Transcriber: Nil Çelik
Reviewer: Zsófia Herczeg My father started his career
as an engineer in a time when the internet did not exist, neither did the easy access
to information on personal finance. He was earning good money, and when accidentally, an insurance sales
representative came across, he signed a life insurance contract in order to put
some money aside for later. His first encounter
with personal finance and investing was at the age of 50. He discovered that the stock market is accessible
for ordinary people’s wealth creation, and not only for the multi-millionaires. He learned that at a very expensive
money guru seminar, where he was told
that even as a simple employee, he could become rich
by investing in mutual funds, financial products that were,
and indeed are today, very expensive and often lack the promise
of delivering superior returns. But they are one of the few opportunities to invest in the stock market
in a diversified way. So he took a bold decision. He borrowed money
against his parents’ house in order to invest it in mutual funds. Shortly after, the dot-com
market bubble burst. His funds lost in value,
and he decided to sell his parts. We as a family, we needed money, and he was lacking of education
and experience on investing. By selling his parts, he realized
huge losses on his investment financed with borrowed money. Financially, it was a disaster, but how could he have known
or done it better? His case is not an exceptional one. Hundreds of thousands out there
share the same financial biography. Unaware of the availability
of financial education, we trust professionals
and may fall for faulty advice. This raises questions such as:
Where do I start with my finances? Who's a trustworthy advisor? How do I not lose money
on the stock market but still can make my savings grow
in order to close my pension gap? How do I not mess it up? And is that even possible? Yes it is. I am convinced
that the best money manager is you - by following some very simple
but smart decisions. Let me first tell you why I’m convinced that you can learn how to do
your finances yourself, and then how. Let’s start with the why? Maybe a little question in the round: Who’s investing right now
or put some money on the stock market? Okay. Who was already invested in 2020? Okay. That’s what I was - a bit expected. And in 2008? Who was already
invested in 2008? Okay. Very little. Okay, okay. 2008 was my first financial crisis. Financial crises typically come
with negative consequences such as job losses, monetary losses,
and in some severe cases, even home losses like in 2008. But often, they mark a turning point
changing the status quo permanently. As I said, 2008 was my first
financial crisis. At that time, I was glued to the TV, watching stock market reporters
fearfully describing how markets are crashing,
and banks are going bankrupt. I didn’t have any like-minded investors
to whom I could talk, nobody to share my fears and no social community around me
to support me in order to stay invested. I had no blogs or websites at my knowledge where I could have read
how to behave in such a situation. Twelve years later,
another financial crisis struck, but this time it was different. I will tell you why. The Covid pandemic made
the stock markets implode again. Up from February 2020, the stocks prices started
falling as sharply as they never did before in history. At that time, during my vacation
on a Pacific island, I produced a video
on why investors should not panic and why markets
tend to recover after crashes. I was also sharing what I will be doing
in this particular situation with my personal finances. More than 400,000 people saw that video. Back then, I had created, together
with my founding partner, a community of people
interested in financial education. Led by the pandemic crash,
we started regular streaming in order to engage closer
with our community. And here’s the thing that changed. Unlike me in 2008, instead of fearfully watching their TVs, young people, like many here,
started investing. They seized the opportunity. They took advantage
of the 30% market drop in order to buy stocks cheaper. The crisis was the beginning
of a new generation of young investors who celebrated their stock market debut and took over control
of their personal finances. So what was the shift between my father’s time
of personal finance, my father’s era, and the post-Covid world? It was the time of the beginning of the rise
of the do-it-yourself money managers. Now information is freely available
and had replaced costly seminars and communities stepped up
where gurus once stood. When we started YouTube in 2016, it was the second largest search engine
with a huge demand on educational content. Here are two examples. On the left side, you see
a video of a math teacher explaining how to add fractions. 2.6 million people saw that video
only in the German-speaking environment. The second one is a video we produced
on how the stock market works. Two million people saw that video. It was one out of 700 that we produced. Today, you could be enjoying
your favorite Spotify music playlist, and with the simple switch
within the same app, start listening to a finance podcast
from your favorite Wall Street journalist or dive into an absolute beginner's guide. Knowledge is now freely accessible
so that you can deep dive into any topic. Learning about finance was never as easy. But knowledge is not everything. The real value lies in applied knowledge. I had shared today the story of my dad, who did the mistake of investing
in mutual funds with borrowed money. I shared the story today so that you are aware of the risks
that are associated with that. But so as I do, hundreds,
thousands do it out there as well, They share the stories, experience reports
and case studies openly on platforms like Reddit,
YouTube, Discord, blogs, podcasts, newsletters, you name it. You can start following them. You can now learn
from the mistakes others have done so that you can avoid them. Another thing that has changed is that cost of financial products
fell to a record low. In the past, my father
had to go to a physical fund shop in order to buy those funds and had to pay
a high, four-figure commission. When I started investing,
the costs were much lower, but still at €20 per order. Today, brokerage is almost free, permitting you to start collecting
experiences with a very tiny budget. Let’s say 50 to 100 euros
or francs per month. But broker commissions
is not the only thing that fell. Also newly, very cost-efficient
funds had arisen: ETFs - for those who know me,
my favorite financial product - had been conceptualized, not for us private investors, but initially for professional
asset managers. This is usually a good sign, as professionals tend not to fall
for the shiny marketing bling bling, but ask for high liquidity and low costs. Participating in a financial market had never been as accessible,
transparent and social before. So this is why I am convinced that you can manage
your finances by yourself. Let’s now talk about the how:
how not to mess it up. Now that you have access,
learn the basics, use the aforementioned tools for yourself
in order to get the information you need for your particular situation. You’re young, you have time, you want to grow your wealth
or close your pension gap. Learn how to invest in a stock market
in order to beat inflation. Key learnings here are diversification
of risk and keeping costs low. You want to live in your own little house? Then learn how to save for it
and how to avoid the main financing traps. You want to get out of that? Learn how to create a sustainable budget
so that you can refund the debt and never need to borrow again. The more you learn,
the least you will mess it up. Second, follow the money
in order to unveil conflicts of interest because they are everywhere
in the financial world. A financial advisor offering you
a free insurance and investment check has a high incentive
of selling you a product from the company he represents regardless if you need it or not, A bank advisor will not be able
to advise you on the best ETF strategy, as he can only advise you on the products
the bank asks him to sell. And the mortgage lender
is disincentivised to tell you if your real estate project
might be too ambitious for your financial situation. Follow the money and ask who benefits? Third, always exercise
skepticism in finance, especially when faced with an offer
that seems too advantageous. Did you ever hear of this revolutionary,
once-in-a-lifetime opportunity with no risk, high reward and at the same time,
inflation protected and tax free? (Laughter) This product does not exist
outside the marketing world. What if you hear of this fancy startup based on blockchain
that will democratize finance? Democratizing in this context often means
“making accessible to everyone.” But start asking
what has been made accessible. “Buy now, pay later”
startups, for example, give you an easy access
to consumer credits right at the checkout
of your favorite e-commerce website. Did you ever shop something online
and get the suggestion: Do you want to pay your -
what you’ve bought in two or six or 12 months? This is exactly this. In my view, there is no need
for an easy access to self indebtment via consumer credits. Others provide you trading without fees
in a highly gamified app. High frequency trading with risky products
made accessible for everyone. This usually
only benefits the brokers as more than 80%
of retail traders lose money. Brokers benefit the more you trade. You risk losing more. Don’t get me wrong. Revolutions in finance benefit
many in the emerging nations, but in Europe, you should be wary because often the innovation
is not in the product but in the marketing strategy
making you buy something. Finally, don’t be afraid
of doing mistakes, because if there's one guarantee, then the one that you will not
make it right at the first try. This is usually true for any sports,
for baby learning to walk, and for your finances. What makes the difference is the application of knowledge
or your personal experiences. So start applying soon
what you’ve learned, and if you’re hesitating,
just reduce the budget of your decision. You're afraid of investing €5,000
in the stock market. This is totally normal. Just reduce the budget
to, for example, a few hundred or to a monthly savings plan
in order to see what happens. Taking over control
of your personal finances might be one of the most impactful
decisions you could possibly take. It comes at a risk,
like many things in life. Today’s landscape is shaped
by vast resources, abundant knowledge and supportive communities. This is how you navigate wisely. Thank you. (Applause) (Cheering)
