With the average age of a first time buyer being 37, rising interest rates and the current cost of living crisis, most people live a life of scarcity and uncertainty. We at WealthBuilders want to help stop people from falling into that trap. Wealth building is about taking small, consistent steps every single month. An important part of building wealth is sharing your knowledge and there is no better person to share your knowledge with than your children. Unfortunately, most parents are following an old, outdated imprint and are not equipping their children with the correct skills to build wealth. Tune in to hear Kevin and Christian dispel the myths that just seem to get accepted around building wealth and why you should be equipping your children with the correct skills to build their wealth, regardless of their age.
With the average age of a first time buyer being 37, rising interest rates and the current cost of living crisis, most people live a life of scarcity and uncertainty. We at WealthBuilders want to help stop people from falling into that trap. Wealth building is about taking small, consistent steps every single month.
An important part of building wealth is sharing your knowledge and there is no better person to share your knowledge with than your children. Unfortunately, most parents are following an old, outdated imprint and are not equipping their children with the correct skills to build wealth.
Tune in to hear Kevin and Christian dispel the myths that just seem to get accepted around building wealth and why you should be equipping your children with the correct skills to build their wealth, regardless of their age.
Resources Mentioned In This Episode:
>> TED Talk - Sir Ken Robinson: Do Schools Kill Creativity?
>> Register your interest in WealthBuilders for Families
>> Join the WealthBuilders Community
>> Register for the FREE Live Academy Webinar
>> Join the WealthBuilders Academy
>> REGISTER HERE FOR FREE RESOURCES ACCESS
If you have been enjoying listening to WealthTalk - Please Leave Us A Review!
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 178 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. Hello, Kevin.
Unknown Speaker 0:28
Hello, good. Good to be with you again on this festive day.
Christian Rodwell 0:32
Yes, it is indeed only less than two weeks until Christmas now and this will be our last podcast episode of 2022.
Unknown Speaker 0:41
When we put it up there you thought you were going to say this is our last podcast ever?
Christian Rodwell 0:46
No way
Unknown Speaker 0:46
me nervous crews come on?
Christian Rodwell 0:49
Not at all. I think we're nearly at our four year anniversary, which early next year, so no, we're not stopping anytime soon. And once again, thank you to everyone listening, who has supported us throughout this year and left us very kind feedback reviews and comments. We really, really appreciate it by the
Unknown Speaker 1:06
way is Christmas is the season of goodwill. If you've been enjoying the podcast, and I meet people, you know, and they say, I'm loving the podcast. So where's my review, you know, so take the time, just do a little review. If you like it, if you don't like it tell us personally and we'll change it for you. But if you are liking the content, the challenge with it, of course, Chris has a bit of a random walk around the whole wealth story, which means you can't use the podcast as a strategic way to build your wealth. But it is a kind of an into a nice little interlude, isn't it from time to time, just to see what the old geezer and the young geezer are talking about. And if they've got any guests worth listening to today to the ramblings of an old man,
Christian Rodwell 1:48
hopefully a little bit more than that. I know, we often get feedback saying, you know, absolutely loving the podcast, been bingeing it. And I've been executing everything that you guys are talking about. So. So hopefully, we're spreading a little bit of magic dust out there to help people build more wealth. But today, we are talking about keeping it in the family. And yeah, we're just going to have a little discussion. And it's kind of a bit of a prelude, because we've talked about wealth builders, for families, but we are ever so close now to having that programme ready. And that will be delivered early part of next year?
Unknown Speaker 2:21
Well, look is we all know, this is the time, you know, for being with families. And interestingly enough, you know, I'm going to be a granddad for the second time. And my middle son has just popped the question in New York. So he'll be arriving anytime soon, actually. So that's all good news. And that's wonderful, isn't it when you're, your family are changing and growing around you. But it made me think, and I posted recently, Chris, about, you know, the real challenge for our young people, the real mix, almost like a deathly mix of of things that are working against them to create their wealth. And, you know, consider myself fortunate, as a baby boomer, that many things were kind of lined up to help us, you know, across the piece, you have big final salary schemes for many jobs for life to create that security. All of those things were there not that I followed that path. Of course it didn't. But for many people, they became financially secure and maybe even independent, without having to do much without having to learn much without having to participate much in their own wealth building journey. That can't be the case now, you know, so I want to dive into those things a bit to try and help parents think, because the big challenge is if the all the deck is stacked up against our younger people, and we'll talk about that, who's going to unstack the deck. You know, in the end, does it end up being bank of Mum and Dad, do we always come to the rescue with the bank account? You know, or are there other alternatives and I want to advocate that there are some lessons to be learned some myths to be dispelled and I want to almost unwavering magic wand if you like to dispel myths that really make my blood boil, and help parents to learn what to do to be a good steward for the next generation rather than let the kids learn the lessons that they perhaps didn't learn because they didn't need to learn them. So maybe we can dive into that. So it's always a it's always interesting dispelling myths and kind of working out how did that even get to be accepted as a home truth, when in fact, it's an old wives tale. So let's get into that, Chris.
Christian Rodwell 4:48
Yeah, and of course, in the last 10 years, the onset of social media, which is a double edged sword, there's obviously great aspects to that in terms of being able to spread it information much more freely and easily. But of course, not all of that information is correct. And so the younger generation, they're going to pick it up from somewhere, right? And often, they might be picking up things, which, as you say, are more myths and actually not backed by solid principles.
Unknown Speaker 5:15
Well, yeah, that's that's a great point, Chris, because wealth builders, you know, I do my best to work on principles. I don't try and give opinions, I'm not trying to be controversial. From an opinions point of view. I'm willing to be willing to discuss it with anybody who tried a different view. But, but I think the problem with social media for me is not that the myths get compounded, which they do. But it's the fact that we're living in comparison economics now. So it's so easy to see the apparent success of people when you're comparing yourself to other people. And that comparison, leads to many psychological actions. And we see it in our wealth builder journey, Chris, we see some people start the journey, and others get a quick start, you know, they find an easy strategy that works for them, it clicks pretty much straight away. Those people who click straight away, they're posting on there, they're saying, This is my next property, this is my next business, this is my next investment. They're doing things. And some people who aren't getting there as quickly, feel bad. There's an emotion attached to that journey. And, you know, we try and help that by having coaching calls every single month, and encouraging people to show up because the wealth building journey is not one that you can follow with milestones that just simply roll on, you know, you sometimes you got to wait, and particularly the beginning and your annual journey you put away many months at the beginning. Because you're learning things, you're discovering things, you know, you've got to get to a place where you can find your flow. And for many of us, we've been educated out of flow. So in other words, you know, there's a absolutely fantastic TED talk, you know, I could not rave enough about it. And maybe you could put a link to it in the show notes, Chris, which is Sir Ken Robinson, I mean, it's probably the most listened to TED Talk almost in history, I think our man is amazing. And the principle of the lesson in the TED Talk, is that the school system has educated the creativity out of our kids. In other words, creativity isn't valued highly. But wealth building is about creativity. And I think what happens then, is when the lack of creativity occurs, and the old wives tale set in, people start to believe I can't, I'm too old. I'm too young. I haven't got enough money to get started. I haven't got enough time to get started. You and I've heard this 1000s and 1000s of times, and all of them are a fallacy. Because wealth building is by taking small, consistent steps every single month. So you have to do and everybody can make one step. And if you can make one step, you can make a second step. But hey, I'm not gonna go down that path today. I want to get to the myths, Chris. Right. And the myths that just seem to get accepted. As you know, this is true. And it's absolutely not true.
Christian Rodwell 8:41
Okay. Right. Where should we begin then?
Unknown Speaker 8:45
Well, I think we should begin with the idea that, well, for example, let's begin with the idea that, you know, you should buy and hold money in the stock market to retire. Right? So this whole idea of saving money as soon as you can to build a nest egg to then draw an income in retirement is a complete myth. Because it doesn't work. And the reason it doesn't work, is because there is no responsibility, no creativity, no participation, by anybody on that journey. The only thing that's happening is a product has been created, the product has been sold, and the product is perpetuated in fees. That keeps a hugely profitable financial industry. It's an industry it's huge. That perpetuates this myth that you should just your buy and hold diversified stocks and hope for the best. It's kind of the call of the buy and hold strategy. And I think it will be better named it was the buy hold and hope strategy, because the challenge is, you can't wait to build a pot. Because when you get a pot, let's say you got a reasonable pot, most people don't get more than COVID million, because they start later, or younger people are starting work later, you know, historically, getting a university degree was a guarantee of a job. Now it isn't, you need an MA. And then you know, you're wanting 50 people trying to get the same job. So while there's a shortage of jobs, there are still a dearth of jobs for our graduates, you know, it's it's getting tougher and tougher and tougher. And then there's the student debt. You know, so I went to university didn't pay for it. And consequently, that was not a handbrake on my wealth, if you see what I mean, I didn't have to make those payments. But of course, student debt is part of life now. And often people coming out of university with 50 grand in debt that so that's a lead weight around you a shackle, isn't it round your leg before you even get started. And then what do you do, you're not you're joining, you do get a job, and then you put some money in a pension, you don't know why you just told them you do. So you put some money in, and you just default your way into putting money into a pot, you have no idea of what it's doing, you've got no idea how to make it improve, you've got no creativity of your own in play. And then you move to another job in the future. And then you leave these disparate pots, maybe sometimes you might consolidate them. But the same problem exists, that it's a challenge to build up paths. And increasingly, you know, the participation rates. In other words, the number of young people who are actually participating in the pensions getting less. And that's one of the reasons why the government's forced it. They've forced the hand of the employee to actually pay into their own pension and, and then they think, Oh, well, the government's paying or the government's encouraging me, the my employers paying a bit, and I'm paying a bit I should be alright. But they don't do the maths. So you save your way you get to a distance, some call it half a million just for a number, which is a big number for most people. Well, what what, what, what then? Right, so you get to 60. And you got half a million quid. Now, by the way, I'm ranting, I know. But hey, you know, hopefully, you can draw the threads of this together. What do you reckon the average age of first time buyers now? Chris?
Christian Rodwell 12:37
Well, late 30s, I would guess
Unknown Speaker 12:39
Yeah. 37. So so the average age first time buyers 37. Right, cross a living crisis interest rates? Hi, what do you think they're going to do with their mortgage? Or they're gonna go 20 years? Gonna go? Kev, you've written a book called Save a fortune? How to completely eliminate your mortgage fast? Right? I've paid mine off in seven, or they're going to pay their mortgage off and seven? No, they're going to take on their mortgage. 30 years, 40 years. Right? So they're still going to be paying mortgage in their 70s? Most. Now, what can they do about that? Well, it's difficult unless you're thinking through the cost of this. And then okay, so you pay your mortgage off at 60. Say, and then you've so you've got another expense, and then you got a pot of half million quid. And then all of your life, then you've been working hard, you get to 60. And you've now got to create a life of certainty from an asset that's fundamentally uncertain. But because is the stock market? Certain? Not? Does it give us the predictable income? It doesn't, you know, you're investing in companies, but most people are investing in default funds. And for many of them, those funds switch to cash as they get older. For for the for the reason that they would build the products, you know, this is the thing more often than not, these are products built for compliance and for profit, not to try and help people build their wealth. So I think there's a misalignment between the objectives of the people selling or putting together this to make a wealthy profit getting paid year in, year out, year in, year out whether the market goes up or down. You know, and always getting paid before you get paid is just a tragic waste of an understanding. And more often than not, the advisors will say, you know, you've got 40 million quid you've done well, you'll get 4% on your money. But it isn't 4% on money. It's they suggest you take 4% 20 grand right half a million gives you 20 grand. Well, that's not a lifestyle. That for many would be a worthwhile aspiration more often. Not it's a cut dramatically in income. And but it's not a 4% guarantee. It's well, what if you get a stock market crash? How do you recover from that if you get a 50%, stock market crash, you need 100% on your money just to get back to where you were before. So there's no magical compounding. There's no risk mitigation. So as a consequence, I think most people live a life of scarcity and uncertainty. And I think that's a tragedy. And I would like to do my best to help people understand that, and to not fall into that trap, not fall into the myth that says you should buy and hold and wait, and everything's going to be okay. Because it isn't, because the big rubber here is not the financial fees. Although that's don't get me on that soapbox on the fees. The big rubber is the creativity. So when when younger people don't participate in their own wealth, they don't learn anything. And all of that wasted education, all of that potential knowledge that's created around them, is not shared. Because most parents are following an old imprint. They're following the final salary imprint. They're following the imprint of the past. And they're not equipping their children of all ages, you know, whether they're eight or 28, and not equipping them with skills. So what I'd like to do is encourage parents to secure their own oxygen mask first job, but then to help their kids or be prepared to think about how they could help them and and what builders for families will be deliberately designed to cater for parents who've got children of any age, including all these like me with, you know, kids getting married, and kids having babies, you know, and, and so I'll give you a, a breather to interject with my ramblings. But you get the point, Chris, it's just it's not stacked up for wealth at the moment.
Christian Rodwell 17:07
Ya know, I'll let you pause and take a sip. But I mean, it's a controversial view, right, that you make there about the stock market. So it will possibly be listeners now who say, Well, I've invested in the markets, you know, it's done me well, and I've built wealth through the market. So we're talking about diversification, wealth builders, is built on the Seven Pillars principle there, that there are seven different asset classes, investments being one of those. So where do investments sit, they do have a place in wealth building,
Unknown Speaker 17:37
they do have a place, but I'm saying Christo, thank you, thank you for the sort of mediation of my tone there. But it's not about me saying the stock market doesn't have a place. I mean, you think about what stock market is, it's a marketplace where businesses offer you a share in the value of their company. Now, historically, I mean, that that came from the industrial age, you know, so as a massive movement in wealth, in terms of epoch or changes, you know, things that fundamentally shift, an epoch, an era, a complete change, from landed gentry, to industrialists. And that's what happened, you know, in the UK, were a powerhouse for that. And then, there was a transition from industrialists to shareholders. And we became a nation of shareholders and homeowners. And I think that's great. And I genuinely do think the stock market originally was was fantastic, because it gave you a share of value. So you could look at companies and say, I like what that company does. And I'd like to participate in its value. And of course, if you choose well, and you choose diversity, there's nothing wrong with the principle of buying valuable companies. I mean, that's what Warren Buffett does, and his entire business is based on that philosophy. However, most people don't buy for value. They buy in default funds, they buy into funds that they don't know what's going on, they didn't choose the company that didn't choose the dividend. It didn't choose anything in particular, they didn't choose something that was aligned with their own personal preferences, whether they were in favour of environmental friendly things, whether they're in favour of green energy, whether they're in favour of electric cars, nobody's investing, or very few people are investing in line with their principles. They're in the investing in line with a default view, where that view is being created by somebody else for making profit. Okay, so I think, you know, it's not that the stock market is bad, but historically, Chris, you know, there was an epochal change there as well. Originally, you know, lots of changes that people may not know about, but, you know, we moved to look to two massive ones fundamentally big stuff, but maybe isn't thought about number one. We came off the gold standard in the 70s. Okay, when our currency was linked to the amount of gold that we had, as soon as you move from gold back to fiat currency, then everything is about sentiment, everything is about quantitive easing, you know, we have no control over the value of our money. And we saw that massively, didn't we, in recent political uncertainties, we saw the pound plummet. Now, when the pound plummets, that affects the buying power of your money, not just in the UK, but abroad. But if you think about retirement is a journey where the destination is retirement land, and then you need a currency to buy your life beyond that. Nobody knows their exchange rate, they don't know how much am I going to get for the money I've saved in my pension, because there's no link to value anymore. It's all linked to sentiment. So sentiment drives everything now. So fiat currency sentiment, shares now on sentiment, it used to be a share was share a value. Now, it's just a share price, and the price becomes everything. So I think investment in the stock market can be done, but can be done well. And it can be done by understanding that income can flow from investments in the stock market, if you choose the stocks, well, it also means you can put in risk mitigation techniques, because the other myth then in the stock market is just just hold on, you know, just roll the dice. Well, I don't know about you, Chris. But you know, as soon as you use the word, roll the dice, go again, you know, roll your gains, there's no compounding then taking place. Because you can lose as quickly as you can gain. So where you can only compound when something adds on top of something else. So I hear people saying, well, I invest in the stock market because it compounds over time. Now it doesn't things only compound if they add value upon value upon value on value. So the concept of compound interest I get, because you earn interest, you don't lose the interest, you earn interest, you don't lose the interest, you earn more interest. That's compound interest. There's no compounding and stock market. The only compounding going on fact in the stock market is the compounding of the fees being charged, which are paid year in year out year in, year out irrespective of whether the market works or not. So I think there's a there's a gap in knowledge that we're trying to bridge and get people to participate in stock market for sure. But to do it in line with their own DNA, with who they are as a person who's their wealth dynamic. What do they feel where its value coming in the world? We saw you interviewed Andrew Craig recently, did you not? Yes, that's right. Yes. And he had a view. And that's an interesting view. I'm not saying it's a it's the right or wrong view for anybody. But it's a view, you know, invest in the whole world. For one, he's got a big view about biotech, and that it's in the end, what comes to our rescue is the creativity of people, you know, finding solutions to things. So this circles me back exactly. To Ken Robinson, which is creativity, Chris has been educated out of us all, we don't want to be wrong, you know. So therefore, we take solace in the old wives tales that we've been told are true, when in fact are untrue. And I want to bring creativity back into wealth building creativity of the parents showing, not teaching because, like, what, why don't they teach us in school? Why? Because teachers haven't learned that lesson. You know, they're still part of the old pattern on the no disrespect intended to teachers. You know, I don't disrespect anybody for the career choice they make. But a teacher is not living a programme of building wealth in the stock market, they're living a programme of a final salary pension. And that's great, you know, because that can give you security. But the kids are not going to be teachers. So the teachers are not well equipped, because they haven't learned the lesson of the difference between trading time for money and a pension, and building wealth through creativity and building wealth through the ownership of assets. So the best people to teach are the parents. But often the parents need to learn some new lessons. And part of the whole wealth builder philosophy, the new lessons, Chris, is to get the parents to begin to think about a new epoch for themselves a new chapter for themselves. So in stage one of the wealth builder journey and Academy, tell people what we do, Chris, as far as the family wealth name is concerned,
Christian Rodwell 24:34
yes. So we get people thinking about their family wealth, name, their family wealth business, and that includes really sitting down with everybody around the table and discussing names that are meaningful memories, and creating a logo creating a name that everyone is involved in, and we've seen such an array from children's hand prints to the family dog, you know, in coats of arms and all sorts of wonderful logos there, but it really brings it to life. You know, it makes it something that everybody's connected to, and meaningful. And, and that's what drives it on and really creating that legacy.
Unknown Speaker 25:10
Yeah. So if you're a parent, you, if you're, you're listening now, then you got the chance to be a pioneer of a new generation of wealthy people in your family. And I mean this in the spirit of wealth, true wealth, which is, you know, responsible, mature, sharing, giving, all of those emotions, all of those those very important qualities that are needed. It's not selfishness, it's selflessness. It's how do you create more value for others. And this is all part of the wealth builder principles, the Declaration of Independence, for example, encapsulates those. So we want to try and lead that thought process of creating the family wealth business, and then creating the concept of stewardship, because stewardship is the opposite of selfishness. Stewardship says, I don't own this, I'm just taking care of it for the next generation, that stewardship, it means you believe that your role is not selfish wealth. That's another one, I won't get into that biblical one. But money is the root of all evil. And we've heard that one before, right. And, of course, that wasn't what was said by Paul, it was money, or the love of money is the root of all evil. But money is just an idea. And an idea is a representation of you. So if you have more money, you'd be the same person. So you know, all money is just just an idea. So let's take the idea and say, Well, how do we build a fantastic family experience? And how do we build a principle of giving and sharing and growing and involving our children, or whatever age they are, so they can participate in seeing things, and you can learn some new things about how you could do that. So that in the future, whatever you call your family, wealth business, and I just love the names, and let's love how they come up with them was wonderful. I was talking to a guy just a couple of days ago, and talking about this very concept. And I said and I'd like you to think about so God already. So what do you mean, you got already and there's a New Zealand I can't remember the name now. But he's, he's a kiwi guy. And the name was just instantly there. And it meant good fortune, you know, as a kid, whatever it is, I come up with the name exactly. But that was his name, not my name. Right. So So you know, minds, wealth builders together with a clasping hands, the five clasping hands around the outside of the circle. And yours being what well being right. So all of these things are, are deeply personal and not for judgement. But the benefit there is you're creating the stewardship idea. So do you want to trigger for another myth? Okay, Am I alright, I think I'm ranting a bit today.
Christian Rodwell 28:05
Let's squeeze one more in then Yeah, more in? Yes.
Unknown Speaker 28:09
Well, look, increasingly, we're seeing the biggest growth in the bank. As a new bank and UK it's rapidly approaching huge datas. And it's the Bank of mum and dad. And the Bank of mum and dad are coming to the rescue in all sorts of ways as the baby boomers who've got some wealth, pass some of that on, but I think there's a there's a principle here and it's an interest, one's going to be a controversial one quiz. So I make no apology for this one. Often. When we talk about the legacy, I write a piece about the Bank of mum and dad, okay, and, and what you can do about it and how you can be a bank and be it well, but it all comes from the point of stewardship. So whether you provide money while you're alive, most people don't. They provide money when they pass. And without the use of trusts and without the use of wisdom, money gets distributed. And then money gets dispelled, and then the value gets destroyed. That's what happens is built in to the very fabric of pretty much all the major Western economies in other words, shirtsleeves to shirtsleeves and three generations clogs to clogs and three generations, somebody wise builds the money, the next generation enjoy the money, the next ones, don't see any link between how the money was created or the values that were used to create it. And the money gets completely used up consumed. And and I think that's a principle that's not correct. I think a better principle to think about anyway, is to think about, it's not what you leave your kids what you leave with. No, it's principles of teachings. It's principles of values, that if you can teach Some wise things. And so we're building a stewardship fund in Rodwell being in wealth builders together in way Mari it might be even I think the name, but whatever the name was, it's your family, crest, your family name. And you're building that not to support just you not to support your direct kids, but the kids of the kids and the kids of the kids and the kids of the kids. In other words, like the big families did in America, the Rockefellers, for example. You create a an institutional process now. And it doesn't have to be massively multi multi multi millions, it can be hundreds of 1000s. And most people have got that now just with property values, that the wealth can be protected through the use of trusts and then rules of engagement, which I call a family charter. And we can help you write a family charter. And that charter will set the rules where those rules allow money to be given. Right. So for example, money on weddings, money on babies, we buy a new car for anyone who's got a baby, because they always need that extra space in there and so on. Anyway, you create your own rules, give you some guidance on that. But in addition to that, it's also about giving back. So if you want to set up a business, you can borrow the money from the trust to set the business up, but you pay back. So it's not a gift. It's it's an endowment of the values. And that's what I think, is critical. That's what I think should be done. And the myth then of just leaving a great legacy, what does that mean? I think leaving a great stewardship is a much better concept. So anyway, spirit of goodwill and all that, Chris, I'm looking forward to the festive period. I know that you've got a massive family so how were you sharing your Christmas this year,
Christian Rodwell 32:03
I'm actually doing some volunteering on Christmas Day. So I'll be helping people enjoy their family Christmas Well, no family but those without a family having
Unknown Speaker 32:13
four I applaud you for that and and you know that again, shows such some great values giving of yourself and hopefully you have a great one. And let's wish all of our listeners a fantastic festive period as well wherever they are in the in the world, and whatever their religion so hope you just enjoy the celebrations and we'll be back with a bang in 2023. For 179
Christian Rodwell 32:43
year, we'll take a couple of weeks off over Christmas to just enjoy ourselves recharge the batteries, and we advise that you will do the same to. So once again, thank you so much for your support for your ears this year listening to us, and we very much look forward to continuing the journey with you. In 2023. Kevin, we'll be back. Same time, same place next year
Unknown Speaker 33:05
until 2023 My friend so yeah.
Unknown Speaker 33:10
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/membership right now for free access. That's wealth builders.co.uk/membership
Transcribed by https://otter.ai