In this insightful episode of WealthTalk, Kevin Whelan dives deep into the lessons learned from his recent mentoring session with ActionCoach.
Kevin explores the four types of investors: defaulters, who invest without much thought; dabblers, who invest with little understanding; divers, who go all-in; and delegators, who hand off responsibility to others.
He explains why understanding your "Investor DNA" is crucial and how aligning your investments with your personal interests and values is the key to long-term success.
Throughout the episode, Kevin highlights the importance of due diligence, the power of diversification, and the need to balance the goals of growing your net worth while ensuring steady cash flow.
Tune in and discover how to become a more intentional, informed, and successful investor.
Resources Mentioned In This Episode:
>> WT80: ‘Gold Is a Hedge Not An Investment’
>> WT02: ‘Are You A Drifter, A DIY’er Or A Dynamic When It Comes To Building Wealth?’
>> WT226: ‘Brand New! Wheel Of Wealth’
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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Christian Rodwell (00:02.018)
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. Today's episode is brought to you by Wealth Builders Membership, a proven step -by -step process that helps you achieve financial security within two to three years. find out more, head to wealthbuilders .co .uk forward slash membership.
Welcome to this week's episode of Wealth Talk. My name is Christian Rodwell, the membership director for Wealth Builders, joined today by our founder, Mr. Kevin Whelan. Hi, Kevin. Hello, Chris. Good to be with you again. You're very gravelly today. got anything to do with that stag do you're on, the drugs and alcohol. Well, we did go to Amsterdam and yeah, I think I've cleared it all out of my system, the alcohol that is. But yeah, it's been a busy summer. I've been hitting the festivals, so maybe all that partying is taking its toll on me.
Could well be. Could well be. All right. So today, we are diving into which of these four investor types are you? Of course, we have many conversations, Kevin, don't we? And we pick up on things and one of our most popular episodes, which was episode two, way back in 2019, which the four Ds, which was the DIYers, the drifters, the dynamics, the delegators, and we come up with another four Ds today. Yeah, I was thinking about it because I was
having a conversation with one of our members and you know they asked me a question I get asked this question a lot and this was specifically about spare money what should I do? What should I do with what would you recommend? Go I don't why would I know what you would do because I don't know your outcome I don't know what you're trying to achieve you know this is a new call anyway laughing apart joking apart
It just made me think about, not quite episode two, but I remember the days when we could see what was holding people back from becoming wealthy, given 95 % of the population don't make it and they still don't make it. Although we're making inroads one member at a time, Chris, we're really scratching on the huge elephant rear end of the world, you know, when it comes to people making a difference and creating certainty in their life.
Christian Rodwell (02:32.536)
when fundamentally life is uncertain and investments are uncertain. This whole idea of investing, people are looking for a solution and there isn't one. And it just made me think about reinventing the four D's, but specifically for investors. So I've got the four. So I've got four different types of investor. See if you can identify you as a listener that is with who you might.
most identify with, guess. And then a few points, three more Ds, which would be things that I think you should do or should consider as a matter of principle, not specifically, not you should invest in this asset or this investment, but these three principles will stand you in good stead if investing is part of your life and investing is part of everybody's life, Chris. It doesn't matter what pillars you build, there's always going to be
investing in there. Let's start with the first one, which is everybody's got more money left at the end of their month is going to have something that's spare and it's got to go somewhere. Does it sit in the bank account? Does it go into another bank account like a savings account? Where does that money go? And for most people, I call it the default.
or the default. They just do what happens. In other words, there's no plan. There's no intention. There's no deliberate decision. Lots more D's there, I guess. There's nothing purposeful about that. It's just wherever my money ends up is where it ends up. And there's no plan. And I think that's all too often many people that we see.
We see business owners with money in their business bank account earning very little. We see people having too much money in their current account earning very little and not really working for them. And wealth is hard work. You need leverage. You need every penny to count. And it doesn't count if you default because you're doing it by accident, not by design. And the other challenge that I see
Christian Rodwell (04:53.838)
which is linked not necessarily to investing per se, but certainly pensions, which is very closely linked, isn't it? Pillars two, pension pillar three, investing, because more often than not, it's the stock market that catches the money, is that people invest where their company has chosen the default. The company chooses a fund and people end up in it. And that can't be right, can it? I mean, it can't be right that a 25 year old
who starts a new company, starts an employment in one company, should be in the same place as the 55 year old who's coming out at the other end. But the default is the default is the default. It's the same for everyone. And even worse, we see default funds called lifestyle funds where for some reason there's a deliberate and conscientious plan on the defaulter.
the computer system not necessarily communicated well that says as you get older we're going to move you increasingly into cash because you shouldn't be taking more risk when you get older. It's all bunkum because you shouldn't take less risk when you're older. Just be managing your risk throughout your life and be aware of the risks you're taking.
throughout your life and make conscious and deliberate decisions and not default. So that's D, number one, the defaulter. Is that you? You know, is someone around you like that? Maybe. What do you think of that, Chris? Yeah, reflective of the drifters, isn't it? Which people just accept what's standard. They don't challenge it. They don't question it. But it's
comes to a lack of education, which is always where things begin, isn't it? The first step in the Wheel of Wealth is you've got to get some education, you've got to understand a little bit more about these things and it only takes a little bit of information, doesn't it, make a big difference? does take a little bit of information, but one of the dangers of a little bit of information leads us to D number two, the dabbler. The dabbler knows a little bit, but doesn't know enough. So they put a bit of money into this and a bit of money into that, or they read about...
Christian Rodwell (07:14.03)
crypto or they read about reets or they read about, you know, they read about something or somebody mentions it to them and they go, I'll put a bit in that. I'll put a bit in that. Again, no plan. You know, I know you're laughing, but this is what people do. It's like getting a tip for the horses almost, isn't it? okay, that sounds good. Yeah, mate's got a horse and he says I should put it, it's a little bit like that. And it's not a plan again. You can't build wealth on dabbling.
I mean, for a start, we'll come on to some of the principles in a while, but you just don't know enough. So you feel like you're doing something. It's almost like getting you off the hook. It says, well, I don't want to default because my money's not doing anything. So I better do something. I don't know. And I'm not going to put enough time in to learn anything. So I'll, I'll just have a dabble. And you hear people say, I've dabbled in stocks and shares. Have you dabbled? Have you? Okay. It's not a good plan.
Dabbling is not a good plan. And unfortunately, you're almost bound to lurch from crisis to crisis as you see the result is never consistent, never sustainable, never replicatable. So can't possibly create security or independence ever unless you suddenly got very lucky and made millions. But even then, if you suddenly make millions, you don't know what you're doing. So you're dabbling. And the next thing you do is even worse.
which is the D number three, which is the diver. The diver doesn't even dabble. They go all in, you know? Have ever played poker, Chris? Have ever seen Texas Hold as a poker game? You know, I've got a son like that. He just goes, no, I'm all in. And he's bluffing. But unfortunately, when it comes to investing, you cannot bluff. You know, you go diving, you're going all in. What you end up doing is...
Either some combination of FOMO or some combination, it's actually the consequences of the dabble are worse. Sorry, are worse with diving because you're putting, often, you're putting considerably more money at risk. It's like diving into a pool without seeing how deep it is. And that's just terribly dangerous. And I see people dive often on relationships.
Christian Rodwell (09:40.898)
then this can be quite serious, not just investing in the stock market and they go all in for a particular stock because they read something or they go all into crypto or they go all into a company where they know somebody who's got a startup and they have a conversation, they like the look of them, they like the sound of them and they put a lot of money in, considerably more than they should be willing to lose.
you know, and as a result, lose money with severe consequences, not just a loss of money, but a loss of confidence, a loss of relationship. know, if you've, if you've done the diving and then you've got to own up to a spouse or a partner or a business partner, you've just lost the significance of the money and you didn't put the work in to understand what you were doing. You know, you've ruined the potential of that relationship moving forward.
And you make yourself a scared investor or a nervous investor with no confidence. I think the combination of the default, the dabbling and the diving, the diving is the worst one because you just really are putting yourself in severe danger. But I see that too. And we've seen it Chris, haven't we? Over time. So the net result is sometimes, you when you don't want to, you feel you don't want to get caught in the default.
You don't want to dabble. You don't feel like, it's not me. You're definitely not a diver. You you're worried about risk. The next one can be even worse in the long term, which is D number four, which is the delegator. Now, let me caveat this point, Chris, by saying there is absolutely nothing wrong with delegation. Delegation with responsibility is a very key skill.
in wealth building in all things. If you delegate in property, somebody else is managing property for you. If you've got a business and you've got somebody managing tasks in your business or responsibility in your business, delegation is a key piece of leverage. It's the leverage of working with people and software and systems and all sorts of things. And you have to trust. But if you delegate without proper authority,
Christian Rodwell (12:04.94)
You can give a job to somebody and they fail it because you didn't actually rigorously assess what they were doing or manage that process. Or in investing, you can delegate it to the financial services industry in general, where there really isn't any other plan other than buy and hold for the long term. The opposite of the all in, you know, where you're trying to make money quickly. This is I'll give all the money to
the industry because they know more than me. I'm a big fan of recurring income Chris as you know, but my challenge is if you delegate and you never get involved, you're giving your recurring income away to an industry that puts a percentage into your life, 1%, 2%, usually 2 % and that money gets paid to them first, before you, irrespective
of what happens if it goes wrong, the stock market crashes, you can't say, hang on a minute, where's your share of the risk? Usually if you have a joint venture, which is another pillar, there's a clear line of communication over the risk, but you're taking all the risk and you put in all the money. And I'm not so sure that that delegation that very quickly turns into application is a solid plan for building wealth.
I think people kid themselves that one day, someday my pension will be okay, my ISA will be okay because I've delegated the money, but I'm not so sure about that. I delegation has its place for sure, but not necessarily as a pathway to say, I give you my wealth, go manage it. You've got to build your wealth. And then I think delegate when you built it.
as you delegate some of the tasks away, but don't delegate your way to wealth. Get more involved in delegation once you've built it. And then you're giving some of the tasks to manage and maintain your money to a third party, but with very clear lines of responsibility and reporting that I don't often see when it comes to people who are using investing as a way to build wealth. So are you a defaulter? Are you a dabbler?
Christian Rodwell (14:28.822)
Are you a diver or are you a delegator? Either one, you know, got a challenge. And I think there's some principles that might be worthwhile exploring, Chris, including me sharing, you know, the three other days. But before we do that, have we got any reviews to check in? We do indeed. So let's take a quick break and head to Trustpilot, where I will read out one of our latest reviews.
There's no name on this review, but they've given us five stars and they say, joined wealth builders just over 12 months ago after far too long procrastinating on the fence. I'm very glad I did. The value of information and training available to me as I've worked my way through the academy has been invaluable. At times it's easy to think you aren't getting anywhere, but when you look back at all you have achieved with some effort, of course, I can see this investment in myself was well worth it.
And the first 12 months has given me a solid foundation for the many different ways to create wealth and really got me thinking about what's possible. Opportunities are now opening up to me for future wealth creation. And I have to put that down to being part and a member of this community and sharing the experience with like -minded people and my own wealth coach along the way. Shout out to Manish. So thanks to the team at Wealth Builders. Kind of reveals a lot about the process, doesn't it really?
I think three things became obvious to me. Number one is this value in having a coach. World building is a series of small decisions that you have to make. And if you make them and hold yourself accountable to them, you're going to be compounding and moving forward. You you're not going to go backwards. So good job for Manish there, Manish Kittaria, one of our coaches, who's also very passionate about investing, by the way. Now, how are we doing on the coaching calls? I mean,
We've going now since whatever, 2019. Yeah. What's the current rating on the coaching calls? We ask our members to rate the coach, don't they, on each call? We do. So after each call, we ask for a rating out of 10. And I'd say we're pretty much five years in now and we are at an average rating of 9 .6 out of 10 for the coaching calls. That's pretty damn good. Isn't it really? So hats off to the coaches. The second point.
Christian Rodwell (16:54.274)
I was going to make is that there's a community. there's coaching, there's community. And when you're involved with community, you see other people's perspectives and those perspectives help you shape your own. And that's really important as it comes to one of my other D's in a moment. Final thing is when you're building wealth, you're transitioning, you're transforming yourself. You become a different person. You become more confident. You become more purposeful.
you become a serious investor, not a dabler or a default or any of the T's. So, so I'm pleased that that review is really quite poignant for this particular podcast we're doing. Just before we get into the three D's Chris, I want to make an observation and the observation is all too often. I see there's only one measure of wealth that is out there in the industry. You know, I was having a little pop at the industry, not that
People aren't well -meaning, but I think there's a challenge with the thinking, which is the only thing they're measuring is accumulation. Like how much are you worth? I think that's important. It's important to measure that, not least because it affects inheritance tax and affects a lot of things. And there's nothing wrong at all with investing for gain, for capital gain. And I think it's important that in wealth building, you do have some of your time.
spent to try and accumulate gains. indeed the Wheel of Wealth you mentioned earlier on Chris might be worth putting a copy of that because you mentioned it but didn't explain it. So I'll explain it very briefly. We have a process of turning the wheel as we call it in this language like pillars, I suppose. And turning the wheel is doing things in an order and sequence that Chris will send you on the show notes. And it starts off with
understanding what's the outcome. So when you turn the wheel 360, education is start of the wheel. When you turn that wheel, what's your outcome? Is it a flow of cash or flow of capital? And it's important when you're building your wealth to do both, to have one wheel turning for cash, cash flow, and one wheel turning for capital, capital flow, so that you're building experience in both. But the only experience I see being focused upon
Christian Rodwell (19:21.824)
in investing in its more traditional sense, Chris, is the capital value. Like this is the value of my share portfolio. This is the value of my pension without any attempt really to try and understand. what does that mean in terms of future cash flow? Because if you spend your life accumulating, you hear the language of this, build a nest egg. You've heard that before. My pension nest egg or I'm building a nest egg.
The implication is you're going to spend it. Well, if you spend your nest egg, in other words, you've got a nest of eggs and you imagine picture in your head, you want a nest full of golden eggs. How are you going to live? You'll crack the eggs open and spend them. So you're decumulating your cracking and you're deliberately but feeling bad about it. You spend years building your money up and now you're slowly starting to remove it. Whereas
My argument is build cash flow first, because if you've got an asset that gives you cash flow, you can spend the cash flow, but you don't depreciate the asset. So on the one hand, your eggs start being cracked and your nest gets smaller and smaller and smaller, and you start to feel it. And that's why so many people are running out of money before they run out of life. know, people are living longer.
Cash flow critical. How do you get cash flow, continual flows of cash flow, multiple streams of cash flow where you're topping up your capital to help you continue to do that? So that to me is an important point. Do you see the point I'm making there about the focus tends to be on one, not the other. So it's both. So let's just make that point clear. Now.
If we then turn our attention to the three D's, you know, me with sevens, if you look at the three things I think you should do as a matter of principle, and this is one I don't hear talked about, so it's not in a book, it's not in a magazine, it's not in some economic theory, but I call it DNA. And DNA means know yourself, know who you are.
Christian Rodwell (21:42.134)
know what you're interested in, what your experiences are, know what your expertise is, know what you're doing day to day, and wherever possible, link your wealth building and your investing to who you are naturally. So you go with the flow. It's a bit like wealth dynamics, Chris. You go with who you are. So it makes it so much easier to continue that rather than become a newbie and start from scratch.
having to learn everything all over again or having to learn completely from ground zero. And I had that conversation just recently with one of our members, Chris, guy called Rod and he was saying, do you know what? I'm a business coach and I've been an accountant. I should be investing with businesses that I know and understand, not businesses that are randomly selected by some default computer program.
And he got it. It's like a realization. went, that's what you mean by DNA, isn't it? And I went, that's right. So let me give you an example of my DNA, And I'm sure others will be able to resonate with their own. My DNA is not the same as yours. My DNA is not the same as anybody else's. It's mine. And I focus on recurring income because it's in my DNA. So I look for businesses that have recurring income.
and I invest in businesses that have recurring income and I seek out businesses that have recurring income because it's true to my DNA. So is it hard work for me? No, it's easy and it's natural because it's who I am. Now, if you are, you know, somebody who does analytics all day long and you can read balance sheets and spreadsheets and you want to then do that, you know, if you love whatever it is that you love.
or you're deeply passionate about or fascinated by. And it could be cryptocurrency or trading options. It could be anything at all. But if it's something you learn enough about, you immerse yourself in, then it's your DNA. And I recommend anybody discover your DNA first before you start dabbling or diving. And it doesn't matter if you leave your money in cash while you're discovering your DNA.
Christian Rodwell (24:06.354)
because when you discover it, you can put your money to work. Does that make sense? It does, yeah. And with technology moving so quickly as it is now, a lot of the platforms where you can invest will have all these sectors. So it makes it easier to get your brain stimulated and having a look and you'll say, yeah, I like that and I'm interested and you can explore further from there. And it could be anything. It could be you're a doctor and you have a real passion about pharmaceuticals that serve a certain industry or a certain
patient it could be you're know you're a car mechanic and you really love what's happening with electric cars or even the opposite of that it could be anything but discover your DNA it makes it easier to do the next D Chris which is due diligence you know due diligence is a word that's often used but like beauty is in the eye of the beholder nobody really knows what it means it means take a leaf out of the book
of Warren Buffett who said, risk is when you don't know what you are doing. So the risk is in the investor, not in the investment. So due diligence helps you understand the risk, understand the reward, make a decision about that combination, that balance, and be able to quantify that.
and make a decision about what it is you're going to do with each individual investment. We'll balance that in a moment with our final deed, but the need to do, now you can delegate your diligence, nothing wrong with that, as long as you understand the diligence that's presented in front of you. And I'll often do that with say a piece of property, Chris, I'll ask somebody else to do a report on the risk, but then I'll read it and understand it and analyze it. And it's the same.
with any form of investing, have to understand world is risky and you have to understand the risk and due diligence doesn't eliminate the risk, but it helps you understand what the risks are you taking and then where you can document that risk, share that risk with somebody else who might have a different perspective on you and say, if it's a spouse or a partner or a business partner, I'm thinking of doing this or we're thinking of doing that.
Christian Rodwell (26:32.6)
Here's what I see the risk, what do you see? And what you're get with a different wealth dynamic is a different perspective on the risk. And then take on board that risk perspective and either make the investment, make less investment, or don't make the investment at all. But either way, it's a deliberate and a conscientious thing, not a default thing, not a dabbling thing. You're not diving all in.
you're not delegating anything other than the reporting. That make sense? does. Yeah, due diligence, another important stage of the wheel of wealth that we've referred to. So I'll be linking to that wheel of wealth episode in the show notes for anyone who's not checked that out. And I really don't apologize for repeating some of the same points because I think sometimes it takes two or three hearings for the penny to drop and you suddenly get it as I did with Rod, for example. The final D
which again is sometimes misunderstood Chris, it's diversify. And what I mean by diversify is multiple streams of recurring income, not buy a bunch of stocks and hope you've diversified in one. Nothing wrong with that as part of a plan, but the overall plan, multiple streams of recurring income so that what you're doing is you're building the stability and the certainty of income in a world that's fundamentally uncertain.
So that if the world changes, and we've seen enough changes in recent years to bear this out through COVID, through stock market crash of 2008, recent wobbles, certainly the war in Ukraine, we've got a new Labour government, who knows what they will do in the next autumn statement. But we're seeing challenges and issues everywhere. So if you know that you've got, you've taken on board those things, you're understanding what's happening in the world.
but you're making decisions that are deliberately and conscientiously different. So they work in different ways. So if one thing goes down, unlike the diver when you're pretty much in desperate straits, you can be inconvenienced but not damaged to the point of being irreparable. Nothing wrong with that. Stock markets can go up and down. You can live with it. Property markets go up and down. can live with it. Markets of all kinds go up and down. You can live with it.
Christian Rodwell (28:58.528)
if you've got assets in different ways that are throwing off different forms of cash flow. And I often will give people an analogy, Chris, which is the core and satellite approach where you're building your wealth, you start off, you can't, you'd be overwhelmed if you dived into seven pillars, right? I'm going to retract the statement of diving. If you took time to want to invest conscientiously in all seven pillars, you'd be overwhelmed.
Because there are too many choices, there will be too many things to do. So imagine a core, like a central planet, if you like, and that's your core strategy. What is your core DNA strategy for you to build your cash flow and wealth? Then build satellites around the outside, whether it's capital satellite, whether it's investing satellite, whatever it is.
You're investing in something that's deliberately different, that works differently, that gives you a different experience and perspective, that starts to diversify in a way that's intentional. And that way, you feel more positive about it because you can see it. You can actually see it on a piece of paper. This is my call. These are my satellites. And you can build as many satellites as you want or as few satellites as you want. That's for you to decide and determine what it is you want to do.
but you can see by this process of interacting. So again, when you default, for example, how many people interact with their Isis or their pensions in default? They don't, they just get a statement, wish you were better, put it back in the drawer, wish you were better, put it back in the drawer and repeat the same cycle of there's no knowledge, there's wisdom being gained or shared at all. So if you're doing it,
and deliberately seeing things when changes happen, you can change your satellites. You make some money on the stock market, you could say, hey, I've made some money. Rather than wait for the stock market to fall again, I'll bank some of that money. And I'll take some of that gain or all of that gain and I'll put it into something else that gives me a different dynamic on the risk, gives me a different type of return. So you're constantly getting involved in that process.
Christian Rodwell (31:18.958)
Whether you do it every 90 days, every six months or once a year, rather than just assume that some computer model with your advisor is going to do it, do it deliberately and conscientiously yourself. invest with your DNA. Make sure you do due diligence and make sure you diversify with a plan and you know that each component of the plan is contributing to your wealth in terms of income security.
or your ultimately your financial independence. And if you can take something from this podcast, it would be put one of those things in play in your next month or your next 90 days. We suggest every month you do something. Obviously our members do that because they have a coaching call every month. So do something every month or do something every 90 days about building your core, building your satellite, discovering your DNA.
watching out for what you've got in your life that's default. Do not dabble in anything, do not dive in anything. If you're going to delegate, do so with responsibility, with authority and with a measure that says, how do I know this delegation is working? So hopefully that was a useful passing on of some wisdom from an old geezer like me that would stand any investor in good stead, Chris. I really enjoyed that wealth talk today. Thank you, Kevin.
And if you enjoyed it as well, please give us some feedback or drop us a message. that's a further question or ideas, you can always reach out to us. Hello at wealthbuilders .co .uk or drop a message in the Wealthbuilders Facebook community. And if you'd like to find out a bit more about what we do at Wealthbuilders, of course, head to wealthbuilders .co .uk. Well, that pretty much wraps things up for today. And I guess you and I will be back.
Same time, same place next week? Yes we will Chris and until then my friend, see ya!
Christian Rodwell (33:22.424)
We hope you enjoy today's episode. Don't forget that we are constantly updating our resources inside the WealthBuilders membership site to help you create, build and protect your wealth. Head over to wealthbuilders .co .uk slash membership right now for free access. That's wealthbuilders .co .uk slash membership.