Bobby Monks
Justin Jaffe

Bobby Monks & Justin Jaffe

Co-authors of Uninvested

THIS CHAT HAPPENED ON October 08, 2015

Discussion

Bobby Monks
Bobby Monks@monksbobby · Author of Uninvested & Entrepreneur
We are the co-authors of Uninvested: How Wall Street Hijacks Your Money and How to Fight Back, published by Penguin Random House in August. Hi all, Bobby here, I'm an investor and serial entrepreneur who has founded, led, and grown many businesses in the financial services, real estate, media, and technology sectors. I am also the chairman of Spinnaker Trust, managing over $1 billion in assets; chairman of Institutional Shareholder Services, the leading provider of corporate governance and proxy services; and founder and director of Atlantic Bank. Hi Everyone, Justin here too! I'm also an investor, writer, researcher, and entrepreneur. I'm also the cofounder of Rapport.IO, a sustainability software platform, and in a previous life was a journalist for CNET and Wired.
Alex Carter
Alex Carter@alexcartaz · Operations @ 60dB. Ex-PH Podcasts 😻
In your ideal world, what does the future of personal finance and investing look like in 15 years?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@alexcartaz A system where power has been restored to investors. Where investors are way more engaged with their investing. And where the largest share of the benefits (and power) of investing is helds in the hands of the investor instead of the middleman.
Erik Torenberg
Erik Torenberg@eriktorenberg · Former Product Hunt
Huge thanks to Justin for taking the time to chat iwht us today, and make sure to pick up a copy of Uninvested: http://www.amazon.com/Uninvested...
Nicki Friis
Nicki Friis@nickifriisw · Entrepreneur. Former Partner @ Ideanote.
@monksbobby Hey Bobby, why is focusing on customer experience a good idea?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@nickifriisw Interesting question. Most big box financial services companies and money managers don't do a great job with customer experience. They charge fees that aren't clearly explained -- and that come out of investors' pockets whether or not they are getting good returns.
Emily Snowdon (née Hodgins)
Emily Snowdon (née Hodgins)@emilyjsnowdon · Operations @ Product Hunt
Hi Bobby and Justin. What was the hardest thing about writing the book? How did you over come these hurdles?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@ems_hodge Given that we were writing about a subject that has the potential to make some peoples' eyes glaze over, we needed to make it accessible and engaging. That was a challenge.
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
Hi everyone. I’m Justin Jaffe, coauthor of Uninvested: How Wall Street Hijacks Your Money and How to Fight Back. Happy to be with you.
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
One quick announcement: it’s just me today. My coauthor, Bobby Monks, is on a plane at the moment. He sends his regards.
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
OK. Let’s get started. Please: ask me anything.
Erik Torenberg
Erik Torenberg@eriktorenberg · Former Product Hunt
How and when did you realize you had to write Uninvested?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
Bobby was the driving force there. The book is largely based on observations he has made during three decades spent working in and around the financial sector – as an entrepreneur, bank owner, chairman of a trust company, and chairman of Institutional Shareholder Services.
Jeff Umbro
Jeff Umbro@jeffumbro · CEO of The podglomerate
This one is for Justin. What were the biggest differences between CNET and Wired during your tenure at both?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@jeffumbro My work at CNET was dedicated to looking at products. My work at Wired was dedicated to looking at technology in a broader sense.
Russ Frushtick
Russ Frushtick@russfrushtick
How did you make the jump from journalist to investor?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@russfrushtick Really, I have been an investor since I opened my first retirement account as a young employee. Part of our mission here is to convince mainstream investors -- including anyone with a 401k or mutual fund -- that THEY are investors.
Jeff Umbro
Jeff Umbro@jeffumbro · CEO of The podglomerate
How does Wall Street hijack my money and how can I fight back?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@jeffumbro The first step in fighting back is to ask a lot of questions. Talk to your money manager about fees, conflicts of interest, and compensation. Ask them if they invest in the products they’ve sold to you. Starting a dialogue with your money manager is the first step toward regaining control and, ultimately, saving money you might have otherwise forfeited through paying high fees.
Jeff Umbro
Jeff Umbro@jeffumbro · CEO of The podglomerate
@justinjaffeny What if you don't have a money manager?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@jeffumbro Assuming you have money in the market in some format, it would mean reaching out to whoever administrates or manages that process -- could be a big box financial services corp, 401k administrator at work, etc.
Jake Crump
Jake Crump@jakecrump · Community Team with Product Hunt
What about the response to Uninvested has most suprised you?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@jakecrump It's been surprising how few people have disagreed with our basic argument -- that the financial industry is systematically taking advantage of investors. Even people within the industry have agreed (violently) with this notion.
Jeff Umbro
Jeff Umbro@jeffumbro · CEO of The podglomerate
What are your thoughts on bitcoin?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@jeffumbro Don't know enough to have an informed opinion, but am generally in favor of technologies that reduce the power and control of large financial institutions that do not act in the best interests of their customers/investors.
Jake Crump
Jake Crump@jakecrump · Community Team with Product Hunt
What other books in the space were most inspiring? Which did you disagree with the most?
Erik Torenberg
Erik Torenberg@eriktorenberg · Former Product Hunt
What critique of the book have you been most sympathetic to?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@eriktorenberg Haven't seen too many critical comments. The facts in the book are facts.
Erik Torenberg
Erik Torenberg@eriktorenberg · Former Product Hunt
How did you split the task of writing a book? Is that standard with how books are typically co-written?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@eriktorenberg I don't think it's standard. There were actually three of us. But I think that we each brought our own experience and judgment to the process and ended up with a stronger product as a result.
Alex Carter
Alex Carter@alexcartaz · Operations @ 60dB. Ex-PH Podcasts 😻
@monksbobby what are the largest hurdles to fighting back? How do you think they can be overcome? Thanks!
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@alexcartaz The entrenchment of the financial industry -- and the normalization of its somewhat perverted business practices -- can make it difficult to convince investors that there is a better way to invest.
Jeff Umbro
Jeff Umbro@jeffumbro · CEO of The podglomerate
When it comes to retirement, what's the best way for me to save quick and get out of the cube life? Investing more is the easy answer, but how do I do it when there are so many money pits these days?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@jeffumbro One effective way to succeed as an investor is to reduce the fees you pay. It's so much harder to get a good return when you have to overcome high fee hurdles.
Jeff Umbro
Jeff Umbro@jeffumbro · CEO of The podglomerate
@justinjaffeny How can I reduce fees?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@jeffumbro Lots of ways. Of course, buying stocks directly reduces the amount of fees you pay significantly. But it's possible to find lower fee index and mutual funds, if that's the route you want to take.
Lukas Fittl
Lukas Fittl@lukasfittl · Product Hunt
@justinjaffeny Thanks for doing the LIVE Chat today! What could entrepreneurs do to be more responsible & socially conscious? Specifically in the context of their investors, or when they IPO one day and (indirectly) support the bad side of Wall St.
Ben Tossell
Ben Tossell@bentossell · Makerpad.co
@monksbobby Hey - what is the most outlandish thing you learnt while writing the book?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@bentossell I was surprised that even industry insiders, including folks who worked for mutual funds, agreed that the average investor typically gets a rotten deal from most collective investment vehicles.
Alex Carter
Alex Carter@alexcartaz · Operations @ 60dB. Ex-PH Podcasts 😻
Do you think part of the problem is rooted in a lack of financial education in K-12 and college? What kind of financial and investing education do you think should mandatory, if any, in high school or college?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@alexcartaz This is certainly a part of the problem; there should be more educational resources as part of a curriculum. But I don't want to let the industry off the hook here; the system is designed to be complicated and overwhelming to the average investor. It doesn't need to be that way.
Ben Tossell
Ben Tossell@bentossell · Makerpad.co
@monksbobby How do you both invest and have time to write books?
Melissa Joy Kong
Melissa Joy Kong@melissajoykong · Content, Product Hunt
There is so much content out there with people offering investment and personal finance advice. You've got the old school classics like Ben Graham and Buffett—but also mainstream voices, like Suze Orman, Dave Ramsey, and Tony Robbins. Who's investment and personal finance advice do you trust the most?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@melissajoykong I'm a big fan of Jack Bogle and Helaine Olen.
Melissa Joy Kong
Melissa Joy Kong@melissajoykong · Content, Product Hunt
Two questions for both of you: (1) What's the most challenging job you've had in your career so far, and why? (2) What's the most hard-earned lesson you've learned about *yourself* to date, given all the experiences you've gone through both personally and professionally?
Jacqueline von Tesmar
Jacqueline von Tesmar@jacqvon · Community at Product Hunt ⚡️
What side projects have you been putting a lot of energy into lately? if any ;)
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
Side project: I am the cofounder of Rapport.IO, a sustainability data platform for small and midsized businesses ;)
Jacqueline von Tesmar
Jacqueline von Tesmar@jacqvon · Community at Product Hunt ⚡️
How did you make the switch from journalist to entrepreneur?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@jacqvon Found a partner with a good idea that was compelling to me and just started figuring it out as we went along. A lot of the same skills that are useful to the journalist are useful to the entrepreneur.
David Nielsen
David Nielsen@spiffyman · Interwebs Marketing
@monksbobby How do you like the computer-driven investment tools like https://intelligent.schwab.com/? Are these a good alternative for someone trying to manage their own investments?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@spiffyman Tech is definitely going to play an increasing role in investing. I don't know the specifics of Schwab's tool -- I assume that the investor still pays typical Schwab fees -- but information has never been more accessible to an investor than it is today.
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@spiffyman I'd also say that as the next generation of investors come online, though 401ks, etc. their native understanding of tech and discomfort with paying for services of dubious value is going to upset business as usual in the financial environment.
websavant
websavant@websavant · Executive Strategist, Delucchi Plus
Can you paint a picture of what the financial services space might look like if we were able to "to awaken a critical mass of engaged investors"? For example, do we become a world with banking services but not necessarily banks?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@websavant Great question, thanks. I think that an awakened mass of investors would have the influence to enforce a greater degree of accountability on large public corporations and perhaps even solve some of the more daunting issues of our time -- i.e. poor environmental stewardship, unchecked political influence, outrageous compensation packages. All of these things are within the purview of powerful, engaged investors.
websavant
websavant@websavant · Executive Strategist, Delucchi Plus
@justinjaffeny @websavant Do you think crowdfunding, or specifically marketplace finance fit into this kind of awakening?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@websavant Hmm. Interesting. I'm not sure that those mechanisms cut out the middleman -- doesn't kickstarter take a percentage? That noted, what's appealing about that model is that it has the potential to offer mainstream investors (i.e. non high net worth individuals) the chance to invest directly in something. But I don't know whether that could be applied to traditional investing/retirement saving. Could it?
websavant
websavant@websavant · Executive Strategist, Delucchi Plus
@justinjaffeny @websavant It could. There are some retirement products emerging in the space, but only with accredited investors because of the regulatory environment.
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@websavant Right. We are actively developing a new kind of money management company -- a collective investment partnership -- that will resolve many of the problems we discuss in the book. We hope to extend access to it to mainstream, non-accredited investors in the future.
Erik Torenberg
Erik Torenberg@eriktorenberg · Former Product Hunt
what's something you fervently believed but now perceive as misguided?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@eriktorenberg I don't know that I believed this fervently but I certainly assumed that the mutual funds that were offered to me as part of 401(k) plans over my career at different companies were selected in good faith and in my interest. I have since learned that most mutual fund companies PAY 401(k) plan sponsors to have their funds put on the menu. That's often how it works.
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@justinjaffeny @eriktorenberg This is called revenue sharing in the parlance of the industry. But it's a total kickback.
Erik Torenberg
Erik Torenberg@eriktorenberg · Former Product Hunt
What are the biggest misconceptions people have about Wall street?
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@eriktorenberg I think most people look at Wall Street warily. But I don't think they realize the extent to which they are being systematically taken advantage of. Though the mutual funds business is a highly regulated industry, there is all kinds of legal larceny afoot. This is why the Department of Labor's proposed fiduciary rule change is so important. Most people assume their best interests are being taken into consideration but 90% of financial advisors are entitled to put their own interests first.
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
@eriktorenberg Here's an article we recently published about just that: http://www.marketwatch.com/story...
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
My parting thought: Ultimately, it remains investors’ responsibility to ask tough questions of their financial advisers and money managers. Are you a fiduciary? What are the fees? Do you invest in what you sell to me? With so much at stake, investors saving for retirement may hope for better rules but must continue to watch out for themselves.
Justin Jaffe
Justin Jaffe@justinjaffeny · Co-Author of Uninvested
Thanks everybody!