In today's episode we look over the year and the huge uncertainty there was in terms of building wealth. Make sure to tune in to find out how we can all prepare to make 2021 a more predictable year.
This year has unveiled a huge amount of uncertainty for us in terms of building wealth. We’ve all got a little bit more time, more opportunity and we should do everything we can to make 2021 a more predictable year. In this week’s episode of WealthTalk, we’re sharing highlights of the commentaries of all our experts across all the pillars as seen on our free ‘Wealth in The 2nd Wave’ guide released last week.
Resources Mentioned In This Episode:
>> WT063: Is Now The Time To Take Control of Your Pension?
>> WT062: Economic & Investments Discussion w/ Manish Kataria
>> WT081: What Is Supported Living?
>> WT056: The Commercial Property Market Post Covid19 w/ Suzi Carter
>> WT060: Business Acquisitions
>> WT061: How To Bounce Back Stronger w/ Shweta Jhajharia
>> WT054: Dr. Joanna Martin - Intellectual Property and Business
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Unknown Speaker 0:01 The purpose of wealth talk is to educate, inform, and hopefully entertain you on the subject of building your wealth. Wealth builders recommends you should always take independent financial tax or legal advice before making any decisions around your finances.
Christian Rodwell 0:19
Welcome to Episode 84 of wealth talk. My name is Christian Rodwell, the membership director of wealth builders. And I'm joined today by our founder, Mr. Kevin Whalen. Hi, Kevin.
Unknown Speaker 0:28
Hello, Chris. Good to be with you again. And, you know, we got a lot to talk about today, haven't we lots of interesting contributions made by people we know like and trust?
Christian Rodwell 0:39
Yes, yes. Last week, we released our wealth in the second wave guide. It's a 47 page Guide, which really consists I guess, of all of our expert commentaries from across this year across all of the pillars, Kevin, and and what we're doing today is actually going to pull out some of the highlights from our experts. So anyone who hasn't yet downloaded a copy of that guide, hopefully will be tempted into doing so after listening to today.
Unknown Speaker 1:07
Well, there's, you know, some common things here anyway, without stealing the thunder have our guests and contributors and of course, we've got many other people in our armory to add more value. And, you know, it's just interesting to take a snapshot of some of those in the guide. I mean, I think the key thing for me, Chris, is anybody, as we can see that, you know, circumstances are not changing yet, we've got the light at the end of the tunnel, as we know. But meanwhile, you know, life is still the not the old normal, it's kind of the new COVID Normal. And we've all got a bit more time, we've all got a bit of opportunity. And we've all got the chance, particularly as we're getting close to the end of the year to that normal kind of a rethink. So I'd encourage everybody to download this to see if it can stimulate their thoughts to make 2021 a much more predictable year in terms of wealth than the huge uncertainty that 2020 unveil for us.
Christian Rodwell 2:09
So we know, the Seven Pillars of wealth, we actually have got nine excerpts from nine experts today to share. And we'll just pull out as we said, some of the highlights and if you haven't yet downloaded a copy of the wealth guide, then you can head over to wealth builders co.uk forward slash wealth guide or one word. And we'll be sharing and debriefing a little bit again, after listening to these clips right now, Kevin. On Episode 63 of wealth talk, we spoke to Paul Brooke sass director, wealth builders about how to make your pensions work harder during these uncertain times. Here's what he had to say. So the pension pillar poll, perhaps not the sexiest of the pillars, but absolutely one of the most powerful ones, if you know how to make it work for you, would you say? Oh,
Unknown Speaker 2:56
absolutely, I'd hundred percent agree with that. And, and certainly, I would say the most common pillar probably outside of home equity and you know, making your your home pillar work, I would say most people have some wealth in the pension pillar somewhere, even if they forgotten about it in truth, you know, which of course a lot of people have. But yeah, a hugely influential pillar in in building wealth. If you know how to make it work,
Christian Rodwell 3:27
can anyone really make their pension work harder? There's some basic rules that anyone can apply.
Unknown Speaker 3:33
I mean, I think the simple answer to that is everyone can make their pension work harder, if they know what to look for, and they know how to do that. And and that ranges from I suppose, at the very simple end of the spectrum to, to really just taking control of the things that you can take control of when you have simpler pensions that are all invested in the stock market. And really, that means taking hold of and controlling the costs of investing all the way up to the sort of super sexy end if I can call it that at the pension world which is which is SAS that directors pension where you know, you can and are genuinely sat in the driving seat of what is you know, the highest performance pension vehicle available.
Christian Rodwell 4:24
On Episode 62 of wealth talk we spoke to Manish Kataria, founder of invest like a pro about the future of investments and markets during the rebound. Here's what he had to say.
Unknown Speaker 4:34
The worst thing you could be doing is panicking. You know, it doesn't take much to panic in this environment, you know, apart from the health which touchwood you know, hopefully everybody is unaffected and staying healthy. But you know, you just look at the headlines all around you and that that there was a huge media frenzy all around us about what was going on. And the markets were collapsing partly as a result of that and It would have been the worst possible time to be panicking. in the, in the heat of the moment, for anyone who is looking to invest, the most important thing is always to have your objectives in front of you. That's the first thing, you know, are you looking to multiply your capital by x and by what time period and then, you know, that's a very simple way to set your objectives. Okay, so somebody might want to, might have a plan to double their capital in, say, five years time. And then once you've got that basic amount of information, work backwards and see how you're going to get there. Okay, so have that plan, have a longer term time horizon, do your due diligence, you know, I'm forever banging on about due diligence, and people should invest, not based on the opportunities that are presented to them not based on you know, sort of marketing spin, and, and, you know, various other ways that people find to enhance their credibility these days. But you've got to do your due diligence, look under the bonnet and make sure that what you're getting fits into with, you know, fits into your long term objectives and your long term plans. So those are the main things really, you know, there's a load of other things that you talked about my 10 sort of core investment principles, which I talked about, so minimizing fees being diversified, you know, reinvesting compounding, you know, there's, there's a load of other things, which I can talk about, but those are the main things really,
Christian Rodwell 6:35
on episode 81, of wealth talk, we invited Lisa Brown, co founder of the supportive living gateway to talk about how they're helping people to connect and create more homes for vulnerable people. Here's what she had to say.
Unknown Speaker 6:46
As I started talking more and more about my experiences of supported living and how great I thought it was as an investment strategy, but also the challenges with it, I was being approached by a lot of property, people saying, How do I get into this, I love the idea of it. It's great, you know, it's the ultimate Win win. It's good business sense. And I can help someone and create a home for someone who may struggle to find a home. But they were not the property, people were struggling to connect with the people who needed property. And on the other hand, I was being approached more and more by providers asking me to create properties for them. People who really heartbreaking stories, you know, people stuck in hospital who would have been discharged 12 months ago, but couldn't actually leave the hospital. Because there was nowhere appropriate for them to move to or people stuck in unsafe unsuitable accommodation who couldn't move who no one could find the right home for them. And the care providers were saying, I'm spending all day on the phone, I'm on Rightmove, I'm speaking to letting agents they, their tenant, their landlords don't understand supported living, they don't want to let to us. And it felt like they needed to be a way to bring these two groups together. So I got together with a group of other people who all have been working in supported living in all different ways, and have a really diverse background. But we're all property investors and developers, when you look at that, in the context of the benefits of supported living, where you may have a lease taken on your property for anything from two to 10 to 20 years. And in that time, you're not responsible for any of the voids. And if the damage is any of those sort of landlord headaches, you know, and often the lease will cover things like your gas boiler, servicing your fire alarm servicing, so actually, it becomes a really, really good passive long term strategy supported living. Once it's set up, it does take a little bit longer to get set up. But once the scheme set up and established, actually, you can really step back from it most of the time and not worry about your property.
Christian Rodwell 8:46
In Episode 56, of wealth, talk, Susie Carter, talk to us about some of the precautionary measures that you can take if you're a commercial property landlord, and also the opportunities to be aware of in the coming 612 months. Here's what she had to say. I'm not sure
Unknown Speaker 8:59
that any of us know exactly what's going to happen. But yeah, I have seen two recessions and and I've got a pretty good idea how commercial property markets react. I also know the retail market intimately because I worked in it and I think that's the market that is going to be the one that's going to be most affected. So you know, I do think I have a pretty good idea how the retail market is going to react as well.
Christian Rodwell 9:24
So we'll see the kids being an entrepreneur is looking for these profitable opportunities, Suzy and they will be some undoubtedly, so for our listeners now. What can they be doing to be getting themselves ready for when these opportunities do start showing themselves?
Unknown Speaker 9:40
Yeah, so I think that there's various things in the the obvious first one is to is to try and get as cash cash rich as you can. You know, I don't think it's any secret that in recessions, banks draw back on the on their lending. And, you know, this is a debunking recession, like 2008 was where you know, lending just stopped. So you have to be in cash. So you still will be able to borrow. But lending terms won't be as good if you're looking at commercial property. And maybe you haven't done too much before, or maybe you're an accidental landlord that I would really encourage getting more knowledge. And so, you know, I see a lot of people invest in commercial property almost accidentally. And actually, you could probably make a lot more money if you if you get a bit more education, or training. On Episode
Christian Rodwell 10:27
60 of wealth taught, we spoke to guy Bartlett about how the virus has impacted businesses. And some of the opportunities that lay ahead for any entrepreneurs interested in buying businesses is we had to say,
Unknown Speaker 10:38
so it's distressed business owners, not distressed businesses, and there will always be distressed businesses. Already in our sector, we've seen quite a big scaffolding company go in the Midlands, and just recently, the truth is they were probably struggling anyway. And as as in the old phrase, today is a good day to bury bad news, you know Coronavirus, will be used as a catalyst and excuse whatever you want to call it for businesses failing. I'm not a proponent of distress purchase. I don't like turnaround or rescue. It's not It's not something I'm a fan of really. The reasons are complex, that you step into it into a difficult position when you when you look at a company like that upset staff, upset clients, upset suppliers, and unless you got deep pockets, and you really know what you're doing. It's not an area I advocate really. So going back to your point, there will be lots of business owners, particularly because of demographics. And the baby boomers, we've got a lot of people in their 60s and 70s, still trying to run companies who will will really struggle with energy and motivation and the fear factor. And it's not about exploitation, it's about saying, okay, I can help you to exit your business. But the big opportunity is in the structure of deals, that's going to change now. So what I mean by that is, we were buying companies before, where we would typically pay between 50 and 65% of the enterprise value. So let's say the business was priced at 4 million quid, we'd pay somewhere between 50 and 65% of that on the day of completion. That's that first tranche of money to the business owner. And then the rest would be over what's called defer consideration. So a period of time agreed between us us in the seller to pay down the rest of that cash all very tax efficient. But But helps to ring fence the deal for us as the buyer, and secures the future. For the for the seller as well. I believe that that's really a thing of the past. Now, the percentage that's going to get paid on day one is going to be less. And because of the risk factors, and depends on the balance sheet depends what is genuinely leverageable amounts of money. But more crucially, what people are going to say is, so in simple terms, if you value the business of 4 million quid it was typically at a multiple of profit, essentially. And that's just a sentiment, it's between buyer and seller. I think it's worth a three multiple of four months or six, whatever, that that's the process of negotiation. The difference now is that nobody can predict what future revenues are going to be. So whereas you take historic performance, and say, Well, this business traditionally does 5 million quid a year makes a 15% net profit, we can see that pattern over the last five years. Okay, it's worth a multiple of x. That's, that's gone out the window, because nobody can forecast now what's happening with Coronavirus, what the market conditions are going to be like
Christian Rodwell 13:38
on episode 61 of wealth talk, we spoke to sweat Acharya about how the virus has impacted businesses, and what the key attributes are that entrepreneurs must embrace going forward is what she had to say. What's your definition of an entrepreneur sweater?
Unknown Speaker 13:55
What's my definition of an entrepreneur?
Unknown Speaker 13:57
Um,
Unknown Speaker 13:59
that's a very interesting question. I mean, we all have our own different versions. For for me entrepreneur is someone who is willing to fail fast and fail enough to succeed. And when I say fail fast and fail enough, this is my mantra, by the way, Chris. And that's for me is not flipping coins. But it's about making series of decisions in a calculated way, knowing the probability of potential success or failure, and the rewards and risks attached to that, and then going ahead with it. And there are two things I'm saying failing fast and failing enough. Sometimes people fail fast, but they don't fail enough, right? They just do a couple of things as a failure, boom, they kind of step back. There are some people who fail enough, but then they're just taking too long and the journey just becomes long and dragged. So can we fail fast? Can we fail enough? After thinking it through in an objective way and being decisive and moving forward for me That's entrepreneurship. And that's exactly what I've been following for the last 11 years. And I make sure my clients are also doing that. I think personalities are not the defining factor for someone being a successful entrepreneur or not. And I think they're all on our own journeys. Sometimes I also think, Chris, that it happens by chance, sometimes you don't people realize, yeah, this is fun. And sometimes people try, but it doesn't work out, and they need to go back. So there's so many factors which come into play when someone is a successful entrepreneur or not a successful entrepreneur. So it's more for decision to try out something different, and say, hey, let's see how it works. But it's surely a science and an art as one would expect. I think it's more for science. One thing I would want to add here, though, which again, I'm very, very passionate about is that the problem with entrepreneurship and why we see a low success rate is because of the low entry, or low barrier to entry. And what I mean by that is that anyone in five minutes, it just takes five minutes to be called an entrepreneur, you register your company, and hey, presto, I'm an entrepreneur, we're going to become a plumber, and electrician, and accountant, a doctor, a lawyer, it takes years before someone can be called a professional. But an entrepreneurship, that's not required. And that's the reason why the failure rate is so high. So I always say that looks someone's quality of business knowledge, quality of you know how well you understand the language of business, which is numbers, and therefore how you're making your decision really determines the probability of success. And that then further feeds on to the confidence of making those decisions even better and faster. And more, as I didn't say earlier, on
Christian Rodwell 16:42
episode 54, of wealth talk, we spoke to Dr. Joanna Martin, about why now could be the best time to learn about the process of creating and benefiting from intellectual property. Here's what she had to say.
Unknown Speaker 16:53
I think for me, that was the first shift, it was understanding that my IP, if you like, is not just what I know. But it is also my take on what I know, because some of us get tangled up in the fact that, that, you know, we might learn an approach to something from somebody else. And because they, they taught us you know, like it, let's take an example, I know, you know, my husband's engaged with your community, from a property investment perspective, he loves property, right. And so Greg's learned how to do investing property over the years from lots of different people. But then it then what he knows and then how he's applied it, and his take on it then becomes his IP. Now, don't get me wrong, there's models and things that are copyright, etc, gotta be careful about that. We're not ripping off people's stuff. But there is more to our IP than just the knowledge, there's also our story and how we've applied things and our take on stuff. And over the years more and more, what I've learned is it is as much my approach to any given problem or any given thing that my community find valuable as any particular kind of formula, if you like, I think it's never been easier than right now to to take what you know, and turn it into products and programs. that's never been easier. I would say 10 years ago, it was a hell of a lot easier to sell that. Because right now in the marketplace, there is a lot of competition, because the barrier to entry in terms of the tick has come down remarkably, I think, you know, I mean, when I first got started in 2008, that's kind of school that that was the last the last big GFC is when we started our business and did seven to seven figures in the first year. So let that be a lesson to everybody who's looking at what's going on out there in the market at the moment thinking why Anything is possible, right? But But back then, it was all email marketing and and you know, we did what we're doing right now and hit record and you know, we had product and that was it that we would it would sell this and we were doing we would do great with it. I think barrier to entry on creating product has come down because more and more people are aware of the tech and more and more people are, are have things to share. And people want to buy stuff. But where I think the greatest challenge is now is in how to market and sell that. And it's not that there's any what's the word? It's not that there's any great mystery in how to market and sell online. Like we all know what the tactics are, if you like, but what I think more than ever, is really crucial to be able to stand out in a marketplace to be able to leverage your IP is some kind of mission or cause behind it. Because if there is not a deep seated, like, you see people all the time, I'm just going to create an online course because that's where the money is. I've got to package up myself. I've said you know, my coach said I've got to do that. And then they're just one in the millions of courses. So why While everyone, every man and their dog is saying, you know, yes, take your stuff online, if you don't have some sense of calling, deep calling, I think that is what has people stand out online these days, everyone can make a beautiful website, everyone can pay someone to make them a beautiful website, everyone can pay to learn how to do a video sales letter or to run a webinar that sells you know, all of these are important pieces to the puzzle. But because anyone can access it, what makes a difference these days is Who are you? And why do you care? And why do I want to be in your community?
Christian Rodwell 20:39
on episode 55, of wealth talk, we spoke to guy race, who shared his experiences of what separates a good joint venture from a bad one. And some of the pros and cons of working in partnership with others his way out to say
Unknown Speaker 20:52
jayvees work really well. And over the past two decades, we've had some very successful jayvees. But jayvees do work both ways. And if they don't go to plan, it's important to say in the worst case, jayvees really can end up losing money, both for the investor and also for us. So you know, it is something that needs to be considered really carefully. But the pros are, there are returns that are higher than perhaps normal, fixed term loans, which is what we do an awful lot of, but a cautionary note there. Again, if someone is offering very high returns. And it sounds too good to be true. Guess what? It probably is. So you know, I think it's important just just just to put that cautionary note out there. And also the fact that property is not easy. So it's really careful or important to be careful who you joint venture with. mitigation is absolutely key and eyes wide open. I think that there are four key things that I'd really mentioned at this point, and considerations, relationship, risk, appetite, documentation, and good communications. And perhaps it might take each of those in turn relationship for us. It's always a key word. We're very driven by that. First of all, we're especially keen to get to know people. First of all, before we start talking business, and parties going into a joint venture must take time to get to know each other. The second thing I'd say is, you know, in the relationship, there must be patience and flexibility. And projects may not go exactly. to forecast timescales or outcome. So that's really important, as many people as you said, Chris, love the idea of a joint venture and get excited about it. But perhaps not consider the downsides. In the past, we've had investors who've thought jayvees work for them, and then they were not sleeping at night, and feeling very uncomfortable. That's not good for anybody. The third area, I would say is documentation. Definitely formalize any jayvees with a clear agreement set out exactly what is required by each party, potential risks cetera. So some clear heads of terms and an agreement. And please do that before any funds are committed. And then finally, something that we pride ourselves on which is good communications. So regular, ongoing interaction and report
Christian Rodwell 23:22
a lots of information now covering each of the seven pillars. But before we get on to the debrief, Kevin, if I may just shout out a few of our latest reviews from the past seven days and Grafton they obviously tuned in last week has said insightful discussion taking into account recent current economic developments, and extrapolating into the future. And then a new set of highly recommend wealth builders, excellent education materials combined with valuable guidance and connections. And then just in a few hours ago, from Adrian, you don't know what you don't know, we've all heard the expression. And wealth builders is excellent for opening our minds to wider ideas, not just for any particular type of investment, but a holistic view of many aspects of wealth, including building it, protecting it, and being tax efficient. And wealth builders also encourage sharing knowledge and experience to help each other learn, grow and take action on the wealth building journey.
Unknown Speaker 24:19
Does he need a job? The summarize that really rather well? Didn't he really
Christian Rodwell 24:24
has given you what are the key elements in there?
Unknown Speaker 24:27
Well, we we have been advertising, haven't we, for a community manager in the group were also looking to expand our SAS division. So you know, lots of things going on. In terms of expansion. I think people are definitely sitting up and taking notice Chris about our structured process, you know, a holistic process. They're resonating with you and me, which is great, and loving our integrity and that we're willing to share without necessarily worrying about whether that pays us back. We're kind of paying it forward on we really and we quite like that. Yeah,
Christian Rodwell 24:59
yeah. There's so much content in this guide, Kevin. But at any point semtech clay just wanted to, to pull out from what we've just had,
Unknown Speaker 25:07
well, I don't want to zero in anything in particular, because those guys have done a good job. And anybody who reads those 47 pages plus all the links to that, you know, that's, that's probably a day's work, right. So I don't want to add to that, except to say there isn't anything that isn't there that you couldn't find one thing to take action on. So I would say whatever it is, you know, obviously, we like to educate and inform, but there's entertainment value, too. But get through that, don't just enjoy the read, find something that you can take action on, whether it's just making more of the home around you. I mean, we've got, I've got a call later on with one of my mentees, Chris, and she's using her pension, so combining her pension with her garden and the garden of neighbors, and turning that into a plot of land on which to build several properties making money for everybody in a true neighborhood collaboration. And that's just by thinking about the space, not just around her own property, but the neighboring properties as well. So you can expand even beyond your own property in that one. Every month, we see people, you know, finding the joy of SAS, as we like to say, finding that sharpest tool in the toolbox and turning their old pensions that are a reflection of the past and turning them to face a new chapter in the future. And we just love that and more and more people are doing that. And certainly we're seeing a big drive in market uncertainties in investments, to drive down the costs and where we've got so many ways that we'll be bringing more value to people to show them the lowest cost way they can drive their investments. And I love the kind of improved sense of connection that Lisa was talking about in supported living, because it's such an impact, isn't it, it's not just financial impact. It's really resonating with people, one of my other mentee clients said, you know, one of their they're one of the grandchildren is going to need that sort of care and attention. And they're driven towards using some of their money to try and work in that area. So you can see there's just impact everywhere, and Suzy where their impact in terms of what's happening with the high street. So I think everywhere, and even business owners switching their mind to thinking about well, you don't have to build the business, you could find other business owners, just as our property people sometimes turn crusty old properties into contemporary properties. You can turn crusty type businesses into new contemporary businesses, you know, focused on recurring income, because many people just getting old and tired, Chris, this has been the last straw, they're not getting rewarded for their blood, their sweat, and their years. So they're looking to do something else. And I think our contributors on business both said something about that. And we move on, we know IP, more and more people having time now to write their story, to write their message and to create value from their intellect instead of just kind of taking it for granted. And then I loving the idea of more and more collaborations which is full circle, again, to what I spoke about in the property. So collaboration is all kind of more fun, and more engaging, Chris, which is why I love our community. I think the biggest thing that gives me satisfaction, apart from seeing people, creating more wealth for themselves moving towards independence, is the true sense of community that's happening inside the program. So I just like to encourage as many people as possible to download the guide in full. And to take a look at what we do and see if it resonates with them for 2021. Because we had a blast in 2020. We've had yes and unprecedented year, but we've had more members, more people making bigger differences. And I can't wait for 2021 to rolling.
Christian Rodwell 29:15
Absolutely couldn't have said it better myself, Kevin. And we really, really do want to thank our contributors. And we genuinely believe there's no better time than right now to start learning about and planning your wealth building strategy so that if times like these come again, then you won't be stuck trading time for money, and you will cross that bridge to the 5% of people that are financially independent. So if you haven't yet downloaded your copy, you can either click on the show notes of the podcast app that you're listening to right now and we put a link in there for you or head on over to wealth builders.co.uk forward slash wealth guide and leave us your comments. Enjoy it maker maker, bro. Sit back, read through that guide and we really, really do hope that it It inspires you to take some action. Well, you
Unknown Speaker 30:03
need more than a couple of brews, I think, Chris, but I get the point you're making. And I definitely want to encourage people to do that. And one other thing, please, please, if you like the guide, tell somebody else about it so they can download it for themselves. Because everybody deserves the right to be financially independent. And most people, you know, are basically looking at current circumstances, and being fearful. Never let that happen again. And we can all control some action, we can't get caught up and what we can't control, we must control what we can, which is our own mindset, and our own actions and employee to take something out of the guide and put it into action.
Christian Rodwell 30:45
So we'll be back again next week with more stories of members of our community, building their wealth and look forward to the next episode.
Unknown Speaker 30:53
Yeah, until then, Christian Yeah, you stole my line again. Yeah.
Unknown Speaker 31:00
We hope you enjoy today's episode. Don't forget that we are constantly updating our resources inside the wealth builders membership site to help you create, build and protect your wealth. Head over to wealth builders.co.uk slash membership right now for free access. That's wealth builders.co.uk slash membership.