WealthTalk - money, wealth and personal finance.

WT008: Protecting Your Assets [The Roof]

Episode Summary

In today’s episode Kevin & Christian talk about the roof that sits upon the 7 pillars which were discussed in Episode 007, and the Foundation discussed in Episode 004 [D.E.B.I.T.S]. The roof consists of a few protective documents which for a few hundred pounds to put in place - will ensure that your assets are protected and ‘watertight’, and ensure you are not leaving family members or business partners with potentially difficult and unpleasant situations to have to deal with after you pass on.

Episode Notes

In this episode of WealthTalk, Christian and Kevin discuss:

Links and a full transcription of this episode can be found at www.wealthbuilders.co.uk/wealthtalk

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Episode Transcription

Chris Rodwell: Hello. Welcome back to another episode of Wealth Talk. I'm Christian Rodwell, membership director for wealth builders and joined by the founder Mr. Kevin Whelan. Hello Kevin.

Kevin Whelan: Hi Chris. Good to talk to you again in episode nine I believe.

Chris Rodwell: We are racing through these and thank you, everyone for your feedback, your comments, reviews on iTunes. Really appreciate it. We are starting to spread across the Internet now. Wealth Talk is popping up all over the place, Kevin. We're now on Spotify.

Kevin Whelan: Oh yes.

Chris Rodwell: And many of the other popular podcasting apps. So today, before we get stuck into it, should we recap where we've been so far?

Kevin Whelan: I think so. Why don't you do that?

Chris Rodwell: So we have covered a number of things in the first eight episodes, but if we think about the Wealth Builder's logo, there's a structure there. The foundation, which is debits, which we covered in episode four. Then we did an overview of the seven pillars or the seven different assets that can be used to build wealth.

Kevin Whelan: And the interesting about that, Chris, is the seven ways to build wealth is only seven. So you know, if there are only seven, it's quite an easy science to learn. So the good thing to get really clear is these steps or principles, they're not opinions. Maybe thing we're talking about now is something that would apply with you in the UK, the US, Canada, Germany, anywhere in the world, which is great to see that some of the podcasts have been picked up in those different places for it. But anyway, I was stealing your flow.

Chris Rodwell: No, it's okay. Well I only have the roof to pop on the top and we covered that in the last episode.

Kevin Whelan: Right. The roof's really important. It's the often, it's the bit that busy people, you know, and I suppose the most popular thing that comes out of this, and I've had a few people saying how grateful they are that they're listening to the podcast, when they're doing their crossfit. Somebody else said they've got a two hour commute. Can you believe that? Two hours each way, unpaid time, like half a day unpaid. But at least he gets listened to, you know, many different podcasts. So there's a bit of leverage of their time there. So it's great to see all that time is being used. However, the thing that business owners and very busy people fail to do is take care of the things that are a little bit unpleasant to think about, which is their death, you know, things going wrong and taking care of paperwork, which is usually the last on the list. So having a watertight roof, really, really important.

Chris Rodwell: Yeah. And we went into this a bit more detail about that in episode eight. So if you didn't check out episode eight, have a listen to that one after you finished with this episode. And back in an earlier episode, we also looked at the five levels of wealth because ultimately, are we not all searching for a life where we have more freedom? A lifestyle that we desire and when we understand what the financial number is that's required for us to live that kind of life. Then we can start implementing all of the things that we've been talking about.

Kevin Whelan: Well, this is where it all joins up together and we talk about, you know, Wealth Builders as a place where you go to learn a step by step process, and it is step by step. So you know, the whole thing does join together. When you look back at where we've gone ... Why don't I kind of briefly summarize how it all works?

Chris Rodwell: Yeah, let's do that.

Kevin Whelan: Yeah. Okay. So like any good building, it starts with a good foundation. We've talked about that. And that foundation essentially needs to be done wherever you are on your wealth building journey now. So whether you're already feeling super successful, whether you've got a property portfolio or a business portfolio or whatever you've got in your life, it's really important to check in to make sure that foundation is good. So two elements of the foundation.

Kevin Whelan: One, know yourself. Which is where we talked about wealth dynamics, really getting your investor compass or your wealth, builder DNA very clear so that you know you're doing the right things and you're always going to be a state of flow. And being positive about what you're doing. And two, as well as the financial, as well as the intellectual and foundation psychologically, is also tuned into tune into your financial foundation. So it's making sure you've taken care of debits. From time to time you checked in, you've saved yourself some money, and you constantly, where you are saving that money, redeploying that somewhere to build your wealth. Now whether that's putting some money into assets, something as easy as putting into the stock market or increasingly easy things like for example, you know, premium bonds are now 25 quid. So if you just saved 25 quid, buy a premium bond, you could win a million quid and then you're very happy that you've made a major injection into your wealth plan.

Kevin Whelan: In addition to that then, once you started to do that saving, you're redeploying that money in some way, you're building wealth. You're not just letting it sit in your bank account. Using your investor DNA, you're trying to work out which is the right method of building wealth for you. So do you focus on your home? Do you eliminate your mortgage? Do you think about ways you could turn your home into an asset? Do you look at your pension, the most overlooked asset of all? Do you look at how you're investing money? How do you mitigate risk? We probably should talk about that on another podcast, Chris, how you can take deliberate conscientious steps to minimize the risk in the market because for the most part, you can't control that at all. Do you invest in a portfolio of property? Property's so multifaceted. So many different things you can do in property, which is why it's so popular?

Kevin Whelan: Do you invest in your own business? Do you look at other businesses? How do you see business and being a true value creation entrepreneur in your life, how do you do that and you have to begin to choose that. Are you the sort of person who is great at taking what you've applied in your intellect? Remember we talked about being an employee and turning that intellect into just cash as opposed to a value. You keep it now as you look at yourself. Could you create value from what you know and how you package that and repurpose that and create books, courses, something that would create more value? And it doesn't have to be life changing value because any little amount you can create and find, you can use to build a step. So we're not talking about leaping from being financially weak to financially, you know, completely sorted for the rest of your life. It's little incremental steps out.

Chris Rodwell: An extra 500 pounds here and extra thousand pounds there that can very quickly, when compounded and you know, layered on top of each other can get you to that financial security level and then that relieves a whole lot of pressure.

Kevin Whelan: That's right and the final pillar of course, which again for time poor people could be the debt collaboration, that true sense of wealth building collaboration, which we know is very popular in the community where people genuinely work together, where some people have skill, some people have time, some people have money, some people have an idea. And you can combine those wealth dynamics in a way that truly makes something more valuable by doing those things together. So that's the kind of starting process. But as you then then say, well how does that work step by step?

Chris Rodwell: Which I know that you have a very, very elegant model. I think it'd be really good for us to actually dive into that now, Kevin. Is, okay, so you know what your financial level is that you're trying to reach. And you've chosen the pillar that you feel is the right pillar for you based on wealth dynamics and your interests. How do we actually make the whole process work? How do we actually start generating income from those assets?

Kevin Whelan: Okay, so you're absolutely right, Chris. You have to begin with some kind of end in mind. And the end in mind for most people at the beginning is how do I move from insecurity to security? Which is from level one on the wealth scale to level two. Now you put some numbers on that so it doesn't really matter what the numbers are. We said that before, but you pick a number, you take stock and see where you are right now. Let's say the target level through for securities 5,000 a month, and you look at what you're generating from assets right now and let's say it's zero. You're not going to go from zero to 5,000 you know, in a heartbeat.

Kevin Whelan: There's a process for doing that. So how you do that is you, once you've identified the number, you then take stock of which pillar is the best one for you to start with. And once you do that, remember we talked about entrepreneurs make decisions looking forward, not looking backwards. They have to do before they know, not know before they do. Now what that means is we work on a process, Chris, which we call the wheel of wealth. Now that's, that was created by me as a thought process, which I believe works every single time. So I'm going to say don't cheat the wheel. Okay? Now I'm going to tell you why people do cheat the wheel in a minute. But first of all, let me describe the wheel, or a cog. So imagine it's a gear. Imagine a circle and we can create, we've got the visual for this and we've got a video for this as well, haven't we?

Chris Rodwell: Absolutely put us in the show notes. So you can click and have a look as we're talking about this is.

Kevin Whelan: We don't want people to do that when they're driving or if they're doing their crossfit, right? So carry on doing what you're doing. But imagine we've got an idea. And that idea might be, let's say property. It doesn't really matter what the idea is because it can come from any pillar at all. Once you've chosen one, you then say, okay, everything starts with education. So you have a wheel which is broken into five spokes, five component parts, five bits of cheese in the wheel. If you remember the game, Trivial Pursuit, that kind of thing. And you have to turn this wheel 360 degrees, full circle. And when it goes full circle and it works for you, you hear a click and that click means you can now lock that action in and it will start creating flows of cash or capital in your life.

Kevin Whelan: So what are the five component parts? Well, the first part as I said is education and you have to really understand how the asset works in every case. So you need to invest some time in education. So if you found money and other aspects of your life, you can use that money to pay for your education. By the way, whoever you get that education from, it's not important that it's from Wealth Builders or from anyone, just you choose the asset, choose where you get the education from. Once you've got the education, you know, how does that asset turn into cash? How does that asset turn into capital? And you work that out and if you liked the way it sounds to you, if you think this fits me, I think. You then look at support, which is aspect number two or part two of the wheel of wealth.

Kevin Whelan: Now the second part in support, really important, because in a world out there, there are, let's say there's true education and there's salesmanship in disguise, so we need to look out for that. So support means how do you get an independent source of intelligence to ask questions, answer questions, make sure that you feel it's unbiased. The interest of the person giving you support is your interest. It's aligned completely with you. Yes, there might be a commercial value, but we, again, we talked about, commercial value is fine if you're getting more value than you're paying, so let's assume you could find out and we believe Wealth Builders are an enormously helpful place for people to be in support because we do not grind an ax in favor of one asset or another. Now, let's say you get that support and you're asking questions and you're, and you said, well, yeah, I think that would work for you. Why don't you do that?

Kevin Whelan: The fastest way then to move forward next is to look at something called connection. Now connection is ... wealth is a path less well-trodden. As we know, 95% of the population don't make it, but 5% do and they leave trails. And we know lots of them. So if you work with someone, let's say to property strategy and you choose to talk to someone to connect to someone who's tried and tested in a community where they are not out for themselves, they're willing to share with you, then that's going to bring that education to life. That's not just going to have you academically understand how the asset works, Chris, it's going to be you physically see what that person has to do. Now that point, point number three of connection is often the most crucial in the wealth building stage because when you get to see and experience what somebody else is doing, you can really check whether it's something you want to do. And many, many, many of the Wealth Builder clients have thought they wanted to do property for example, but then they saw the effort that came in and finding property.

Kevin Whelan: They saw the effort that came in in managing property and tenants and so on and they decided it's not for me, it doesn't fit my DNA. It maybe is not the right path for them to build wealth. For many others, it's the perfect path for them. So not everybody's the same and only that connection stage brings that to life.

Chris Rodwell: You maybe don't know that by just reading a book or watching a video call.

Kevin Whelan: You can't know that. And the danger if you don't go through the connection stage is you get the, you get the information. You get a bit of education, but it's from a single source that might be wanting to sell you more education so you don't really get all of the story. You get a little bit of the story, you don't get a connection to see it brought to life. So you just keep going round in a small education support loop, you go education, support, more education, more support, not realizing that you're just spending money, not moving you forward in your wealth. In many respects going backwards.

Chris Rodwell: And unfortunately we do say that.

Kevin Whelan: We do see that. There are really great educators and trainers out there, but we do see that out there, Chris. So it's really important to to look at that from the unbiased viewpoint. So we know education's important. Support is critical.` Making the right connections or very important. Now, if you get to that point of connection and it works for you, now you're getting excited. You think I could do this. This is definitely something. If he can do it, I can definitely do it. So you decide to do it. There's a step before you decide to doing, and that step is again, like the roof. It's the overlooked step in the wheel and that step, Chris?

Chris Rodwell: Go on.

Kevin Whelan: Due diligence. Now, due diligence is the step that says, before I let excitement win what am I doing to protect the return of my investment? We don't want to get too excited by the return on it because there's lots of excitement out there. We want to check the return off, so we want to know what's the risk of something going wrong? What will be the consequence if this went wrong? What proportion of my total wealth building resources am I willing to dedicate to this one thing? How do I make sure that the process will work for me? And we would a whole training program around due diligence, which we can give to people. Some of it's for free as well, so they can see the due diligent steps they need to take. And the more complex the strategy, the more important it is to do the due diligence. Now in some cases the DD can be really easy. You know, if you're just looking at stocks and you just buy trackers, the due diligence you might need to do just cost.

Kevin Whelan: But if it's something more complicated where you're having to put time, energy, money, relationships, that's a lot of time if you get that wrong. So putting the due diligence stage in there is really critical.

Chris Rodwell: So often people will get excited, they'll be thinking, how much can I make? But actually that due diligence step is actually understanding how much could you lose if they didn't go the right way.

Kevin Whelan: Yeah. And the big challenge about this is, you know we've talked about this wheel of wealth and we still to get to the last point yet, but we're imagining that this wheel is turning clockwise and there's always going in one direction which is forward. But if you don't do the proper dd due diligence, you run the risk of the wheel going backwards and if the wheel goes backwards, there's two terrible consequences. One is you lose money. Two is your confidence of being an investor of being a wealth builder goes backwards.

Kevin Whelan: So instead of then looking forwards like the entrepreneur does, you start looking backwards and start retrenching and retreating and going backwards into wealth and you can't do that. You cannot build wealth by going backwards. You have to keep moving forward. So as long as you learn little lessons, that's okay. But big lessons you don't want to learn. You want to help those lessons that come out in the connection and due diligence stage because you're going to miss them at the education stage often cause you don't know enough yet. The final stage in the process, Chris, which completes the circle is guided action. Now, what do I mean by guided action? Not just action. Why did I call it guided action, not action? Well, the thing about wealth and the reason why imagining cogs is a cog connects to another cog that connects to another cog that connects to another cog.

Kevin Whelan: So if you do things in the wrong order or you do something that your creating same property but you don't realize because you didn't, you missed something about the taxation and you don't know that that's connected to whether you were in a limited company, whether you're doing it personally, whether you're doing it in your name, your name and your wife's name. All of these things have to be connected so you need, back to your support, a place where you can get the action. But what is the implication of this action for the remainder of my wealth building plan? How does it affect my tax and how does it affect other things? My time and so forth? Now when you turn the wheel full circle and you hear the click and that click locks like a gear in your plan, throwing off cash, throwing off capital, and now it needs a bit of maintenance, sure. Every now and again you're gonna need to grease that wheel, but it's only management.

Kevin Whelan: Now you don't have to relearn all this and now you've got your first cog wheel in play. The first gear in play turning. Now what? What I want you to imagine now, Chris, is that wheel gets locked into your plan. So if your plan is to go from insecurity to security, you've now put one of those wheels in the plan. Now did that get you to security? If it did, you're secure. If it didn't and your target was five and this property is throwing off one, you've still got to turn wheels. But you could be just turning the same wheel in, laying the same thing four times, you know? So it's not uncommon for clients to do the same thing and repeat, repeat, repeat. But they've got a model they can repeat and then it works.

Kevin Whelan: Or if they need to go back and say, well that wasn't for me. I need now to turn another wheel and then they can discard that one knowing they've learned about themselves, they didn't make a big mistake. So the mistake people make more than anything else, Chris, if you imagine this circle where you know the top of the cog starts with education and immediately if you were going backwards, one step goes to action. People go from a little bit of education straight to action. And that's always the time when I see people make the biggest mistakes. So the cog doesn't need to turn slowly, you know, you can turn it pretty quickly depending on the complexity. And depending on what people are looking at, it could be as short as a day, it could be as long as 90 days, but it never as longer than that.

Kevin Whelan: When you bring the education, support and connection all in play together as opposed to randomly trying to find those connections out there in the world where if you only go to a couple of networking meetings, say it might take you six months to find the right connection, nobody's really for you and it's taking too long. So wealth building is about trying to make a decision a month, one decision every month, just like going at work or being in your business where you tend to measure things monthly. And you know my phrase, Chris, never let 30 days go by without doing something that's contributing towards your wealth. And it doesn't mean money. It can mean a little bit of time, a little bit of education, a little bit of time with connection, little bit of time and due diligence, a little bit of time with a coach or a guide or a mentor, however you choose to get your support. Everybody's different. We don't mind that either way, then that's the way to do it. Is that a helpful kind of reminder of the process?

Chris Rodwell: I think it links everything together and it's absolutely at the heart of the whole wealth building process. So this is an important episode. A very, very important aspect of really grasp and I think the visual will help. So definitely do click on the show notes, have a look at the wheel of wealth. We have a video as well. We can link to that within our membership area as well, which free access for everybody to go in and see that as well. When I think the penny drops that people understand all of these five steps need to be implemented. That generates the cash in your chosen asset, locks down into your plan, and then it's a-

Kevin Whelan: And it just moves you up the level, step by step by step. And the the point is what do you know the wealth building process is both financially transformational and personally transformational. Yes, it's impossible to go from nought to 5,000 in one go usually. So you have to take it in small steps. But my experience is, Chris, you can get to zero to complete financial independence in only a short number of years, three to seven years. You can do it, depending on your own. The resources you bring in the beginning from time and money and so forth and how fast you learn, but it doesn't have to take a lifetime, as most people take 40 years when they're in jobs with a pension, having a house they live in and having a mortgage on that property and so on. It takes them 40 years to get often, a half of what they've got. That's a long time.

Kevin Whelan: You can do it in three to seven years, so a little bit of hard work doing it the right way, not trying to cheat the process, you know? It doesn't make any difference to me with you cheat the process or not, but it does make a difference to you and I would encourage everybody to listen again maybe. Watch the video, try and really lock it into their own brain and decide whether you connect with Wealth Builders or not, it's a principle that should work in every single case.

Chris Rodwell: That's fantastic. I really appreciate you sharing that, Kevin. I'm hope that everyone enjoyed that as well. And in the next episode, what will we be covering? Perhaps we can look at some of those first steps. We've had some questions recently about just how do I apply some of this extra cash I'm now saving? I've applied it with debits, I've got a few extra hundred pounds per month. Should I do this? Should I do that? So maybe we can give some guidance for that for some of those.

Kevin Whelan: Yeah, we could do that. I call those the tactical questions and more often than not, when people start their wealth building journey, they often start with that question, should I do this or that? But I'd come back to work out what you're trying to achieve first. Work out where you are on your level and then when you're the question, should I do this or this? It's then easy to say, well, which one of those is going to help you move up a level faster than the other one?

Chris Rodwell: And on that note, Kevin, I'd like to just remind everyone that if you go to wealthbuilders.co.uk/wealthtalk, not only can you recap on all of the episodes and the show notes and the full transcriptions if you prefer to read through, but we also now have the capability where you can record a question to send to myself and Kevin and also leave us a comment. So head over there, wealthbuilders.co.uk/wealthtalk. And if you have a specific question that you'd like to ask us and we'll be happy to cover that in a future episode.

Kevin Whelan: Yeah, and I think probably given the number of questions we're getting, Chris, why don't we take one session just dedicated to the questions that were being asked and have a kind of an FAQ update as opposed to, you know, just giving something that we come up with as part of the wealth building sharing. So then we'll kind of answer the questions that people are asking at whatever level they're at, whether they're right at the beginning of their journey, or whether they're much further on in their journey. The questions will be different, but we can talkle them.

Chris Rodwell: I think that'd be great. So we look forward to receiving your questions and we'll catch you next week on another episode of Wealth Talk. Thanks, Kevin.

Kevin Whelan: See you.