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What can a 24 year-old tell you about investing? (you will be surprised) · The Money Puzzle

0:09
Speaker 1: Hello and welcome to the Australian's Money Puzzle podcast. I'm
0:12
Speaker 1: James Kirby, the wealth editor at The Australian and welcome
0:15
Speaker 1: aboard everybody. Look, one of the things I've tried to
0:17
Speaker 1: do on the show is to give you a diverse
0:20
Speaker 1: range of views on the matters we cover. I try
0:24
Speaker 1: to range beyond what you might call the usual suspects.
0:27
Speaker 1: which you get a lot in financial podcasts, understandably enough.
0:31
Speaker 1: So my guest today is one of the youngest I've
0:34
Speaker 1: had on the show. He is 24. Very interesting guest,
0:38
Speaker 1: as you can imagine. Taj Pabari. He's written a book
0:41
Speaker 1: called Young, Dumb and Financially Independent. And I talked to
0:46
Speaker 1: him before the show and we ran through some of
0:48
Speaker 1: the things we might talk about. And I made the
0:50
Speaker 1: point to him that I'm going to start with a
0:53
Speaker 1: difficult question because I did a book, a general book.
0:59
Speaker 1: In fact, it was the original edition of Investment for Dummies,
1:03
Speaker 1: which was, they were a big brand at the time,
1:05
Speaker 1: still a big brand, I suppose. And it was an
1:07
Speaker 1: encyclopedic introduction to all things finance.
1:10
Speaker 2: But I was....
1:13
Speaker 1: I don't know. Let me think. 31, 32, 33, 34, maybe.
1:17
Speaker 1: So I was about 10 years older than Taj. And
1:20
Speaker 1: why I wanted to bring that up is because I
1:21
Speaker 1: will say to you, Taj Bapari, what can a 24-year-old
1:25
Speaker 1: tell our audience about investing and finance when you haven't
1:30
Speaker 1: had enormous experience of cycles and life experience?
1:36
Speaker 2: Well, that's true, James. I think, look, I started my
1:38
Speaker 2: journey in the workforce when I was 14 years old.
1:41
Speaker 2: So it Couldn't get a job, a casual job, when
1:44
Speaker 2: I wanted one, so I created my own. So I
1:47
Speaker 2: really am now celebrating my 10th year, my first decade
1:50
Speaker 2: of working for myself. And I guess through that process,
1:54
Speaker 2: I've ended up learning some really weird and wonderful things,
1:57
Speaker 2: and financial literacy in particular was one of those things
2:00
Speaker 2: that I was forced to learn when running my own business.
2:04
Speaker 2: I think it built a beautiful social enterprise, and alongside that, without...
2:10
Speaker 2: parental grandparents help. I was able to, I guess, purchase
2:14
Speaker 2: my first home at 18 and purchase three more within
2:17
Speaker 2: four or five years thereafter. So I guess I am living,
2:21
Speaker 2: breathing proof that young people, especially in their 20s, can
2:25
Speaker 2: be financially independent.
2:26
Speaker 1: And you are, and it's very impressive. Tell me, you
2:30
Speaker 1: talk about school and that, and you mentioned financial literacy.
2:34
Speaker 1: Did you see the NAPLAN results that came out this?
2:37
Speaker 1: I'm sure you did because this is one of your
2:39
Speaker 1: key areas, I know. And how disappointing that NAPLAN results
2:43
Speaker 1: are and how it never seems to improve. I mean,
2:47
Speaker 1: enormous amounts of money went in on the Gonski plan.
2:50
Speaker 1: And still we have this basic situation. where based the
2:54
Speaker 1: wealthier you are, the more likely you are to do well.
2:57
Speaker 1: If your parents went to university, you're much, much more
2:59
Speaker 1: likely to go to university yourself. And we have these
3:03
Speaker 1: sort of terribly, it seems to me, structural barriers. And
3:08
Speaker 1: then in financial literacy, Taj, it's not very different. I mean,
3:13
Speaker 1: in many ways, they have similar issues, except financial literacy
3:16
Speaker 1: scores are actually going backwards the naplan ones are bad
3:20
Speaker 1: but they're stable in they're stable in their weakness but
3:23
Speaker 1: financial literacy is even worse on the recent hilda on
3:27
Speaker 1: the hilda scores uh what do you think because you
3:33
Speaker 1: were particularly interested in this and you're involved in it
3:37
Speaker 1: what can younger people do and i can we expect
3:42
Speaker 1: so much from schools anyway if the broader education system
3:46
Speaker 1: is so lacking anyway in terms of its scoring?
3:51
Speaker 2: Well, I think there's probably a couple of points there, James.
3:53
Speaker 2: I think the idea of, in all honesty, now I've
3:56
Speaker 2: not seen the NAPLAN results. I find myself as a
4:00
Speaker 2: student who went through NAPLAN over many years, I think
4:03
Speaker 2: there's the divide between success in traditional education and I
4:08
Speaker 2: guess the needs of the real world have never been
4:10
Speaker 2: more clear, right? The value of a school-based qualification or
4:15
Speaker 2: a university degree in particular has changed. Now, if I'm
4:19
Speaker 2: going to a doctor or I'm going to get a surgery,
4:20
Speaker 2: now I want my doctor and my surgeon to have
4:23
Speaker 2: a university degree, right? I would feel far more comfortable
4:27
Speaker 2: and I probably wouldn't see a doctor unless they had
4:29
Speaker 2: that qualification. Same thing with a lawyer, some of those
4:32
Speaker 2: technical professions. But for most of the population, the.
4:36
Speaker 2: Qualification, the certificate really is a mere indication of seat
4:41
Speaker 2: time served rather than mastery and a genuine proficiency or
4:46
Speaker 2: an understanding of a particular skill. I took that route.
4:50
Speaker 2: I finished school, I just passed, but I built up
4:54
Speaker 2: a number of a portfolio of skills in lots of
4:57
Speaker 2: different areas that I was passionate about and I was
5:00
Speaker 2: interested in. And I guess those skills actually meant something
5:02
Speaker 2: because I was able to deliver and demonstrate those skills
5:06
Speaker 2: in the real world alongside school. So I think there's a, obviously,
5:09
Speaker 2: if we're measuring the wrong thing in NAPLAN is a
5:12
Speaker 2: great indication of measuring young people on a very narrow
5:16
Speaker 2: set of skills that may or may not be important
5:19
Speaker 2: in the real world. What we like to see when
5:22
Speaker 2: it comes to financial literacy, for example, the schools, teachers
5:26
Speaker 2: want to teach these sort of things, James, but if
5:28
Speaker 2: they don't feel qualified to do it themselves, then we're
5:31
Speaker 2: probably going to have a pretty tricky situation. That's probably
5:34
Speaker 2: the case we're in right now where teachers don't necessarily
5:37
Speaker 2: feel fully qualified themselves to deliver their financial literacy education.
5:41
Speaker 2: And therefore, the theoretical knowledge that I guess the curriculum
5:45
Speaker 2: has built into the maths curriculum is being used, which
5:48
Speaker 2: isn't overly useful, but 100% useful in the actual real world.
5:53
Speaker 2: And that's what we're looking at solving.
5:56
Speaker 1: I'd love to ask you a couple of questions just
5:58
Speaker 1: on the hop here. And I know we had a plan,
6:01
Speaker 1: but we're varying from it already. But I'm sure you'll
6:04
Speaker 1: be able to wing it with me. Do you think
6:08
Speaker 1: when they measure NAPLAN and even financial literacy, it's all
6:12
Speaker 1: about numeracy.
6:13
Speaker 2: A lot of it.
6:14
Speaker 1: Hangs on numeracy. Do you think that numeracy in and
6:18
Speaker 1: of itself is fundamental to investment or business success?
6:24
Speaker 2: Yeah, absolutely. We need young people who can count. I
6:27
Speaker 2: fundamentally believe that every single young person needs to have
6:30
Speaker 2: a base level of maths understanding, and that's wonderful, I think.
6:35
Speaker 2: The issue comes when we start asking young people have
6:39
Speaker 2: a basic understanding of how to do long division, but
6:42
Speaker 2: they can't tell you how interest rates work or compound
6:45
Speaker 2: interest works. And I think that's a problem.
6:47
Speaker 1: Can I rephrase the question? You left school and you
6:51
Speaker 1: went straight in. You have a social enterprise, growing social enterprise.
6:54
Speaker 1: You've written a business investment book and you also have
7:00
Speaker 1: multiple property interests. Let me rephrase the question. Do you
7:03
Speaker 1: think the ability to successfully invest is innate to some degree?
7:11
Speaker 2: Perhaps for some, but I think overall, it's something that
7:15
Speaker 2: you can learn. In many cases, for a base level
7:18
Speaker 2: of financial understanding, it's a skill and you can learn it,
7:22
Speaker 2: but you need to know where to learn it from.
7:24
Speaker 2: If you don't have two parents that have been in
7:27
Speaker 2: the workforce or have got some level of financial literacy themselves,
7:31
Speaker 2: the odds of you getting in school is very little.
7:33
Speaker 2: So you've got to learn from somewhere. And that's the
7:36
Speaker 2: big question mark. Where do you actually learn that from?
7:38
Speaker 1: So where did you learn it from?
7:41
Speaker 2: Look, Jay, so I did finish school. I finished grade 12,
7:44
Speaker 2: which was great. I just had the attendance to get
7:49
Speaker 2: my certificate of education. So that was wonderful. But I
7:52
Speaker 2: had two parents that cared about me and loved me.
7:55
Speaker 2: One parent My dad, he couldn't afford to go to
7:58
Speaker 2: university in East Africa. So he went straight into the
8:01
Speaker 2: workforce and I guess got a really good taste of
8:03
Speaker 2: the world of work from a young age. Mum, on
8:06
Speaker 2: the other hand, she spent a long time in university,
8:10
Speaker 2: went back to university and is in the workforce right now.
8:13
Speaker 2: So I had two parents that worked. And I think
8:16
Speaker 2: the idea of having two parents that work is not novel,
8:19
Speaker 2: but when we used to go out or when we
8:21
Speaker 2: used to sit around for dinner at home, they wouldn't
8:24
Speaker 2: shy away from having discussions about how much they've got
8:27
Speaker 2: to pay on their credit cards. They didn't shy away
8:29
Speaker 2: from discussions about their home loans or home loan. They
8:34
Speaker 2: didn't shy away from discussions about how much things in
8:37
Speaker 2: the real world cost. And that wasn't just something that
8:39
Speaker 2: started when I was a teenager. These conversations were happening
8:42
Speaker 2: from when I was in primary school. These were just
8:45
Speaker 2: basic household conversations I was having.
8:47
Speaker 1: You're telling me that it was very useful, obviously, but
8:50
Speaker 1: they weren't entrepreneurs like you are.
8:52
Speaker 2: I guess dad ended up starting a business a couple
8:55
Speaker 2: of years ago. So he dipped his toes into the
8:57
Speaker 2: world of small business. But I guess both parents were
9:00
Speaker 2: in work. They both worked for someone. I saw the
9:03
Speaker 2: value of hard work and they never shied away from
9:06
Speaker 2: financial discussions or even just hard work conversations in front
9:10
Speaker 2: of us. And I think that was probably, it taught
9:12
Speaker 2: us that you've got to work hard in particular.
9:17
Speaker 1: It's terrific. There's so much I want to cover with you.
9:19
Speaker 1: We'll take a short break before I do take that break.
9:22
Speaker 1: I will hit reverse and remind the audience what your
9:28
Speaker 1: main operation is. I know we mentioned the book, but
9:30
Speaker 1: you could give them an elevator pitch on what your daily,
9:34
Speaker 1: on what your business, what ASE is, the group that
9:36
Speaker 1: you're best known for.
9:38
Speaker 2: Totally, James. So it's called the ASE group, and we
9:41
Speaker 2: do life skills education, employment programs, and self-employment programs for
9:46
Speaker 2: Aussies of all ages. We start with young people aged
9:49
Speaker 2: three years old, so in kindergarten, And we take them
9:51
Speaker 2: all the way up until like our oldest participants, like
9:54
Speaker 2: 73 years old. So it covers the whole spectrum and
9:57
Speaker 2: we really equip them with this adulting skill. that aren't
10:00
Speaker 2: taught in traditional classrooms.
10:02
Speaker 1: Very good okay we'll take a break we'll be back
10:04
Speaker 1: in a moment Hello and welcome back to the Australian's
10:15
Speaker 1: Money Puzzle podcast. I'm James Kirby, Wealth Editor at The Australian,
10:18
Speaker 1: talking to Taj Bapari of the ASC Group, an author
10:23
Speaker 1: of Young, Dumb and Financially Independent. I will say that
10:28
Speaker 1: I had a look at the book, Taj, and I'm familiar, obviously,
10:31
Speaker 1: with some of the basics that you needed to impart
10:34
Speaker 1: to your readers and very young readers, which is great.
10:38
Speaker 1: And I'm delighted that you're doing that sort of work.
10:41
Speaker 1: Can I just zone in on one thing about financial advice?
10:45
Speaker 1: Because you mentioned how you need to learn, right? And
10:49
Speaker 1: my show and this show is really for investors primarily.
10:54
Speaker 1: Lots of people have their own businesses, but it's about
10:56
Speaker 1: the investment point when they go to invest. It might
10:59
Speaker 1: be investing in property, might be investing on the share market.
11:03
Speaker 1: It might be investing in their own super, whatever way
11:05
Speaker 1: they want to approach it. So this issue of advice
11:08
Speaker 1: is very central here. to everybody. Tell me your instinctive perception,
11:16
Speaker 1: if you would, of the financial advice scene that is
11:20
Speaker 1: open to people in Australia.
11:23
Speaker 2: Yeah, I guess, James, look, it's tricky. I think the
11:26
Speaker 2: people that, I guess, need financial advice are the ones
11:29
Speaker 2: that can't perhaps afford it. And I think that's unfortunate.
11:33
Speaker 2: We've seen the rise of these wonderful Some poor, some
11:37
Speaker 2: wonderful influencers that young people have been so attracted to. Generally,
11:43
Speaker 2: the young people that need this advice are the ones
11:45
Speaker 2: that can't afford it. They're in part-time casualized work and
11:48
Speaker 2: therefore are looking for any way to grow in their lives.
11:52
Speaker 2: They're turning to social media and sometimes they're getting some
11:55
Speaker 2: really poor advice because they quite simply just can't afford
11:58
Speaker 2: real authentic advice from an expert, I think. idea that
12:03
Speaker 2: a financial advisor, in some cases, is out of reach
12:06
Speaker 2: for some young people. And that's why they're turning to
12:08
Speaker 2: social media to get their advice from that. Yes.
12:12
Speaker 1: And what do you think of the conundrum that they face?
12:18
Speaker 1: Is there a middle ground between influencers who are terribly
12:24
Speaker 1: varied in quality? And I worry about the banality basically
12:31
Speaker 1: often of the advice is for want of a better
12:33
Speaker 1: word that I see there. Sometimes it's okay. Sometimes it's
12:35
Speaker 1: absolutely dreadful. And then at the other end, there's financial advisors.
12:41
Speaker 1: They want $ 5, 000 when you walk in the door. What
12:44
Speaker 1: can we do? What can younger people do?
12:47
Speaker 2: Yeah, like I think obviously everyone who's doing this is
12:50
Speaker 2: an adult and they've got to make their own decisions.
12:52
Speaker 2: And I think the more options, the better. They've got
12:54
Speaker 2: to make a decision of which option ultimately is right
12:57
Speaker 2: for them. I think influencers can be wonderful. I think
13:00
Speaker 2: they've exposed a lot more young people that wouldn't necessarily
13:03
Speaker 2: be thinking about their careers to the big wide world
13:07
Speaker 2: of finances. So from a place of an introduction, I
13:11
Speaker 2: think that's fantastic. We also know that young people have
13:14
Speaker 2: a very low attention span. Now, I'm 24. I'm in
13:17
Speaker 2: the heart of Gen Z. I'm not a huge user
13:21
Speaker 2: of social media, but my attention span is far lower
13:24
Speaker 2: than The average human being, I think, as we go
13:26
Speaker 2: from Gen Z to Gen Alpha, that's only getting more significant.
13:30
Speaker 2: And that's why quick 30, 40 second reels on Instagram
13:34
Speaker 2: or TikTok teaching them about a particular area of finance
13:37
Speaker 2: is so captivating. Obviously, that's not practical. That method or
13:42
Speaker 2: that medium of education is not practical for giving personalized
13:46
Speaker 2: financial advice, but actually recognizing that young people are disengaging
13:51
Speaker 2: far quicker than everyone else. And Obviously, that's why they're
13:54
Speaker 2: going to social media to get that advice. I think
13:58
Speaker 2: it's obviously very boring, but there's got to be some
14:00
Speaker 2: level of toning it down and making it a lot
14:03
Speaker 2: more youth-friendly to get more young people to actually use
14:07
Speaker 2: proper formal advice mechanisms, not just social media.
14:10
Speaker 1: Boring but worthy. Hey, I'm going to pepper you with
14:12
Speaker 1: a couple of quick questions, okay? What do you think
14:15
Speaker 1: is the most common misconceptions that younger people make about
14:19
Speaker 1: finance and investing?
14:22
Speaker 2: Look, I think we're seeing so much doom and gloom, James,
14:25
Speaker 2: about buying your home. And if that's your asset of choice, fantastic.
14:29
Speaker 2: For me, it was. I believe in it. It's something
14:31
Speaker 2: that I decided to pursue from a young age. There's
14:34
Speaker 2: so much doom and gloom that buying a house or
14:36
Speaker 2: buying your first home is just not going to happen
14:39
Speaker 2: for this generation. And I think that's crazy.
14:42
Speaker 1: Sorry, you think it's crazy because you think you should
14:45
Speaker 1: have a more confident attitude?
14:48
Speaker 2: Absolutely. It's entirely possible for young people. We float these
14:51
Speaker 2: big numbers about median housing prices across the country. And yeah,
14:55
Speaker 2: they look large and that's what it is. But statistically,
14:59
Speaker 2: there's 50% of houses underneath that are a lot cheaper.
15:03
Speaker 2: So I guess young people don't necessarily need to buy
15:06
Speaker 2: an average house. They also don't need to buy their
15:08
Speaker 2: dream home. And I think if we look at and
15:12
Speaker 2: expose young people to the fact that housing isn't that
15:15
Speaker 2: doom and gloom, and that's just one example that it's
15:17
Speaker 2: entirely possible to start laying down foundations from a young age.
15:21
Speaker 2: And I think be that housing, be that their basic
15:26
Speaker 2: share portfolios, start young, start learning young, read lots, consume
15:30
Speaker 2: a significant amount of information. And I think the sooner
15:33
Speaker 2: you begin that journey, the happier hopefully they'll be in
15:36
Speaker 2: the future.
15:37
Speaker 1: Okay, I like your approach. Tell me, you're familiar, we
15:39
Speaker 1: did a show recently on the FIRE movement. People love
15:43
Speaker 1: to grab a concept. And you know, FIRE, financial independence,
15:47
Speaker 1: retire early. And we were talking about social media and influencers.
15:52
Speaker 1: Lots of that, that fire movement gets a lot of attention.
15:55
Speaker 1: Do you think it's a realistic path to follow that
16:00
Speaker 1: you could retire early? And what do you think you
16:03
Speaker 1: might have to do to achieve that?
16:04
Speaker 2: As you put it, everything's got to be done in moderation.
16:07
Speaker 2: The idea of not having any friends and if you
16:09
Speaker 2: don't have any friends, you don't have the expenses and
16:12
Speaker 2: you can retire early is, I guess, maybe appealing to
16:16
Speaker 2: to an interesting introvert who genuinely just wants to retire
16:19
Speaker 2: in the middle of nowhere in a caravan in their
16:21
Speaker 2: friend's land. And that's fine. But I think in moderation,
16:23
Speaker 2: that's not such a bad thing. Take everything, like anything
16:26
Speaker 2: in life, whether it be sugar, ginger beer, whatever, everything
16:31
Speaker 2: in moderation. I think the same thing for the principal.
16:34
Speaker 2: I think it can equip young people in particular with
16:37
Speaker 2: some good overall financial habits. But again, everything in moderation,
16:43
Speaker 2: and that's probably a really good one.
16:45
Speaker 1: All right, let me try something else with you. You're 24.
16:50
Speaker 1: If you woke up tomorrow and you were 34 and
16:53
Speaker 1: you had two small kids and a large mortgage, and
16:58
Speaker 1: let's just say for, just to make it even more interesting,
17:01
Speaker 1: that your career was going through a more difficult patch
17:08
Speaker 1: than it is at the moment, for whatever purpose. Do
17:11
Speaker 1: you think your attitude and the concepts you've put forward
17:16
Speaker 1: in your book about financial independence and the approach would
17:20
Speaker 1: change in any fashion?
17:23
Speaker 2: Look, James, while I don't have any human kids, I
17:25
Speaker 2: do have two cat kids and a couple of seven-figure mortgages.
17:28
Speaker 2: So yes, while obviously the specific pressures that I may
17:33
Speaker 2: face at 33 with two human children may differ, I
17:37
Speaker 2: think the fundamentals are the same. So many Aussies aren't
17:40
Speaker 2: living within their means, and that might be In many cases,
17:45
Speaker 2: in my opinion, it is out of choice. You look
17:47
Speaker 2: at young people buying cars, James. Does a 17-year-old in
17:52
Speaker 2: school actually need a car? It's become a rite of
17:55
Speaker 2: passage for many 16s and 17s when they get a
17:58
Speaker 2: loan licence or their P's. But I don't believe young
18:01
Speaker 2: people need a car. They could put that money towards
18:04
Speaker 2: something far more constructive to set them up for life. Now,
18:07
Speaker 2: at 33, I sort of feel that everything, you've got to,
18:12
Speaker 2: hopefully you've got to, A decent job, you've got a
18:14
Speaker 2: decent career. You might be struggling, but I don't think
18:18
Speaker 2: any of the principles would change. The fundamentals would be
18:23
Speaker 2: the same because I believe you live within your means.
18:26
Speaker 1: Do you have a car?
18:28
Speaker 2: I don't now, actually. No, I don't have a license, actually, James.
18:30
Speaker 2: So when I was buying my first homes, I'd be
18:33
Speaker 2: taking a bus with my electric scooter and then I'd
18:35
Speaker 2: electric scoot to all the opens. And that's what I've
18:37
Speaker 2: done up until we bought one a couple of months
18:39
Speaker 2: ago and I scooted. to the settlement. So I guess
18:42
Speaker 2: it's something that I've done and still do. I guess it's,
18:45
Speaker 2: I believe there would be absolutely no difference. There was
18:49
Speaker 2: that Tony Robbins quote, when people are about to die
18:51
Speaker 2: or succeed, they tend to succeed, right? And if you
18:56
Speaker 2: were in that position and you were struggling, it's really
18:58
Speaker 2: a matter of wanting my opinion. And I guess I
19:01
Speaker 2: don't say that as someone who's grown up. Yes, I
19:03
Speaker 2: went to a good school and I had two parents
19:04
Speaker 2: that loved me, but my first business at 19 ran
19:07
Speaker 2: out of money and we got ourselves out of that.
19:09
Speaker 2: with just strong, hard decisions. And I think that would
19:13
Speaker 2: be no different if we were going to do it again.
19:14
Speaker 1: Do you think, I just want to finish on this, Taj,
19:17
Speaker 1: but I find, I certainly find it very interesting peppering
19:20
Speaker 1: you with these questions. Do you think, do you perceive
19:24
Speaker 1: even that your attitude towards risk might decline as you
19:30
Speaker 1: get older? Or have you even felt that happening already?
19:33
Speaker 2: Of course, I think I was far more open to
19:35
Speaker 2: trying different types of things when I was pre-mortgage, pre-cats, pre-partner. Absolutely,
19:44
Speaker 2: that's natural, but... Why?
19:48
Speaker 1: Why is it natural?
19:49
Speaker 2: Well, look... I think you're conserving, you're protecting, I guess,
19:53
Speaker 2: what you might have built. When you don't have anything,
19:56
Speaker 2: it's a lot easier to perhaps risk what's available. I
19:59
Speaker 2: guess when you've actually perhaps built something or you've got
20:03
Speaker 2: to a certain level, you want to conserve the base.
20:06
Speaker 2: And I think, I guess, 24 right now, and that's
20:08
Speaker 2: the phase I'm in. Yeah, absolutely.
20:10
Speaker 1: Wouldn't that disposition start to limit you as a business person,
20:16
Speaker 1: an entrepreneur as you go forward?
20:18
Speaker 2: Perhaps, but I guess in my business, James, my job
20:22
Speaker 2: is to grow, but make sure that the interests of
20:24
Speaker 2: my investors are protected and make sure that in 10
20:27
Speaker 2: years time, this structure is still standing. And I guess
20:30
Speaker 2: in the same way, in my own personal life, yeah,
20:34
Speaker 2: of course, we all want to grow. But there's got
20:36
Speaker 2: to be some level of a base that I want
20:40
Speaker 2: to keep in order for me to live the life
20:41
Speaker 2: that I want to live. And I think the same
20:44
Speaker 2: way you grow a business, you don't risk 100% of
20:46
Speaker 2: the business every single time you take a step to grow.
20:49
Speaker 2: I think the same thing would happen and happens as
20:52
Speaker 2: perhaps you grow older.
20:54
Speaker 1: Okay, very good. All right, we'll be back in a moment, folks.
20:57
Speaker 1: And we will be back talking to Taj about some
21:01
Speaker 1: of his investors, actually, I want to talk about. And
21:03
Speaker 1: I want to talk about how he applies some of
21:06
Speaker 1: the principles that he explains in his book, Young, Dumb
21:09
Speaker 1: and Financially Independent, to his own life and his business activities.
21:13
Speaker 1: Back in a moment. Hello, welcome back to The Money Puzzle.
21:26
Speaker 1: James Kirby and Taj Bahpari here. Taj, the book, Young,
21:32
Speaker 1: Dumb and Financially Independent, you've been very fortunate. I've mentioned
21:35
Speaker 1: the title about five times. Normally when someone's on the
21:37
Speaker 1: show and they have a book, I mention it once.
21:40
Speaker 2: I think it's a good title, by the way.
21:41
Speaker 1: Tell me, it's all about being financially independent, financially smart.
21:47
Speaker 1: Here's the thing. Did you get a good deal with
21:49
Speaker 1: the publisher when you published that book?
21:52
Speaker 2: Look, we decided to go through that process ourselves, James,
21:55
Speaker 2: I think. When we began this process, we realized that
21:59
Speaker 2: you actually have to be very famous and you have
22:02
Speaker 2: to do something really quite incredible in order to make
22:05
Speaker 2: that pathway with the traditional publisher work. So we decided
22:09
Speaker 2: to go through that ourselves. We ended up with some
22:12
Speaker 2: beautiful distribution pathways and hopefully it's going to be a
22:15
Speaker 2: really great asset for young adults and school students.
22:18
Speaker 1: So you applied your entrepreneurial zeal basically and said, I'm
22:24
Speaker 1: not going into corporate publisher to get a miserable deal,
22:29
Speaker 1: I'm going to actually do it myself.
22:32
Speaker 2: Yeah, look, we've got our publishing arm now in case
22:35
Speaker 2: any of our future employees decide to write their own
22:39
Speaker 2: little pieces. James, we're all about life skills, so who
22:42
Speaker 2: knows what the next life skills might be. But absolutely,
22:45
Speaker 2: I think it was a pure financial decision. We looked
22:48
Speaker 2: at the numbers on traditional, we looked at the numbers
22:50
Speaker 2: going directly, and for us, it just totally made sense.
22:53
Speaker 1: Yes, I've entertained the listeners before with the fact that
22:55
Speaker 1: I wrote five books. Four of them were business and
22:58
Speaker 1: one was history. And then I stopped. I wrote five
23:01
Speaker 1: books in six years and then I stopped because I
23:03
Speaker 1: realized I'd probably get more per hour, you know, flipping
23:06
Speaker 1: burgers somewhere. But I still get royalty checks and I
23:09
Speaker 1: got my royalty check this year and I think it
23:12
Speaker 1: was $ 145.
23:14
Speaker 2: Well, congratulations. That's $ 145 in the right direction.
23:18
Speaker 1: Yes, which tells me I should have done what you did.
23:21
Speaker 2: All right. Very good.
23:23
Speaker 1: Tell us briefly about your link with ASE. You explained
23:28
Speaker 1: the business. And obviously, in a way, I don't want
23:31
Speaker 1: to call it an entrepreneurial school, but there's an element
23:34
Speaker 1: of that to it. And there's an element of financial
23:36
Speaker 1: literacy initiative and agency there. You have some interesting investors.
23:40
Speaker 1: You had an investor that's very well known. celebrity investor
23:44
Speaker 1: really tell us about that.
23:46
Speaker 2: We do so i guess we're a social enterprise but
23:48
Speaker 2: everything's we've got some great impact investors and one of
23:51
Speaker 2: them is steve baxter who used to be on shark
23:53
Speaker 2: tank and um i guess steve and i've known each
23:55
Speaker 2: other for for many years um i actually went to
23:58
Speaker 2: his office when i was 15 to pitch my first
24:01
Speaker 2: idea to him and um i wore my dad's suit
24:04
Speaker 2: and um i guess saw him on a weekend he
24:07
Speaker 2: made the time on a weekend and he hated my
24:08
Speaker 2: idea i i think i walked out of the room
24:11
Speaker 2: in tears and we ended up just keeping in touch.
24:14
Speaker 2: And a couple of years ago, he jumped onto this business.
24:17
Speaker 2: I see.
24:18
Speaker 1: What was the idea he rejected? And why did he
24:20
Speaker 1: like the one you have now?
24:22
Speaker 2: It was teaching kids about digital literacy, which I really
24:25
Speaker 2: thought was right up his alley as this tech tycoon.
24:28
Speaker 2: And we wanted to create 21st century Lego. So rather
24:31
Speaker 2: than just using like boring plastic bricks, get young people
24:35
Speaker 2: to actually build up, connect the pieces of a motherboard
24:38
Speaker 2: and the flex cables, the ramp, cpu etc and at
24:41
Speaker 2: the end it would turn on and be a tablet
24:43
Speaker 2: i walked out of that room i think we wanted
24:45
Speaker 2: like a hundred thousand dollars of investment and he said
24:48
Speaker 2: if you sell 10 000 of these units i'll give
24:50
Speaker 2: you a million dollars in cash we actually ended up
24:53
Speaker 2: selling 10 000 of these in pre-orders we had to
24:56
Speaker 2: refund everyone's orders because of like some electrical safety issues
25:00
Speaker 2: so we actually did sell 10 000 we just had
25:02
Speaker 2: to refund everyone which was unfortunate but yeah no he
25:05
Speaker 2: ended up taking a liking to the idea of teaching
25:07
Speaker 2: kids okay.
25:09
Speaker 1: And he's still involved obviously with you is he like
25:12
Speaker 1: involved in your strategic direction.
25:15
Speaker 2: Yeah yeah yeah he's on our advisory board in.
25:17
Speaker 1: Terms of financial literacy more generally because that's your passion
25:20
Speaker 1: i know particularly as it applies to younger people they're
25:25
Speaker 1: the the extra e c s t r a the
25:29
Speaker 1: the foundation the financial literacy foundation I mean, it's difficult, obviously,
25:34
Speaker 1: against the concept of NAPLAN itself. The education in Australia is, well,
25:39
Speaker 1: on international scores, is very poor. The financial literacy is
25:43
Speaker 1: even poorer. But they extra have been running some big
25:46
Speaker 1: programs through the schools, basically not waiting for the government
25:49
Speaker 1: to pick up and get going. And they've been running
25:51
Speaker 1: their own programs through schools, quite a lot of programs
25:55
Speaker 1: through schools. And it's an interesting organization. I think they
25:59
Speaker 1: are doing quite well within that. Is there anything you
26:02
Speaker 1: think that, are there any easy wins that you think
26:07
Speaker 1: have been missed in financial literacy society?
26:12
Speaker 2: Yeah, James, I think there's lots of one-off programs that
26:15
Speaker 2: currently take place in schools and universities where you go
26:18
Speaker 2: in for a day or an hour, two hours, you
26:20
Speaker 2: listen to someone talk about, yeah, you should budget, you
26:24
Speaker 2: should look at buying a home or whatever that presentation
26:28
Speaker 2: might be, but they're very one-off. They come in and
26:31
Speaker 2: they leave and everyone goes back to their day-to-day habits
26:34
Speaker 2: and it's business as usual. We sort of feel that
26:37
Speaker 2: there's got to be something a bit more long-term. There's
26:40
Speaker 2: got to be something that's got to be just like
26:43
Speaker 2: an English class where you really get to the nitty-gritty
26:46
Speaker 2: of that particular book or Shakespeare play you're writing on.
26:50
Speaker 2: There's got to be something more consistent. We sort of
26:52
Speaker 2: feel school is a great place for that, absolutely, because
26:55
Speaker 2: the kids are only in school from nine to three. University,
26:58
Speaker 2: even better. They're barely there. So the best time to
27:01
Speaker 2: teach these skills is to do it in school.
27:06
Speaker 1: Do you think it should be a standalone subject in school?
27:08
Speaker 2: Life skills. It should cover that broader life skills area.
27:13
Speaker 2: Financial literacy is obviously a fundamental element to that. But
27:17
Speaker 2: when we actually think, well, how do we do it?
27:19
Speaker 2: Encouraging young people to start a business from a young
27:22
Speaker 2: age is a perfect way to teach financial literacy, regardless
27:26
Speaker 2: of whether they care about running a business or not
27:28
Speaker 2: in the future. The principle of starting a business forces
27:32
Speaker 2: you to become a jack of all trades. You have
27:34
Speaker 2: to understand basic. You have to read profit and loss statements.
27:38
Speaker 2: You've got to submit your BAS statements. Even just the basics,
27:42
Speaker 2: even if it's not a micro business, at a young
27:45
Speaker 2: age will, I guess, ensure that young people are taught
27:48
Speaker 2: basic financial literacy. And I think that's a great thing.
27:51
Speaker 1: I want to ask you two other things. One is
27:54
Speaker 1: about financial literacy. Do you think commercial organizations can be trusted?
27:59
Speaker 1: with financial literacy. I'm thinking of disappointment in the past
28:02
Speaker 1: with banks and investment companies when they claim to offer
28:05
Speaker 1: a financial education, and that will never end, and they
28:07
Speaker 1: do it in a very sophisticated manner. Yours is a
28:10
Speaker 1: social enterprise, so I wouldn't worry, but I'm talking about
28:13
Speaker 1: a profit-making enterprise. Do you think they can be trusted
28:18
Speaker 1: with financial literacy assignments?
28:22
Speaker 2: Not directly. No, I think we've got to be extremely careful,
28:25
Speaker 2: and we've seen some of the effects of one bank
28:27
Speaker 2: in particular and what they've done to financial literacy in Australia.
28:31
Speaker 2: I think we've got to be extremely careful with banks.
28:34
Speaker 1: Are you talking about the Dolomites program?
28:37
Speaker 2: Yep. So, James, in transparency, my parents signed me up
28:41
Speaker 2: for Dolomites in school. I got my money box in
28:44
Speaker 2: the classroom and my first mortgage was with CBA. So
28:48
Speaker 2: I guess I was a... I guess I've got nothing
28:50
Speaker 2: against CBA, but that's a perfect example that their financial
28:53
Speaker 2: literacy program wasn't about financial literacy. It was a marketing
28:57
Speaker 2: pipeline building program. I firmly believe that, I guess, done right,
29:02
Speaker 2: we've got to be careful, but done right, banks do
29:04
Speaker 2: have a place to teach financial literacy to young people
29:08
Speaker 2: from a pure education point of view. There's got to
29:12
Speaker 2: be some arm length between their actual marketing teams, but
29:16
Speaker 2: I think they do have a path to play in
29:18
Speaker 2: teaching young people because, I guess, they've got brand recognition
29:21
Speaker 2: and schools are screaming for this sort of stuff. So,
29:24
Speaker 2: They've got branches all across the country. Why not bring
29:28
Speaker 2: them into schools in an open, transparent way, but doesn't
29:32
Speaker 2: result in them actually signing up to their bank right there,
29:36
Speaker 2: right now?
29:37
Speaker 1: Okay. Well, hope springs are turned. last thing. You mentioned
29:41
Speaker 1: in passing that about investment property and that you had
29:43
Speaker 1: several properties. Do you see that as a business in itself?
29:47
Speaker 1: People should approach that as a business in itself.
29:50
Speaker 2: Look, James, I'm a capitalist. I do. I believe it's
29:52
Speaker 2: a great business. I've taken just like Someone might want
29:56
Speaker 2: to sell popcorn as a side hustle between their jobs.
29:59
Speaker 2: This is my side hustle. This is my business outside
30:02
Speaker 2: of work. I love my job. I've got the best
30:04
Speaker 2: job in the world. But my pastime, the thing that
30:06
Speaker 2: I do for fun is I go to open homes.
30:09
Speaker 2: I look at property. I check out the market. And
30:12
Speaker 2: that's what I genuinely do for fun. So it's a
30:15
Speaker 2: fun business for me.
30:16
Speaker 1: You're not the only one, Taj. We have many listeners.
30:19
Speaker 1: You've picked up the national pastime pretty quick.
30:22
Speaker 2: Well, look, investors have been demonized by many people, many
30:27
Speaker 2: outspoken people who've got very quick one sentence slogans that
30:32
Speaker 2: fit on green colored banners. But I think it's a
30:36
Speaker 2: great business. It's a great business to teach you about
30:38
Speaker 2: the world. And even leaving aside the financial side, I've
30:42
Speaker 2: met some great people through that circle. So from a
30:44
Speaker 2: social point of view, I've built a beautiful network. So
30:47
Speaker 2: it's become a fun business, but also a really great
30:51
Speaker 2: way to meet interesting, like-minded individuals. Okay, terrific.
30:56
Speaker 1: We might leave it at that, Taj. Thank you very
30:58
Speaker 1: much for coming on the show. That's Taj Pabari of
31:01
Speaker 1: the ASE.
31:02
Speaker 2: Group, folks.
31:03
Speaker 1: You can check him out further. You can check out
31:05
Speaker 1: his book, which I've mentioned so often, I'm going to
31:07
Speaker 1: repeat the title again. But if you've been listening to
31:10
Speaker 1: the show, then you know what it is. He published
31:12
Speaker 1: it himself, which is all the more impressive. It's probably
31:15
Speaker 1: become a bit easier to do that these days. It
31:17
Speaker 1: used to be very difficult. It's got a bit easier.
31:20
Speaker 1: But congratulations on it, Taj. And thanks very much for
31:24
Speaker 1: coming on the show.
31:25
Speaker 2: Thanks for having me, James.
31:27
Speaker 1: Lovely to have you. OK, folks, we will resume normal
31:30
Speaker 1: transmission next week and we will be having correspondence. We
31:34
Speaker 1: will be doing questions and answers again. I'm delighted to
31:38
Speaker 1: say that we just had a short break on that.
31:40
Speaker 1: As you know, let's have a revival now, if we may,
31:43
Speaker 1: on the questions coming in from listeners. The email is
31:48
Speaker 1: themoneypuzzle Talk to you next week.