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“Everyone needs to speak the language of finance to at least a primary degree”, with Jason Hartman & Alan Grujic

Everyone needs to speak the language of finance to at least a primary degree and to feel reasonably comfortable with the subject matter. The solution is to create a full-year high school course (sometime in the Junior or Senior year) that teaches everyone the basics of personal finance management. It would cover matters like compound […]

Everyone needs to speak the language of finance to at least a primary degree and to feel reasonably comfortable with the subject matter. The solution is to create a full-year high school course (sometime in the Junior or Senior year) that teaches everyone the basics of personal finance management. It would cover matters like compound returns, so young people understand the advantages of starting to save early, tax minimization, and a component on real estate investing. There’s a lot to learn — too much for a single semester — but I think it’s wholly deserving of the time in the curriculum.

As part of my series about the “Five Essentials for Smart Investing”, I had the pleasure of connecting with Alan Grujic, founder and CEO of All of Us, the world’s first self-directed investing platform that introduces a radical new paradigm: Get Paid to Trade. Alan founded All of Us to ensure every investor is empowered to achieve the kind of returns financial institutions have traditionally kept for themselves. Alan has had a long career in institutional investing and high frequency trading. He co-founded the largest high-frequency trading firm in Canada, The Infinium Group, with over $100 million in profit and global footprint. Alan also founded a multi-hundred million dollar algorithmic trading hedge fund, and built a highly profitable, structured finance division for TD Bank in Asia. Alan and the team at All of Us recently launched its social-based web and mobile application out of stealth, and is now accepting waitlist sign ups at www.allofusfinancial.com, before the platform officially launches in Q1 of 2020.


Thank you so much for joining us, Alan! Can you tell us the “backstory” about what brought you to the finance industry?

I graduated as an electrical engineer from the University of Toronto and worked for a General Motors’ subsidiary, programming their assembly line systems. After being inspired by the books I was reading on financial markets and financial engineering, I decided to go back to college and study for my MBA in finance.

I was hired straight out of school by TD Bank, a large banking firm in Canada, and worked for them in Toronto, London, and Tokyo. I began as an options trader, where I worked my way up and went on to run a large trading department. In my last role at the firm, I built a brand new structured notes business for them, which involved complex interest rate and credit derivatives capabilities.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?

I co-founded and built a high-frequency trading business from 2002–2011, during a time of incredible change in capital markets. During this time, the concept of a fully automated trading system was still in its infancy, and many people didn’t believe it could be done. It was this sentiment that drove me to change that perception.

By 2008 — the time the financial crisis hit — our operations and trading activities had significantly grown. So when the markets became volatile and volumes spiked, our systems were trading at exponential speed and quantity. It was impossible to process what was happening in real-time, and it was only then that I appreciated the incredible capabilities of automation. It was truly humbling.

It drove home what I already thought — that automation and data science can increase humanity’s capabilities way beyond our current expectations.

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

Throughout my career, I have seen everyday people sit on the outside of the financial ecosystem, looking in. A problem that happens over and over again. This is why I have been part of a team working on creating the world’s first self-directed investment platform, called All of Us.

All of Us is a social-based web and mobile application that looks to flip the standard investment model on its head and place the earning potential of financial institutions squarely into the hands of those who deserve it most — the investors.

We are focused on bringing an unprecedented level of transparency to the industry so that every investor is empowered to achieve the kind of returns financial institutions have traditionally kept for themselves. No more hidden revenue streams, no more so-called “free deals” that still leave investors out of pocket.

The All of Us platform architecture is built around engagement and community knowledge. This enables investors to tap into the industry wisdom and buying power of a collective group while maintaining control of their assets as an individual.

For a small, capped service fee (no more than 50 basis points), our platform monetizes all possible revenue streams and directs them to our members. This enhances their ability to make money outside of their traditional portfolios. We can also get them equal access to the all-important private markets, something that, until now, has not been available to smaller-scale investors.

Through the power of social engagement and sophisticated machine learning, we believe we can transform ordinary investor experiences, and most importantly, make them money. Best of all, All of Us doesn’t make money until its members do. Our revenue comes out of the savings provided and not charged to the user.

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 these unfortunate numbers?

Quite simply, the school system is not educating our children when it comes to personal finance management skills and financial math. It was the same when I was going through school, and as I’ve experienced with my three children, it hasn’t got any better over the years.

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

Everyone needs to speak the language of finance to at least a primary degree and to feel reasonably comfortable with the subject matter. The solution is to create a full-year high school course (sometime in the Junior or Senior year) that teaches everyone the basics of personal finance management. It would cover matters like compound returns, so young people understand the advantages of starting to save early, tax minimization, and a component on real estate investing. There’s a lot to learn — too much for a single semester — but I think it’s wholly deserving of the time in the curriculum.

Second, I would change the way the investment industry operates to be more transparent and more focused on customer education. It’s hard for people to make the best investment choices if they don’t have the information they need. That, of course, is one of the core components of our mission at our company, All of Us.

Thirdly, in the US, the government needs to dedicate policies and resources to encourage people to save more. There is still a need to empower women to consider careers in financial services. To this day, the industry is still male-dominated. Not surprisingly, we are putting a lot of thought into how we construct our community so that it feels inclusive for all.

You are a “finance insider.” If you had to advise your adult child about 5 non-intuitive essentials for smart investing what would you say? Can you please give a story or an example for each.

1.Save monthly and start early
If you save $100 per month for 30 years at an average of 10 percent annually in return, you will have over $200,000 at the end. The first $100 turns into over $1,700, the middle $100 turns into just over $400, and the last $100 is only worth about $100! So starting as soon as possible is critical.

  1. Use dollar cost averaging

That means investing the same amount of money every month, whether the market is up or down. Human nature tends to become conservative when markets are selling off and brave when they are rallying, but that’s precisely the opposite of what you should do. If you buy $100 worth of a stock at $10, $100 at $9, and $100 at $11, the average price of the stock was $10, but your average price was $9.933. So remember that, and be consistent

3. Buy and hold liquid and low-expense ratio ETFs to create your portfolio. Don’t trade around

For example, the SPY ETF gives you exposure to the broad equity market and is hugely liquid, plus it has an extremely low-expense ratio. This is the only thing you need to own to be sufficiently diversified in your equity holdings. It’s that simple!

If you do want to be a little overweight in some sectors, you can buy significant sector ETFs such as XLF (finance) or XLK (technology). Again, it’s that simple and buying the individual stocks is rarely worth the effort, particularly in the long run.

Research has shown that for the average investor, passive investing beats active investing. Even full-time investors may well find the same.

4. Don’t use investment advisors to make investment decisions

They don’t do any better than the overall market but will still charge you for the lack of delivery anyway. Instead, buy a highly-rated book that explains what your target portfolio should be throughout each decade of your life and learn how to be a responsible and disciplined investor.

The figures speak for themselves. Over the last 10–15 years, self-directed investors have outperformed those with investment advisors. Nowadays, it’s as simple as constructing your portfolio out of a few low cost ETFs and saving all the service and advisory fees people used to have to pay to get diversification.

5. Do use tax planning advisors and estate planners.

This stuff is complicated and hard to figure out on your own, not to mention the government keeps changing the rules, so it’s hard to manage. Sufficient tax and estate planning can save you a lot of money, so make sure you put it in the hands of someone in the know.

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

Several examples come to mind. Firstly, I was an only child, which has its advantages and disadvantages. One advantage was that my parents spent a lot of time with me, encouraging me to learn, especially when I was young. I think this made a big difference, and my habits of learning grew and grew. Most people think intelligence is just being able to figure stuff out, but I believe knowing how to learn is just as important as being naturally smart.

Second, my wife was always supportive and patient as we moved around the world, building my career, even as we had children. While I’m grateful for that, I am also aware that, as a society, we need to find a more balanced way for both spouses to manage their working lives.

Lastly, during my high-frequency trading days, my co-founder and I didn’t always agree on things. He was an incredibly capable business partner, and that allowed me to maximize my value delivery as we grew the business. The lesson here is that teamwork is very powerful and usually necessary for success.

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

At some point, I got enough perspective on life to realize the most important, and the most simple thing I should endeavor to accomplish at all times is to be constructive. I often fail at it, but I’m always aware of it and keep returning to it. I’ve experienced a lot of good life lessons, but I feel this one is the foundation that sets you up for ultimate success.

As a person of great influence, if you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be?

I would inspire a globally coordinated effort of human rights enforcement for everyone on the planet. Yes, such laws exist in almost all countries but they are not enforced. Especially not for the poor or those that are the victims of prejudice.

There is a book called the Locust Effect, which is probably the most shocking book I’ve ever read about how things are right now in the present. This is not a problem from the past; this is a problem that exists today and continues to be a significant issue affecting billions of people. Such injustice needs to be accountable, and the atrocities that some people experience must stop with the full force of the law.

Thank you for all of these great insights!

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