In this episode of Saturday Morning Muse, Andy explores the evolution of equity ownership and stock trading from the Dutch East India Company to the establishment of the London Stock Exchange. He discusses the challenges of informal trading, the catastrophic South Sea Bubble, and the eventual need for organized stock markets, highlighting the principles that govern modern financial markets today.

In this episode of Saturday Morning Muse, Andy explores the evolution of financial markets, focusing on the innovations of the Dutch Republic in the early 1600s. He discusses the limitations of previous equity ownership models and how the establishment of the Dutch East India Company (VOC) revolutionized investment through the introduction of transferable shares and a secondary market.

Growth requires some degree of risk tolerance. The more self-confident, and the higher our self-esteem, the more calculated and informed risks we’re willing to take. To build self-confidence and self-esteem, we must take risks and be willing to learn from failures and missteps. This virtuous cycle works best when we surround ourselves with positive challengers—people who will simultaneously support and challenge you in an environment of psychological safety.

How we feel about risk and how we respond to risky situations is not applicable solely to the financial investments we make. Our feelings toward risk influence what jobs we pursue, the relationships we engage in, the products we buy, and the recreational activities we take part in. Your personal relationship with risk touches and helps shape nearly every aspect of your life.

As humans, we tend to not put enough thought into the worth or value we assign to the products and services we purchase. We’ll make better decisions on what we purchase with our hard earned $$ if we take a bit more time to consider how we place value on the things we buy. The interesting thing about finance and financial literacy is that it is equal parts objective evaluation of our financial position and our behavioral perspectives about our personal economy. How we feel about money, investing, and consumption is as important as the numerical and analytical side of working with our finances.

The important point is to recognize that these biases exist and they have a profound impact on our ability to make sound decisions with our money. The purpose of engaging in self-talk is to challenge our internal biases and to bring more decisions—especially the important decisions we make—into working memory as opposed to giving agency to our biased, subconscious mind.