Discover how to accelerate your path to financial independence by focusing on compound income, reinvesting recurring income streams across assets like property, business, and pensions to create lasting wealth. Christian Rodwell and Kevin Whelan share real-life success stories and strategies to help you build predictable, growing income for financial security.
Many people focus on compound interest, but the real key to financial independence is compound income—creating and reinvesting recurring income streams that grow over time.
In this episode, Christian Rodwell and Kevin Whelan reveal how to apply compounding beyond interest to property, business, pensions, and intellectual property, helping you build predictable, recurring income.
You’ll also hear real-life success stories, including how WealthBuilder Mark Stokes doubled his pension in just five years.
Whether you're starting out or optimising your assets, this episode will give you the strategies to make your money work for you and accelerate your path to wealth.
By focusing on income that compounds rather than just savings, you can take control of your financial future and create lasting financial security.
If you're serious about building wealth and achieving financial independence, this is an episode you won’t want to miss.
Tune in now and start building the assets that will transform your financial future.
Resources mentioned in this episode:
>> Watch "How To Get A 25% Discount On The Price Of The Stock Market, Gold Or Property"
Next Steps On Your Wealth Building Journey:
>> Join the WealthBuilders Facebook Community
>> Schedule a 1:1 call with one of our team
>> Become a member of WealthBuilders
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Speaker 1 (00:00.024)
He or she who understands compound interest earns it and he who doesn't pays it. I'd like to bring it up to speed really, up to the 21st century and talk about the concept which is more dear to us and wealth builders, which is called compound income. It's much more powerful than compound interest. Interest is incremental. Compound income is the power to be exponential and that's about speed. If you want to become financially secure then financially independent, you want to do it in
30 years? What do you want to do in 3 years?
Speaker 2 (00:33.634)
Welcome to this week's episode of Wealth Talk. name is Christian Rodwell, the Memchip Director for Wealth Builders, joined today by our founder, Mr. Kevin Whelan. Hi, Kevin.
Chris, great to be with you again and after some spectacular news from you now you're engaged to be married you old dog.
Thank you very much. Yeah, that was some big news. New Year's Eve. I was away in India with my fiance now. So yeah, really pleased. Thank you.
I'm not coming to the stag do, even if you invite me, right? You know that, don't you?
dear, that's disappointment.
Speaker 1 (01:07.022)
I can't handle the beer, Chris.
dear, well hopefully you had a lovely break yourself.
I did, thank you very much. And refresh, recharged and ready to go. And of course you wouldn't be, well, it's the first one we got together, right? Cause last week, the podcast was really something different, which was unusual, right? So you might as well explain what that was.
We ran the replay of a webinar we hosted a couple of weeks ago, which, yeah, how to create multiple income streams and break free from the time for money trap. We shared all about the Wealth Builders Academy and how we help our members to achieve financial security within three years. I'd like to... Financial security? Yes. Well, financial security being the amount of money that you need right now as a family to cover all of your essential outgoings on a monthly basis.
us? Define us?
Speaker 1 (01:54.904)
Yeah. And if you've got an income stream or better still multiple income streams that can generate that for you, essentially you've got time freedom to be able to build that compound on that even further. which is the subject of today, but of course let's welcome our new members. So we're thrilled that a new cohort of joint wealth builders and we're looking forward to working with them on the inside and Chris as membership director, you've got lots of new things in store.
2025 that are always building and improving on what we've done before.
Yes, we absolutely have. yeah, I know our new members are already booking in their welcome calls and we're preparing their wealth maps as we speak. yeah, great to have you with us. So on the webinar, Kevin, we talked about this concept and I'll let you introduce this because it's perhaps a term not commonly referred
to. We've done a podcast before on the subject of compounding and I guess you could showcase that Chris and highlight that in the show notes, but we made reference on the webinar to an Einstein quote and Einstein is known as kind of a smart sort of a guy, really a genius one would argue. The quotation that he uses is really all about something called compound interest. And most people have heard of that, right? So they've heard that if you
put some money in, you earn interest on it, and then you leave it to run, for example, for another year, it will be worth more money. And then it stays again for another year. Then you've earned interest on top of interest. And everybody kind of knows that, you know, and the quotation says it's often referred to as the eighth wonder of the world. And although it's very sexist language, he says he who understands it, well, let's say it's gender neutral, he or she who understands compound interest earns it.
Speaker 1 (03:43.296)
And he who doesn't pays it. I'd to bring it up to speed really up to the 21st century and talk about the concept, which is more dear to us and wealth builders, which is called compound income. And it's much more powerful than compound interest. Interest is incremental. Compound income is the power to be exponential. And that's about speed. And if you want to become financially secure, then financially independent. Do you want to do it in
30 years, what do you want to do in three years? That's why you have to understand compound income. And I'm going to say the same thing. He or she who understands it will earn compound interest or compound income. And if you don't actually, you might be surprised you're probably paying it and not knowing you're paying it. I like to throw out a challenge to anybody who's listening to have a look in your life. For example, do you have a
pension fund or an ISA fund or something that's in the stock market, you know, those fees that get taken out typically 2 % of the value of the funds. Is that a compound income you are receiving or is it a compound income that you are paying? And I think most people are paying in. I'd like to reverse that Chris. And I think when I was considering what the characteristics of compound income is,
I've got five very specific and unique characteristics that are fundamentally different to compound interest that I'd like to maybe touch on if that would be all right with you.
go for it. Yeah. So what's the first one?
Speaker 1 (05:25.816)
Well, the first characteristic is, you know, when you look at income and compounding income is really recurring income. And that's the very theme and the very tenant of the wealth builder principles that you build assets that create recurring income. So it's worth repeating that income that is compounding is permanent, not temporary. So once you build it, it carries on. And yes, it needs a little management, but you know, if you build a property portfolio,
or intellectual property, you create a rental, you're creating value, and that value is much more likely to continue as long as you own the asset. So it's the ownership of that and the power of the rate is often significantly higher than the simplistic nature of just leaving money in cash, which by the very nature is only one asset. The second is that the income is predictable. It's not volatile.
So I have a bit of an issue with the tradition of financial planning, not least that you end up paying recurring fees instead of earning recurring income, because the very subject to think of traditional financial planning is about building an accumulating value. And there's a problem with the accumulation model, which is it never generates income. You never really compound because if the stock market goes up and then it goes down, where's the compound?
You've lost it on the turn of the wheel where the market falls. And we saw that in 2008, 2020, and we'll see it again. And the timing of that can be horrific. If you're looking to turn your accumulated money into income at a time when the world is volatile and the world's getting more volatile, not less. think we can all see that from all corners of the globe, all political persuasions, there's more volatility happening.
And the third element of that is, I think it's a word I'm going to invent now, it's pass onable. In other words, it's income that you can pass on to the next generation, but with wisdom and knowledge. And that's a key aspect, which I'll come onto about the ability to learn something new, teach something new, and build and equip yourself and the next generation with more skills. And the implication or the inference
Speaker 1 (07:52.79)
in leaving money and interest as it doesn't teach anybody anything. See the point? Okay.
Yeah. And there's some more.
All right. I see you're not probing me too deeply. The second is if you're earning recurring income, you can bank that recurring income, not compound income. In other words, you can reinvest it in other assets because you're creating much more value. So you've heard me in the past, Chris mentioned an acronym I used. I'm sure you remember it G O L D or gold.
Yeah, think we recorded a podcast episode which I can link to.
Okay. So gold isn't gold because gold doesn't create incurring income, of course, it's a hedge, but the word G O L D each letter stands for something with therefore it's easy to share and easy to teach. So G means identify your gain. That's what we do in wealth builds. talk about identify your gain. So in other words, what's the steam that's flowing from the, your ownership of the asset. What's the compound income you're generating. So what you're generating is the G.
Speaker 1 (08:59.214)
The O is take it off the table. So in other words, identify it and decide by intention how much of that you want to bank. Right? So if you're making 8%, you could almost leave 4 % of cash and reinvest 4 % somewhere else if you get the point. So the more that you can influence the return, the ROI, the more that you can decide how you're going to be able to diversify your wealth. Lock in the gains is L.
So you lock them into something else and you de-diversify. So if you understand the pillars and most people who follow the podcast Chris will know there are seven pillars, seven unique and only seven assets you can use to build wealth. And all these years later, there's still not number eight and it's not appearing anytime soon. So you can use that money and reallocate it into any of the pillars that particularly appeal to you, which therefore gives you greater diversification.
which means the more streams of income you've got, the safer you are. And fundamentally to me personally, Chris, wealth is about creating certainty in a world that fundamentally isn't. Because then if you're safe, you're confident. If you're confident, you can build things, you can take risks. And if you're confident, you can pass on that confidence and that knowledge knowing that you're building on good foundations. You're not just hoping for something. And the problem with interest, of course, is we saw
A long time ago now, seems five, six years ago, interest rate was zero. You know, how do you get compound interest when the interest rate is zero? But when the interest rate is zero and you're not compounding, there are many, many other ways that you can generate income. So I think it's this richness and diversification of wealth building assets that you can compound and start to spread the value and the gain in different places to make yourself even safer still.
Very good. I guess if we're applying that to our seven pillars of wealth and we know that those are most commonly property investing. So profits from properties can then be reinvested to buy more properties. So we're compounding the property income stream. Business profits can be reinvested in more machinery, plants, stock, marketing to increase the revenues there. Likewise, let's say intellectual property. So we have royalties.
Speaker 2 (11:21.474)
which be reinvested again into creating additional intellectual property. Royalty is your favourite.
Say that word again Chris, I like that one. I like the sound of that one, yeah.
Yeah. And likewise, you mentioned investments there, but of course there are dividend generating investments which could be reinvested then for further growth.
Yeah. And you know, I like the certainty of that rather than what you tend to get. And I see it a lot when people are not building based on the principle of compound income is they try and they know that compound interest too slow. So let's try and cheat the process. And how do they do that? FOMO. I'll go with the latest this or that. I'm not saying what's good or bad as an investment. never do that. The reason to chase an investment isn't because
anything else other than you believe it fits in with your investor DNA, with who you are as a person. You're either building a hedge or you're wanting to diversify your knowledge. But there's been a massive chase in people doing cryptocurrency, for example, without understanding it. If you understand it, that's great. Trading things they don't understand like Forex and other things or being rushed into what looked like tax privileged vehicles like EISs and VCTs. I'm not going to get into the detail of those, but
Speaker 1 (12:40.44)
highly tax geared or tax beneficial investments, but they're fundamentally risky. So people can sometimes in the search to beat the compound interest as compound mistakes. And we see so many people make mistakes when they're not sure of the fundamentals. So they're banking on what some guru says or what somebody says down the pub or their brother or sister, whoever says. And I'm not saying you shouldn't pay attention to what other people say, but I would say build your wealth with principles.
Not what anybody individually says and including whatever you and I are saying, take with a pinch of salt, you know, check it with your own principles and see if you believe compounding income is better or worse than compound interest. Well, you make your mind up. So there are more features than that. And one of those that I really like, Grace, other than the principle of reinvesting and diversifying is you're building more connections, you know, so that when you build wealth and you're looking at new pillars,
based on the culture that we have within wealth builders, which we often refer to it as the who not how culture. How do you make money work? Somebody knows. And if you build those connections, do rigorous due diligence, and we help with that process, then you can shortcut or even see what's happening in other assets that you wouldn't see if you were just doing this entirely online. So I love the connections. I love the power.
of working with others, which why I mentioned, you know, me being able to make investments and I use my pension to do that. For example, my SAS pension, you can lend money and become a bank, do good due diligence, get a first legal charge in 12%. It's a lot better, I think, than leaving it in the bank at 4%, but it suits me. It didn't, might not suit somebody else, but that's one of the things I do for myself. So the compounding of connections, more and more connections and
I love what I do because I get to meet more people and get to see what outstanding people are doing and the distinctions and the things they, the intellectual shortcuts they can help me make so I can get to where I want to faster, safer and more enjoyable than trying to do it all on my own. So I think the environment of more connections is fundamental to enjoying building wealth. That if you do it on your own and compound interest sounds lonely to me, sounds like you just
Speaker 1 (15:07.458)
Park your money in the bank and you hope. But compounding connections to me is fundamentally where I want to be and how I want to build my wealth is working and collaborating with others. Do agree with that?
Certainly you can sort of see a difference in more of an active and a passive approach there with the compound interest. It's kind of like sit and wait to see the results, which is no bad thing, right? And as Einstein said, it is a wondrous thing.
It will work. It'll just take a very, very, very long time. That's all.
Yes, and mentioning time, guess the same principle applies to both in that the sooner you start, the better the compounding does improve with time on your side.
Well, one would argue that, and this is an argument we make, is that people will often judge themselves in terms of what they won't do. What we say to people, certainly in wealth builders, is make one small, smart decision every month, and that will compound. Because you'll be building more wealth, you'll be building more knowledge, you'll be building more connections, you'll be building more experiences, you'll be building more distinctions, you get the point. Whereas when you look for
Speaker 1 (16:16.408)
the magic bullet, the secret sauce, the FOMO opportunity, you're always waiting for something and trying to find something that will just miraculously get you there. When I think it's the marginal impact of making small decisions every month, which is why part of what we say, that's a quote I use, isn't it? Never let 30 days go by without doing something positive that helps you build your wealth. And I think that's an example of compounding. It's not necessarily
compounding income, but it's compounding actions. Because soon as you do that, and certainly as you get to security, you find yourself with more time to focus on building more wealth. And so many of our clients reach security, then they sack the boss or they spend less time doing what they're doing. If they're not enjoying it, and if they do enjoy it, that's great. But often people are not enjoying what they're doing because they feel it's not really truly who they are and giving them the balance that they want.
But anyway, the value to me of that is you're in control. And control is probably one of my greatest acknowledgements of my freedoms is the freedom of control. What I want to do. Everybody's got different freedoms. And we've talked about that all the time. Freedom of time, freedom of location, freedom of money, freedom of creativity, so many different ways you can express it, but freedom of control for me is probably my highest level one. Are we cooking on gas here?
So I think the concept of getting to a point where you're generating this compound income, if you wind it all the way back, always begins with education. So we hope that today we're providing just a different thought, a different way of looking at things. And our little gift out to the world are these podcasts, Kevin, and nearly six years actually next month. So February will mark the sixth anniversary.
Well, you mentioned it's a gift and we'll continue to do it. We love doing it. I think we love to give away things, books, I suppose, know, podcasts as well as guides and so on, so that people can find out a bit about our culture, see if they like what we're saying and how we say it, or give them a distinction that go and do themselves. Because we're quite happy of delight in fact, if someone takes a distinction we make or one of our guests make.
Speaker 1 (18:36.812)
and they go off and do it and they build wealth. That's just amazing. So it's a good environment to do that. I think there's a secret I want to share Chris that I think everybody needs to discover, particularly here in the UK with the changing of the inheritance tax regime. Anybody who's been paying attention to the last budget, we did a podcast on that, will recognize that inheritance tax is really a tax on value. It's a tax on the accumulation.
So the other reason I don't like the accumulation model as the sort of the bedrock of what you do, but focus on cashflow, not accumulation, is inheritance tax, tax is accumulation. So whatever you leave, it gets taxed based on that and that alone. But if you're in a position where you understand inheritance tax and understand that it's largely a voluntary tax, it's a tax paid by those people who don't plan.
And while you might not be able to avoid it completely, you can mitigate it significantly by understanding the difference between accumulation and income. And what I mean by that is, as we know, pensions are coming into the mix. In 2027, pensions are going to be taxed from inheritor's tax. And they've got no right to do that. There's no role for that other than an easy tax target. I mean, people have worked, including me, I have to say, for decades.
to build their pension, to build their tax-free wealth, and then to be told, we're just gonna pull the rug and tax your family, even though you've been planning this for 20, 30 years. There's just no place for it. I think it's pernicious, it's horrendous, and our rant is over now. What can you do about that? Well, when you understand that, there's a little known, let's say, an exemption.
So we know from an inheritance tax point of view, those who've studied inheritance tax, that there are two current exemptions. One is the first 325,000 per individual, which is called the nil rate band. It's funny name, but nonetheless, it just means you don't pay tax on that band of your assets. This is your asset base, not your income, but your asset value. And then secondly, there's a...
Speaker 1 (20:50.294)
an exemption that relates partly to your home. But if you live in a home and you're going to give that home to your direct descendants, you don't have any, you don't get the exemption, then that's 175,000. So if you put the two together, 325 plus 175, you get 500,000 or half a million. Hence then for a couple, the inheritance tax kicks in really at 1 million pounds. And if you happen to live in London,
or you live in a nice area where house prices just happen to be higher, then if your assets are worth 2 million or more, you lose the nil rate band that relates to the property. So you lose that 175 gradually. So when you get to around 2.3 and a half, let's say, well, you 2.35 currently, in terms of asset value, it's not that difficult to do in some cases, just with property really.
then you lose the residence and the right band. You lose that 175. So therefore you're down to 650. And if you've got a family of three or four and you're paying 40 % on assets over that, you could often be giving money more to the tax man than you're paying individually to your children. And I think it's just outrageous. So what can you do about that by understanding the concept of compound income is understand there's a little known exemption, which is called the gift out of income.
Because ordinarily when people talk about the 325, the Nile rate band, is they can make a gift of 325 and then they've got to live seven years before that gift kind of rolls off and then you can do it again. But the problem with doing that is first of all, you don't know how long you're going to live. Second of all, to give away 325 means you've lost it. I mean, you've got a part company with it. And what if you need that money because your own assets are volatile because they're in the market and you
might want to rely on that money for income, but you've given it away. So there's a real problem and people don't do that very often. There's not too much gifting going on from an inheritor's tax point of view, because the person or family who want or considering the gift don't want to make it because they're fearful of the future. Now, what can you do? Well, if you build recurring streams of income or compound income, and you know that the second step in our process is to get people from security to independence.
Speaker 1 (23:15.436)
Now let's say independence happened to be, don't know, pick a number. doesn't really matter what it is. It's different for everybody. But let's say the number was 6,000 a month just to pick a number, Chris. And you know, you've got income flowing in from your different assets. You don't have to have seven, but some combination of the assets and you get to a very healthy 10,000 pounds a month. Right? You built it. It's growing. Then you're allowed to make gifts from your income over and above what your expenses are.
So if you know what your expenses are and say they're 5,000 a month, then as long as you can prove that and you can prove this income is regular, it's coming in. In other words, it's permanent, not temporary. It's predictable, not volatile. And you can pass it on, then you can do that. And there is no seven year rule. There's no three, two, five limit. You can give whatever you want and you can give it with confidence knowing your income is assured.
because you've already got yourself to financial independence. So this concept Chris, albeit you might need to listen to it twice if you're a listener, it's fundamental and it's fundamentally different to how your typical financial advisor is going to arrive at their thoughts because really and truly they want that recurring income for themselves and they value their business based on how much recurring income they are getting from you. And I say,
just as inheritance tax is inappropriate and very pernicious, very painful, unnecessary. So it is that most people are paying fees that are just so opaque that it's causing them to lose so much income in their life and they should stop it. Or at least challenge it and negotiate if they have a good advisor, negotiate or stop doing it and learn how you could build wealth on your own terms and that's where we come in.
Hopefully that was useful, Chris. I hope that was a good enough introduction to our shares. from any guests today, but just from me and you. So I hope that was useful today.
Speaker 2 (25:21.814)
Absolutely. Yeah, I imagine a few ears will be pricked listening to that. And if you'd like to have a chat with us, if you think that your personal circumstances could benefit from speaking to us and understanding, could this be something that we can support you with, then please do get in touch. Easy for you to do that. You can either head to the Wealthbuilders website and click on the book a call button, which you'll see at the top of the page, or drop us an email hello at wealthbuilders.co.uk and yeah, our team will.
respond to you very promptly.
So the final thing for me, Chris, is we love making gifts, as we said. So if you're a regular listener and you've tuned in again in 2025, do subscribe to us, do like us, do tell other people about us so that we can continue this good work. Because we're doing it in a bit of a vacuum, we really? We're talking to ourselves and putting it out in the real world. And we need some feedback to make sure, are you enjoying it? Is there something you would like us to dive deeper into?
interact with us, know, let's compound that relationship and make a connection with us if you haven't. So don't just listen innocently and as a bystander in the process, get in touch because we'll create something for you or we'll write something that perhaps we can connect you to somebody to help you on your journey too. So do something more than just listen. Compounding action is more important than just listening.
Hit that share button right now, send this to a friend and Kevin will be back same time, same place next week.
Speaker 1 (26:51.65)
We will indeed, until then my friend, see ya!
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