the 40 drawdown um and you said you know that it will happen um do you think would you one soon the thing is i don't know i know it will happen i don't know when so i think for me it's about being ready for it whenever it happens you know my grandmother always used to say romen at my age you have to keep your bags packed because she was like 70 um so i i think that's the way to approach it you've got to keep your bags packed for the next crisis and you never know when it's going to happen and if you're in about to enter drawdown well then you better have your bags Do you think, like from an equity perspective, obviously we can talk about it all day as an interesting talking point for the world, but do you think from an equity investor's perspective, it's just kind of part of the ebbs and flows of the globe and it's not something that they should be overly worried about as long as they've got a long time horizon for investment?

59:07Yeah, I mean, if you're accumulating, these kind of crises are great. You know, for you two, brilliant. You're buying equities now at a depressed price. Well, not anymore. Not really. Briefly. what you were and maybe again, but it's good for you. So I think, yeah, this is just another crisis and a long history of crises, which eventually evict the equity market. But things snap back, you know, that's just the nature of the investment. You've just got to get used to the idea that something will make them fall 40%, 50%. And you've just got to get used to that idea. And if you haven't, if you're not comfortable with that, then just de-risk a bit.

59:44if the market doubles tomorrow would you feel bad about the fact that you do risk i think so i mean i'd have 60 of that so you know that's still pretty good would i have wished i'd have done more would i wish i'd have had something levered yeah maybe but you know i have played with levered uh funds you know i did like crazy three times nvidia versus tesla so long nvidia short Tesla. And I was just a wreck when I did it. It was in my fund portfolio, but I was checking it every day, every hour. And I was nervous. And I just didn't understand why Tesla wasn't selling off, even despite all the negative news flow.

1:00:24Eventually, it did recover, but it was after I closed down my trade, because I was just a wreck. And Laura was saying, look, you're spending too long on this. And she was right. So it was a bit like being a gambler in that sense. It's just not my nature to do that kind of thing so would i have fomo yeah probably does it feel boring now do you feel kind of out of the market a bit no i mean i still have the exposure so i still feel uh worried when markets fall but i think it worries me less than it did it did feel like things were toppy and it did worry me yeah it surprises me that it worries you when you're so stoic and you sit down and say oh you know it just is what it is i think also the news flow just made me quite depressed just reading what's going on in the world all the time it just feels as if every generation you think that the world's going to be better than the previous one and for our generation it was true you know when i was a kid we grew up with nuclear weapons we had the ussr and you know things were you know when i grew up people would quite openly call you a in the 70s and and now you get to the 2020s almost the 2030s and it feels like we're going back to that world where we've got these blocks of people that hate each other both within our country but also between countries and it just feels like things are going quite divided yeah and it's sad to see and that depresses me perhaps more than what's going on in market yeah it does feel like we've taken a bit of a step backwards in politics as well and we can't finish on that can we i was gonna say we're out here like showing them like the power of friendship so like you know me and damo yeah showing the world that you know it's all about love yeah but um he keeps coming trying to kill you yeah he keeps trying to kill me dig me up depress me i really i know what you mean though i mean you've got trump and you've got like a lot of people it's like you're either this or you're that you're left wing you're right when you're republicans oh yeah screw the rich Screw the poor, it's immigrants, and it's a lot of that.

1:02:27But I don't know. I think overall, the younger generation I've got more faith in, like Gen Z, I feel like they're kind of like, oh, we need to protect the planet, we need to do more things. I've always felt very lucky that I live in a crazy time of, not the nasty stuff, but in terms of development of technology and the things I've seen, the Silicon Age almost, and the fact that, you know, I've seen the development of computers in my lifetime to the point of I used to record songs on a tape player and now it's like abundant music in my pocket at all points and all the things that are iPhone and that.

1:03:03And anyone would have said, you lived in a miraculous time of development. And just as that's kind of like flatlining, they go, there's AI. And like, that's wonderful. I've been coding with Claude. Claude is amazing. Like every day I code with Claude. Yeah. And I feel like a god. Yeah. Yeah. I mean, you are. You are. No, but I mean, between like 1066 and 1700, it was just flatline misery. Do you know what I mean? It was just nothing. I mean, there was stuff, but it was a grind in existence and there wasn't much development and people's lives didn't really change or improve. It was just kind of like this.

1:03:41Whereas we've just hockey sticked and then we're about to find a whole new gear in this thing. You know, I was at a dinner last night speaking to some tech people and they're obviously a very like you know they drink the kool-aid of of the ai but they're genuinely sitting there going this is going to change everything about how we do our business we are like ripping up our whole business because of this stuff and i'm just like this is amazing yeah it's interesting the people it's affected it's the people who used to be the well-paid people right so lawyers coders well now coding almost anyone can do it i mean Not everyone can do it well, but you can be so much more productive.

1:04:19Now, if you've got AI, you can write what a whole team of developers used to be able to do. In fact, I reproduced a lot of what my team at the investment bank could have written over the space of months, over the space of a few days. Don't say it too loud, because I think what will happen is the cost to access these services will shoot up dramatically. When people start going, I'm making so much money off this thing. Are you? We need a slice of that. basically it'll get to a point where the economics are it costs just less than a person to hire do you know what i mean and then you'll have to hire someone to code it yeah or to prompt it so but i think that i think the point at which i realized how important it was was when i was speaking to a client i do coaching sessions one-to-one and they sent me what their ai had done and they said is this research okay so i find that quite often now which is that people send me the ai research and they want me to look over it to see if it's done something sensible so you've still got that human trust i think where people don't trust the ai maybe as much as they could i think there's still a role for people like you and me and i think you know the word ai slop tells you that people don't want to watch ai stuff they want a human who had to sweat to generate that video and it is blood sweat and tears if you create content isn't it i mean We know that.

1:05:40And people appreciate that. And they like the kind of human aspect of it as well. But I do think there's lots to be excited about. Oh, yes. I think we live in a miraculous time. I think hopefully in a couple hundred years, I look back at this moment where we lived and go, this is where everything started, basically. They were living in the Stone Age before this moment. And I'll still be there. 2 ,000 years old. Terminator demo just chilling out. Buy a global index fund. Yeah, yeah. Still 100 % equities. Still 100 % equities. Thank you so much as always, mate, for coming on. Great pleasure. Thanks for always.

1:06:23I can't do it with a bee above my head. No, your dish is going in it. You melt. You being a melt. Look, there's the bee. Where? Oh, it's right near you, mate. Stop it. Well, he has a hissy fit. I'll just talk to you about Roman's episode. Love having him on. and um are you all right i don't know where the b is but it's on your shirt bro don't do that i'll end up hitting you by mistake we spoke about ai and retirement in that and actually our ai tool that we've been building we've recently introduced some retirement components to that so if you want to check out check it out and look at things like um can i afford to retire when should i retire blah blah blah we'll leave a link to that below for you there it is you didn't just do that when i'm running away from a bee did you i'm not running away from a bee man i've got work to do

1:07:16We are sorry, but the new retirement feature for the AI isn't quite ready yet. We just had to keep that ending in just to show how much of a melt tea is. You can still get help with your money today, though, from the rest of the AI. We've left a link in the description and I'll let you know when the retirement planner thing is ready. and a little reminder just before you go if you've got five minutes it would be great if you can fill out our survey which you can find in the description normally this is where we'd say this isn't financial advice and it really isn't but if you want to speak to a good financial advisor then we might be able to help we've partnered with a few advisors to offer a range of services from one-off flat fee guidance to ongoing advice i'm actually using the guidance service to sort out my finances.

1:07:58If you'd like to understand your options, there's a link in the description where you can answer a few questions and then book a free call with my colleague Will, so you can figure out what might be right for you. This episode was produced by Ruth Edwards, and it was filmed and edited by Ben and Jack at Flowspire. See you next week.