MI357: THE SLOTH INVESTOR

W/ R P STEVENS

24 June 2024

In today’s episode, Patrick Donley (@JPatrickDonley) sits down with R P Stevens to discuss his new book, The Sloth Investor. You’ll learn about his investing journey and how he developed his SLOTH investing philosophy, what the 5 bedrock principles of SLOTH investing are, how he goes about constructing a globally diversified portfolio, how he thinks about his financial freedom number, what his biggest takeaways have been from his guests on his podcast, and so much more!

R P Stevens is the author of the forthcoming personal finance book ‘The Sloth Investor’.

The publication date is Friday June 28th.

The book is an insightful beginner’s guide to investing where R P Stevens teaches readers how a ‘sloth-like’ approach is the rational, evidence-based roadmap to investment success. The Sloth Investor’s 5 Bedrock Principles of Investing provide an actionable pathway for anyone looking to grow their wealth.

Originally from the UK, R P Stevens currently lives in Hong Kong with his wife and two children.

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IN THIS EPISODE, YOU’LL LEARN:

  • What R P’s investing journey has been like and who his biggest influences have been
  • How his investing philosophy has evolved over the years
  • Why he decided to write The Sloth Investor
  • What the 5 bedrock principles of SLOTH investing are
  • How he goes about constructing a globally diversified portfolio
  • Why optimism is so critical for investors
  • How R P thinks about his financial freedom number
  • What his biggest takeaways from his podcast guests have been
  • And much, much more!

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:02] R P Stevens: The five bedrock principles, they spell sloth. S L O T H. So S is simplicity. L is low fees. O is own the world. T is time and H is headstrong.

[00:00:17] Patrick Donley: Hey guys, in this week’s episode, I had the opportunity to sit down with R. P. Stevens to discuss his new book, The Sloth Investor. You’ll learn about his investing journey and how he developed his sloth investing philosophy. What the five bedrock principles of sloth investing are, how he goes about constructing a globally diversified portfolio, how he thinks about his financial freedom number, what his biggest takeaways have been from his guests on his podcast, and so much more.

[00:00:43] Patrick Donley: RP is the author of the forthcoming personal finance book, The Sloth Investor, which comes out this Friday, June 28th. The book is an insightful beginner’s guide to investing where RP teaches readers how a sloth like approach. Is the rational evidence based roadmap to investment success. The sloth investors, five bedrock principles of investing provide an actionable pathway for anyone looking to grow their wealth. Without further delay, let’s dive into today’s episode with RP Stevens.

[00:01:17] Intro: Celebrating 10 years, you are listening to Millennial Investing by The Investor’s Podcast Network. Since 2014, we interviewed successful entrepreneurs, business leaders, and investors to help educate and inspire the millennial generation. Now for your host, Patrick Donley.

[00:01:43] Patrick Donley: Hey everybody! Welcome to the Millennial Investing Podcast. I’m your host today, Patrick Donley, and joining me in the studio today is RP Stevens. Welcome to the show.

[00:01:52] R P Stevens: Thank you very much. It’s a pleasure to be here. It’s a real honor. I’m looking forward to our discussion.

[00:01:57] Patrick Donley: I first wanted to get into like your investing journey and your background. Were you this young wizard kid who was into the stock market and investing early or did you kind of get involved and interested in investing later in life? I wanted to hear about your, just your background and your journey towards investing.

[00:02:15] R P Stevens: Yeah, I really wish I was one of those kids that kind of from a young age was really kind of dead set on investing and I learned a lot about investing.

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[00:02:21] R P Stevens: Unfortunately, it wasn’t the case. I actually come from a family of non-investors. My parents, who sadly passed away now, neither of them invested. Very little, if anything, was ever spoken about investing at home. And if there were any occasion when the stock market was spoken about, it’s because of perhaps some intermittent kind of news coverage on the television, Wall Street stock exchange, a flashing neon light.

[00:02:42] R P Stevens: So the stock market for me was something just way, way out of my kind of zone of interest, my circle competence. It wasn’t anything that interested me. And it wasn’t really until I met my father, and I believe it or not, he was actually, I met my wife and she introduced me to her father for the first time.

[00:02:56] R P Stevens: And he started to gradually speak to me about investing and if I’m honest with you, I wasn’t particularly interested. Again, I was kind of someone with a bit of an investing imposter syndrome. I thought, this is not for me. Thanks for no thanks. And then I think, I guess I, he gradually wore me down, again and again, successive conversations.

[00:03:13] R P Stevens: He spoke to me about, growing your money, compound interest, and kind of its time in the market and introduced me to this guy called Warren Buffett. Who’s Warren Buffett? Who is this guy? And he I think was the catalyst he was the one who first really got me interested in investing, I would say it’s my father in law, John, and it was through reading a key book for me, a key text by an author called Andrew Hallam.

[00:03:36] R P Stevens: So Andrew Hallam wrote The Millionaire Teacher really, gosh, key book for me in terms of my investing journey. I mean, that was the book that really kind of propelled me on to want to learn more about index investing, how to invest simply, the importance of low fees and so on. I think it says two key figures for you, my father in law, John, and Andrew Hallam, the author of The Millionaire Teacher.

[00:03:57] Patrick Donley: So how old were you when that conversation with your father in law took place?

[00:04:01] R P Stevens: I guess I would have been, gosh, around about, oh gosh, around my late twenties. I want to say about 28, 29. And looking back now, I wish that conversation had taken place 10 years prior to that. Because how, oh boy, how I could have benefited from the wonders of compound interest.

[00:04:17] R P Stevens: And obviously, that’s what I speak about in my book. But I just, I look back and I think, oh, don’t be too hard on yourself. At least I did get to speak to my father in law and learn about investing eventually. But I just wish I could have been someone at 18, 19 who had someone to speak to. And I guess that’s a key reason for writing my book, really.

[00:04:32] R P Stevens: And I guess we’ll touch upon it later. But I really want people that age group and old, of course, to learn about the importance of investing as early as you can.

[00:04:41] Patrick Donley: And you were working as a teacher, correct? When around like your late twenties, I mean, you can, you are a teacher now, but tell me a little bit about that.

[00:04:49] R P Stevens: Yeah, working as a teacher. My wife and I teachers and my father in law as well. He’s retired now, but he was also a teacher. And I guess that’s how I got into kind of being a teacher by Andrew Hallam. So on the international school teaching circuit, this is a book that’s become quite widely known. It’s become quite popular.

[00:05:05] R P Stevens: And if I’m honest with you, I can’t actually remember if I borrowed it, if someone suggested it, but I definitely kind of some way or another kind of stumbled upon this book. And my goodness, I’m glad I did. I read it from page to page. And yeah, really revelatory again, it kind of built upon what John had told me.

[00:05:20] R P Stevens: So John was kind of like the initial starting point, spoke to me about the importance of investing compound interest and so on. And I guess Andrew Hallam reading his book, took it up a little bit further, just kind of introduced me to kind of the notion of index farms and low fees and, the importance of not getting into debt.

[00:05:38] R P Stevens: I believe he’s got these kind of like nine rules of wealth that you didn’t learn at school, he touches upon in a book. So, yeah, I mean, I guess it’s a blessing that A, I met my wife and spoke to her father and B, working on kind of international school teaching circuit. That’s how I got to kind of read Millionaire Teacher by Andrew Hallam. So two key figures really in my kind of educational journey that kind of got me started.

[00:05:59] Patrick Donley: Andrew Hallam, he retired at 40, right? On a teacher’s salary. Isn’t that correct?

[00:06:05] R P Stevens: I believe so. And yeah, right about that. And it’s fascinating his journey because he’s got this great story about the fact that I think he was he was a lucky 18, 19 or like I mentioned, he was about 18, 19 years old.

[00:06:16] R P Stevens: He was working at a bus depot, I think in Canada, he was like washing buses down a summer job. He was working with like a bunch of mechanics. So the story goes, he’s told the story a few times, is a group of mechanics come up to him and said, look, you didn’t see that guy over there. That guy over there is a millionaire.

[00:06:31] R P Stevens: Yeah. And Andrew said, no way, I don’t believe it. He’s on a mechanic. So there’s no way he’s a millionaire. And, they said to him, listen, if that guy ever talks to you about money, you make sure you listen, go and speak to that guy. And Andrew, obviously, took that wise advice, went over and started to speak to this kind of man and mechanic, if you like.

[00:06:48] R P Stevens: And again, I always, I’m not much of a romantic comedies guy. But I think back to that kind of romantic comedy from the 90s. Is it Sliding Doors of Gwyneth Paltrow? And you just think about those sliding doors moments. And you just think about for Andrew, that would have been one of those sliding doors moments.

[00:07:04] R P Stevens: Did he really take heed? Of the advice and go and talk to the mechanic. Or do you think I’m not going to bother, mechanic? No way. But no, he was humble enough to kind of go over and have a chat. And again, I think it’s talking to a mechanic that kind of got Andrew started on his journey. And I guess for me, it’s reading Andrew’s book and also talking to my father in law.

[00:07:23] R P Stevens: So, and that for me, that again, that’s typifies investing, because I think in most realms of life, if I’ve got a back problem, I’m going to go and see a doctor. If I’ve got a dental problem, of which I’ve had many in the past, I’ll go and see a dentist. But for me, the great thing about investing is that you don’t necessarily need to be a numbers guy.

[00:07:39] R P Stevens: You don’t need to crunch numbers, compute complex algorithm. You can be just a humble teacher. You can be a humble mechanic and you, as long as you have the kind of temperament, which I guess I’ll touch upon more later as well, and the right philosophy, you can do really well. So, that’s what’s always kind of fascinated me about investing as well. Those key, one of those key elements.

[00:08:00] Patrick Donley: Have your investing strategies changed over the years since you read the book, or did you kind of find this style that worked for you and you’ve stuck with it?

[00:08:10] R P Stevens: Rick Ferry’s got this quote, and I’m not going to be able to quote him but paraphrase it basically. Rick Ferry, of course, I think he’s a presenter of the Bogle heads podcast.

[00:08:17] R P Stevens: He talks about how eventually, through thick and thin people, individual investors come around to that philosophy of investing index funds. And I’m fully, I will fully concede, I’ve made the mistake in my early years of thinking like, hey, that’s a kind of, that’s a great high growth stock and go for this stock and that stock.

[00:08:33] R P Stevens: And don’t get me wrong. I’ve had some individual stocks that have been successful, but ultimately what I found is that it’s that kind of like flow city approach that’s worked better for me. And there’s a great quote I love by Morgan Housel. So many of your audience will obviously know him from the psychology of money and so on.

[00:08:48] R P Stevens: I think it’s all like 5 million copies. But he makes this great point about, he makes a point that, speaking by himself, he states, I can afford not to be a great investor, but I can’t afford to be a bad investor. And I think for me, that typifies my approach to investing. I’m happy not to be able to, I’m more than willing and humble enough to concede that I’m not to catch those great high flying growth stocks.

[00:09:07] R P Stevens: I don’t have that crystal ball that so many of us would like, but I definitely don’t want to be that kind of bad investor. What I talk about in my book is that my investing philosophy is for those of us that don’t have a crystal ball, who has, does have a crystal ball. And it’s just so for me, yes, from the outset, after reading Andrew Hallam’s book, I was aware of index funds.

[00:09:27] R P Stevens: But I was still someone who was keen to dabble in individual stocks every now and again, I will admit, but more and more as the years have progressed, I’ve definitely become more and more of like an indexing guy, I would say.

[00:09:38] Patrick Donley: Was your father in law, was he an index fund guy as well? Or did he do active stock picking? And did he have any recommendations for you?

[00:09:47] R P Stevens: Yeah, I mean, I’ll be honest with you. He is more of a like, kind of an individual stocks guy. So I will credit my father in law, John, for being a person who kind of got me started on the whole journey. And he would definitely speak to Hey, this is how you kind of like value a stock to speak about a P ratio to peg ratio.

[00:10:03] R P Stevens: Forward P and so on to do at Yahoo Finance, hey, look at this chart and so on. And it’s definitely quite interesting in that respect. And then I guess the more and more, not only my own experience, but the more and more I read, where it’s booked by books by Daniel Crosby, Morgan Housel, Robin Powell in the UK, William Green, the more and more I kind of became that kind of like archetypal index investor.

[00:10:25] R P Stevens: So, Increasingly, as I’ve read more and through my own experience, I’ve definitely, I’m not going to lie, I’ve had my fingers burnt with stocks where I look back and think, geez, why didn’t I just keep it simple and invest in like a low fee, globally diversified index fund as opposed to kind of wanting to dabble in this, so called like sexy other kind of like growth stocks, if you like.

[00:10:43] R P Stevens: When I just should have kind of kept it simple. And that’s why my first bedrock principle is simplicity, for example. So yeah, I guess that’s a bit of an insight into the evolution of my investment philosophy.

[00:10:52] Patrick Donley: Did you, once you read the millionaire teacher, did you just kind of go down this rabbit hole of reading investing books and just soaking up and absorbing as much information as you could?

[00:11:02] R P Stevens: Absolutely. I mean, that for me was the catalyst and that got me started. So after millionaire teacher, then I started to read books such as a wealth of common sense by Ben Carlson. I read. Yeah, that’s a great one. I read Daniel Crosby, the behavior investor. Of course, the psychology of money and what fascinates me about Morgan Houser is, of course, he’s become so widely known for the psychology of money, but I actually love so many of the articles that he wrote while he was at the Motley Fool.

[00:11:30] R P Stevens: So I become, I just become a voracious reader of his articles at the Motley Fool. There’s one that I particularly love called the tyranny of the calendar, the tyranny of the calendar. That’s one I touch upon in my book as well. Is so he focuses upon the fact that so many investors are just so obsessed with the 1 year return.

[00:11:47] R P Stevens: Hey, what’s the 1 year return on the stock? What’s the 2 year return? And he said, the only thing that matters is the point at which you want to get to whether it’s 3 decades online, 4 decades, don’t worry about that one year return, don’t even worry about a six month return. What matters is three, four decades down the road.

[00:12:04] R P Stevens: So down the line. So, for me, tearing up the calendar just is one of my favorite articles that he wrote at the Motley Fool. Even I guess joining online groups, online blogs, watching videos, conversations with colleagues as well that I work with. So I would just say. In my spare time, I actually love reading nonfiction, so current affairs and history.

[00:12:24] R P Stevens: But in that kind of period of my kind of late 20s to early 30s, I just dived so deep into kind of personal finance and wanted to know a lot more. And for me, it was kind of those inherent contradictions that fascinated me. Like I mentioned, most realms of life, again, when it comes to the things that high fees, if you pay high, higher fees for dental work, medical, you’re going to get better service.

[00:12:45] R P Stevens: But when it comes to investing, it seems to be the polar opposite. Likewise, I mean, and this goes back to the whole concept of the sloth in most realms of life. It’s activity, it’s energy, it’s effort that brings you great reward. Whereas wife, the more and more I read, the more and more I realized that actually it’s less effort, it’s less activity that brings a great reward.

[00:13:04] R P Stevens: So, yeah, I just definitely dove down at rabbit hole, like you mentioned, and I wanted to learn a lot more about investing.

[00:13:10] Patrick Donley: There’s an investor you’re probably familiar with, Monish Pabrai, who I love. He’s got this, I’m going to paraphrase, but a quote about like, if you want to be a great investor, you’ve got to be really good at just watching paint dry.

[00:13:20] Patrick Donley: Like just be, get used to like just sitting there and being bored and not doing anything, just sitting on your hands and yeah. Letting time take care of everything.

[00:13:29] R P Stevens: Yeah. I touch upon that in my book as well. And I think what happened, what hasn’t helped, and ironically, I talk about the fact that we think about last 10, 15 years, what are the stocks that really stick out to us as being those great kind of high growth stocks have done well.

[00:13:41] R P Stevens: It’s the FAANG stocks courses and it’s Facebook, Amazon, Apple, Netflix, Google, but what is it about those stocks that, what are they compelled humans to do? I think they’ve actually, you could argue that they’ve compelled us to become more impatient with them. Yeah. We’re so used to now getting things on demand, my wife and I were talking to our kids the other day about friends and we said, Hey, back in the day in the nineties, growing up in UK, we’d have to wait until Friday night to watch the friends, for new friends episode way again the following Friday, whereas now you could just, binge watch on Netflix, likewise, Amazon prime, Google and so on.

[00:14:11] R P Stevens: We get, we get our hearts desire instant gratification. And while I think in some respects, that’s really great. And we kind of spoke, in contemporary life. I just do wonder if, as investors, that’s caused so many of us to become impatient. So I do wonder about the effects of like this kind of our contemporary lifestyles.

[00:14:28] R P Stevens: Are you familiar? Have you seen, there’s a great comedy show by a Malaysian comedian called Ronnie Chang on Netflix. Have you seen that show?

[00:14:35] Patrick Donley: I’ve not seen it, actually, though. I’m familiar with it.

[00:14:38] R P Stevens: Yeah, he’s got a great riff. He talks about Amazon Prime. He talks about like, don’t just give it to me next day, give it to me now, put it in my hands right now.

[00:14:45] R P Stevens: And I touch upon in a book, the fact that we have just become so incredibly driven to have things in an instant. And just the fact that I do wonder what that’s had on our attention span and our ability to be patient. So yeah, I always see that as a bit of a technology is a mixed best before for investors.

[00:15:01] R P Stevens: The fact that in some respects, it’s made it so easy to invest. And we’ve got this kind of democratization of information now at our fingertips. On the other hand, just the fact that we become accustomed to getting things whenever we want, when we want. I do wonder what effect that has on kind of like contemporary psyche.

[00:15:18] Patrick Donley: Yeah. Well, it gets into the psychology of the investor. It’s like you do develop this high time preference of just getting things really quickly, really fast. It leads to impatience. And it’s like the antithesis of what works in investing. Like you, you just, that kind of mentality is going to work against you.

[00:15:35] R P Stevens: Yeah, it’s something I touch upon in my book as well. So I’ve got five bedrock principles now, I’ll touch upon them later. But one of them is time. And I even touch upon the fact in one of the chapters of my book that you think about those aspects in your life that brought with it great reward, whether it’s learning a musical instrument, whether it was, I don’t know, going on a diet, learning to drive a car, they all took time, these things don’t come overnight.

[00:15:55] R P Stevens: And without wanting to sound cliche, investing is the same, it will take time, but you have to be patient. Yeah. And, patience is the order of the day, you have to be a Jedi patient to be rewarded in investing and me, it’s something that I really crucially fundamentally believe in.

[00:16:08] Patrick Donley: I want to take a step back. You’ve mentioned the sloth investor a little bit. What was the genesis for the book, the inspiration? Tell me a little bit about how you decided to write the book and why the sloth as you’re like investing, spirit animal.

[00:16:22] R P Stevens: Yeah, I mean, I mentioned earlier how I just dove straight into so many books after reading millionaire teacher, and I even started to dive into kind of shareholder letters. The book Hathaway Shareholder Letters. I can read them way back into kind of the early two thousands and nineties, the eighties, and I think it was the, if I remember correctly, Warren Buffett’s book, Hathaway’s 1990, letter to Shareholders. And there’s a statement in there where Warren Buffet states a lethargy border on slough is the cornerstone of our investing philosophy.

[00:16:52] R P Stevens: And I thought, ah, I love that. Cool. I love that. What a great analogy. What a great metaphor. And then say it again.

[00:17:00] Patrick Donley: I’m sorry.

[00:17:01] R P Stevens: Yeah. So it’s, Yeah, it’s okay. Lethargy bordering on sloth remains a cornerstone of our investment style. So lethargy bordering on sloth. And I love that because that just speaks to me.

[00:17:12] R P Stevens: That is the essence of what it truly means to be a great investor. So this is why I think, to blubber my book I mentioned at the beginning, Bull and bear step aside, the humble sloth is the best animal to characterize successful investing. So it’s really, it was reading that quote, lethargy bordering on sloth.

[00:17:28] R P Stevens: Then it’s piecing together what I’ve started to learn about investing that, there was that famous fidelity study whereby they found that the most successful investment accounts belong to those people that either, forgotten about their investment portfolios or that simply passed away.

[00:17:42] R P Stevens: So it’s that fidelity study, it’s Buffett’s quote, it’s talking to my father in law, it’s reading Andrew Hallam, it’s reading Daniel Crosby, Ben Carlson, Morgan Housel, and I’m starting to accumulate all of this wisdom. And this is how this whole concept of the soft comes into play. I’m thinking like, why, why is no one really seeing that less is more inactivity, that is the order of the day, really.

[00:18:04] R P Stevens: And that’s how to kind of this whole concept of the stuff came about. And then I kind of started to develop my kind of like five bedrock principles that ultimately, I bet you can be a bit corny cliche, but my five bedrock principles do, end up spilling the word sloth. I’d be happy to go into those now if you like.

[00:18:20] Patrick Donley: We’ll get into that, but I wanted to hear more about like, when you were like, I’m going to write a book, like, when did you decide, like, that takes a lot of confidence to say, I’m going to write a book. How did somebody approach you to do it? Or how did that all come about?

[00:18:34] R P Stevens: Well, I’ve always been a voracious reader from a young age. So, my mom who passed away actually when I was 23 many years ago now, she always inspired me to read and she was a voracious reader herself. So I always did wonder in the back of my mind, could writing a book be something I’m capable of? And it even wasn’t necessarily a book about investing, but I just thought maybe one day I could write a book.

[00:18:51] R P Stevens: The whole idea of the sloth investor came around, I started kind of form this concept. And then I guess it was around about gosh, it was right about 2019. And so actually, perhaps he was the catalyst, but my father in law and his wife, my mother in law came over to visit us here in Hong Kong. And I guess I was talking about investing.

[00:19:09] R P Stevens: I remember my father in law, mother in law, and my brother in law, Went out to, a day’s kind of like sightseeing and my wife and kids in Hong Kong. And I just sat down here where I am now at home. I started to like to write, I actually wrote about 2000 words that they started to put together this idea because I wish I could pinpoint that one precise moment when I thought I’m going to write a book by investing.

[00:19:28] R P Stevens: But I think around about 2019, that’s when I started thinking, I can do this. I’ve got this idea about the bedrock principles. I want to say this. I want to talk about Bogle, which I’ll get to later, index funds. I want to talk about simplicity. So it just kind of started to formulate in my mind. I actually wrote an article on Medium.

[00:19:47] R P Stevens: Are you aware of the platform Medium? I actually wrote an article because I believe Bogle passed away. I’ll get to that later, of course, but Jack Bogle passed away. I want to say, I think it’s January 2019. And in the obits, yeah, the obituaries, I think from New York Times, Washington Post, Online obituaries.

[00:20:02] R P Stevens: I think there was just one obituary for Jack Bogle. And I just thought about, wow, the kind of legacy, the influence that he’s left in the world of investing and everyday people. I was just kind of really aghast at that. So I actually wrote an article on medium, the platform, and I wrote it, it bogles the mind, it bogles the mind.

[00:20:19] R P Stevens: That was the headline. And that was really quite successful. And it caught on some like online groups with Vanguard investors and so on and so forth. Yeah, it got widely picked up really. And that’s what inspired me to think, well, you know what people like my writing that went down well, and it kind of picked up from there.

[00:20:34] R P Stevens: So the following year, is when I kind of really got into the book a lot deeper. I mean, I know we spoke about it briefly before the podcast started, but COVID in Hong Kong was incredibly difficult. It was the rules here were quite draconian. We couldn’t travel back home, couldn’t travel anywhere for that matter.

[00:20:52] R P Stevens: And so in a way, it’s a blessing in disguise. I think it was incredibly hard for everyone here in Hong Kong, but the fact that I couldn’t travel summer 2020 and summer 2021. Those two consecutive summers were the summers when I simply wrote the bulk of the book. I must have written about 000 words on each of those summers.

[00:21:09] R P Stevens: I got the bulk of the book written. So I guess it was a gradual process. Another thing that kind of gave me the confidence was the success of my podcast, the Self Investor podcast. And the fact that I’ve been able to kind of attract kind of high profile names like JL Collins and Brian Feroldi, opportunists.

[00:21:23] R P Stevens: And my growth on Twitter, I started to get attention from having high profile names like William Green, writers at the Motley Fool and so on. So, yeah, it’s a gradual process really of kind of putting articles out there and writing. I also write in Substack every two weeks as well. That’s given me some confidence as well.

[00:21:40] R P Stevens: I’ve got a following on there. So it’s kind of this gradual process of kind of getting the book out there really. But I always thought, maybe I’ve got a book in me and I’m proud I, I’ve been able to get out finally.

[00:21:49] Patrick Donley: So did you approach publishers then once you had completed it or how, tell me about that a little bit more about, getting the book actually published. There’s a lot of people that have written a book. I’ve written a novel, like never got published, but tell me about that.

[00:22:02] R P Stevens: Yeah, I must admit, I mean, I was naive going to, it’s been quite a lengthy process. There was me thinking, at the end of last summer, I think it was in the end of last June, 2023, when I got the book written and I naively thought, I can probably get this book out within a few months and perhaps Christmas and go back to UK Christmas 2023, do a bit of promotion, perhaps going to schools, colleges, businesses, give talks and so on.

[00:22:23] R P Stevens: And boy, I was quite naive. There’s been quite a lengthy process in terms of kind of copy editing, proofreading, getting the book cover designed. Publishing companies, they work with many other books at the same time as well. It’s not just the stuff I invested in working, of course, I’m humbly, humble enough to see, of course, so it’s taken quite a process or quite some time.

[00:22:43] R P Stevens: Sorry, so I’d say it’s taken about kind of the best part of like 8 to 9 months to kind of get it ready the whole process back and forth. There’s an odd thing that maybe needed tweaking in terms of a footnote here and, tweak this chapter here and there. So it’s been quite a lengthy process.

[00:22:56] R P Stevens: It really has. And it’s been beneficial to give me a real insight into kind of that process. And I guess it’s given me a newfound respect for what publishing companies have to do. And my publishing company, Troubadour, have been really positive and helpful every step of the way. So if anybody out there is looking to kind of get out there and publish, that is a company that I can certainly recommend and they’ve done a great job in that respect.

[00:23:17] Patrick Donley: I want to get into that you’ve mentioned the five bedrock principles. So let’s talk about those principles and then how did you come up with them?

[00:23:25] R P Stevens: The five bedrock principles, they spell sloth, S L O T H, so S is simplicity, L is low fees, O is own the world, T is time, and H is headstrong.

[00:23:38] R P Stevens: And I’m often asked for, hey, what do you consider to be the most important of those five bedroom principles? And I guess I don’t really have one. But you know, if I had to if someone put a gun to my head and I asked me, I probably would maybe opt for simplicity, because I go back to this fantastic quote by Jack Bogle, who has been such a profound kind of influence upon me.

[00:23:56] R P Stevens: I remember there was a conference back in the late 90s, and he spoke about the fact that, simplicity is the ultimate sophistication. And that really resonated with me. And so that, for me, is such a core tenet of my book as well, because I’ve written my book for beginner investors. The kind of like tagline slogan on my book is Simplifying Investing for All.

[00:24:16] R P Stevens: And for me, simplicity is so critically key because I think something that puts so many people off and this is this was me when I was a young man, something that put me off is that I had a bit of an imposter syndrome. I come from quite a humble background. I come from quite a working class background.

[00:24:30] R P Stevens: My father worked, blue collar, very much, worked manual labor and so on. So I certainly saw kind of the heady world of investing is kind of off limits to me. That wasn’t something I would even consider. So, what I really want to try to articulate, and I think I have achieved in my book, is that simplicity is so critically key, and I think it’s polar opposite.

[00:24:50] R P Stevens: Complexity is something that puts people off. At times, they look at kind of CNBC, they turn on the television CNBCs on, they see the flickering neon lights, they hear the financial jargon, and I think they get put off by kind of people on Wall Street, the traders and so on. So, simplicity is really key for me.

[00:25:09] R P Stevens: And I guess then allied to that, if we’re looking for an approach to investing that’s defined by simplicity, then automatically that should imply if it’s a simple approach to investing, then it’s low fees. So low fees, again, it’s just, critically key. I speak again and again about compound interest in my book.

[00:25:26] R P Stevens: And high fees are just going to compound if you’re paying high fees for investment funds, they’re just going to compound, they’re going to really eat into your returns. And that’s, again, why I’m such an admirer of Jack Bogle, who obviously founded Vanguard and first of index fund things 75 or 76, because just what he has done for the world of investing is incredible.

[00:25:44] R P Stevens: I think back to a great book I read, I think it’s by Robin Wigglesworth, he wrote trillions. And he wrote about kind of Vanguard and the index fund being the kind of Manhattan project of financial management. And I just love that, coming on the hills of Oppenheimer last year and a whole idea of the Manhattan project.

[00:25:59] R P Stevens: But for me, the index fund is the Manhattan project, is the Manhattan project of financial management. So low fees are critical key. And owner world is an interesting one. So. This again goes back to the importance of a diversified portfolio. And in this respect, I was really influenced by someone called Lars Kroyer.

[00:26:18] R P Stevens: So this is a Danish guy who used to work as a hedge fund investor in the UK. Lars Kroyer He wrote a great book called Investing Demystified, and really enjoyed that really, curious to learn more about it. It’s a really insightful book. And again, Lars Kroger makes the point about, well, again, he’s an advocate of Bogle and that’s a simple approach to investing low fees.

[00:26:39] R P Stevens: And he speaks about owning the world. He talks about, for example, a globally diversified portfolio. What edge do we have as investors? How do we necessarily know whether we should tilt to the US or Japan or into Brazil? Merger markets, we don’t know. So he speaks there about kind of this diversified portfolio.

[00:26:55] R P Stevens: So it’s Bogle, it’s Lars Kroyer. It’s spoken to my father in law. All of these things are starting to kind of like percolate in my mind. I’m starting to synthesize what I’m learning. And teatime, of course, that is crucial. And again, I guess it ties back to what you mentioned before about just being patient, don’t react to, to short term, keep that long term game in mind.

[00:27:16] R P Stevens: And if I were to show you any graph to any beginning investor, it would be that long term return of the S& P 500 or the Dow Jones over time what it’s done. And yes, there have been ups and downs, no doubt. And there have been times when perhaps The U. S. hasn’t returned so well in a certain period, or maybe global equities haven’t.

[00:27:32] R P Stevens: But over time, generally, the stock market as a whole, as an aggregate, it’s generally gone up over time. So time, for me, is just so critically key. And then finally, it’s kind of, it’s headstrong. And thinking back now, I can vividly see the beginning of my chapter in Headstrong. I talk about the fact that investors worst enemy, our worst enemy, is what we see when we look in the mirror.

[00:27:53] R P Stevens: It’s the fact that when we look in the mirror, we’re seeing someone who is full of all these kind of like cognitive biases that kind of could deter us, put us off track from our desired goals. So it’s that ability to be headstrong, to kind of block out the noise and to keep on track with your investing journey that I think is key.

[00:28:10] R P Stevens: I always kind of talk about, for example, what investors need, stock investors need in particular is kind of a blindfold to not see the headlines and like I said, earmuffs just kind of block things out, tune out the noise. So the importance of being headstrong in my book, actually talk about cognitive biases, such as action bias.

[00:28:27] R P Stevens: recency bias, authority bias as well, that kind of goes into kind of the whole thing about paying high fees. Sometimes we see these kind of like figures, sharp suit, when holding a briefcase, we see them as this hot authority figure. And I think too many people kind of succumb to these kind of impression amplifiers.

[00:28:44] R P Stevens: And they think, okay, I’m going to place my word money in the hands of these people. Whereas ultimately, I think, in 2024, A simple low fee globally diversified approach to investing is what so many people can achieve. So it’s not necessarily the case that you need to pay high fees to go and actively manage funds.

[00:29:01] R P Stevens: That’s I guess, like a whistle stop tour through my five bedroom principles. I might just mention one more person, actually, who’s surprisingly someone whose philosophy and investing is interesting is Michael Lewis, who wrote The Big Shoe and Moneyball. It was actually when I spoke to Eric Balchunas on my podcast, and he wrote a great book called The Bogle Effect, Eric Balchunas, and he spoke about the fact that when he spoke to Michael Lewis mentioned the fact that even with his background in finance and working on Wall Street and stuff, he is someone that invests in index funds as well.

[00:29:33] R P Stevens: So that is something that I find interesting. This is someone who’s kind of probably worked with Hollywood, the Big Short, Moneyball, and so on. But yet Michael Lewis is kind of humble enough to concede that, index funds are the approach I take my own money. So I just find it fascinating.

[00:29:48] Patrick Donley: Yeah, no it’s, I mean, Buffett says it’s the way to go too. It’s like so hard to devote the time to be a good, if you’re going to be an active stock picker to actually do that as a retail investor really hard to do.

[00:29:59] R P Stevens: Yeah. And we think about his own advice for his wife, right? We think about what he you probably know this, don’t you, about like when he passes away, we don’t want him to live forever, but there will be a time when Goran passes away.

[00:30:08] R P Stevens: He’s left the trustees with the simple fact that he wants his funds to be entrusted in, I think it’s like 85 percent in S& P 500 funds. So that speaks volumes for what Buffett thinks about index funds, yeah.

[00:30:20] Patrick Donley: I wanted to get in a little bit to the own the world portion of that. So how do you do that in your own portfolio? How do you determine percentages and break it down? Talk to me a little bit more about that. I’m curious.

[00:30:32] R P Stevens: I think it could be tempting to think, let’s buy a North American fund with us in Canada. Let’s buy kind of like a Far East fund with Japan, Hong Kong, China, and so on. But I think again, if someone is going to go down that approach, again, that’s going to lead to high fees because Each of those funds, even if they are index funds, they are going to lead to high fees.

[00:30:51] R P Stevens: What I love about what Vanguard has done is they’ve enabled investors, whether they’re investors in the US or the UK, for example, Australia, they’ve enabled investors just to buy these low fee Globally diversified index funds. So one that I invest in, for example, the London Stock Exchange, it’s got a ticker at VWRP, and it’s simply the Vanguard FTSE All World Index Fund.

[00:31:15] R P Stevens: And what I love about that is just it’s got this exposure, I want to say it’s around about 65 percent exposure to the US. It’s got exposure, of course, to kind of to Japan, to Canada. So what I love about that is the exposure that fund has is equal to What each country’s representative share of the global stock market is as a whole, and that for me is what I advocate in my book when I had that section on the world in my book, so, that is something that I do. And again, this goes back to my belief in the fact that, well, none of us have a crystal ball. We don’t know whether in the 2020s, the US stock market is going to continue to dominate. Will it be emerging markets? Will it be Japan? We just simply don’t know. So what’s great about that is that it is for investors that don’t have an edge.

[00:31:58] R P Stevens: We don’t know quite simply what the future is going to tell. And it kind of goes back to that vocalism, if you like, of don’t look for the needle in a haystack, buy the haystack, which I absolutely love. When I’m talking, when I’m giving, when I’m giving these kind of like beginner investor talks, I always go back to that statement.

[00:32:13] R P Stevens: Don’t look for the needle in a haystack, buy the haystack, own the world. It’s as simple as that. And what’s great about that is that you just get that exposure to those markets that are doing particular, hey, let’s say there’s that great I am flying stock in, in Singapore, maybe Japan starts to do well.

[00:32:27] R P Stevens: India, people talk about India. I was watching I’m really interested in geopolitics. I was actually watching a great interview with Neil Ferguson, one of my favorite historians. He was at Davos several months ago. He was speaking to some Indian economists and, he’s quite kind of bullish if you like on the Indian stock market.

[00:32:42] R P Stevens: So I like the fact, in the globally diversified stock market fund, you’re going to get exposure to India as well. What I would say as well, I make the point in my book that if we go to a restaurant, if you and I go to a restaurant, we are going to have a very different palette. Mrs. Sloth, my wife, for example, unfortunately, Mrs.

[00:32:59] R P Stevens: Sloth doesn’t have the same palette. I love spicy food, and I happen to love Indian food. My kids and my wife, not so much. So when I go to an Indian restaurant, I want that hot. I’m going to a few weeks’ time. I love the culture there of like curries. I love going to the UK on a nice day. I love the fact I’m having a spicy curry.

[00:33:14] R P Stevens: Similarly, I think with investors, we’ve all got our own unique palette. I think the danger of investing today is I wouldn’t want to kind of be considered a zealot where I say, hey, this is how you must invest and this is the only way. So I’m more than willing to see that, there may be some investors who might say, you know what?

[00:33:30] R P Stevens: I am someone who wants to put like a good percentage of my portfolio, let’s say 80 percent in a, an index fund, a low fee global diversified index fund. But why don’t I’m going to dabble? I’m going to dabble in some high growth stocks. I’m hearing about this tech fund. I’m here about this high flying stockings from Singapore and so on and so forth.

[00:33:45] R P Stevens: So I don’t think there’s anything wrong with that person. What I would say though, is that for peace of mind, I think that counts for a lot, the kind of swan approach to sleep, but at night for peace of mind, I do only see recommend actually that for the majority of investors having their portfolio.

[00:34:01] R P Stevens: Allocated to a really high percentage and index funds is kind of the keyway to go, but I can definitely see how some people might want to tilt slightly to maybe one region or tilt some individual stocks. But for me. Oh, in the world of a low fee, globally diversified index fund is key as well.

[00:34:18] Patrick Donley: I had not heard that the swan approach sleep well at night. That’s, I like that.

[00:34:22] R P Stevens: Sleep well at night. Yeah. I like that. I mentioned, I believe I mentioned in my book and I think it goes back to this whole idea of what Jack Bogle mentioned. I think it’s in one of his books. I know Eric Balchunas mentioned the Bogle effect, but he mentions this whole idea of relative predictability.

[00:34:38] R P Stevens: And that’s why it seems that index fund investors, they tend to behave really well, because inherently, they just, they recognize that over time, yes, there may be volatility in one year to the next, COVID 19, the effects of that, geopolitical, phrase between the U. S., China, whatever it might be, tariffs and so on.

[00:34:56] R P Stevens: But over time, the stock market does go up. So it’s that relative predictability that I think is paramount for me. And that’s why I try to kind of stress in my book that if you just recognize that over time, the stock market will go up, there’s that predictability to it. And I think that just wonders for kind of investor psychology.

[00:35:14] Patrick Donley: And then do you recommend a dollar cost averaging method of investing, just having a set amount that you invest into index funds each month? Is that how you do it for your own self?

[00:35:24] R P Stevens: Yeah, I would say so. I would say so. Just generally, some months I’m going to be able to buy more shares, some months less, but generally keeping it simple.

[00:35:31] R P Stevens: Dollar cost average, pound cost average, euro cost average, wherever you are. But yeah, dollar cost average. That’s what I would say. Just keeping it ever so simple. And that’s again, something I touch upon in my book as well. So, Yeah, I’m all about simplicity and yeah, the books really driven at tailored towards beginner investors. So yeah, dollar cost averaging for me is something I advocate.

[00:35:50] Patrick Donley: You’ve mentioned some you’ve mentioned William Green, Brian Feroldi, I think you, you’ve gotten some attention from some, financial writers. I don’t know if Morgan household has. You’re on his radar or not, but like it’s, you’ve gotten some nice attention from people.

[00:36:05] Patrick Donley: So this definitely helps the book. I wanted to just talk about those relationships, like how they’ve unfolded or how did you create a relationship with, let’s say, William green or Brian or like, how did that come about?

[00:36:16] R P Stevens: I think it’s just, for example, making an initial contact, outlining my philosophy, my five bedrock principles.

[00:36:23] R P Stevens: And I think the great thing about I bedrock principles is that they’re just evidence based, Whether you’re JL Collins or William Green, Eric Balchunas, Andrew Hallam, without wanting to kind of sound kind of egotistical, arrogant, I think people can see the evidence for simplicity, low fees, owner world, time, having a headstrong approach.

[00:36:42] R P Stevens: And it’s been really good. And if I could single out JL Collins in particular, he’s been a pleasure to kind of interview. I’m humbled by the fact that he’s written the endorsement for my book, which is great. And something that has really struck me by so many of my guests and something that has been kind of a recurrent theme amongst those guys, whether it’s Andrew Hallam, JL Collins, for example, Brian Feroldi, is kind of optimism.

[00:37:04] R P Stevens: And that’s something that has really struck me. And it’s funny, actually, I was actually having a conversation with a friend a couple of weeks ago, and he posed me a challenge, if you had to come up with five alternative bedrock principles, what would they be, kind of struck kind of struggled at first.

[00:37:18] R P Stevens: But I think, oh, for me, it’d be optimism. I think it’s so critically key for investors to be optimistic. And that’s something that I love about JL Collins. He’s comes across as this real kind of avuncular guy, really charismatic, fun, kind of quirky in some ways, great sense of humor. Andrew Hallam is similar.

[00:37:36] R P Stevens: So that’s something that I’ve really taken from those guys. And, even day to day for myself, if I put investing aside, we have days, some days are good. Some days not so good. Kids are tiring. I’ve got two kids under 10. They can weigh you down. Don’t get me wrong. But The rain in Hong Kong where I am can get you down at times, but just having that inherent sense of positivity and optimism, that’s something that I’ve learned from those guys as well.

[00:37:57] R P Stevens: And yeah, I mean, to anyone who perhaps is like me when I was in my late twenties and wanting to learn more, check those guys out, check out this simple path to wealth by JL Collins or why does the stock market go up by Brian Feroldi or the Bogle Effect by Eric Balchunas. I mean, these are texts that I would love to see.

[00:38:14] R P Stevens: In secondary schools in the States, the UK, Australia, Canada, wherever, France, Germany. I would love to see them. And that’s something I’m really passionate about in terms of financial literacy and getting out there and getting those books in secondary schools, colleges, libraries, universities, and so on.

[00:38:30] Patrick Donley: We’ve touched on that. You’re an international schoolteacher. Is that part of your agenda is to try to increase financial literacy in Hong Kong and to your students? Is that something that is really a passion for you?

[00:38:42] R P Stevens: Yeah, I’d love to. I mean, I’ve even started to formulate some ideas for what my workshop wouldn’t tell.

[00:38:47] R P Stevens: And I could give like a sneak preview. Actually, at the beginning of my book, I touch upon, for example, Bruce Lee and John Lennon, for example, there are two figures from a past I admire. Interestingly, they were both born within five weeks of each other, Bruce Lee and John Lennon. I also about a paragraph or two later touch upon Serena Williams.

[00:39:04] R P Stevens: So at the beginning of my investment talk, I talk about those three. Okay. I’ve got various props that I’m planning to use in my investing workshops as well, just to make it kind of engaging and interactive. And I think that’s something that I’d like to think kind of sets me apart from perhaps other authors as well is that I work in education.

[00:39:21] R P Stevens: I know how to kind of captivate and engage an audience to kind of sustain their interest. So yeah, that’s something I’m really passionate about. And I’m looking to do much more in the future. So financial literacy is really key for me.

[00:39:34] Patrick Donley: So how do you incorporate Bruce Lee and John Lennon and Serena into investing? How does that, what’s the tie in there?

[00:39:41] R P Stevens: I’m going to give you a bit sneak preview here. So I’m going to talk about the fact are you aware of the book outliers by Malcolm Gladwell? Yeah. Aware of Outliers? Yeah. So he talks about this practice become a bit cliche now, but he talks about this kind of like 10,000 hours kind of notion.

[00:39:56] R P Stevens: So he talks about the Beatles, for example, in Hamburg, and how that brought them great success and helped to lay the foundation for their future success. And then I started to read about Bruce Lee. I’ve read a few books of Bruce Lee. And again, you read about the training he went through, the people he worked with, the hours and hours of practice he went through.

[00:40:15] R P Stevens: And I speak about in my book, I think it’s the second or third page, watching King Richard, I think it was the year of COVID, maybe the year after. The movie about the Williams sisters, and I think one thing that kind of unites all three of those individuals, Lennon, Bruce Lee, and Serena Williams is just so much effort, so much energy, so much activity, and I make the point to my audience that think about it, guys, in most realms of life, that’s what we’re taught, to pass exams, to kind of perfect our golf swing, to perfect our tennis, serve, to learn an instrument and so on and so forth.

[00:40:48] R P Stevens: It’s activities, energy. But this is one of the kind of interesting things about investing, is that investing is different. It’s actually inactivity. It’s kind of less effort that brings with us, that brings with it great reward. So that’s kind of like a bit of my kind of like reference to Lennon, Bruce Lee, and Serena Williams.

[00:41:06] R P Stevens: The fact that yes, hey, for those guys, it was energy and activity and great effort that brought them success. But when it comes to investing, it’s actually less effort. It’s actually that kind of like sloth like approach that brings with it great success. So again, this goes back to the whole notion of my friend, the humble sloth, why the humble sloth is the best animal to characterize successful investing.

[00:41:26] Patrick Donley: It kind of reminds me of what attracted William Green to investing a little bit was like, he admittedly was a little bit, he’s like a little lazy. He said as a young kid and he’s like, the idea of that I could just invest in something and make money just by, using my brain a little bit and just sitting there and watching it grow really appealed to him.

[00:41:43] R P Stevens: Yeah. It seems incongruent, doesn’t it? It seems so incongruent that, I remember growing up. My mom would say to me, Roy, just, you got to read so much. If you want to be able to get those top grades, go to a top university read practice.

[00:41:53] R P Stevens: And I was always one of those guys at school. My particular grades are always lower. So I would be someone kind of from kind of like February to June, I would just cram. I’ll be doing so much revision. In those four or five months for the exam, and I would end up getting a much higher grade than I’ve been kind of predicted.

[00:42:10] R P Stevens: So, again, it’s just activity energy. That’s what we taught from a young age, whereas investing, it’s kind of, the polar opposite really is.

[00:42:17] Patrick Donley: I wanted to touch a little bit on, do you have, there’s an investor I like, actually he’s, I believe from the UK, Nick sleep. I don’t know if you’re familiar with him.

[00:42:26] Patrick Donley: He is in, he’s featured in, he’s featured in richer, wiser, happier. He had this idea of an X number. He called it that once he hit a certain number in net wealth, he was going to retire from the world of active investing and per, pursue more like philanthropic pursuits. And he did he hit his number.

[00:42:45] Patrick Donley: I don’t know exactly what the number was, but he did return the money to the, his investors and went on to pursue some charitable giving and things like that. Do you have a number like that in your head where you’re like, once I reach this number, I’m going to, I don’t know, whatever your hopes and dreams and goals are, do you have anything like that?

[00:43:04] R P Stevens: It’s interesting. It’s a really good question. It’s something that I pondered about before. I’ve spoken to friends and family members about it. I guess I don’t really have a number. I guess for me, it’s maybe it’s more of an age. For example I think about both of my parents, like for example, sadly, my mom passed away at the age of 58.

[00:43:18] R P Stevens: My father passed away a few years ago at 69. So they didn’t in today’s day and age, they lived a relatively short life. They didn’t, neither didn’t reach their seventies. So I would like to think, for example, what I’m 41 now, what if I could get to 55? If I got to age of 55, I’ve continued to invest like a sloth for the following, for the next 14 years.

[00:43:36] R P Stevens: Could I, for example, perhaps, I don’t know, at 55 retire? I’ve spoken to my wife about this. Maybe once I hit 55, would I be at the stage where I could retire? That’s something I thought about. I can’t say with any certainty that is something that’s going to happen. Maybe if I’m fortunate, if things get going well, I’ve got a fairly good sized portfolio so far, maybe it could be early, maybe it could be 50, who knows.

[00:43:55] R P Stevens: But yeah, I haven’t really thought necessarily about a particular number in terms of value, but. It’s certainly something I thought about in terms of age, yeah, in terms of age. How about yourself? Is that something that’s crossed your mind or?

[00:44:07] Patrick Donley: I do. I think about it and the 4 percent rule and I always think about like, what do I, what do my wife and I spend each year and how much do we need to live the kind of life we want?

[00:44:16] Patrick Donley: And I like to go through those exercises. Yeah. I think it’s fun to do, but I think the number keeps moving. I think like that’s the danger of money in a sense is like, it’s like more, I think the hurdle just keeps like getting higher and higher that you want to jump over. But yeah, it’s so that’s why I admire Nick sleep was that he was able to stick to his number and then pursue other things, like once he hit the number. Hard to do, I think.

[00:44:41] R P Stevens: And I guess there’s so many factors at play as well. I think about if the UK government is going to kind of, continue to increase tuition fees over the next 5, 10, 15 years, that’s going to have an effect as well. Because I’d like to, I wasn’t fortunate enough to have my parents pay for my university education tuition fees.

[00:44:56] R P Stevens: But I’d like to think that I could help my kids out to an extent as well. So that’s something I like to help them when that’s a key reason why I invest is to kind of smooth their path through life as well. So, Yeah, I mean, that could play a role as well in terms of what my kid’s future will entail.

[00:45:10] R P Stevens: Perhaps the career path that they choose might need a bit of funding. Who knows? Who knows what? Again, no one is a crystal ball, but all these factors come into play. But yeah, I mean, and that’s something I would say to those people who want to get into investing and perhaps a little bit more mathematically inclined.

[00:45:25] R P Stevens: Then that is something that can be interesting. They can begin to think about like you mentioned, what’s your number, whether it’s a particular value in terms of money amount or an age amount with an age number. That’s something that can be interesting to kind of probe deep. And you can look at all these compound interest calculators, Kager calculators online.

[00:45:42] R P Stevens: If the stock market returns 78 percent per year, I could get here. If I up my kind of like investments per year, it’s fascinating looking at all those what ifs and the variables and so on, it really is.

[00:45:53] Patrick Donley: It is. It is. I was going to ask you, you’re wise. I wanted to hear you’ve got two children. Is that I wanted to know how you think about wealth. Is that something that you do want to create and generate for them or do you see dangers in that?

[00:46:07] R P Stevens: Yeah, that’s a really good question. I actually had an interesting discussion on LinkedIn about this recently because I’m really someone who’s fascinated by the whole concept of anti-fragility and I think it’s Nassim Nicholas Taleb’s got this book where he talks about this as well, how in life it’s actually the fact that we need some kind of like shocks and we need some kind of disturbances for want of a better term.

[00:46:30] R P Stevens: We need to go far, go through these kind of like times in our life where we experience those moments that cause us to kind of feel a little bit of pain and discomfort. So. Yeah, I think it’s about finding that balance as a parent. So on the one hand, I definitely do want to smooth my children’s path throughout life.

[00:46:46] R P Stevens: But put it this way, I don’t want to put everything on like a silver plate from, give him a golden spoon. I don’t want to say, hey, here you go. Let me, I’m going to pay for this and I’m going to pay for that. I think it’s about finding that balance because you want to ultimately kind of cultivate that spirit of independence within them as well.

[00:47:01] R P Stevens: And I mentioned earlier that I love reading nonfiction. So if I put personal finance aside, there’s a book that I love. That came out a few years ago by John Heights, American, I think he’s a professor at NYU. The coddling of the American mind. And he speaks a lot about this. I love that book.

[00:47:16] R P Stevens: He speaks a lot about how in recent years, particularly in the West, we’ve kind of been inclined to kind of coddle our kids, wrap them up in cotton wool and learn behind what we’re finding is that too many people, too many young kids now getting into their teens and their twenties. I’m not dealing with life as they should do.

[00:47:31] R P Stevens: So I’m very aware of that as a parent, having read John Hyde’s book, I’m a parent right now. I’m very aware of, yes, I want to give my kids a better starting life than I had. I want to kind of teach them my kind of financial principles, but at the same time, I don’t want to make things too easy. So that’s, it’s a careful balance of that. It’s like as a parent it’s interesting. I mean, do you have kids yourself? Is that something that you’ve thought about or?

[00:47:52] Patrick Donley: I’ve got three stepchildren, and it’s something my wife and I talk about, like, what we want to leave with them or not, like, like, I do think there’s a lot to be said for the anti-fragility thing and the coddling.

[00:48:02] Patrick Donley: I saw an interesting stat yesterday on Twitter about, I think approximately 20 percent of parents are showing up at their college age kids job interviews or calling the inner or the employer, like getting involved in the interview process for their college age child. Like, so I do think there is some coddling there that really is as a concern to me.

[00:48:22] Patrick Donley: I don’t. I don’t think making life easy is, life is difficult. Like it’s not, you’re not doing your kids a service like by making things easy for them. I don’t think.

[00:48:33] R P Stevens: Exactly. And I think there’s great validity and there’s definitely value in, as they become older, getting them to kind of, say for things.

[00:48:41] R P Stevens: I can remember when I was perhaps, I was at 16, 17. I saved money for my first hi fi. I’d really gone through this phase of like checking out my mom and dad’s old vinyl records from the 60s. So my mom and dad went to the Stones, Beatles, Motown, Jimi Hendrix, and so on. And I thought, I want to get a high five, a turntable on CD player, the works cassette.

[00:48:59] R P Stevens: And I can remember gradually week upon week doing some chores at home. And when I could finally go into that store and buy, the high five story for myself, it gave me such a sense of accomplishment. So I think there’s A real value in doing that, not just given handing things to kids on a silver plate and say, hey, I’ll go out and get this and do this and that for you.

[00:49:18] R P Stevens: I think there’s a real purpose to kind of getting kids to strive and I might say not coddling them because there are dangers in our world of like coddling kids too much. And what you mentioned is fascinating. Was it 20 percent you said going to kind of interviews?

[00:49:31] Patrick Donley: Yeah, I think it was around 20 percent of parents are showing up at interviews.

[00:49:35] R P Stevens: I mean, it’s just madness. I mean, we’re trying to cut, you want to kind of inculcate that sense of independence within your kids. And just to do that is just certainly doing the opposite, isn’t it? It’s crazy.

[00:49:46] Patrick Donley: I wanted to touch on your podcast a little bit. You’ve had some really cool guests on JL Collins. You mentioned Eric Balchunas, Brian Feroldi you’ve had on. I believe.

[00:49:55] R P Stevens: Brian Feroldi. Yeah. Yeah.

[00:49:58] Patrick Donley: Talk to me a little bit about some of your biggest takeaways from some of those guests and maybe things that you’ve implemented in your own life by speaking with them.

[00:50:06] R P Stevens: I really enjoyed actually talking to Eric Balchunas.

[00:50:09] R P Stevens: So Eric Balchunas, for those members of the audience who are not familiar, wrote a great book several years ago called The Bogle Effect. So he is someone I believe Eric Balchunas still works for Bloomberg. He wrote The Bogle Effect, a really easy read, about 200 plus pages. And just the analogies that he brings up.

[00:50:26] R P Stevens: He’s, if you like, a Bogle connoisseur. He must have read every single book written by Jack Bogle. He’s got this great analogy that he touches upon that I was unfamiliar with. The Hedgehog and the Fox. Are you familiar with the Hedgehog and the Fox? I love that. Ah, I love it. And I was, and I thought I was quite cleaned up with Bogle, but I love it.

[00:50:44] R P Stevens: So, perhaps I’ll briefly go into it for your audience. So, it’s this Aesop’s Fable about, the Fox is very cunning, very sly, very devious, can do many tricks. multitask and multifaceted, whereas a hedgehog just knows this one great thing, how to curl up in a ball, protect himself, the spikes can deter predators such as the fox and so on.

[00:51:03] R P Stevens: And Jack Bogle makes this great point about you can be someone who’s great at this or that or so multi-talented, but if you’ve got this one great approach, like the hedgehog has that one great approach, you just curl up in a ball, deter predators, that’s all it takes. So, Yeah, that’s essentially Bogle Balchunas probably explained a bit on my podcast interview with him, but that kind of approach is just something that really resonated with me.

[00:51:28] R P Stevens: So speaking to Eric Balchunas was great as well. And also, yeah, JL Collins, I mean, JL Collins is great. I mean, touching back upon my interview with him, one thing that he spoke about again and again is just the kind of debt, the unacceptable burden. I actually believe in the simple path to life.

[00:51:44] R P Stevens: One of his chapters is called debt, the unacceptable burden. He again, talks about how in our contemporary world, whether it’s TikTok, Instagram, Facebook, et cetera, Snapchat, so many young people are kind of so willing to keep up with the Joneses and see what their friends are wearing, clothes, shoes, et cetera, et cetera.

[00:52:01] R P Stevens: So what JL Collins has to say on debt is It’s really important as well. Andrew Hallam was he was delightful as well. And I love Andrew Hallam’s got this great story in our podcast about when he met Warren Buffett. So he was actually teaching at a time, I believe, an international school in Singapore.

[00:52:15] R P Stevens: And he said to students, hey, why don’t I try and meet Warren Buffett? And he, I think he said to his students, it won’t happen. I won’t try. And of course, kids being what kids are like, the kids like, no go, Mr. Hallam, go, try. So he wrote a letter to Warren Buffett to Berkshire Hathaway.

[00:52:29] R P Stevens: He got invited. To one of their annual general meetings, he went over and I think he actually met Warren Buffett and then he thought to himself, what on earth, what do I give one of the world’s richest men? What do I give Charlie Munger and gosh, Andrew Hannum, if you ever watch this, you have to forgive me.

[00:52:44] R P Stevens: I believe he might’ve actually given them each a t shirt with like a corny phrase on it. I’d have to look back at my podcast to remember what it was, but I think he gave them each like a t shirt. And interestingly, that day, I think he also met Bill Gates. So Bill Gates happened to have been in town as well.

[00:52:57] R P Stevens: So not only did he meet Buffett and Munger, but he also happened to meet, so, in the same room as Bill Gates as well. So that was a quite interesting day, I think, for Andrew Hallam. But no, it’s been a real privilege to meet Eric Balchunas, JL Collins, and just kind of like circling back to what I said before, just that kind of overarching emphasis that they really have, particularly JL Collins and Andrew Hallam, on optimism and positivity and If I could just circle back to Hanon for a moment, Halim’s got this great book as well called Balance, where he talks as well about the importance of kind of experiences as well and what they bring to us, and kind of the importance of not attaching too much emphasis to kind of things and buying things, and the importance of what experiences can bring us as well.

[00:53:41] R P Stevens: So that’s something as well that I really took from our discussion of Halim and his book Balance, so I could go into that a bit deeper later on, but yeah. I mean, I’ve really enjoyed speaking to those guests. It’s really good.

[00:53:52] Patrick Donley: So it was Andrew Hallam wrote the book balance. Is that what you said?

[00:53:56] R P Stevens: Yeah. He wrote balance. That was his most recent book. I believe that was around about two years ago. And again, that’s more of a book that yes, it does dive into personal finance, but he also talks about just how in life we can achieve more balance, whether it’s with our physical body in a financial sense and so on.

[00:54:12] R P Stevens: He’s got this great story about this town in Pennsylvania, I think it’s called Rosetto. I’m not sure if you’re familiar with this story, but it’s about these Italian migrants that moved to Rosetto in Pennsylvania. And they’re a really tight knit community in the 1950s and 60s. They had one of the highest life expectancies in the States.

[00:54:29] R P Stevens: I mean, this is incredible. People started to consider researchers, what is it about these guys? Why do they live in so long? And they started to realize it was the tight knit community that they brought with them from Italy, perhaps from Sicily, Sardinia, I think it might have been. And Hallam talks about that, about the importance of these tight knit communities, kind of ties into the whole notion and concept of blue zones.

[00:54:48] R P Stevens: There’s that great Netflix series on blue zones. And then, yeah, and then Hallam later on in balance, he talks about how, for example, sadly, that started to kind of wither away, that sense of community. And the fact that the life expectancy, again, has started to plummet. And why? Well, it’s because the community is broken down.

[00:55:04] R P Stevens: You’ve got these kind of like out of town malls that the residents started to move to. People no longer like leaving their doors open, knocking each other’s door, how you’re going and so on and so forth. So, that is fascinating to me, this kind of importance of community experiences. And that’s something that I briefly touched upon in my own book as well.

[00:55:21] R P Stevens: There’s kind of like a section where I’ve got 10 questions you may have and so on. And I do also touch upon the importance of experience. And that’s something again, I touched upon in my workshop as well for beginning investors experiences over things as well. That’s so critically key.

[00:55:35] Patrick Donley: Yeah, there’s a couple of people I’ve interviewed that have mentioned the book die with zero. And there’s an idea in that book called the creating a memory dividend fund. So basically creating a fund that the money is just siphoned off towards just creating amazing memories. Cause you know, at the end of when you’re on your deathbed, like it’s not, you’re going to remember the times you had with people and the experience you had and that kind of thing, rather than I had a huge pot of, they talked about the importance of really. Not being afraid to spend some money on really amazing experiences.

[00:56:08] R P Stevens: I love that the memory dividend fund and yeah, I mean, that’s something I have thought about given that I mentioned before without wanting to sound too morbid, but both my parents didn’t live into their 70s and it’s so nice when I’m 41 years old, how long will I live?

[00:56:21] R P Stevens: I hope, I live a relatively, healthy life here. The kids keep me. On my toes, but that’s something that it really is important to me as well. Just the important experience is going out with the family to a great restaurant, got a nice holiday, going out to the park. You can do things with family that don’t cost any money.

[00:56:35] R P Stevens: Just have a great time and build those experiences. And I think particularly in today’s day and age, and again, circling back to another book by Jonathan Hyatt, I think he’s got this great book now about so the anxious generation, I think it’s called. It’s just come out within the last few months. But again, you think about so many kids in today’s world, looking at smartphones and so on devices, get the kids away from the devices and, get them talking to each other, emphasizing points of experiences as well. So yeah, that’s really critical.

[00:57:01] Patrick Donley: You had a Twitter post, I think you asked outside of Buffett, who’s the world’s greatest living investor. Did you have any thoughts on that? Like what people said or even your own thoughts on what, who you think that would be?

[00:57:15] R P Stevens: It’s interesting. I can look at it in several ways. So I think for example, And I’ve got no insight into particularly, how he invests in a monthly basis and so on. But in terms of, for example, if I was going to pick, let’s go down an author, if I was going to go down an author who I know invest, I love Morgan Housel is perhaps become a bit of a cliche now, but I love his writing, the psychology of money, for example.

[00:57:36] R P Stevens: What he’s articulated in terms of, again, he, I know he is someone who’s a firm advocate of keeping investing simple and index funds, for example. I think he’s mentioned before, he’s just got two simple funds. I think one is a Berkshire Hathaway fund. One is a globally diversified fund as well. So Morgan house will be contender.

[00:57:52] R P Stevens: I think I even mentioned my Twitter. I think I actually mentioned on that occasion. JL Collins, I know he’s known as kind of the godfather of FI of financial independence. So what JL Collins has done, I know he used to have these kind of financial conventions in the States, the simple path to wealth. He’s written more recently Pathfinders, he spoke about that on my podcast.

[00:58:11] R P Stevens: So, JL Collins is someone who I admire greatly, and it’s fascinating for me, it’s really fascinating because he briefly touched upon this in in Pathfinders, his most recent book that even his style of investing has evolved over time. He talks about the fact that initially he was an individual stocks guy, and then gradually over time, he started to realize, what do I know?

[00:58:30] R P Stevens: Why am I investing in these individual stocks? And he started to kind of invest in index funds himself. So I love that humility. I love the humility of people like that, who can kind of see the error of their own ways and the humble enough to admit that you know what, this is what I’ve done. You might want to learn from me and so on.

[00:58:46] R P Stevens: So, yeah, if I kind of just had to pick out one, I probably would go for JL Collins. I think. How about you? Any thoughts about that? Any thoughts?

[00:58:53] Patrick Donley: That’s a good question. I really liked the last chapter of Morgan Housel’s psychology of money. It’s called confessions where he goes, where he kind of opens the hood to his own financial life and kind of takes a peek inside.

[00:59:04] Patrick Donley: And I forget that who said this, but it’s like, I don’t really care what you think. Just show me what’s in your portfolio. Everybody can have all kinds of ideas but let me see under the hood and see what you’re holding in your own portfolio. I really like that. And he dives deep into like how he does his own, he and his wife and his family manage their money.

[00:59:22] Patrick Donley: And they’ve got a high savings rate. It’s very simple. Like you said, they’ve got their house paid off. That kind of goes against maybe traditional financial advice of not having a mortgage and being able to deduct the interest. But yeah, I found that really interesting. Just the last chapter of his, do you invest in anything outside of index funds or you, do you like to keep it simple, like you said.

[00:59:43] R P Stevens: I do like to keep it simple by an investor index funds, but it’s interesting what you mentioned there about how’s all paying this house off. My wife and I did the same actually. And I think again, it ties back into that whole notion of swan of like sleep well at night. It’s a psychology of money in terms of, I remember when my wife and I were looking to buy a property, this would have been about six or seven years ago.

[01:00:02] R P Stevens: And there are various agents in UK say, hey, but you could do this. You could kind of flip the property this by two projects. But I think we just wanted to kind of like peace of mind, have it paid off, for example. And I think so many people underestimate the kind of significance of the psychology of money to phrase, to use a book there.

[01:00:19] R P Stevens: But yeah. So when I read that section of this book, that really kind of, resonated to me, it really did. But yeah, in terms of investing, I do tend to kind of, I do tend to keep it simple. I don’t want to be a hypocrite and be accused of dabbing on things. I do tend to, as my book advocates, keep it simple and low fee index funds.

[01:00:36] R P Stevens: And like I mentioned before, I’m definitely someone though, if someone were to say to me, Hey, but what about if I have like a little fun section on my portfolio, maybe 10 percent while I dabble in some kind of like, we have some fang stocks or some high growth stocks, or Hey, my uncle works with this company, I’m all for that.

[01:00:50] R P Stevens: Go for it. But just think about the evidence and have a core component of your portfolio in what the evidence has shown to have gone up over time that a globally diversified approach to investing in an index fund.

[01:01:02] Patrick Donley: RP, this has been a lot of fun. The Sloth Investor is coming out soon. How can people find out about you, find out more about the book, reach out to you, that kind of thing?

[01:01:11] R P Stevens: Yeah, so I’m on X. It feels weird not to say Twitter anymore, but I’m on X now. And it’s @sloth_investor. I’m on YouTube. My YouTube handle is @TheSlothInvestor. And you can also check me out at Substack. So it is the slothinvestor.substack.com. My book is starting to come out now. For example, it’s available on Amazon.co.uk, Amazon France, Amazon India. It’s available in the U.S. on Barnes Noble as an e-book at the moment. But I’ve been told by my publisher that gradually as we get deeper into July and as the summer progresses it will start to become available as you make deeper inroads into the summer. So I’m looking forward to kind of investors around the world because it doesn’t matter where you’re from. Anyone can invest like a sloth. So I’m really looking forward to kind of getting that kind of global exposure, getting more people to kind of invest like a sloth. I really am.

[01:01:58] Patrick Donley: Yeah. It’s a great idea. Great title for the book. I’ll put all of the, everything you mentioned there in the show notes, so people can find it and buy it and read it and hopefully implement it. But thanks a lot for your time, RP. I really appreciate it.

[01:02:11] R P Stevens: That’s a pleasure. Absolute pleasure. I really enjoyed it. And yeah, we’ve got some similar interests as well in the books we read. So, it’s been a real pleasure and honor to join you on today’s episode. Thank you so much.

[01:02:20] Patrick Donley: Okay, folks, that’s all I had for today’s episode. I hope you enjoyed the show and I’ll see you back here real soon.

[01:02:26] Outro: Thank you for listening to TIP. Make sure to follow Millennial Investing on your favorite podcast app and never miss out on our episodes to access our show notes, transcripts, or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by The Investor’s Podcast Network written permission must be granted before syndication or rebroadcasting.

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