CEO of Robinhood on The Best Money He’s Ever Blown | Men’$ Wealth | Men's Health - video Dailymotion

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Vlad Tenev, co-founder and CEO of stock trading app Robinhood, gives us the rundown on building Robinhood, the best/worst money he's spent throughout his career and explains what he's learned along the way.

Transcript

00:00 My biggest money mistakes have been when I've reacted emotionally.

00:04 Maybe I've read something in the news that led me to sell something

00:08 before my thesis had changed about the company or the product.

00:12 Anytime you react emotionally, there's a higher likelihood that you'll end up making a mistake.

00:18 I'm Vlad Tenev and I'm going to tell you how I learned about money and how to spend money.

00:23 Let's do it.

00:24 [MUSIC]

00:34 My family and I immigrated to America when I was a small child.

00:41 Both of my parents work. I spent a lot of time growing up on my computer.

00:45 This was in the mid to late 90s. We didn't have cable television,

00:50 but we did have a family computer with a 56K modem.

00:54 So I created a virtual portfolio on Yahoo Finance.

00:58 I was tracking my stocks. I got really into it.

01:01 I would tell my parents my progress and show them my portfolio from time to time.

01:06 And they saw, well, wait a minute, this kid's doing quite well at this stuff.

01:10 And at the time, I was trying to get into a selective summer program where you basically

01:16 do a year's worth of math classes in a couple of weeks.

01:20 One of the things you had to do to get into this math program was to do well on the SAT.

01:26 And my parents, they had this idea that if I got over a 1300, which would be a pretty good score,

01:33 they would give me money to invest in.

01:35 And I don't think they thought that I would actually do this,

01:39 but I ended up getting a 1370 on the SAT as a seventh grader.

01:44 Of course, this was in the heyday of stock investing,

01:48 and I ended up making some mistakes and ended up losing some of that money.

01:52 But that actually got me on what's been a lifelong journey of learning about the markets,

01:57 learning about investing and getting better and better every single year.

02:00 I remember the first extravagant purchase that I made was a really nice sectional sofa.

02:09 It was extra deep. You could kind of sleep on it and lounge on it.

02:14 It was very comfortable. The kids loved it.

02:16 And actually, I still have it to this day. It's still my favorite couch.

02:21 I was raised with sort of an apprehensions about going into debt.

02:30 It was all like pay for everything in cash, make sure you never go into debt.

02:35 And as a result, I was actually a renter up until fairly recently.

02:41 I mean, a few years ago, we actually bought a house.

02:45 And in hindsight, I think that if I had gotten into real estate,

02:50 even maybe had a mortgage a little bit earlier,

02:53 I would have been able to take advantage of the historically low interest rates

02:58 and the appreciation that the real estate market has seen over the past few years.

03:03 I started Robinhood because as an immigrant from Bulgaria,

03:09 which was a country that in the 90s saw its financial system collapse,

03:15 I grew up with a deep appreciation of what it means to live in America,

03:20 a country that has a very stable currency and a vibrant and powerful financial system

03:27 that in many ways is the envy of the world.

03:30 You know, the world's best companies list here,

03:32 they're publicly traded and available for investors to participate in.

03:36 What we saw was that if you're a high net worth individual

03:41 and you have quite a bit of money or you're an institution,

03:45 you have access to great tools and really high quality access to the markets.

03:50 The rest of us didn't.

03:51 And so we built a tool in Robinhood whose idea was that

03:56 every advantage that the big guys get, we should make available to everyone.

04:02 I was essentially a graduate student meeting my living expenses with my grad student salary.

04:09 So it wasn't really until I started Robinhood that I was able to use the product that I built

04:17 to actually become a more serious investor.

04:20 That was one of the really special things about building the company and the product.

04:24 It was a need that I had, and I actually learned quite a bit about investing and about finance

04:32 through continuing to refine the product that I'd built.

04:35 Growing up, my grandfather would always tell me,

04:39 if you have to remember one thing, it's try to spend less than you earn every single month.

04:45 And my grandfather was a doctor in the Navy in Bulgaria,

04:50 and they didn't have access to the ability to invest.

04:54 He would basically take his money and use it to buy copper cookware,

04:58 pots and pans, and that was his way of investing.

05:01 So I grew up with the appreciation very early that thinking about investing,

05:08 thinking about diversification is a way to protect the money that you've built up

05:13 and the nest egg that you've saved for your retirement and for your future.

05:17 I think those formative things led me to eventually being interested in it as a child

05:24 and kind of maintain that passion as I grew up and led me to where I am today.

05:31 I think the most common mistake is selling too early,

05:35 you know, reacting to something in the news,

05:38 letting your emotions get in the way and trying to time the market.

05:41 When for most people, unless your fundamental view about the economy

05:46 or a particular company changes, they shouldn't change their strategy.

05:50 Weeks ago, I got this bag of magnesium bath salts off of Amazon.

05:57 I think it was $25 or something.

06:00 If you haven't taken a magnesium bath, it's just a very nice way to

06:04 de-stress and relax after a hard day of work or a hard workout.

06:09 I have a family with small children and my favorite thing is just to

06:14 travel with them and show them different parts of the world.

06:19 I think one thing that's very important that a lot of people don't get is that

06:24 it's much more powerful the earlier you start.

06:28 It's almost more important to start early than to start with a large amount of money.

06:33 So a lot of people in America don't invest until they're in their 40s or 50s.

06:38 If we could just get people to begin the habit of it earlier,

06:43 compounding is this magical force.

06:45 That's this very powerful idea that you can start with something very small,

06:52 a small amount of money, and then add to it slowly over time.

06:57 And a few decades later, that could turn into a sizable nest egg for your retirement.

07:05 That's really sort of like the secret behind investing and wealth creation.

07:09 I grew up as a single stock investor.

07:14 I would invest in companies that I know, companies that make products that I use.

07:21 And what I realized over time is that diversification is actually incredibly important

07:28 because even though it might be not as exciting,

07:32 it helps you protect the investments that you've made and protects you against downside scenarios.

07:38 And ultimately, if done well, helps you sleep better at night.

07:42 And I think over the long run, that becomes more and more important.

07:49 Start as young as possible and just keep doing it.

07:53 Keep getting better every day.

07:54 Thanks for watching.

07:56 Now you know my secrets to investing in financial wellness.

CEO of Robinhood on The Best Money He’s Ever Blown | Men’$ Wealth | Men's Health

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