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Make Money While You Sleep, Or Work Until You Die [Part 1]

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Speaker 1 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.

Speaker 2 0:19
Welcome to Episode 228 of wealth talk. My name is Christian Rodwell membership director of wealth builders joined today by our founder, Mr. Kevin Whelan. Hi, Kevin. Hi, Chris.

Speaker 3 0:28
Good to be with you again. And what a fantastic response we had to what AAA offering. So more affordable, more accessible, and an absolute no brainer. Thrilled to be welcoming our new members into wealth builders.

Christian Rodwell 0:42
Absolutely. Couldn't agree more. Welcome to all of you. And we had a couple of great webinars last week. If you missed out, do head to wealth forward slash membership. And you can find out more details right there. All right, we've got a special edition today, Kevin. And we're going to be actually playing or replaying a recent interview that you did. So more of that in a moment. But we're also celebrating some other good news this week, which was passing the 10,000 votes, shall we say? What is it a petition financial signatures, that's the word I'm looking for 10,000 signatures. We're absolutely thrilled and delighted to see that. This is the petition that was created by Louise Hill, the founder of go, Henry. Yeah,

Speaker 3 1:22
that's right. Definitely wasn't out. But I know you've got your words mixed up with votes there. But we want to get it into Parliament, which is where the votes are really counted. So we've done that, obviously, they did the hard work, and we just did our bit to back the idea and many of our members have have been on signing the petition and getting their spouses to sign it and, and sending it on out on their social. So, you know, now we pass 10,000 or side set on 100,000. Because then it's debate and I'm gonna I'd be in that, where would I be? I'd be watching it live on telly. You know, the debate about getting financial literacy taught in schools once and for all, Chris, it's just a critical issue for so many different reasons. And some of those reasons are pulled out very well by James Vincent, who did the interview with me. So he did a great job. And I commend him for that. Actually.

Christian Rodwell 2:15
He did indeed, yes, absolutely. family wealth and children living to the age of 100 are topics that are covered in the conversation that we're going to be hearing in a few minutes. And James Vinson, he's an action coach, of course, couple of years ago, Kevin, you were on stage at the big event, that action coach hold. And there's about 1000 people in the audience that day, and that was really okay, well didn't have big losses on their

Unknown Speaker 2:38
main main main clear, balding lather. Yeah, she

Christian Rodwell 2:41
was, she was the compound, Isn't she so? So that was a great day. And you and James, were in a very nice London studio recording this interview. And we're going to actually break it up because it was quite long. So we're going to do part one today. And then we're going to play Part Two next week. But some of the things that I know you cover, we talked about family wealth, we're going to hear about obviously, the importance of generating recurring income, and there's only two types of income, you've got asset income, work income, going to be covering those. Why should people stay tuned, Kevin, what else they're gonna hear?

Speaker 3 3:10
Wow, I don't know. I mean, there's always something new and you get an insight into people and where they've come from. And again, James did a good job. In fact, James inspired me to do something similar. So using the same studio in London, which is really good quality studio, which we liked. I'm going to be running a series of new podcasts because not to use a view not to do that. But but to do some interviews myself, kind of deep dives into who they are, where did they come from? What did they do? Who did they serve? What were their big successes? What were their big mistakes? What was life like as a kid? What did they learn as a kid, you know, you get the idea. And I'm going to call that head to head with me being the head of wealth builders, and then interviewing somebody else who's the head of a business with whom we resonate. And we've got a couple lined up already, certainly we sell, because we love what go Henry are about, but it'd be really great, wouldn't it to find out what inspired her to create that? You know, how did she get going? They recently sold some of the shares as well. So what did they do? How did they do it? That's just great. Another one we've got lined up is Simon zushi, of the property investor network, who's doing a great job in the world of property, education, and I definitely resonate with him. And I've been a fan and a follower of Simon for many, many years now. And we'd love for you to suggest, you know, who would you like me to interview in the TV studio? Who would you like, you know, obviously, we try and get him. The bigger they are, the harder they are to get. But nonetheless, we'll do our damnedest. And of course we mentioned today, one of the best quotes from Warren Buffett, don't we which is you got to work or find a way to make money while you sleep otherwise Is your work till you die? And that's sort of almost calves Rule number one is find recurring income and what's Rule number two, don't trade time for money, find recurring income. So keep finding recurring income streams is that the key to all of this and we will not get Warren Buffett on the head to head uncertain of that. But we might get some other people. And we just love to hear from you as to who you think will be good to get some insights from so maybe we can reach out and ask people just to respond. And I will do that, Chris. Yeah,

Christian Rodwell 5:30
answers on an email to Hello at wealth is the fastest way to get in touch with us and our team. And if you'd like to see the video recording of today's episode, then you can head to wealth forward slash two to eight. And you'll see the video from that. And we can include the biz X recording also. So you can see that event. Just before we head to our interview, your interview Kevin with James Vinson as a real goodie. So looking forward to hearing this, we have to read out the review that we received this morning, Kevin, I'm going to do that right now it's on Trustpilot, you can head to Trustpilot go and check out the wealth builder reviews for yourself. But this was from one of our members who joined a year ago, and I'm going to read it out now. It's from Matt, who says I was introduced to wealth builders in 2022. After hearing Kevin being interviewed by Simon zushi talking about SAS pensions, and thought I liked the sound of this chap and the content of his message. After a little research, I decided to join the wealth builders Academy. And as an accountant, the financial world is familiar to me. But I was looking for some guidance and structure and a coherent plan for my long term financial security and accelerate leaving the day job. I can honestly say it was one of the best financial decisions I've ever made regarding my wealth building journey. And it has opened my eyes to opportunities and strategies, I'd either not considered or thought were not for me. I cannot speak highly enough of the integrity, the genuine care for people and the effective structure they provide to guide and support people on their road to financial security and financial independence. There is so much I could say about the benefits of being part of the wealth builders community, but the space won't allow. However, I will say one thing that might illustrate my trust and confidence in Kevin Christian and the team. And this is I have sat down with my two adult children who are 23 and 27 to explain the plan for the long term financial security of our family and told them that if anything happens to me one day, and I'm not around to guide them, they need to get on the phone to wealth builders, and they will be safe in their hands to provide the support and plan for their financial journeys. And their phones now have wealth builders on speed dial.

Speaker 3 7:52
That's amazing. There's nothing to say except to be humble, isn't it? And so how that epitomises everything well builds a backrest. So here's a long one. But you couldn't take a word out of that. It was so carefully thought through and elegantly written and we take our time to think out loud now. Matthew Smith for his contribution, it's definitely moving.

Speaker 2 8:15
Okay, let's head on over now to the conversation with James Vinson and Kevin Whalen.

Unknown Speaker 8:22
The first question what is wealth? Wealth

Speaker 3 8:25
is the ability to create certainty. When life is uncertain,

Speaker 4 8:31
I knew you were going to have something for that. Okay. So it's the ability to create certainty when life is uncertain. When

Speaker 3 8:37
you think about life and all the trials and tribulations that exist out there right now. Life is unpredictable, Life is uncertain, and life is being lived longer. Now, people are curing ageing, but we're getting older. And you know, I'm a granddad now for the second time. And what's shocked me and hopefully, we'll talk a little bit more about this, which is a good shock. But it's a bad shock, which is children born today can fully expect to live to 100 years of age, which means the old traditional models of education, work or business and then retirement or shore. So we have to completely change our mindset on how we go about creating streams of recurring income, which provide diversity and certainty. So that whether the stock market is up and down whether interest rates are up and down, whatever political persuasion, we have or is in power, we can be mildly irritated by the outcomes of those things we can't control. But what we can control is having multiple streams of continually recurring and repeating revenue, which serves two purposes. One it serves us as the pioneers as as the business owners, let's save our own wealth. But secondly, given the point I just made about children living into 100, we're gonna need to support them, we're going to need to provide that lasting wealth and that lasting income, to make sure that they have got the best chance of living the best possible life they can. And don't you believe that's a good thing?

Speaker 4 10:15
I don't believe it's a good thing. I mean, at the moment, I'm taken aback by your depth of answer, level of seriousness. Yeah, I've got this whole compassion, of this sensitivity about this. Children living to 100. Yeah. And the way we're thinking about wealth has changed.

Speaker 3 10:38
We're not changing our education system to reflect that. We

Speaker 4 10:42
are educating people right now, though, so we're not so well,

Speaker 3 10:45
you know, the, the erudite few who are paying attention will look at that. But every time I speak on stage or talk on a podcast, or present anywhere, I always talk about the purpose of recurring wealth is not just for us, it's a bit like the person who's willing to plant a tree for someone else to shade themselves from, because it won't be us. So I believe as the pioneer of my family's wealth, that I have that right and obligation, but not just to provide for my younger generation, but to provide for the generations to come and to come and to come after that. And that means stewardship, it means passing on means almost like a baton handover between one generation to the next. And that's not the same as most people think. Because if you go back generations, people didn't have much to leave. Now the baby boomers have got more money to leave, statistically, but they're quite private about their money. That's why so much inheritance taxes paid, there wouldn't be as much inheritance tax paid, if people were more upfront, more communicative, more collaborative in their style. And I think it's part of this old educational lockstep system of, you know, you go to school, everybody's at the same, you go to work, everybody's the same, and then you retire, and everybody's the same. But now we live life in transitions, we live life changing, changing, changing. And we have to be able to cope much more with the transitions that we see people go through. And our children today, including ourselves, will live through many, many more transitions. I think, Mr. Buffett said it well. If you don't find a way to make money while you sleep, you will work till you die. And that's the flip side of living 200. Because it's good, isn't it that people live longer, but it means you've got to support yourself for longer, which means probably for most people, unless they sought this out, as a whole family, the next generation of children will be the longest working children ever in history, they'll be working in their 70s, some of them will be working in their 80s. And their transition will be much much longer. Because they're living longer, and they won't have enough money to fund it. And that's my mission, my mission is not personal worth it any longer. It's to try and help those people who've got the best chance of being the pioneers of the future wealth, not just for themselves, but for the next generation as well. So I'm reaching out to parents, grandparents, business owners, because I've been through you know, my story a bit. I've been through a transition with my own father dying as a business owner, who made all the mistakes that he shouldn't have made. But he made them all the same, because he was a private individual. He was Mr. Superman thought he could do everything on his own. And you can't, and that's why I like to share so as to encourage collaboration, and openness and discussion. Not, I'm going to do this on my own. And that's why I reflect in respect of you guys, particularly the coaches and the coaching communities, because you're getting people to become open minded, that they can be helped. And that they should ask for help. Because collaboration is a much, it's a faster, safer, more enjoyable place to go through the transitions than it is to try and do it all on your own. And hope you can master the skills on your own, you just can't do it. So I love the opportunity to share. And hopefully just to give one person who's listening and insight that they do something different or better for their own family,

Speaker 4 14:19
Kevin very quickly. We've gone really deep, and I'm getting this sense of depth and wisdom from you. Alright, so I want to crack all of this open. There's so many things that you've said that we're going to touch into. I'm going to repeat something that you said here. I think I managed to capture it. I said it let me repeat. If you don't find a way of making money while you sleep, you will work till you die here. Did you say that?

Speaker 3 14:43
I did say that was Warren Buffett who said it not me. So I I take some credit for spotting and sharing it but it wasn't my original idea. Yeah,

Speaker 4 14:52
yeah. Good. And let's credit Warren Buffett on that. Let's bring Warren Buffett into the conversation. That's really good, isn't it? The other thing I got from what you said is Wealth is as a family. It's generation. It is this whole 100 years thing. I got thinking as you said it. I did a live this morning, you know, and I said, You've got to be grateful things. You know, when you're even eating an apple today, be grateful for the person that planted the trip.

Unknown Speaker 15:19
There's something in there. Of course,

Speaker 4 15:21
proximity is power. I said that this morning, I'm instantly relating that to what you've said here. Wealth as a family. Yeah, 100 years, we live in longer. Does retirement exist anymore. Retirement

Speaker 3 15:32
is a transition. And it's a state of mind. Because, you know, I mentioned it was lockstep everybody working together, the whole definition of retirement was this idea of retiring from something. In other words, you worked until you were no longer able to work. And then you stopped work. And then through some combination of government or company, on yourself, you're able to sustain a life beyond that. And traditionally, you didn't live long. I mean, my father died at 46. I never saw retirement, but so many others. If you go back a generation, they probably had a life expectancy of maybe 70. So they retired at 65 and died at 70. You know, five years in retirement is not much of a, you know, it's no retirement. We're living longer now. We're living healthier now. But we're living life sleepwalking, because we don't know how to fund that life. And the way you fund it, is not to have a basket of money, like a basket of eggs. Right? It's to have a recurring stream of golden geese, if you like, laying those eggs so that you capture them. And we can talk about what they are and why we arrange. We'll talk about what there's a finite number of what those things are, they

Speaker 4 16:51
will look, the student right now is with the Master, right? You've got me and I'm speaking on behalf of all of the listeners here as well. And I love it. I mean, you've got my attention. Streams are recurring income recurring wealth is not just for us, it's, it's for the years to come. Yep. And it's for my children as well. I'm a dad, I've got children. And if I don't find a way of making money whilst I'm sleeping, I'm going to work until I die. And that impacts will be there for the kids as well. So you've got me, that's a positive by the way, the student than the Master? Yeah. Will you help me become the master?

Speaker 3 17:26
Well, I can share as much knowledge as I've got for you then and anybody else to act upon that? No, I am. And then that takes them through. There are a number of principles I've written about in this whole idea of family wealth. When you go out there in the world, have a new mention the word wealth, let's say, you you get people think thinking about wealth managers, people who manage money, yeah, fund managers, advisors, the best person to manage money, the best person to influence money and therefore teach it to the next generation is you for most people don't take the time to absorb the right knowledge, which is not difficult, frankly, is understanding there's two types, only two types of income, work income and asset income. That's it, right. So principle number one is learned the difference between the two, which goes to the heart of what Buffett saying. So working comes trading time for money. You know this? Yeah, we talk about this with business owners classic Kiyosaki, and classic Kiyosaki. Of course it is. So trading time for money and a very easy way that I tend to articulate that it whether I'm speaking to a job owner or business owner, so okay, what are you earning? Or what are you drawing? Let's say we're having a trusted conversation. And let's say they say to me, 100,000 a year 50 could now 200 grand 100 Now, so you take the amount of money, they're earning your drawing divided by two, and that's their hourly rate. But there's a finite relationship between trading time for money because when you stop trading the time the money stops, yeah. So where's the wealth? Where's where's that recurring income that works? Whether you're alive or not, is whether you're working or

Speaker 4 19:10
not, is well for about recurring income. When it comes down. in financial terms,

Speaker 3 19:14
wealth is about recurring income. Yes. Now one could argue there are many aspects to wealth. There's wealth, freedom, freedom of time to enjoy spending time with the kids, which is health, which is health. That's a form of wealth. Well,

Speaker 4 19:27
time is a healthy balanced health healthy relationship. Yeah. With your children, spending time with the children. That's part of wealth, isn't it? It is part of it because the financial management of it it allows you to have that time it

Speaker 3 19:44
does if you if you think about that, and you decide to do that many wealthy people have created decided to create wealth, precisely because the reason the catalyst for them to overcome the inertia of doing what they were doing is to spend Time with a family. Yeah, well, how do you do that? Well, more often than not the way to do that is not get caught up in a construct of somebody else's employment, because then you can't do what you want to do when you want to do it. And that's part of the freedoms. So to me, wealth is freedom, expressed in a whole different way. Now, many business owners are under the illusion that because they've got a business, therefore, they're free of that time, but they're not they get trapped by the very fabric they constructed. Because they then get caught, and they don't have the time for holidays, they don't have the time for the freedom that perhaps was the original intention for them to get into. But then the business traps them, and they don't get out of that. So my biggest challenge for business owners is that so few business owners really generate wealth, from their business, they generate income from the business, yes, but not sustainable. If they weren't, they aren't recurring whilst they're sleeping, or even if they were dead. And this is the whole point. So the sleeping analogy is, when you're permanently asleep, you want the wealth to keep coming in, because you've created assets that generate the flow of income, whether you're alive or not, whether you're here or not, which is why it's important, isn't it to think about the stewardship idea of not just having entitled children who receive the money, the next generation spends the money in the next generation, I've got no money, as traditionally what happens, my idea and my principles, which is, as I said, I've written seven principles, and one of them was called passing on. Yeah. Which is how do you pass on the baton to the next generation, with incredible skill in stewardship, and that's through writing something called a family Charter, which creates the rules, once the wealth is built. But you've got to build in the first place, because that's the hardest part is that

Speaker 4 21:46
what Brad talks about in terms of creating the trust the family trust type thing? Probably,

Speaker 3 21:51
yeah, there's, there's obviously some similarity in language. And if you want to talk about trust, I'll go there, if you want.

Speaker 4 21:59
Just put a banner on it, you know, the, whatever your name that the family wealth, or whatever you want to call it, you gives it that and, you know, how do you pass it on with skill and steward stewardship, you said, you got to build it in the first place, but you got to build it in the first place. And here's the rules. Yeah.

Speaker 3 22:15
And then you got to teach it so that the children, the next generation absorb those lessons so that then they know what's going on, which is one of the principles I've got, which is participation. So you've got to get children involved at all ages, whether they're 515 25, or whatever, get them involved and participate in discussions, open discussions about money. And that's an important part. And children are sponges, you know, all of the habits that are formed in life are often the seeds of that start before the age of seven. So they're absorbing what you're saying and how you're thinking about it. Think about your own childhood and what language was being shared with you, you know, mine was like, money don't grow on trees, Kev, you know, or shut that door, the heats going out, use something good, but it was always about scarcity. And children pick up scarcity. So did you shake that off, shut that off when he died. And that's when I realised that I could not be in a position where I died at 46 years of age, and had a family which I didn't have at the time, but a family I'd intended to have, and put them in a situation where instead of moving forward to the family, the family went backwards. So when my dad died as a business owner, thinking he was Superman, he didn't have a will didn't have any life cover. So there was still a mortgage on the house didn't pay off. He didn't have a business succession plan, yet he had a good business. He was like an agent for naughty oil rig workers. So he's being paid by BP and Shell for recruiting workers that he was putting the workers in and he was getting a margin plus whatever he's doing for himself. So doing well, you could tell we were doing well, until we stopped doing well. And it's because he didn't put the things in place. So you know, the one of those principles of trusts is making sure things like wills are made, that you've got life cover in trust, then you start to put pensions aside and put them in trust. And you understand what a trust is, which most people don't? Well,

Speaker 4 24:20
we're going to talk about all of the pillars, all of the things to put in place, I think, is a bedrock for that. And you might have already said some of these, what are the big mistakes that people make when it comes down to recurring income, or wealth creation, sustainability for the

Speaker 3 24:38
first one not getting the understanding between work income and asset income? So they think income because they've got control over an income flow? Yeah, that's somehow because the income is flowing today. It will flow permanently. And it won't. It can't. We know we can

Unknown Speaker 24:57
love our matter of fact your eyes just So good,

Speaker 3 25:00
because every business has an exit strategy, even if you don't plan it. And most people don't plan it. So therefore the exit strategy is what happens when something goes wrong? Yeah. So the going wrong for most business owners is an expectation that my business is my pension. So I put all my eggs in the business basket, and then something happens to the business. Now, nobody wants to think that their business could be weak, when they feel strong. Nobody wants to feel that. But we've been around businesses long enough to know that businesses can be affected for all sorts of reasons that are not within your control. Just look at what happened with with COVID. Just look at what happened when all sorts of different disasters happen in business. So we know we're not in control. The big evidence of all of this is the number of businesses that successfully sell for wealthy money, let's say wealth money would be I'll put a number on it for the sake of just having a discussion. I'm not putting a number on wealth, because everybody's wealth is less of it. Yeah. So a recurring income of 2000 a month, if that's what you want is great. 10,000 a month is great. 20,000. I don't worry about the number, because you've chosen your freedom around that sustainable level of income.

Speaker 4 26:16
See, is one of the first things choosing the number. Choosing a number is one of the things Yeah, well, it helps it gives direction it does.

Unknown Speaker 26:23
It does

Speaker 4 26:24
that first time mean is that point number one, understand the difference between work work income and asset income. That's the first thing. And how does someone do that? What are the read what the what phrase the the playoff? What are the look into?

Speaker 3 26:42
Well, most people will will have heard or be introduced to the idea of words that they've heard like, which I don't agree with, by the way, like they hear the word passive and yes, nothing is passive. Yeah, it's in there. Everything needs to have some management of it, even if it's stewardship management, you need management, but they don't know how to get it. Because their activity in their skill set has been formed on creating a flow of work income. Yep. So you have to open your mind and open your eyes to something different. Now, where do you get that? Well, I call that a catalyst. So when people are doing what they're doing, from a wealth perspective, I say they're at rest. They're delivering a life, but they're at rescue from a wealth perspective. Now we know from old science, we know money's not taught in schools, but some sciences and one of those is Newton's law, which is an object at rest stays at rest, unless you move it. So who's the mover? Well, it's a book is a podcast like this? Yeah. It's a connection cast somebody? Yeah, a catalyst, a reason to overcome the inertia. So

Speaker 4 27:49
this gentleman named Alan Mills is in business, finance and strategies are amazing. And he says, it has some presentations sometimes. And he said, Put this on repeat. Keep listening to it until the penny drops, because it will get more complicated than this. Okay? And he's talking specifically about business, finance and managing the finances. We're talking here about working camassia income, wealth creation, over the lifetime creating recurring. Maybe the people love to listen to this repaired live for it to digest then and just have that time for personal reflection.

Speaker 3 28:25
You know, you mentioned Robert Kiyosaki, for example, brilliant. But you know, the number one lesson of Kiyosaki that when I ask people, what's the number one thing they take away? They don't take away the number one lesson that I took away, which is the reason why Robert Kiyosaki became wealthy wasn't because of anything other than he had a mentor, who's the rich dad. Without the mentor, the book is meaning fine, isn't it? I mean, so they get something else from it. And I got that, which means you need a mentor to open rich that your eyes there's a rich dad, without the rich dad, the book doesn't doesn't have any meaning whatsoever. It's like, your guy got a good education, went to university won't be became a university teacher, like his dad, and retired like he's dead, or didn't happen. And obviously, there's a lot more to it than that. But the principles are somebody in hell else needs to be the catalyst for you, and just receive it with open arms. And I have a little game I play, which is why some cheeky people say to me, Kevin, you look a bit like a wizard, old wizard. You know, like an old geezer who's been doing this for years. Why do you keep doing it? Gandalf?

Speaker 4 29:40
Do you want to be called Gandalf? Well, your hair's not long enough, but

Speaker 3 29:43
you get the point. You know, I could be something like that. Yeah. But I positioned myself as a guide to people. And when you are a guide, the reason you don't get bored is because there's one ROI that I seek every day. And I seek it every single day and you Only one relationship, which is our opportunity, which is Oh, and I, which is idea from a complete transformation in your wealth or somebody else's wealth. And I try and be that ROI for people, I mean, not in a forceful way, not in a way that self serving, I don't try and get people to buy things from me, just to try and give them a distinction if if invited to do so I don't force myself upon anybody ever. But if invited to and I get invited to a lot, I will give people a bait site. And I've got a CAT scan brain. That means if I sit down with somebody, for 30 minutes and a cup of coffee, I can diagnose their financial health, and give them at least three things that they can do to immediately improve their wealth position by non so you do a CAT scan, I do a CAT scan. Yeah, it

Speaker 4 30:52
should be called an ROI scan, a relationship opportunity ideas.

Speaker 3 30:57
Yeah, you know, it's a, it's a financial gap like brain, really, I'm not qualified as a doctor. But I've been around finance for long enough to consider myself an expert in many things. And of course, I'm humble enough to accept the expertise of people that I met who got knowledge way beyond me in certain specific areas that I think I need to call on. And that's an important part of what I do. So I'm a, I'm a creator of ideas, and principles. And hopefully, we'll talk some of those principles, because they're mine. And I share things that I've learned from other people or connections that I think would be useful for somebody else. And that's why I'm always looking for new people to talk to go, that would be interesting for them to meet Fred, or Joe or Harry, or Harriet doesn't really matter. It just allows me to be thinking about, wow, that could help somebody else there and be that connector as well. So

Speaker 4 31:51
there's certainly a directness and intensity about the way that you communicate in here. And it's a, it's needed. Because this is so important. I think it is. So biggest mistakes, not understanding work income, asset income. Yep. Anything else?

Speaker 3 32:07
Well, let's deal with that. Why don't we deal with that? Because that's the elephant in the room. Well, what are they gone? Right? Because in order to build asset income, you got to know what the assets are. And the fantastic news is, there are only seven? Yeah, the seven pillars, as you put there are no more than seven. Yeah, I've gotten written down here. And you don't have to know all seven. You just have to be able to create enough income from enough of them to give you the level of asset income that

Speaker 4 32:33
you want. So just for the listeners, yeah. In summary, there's only seven assets seven, only seven types of assets. Yeah, they're all more heavy. I just rattle them off. I've got them written down here.

Speaker 3 32:42
So let's deal with the mistake or three isn't there? Right. So most people in life have got an asset somewhere in their life. But it's under utilised. It's not working. It's like, you know, it's, it's sort of the engine isn't really performing. So most people gotta house. They live in house. But it doesn't create income? No, it could, in so many different ways. Right? There are many, many ways you could create income, you could rent a room for 7000 a year tax free, you could refinance it and use that money to go buy other assets that you could earn, you could one of our clients created an annex, because she lives near Heathrow Airport needed some money. What did you do create an annex, and now it's the airline pilots and the airline workers that stay there, she didn't do anything, she just provides accommodation. So your, your home and the space around you is a potential assets. So all these assets are potential. So they're called latent latent as in the fires, pilot lights there. You've got to ignite it, or you can ignite it. Number one, then is why call that home capacity, the capacity in your home. Yep, is number one. Most people have got one of those, but they don't use it as an engineer. They don't need time they ever use it as a wealth creation tools when they get old. Got it. And they go, Oh, I'll some exploitive can't afford to live now. Oh, so what am I going to do? I'm going to downsize through. And that's what happens, or they or they raise equity from now. So they do too late, because they don't learn any lessons in the time. So they just do when they're late. And when they're old and they've got no choice. The second is most people have got some form of pension. And pension is designed traditionally, to be a form of original pensions were a form of income, replacement low wages after you'd stopped working. Yes. It was not true anymore. It used to be you got a state pension, which is now 66 can move to 67 gonna move to 6800 and you know, it's gonna get for our 100 year old children at bat. Yeah, definitely. No government can afford it. I'm not being politically it's just mathematically the case. You know, from a macroeconomic point of view, no government can afford that. So the state pension can't work. Traditionally, then, in the old lockstep the employer used to provide a pension, called a final salary pension, you just got the income, you didn't have to think about it, they paid you don't exist anymore. For an elite few public sector, they get them. Everybody else doesn't get them. The elites are like that. Yeah. So what it means then, is most people have got only one option, which is to put some money, and some employers money into the stock market, which they don't understand how it works. So they just hope that one day someday, there's going to be a big enough money in the pot. But then when they get there, they don't know how to exchange the pot for income. Right. And the way I think about that is retirement income is like, going on holiday, you've got to know the exchange rate. When you go on holiday, yeah, you can't buy Bart, or Florens, or euros or dollars, unless you know what, what am I going to get for that? Most people have no clue. So they're taking risks they don't understand. And they're hoping that one day will give them enough evidence. Now when you know, when you the average retirement pot that people have in this country, when they add the state pension and the pension pot together is about 15,000 a year. Okay, so the average person, this country, if they don't find a catalyst will get about 15 grand a year. Right, some will get less, but that's the average. So they don't know how to do that. So the key is learning how you convert that money and how to grow that money more effectively. Yeah. And one of those lessons is just learn how the stock market works, or learn some different things you can do with your pension. And that's another story. The third is most people got some savings, right? They got money, cash, they got some money in ISIS. Same problem. They're parking their money in a way they don't understand. You know, most people have got money and cashed on what interest rate they're getting, could they get better? Could they get worse? It's not designed to maximise what it is more now mean? Up until when gonna get hardly anything for savings. Now, you get 6.2% in national savings at the minute, is that hardly anything, that's better than that's a lot, you know, so you got to be on top of this, two years ago would have been like 1%. Now 6%. But if you don't know that, you're not keeping on top of money. And that's what I find most people not doing. So in the house, then in the pension and in the investments they've got, everything is under par. Everything is underperforming. And as a result, no chance of becoming financially independent. financially independent, then, is having enough recurring income to live the life that you want without compromise, whatever that figure is. Okay, so let's pick a number for the sake of it. All right, if the average income was 15, grand, but most people in my community I talked to we'd like 100 grand. Yep, that's a hell of a grand off. That's a hell of a gap. Right. So how do you bridge that gap? Well, you have to learn what the other assets are, how to move this. How to move that in number one. Number two, what are the other assets because you can't build wealth in your home your pension your investments unless you do something where most people delegate that money? The house? Yeah, not moving pension, somebody else's got it. The investments in institutions got it. Yep. The four ways that you can be a value creator, right on someone who's adding value, which means you've got to learn something, which means that you've got to be educated, which means you've got to be open minded to being supported so that you can't learn it on your own. This is a value created value creator. And there are four ways to do that. So we've gone on to three can't work. Four or 567 are the ones to come.

Speaker 1 38:55
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Episode summary

Kevin Whelan was recently a guest on James Vincent’s Business Excellence podcast, where he discussed the importance of creating wealth that can sustain future generations.

This is part 1 of the interview, where Kevin emphasises the need for recurring income and highlights the misconception that owning a business guarantees freedom.

He encourages individuals to understand the difference between work income and asset income and to prioritise financial education so that you can build a recurring income that works even when you are not actively working.

Resources mentioned in this episode