Oct. 19, 2023: Learn Wall Street aims to promote financial knowledge in kids
Raji Khabbaz knows Wall Street, with a career that spans experience at hedge funds and family offices. After having his first child, he felt a calling to provide financial intelligence to the rising next generation and make it accessible to more people. He talked with Crain Currency about his new initiative and the impact he hopes to make in children’s lives.
What was your “why” for launching Learn Wall Street?
Financial knowledge is somewhat unique in comparison to other subjects like math or history. It’s much more valuable the earlier you learn it in life because of the long-term power of compounding. Our students’ youth is really a superpower. It gives them a very long investment horizon.
It’s interesting that, more than a few times, parents reported back to us that the students came home after just the first lesson and asked for investment accounts to be opened for them. Maybe we should have waited until the later lessons to tell them about how much money will grow at 10% a year compounded for 30 to 40 years!
While there is a growing recognition of the importance of financial education for young people, there remains a large gap in traditional school curriculums. Many online financial education apps, videos and in-person programs, like the boot camps, place perhaps too much focus on knowledge—things like theory and definitions—and too little on wisdom, which comes from experience. A little bit of knowledge without wisdom can be a dangerous thing.
How do you give teenagers, who’ve never bought a stock, investing wisdom? We use important case studies involving heroic Wall Street victories and catastrophic failures to teach the lessons. This helps us bridge the wisdom and experience gap. The case histories give them a mental library to access as they enter the investing world.
The other super-important aspect of the case-study approach is that it helps solve the Achilles' heel present in all financial education programs—teenager boredom. It’s a huge obstacle to getting the students to engage. Dan Brown’s The Da Vinci Code turned medieval history into a page-turner. We’re trying to make finance and investing interesting in the same way. That’s the reason for Learn Wall Street.
What will the program include?
The program is a 12-week, once-a-week, one-hour class. Each week covers a foundational principle, like risk and reward, stock valuation or the trade-off theory. The progression of the 12 lessons is purposely designed to take the students from a point of financial ignorance to one of relative enlightenment in three months.
Who can participate?
The targeted student levels are ninth through 12th grade and college.
How can the next gen of family offices really benefit from something like this?
I’ve spent the last 3½ years in the family space. One of their most critical needs is to prepare the next generation to handle the eventual transfer of significant wealth. Remember, I said a little knowledge can be dangerous. Well, that piece of wisdom is further confirmed by wealth management executives we spoke with who confirmed bad outcome after bad outcome because of a little knowledge. I strongly believe our approach of embedding as much wisdom as possible in our lessons produces a richer mental framework for the next gen of family offices to navigate financial markets.
You’re piloting the program now. What are your thoughts on next steps?
As a former hedge fund manager, I’ve looked at the online education industry from an investing perspective. The governing ethos is that technological innovation is the key to teaching success. It’s true that technological innovation in education has disrupted the industry. It enables a much greater and almost instant reach for the material. It created a whole new set of teaching tools, like simulations and educational gameplay.
However, I think the challenge of making financial literacy engaging to younger students means content is still king.
The good news is there’s tremendous synergy between great content and technological innovation, like what is happening in artificial intelligence. For example, if people can now use AI to make movies in the blink of an eye, imagine how much more alive and interesting AI could make investing case studies in an online format. That would go a long way toward discouraging teenagers from tuning out after 30 minutes on an app or while watching a YouTube video.
If you want to reach as many students as possible with what you believe is life-changing knowledge, the future is innovation and online. And the key to that future is amazing storytelling and content. That is the direction I would like to take the program ultimately.
More Insights: Tunnel vision in family offices: The indispensable role of expert generalists
By KARA PASS
“If you’ve seen one family office, you’ve seen one family office.” Of all the tired adages in the family office space, this one makes me cringe the most. Because it’s accurate–and it shouldn’t be. This maxim implies a unique nature that can result in "tunnel vision," an overly narrow approach to managing generational wealth.
When you look at how family offices got their start, it was usually born out of a need, and a particular focus, of the wealth creator. It’s no surprise that these offices tend to have a bit of tunnel vision because of their particular focus, which isn’t inherently determinantal. In fact, a laser-focused approach can yield unparalleled results.
But what if it’s at the expense of a well-balanced approach to financial management? Problems arise when this specialized focus compromises a balanced and comprehensive financial strategy.
It stands to reason that an office might have a relentless focus on real estate portfolios and not pay enough attention to estate and legal planning. An office could have a laser focus on equities and traditional investments but fail to explore philanthropic efforts that can also serve as strategic tax shelters or align with the family’s legacy goals — the type of approach that nurtures long-lasting legacies and success for future generations.
The challenge isn't the initial specialization of a family office but its evolution over time. How does it grow and adapt to ensure that this acute focus doesn't become restrictive? How can it safeguard the family's legacy and overarching goals?
The antidote to tunnel vision is the Expert Generalist, ideally positioned as the Lead Adviser. While many family offices start off with specialists — out of initial necessity — the evolution often sees these specialists inadvertently become Lead Advisors. Although some specialists adapt well to this generalized role and vice versa, I argue they're outliers.
In essence, a Lead Advisor, in my view, should embody the traits of an Expert Generalist: coordinating a diverse team of specialists; creating an exceptional client experience; understanding and addressing unique needs; and ensuring well-integrated, efficient solutions for today and generations to come.
FINDING THE RIGHT EXPERT GENERALIST
Spotting a specialist is straightforward. Their expertise, experience, and credentials typically align with specific job requirements. But discovering an Expert Generalist? That's a unique endeavor. It reminds me of a recruitment drive I did at an Ivy League institution.
Each interview was more impressive than the last. Resumes were filled with accolades, internships at prestigious firms, and several had started business ventures or nonprofits. It wasn’t until the 13th interview that I found what I was looking for. The woman sat down in front of me and sheepishly apologized, likely aware of her peers’ plentiful pursuits, that all she had to show for her summers was work at an ice cream shop. I exclaimed: “Finally! Someone with some customer service experience!”
I was hiring an entry-level position, but one that would be on a generalist track. I wanted someone who had experience serving others, someone who had been in the trenches and had been disproportionately treated badly by a customer. These are the types of stories that help me identify what makes someone tick. We all love joyful interactions, but what happens when someone is angry? Expert Generalists don’t judge these moments, they get genuinely curious. “What is going on in the life of this person? Why are they in distress? How can I help alleviate their concerns and show them that they matter?”
There are a lot of generalists in the world, but how do you spot the expert?
Expert Generalists tend to have worked in different disciplines, but they are likely to have deep experience with customer service and hospitality. They have experience with difficult situations, and instead of dreading those situations, they lean in because they see someone in distress and know they can help. They want to not just solve problems but create an experience. They don’t get nervous when they don’t know the answer to every question — they are experts in asking questions. They listen more than they talk. They demonstrate their care in how well they listen. They are meticulous and humble. They are proactive, and they have exceptional written and verbal communication skills. You feel calm and at peace in their presence. They are salespeople who never sell. Their drivers are people, and there is no more powerful reinforcement than the affirmation they get from their clients. They live for the client experience. They find the best people to orchestrate the best experience.
Expert Generalists never have tunnel vision; they are constantly paying attention to what’s happening in the periphery.
While I appreciate the distinct focuses of family offices, my wish for the industry would be to institutionalize the role of the Expert Generalist. This would ensure that wealthy families reap the benefits of specialization without succumbing to the pitfalls of tunnel vision.