Hendrik Meesman studied economics at the London School of Economics and worked at Goldman Sachs, MeesPierson and Robeco. He is author of the book How to Build Wealth and founded Meesman Index Investing in 2005. "I'm a big believer in the phrase 'Pay yourself first.' When your salary comes in, put some aside for later before you spend it all now."

What is index investing anyway?

"Strictly speaking, index investing means you follow an index. There are more than three million indexes in the world. Every country, region, sector, you name it, has one or more indexes. An example is the AEX, the index with the largest Amsterdam listed companies. At Meesman we understand index investing differently, namely passive and globally diversified investing. This means that you do not invest in just one or a few countries, regions or sectors, but in all of them. It's called passive investing because you don't make choices. You simply can't know which stock will perform best - after all, you can't predict the future - so you buy a little of everything. You don't go for the needle in the haystack, you go for the whole haystack."

So do you really invest in all the stocks in the world?

"Not in all of them, but in a lot of them. There are about 20,000 publicly traded stocks you can invest in. If you invest globally with Meesman, you put your money in 6,500 of those stocks. That sounds like a small fraction of the whole, but with that you've covered about 98 percent of the stock market value worldwide."

What is the advantage of global diversified investing?

"A very big advantage is that this way you minimize your risk. If one of the 6,500 companies goes bankrupt, you notice almost nothing. But if you invest in 10 stocks and one of them goes bankrupt, the negative impact is much greater. Another very important reason is that globally diversified investing results in greater returns. That's because small companies and emerging countries yield more than large companies and developed countries, which are often primarily invested in. In short, globally diversified investing gives the best balance between return and risk."

And all those people who are actively investing?

"It has been scientifically proven that the vast majority of them do not beat the index. So they don't do any better than those who are globally diversified investors. And of the small proportion of active investors who do outperform, there is no way to predict that they will outperform. It is pure luck, and that cannot be sustained in the long run. The underlying reason is that stock prices cannot be predicted. And that, in turn, has to do with efficient market theory. This implies that the financial markets are very efficient: if there is new information about a company, for example how much profit a company has made, or information about a particular scandal, then that information is almost immediately incorporated into the price. As a result, as an investor you cannot have an edge when you have certain information, and therefore you cannot outperform the market average in the long run. Those who are smart invest globally on a diversified basis."

Is it also smart to put your money in a spread?

"In principle, it is wise to invest money that you have available to invest directly. After all, you don't know if the prices are going to rise or fall, so you can't anticipate that. However, if you don't want to run the risk that afterwards it turns out you invested at an unfavourable moment - and you might regret it - then staggering your investments can be a good idea. So it depends on how someone deals with risk. I always invest my available money directly, but that doesn't mean it's the best choice for everyone. For example, I sold a house once and that money went straight into my investment account. And I also put in a fixed amount every month. I've been doing that for a very long time."

Is passive, globally diversified investing a good idea for everyone?

"I would definitely recommend it to anyone who has first built up a savings buffer for unexpected things in the short term, and who also has money left over to invest with. It is important, however, that you have patience: you have to be able to do without your money for the long term. Think at least ten to twenty years. You need this time to build up some money and to sit out fluctuations in the stock market. Because sometimes you go through deep valleys, as was the case with the credit crisis in 2008. That's hard to swallow, and you mustn't panic, but give your investments time to recover. Because in the long term, that always happens again.

Still, many people don't invest because they find it scary.

"That's right, with the peaks and troughs in the stock market, there's a lot of emotion involved. And especially with those valleys; people don't like risk and loss, especially when it comes to money. That's why many people are very cautious. That's understandable, but above all a real shame, because investing can bring you so much."

What would you advise people who don't have a lot of money, but want to be smart about it?

"To start as early as possible with monthly global spread investing. You don't have to have thousands of euros to get started. For example, put in a hundred euros every month, and keep that up for the next few decades. But I also understand very well if someone likes to pick stocks themselves. I did that in my younger years too, investing with what you might call "play money". Buying individual shares myself was quite a disaster. That's how I found out firsthand that active investing is not a sound strategy for the long term. I can tell people that, but sometimes it works better if someone experiences it for themselves."

Why is it so important to put in monthly?

"I'm a big believer in the American phrase 'Pay yourself first.' When your paycheck comes in, put some aside for later before you spend it all now. Transfer that 100 or 200 euros to a mutual fund, do it right away, because otherwise you've already spent your money. You might buy one less item of clothing, or go out to dinner less often. But otherwise you do not notice it. And later it makes such a big difference. People are simply so constructed that they find it difficult to put money aside every time. That's why I'm such a big fan of Flow. Flow helps people get their finances in order by offering them structure and discipline. You set once in the app how much money should go to which jars, and then Flow takes care of it again and again, every month. I think that's great."