Latest / The Curve / RTC144: The new way to borrow and invest smarter, with Sam Rosenberg.

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RTC144: The new way to borrow and invest smarter, with Sam Rosenberg. · The Curve

• 0:00
  Welcome to Raising the Curve, a podcast designed to teach you everything that you need to know to be better with your money.
• 0:06
  Come and learn alongside me, Sophie Hallwright, a total beginner from the finance expert Victoria Harris.
• 0:12
  So I've asked all of the questions you wish you could so that finance, investing and growing your wealth actually makes sense.
• 0:18
  Yes, it's expert education but with promise will not be boring and in the wise words of sheer...
• 0:22
  My mom said to me, you know sweetheart, one day you should settle down and marry a rich man.
• 0:28
  My mom, I am a rich man.
• 0:30
  Come and talk and learn and laugh with us because together we really can raise the curve.
• 0:36
  We are about to speak to Sam Rosenberg who has created ideated, split, absolutely.
• 0:44
  Everything into this new amazing FinTech, which actually I should explain because I remember when I heard people first saying FinTech and I was like,
• 0:52
  what's that? Essentially it's a financial tech product.
• 0:56
  So I think the reason why I found this conversation particularly so fascinating is that what you're told a lot when you speak to business advisors or investors or anything is
• 1:08
  you're trying to solve a problem, you're not actually, you don't want to just come up with a product idea or a business because you think it sounds good.
• 1:16
  You need to be really looking at what is a problem that you're trying to solve.
• 1:20
  And the reason that this new product called Belong is so amazing is there's this real problem when it comes to age versus money with investing.
• 1:30
  So when you're younger you've got a lot of time on your side but you don't have a lot of money but when you're older you have a lot of money but no time.
• 1:39
  And obviously when it comes to investing you need both, you need time and money.
• 1:44
  And so speaking to Sam about how she came up with this business idea and the functionality it's essentially like looking at how people make so many returns when it comes to getting a mortgage because you're able to leverage money so you can borrow money from the bank and it just basically compounds the amount you can return.
• 2:03
  So let's just say you bought a house, oh my god actually I don't trust myself to explain this by myself and fix not here but essentially it's the idea that when you borrow money you only relive to pay back what you borrowed but it magnifies the amount that you can make.
• 2:17
  So similar later that she's created a whole product that allows you to borrow money and actually then invest with more so it's really cool.
• 2:25
  And I think what was so interesting is that her background is from she's done a lot of studying and one of the degree she was on behavior economics so understanding how and why people spend money.
• 2:38
  How and why people either do or don't invest and she's created a whole product that that speaks to everything that she's learned when it comes to people and money.
• 2:47
  So this was a super interesting chat for us and honestly one that we could have just had with her at a cafe but we thought actually I think that our audience would be really interested in learning about this and the more that we put content out that is business related the more feedback we seem to get from people enjoying it.
• 3:06
  And so please let us know if you listen to this and you're like I don't know I didn't learn a lot and didn't find it interesting because it would be really good to know we have so many conversations like this one privately and we just thought it would be fun to bring it to you so you can get a peek inside of some of the conversations that we have with incredible business owners over here in the UK and in other parts of the world so we hope that you enjoy it and with that here is Sam Rosenberg.
• 3:36
  Firstly welcome to our first ever South African. I love podcasts. Firstly I want to explain how we met because it was kind of like I want to say serendipitous.
• 3:47
  That was the way that I was going to go for. So Sam reached out to Instagram was like hey love what you girls are doing and I would love to catch up with you guys.
• 3:57
  Life got in the way and then I was actually the dinner friend of a friend was like I should introduce you to my friend Sam who's created belong and so finally connected.
• 4:04
  We want to see you on the podcast learn more about belong what you're trying to achieve your investing journey and all of the about so welcome.
• 4:10
  Thank you very much. Thanks for having me.
• 4:12
  Can we start by getting a bit of an overview as to how the idea came about yes of course I studied economics and law specialized in behavioral economics and then further specialized in financial decision making.
• 4:25
  Behavior economics so it's the intersection of psychology and economics that's quite incredible and then you went into financial financial decision making.
• 4:34
  So essentially behavioral economics is understanding how economic players how they make decisions why they behave the way that they do.
• 4:41
  And it's found on this idea that you know traditional economics is that we're perfectly rational that when price goes up demand goes down and that's just that doesn't hold in reality we're not perfectly rational we're actually perfectly irrational in these predictable ways by understanding those predictable
• 4:57
  rationalities we can then drive behavior or influence behavior for better.
• 5:02
  Oh my god I always wanted to do psychology psychology and money psychology and economics I just think yeah I find just people's behavioral patterns and humans psychology in general is fascinating.
• 5:14
  But to hear that you've married the toe yeah how cool and so did you think I want to work in advising financial institutions as to like what you think you're going to see or my research wasn't gambling addiction which was can we do a whole other episode on that I be fascinated.
• 5:34
  So I did my master and it had just kind of landed in South Africa as this new thing in the academic space a lot was going on in the rest of the world Australia with the next unit UK also had one where they were embedding behavioral science into the way they created policies.
• 5:49
  So the famous one was the organ donation.
• 5:52
  Oh the default.
• 5:53
  Yeah so it's like it's like it's like pension you automatically roll you have to opt out.
• 5:59
  Is it the idea that if you say to someone like it's a lot harder to decide to opt out opposed to.
• 6:06
  Yeah well it's kind of one of these predictable irrationalities because most of the time the rational thing is to just go with the default.
• 6:14
  But that's the easy thing to do so we know that most people go with the default even if it's not the rational thing to just the irrational thing to do it's kind of like when you see a really long line outside of a restaurant the rational thing is obviously a good restaurant because all these people are lined up.
• 6:28
  But there is a chance that it's actually not a very good restaurant everyone's lined up because people are lining up because everyone else is lined up that's called the herd effect we see we just follow the herd.
• 6:37
  But would the irrational thing to do be to wait in the queue or to go to somewhere that doesn't have a queue.
• 6:43
  The perfectly rational thing to do would be to research the restaurant slow down your decision making look at the menu see if somebody actually want to do.
• 6:51
  And so this nudge like what was happening in terms of some of the policy changes that was happening at the time and so you thought this is kind of interesting.
• 6:59
  Yeah I was like this is so cool by pure chance as I finished my masters a friend of mine knew someone who had just started was pulling together the first team of applied behavioral specialists in Africa.
• 7:14
  So I joined that team I was specifically looking at the way people behave with their money I worked with all the big banks the insurance companies investment companies on how to embed behavioral thinking into the existing products and processes.
• 7:26
  Would this be like when I'm booking on Ryanair to go to Barcelona for the weekend and it's like do you want to pick your set and I'm like no but then they make the color the opposite to what I'm trying to click so then I always get confused and I'm like well maybe I do want to pick it and then I'm like no I didn't want that.
• 7:46
  So what it comes down to is system one and system two thinking system one is very reactive knee joke reactions if I say what's one plus one you say it's two if you see people standing in line for a restaurant that's a knee joke reaction if you see it the color of the buttons green and not red that's knee joke reaction system two is slow rational thinking where they're not I should save and invest where they're not I should immigrate like these big life decisions should happen in system two.
• 8:12
  But what is happening is we make most of our decisions in system one do you just go around all day going no that system one no I'm not going to fall for that I'm going to fall yeah I could be so clever with the way that you talk to people the way that you can products the way that if you understand and well that's one of the problems of that is because we have some of the smartest people in the whole world creating marketing campaigns.
• 8:37
  And green buttons when they should be read in the UX to get us to spend more money instead of saving it and when you say UX you mean the user experience yeah holy shit though and terms of creating your own product kind of genius and so what would you do when you were working with financial services companies like can you give us an example of something yeah so big one was retirement savings.
• 9:01
  So in South Africa you have two opportunities to access your retirement savings one when you retire at the other time you have you can access your savings is any time you move job.
• 9:12
  What which is crazy yeah I mean that was great like 40 50 years ago when everyone stayed in the same job but now with people moving all the time people getting access to their retirement savings every two three four years every time these young people in their 20s 30s move job they get a phone call from pension provider saying.
• 9:30
  Hey what would you like to do with your retirement savings and obviously I want to take it and go.
• 9:35
  Obviously yeah and I'm in this very uncertain space moving jobs.
• 9:39
  What was like during COVID when Australia gave that option to take out.
• 9:44
  I think it was $20,000.
• 9:45
  I did.
• 9:46
  It was $20,000.
• 9:47
  If you ever won off your $20,000 withdraw.
• 9:49
  And that's a one.
• 9:50
  If you had made that decision in system two you would have sat down and thought do I really need all of this what am I going to spend it on you would have done a budget for it.
• 9:57
  So a system one has nothing to do with how you like it's purely on the way they make the decision rather than the process because for me I had to apply to take that money out.
• 10:07
  No one was calling me to say do you want to take it out.
• 10:09
  So just a system one versus system two of anything to do with that.
• 10:12
  So it kind of is the process that you used to make the decision because you leaning on these mental shortcuts.
• 10:18
  So it's all about these mental shortcuts system two you don't take any shortcuts you do all that hard thinking system one you take the mental shortcut.
• 10:25
  Do I need the money.
• 10:26
  Yes, that was your first decision.
• 10:28
  You then just had to apply you to really made the decision that you want to take the money.
• 10:31
  What were you trying to change within the system and South Africa for pension specifically.
• 10:35
  So we weren't working at a systematic level.
• 10:38
  We were more layering on top of the existing processes at each individual institution.
• 10:44
  So for example, in that case we want to encourage people to keep their money when they got that phone call to say no I don't want to take it.
• 10:52
  And we just made changes to the contact center script.
• 10:55
  For example, we use something called anchoring.
• 10:58
  You get a call you say hi.
• 11:00
  We see you moving jobs.
• 11:02
  You've got 10,000 pounds of retirement savings. What would you like to do with it?
• 11:06
  I'm going to say I'll take the 10,000 pounds. Thank you.
• 11:09
  We changed us to say hi in order to retire happily one day.
• 11:12
  You'll need 100,000 pounds.
• 11:14
  You're currently have 10,000 pounds.
• 11:16
  What would you like to do with it and just giving them an anchor what they need.
• 11:19
  And they're just so easy.
• 11:21
  You're not saying that you're degrees.
• 11:23
  It's so mind-blowing to think that that's such a tiny tweak but the enormous impact that that would be having in a positive way.
• 11:32
  It's like saying do you think I look good on this outfit?
• 11:35
  No, what would you change about my outfit before you leave the hat?
• 11:38
  Yes.
• 11:40
  I think I'm suffering forcing.
• 11:42
  Do you think I look good?
• 11:44
  Yes, yes, yes.
• 11:45
  So when you were working within that space, would that have been a two-year project?
• 11:50
  Do you have to come up with all these examples and do interviews and tests that would work?
• 11:55
  How has that even...
• 11:56
  Yeah, so we did a lot of AB testing and experimenting.
• 11:59
  In an example like that, we'd listen to a whole bunch of conversations with customers and then figure out basically where the biases were in the conversation
• 12:08
  and come up with a whole lot of ways or behavioral theories for how we could counteract those biases, implement them into the script.
• 12:17
  Split the context into like two groups, one group uses the new script, the other group uses the old script and seeing what the impact is.
• 12:25
  So these projects ran for about three or four months and then we'd kind of handed over to the institution to implement across the board.
• 12:32
  Did bail on come because of frustrations within working in the system?
• 12:37
  I'd love to hear what was happening at the time that sparked you, I think, actually there's really something here.
• 12:43
  I think that's why I was absolutely loved it. I was going to do that for the rest of my life.
• 12:46
  And then very quickly, it was almost like the walls of my life were closing on me.
• 12:50
  I could very clearly see the next 50 years, like living in South Africa, working and consulting, doing this thing that I love.
• 12:57
  And weirdly, that really scared me. And I was like, there has to be more.
• 13:02
  Like I couldn't have cracked the code at 24 years old.
• 13:05
  That's not how I used to be.
• 13:06
  I was just out of my masters.
• 13:08
  And that's when I started thinking about, okay, well, what would I do?
• 13:12
  And I knew that it was still going to be in behavioral economics.
• 13:16
  It was still going to be with the way people behave with their money.
• 13:19
  But there was definitely an opportunity to be doing it at a grassroots level.
• 13:22
  So to be building businesses from the ground up based on what we know about the way people behave.
• 13:27
  But I had no idea how I was going to get into that.
• 13:30
  So I moved to the UK and I did my MBA at London Business School.
• 13:34
  And that was the best thing I ever did because I dropped the blinkers.
• 13:38
  And all of a sudden, it was quite clear how I could make a career out of building products.
• 13:45
  And businesses from the ground up using behavioral science, you could start your own company.
• 13:50
  What was that, what kind of light bulb moment of like?
• 13:53
  Belong is the company I'm going to create.
• 13:55
  For me, it was a massive misconception was that one day you wake up, you're like,
• 13:59
  I've got a brilliant idea.
• 14:00
  I've got a problem I want to solve. I've got the solution.
• 14:03
  And I'm going to be a founder.
• 14:05
  It wasn't like that at all.
• 14:06
  It was like one day I just woke up and I was like, oh gosh, I've just been the last year of my life becoming an entrepreneur and now I'm a founder.
• 14:13
  And so it was very much a journey.
• 14:15
  There were definitely micro light moments.
• 14:19
  One of them was meeting Nick Hungerford, the founder of Nutmeg.
• 14:23
  He mentored me during my MBA.
• 14:25
  Oh, that's amazing.
• 14:26
  Yeah.
• 14:27
  Just for anyone who's not based in the UK, Nutmeg is a trading platform.
• 14:30
  So it's like a DIY similar to Shazies or steak.
• 14:35
  And he introduced me to my co-founder.
• 14:37
  He's always says that he introduced us because we were speaking to him about the same problem just using slightly different language.
• 14:44
  So from my behavioural background, I was speaking about these irrational decisions we make.
• 14:48
  Looking at a macro level, millennials are the first generation say to be less well-off than our parents.
• 14:52
  We aren't building wealth.
• 14:54
  We don't have the tools to build wealth that our parents did.
• 14:56
  And everything around us is about instant gratification.
• 15:00
  And Abby, on my co-founder, her background is an investment banking.
• 15:03
  She worked in Fintech for a long time.
• 15:05
  She was speaking to him from a more mathematical or rational perspective.
• 15:09
  And she was saying, you know, in order to build wealth, you need to get in earlier with more benefit.
• 15:13
  Benefit from compounding the classic Warren Buffett approach by and hold.
• 15:17
  And they just aren't any solutions out there that are encouraging that and owning that narrative.
• 15:22
  So he put us together.
• 15:24
  It really resonated with me in that I studied economics.
• 15:28
  I specialised in the way people behave with their money.
• 15:32
  I worked in financial services.
• 15:34
  I was not doing an MBA and I still wasn't investing.
• 15:37
  So now I'm sitting there.
• 15:39
  I've done invest.
• 15:40
  I've got 500 classmates that I'm like, okay, they definitely invest.
• 15:43
  So let me talk to them about why they're not building wealth.
• 15:45
  And what I very quickly realised is that they weren't investing.
• 15:49
  Because I remember when we called up and you told me a story about how you were talking to a friend or something.
• 15:55
  And we're like, do you invest?
• 15:57
  And they lied and said, yes.
• 15:59
  Because I thought that you invested.
• 16:00
  And when you said you didn't invest, they're like, oh, thank goodness.
• 16:02
  Because I don't have to say that.
• 16:03
  So this whole thing of like, well, we're learning about economics and finance.
• 16:06
  So therefore we should be.
• 16:07
  It's embarrassing.
• 16:08
  Nobody wants to talk about it.
• 16:10
  It's so weird.
• 16:11
  Yeah.
• 16:12
  And when you ask people, they immediately go to very rational reasons.
• 16:17
  So I don't know how to invest.
• 16:19
  I don't have the expertise.
• 16:21
  There's an estimated 300 billion of cash sitting in the hands of 18 to 44 year olds in the UK.
• 16:28
  Cash.
• 16:29
  So that means they're not investing.
• 16:30
  They're not investing.
• 16:31
  It's just sitting in the bank.
• 16:33
  I'm trying to think what can be done to make a big hoar about this.
• 16:38
  I also think there's an element of, I don't have time.
• 16:42
  These are the very rational reasons people give.
• 16:45
  I don't have the expertise.
• 16:46
  I don't have the time.
• 16:47
  I don't have the money.
• 16:48
  As we start peeling back the layers, we see that there's all these other reasons that people don't invest.
• 16:52
  They like the feeling of liquidity.
• 16:54
  It feels safe.
• 16:55
  Yeah, it does.
• 16:56
  It gives you a feeling of safety.
• 16:57
  So if people don't have a decent amount of that, you wouldn't want to part with more money to invest.
• 17:03
  The challenge comes in when you're holding on to more than you need for emergency savings.
• 17:09
  So £20,000 for the average millennial living in London is probably more than your emergency savings.
• 17:16
  But we just don't know how much to invest.
• 17:18
  I feel safe.
• 17:19
  Just hold on to all of it.
• 17:20
  Investing it feels like giving up control.
• 17:22
  If I'm going to invest it, I feel like it needs to be a meaningful amount.
• 17:25
  Enough amount.
• 17:26
  I don't know what a meaningful amount is.
• 17:28
  It's like when I looked at my boyfriend, ex-boyfriends.
• 17:32
  Boyfriend ex-boyfriends.
• 17:33
  It's a long story.
• 17:34
  I was even better before you were there.
• 17:35
  Very good.
• 17:36
  And I hope he doesn't mind those saddles.
• 17:38
  But he had quite a lot in his savings or in his liquid account.
• 17:43
  I was like, well, why?
• 17:44
  I might need it.
• 17:45
  I'm like, when are you going on a $40,000 holiday?
• 17:47
  You know, I was like, that is wild.
• 17:50
  It was that whole safety net thing.
• 17:52
  What would be the top five reasons that people either avoid or don't invest?
• 17:58
  So that's the first one is around the safety net of the liquidity.
• 18:02
  You do need emergency savings.
• 18:03
  You should always have emergency savings.
• 18:05
  But anything above that money you don't need to live should be put to work.
• 18:09
  The second one is around people feeling like they lack discipline.
• 18:14
  So what we hear a lot is I know that in order to invest in a meaningful way,
• 18:19
  I should put down a lump sum and then contribute monthly or on a regular basis.
• 18:25
  But I also know myself.
• 18:26
  I don't have the discipline to do that.
• 18:28
  So I'm not even going to start because I won't be able to keep up with it.
• 18:31
  It's like trying to do so over October being like, no,
• 18:34
  but I know I'm going to drink on the tens.
• 18:36
  Exactly.
• 18:37
  So I'm not even going to start.
• 18:38
  I'm not going to do it.
• 18:39
  Oh, you're going to drink on the 29th.
• 18:40
  So I'm just not going to do it.
• 18:42
  Exactly.
• 18:43
  Links to that.
• 18:44
  There's also this feeling of having lost that on too much time.
• 18:47
  I should have started 10 years ago.
• 18:49
  It's too late now, even though I'm like 35.
• 18:52
  Too late.
• 18:53
  The fourth one is the thinking that investing equals stock picking.
• 18:58
  People thinking that they have to pick stocks index tracking funds is the biggest unlock for customers,
• 19:03
  like realizing that, oh, you can actually buy the market, like just breaking down that decision-making.
• 19:07
  And then I'd say the most prominent reason that people don't invest is prison bias.
• 19:14
  We are hardwired to favor the current self over the future self.
• 19:19
  That's all about instant gratification and delayed gratification.
• 19:21
  It's like the marshmallow experiment where you have the marshmallow experiment with the kids.
• 19:25
  Yeah.
• 19:26
  And you give them one marshmallow and you say you can either eat marshmallow or you can wait 10 minutes
• 19:30
  and you'll get another marshmallow.
• 19:32
  And the kids eat the first marshmallow and don't wait for the second one.
• 19:35
  That's the decision to invest.
• 19:37
  You can have one marshmallow, say, or you can have two marshmallows 10 years from now.
• 19:41
  But what behavioral economists have found is it's not as simple as a thousand pounds for Sam today
• 19:45
  or 10,000 pounds for Sam in 10 years from now.
• 19:48
  It's actually 1,000 pounds for Sam today or 10,000 pounds for a complete stranger 10 years from now.
• 19:54
  Is that because that concept of me and the future is so far?
• 19:58
  45-year-old me is the same as 45-year-old stranger on the street.
• 20:02
  Because I was like, I can't even imagine myself 45.
• 20:04
  That's why when you say invest for future you, I'm like, it means nothing to me.
• 20:08
  Just what is future me?
• 20:10
  I don't even know what I'm doing tomorrow.
• 20:12
  I've known in 15 years time.
• 20:14
  Oh my god, I reckon that we should like create a new at 60s.
• 20:18
  You can see it.
• 20:20
  Oh my god, me at 60 and I haven't been invested.
• 20:22
  Me at 60 and I have.
• 20:24
  And like, what I look like, what my situation.
• 20:26
  Oh, that would be quite unlawful.
• 20:28
  They did a study on that. I'll send it to you.
• 20:30
  Oh, I got a message.
• 20:32
  In the US, on 401k, and showing people an AI generated picture of their future souls.
• 20:36
  And people were more likely to contribute more to their pension after seeing that image of themselves.
• 20:42
  I reckon I would. I reckon that would be unlawful.
• 20:44
  Yeah, it's fine.
• 20:46
  So let's jump into what is belong.
• 20:48
  It is encouraging this generation, inspiring this generation to be long, to take a long term perspective on their wealth.
• 20:56
  Be long.
• 20:58
  And be long. I love it.
• 21:00
  Yeah, so in a lot of ways, just productising Warren Buffett's advice of buy the market and hold it.
• 21:06
  He says that anything less than £100,000, just put in the S&P.
• 21:12
  That's Warren Buffett's advice, don't mind.
• 21:14
  And creating a product that makes that really straightforward.
• 21:18
  Based off all these insights, we came up with the boosted own feature.
• 21:22
  Fundamentally, it's an investment platform where you come on.
• 21:26
  You can choose from four index tracking funds.
• 21:28
  We've completely cut out the complexity.
• 21:30
  You make three decisions.
• 21:32
  I know.
• 21:33
  Just so, Jane, yes.
• 21:34
  So I'd be up.
• 21:35
  Get it out now.
• 21:37
  There's a second part.
• 21:38
  Sorry.
• 21:39
  Which was one of the three decisions.
• 21:40
  So first decision is how much we would like to invest.
• 21:42
  Anything from £1,000 upwards.
• 21:44
  Second decision is which of these four index tracking funds would you like to invest in.
• 21:48
  And then the third decision is with all not you want to take out this optional boost loan.
• 21:52
  So let's say you come on to our...
• 21:54
  Sorry, do you say boost loan.
• 21:56
  Boost loan.
• 21:57
  I want a boost loan.
• 21:58
  So how it works is to build wealth.
• 22:01
  We need two things.
• 22:03
  We need time and money because we need our money to compound over time.
• 22:07
  The challenge is that unless you come from wealth, we rarely have these two things at the same time.
• 22:12
  Because when you're young, you typically have all this time ahead of you.
• 22:16
  But you don't have the capital to invest for to compound.
• 22:18
  And when you're older, you have less time, but more capital.
• 22:23
  If you come from wealth, then it's easier because you've got the capital and you have the time.
• 22:26
  You're both lucky.
• 22:28
  Yeah, most of us don't have that.
• 22:30
  So what the boost loan looks to do is correct this.
• 22:33
  In addition to all those other behavioural or psychological blockers that we identified in our research.
• 22:38
  So you come on to our platform.
• 22:39
  Let's say you've got £5,000 to invest.
• 22:41
  You then have the option to apply for a boost loan, which will give you another £5,000.
• 22:45
  So on day one, you can invest £10,000.
• 22:48
  The full £10,000 goes into that fund in your name.
• 22:51
  And you repay the £5,000 boost loan monthly out of your pocket.
• 22:56
  What I love about this is that it's like there's that whole preface of wealth breeds wealth.
• 23:01
  You can't give someone at the tail end of their life more time.
• 23:05
  But you can give more people at the beginning of their life money.
• 23:08
  So it's like you can solve one of those things.
• 23:10
  It's like let's give people when they're younger, more money and see how that compounds over time.
• 23:16
  Do you know what this sounds like?
• 23:17
  It's sort of similar to how you lend money when you are buying a house.
• 23:22
  Because you can benefit more from the leverage.
• 23:25
  It's kind of similar.
• 23:27
  Right, it's kind of you get a loan to be able to invest more.
• 23:30
  We've taken the structure of a mortgage.
• 23:32
  And at the time they've seen the stock market.
• 23:34
  Yeah, it's enabling young people to tap into leverage asset returns when they're younger.
• 23:38
  Which is exactly what a mortgage enables you to do.
• 23:41
  Do you have a lot of people that are scared?
• 23:43
  Yeah, I think a lot of it comes into how we position the proposition and the information we provide to the customer
• 23:49
  when they're taking out the product and making sure that they understand both the benefits
• 23:54
  and the risks is really important and being totally transparent with the risk of the product.
• 23:59
  What is the risk and what would the like interest be?
• 24:02
  Currently it's 6% interest fixed.
• 24:06
  So am I right in thinking then?
• 24:08
  You kind of need on average minimum of a 6% return to be able to make it makes ends.
• 24:15
  That's the most basic way of thinking about it.
• 24:17
  What's the return of the market over the past 30 years?
• 24:20
  On average, the return of the market is 10% over the last 20 years.
• 24:25
  Yeah, yeah.
• 24:27
  Well, the point is definitely more than 6% on average.
• 24:31
  And it's definitely more than 8% on average.
• 24:34
  So you're getting a better return if you invest even with a loan than if you went.
• 24:41
  So why would I not go to the bank and just be like, hey, can I borrow $10,000 to invest?
• 24:46
  We had some customers who told us that that's what they've tried to do.
• 24:49
  They just couldn't get a personal loan at a low enough interest rate.
• 24:52
  It's so genius. It's such a good idea.
• 24:55
  I love it.
• 24:56
  One thing I wanted to talk about,
• 24:58
  are there any cultural differences when it comes to money with South Africa in the UK?
• 25:02
  In South Africa, just given the socio-economic and political context,
• 25:07
  money is definitely more of a talking point.
• 25:10
  I feel like in the UK we don't speak about it. It's a taboo subject.
• 25:14
  You recently got married.
• 25:16
  Congrats.
• 25:17
  Congratulations.
• 25:18
  Thank you.
• 25:19
  Does he sell South Africa?
• 25:20
  Yes, he is.
• 25:21
  And so did you have similar approaches to money?
• 25:24
  How did you deal with money within your relationship up until the point of getting married?
• 25:28
  Yeah.
• 25:29
  You know, if you put pre-nups in place,
• 25:31
  I'd love to hear how you've managed them.
• 25:33
  As soon as our relationship started getting serious,
• 25:35
  we had the conversation about finances and how we'd manage our finances.
• 25:38
  Given that, I obviously had just finished my MBA used most of my savings
• 25:43
  and was now starting a business, wasn't taking a salary at the time.
• 25:46
  He had a far more secure job.
• 25:48
  He works in private equity.
• 25:50
  And that just set the tone for the rest of our relationship of finances,
• 25:53
  just being this really open conversation that we have and budgeting.
• 25:57
  Did you think you wouldn't have brought it up because,
• 26:00
  in short, it was wrong, but like you weren't earning.
• 26:03
  And therefore, you were the, I guess, the inferior earner.
• 26:06
  So you didn't want to bring it up? Do you think that's...
• 26:08
  Yeah, I think that was definitely a part of it.
• 26:12
  Which is even more kudos to him for bringing it up.
• 26:14
  I was about to say it's pretty cool that he did.
• 26:16
  Yeah.
• 26:17
  And so, where did that evolve?
• 26:18
  Because starting a business, not taking a salary is a pretty difficult place,
• 26:22
  particularly in a really expensive city like London.
• 26:24
  Did you, at that point, agree on what?
• 26:27
  That would look like on how you'd be able to support each other.
• 26:30
  So what we'd essentially decided was that his career was going to pay the bills
• 26:37
  and buy the house and put our kids through school.
• 26:40
  And mine is our earlier retirement.
• 26:42
  That is such a good way of looking at it.
• 26:44
  Like you were almost sacrificing now from a money or an earning capacity
• 26:49
  for the future.
• 26:51
  Yeah. You guys.
• 26:52
  How much pressure did that feel to you?
• 26:55
  To belong to the A, incredibly financially successful.
• 26:59
  And B, to not feel controlled or owned by a hand if he was paying for day-to-day things.
• 27:07
  I'm very fortunate to have an extremely supportive and understanding husband.
• 27:12
  He definitely doesn't add to the pressure.
• 27:14
  And if anything, he takes away from it.
• 27:17
  And in terms of the controlling this, not at all,
• 27:21
  I think a lot of that has got to do with him as a person and our relationship.
• 27:26
  But I can very easily see how that could be a dynamic for some people.
• 27:31
  I would find it really hard if I was earning the majority of the income
• 27:36
  and also giving someone allowance or controlling what there's been thing.
• 27:40
  And vice versa, if they were doing that to me, I'd just find both ways.
• 27:44
  I don't know.
• 27:45
  I think I seriously have to work on being okay with it no matter what way it is.
• 27:49
  Imagine if you saw them just going on a three-way holiday
• 27:52
  and not working on the business, you know.
• 27:54
  I mean, house the business going.
• 27:58
  It would be hard to be a general legend in that situation both ways, I think.
• 28:04
  There's no such thing as overcommunicating.
• 28:06
  I found and trust.
• 28:08
  Do you feel pressure with yourself as well being an entrepreneur and becoming a mother
• 28:14
  that you've now going to have like two babies?
• 28:16
  And how you're going to step away or you're a suicide time for that period of adjustment?
• 28:22
  It's really difficult.
• 28:23
  I'm fortunate that I have role models, one of them being my co-founder
• 28:29
  and she is an absolute superstar.
• 28:31
  Wow, that's incredible.
• 28:32
  I do think it's leading by example, isn't it?
• 28:34
  If you've seen someone else do something, it's less scary.
• 28:37
  Okay, final questions.
• 28:39
  What would be your biggest money or investing to?
• 28:42
  I'd say just get started.
• 28:44
  What would yours be?
• 28:45
  Mine would be you always have enough time.
• 28:48
  If you're 20, if you're 90, if you're 45,
• 28:52
  you've always got time.
• 28:53
  You can always join the club.
• 28:54
  Always join the club.
• 28:55
  What are some of the ways that we can overcome when we do have,
• 28:59
  like whether it's going to invest and you have a tiny little voice in the back of your head,
• 29:03
  it's like, oh, but maybe you might, you know, I think there's a lot that could be said for if we understand the way our brains work,
• 29:08
  we can probably rise above what those tendencies are,
• 29:12
  rather than falling to just whatever is what a matter.
• 29:16
  What it requires is a consumer understanding or a retail investor understanding of those things,
• 29:22
  but that has to be coupled with products that also encourage the same behaviors in the same ways.
• 29:29
  Because it doesn't help for us to be so aware of, okay, I know that complex T freaks me out.
• 29:35
  So I need to be aware of that and I just need to like track on and answer all the questions as I'm going through the app.
• 29:40
  But then the app is also like overly complex.
• 29:43
  Yeah, and I think that's happening.
• 29:45
  You can start to see a lot of tech emerging from amazing female founders who are creating products for specific people.
• 29:52
  So how's it launched?
• 29:53
  Yes, we've launched.
• 29:54
  And if you want to learn more, be dashlong.co.
• 29:59
  What countries is available on right now?
• 30:01
  Only in the UK for now.
• 30:02
  Sorry.
• 30:03
  Is it coming soon to the rest of the world?
• 30:04
  Global domination.
• 30:06
  Yes.
• 30:07
  Yes to that.
• 30:08
  Okay, can't wait.
• 30:09
  Thanks Sam.
• 30:10
  Thanks for coming in and looking forward to getting to Cape Town.
• 30:13
  Thanks.
• 30:14
  Thank you so much for listening to Raisin the Curve.
• 30:16
  These conversations are designed to teach you everything you need to know to be better with your money,
• 30:20
  saving, to investing, to talking with your friends about your salaries, or that stuff.
• 30:23
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• 30:27
  wherever you're listening, and leave a comment.
• 30:29
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• 30:30
  And it only takes one second and it would really make our week a month.
• 30:34
  Oh yeah.
• 30:35
  Yeah.
• 30:36
  So please do it.
• 30:37
  Okay.
• 30:39
  Okay, quickly, the curve was created to empower and educate you about investing,
• 30:43
  but we are not financial advisors.
• 30:45
  Our platform exists for educational purposes only, and it doesn't provide personalized,
• 30:49
  investing advice for your individual needs, and should not be relied upon to make an investment
• 30:53
  or financial decision.
• 30:54
  And always remember to do your own research before making any investment or financial decision.
• 30:59
  We're here for any knowledge and support you need, but the final call is always yours.
• 31:03
  And thanks for being here.
• 31:04
  You got this.
• 31:05
  Yeah, we know you got this.