The investing advice I wish I knew earlier - Toby Newbatt
Mar 10, 2025
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Toby Newbatt, a self-taught personal finance YouTuber, shares invaluable investing wisdom drawn from reading over 40 books. He candidly discusses his early investing blunders and the lessons learned, emphasizing the need for accessible financial education. The conversation dives into the charms and pitfalls of cryptocurrency, the importance of research in making informed decisions, and the ethics of trading platforms. Toby also highlights the benefits of diversification and the necessity of long-term strategies to navigate the unpredictable investment landscape.
Self-education and resourcefulness are crucial for success in investing, as many begin their journey without clear principles or strategies.
Understanding historical investment trends and classic literature like 'The Intelligent Investor' is vital to adapt to modern market environments.
Behavioral economics plays a significant role in investment decisions, emphasizing the importance of recognizing psychological biases that affect rational judgment.
Diversifying investments globally can mitigate risks associated with market volatility, highlighting the need for broad portfolio strategies beyond local stocks.
Deep dives
Accidental Beginnings in Investing
Many individuals enter the world of investing without a clear understanding of the principles or tools involved, often starting with general investing accounts. For instance, one speaker shared that they began their investment journey somewhat haphazardly, engaging in activities like FX trading without proper research or knowledge. This approach often leads to initial losses, as traders may rely on instinct rather than informed decision-making. Eventually, one can transition into more structured forms of investing, yet many still lack awareness about essential accounts such as Stock and Shares ISAs and other investment vehicles.
The Power of Resourcefulness
A significant theme in the discussion revolves around the importance of self-education and resourcefulness when it comes to investing. One guest expressed that their early understanding of finance was heavily influenced by online personalities who shared insights about U.S. investment strategies through platforms like YouTube. This led them to seek out information pertaining to UK-specific investment opportunities, realizing a gap in resources available for UK investors. By correlating with others in their workspace who also invested, they were able to gain valuable knowledge and insights, underscoring the adage that often success in investing requires a mix of luck, community, and initiative.
Learning from Historical Context
The podcast highlights how investors can learn from historical trends and significant financial books. Discussions about earlier investment philosophies often reference well-known texts, such as Benjamin Graham's 'The Intelligent Investor,' yet the speakers noted these books might not always align with modern investing practices. There's a suggestion that traditional methods may no longer suffice in today's rapidly shifting market environments. Consequently, understanding the evolution of investment strategies and theoretical underpinnings remains crucial to navigating the contemporary landscape.
Behavioral Economics and Investing Psychology
The conversation pointed towards behavioral economics as a key factor in investment decisions. A notable example includes the tendency to follow popular trends, where investors often gravitate towards high-performing assets in hopes of replicating success. The discussion referenced various behavioral biases that lead to irrational decision-making, such as buying stocks based solely on familiarity rather than fundamental analysis. This emphasizes that good investing necessitates an understanding of both the products and one’s psychological tendencies to mitigate risks associated with market speculation.
The Relevance of Global Markets
Global investment strategies emerge as a critical topic in understanding diversification. The speakers discussed the benefits of investing in a mixture of global indices as opposed to narrowly focusing on U.S. stocks. With statistics indicating that a good proportion of revenue from U.S. companies comes from international markets, there's a compelling case for global investing to hedge against volatility. Understanding how major corporations operate globally can mitigate risks linked to regional downturns, reinforcing the idea that investors should embrace a diversified portfolio.
Engaging with Emerging Economic Trends
Adaptability to emerging economic trends, such as the rise in popularity of cryptocurrencies, is essential for modern investors. The speakers recognized Bitcoin as a unique asset class that diverges from traditional stocks, positing a different value proposition as a store of wealth. However, they cautioned against the speculative nature of many investments in the crypto space, urging a tempered approach. Participants suggested that familiarity with personal finance and crypto should be balanced with a healthy skepticism, ensuring that investors are well-informed about risks before diving into these more volatile markets.
The Importance of Financial Literacy
Enhancing financial literacy is presented as a core goal for the podcast's discussion. The reality is that many people in the UK lack sufficient financial education, which inhibits their capacity to invest confidently. Regularly accessing financial education resources—whether through podcasts, books, or personal discussions—can empower individuals to make informed investment choices. As the conversation progresses, it’s emphasized that the broader society could benefit from improved financial understanding to ultimately facilitate better investment decisions and more substantial economic outcomes.
Can anyone learn to be good at investing? Toby Newbatt, a personal finance YouTuber (@TobyNewbatt), certainly thinks so. When he first started investing, he knew next to nothing and definitely made some mistakes. But over time, he taught himself what he needed to know—even reading over 40 books on the subject!
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This is not financial advice. The reason it’s not financial advice is because it’s not tailored to you. We explain the principles of building wealth but if you want personalised advice, it’s worth speaking to a financial advisor. As with everything financial, please do your own research. We really encourage that because no one cares more about your money than you and if you learn the basics then it will change your life.
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