How to build wealth - The Plain Bagel, AKA Richard Coffing
Who is The Plain Bagel?
Richard Coffin is The Plain Bagel, a mega YouTuber.
He is a trained financial planner and investment analyst by day - and content creator by night.
He says that passive investing (rather than active, when you’re picking stocks) is good for people getting started with investing because it’s not easy to beat the market.
Interestingly, he says there’s no such thing as truly passive investing because you’re always making some active choice, like investing in the S&P 500 (America) or even the globe.
Richard thinks whether you should try active investing or not comes down to three things: having natural interest in doing it, sufficient financial education and enough time.
One reason he likes being an active investor is that he likes to understand the companies he’s investing in.
We interviewed his mate and YouTuber Patrick Boyle who is a quantitative investor which basically means stats-driven, whereas Richard is a fundamental investor which places more emphasis on qualitative factors like the quality of the product being sold by the company.
He starts his investing process by understanding a company, the economy it's in, the legal frameworks etc.
Then, if he likes the look of a company, he looks at its valuation - is it undervalued? But valuing accurately is really hard.
When does it make sense to get a financial advisor?
Richard says you normally need a minimum investment amount, which is very true. In the UK, you normally need at least 6 figures to invest, generally starting around £200k - £300k.
This is why we’ve just started a service where you can speak to financial advisors for guidance for a flat hourly fee of £180 - £350. Some of the advisors have been on the podcast. Just hit reply if you’d like more info on this service.
The minimum investment amounts rule out a lot of people from getting advice, but for those who do qualify, then Richard says a good reason to get a financial advisor is if you don’t feel confident managing your money.
This can be for a lack of 'hard' skills but also 'soft' skills, e.g. Richard says money managers can help with the behavioural and psychological side of finance because managing your emotions is key when things go against you.
Plus, as the size of a person’s assets grows, managing their finances get more complicated - e.g. with tax planning so that can be an argument to get advice at that stage.
On the flip slide, he says you don’t want to be paying a few percentage points a year for beginner level advice because otherwise, you're not getting your money's worth.
Some plain thoughts on the future
Richard thinks America will maintain its dominance for some time.
Even if the US ‘empire’ falls, he’s skeptical that it will be quick because America is so embedded around the world, e.g. the US dollar is the currency of choice for trade.
He questions if the fall of US dominance will be in our lifetime.
He says an area of concern is the US property market and failing loans so it’s worth keeping an eye on that, but equally, don’t lose sleep on that.
Fellow creator Ben Felix has mentioned research showing how tech revolutions aren’t great for stock market returns because so many companies fail, making it very hard to pick the winners. A classic case was the dot com boom.
He is aware of and avoids popular investing themes, from AI which is all the rage at the time of writing, to the boom (and bust) of weed companies in Canada.
Content creators look for short term topics like crises because it gets attention - but investment should for the long term. This creates an intrinsic conflict of interest.
