When financial planning is brought up, people tend to think of it as a lengthy incomprehensible mathematical process that results in a thick, indecipherable document that is usually left abandoned on one of their shelves. But this financial advisor is here to change this mentality! She simplifies the complicated business world and adds a fun twist to it.
So if you are looking for an easy and simple way to understand big business terms, then you should start reading her blog, and we guarantee you won’t be reading long boring corporate articles.
Stemming from her belief that while success often starts individually, ultimately, it should elevate to the collective; she started blogging to help the mass stay informed, financially educated, and to focus on the youth.
‘ If success enables us to do well personally and financially, it should also invite us to do good socially.’
Danielle Hatem took some time out of her busy schedule to take us through her work as a financial advisor, and to share with you practical financial tips that would help you during this critical period. So let's see how D Does Business!
1. On Instagram, you’re known as the business guru who can turn dull economic topics into intriguing stories that the mass can understand and relate to. But aside from numbers and statistics, how would you describe yourself?
I like to describe myself as a social entrepreneur with a bigger calling than just educating people. In terms of personality, I am mainly goal-driven, a multi-task person as I’m juggling between being a mom, pregnant with my second baby, and working on my page.
I have to admit that sometimes I can be too obsessed about news and especially recently which doesn’t play well because it tends to stress me a bit more than usual. However, I do create my own new challenges to avoid entering a comfort zone to keep pushing forward and stay motivated.
2. Why did you decide to start the ‘D does Business’ blog? What was the first step you took in this journey?
When I used to travel, I realized that news were available everywhere, and I didn't have to search for it. Whereas in my country Lebanon, I had to search for news and look it up. Thus, I decided to create “D does Business” tool to reach out to the people and showcase interesting and educative topics in a simpler manner so they can stay informed. It’s true that I first started this page under an “Education” goal, however, it evolved with time and became more with the purpose of inspiring and motivating the youth. A purpose essentially built on a calling that instills hope and drives people forward, one by one, little by little, to do the work of betterment in changing times.
3. In the business world, do you consider yourself a conservative or a risk-taker? And in your opinion, what are the pros and cons of each?
I used to work in capital markets, trading futures, thus I would say I highly qualify as a risk-taker. Whether it's my personal or professional life, I love to take risks and face new challenges or else life becomes a routine and too ordinary in my eyes. However, I always try to put some reason into my actions, I try to channel and contain my energy wisely because taking so many risks can make you fly high, yet any small mistake can turn the tide against you.
‘Don’t start a business just to make money, start a business to make a difference! ‘
4. How do you measure success? And given the critical times we’re living now, what goals do you see yourself achieving within the next 5 years?
I believe that success is very relative. I grew up equating money & power with success. But as I matured, my mindset and perception of things evolved. Today, I would say it’s hard to measure success. For me, true success in life cannot be defined as having a lot of tangible possessions or earned degrees but instead by having a positive impact on people’s lives, uplifting others & inspiring them. I always say: don’t start a business just to make money, start a business to make a difference!
I agree with you that nowadays the MENA region people are living in very critical times at all levels, economically, monetary, socially, health-wise, etc. This is paralleled by a global economic downturn & a health crisis that is not sparing any country or region. So it is during these times when people like to read and follow the news to know what is exactly going on and how it will reflect on the economy and their lives. This is motivating me to cover on a daily basis as much as possible such news and related analysis.
As for my plan for the next 5 years, I aim to expand my work to most of the Arab region. I would love to become an inspirational leader giving workshops, seminars and supporting the youth in reaching their goals. I believe that credibility is built over time, hence I am working hard to gain respect and trust of my audience in order to make a difference in Lebanon and then expand abroad.
5. What would you say are the biggest challenges of working in this field? How do you overcome them?
In the beginning, it was very hard for me to start an educational account on a platform that was mainly dominated by fashion, travel, and fitness enthusiasts. However, I saw an opportunity and a gap that I was eager to fill, given my educational & professional background and my passion for everything related to economics and business. I had to think inside and outside of the box to shape my own box and break mainstream thinking. Most importantly, I wasn’t demotivated when some criticized me at the beginning. It might not have worked or been fruitful at the beginning but I was willing to lose at first so I would gain later.
One has to believe in the change s/he is pursuing and persevering. No success story has a smooth start. If you’re to dream big, you need to work big and persist bigger. The other major challenge was to monetize my page as it takes time to build an audience and gain credibility on social media. But my hard work started paying off almost a year later when I was able to start my first collaboration. Patience is very important if you are willing to launch any new project, you should not expect big gains immediately. Instead, focus on building momentum and consistency and all will fall into place in due time.
6. You tend to focus on Millennials. Are there any DOs and DON’Ts in teaching younger generations about handling personal finances?
I am sure everyone is learning a good lesson these days around the world. The best lesson learned is through our own experiences! What we are living in today is better than going to Harvard and taking a budget management course. We are all learning the hard way, yet an unforgettable way.
However, the basic is to have a clear budget, stick to it and avoid debt! One should always save for retirement and for difficult days like we are witnessing today. Millennials tend to live the moment, aim to travel the world with their savings. However, during times of crisis, they are the people that are hit the most because they are not well prepared for this downturn. With less experience than older generations, they may be the first to be laid off with insignificant compensation which makes them vulnerable to ultimately default on their debts and rents. It is, therefore, crucial for them to know how to diversify their investments, to save for the rainy days to cover 3-6 months' expenses and monitor their spending wisely because doomsday can knock at our door unexpectedly. The older generation always planned ahead.
7. FinTech, Cryptocurrency, blockchain have been the trending words in the business world recently. What do you think of each of these transforming new elements? And how do you think they can mitigate the risks of COVID-19 on the economy?
FinTech encounters different types of companies. Some of them are on the capital market side and others on the personal finance side. They include trading firms doing proprietary trading, high-frequency type of trading, market making or cash payment apps where you can make a financial transaction by sending money to colleagues or friends, etc. The rise of FinTech posed initially a risk to banks and mostly to their capital market business (the trading business). Banking regulations globally have been very restrictive on banks especially post 2008 which have forced them to step away from market-making because it became expensive for them as they had to increase their capital. Hence, market-making became more appealing for FinTech companies who could trade enormous amounts of transactions in a day or a second while being less regulated.
However, the lending business hasn't been impacted at all because FinTechs don’t have the same capacity as banks. Even the robot advisory business didn’t gain a lot of traction. Hence, the only weakness for banks was regarding the impact on their trading business but quickly banks were able to build their own FinTech platforms themselves thus mitigating the threat from FinTech.
As for cryptocurrencies, there’s been a lot of fraud and theft. Personally, I believe that Bitcoin has value and its main advantages are the fact that it is a decentralized immutable currency and it removes the need for third parties such as a custodian. However, some other cryptos may be scams.
The issue is mainly the regulation of such currencies and also the fact that you still need a platform to trade it. By default, the price mechanism has to include an exchange which by definition is a third party executing the trade. So we’ve reintroduced the third party again. That’s the main dilemma. Unless you buy it on the exchange and then move it to your ledger and your wallet and keep the keys of this wallet to yourself. However, not everyone has the appropriate knowledge to do so.
The initial blockchain was the bitcoin blockchain. At the beginning, people started preferring blockchain to bitcoin but when financial institutions created their own blockchain, there wasn’t much difference between the blockchain and the companies own database. A blockchain has to be distributed, be immutable and completely transparent whereas in a database you are most likely to do changes. The interesting part of the blockchain is that you can hold any type of information on the blockchain, it doesn’t have only to be a code, and thus it is a very revolutionary business model. However, it hasn’t proven to be efficient and is costly to manage. The added value to replicate what is currently used by financial institutions is not really justifying the need to switch to a blockchain. The whole dilemma here is: “Why are we building a Blockchain if what we have is giving the same result?”
To answer the last part of this question, COVID-19 changes everything about FinTech. Although the hype went down at the moment, investment in technology is never going to stop. COVID-19 is a health issue, maybe in finding a vaccine you can leverage AI but this is a purely a technological and healthcare approach. If COVID-19 was not a health issue, then people would have lined up to the bank to take their cash out and FinTech would have had a very important role to play but this is not a fundamental financial shock.
However, cryptocurrencies maybe a resort for people who don’t trust the financial system. But the current events proved to everyone that cryptocurrencies are not immune to financial crises as we saw their prices going down when markets started plummeting. So they're not really a hedge at the moment. As for blockchain, I don’t see a lot of ways it could be utilized, unless you put all data related to the pandemic on the blockchain but we haven’t seen anything of that sort yet.
8. Analysts and economists are raising concerns about an unprecedented global recession. Some are even warning against a looming economic depression. In such times, how do you think people should manage their personal finances?
I think in retrospect, it’s a bit too late for anybody to give advice under these circumstances. It is always important to have some savings for a rainy day, enough to cover a period of 3 to 6 months in case you lose a job or a crisis happens. This applies to what we are living today, the COVID-19 outbreak, which I believe was a lesson for everyone that the equivalent of a minimum 6 months spending should be kept aside for such periods. The same applies on corporations. I think a recession is inevitable now, a recession that is affecting everyone. The most hit sectors are: tourism, entertainment, leisure and the luxury industry.
We may witness a lot of bankruptcies in these fields. Consumers will also start defaulting on their own mortgages and/or credit cards and as a result banks will take the hit. But the aid of central banks will help to shield it a bit. This may be the new normal! There is no guarantee the vaccine will be found anytime soon, and until then the virus may keep spreading and the snowball keeps growing bigger. Thus, people will have to adapt in a certain way in the coming months and forward.
My only advice here is to learn from this experience and know that there will always be unexpected crises, so be prepared!