The CFO Series: Joel Stephens (Lyst) on Personal Financial Management
As a self proclaimed "marketers dream", Joel Stephens, director of financial operations at one of the biggest fashion tech companies, Lyst, loves spending his money on sports, GoPros & smart home gadgets. His interview details his approach to personal finance, and contains some great reading to learn from, including:
- The Hard Thing About Hard Things: a play book for how to run a start up (buy it here);
- Liars Poker: a synopsis on the bond markets of 70’s (buy it here);
- More Money Than God: strategies adopted by famous hedge fund managers since the 60s buy it here); and
- The Flash Boys: the madness of high frequency trading (buy it here)
Lets jump into the interview:
1) You've been with Lyst for three years, having started your career with KPMG, in their corporate audit team. You have a strong knowledge of finance; how do you approach your own financial management?
Question everything: I have a Maths background and then went into auditing. It was drilled into me to never just accept something, but to always pry and try to understand it better.
That has stayed with me and become an important trait for life at Lyst. One of the most important things I expect from my team, and certainly what I look for when we are hiring new finance individuals, is that they can bottom out issues- really dig and find out as much as they can about the situation or issue. Start-ups and tech companies can be incredibly complicated so you really do need to be on top of the detail to ensure you don’t miss something important.
Know as much as you can: For me this is definitely something I have replicated when it comes to personal finances. I get as much information as I can about as much as I can. You can’t know everything but a good base knowledge of how the financial system works can make a real difference.
Finimize: The best piece of advice I can give on how to do this is to join Finimize. Corinne has previously mentioned this as one of her favourite new start-ups and I definitely second it. Finimize sums up market changes in a daily email that takes about 3 minutes to read; it explains why stocks move up and down and sets out relationships between things like interest rates, bond prices and FX rates.
It is so simple to get to grips with and yet so important. I still find it strange to think people invest in stock without really understanding how the markets work. This macro economic understanding can impact what mortgage you get, how you invest savings and even where you go on holiday. Worth swatting up!
2) What is fintech to you? Where do you stand on it? Which ones, if any, do you use for your own personal financial management?
I’m actually pretty vanilla when it comes to personal finance. I still have a spreadsheet to track house hold bills. I’m yet to meet an FD or CFO who hasn’t come up with a way to incorporate a spreadsheet into their personal finances.
I love Monzo: I appreciate it seems to divide opinion; you either think the bright orange card is all hype, or you are obsessed. I fall into the later. I like to know exactly what I’ve got in the bank at any one point in time so I love that transactions occur instantly, as opposed to waiting days for it to appear. They have recently adopted the idea of compartmentalising your account (partitions in your account to help you with building up mini savings) and this is something I think is a tip top for personal finance.
Personal financial management is about “living within your means”. I appreciate that sounds like something your parents would tell you as you used 80% of your student loan to buy another round of vodka Redbull’s, but it’s pretty important. Now, for me there are certain big spends that happen each year: holidays, presents for family, annual memberships etc. I work out how much each of those are going to cost me, and then split it into a monthly amount and pay that into a separate bank account. I actually have one account for each of those types of spend, as I like to know exactly how much I have left to spend on holidays or how much is in the present fund.
Each month my “free spend” or the remaining cash is always the same and if I do decide to book a holiday it doesn’t leave me with pennies for the rest of the month. I don’t actually own a credit card; everything has already been saved for. It’s not a complicated system and many would say it’s over the top, but I always know exactly where I am with my finances.
3) Other than Lyst, and outside of personal finance management, tell me about your favourite piece of technology in your life.
I am a marketers dream. I actually wonder whether marketers think “what outrageous and completely unnecessary thing can we get Joel to buy next?” The main ones are:
Photos: I love capturing film and photos when I’m on holiday so I have a number of GoPros and have just bought a drone.
Sports: I’m a big fan of sports so have the latest sports watches, bikes with electronic gears, and headphones that you can use while swimming underwater.
Smart home: I’ve also starting getting involved in the smart-home scene and strangely, and I assume completely unrelated, Google seems to got much much better with it’s targeted adverts for me…
4) We should always be learning; tell me what your favourite read was (book, blog, newsletter or otherwise), and why?
My non fiction interests come in 3 forms;
- start-ups and managing businesses;
- financial markets; and
The Hard Thing About Hard Things is great and very funny. It almost becomes a play book for how to run a start up. Even if you don’t buy into the management methods used in it, it follows a company through a very interesting journey from founding to IPO. Buy the book here.
In terms of geeking out, I’ve got a bit obsessed with the boom bust cycle of finance and have read:
- Liars Poker (bond markets of 70’s); (buy it here)
- More Money Than God (strategies adopted by famous hedge fund managers since the 60s); (buy it here) and
- The Flash Boys (the madness that was (is?!) high frequency trading) (buy it here).
I’ve learnt a lot about finance from these books but they also talk about some of the ridiculous things that happened on Wall St in those days (think Wolf of Wall St).
In terms of the commercial side of my world, I love the site LooseThreads. They have lots of articles about commerce; where it’s going, and what to expect. Their articles range from looking into why Amazon Prime succeeds for retention, to why Supreme should set up a second hand clothes market and to why digitally native companies are buying bricks and mortar.
5) Any final comments for Wee Scot Finance readers?
Before I start talking about this company, I should disclose that I am a friend of their CFO (to be fair the CFO network in London is pretty close, so this isn’t unusual).
(Disclaimer: I'm not providing investment advice) Goji Investments are a new(ish) company that release 12 month bonds each month. The bonds, however, are made up of many small loans to private companies. Goji bundles the loans together: when you invest, you do so over a diverse group of loans. This diversification reduces you risk. Coupled with this, the loans have high interest rates, and thus rates of return to the investor. While some of the loans may default (due to the high interest rates), Goji still expect to give the investor a return of around 5% (their first bond just closed at 6%). Furthermore, the government love them, and have allowed you to take the interest as part of your ISA and thus it's tax free.
That's all from Joel; next week we have the CFO, Will Herman from the Venture Capital company, Forward Partners.