Take care of yourself, no one else will do it, says the youngest Czech popularizer of economics Štěpán Drábek

In this interview, we look at the views and story of the youngest Czech popularizer of economics. What does Štěpán Drábek think about the financial literacy of young people and the future of bitcoin?

Admit it - who among you knew when you were 15 that there was such a thing as inflation, recession or fiscal policy? Personally, I can't imagine using such a term in everyday conversation at that time. But this is not the case with Štěpán Drábek, who was so absorbed by economics that he even decided to spread awareness about it - especially with his project Economics Made Simple. And I have to admit that he is doing a great job! On his networks he deals with everything related to this field. He also invites various experts and personalities from the financial world to his podcasts and interviews. But I decided to reverse the roles a bit this time and interview Stepan. Of course, especially about economics and its popularization, but also about young people's view on money and securing the future.

1) Let's go in order. How did you get into what you do? After all, economics, finance, markets and everything related to it is not a common hobby among your peers. Moreover, judging by your knowledge, you've also had some time in the field. What made you do it? What is your main motivation?

Life is random sometimes. For me, studying economics was not a long-term plan, but merely the result of combining a long moment in the first lockdown of 2020 with the output of a complex algorithm on YouTube, where I was recommended the first interview with, for me at the time, a complete unknown, economist Dominik Stroukal, in which he talked about bitcoin. I was absolutely captivated at the time by his beautiful talk, and especially by the interesting information contained therein. This sparked an imaginary spark in me, in the form of the realisation that there was a certain field that linked my interests, which at that time were money, the workings of society and, to some extent, mathematics. This field is, as I am sure is already clear to everyone, economics, which also intrigued me by the wide range of its various interesting subfields.

If you ask me about my motivations for studying economics, the main one is simple addiction. Dependence on the process of gradually understanding (though of course never fully understanding, I am infinitely far from that because of the limitless complexity of our world) certain social, historical and political contexts. The great thing about economics is that it provides exactly this opportunity for people.

2) Probably all of us would like to see the awareness and level of education about economics and money improve in our country. How do you think this could best be achieved? Especially among the young.

Behind every human action, in order to analyze it retrospectively, it is necessary to look for the incentives behind the decision to take it. Therefore, if we want to achieve a goal - better economic literacy - we first need to create an environment with the right incentives, based on which people will spontaneously act as we wish, without any recommendation, coercion or regulation from us. I think that the incentives to become interested in the world of money, investment and the workings of the economy are greater today than ever before. We live in an environment of unprecedentedly high inflation and huge, and growing, government fiscal irresponsibility. I believe that these factors are now creating strong incentives to take a greater interest in personal finance. Indeed, we can see this clearly today - the interest in investing is by far the highest it has been for several years. However, I believe that this may be to the detriment. Investments are certainly not for everyone. It is a professional field, and not everyone is able to understand it, or simply does not want to devote a significant part of their precious time, which could be used for other activities, to trying to preserve the purchasing power of their hard-earned and saved money. Sadly, today's environment is forcing almost all people to invest, regardless of their own focus and areas of specialisation. These 'unqualified' individuals then, and this was not unexpected in advance, make unforgivable mistakes in hindsight. It is no coincidence that, at the same time, the number of investment frauds carried out or the number of dubious platforms used for such purposes is also increasing at a dizzying pace.

For young people, say, my peers, the situation is quite similar, yet different in some ways. While economically active citizens feel the need to allocate their money in such a way that they do not lose so much of their purchasing power over time, the young tend to seek out riskier investments whose potential success could make them rich beyond their means. The difference, then, lies in risk aversion. Therefore, the assets in which my generation primarily invests are, unfortunately, crypto-assets.

3) There has been a lot of talk lately that financial and investment influencers have a lot to do with financial education. Do you see an improvement through your work among your family, friends and classmates, for example?

Certainly within my family, and among my classmates I think I have a lot of credit for them understanding at least a little bit about economics.

4) I noticed that you are a big fan of bitcoin. I'm not going to ask for price predictions here (but of course if you have, you can give 😊), but I'm more interested in whether it's possible that it will one day replace gold? What do you think of El Salvador's moves?Has the president there helped cryptocurrencies, or has he rather tarnished their name with retail?

If I understand correctly, you are asking me whether bitcoin will become digital gold in the sense of a stable asset - a safe haven, not money, since gold serves nowhere as money today. I think bitcoin has all the ingredients for that, after all the only major advantage of gold over bitcoin is its age and its "test of time". Otherwise, bitcoin clearly dominates in everything else (except perhaps people's psychological attachment to the fictional stability of gold), at least in terms of monetary properties.

El Salvador is an exemplary but very shameful and at the same time quite frightening example of how irrational, at times even strongly fanatical, the bitcoin community can be. Bitcoiners are, if I may generalize, generally libertarians - advocates of personal and economic freedom. Unfortunately, many eye-popping examples have emerged in recent years of hypocrites who have no problem with their ideological bent actively supporting the dictatorial regime there by legitimizing, with utter seriousness on their faces, the actions of the President of El Salvador, who, through legislative power, is forcing his citizens to engage in his preferred behavior - the universal acceptance of bitcoin as legal tender. I am still at a loss to understand how a huge segment of the bitcoin community, including many of its well-known leaders from our local area, whose roots grew from the fertile soil of the Austrian School of Economics, can support a nationalist regime and advocate forcibly compelling the acceptance of bitcoin by the ruler of that nation.

5) Would you recommend investing in the stock market to young people?Do you have a favorite stock, ETF, or even a specific sector?

Picking specific stock titles is too risky and disproportionate to the knowledge of the untrained layman. I'm sorry, but I'm far from giving investment advice to others out of my (in)competence.

6) Who (besides you, of course 😊) should young people learn about finance from? Do you have any role models?Someone whose opinion you always like to listen to?

The best source of almost all information is books. Read, the Liberal Institute has translated everything important in economics, plus the vast majority of it is free. Personally, I like to read articles on Roklen24, primarily by the most knowledgeable person in the world of financial markets - Jan Berka, and listen to the podcast Ve vata (the episodes with Dominik Stroukal are particularly good). However, I watch the tempting preview images on Czech financial YouTube and other social networks on a daily basis with horror in my eyes. These people, I would not be far from the truth if I expressively labelled them charlatans/amateurs, sell cheap, shallow investment lessons that are mostly not based on empirically successful investment strategies. These are people who only exclusively understand the topics they release highly popular and profitable videos about. There would not necessarily be anything wrong with that, after all, people participate in these transactions voluntarily; but the problem is that this superficial, poorly crafted information overshadows the really good and beneficial ones. The tabloids are winning, and unfortunately this is also true for financial influencers. Real experts are rarely heard, despite their years of knowledge and sometimes excellent speaking skills (my favourite economist, Dr. Pavel Potužák, is a prime example. The recordings of his lectures and interviews with him have only a fraction of the reach of the authors I criticized above, despite his, dare I say, almost encyclopedic knowledge, and yet clarity and wit of explanation. It would be hard to find a better economist in the Czech Republic, if such a person exists at all, but he has almost no space - I hope to remedy this in the future. :D)

7) I know it's far in the future, but let me ask: Do you think a person aged say 15-25 can rely on a pension from the state? Or do you think he should start preparing himself and rely on his investments?

If we take into account the current demographic development of the population of the Czech Republic and extrapolate it a few years further into tomorrow's times, it is impossible to maintain the current so-called pay-as-you-go pension system without insufficient financial resources in the public budget affecting the quality of the most important state services, such as security, health care or education. Either future pensioners will receive substantially lower retirement pensions than we are currently used to, or we will have extremely underinvested in the key sectors that co-create our nation's wealth - relatively high-quality education and healthcare. Therefore, no one should rely on state support in old age, especially not the so-called Husak children and the generations after them - the money in the state coffers is simply not there, and that is not going to change. So my message is: Take care of yourselves and your neighbors, don't count on someone else to do it for you, let alone a state with such a lousy fiscal policy.

8) What is your goal for the future? Do you see yourself more as someone who is involved in educating and popularizing economics and finance, or more like a government advisor/economist?

That is not inherently mutually exclusive. I'd like to spend the next few years reading and studying as much as possible, and then educating as wide an audience as possible about economics, then going the academic route. I want to distance myself from the state for a long time - or keep as far away as I can - it has irreversibly (negatively) marked many people, but I don't rule out that I might end up in a position embedded in the question at some point.

9) Do you have any final advice for our readers? Whether it be about investments, money, or life in general.

Be kind to yourselves, there is entirely too much unnecessary hate and general bad vibes in society (now I realise I'm not setting the best example with my criticism of financial influencers). We are living in by far the best time in all of history, let's cherish that and not do everything we can to lose it soon.

Educate yourself. As cliché as it is, it's also the best advice. Without an understanding of the fundamentals of modern central banking, which affects the financial world more than anything else and more than ever, it is impossible to achieve satisfactory long-term and stable results in your investment plans.

I would like to thank Stephen for his comprehensive comments and wish him every success in the future! You can follow him on his networks - Web, YouTube, Twitter

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Disclaimer: This is in no way an investment recommendation. This is purely my summary and analysis based on data from the internet and other sources. Investing in the financial markets is risky and everyone should invest based on their own decisions. I am just an amateur sharing my opinions.