Hello everyone.
My name is Dolly Agostino and welcome to FinTech TV.
I am pleased to welcome Anthony Scaramucci, founder and managing partner of SkyBridge Capital.
Thank you for joining us, Anthony.
Hey, it's great to be on with you.
Good morning.
Um, I know you and my dad are good friends.
My dad says that he hates it when you and him are in a room together because he becomes the 2nd smartest Italian.
Well, and, and the 2nd best looking Italian too.
Make, make sure you tell him that as well, OK?
I'm kidding.
I'm kidding.
Your father's very smart and very good book.
A few years ago, I started a YouTube channel dedicated to teaching financial literacy to kids.
Now, with the help of FinTech, I'm interviewing inspiring business leaders to hear their view on money and advice for kids starting their financial journey.
Let's begin You help families and they institutions manage their money at SkyBridge Capital.
For kids, it's hard to know how to manage our money when we want it to grow.
What advice do you have for kids confused about where to put their money?
Well, it's such a good question.
And so where, where I started was the stock market.
And so what kids could do if they talk to their parents, they can get an account open or they, they call these accounts either um a 527 plan, which the government allows the money to grow in a tax-deferred way, or there used to be something called a uniform gift for minors Act, where your parents could help you put some money away.
And so for me, even though.
I was probably a little older than you when I first got started.
I got started at age 17, uh, and I put a little bit of money in the stock market every Month in a mutual fund.
And so, my recommendation to people is to get off of zero and to just get started.
Even if it's $50 100 dollars a month, or, or something like that, uh, it adds up over long periods of time.
And then before you know it, your money is actually making money for you instead of your time and your labor.
Um, I know your son is a very successful investor.
Do you remember any lessons you taught him that are important?
So is it just an interesting part of his story?
So he's a card collector, and so I, that's why I wore this today.
See this is the Topps uh baseball card company.
It's now owned by Fanatics, and they make the baseball cards for the different sporting.
Professional teams and individuals, etc. and my son, when he was about 7, maybe 8 years old, uh, I got him involved in Pokemon collecting.
And so these are these little cards.
Uh, Pokemon is short for pocket monsters, and this is a game that got started back in Japan about 30 years ago.
And the result of which I think the process of collecting and understanding the value in the cards, he was able to translate into understanding value in businesses and stocks, and various uh securities.
So, um, I would, I would say this though about my son, he had it in him from the beginning.
I mean, this is something he really always liked, so, uh, some of that is innate too.
You run a big investment firm where people invest money for years and try to grow it carefully, especially for kids.
It's hard to invest money when you can't imagine that far in the future you are benefiting benefiting because of it.
How can kids set goals for themselves to make investing seem more realistic?
OK, I'm gonna, I'm gonna show you something, OK, hold on, let me get it that we had this book nearby.
This is a book.
This is a book that I recommend to kids, and this is a book I recommend to parents, actually.
This book is called the Richest Man in Babylon.
It was written 100 years ago by George Clayton, and it's a story, and it's a story about how to save money, and it's a story about, it's a parable, it's about the richest man in Babylon and what he did, which was very slow savings, and there's a um there's a law in in investing, and there's a law in mathematics called compounding.
And what he explains in the book is that if you get a certain return every year, over a period of time, your money will double.
And so, uh, as an example, not to make this overly complicated, but if you had a 7.2% return every single year for 10 years, your money would double.
So if you put $1000 in the stock market, by the end of the 10 years, it would be worth $2000.
And the concepts in this book.
Uh, really helped me get started in investing, and so I always recommend this to young people, uh, to read.
It's very easy to read, uh, and it's, it's an investment idea told through a story.
Uh, but the bottom line is if you put a little bit of money away every single week, you know, we pay.
Or our Starbucks, or maybe we buy video games, or maybe we buy American Girl girl dolls, or we buy clothing, or you pick the thing that you like, instead of uh buying, you know, 10 of those things, buy 8 of them and take the extra money and put it in the stock market, and it's a way to save, and then it's a way to get other people to work for you, because if you think about it, when you own something in the stock market, you own a piece of the company.
Uh, and that means you've got people working for you at that company that are helping you and your family grow your money.
Um, I talk about compounding a lot because I always say that time is kids' most valuable asset, and that works directly with compounding and saving your money over time.
You used to work with very wealthy clients at firms like Goldman Sachs, helping them plan for college, retirement, and big life events.
As they get older, kids start to think about these big life events and the money that goes into them.
Can you give one important example of a kid.
Of a thing kids can start doing today to help them save slash grow their money.
Well, I mean, there's a lot, a lot of different things that kids can do, right?
One of them is the card collecting.
One of them is, uh, you know, you can buy, you can buy things that are scarce, that people like.
You can purchase a Bitcoin at a company like Coinbase where your dad works.
Um, you can buy stocks.
Um, there's a lot of different things that you can do, um, but I wanna, I wanna say a quick story, OK, cause this also will help children understand compounding.
If I said to somebody, I could give you $10,000 and every day for 30 days, I can give you $10,000 or I had a magic penny.
And my magic penny would double every single day for 30 days.
And you ask a kid what would they rather have, the $10,000 a day, or the magic penny.
Uh, that's, so the $10,000 a day sounds like a lot of money.
It comes out to $300,000.
But the magic penny, in the first day, it goes from 1 penny to 2 pennies, and then it goes from 2 pennies to 4 pennies, and 4 pennies to 8 pennies.
So that doesn't sound like very much.
But as you're getting towards the end of the month, uh, if you look it up on the internet, or if you just Google, uh, the magic penny, you'll see.
That at the end of 30 days, that penny through the process of doubling is worth $5.4 million.
So, it's just an interesting way to teach children about the concepts of compounding.
You would rather take something where you can get a return on it consistently, uh, than just cash flow coming in.
It's just a, it's just a neat way to explain compounding to people.
You host big finance conferences and talk shows where adults discuss budgeting, risk, and saving.
Lots of kids often worry about making mistakes with their money.
From experience, what is the most common money mistake you see people make, and how can kids avoid a smaller version of that mistake with their own money?
Well, I mean, that is such a good question.
So for me, the biggest mistake that I have made is I sell things too early.
And so I would tell people, if you buy very high quality things, and, and you can let the company called S&P, which stands for Standard and Poor's really help you, uh, the Standard and Poor's has an index of the 500 best stocks that they rate through market capitalization, the quality of their business, their earnings growth, their dividends.
And so, they're doing a tremendous amount of work for you.
And what you can do is you can buy the S&P 500.
And uh you can sit and hold it and not think about it.
And sometimes some stocks will come off of that list, and let the, let Standard and Poor's do that work for you.
Uh, and so for me, uh, I have made a decent amount of money and have had some measure of success just by owning the S&P 500.
And right now, I can tell you, That it's been 30 years since I bought my first S&P 500 index, if you will, and so I have a 30 year holding on that, and it's been a very good, very good, uh, return over that period of time.
So, I would say to you, uh, that would be.
The number one thing to do is to buy something of very high quality and not sell it.
My mistakes have always come into selling.
You advise people to save part of what they earn and to think about the future, just like you do with your own kids.
Since you work in an industry where people think a lot about risk and planning, how would you explain to a kid who may have trouble looking to the future to decide between saving money, spending it, and maybe even trying a small way to grow it, like a savings account or a future school project about investing.
Again, this is such a great question.
So I would tell people.
That, uh, break it up, you know, take, take it, you know, think about a pizza.
And let's say that I was bringing home a very big pizza, uh, I would say, OK, how much of that do you wanna eat?
And that would be like the analogy for spending it on.
Tickets to a game, or tickets to a movie, tickets to a concert, or buying clothing, or doing things, going to a restaurant, or buying popcorn at the movies.
And so that's a certain slice of the pizza.
And then the second part of the pizza, I think may be for your savings account, where you just have cash in a savings account, uh, maybe at the local bank, or maybe by a money market account or something like that.
And then the third slice of the pizza would be for investing, and that could go into things like Bitcoin, or that could go into what I just said, the S&P 500 or other ideas.
Maybe there's a company that you really love, you know, one of the things I did for my children when they were young, I bought them shares in Walt Disney, uh, and I actually even called the company and I asked for the share certificate, so I could put it in a frame and I put it on the wall.
And I said, look at this, you own a piece of Walt Disney.
So every time somebody goes through the turnstile at Disneyland, or every time they make a movie, or every time they collect money on their Disney Plus streaming service, a tiny tiny piece of that goes to you as one of the owners of Walt Disney.
And so, I'm just giving you some ideas.
Of how to think about it, but Cut it up into pieces.
In other words, you don't have to save all your money, cause then that would make life too boring, but you have to save some of your money.
You know, you probably remember that story when you were a kid about the grasshopper and the ant, you know, the ant was working all summer, uh, to save some food and so forth, uh, and the grasshopper, of course, didn't.
And so the ant did better, you know.
And I think that's a really good story about thinking about saving and delaying gratification so that you can have a really healthy and good future.
Um, I actually think that's a really smart way of getting kids interested about stocks by by investing in something that they find very interesting.
Yeah, exactly.
You know, if you like, if you like Coca-Cola, probably bad for your teeth, you can, you can buy that too.
Just to buy that for my kids too.
Well, that's the end of my questions.
Um, thank you so much, and I hope you and everyone watching has a great day.
Wonderful to be on with you.
Thank you again for having me.
