The 5 Essentials for Smart Investing, with Thomas Beattie and Jason Hartman

 Jason Hartman

September 24, 2019

Originally published in Authority Magazine. Written by Jason Hartman.

As a part of my series about the The 5 Essentials of Smart Investing, I had the pleasure of interviewing Thomas Beattie, CEO of Voleo. Thomas has more than 15 years of experience in the capital markets. He began his career as an investment banker, then worked as a consultant to public and private companies before taking on his role with a startup. Thomas has always been a champion for financial literacy and wants to create a generation of informed, empowered investors. Thomas is a CFA Charterholder, has been registered under the securities legislation in the US, Canada and UK, and received his Bachelor of Commerce in Finance from the Sauder School of Business at UBC.

Thank you for doing this with us! Our readers would like to learn a bit more about you. Can you tell us about your “backstory” and what brought you to the finance industry?

I was eighteen years old and made my first stock investment — the shares I bought were in a small technology company that was to bring chip and pin technology to North America. For the first week it was looking great, the shares were up 30 or 40%. Unfortunately, it was March of 2000 and the dot-com bubble was bursting, and a few weeks later I lost half my original investment and sold. I was devastated, and since that was my savings from a summer job, I resorted to buying and selling things on eBay to earn some spending money during college. Despite my mistake I knew I wanted a career in finance.

Can you share with our readers the most interesting story or turning point that occurred in your career so far? Can you share the lesson you learned from that story?

Deciding to leave the exceptionally well-paying field of investment banking to start my own consulting business was certainly a turning point. For those who don’t know, investment banking is a fantastic career for finance professionals who are unnaturally driven. You work very long hours under demanding conditions and in return are compensated handsomely. For me, while the dynamic nature of the job was enjoyable, I reached a point where I was more interested in contributing directly to the growth of businesses than participating in the mergers and acquisitions or capital allocation process.

Are you working on any exciting new projects now? How do you think that will help people?

Nearly all my time and energy go into Voleo, a stock investment platform built on the premise of collaboration for a better financial future.

Voleo started with investment clubs because working as a team shatters the barriers to entry (money, knowledge, time and fear) for new investors, and provides traditional benefits of lower cost, lower risk and wisdom of crowds to everyone. We leveraged technology to take care of all the hard parts — signup takes less than ten minutes entirely from your mobile device.

While you benefit from the entire community’s best ideas, you invest only with people you already know and trust. Everyone takes part by voting on trading ideas and every member of your club has a vested interest in seeing you succeed. You get to learn from all your decisions. Plus, “I told you so” is a fun mechanism that feeds a community you can follow in real time.

All of this is meant to help people start investing earlier and leverage their greatest asset: time. Compounding means that the sooner you start investing, the better you’ll do in the long run. Our teams are doing well and growing over time, spreading the low cost ($4 per person per trade at most) across more members. The average amount paid by our users is about $1.25/person per trade.

In my nearly non-existent spare time, I support Jamie Hankinson of Eli Technologies, whose Eli Reports leverage AI to read condo corporation documents to give buyers a better sense of the health of their building. In the future I intend to address the problem of housing affordability in the world’s greatest cities, because I believe we all deserve to live in the communities in which we work.

According to this report in Fortune, nearly two-thirds of Americans can’t pass a basic test of financial literacy. In your opinion or experience, what is the cause of this unfortunate statistic?

The gaps in our education system are undeniable. You are more likely to be taught how to conjugate a foreign language than about high-interest loans. Not everything can be taught in school (and we easily forget what isn’t relevant to us) but even one term covering the basics would be helpful. Some believe we should be learning about this at home, but between finances being a taboo subject in many households and the fact that many parents don’t know all the answers, I believe the classroom is a great place to start.

If you had the power to make a change, what 3 things would you recommend to improve this statistic?

1. I would initiate a high school course that would cover:

  • Earning money: The differences between being employed and self-employed.

  • Spending, saving and giving: Cash, debit, credit and what we do with our money.

  • Main types of taxes on individuals: Income, capital gains, sales and service.

  • Economy: Inflation, interest rates and what it means to you.

  • Investing: Growth vs. income, equity, debt, dividends and interest and compounding.

2. I would suggest a mandatory defined contribution retirement plan, either SEP or 401(k). To reduce the initial burden on ordinary Americans, it could be phased in over time and the minimum funded by employers. Even if it’s only 3–5% of base income, it would make a significant starter-pension for a generation that doesn’t have many defined benefit employees. An optional employer match on additional contributions of up to 2% could see everyone saving for a better future. There would be self-directed or low-fee robo-portfolios only to keep fees down. Just trust me on this!

3. I would focus on financial inclusion. It is the most financially vulnerable members of society who get hit with the majority of overdraft fees, high-interest loans and the most vicious debt cycle with opportunistic payday lenders. As a society we could do better by these individuals.

You are a “finance insider”. What are 5 unique essentials for smart Investing that everyone needs to know? Can you please give an example for each.

1. Compound interest: Your biggest asset is time. The magic of compounding is often told and yet remains underestimated. Since you can’t start investing yesterday, start today.

2. Diversify: It’s simpler than it sounds; just 12–15 stocks across sectors and size will explain the vast majority of movement in a stock market.

3. Dividends: A strong business with growing dividends and earnings is a powerful part of a portfolio.

4. Fees: There’s a reason stockbrokers drive nicer cars and live in nicer houses than you do. Minimize your fees by investing directly in shares, low-cost ETFs or use a robo-advisor.

5. Money isn’t everything: When it comes down to what really matters, money can’t always help you and you definitely can’t take it with you. Love your family and be happy with what comforts you have.

None of us are able to achieve success without some help along the way. Is there a particular person you are grateful towards who helped get you to where you are? Can you share a story about that person?

I have had the honor of working with many intelligent people whom I consider to be mentors. One in particular stands out, both in his personal integrity and professionalism. He was an investment banker who felt the need to do more and built a tech-related company to a nearly $1 billion exit. While I am infinitely grateful for the role model he is, I believe he would appreciate anonymity. He inspired me to start my career before we’d ever met: Based on his securities exams he was the brightest individual working at the boutique investment firm I worked for, and I decided investment banking would be a challenging career.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life or career?

Success usually comes at the end of a long series of sacrifices. If you are fortunate enough to realize success, you’ll know the number of late nights, failures and doubts that it took to get there, and how much persistence it takes to overcome the obstacles that were inevitably in your way.

I have never believed in accepting fate and always known we have the ability to shape our future.

If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger!

If you are interested in doing the most amount of good to the greatest amount of people it has to be advancing the citizens of developing countries, and I believe the best way is through promoting free trade. Being tough on trade is in vogue but there’s an amazing amount to gain by exploiting relative efficiency and different wages in different economies. Tariffs are a net negative; trade wars are a net negative and barriers to trade make us worse off.

The pursuit of free trade will support citizens of developing countries as strengthening their economies will improve access to clean water, sanitation, immunizations, medication and education.

Thank you for all of these great insights!


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Disclaimer: If specific securities are mentioned they are for illustrative purposes only and such mention shall not be seen as a recommendation to buy and/or sell. None of the opinions expressed by Voleo or participating guests should be construed as investment advice. Securities offered through Voleo USA, Inc. Member of the Financial Industry Regulatory Authority (FINRA), Securities Investor Protection Corporation (SIPC). Security products are not FDIC insured, not bank guaranteed, and will fluctuate in value. We do not solicit, recommend, or offer investment advice. Voleo USA, Inc. is a wholly-owned subsidiary of Voleo, Inc.