Passive Investing is Broken. Here's how to fix it | Tom Sosnoff | TEDxUChicago

As a CEO, and financial educator, Tom Sosnoff has encountered his fair share of difficulties and obstacles. However, as he recalls in his talk, true financial literacy isn't possible without taking a few risks. Tom Sosnoff is the founder and co-CEO of dough, Inc., which includes tastytrade, the fastest growing online financial network, and dough, a financial technology content aggregator. Tom is a recognized online brokerage innovator and sought-after financial educator. Tom founded thinkorswim in 1999 (selling it to TD Ameritrade for $600 million in 2009), and tastytrade in 2011. Leveraging over 20 years of experience as a market maker for the Chicago Board Options Exchange (CBOE) Tom pursued a vision to educate retail investors in options trading and to build a superior software platform at a brokerage firm that specialized in options. His efforts ultimately changed the way these instruments were traded by individual investors. This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at http://ted.com/tedx

Comments

1. Thank you sir. I am so hungry to learn to invest wisely, to start a business and succeed, to write a successful novel and do a movie with it. I also want to help homeless people and be a blessing to others!!!! I hate poverty!!!
2. ur so full of it sosnoff
3. more crap
4. Sosnoff is a financial industry entrepreneur, and a former market maker on the CBOE. He can't see that most of us have no business trading options.
   
   He talks about risk as if there were no downside. The hard truth is that the stock market occasionally crashes (1973-74, 1981-82, 2000-02, 2007-09), and sometimes moves sideways for extended periods (1946-49, 2015). A successful investor is one who can ride those periods out. 2009-10, the dividend/share on Vanguard's S&P 500 index fund declined 22%. But in 2011-12, that same dividend/share rose by 31.5%. By 2012, dividends were higher than their previous peak in 2007-08. This was a hard period for anyone counting on a modest dividend income to support a family, which would have been my situation were it not that I had a job during that period. 2012-16, the annual dividend/share rose 38%. Good nothing, because I had to retire in 2014. I am building up the cash reserve I will need to tide me over the next recession, which is overdue.
5. passive meaning investing in only paper assets and not building a business.
   
   taking risk worked for him and that is great but it is not for everyone.
   
   if he was an idiot he might have went 0 for 20 and index investing might have been a better choice.
   
   but I think his point is clear if you want massive wealth you need to build a business which is alot riskier then a 9 to 5 job. But by taking a risk there is a chance of a big reward. or you could climb the ladder of a large company. but more fun to create your own vision/company.
6. hn
7. This is very dangerous advice. Follow warren buffets advice, learn from other peoples mistakes so you dont have to make them. Rule number one, always protect your capital. and rule number two, dont forget rule number one.
8. So I'm two minutes in and this is already pissing me off. The current financial landscape exists because pensions were phased out in favor of 401ks. The financial system SHOULD be simple because it's stupid to think that we can all be financial experts.
9. 7 minutes into a 17 minute video and this guy has said risk 8 million times and not talking about investing.
   Cool story Hat-man.
10. Oh dear god, Tasty Nut Job.....I'm outta here.
11. What does the expression "o for 19" @ 9:21 means?
12. This is a bullshit ted talk
13. Love this dude
14. This was awful
15. I am still yet to find Tom Sosnoff's neck.
16. His advice sucks and is harmful. 75% (give or take) of active investors fall below the average market return. This is individual investors and fund managers. So if you invest in market index mutual funds and get 'average' returns you're getting above average returns. Not to mention that most active trading or actively managed funds have huge expense ratios/fees compared to certain passive funds. Well chosen passive investing is 100x simpler than active investing and much more profitable for the majority of people.
17. out of topic though
18. another marketing video. TED sort your shit out.
19. I like how they Branded "Think or Swim"
20. This doesn't add up at all. He says he had been trading for 20 years when he was in his around 40 and burned through around 50k per year because "he made a lot of as a kid uhh you know uhh during this period we made all these horrible investments" (at 19:46). Well which one was it? Horrible investments for 20 years or making a lot of money during that 20 year period. Because if it were only horrible investments of 50k a year you had to get that money from somewhere, right? Because no way a guy in his twenties can afford to squander 50k a year and that "made a lot of as a kid" part makes it sound like your parents backed you up financially, which wouldn't be much of a risk. Tried to google this guys background for a bit, but that is no where to be found. I could be wrong though, but this bullshit about taking more risk is making it seem easy, while most of the people won't be able to spend 1M on bad investments over the course of 20 years.