This week sees the first part of a five-part mini-series, where I am joined by a property buddy, Rupal Patel, Founder of Blue Infinity Group and Entreprenora. We jokingly describe these conversations between friends as Two Smart Buddies or 2SB for short. This first part is themed, 'what advice would we give to our younger selves'...say if aged 18-21 or close to that. However, we are never too old to learn, as I am still discovering every day! So, have a listen in for yourself as well as perhaps with an eye or ear out for a younger person that might enjoy this too. Hint: the parting comments are worth sticking around for as well, trust me!
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Transcription of the show
Hello, and welcome to another episode of The Property Voice podcast. My name is Richard Brown and as always, it’s a pleasure to have you join me on the show again today.
This week sees the first part of a five-part mini-series, where I am joined by a property buddy, Rupal Patel, Founder of Blue Infinity Group and Entreprenora. We jokingly describe these conversations between friends as Two Smart Buddies or 2SB for short. This first part is themed, 'what advice would we give to our younger selves'...say if aged 18-21 or close to that. However, we are never too old to learn, as I am still discovering every day! So, have a listen in for yourself as well as perhaps with an eye or ear out for a younger person that might enjoy this too. Hint: the parting comments are worth sticking around for as well, trust me!
Property Chatter
Another video share for this week...
Transcription of the Show
- Rupal, hi!
- Hello, Richard.
- How you doing?
- Good, it's really, really great.
- Good, good. I'm just gonna address people who are watching this, and we could, maybe, have a focus. Because, it's Richard Brown, obviously. You may know me as the Property Voice. And I'm being joined by delightful Rupal Patel. Rupal?
- Hello, everyone.
- Do you just wanna give a little intro, maybe?
- Yeah. So, Rupal Patel. Director of Blue Infinity Property and founder of Entrepreneura.
- Yeah, that sounds exciting. I'm sure we'll get into that at some point. So, we've connected a little bit, haven't we,
- We have, yeah.
- And we thought, why don't we just do some video shoots on some topics. So, I think what we plan to do in this first one of the series, is talk about what we might tell, or what advice we might give to our younger selves, maybe if we're 18 or 21 years old, that sort of age group, right?
- Yeah.
- I remember actually when I first talked to you on our podcast, you actually talked a little bit about this topic, didn't you?
- Yeah, definitely.
- Where do you think you, you know, where should we start this topic of conversation?
- Gosh, well, there are so many things I wish my younger self knew, or had realized. I think one of the big ones that keeps coming up again, at every stage in life, and one of the things that I was lucky at that time in my life to have just happen naturally, is being very conscious of the people you let into your life. There's a saying some people have heard, and I think of all the time, about, you are the average of the five people you spend the most time with. And, so often what happens, especially when you're young, you just sort of, those five people who you spend the most time with, you're not very particular or choosy about it. It's just sort of, you know, mates that you play sports with, or people you get on well with at school. But you're not really thinking about the bigger picture and the influence they have on your life. And like I said, I've gotten lucky that the people that I've always had the most time with have generally, with some exceptions, especially as a young child and teen, have been pretty good influences. But I also know that when I had spent more time with the quote-unquote bad influences, I did some pretty stupid things. And so, I think, yeah, just being thoughtful about the people we're spending time with is a big, big one for me.
- Yeah, so the peers, if you like, the people you hang out with, that can be a really good influence or not a good influence, depending, so... I'm just thinking, when I was 18 to 21, that sort of age, that was kind of a, an age of further education. And so, one of the things that comes into my mind is to get what I would call my real life education.
- Yes, definitely.
- So, you know, not just go through the formal academic system and then maybe start to get... Because we come from property and investing and that sort of thing. That's our back-drop, so I guess... So, in terms of financial education, was there any financial education at school? Or in college, or anything?
- Oh my god, no, never! And it's one of the life skills that I think is just, it's criminal that we don't teach it more formally in schools, especially starting from school age. Because, all of the... You know, we have this weird stigma in the US and the UK around maths, and people think that math is scary, or it's somehow unapproachable, or it's beyond mere mortals, but it's not. And, you know, basic arithmetic and just being comfortable with numbers is a life skill, and I think we have a lot of work to do to make people see the relevance of what we're doing. Because math and money dictates so much of our lives, and we need to be well-informed about how it works, and feel comfortable with it, in order to make the most of what we've got, and what we do with what we've got.
- Yeah, I mean, so, surely the government's going to look after our best interests and,
- Yeah, obviously!
- you know, big financial institutions. They're all, they're all after our best--
- Yeah, we know how that goes!
- Yeah, yeah, exactly.
- Definitely.
- So, I think, so where I'm going with that, really, is, you know, it's, the responsibility is on us.
- Us, yeah, definitely. And our parents, if we're lucky enough to have parents who are switched on.
- So, yeah, we can input into our children sound financial management principles, for example. And if we don't have that backdrop, I didn't really have a strong backdrop in financial education at home or through the academic system. We can get ourselves educated, can't we?
- Yeah.
- We can read some books, we can hang out with some people who know this sort of stuff. Actually, just thinking about books, I was just thinking about books. Maybe we'll talk about books in another episode, specifically, but one that was coming to my mind, maybe you've got some in yours, but there's two great books I would always suggest to people reading in this topic. One is "Rich Dad Poor Dad".
- Yup, classic, it's really good.
- And there's one for teens, as well, by the way.
- Oh! Okay.
- And then the other one is "The Richest Man in Babylon".
- Yes! Yes, yup.
- I may have stolen your book reference--
- No you haven't, no you haven't. And I'm sorry, the reason I get so excited about both of those, is because my dad... As I said, I was very lucky that both of my parents were very switched on, and self-taught, but switched on about money and investing and saving, and all that. And a lot of what I learned was just by observing what they did. But some of it was through the conversations we had. And with my dad in particular. He's a reader, I'm a reader, and those two books were two books that he actually gifted me when I was 18. "Rich Dad Poor Dad" I read at the time and I was, like, "I have no idea how this applies to me." And, similarly, with "The Richest Man in Babylon". But then, having revisited them a few years later, I realize how they are just so, as with most really powerful things in life, they're so elegant in their simplicity. And anybody who wants to get smart about money in a very easily digestible way, I think those two books are fantastic. Another one that I just recently came across is by a woman called Lois Frankel, called "Nice Girls Don't Get Rich". And it's, sort of, using the word Nice Girls in quotes, but the idea is that, for a lot of women in particular, being financially independent is not something that is always a reality. A lot of women end up leaving their careers when they have kids, or following their husband's career. And there are a lot of things over a lifetime that interrupted their wealth-building and their income generation. And some, the tips that she gives in this book are fantastic, because it applies to every woman in every scenario, whether you're working, whether you're not. But it's some really great, easy to implement, and easy to understand tips and ideas about how to get rich, in whatever way, you know, that--
- Whatever that means to you.
- Means to you, exactly. And I think some of it is also just, well, what should be common sense. The biggest one is, live below your means. Again, especially as, in those 18, late teens, early 20s, that's when we all generally get the first taste of money, of earning something, you know, income from a job. And what so many people do is just live paycheck to paycheck. They splash out on the most expensive apartment they can afford, or cars, or clothes, or holidays. And it's exciting. You've got money coming in for the first time, you're your own person. But the key is to make sure that you're not ever spending, well, definitely not more than you earn, and going into credit card debt and that kind of stuff. But also, just being very careful about living below your means, so you're not setting yourself up for failure for the long term.
- So, I agree with you. It's live below your means. But I think, aligned to that, really, is to save, isn't it?
- Definitely.
- So, set aside, because
- Definitely. I remember when we spoke the first time, you were kind of encouraged strongly, if I remember?
- Yes, basically, forcibly encouraged. So, the rules in our household was that whenever you got your first paycheck, at every job, half of it went to, well, after you cover your expenses, the remaining half, half went... Of the remaining, half went to charity and the other would be your pension or your retirement. And we were also encouraged to contribute the most that you possibly could contribute to your retirement fund, whether it was through your workplace pension or through a private pension, to invest for your future. Because that was just the rule. And my first job I had at 16.
- I was going to say, when was that?
- It was sixteen. And I remember coming home, and I think it was, like, $250, which was a fortune at that time.
- But then they took half away, right
- Basically! And you know, it was really annoying and frustrating at the time. And I was like, "What the hell "does my dad think he's doing? "This is my money!" But it was a great habit to instill from that time, because it then just became a habit. It just became the way things work. And to be honest, when you don't see the money you don't really feel it not being there. So, the great thing about pensions and savings these days is that you can automate it. Instead of direct debits or transfers or whatever it is, so that you don't even see the money before it's taken away and being saved for you. Which I think is a really important thing for most people. It's like we're ingrained to just burn through whatever we get. So, if you're not going to be disciplined enough to do it yourself and save yourself, just make it automated. Set it up in your bank, or with your pension, or whatever it is.
- Yeah, so living within your means. Saving some money. And it's what you do with that savings, as well, I think is important. But the most important thing, I guess if I... I didn't do this, you see. But you did do it, and maybe it was instilled upon you. But I didn't do it when I was that sort of age. But one of the best pieces of advice I think I can give anyone of that sort of age group, is to start now. Start then.
- Yeah, 100%.
- Because, as Warren Buffet says, it's not timing the market, it's time in the market--
- Totally agree.
- That counts. So, if I'd have started investing, because we're talking about saving, what can you do with your savings? Well, you can save it. You may get a modest interest rate, let's say. But if you start to invest it, maybe you can get a better return. And even if you start talking about these things called leverage we can actually grow our money into something else.
- And that's the beauty of "The Richest Man in Babylon". It's a very simple principle, the idea of having your money work harder and multiply for you. I think that the metaphor he uses is having your children and your children's children make more children. You know, the money just sort of multiplying in the way you invest it. And it's exactly right. You know, it's not enough to just save. You're not going to build independence and wealth by just saving. It has to be invested, and thoughtfully and carefully taken care of, as all important things in our lives are, whether it's your health or your financial wealth. You know, you have to invest time, effort, in taking care of it.
- So there's this thing I just touched on a little bit, the word leverage, really. And so, what does it mean? For me, I'm just going to give my own definition--
- Yeah, sure.
- And you can pick up, but, leverage for me means using other people's money to make your money go further. So, you talked about a pension, for example. So, if you are fortunate enough to have a company pension scheme, for argument's sake, your employer's putting money in to your pension, maybe you're putting money into the pension. And that can multiply because of the two contributions instead of one. That's simple leverage, right.
- Exactly.
- You've probably got other examples.
- Well, the beauty of leverage like that, too, is tying that in to something you said earlier about starting as soon as possible. There's leverage and then there's compounding, right? So, when you're young, or at whatever point you start. You know, start now, basically, if you haven't done it already. But the longer you have in the market, there's this thing called compounding, where money invested, let's say it's earning five percent. That $100 in a year earning five percent becomes 105. And then that $105 is earning another five percent, which becomes 110 and--
- You're gonna do the maths
- 110.25, and the next year, you know. And that's the thing, that's the beauty of compounding, is that the same amount of money invested over time grows, because it's the amount that you've got because of interest rates and other things, just is growing naturally and compounds and gets bigger and bigger and bigger without you really having to mess around with it. So, when you're leveraging other people's money, let's say in this pension example, most employers will contribute some amount. And that amount, however it is invested, is going to compound over time as well. So you're making money from somebody else's. Effectively, sort of, free money. And it's growing at a faster rate because of compounding. So it's almost a no-brainer to not invest in a pension scheme, or something that you're getting benefits from.
- But I guess, you know, I'm thinking to myself, if you're 18 or 21, are you gonna be really switched on by the idea of a pension some time in the future that you can't even speculate, 60, 70, 80 years?
- I think that's the thing, is that... Probably not, but that's what separates the people who become financially independent from the people who don't. And I think the problem isn't in the knowing, it's in the doing, right? So all of this sounds like great ideas, and all of this is proven to work. Look, if Warren Buffet is saying something, it's almost a no-brainer. The guy clearly knows what he's doing around wealth and saving and investing, and things. But most humans don't learn from other people. If they're anything like me, you learn from your own mistakes and then try to catch up.
- But you make an interesting point there. Perhaps I'll come back to the leverage point in a second. But the point about where you take your advice. So if, for example, you wanna be in the top one percent of the population... I did talk about this recently, about how much wealth you need to be in the top one percent, I don't know if you know the figure?
- I don't.
- Okay. So in the UK, on average the top one percent is a net worth of three point two million, to get into that club. So, the point is, there's 99% who haven't got that kind of wealth.
- Of course, yeah.
- So, if you wanna be in the one percent, who do you listen to? The 99% or the one percent? So, I think it's the idea of getting the advice from the right quarters.
- Yes, definitely.
- The guy down the pub can give you advice, but--
- He's not qualified .
- Do you wanna be in that place? Sorry, but I just drifted into that. Sorry, but, just to go back to my thinking about leverage. So, we've got pension funds, where we've got companies putting in contributions. We've also got the tax man. He can make a contribution in certain investments. A pension's one and ISA is another one, for example. That's free money, so you should take that, I believe. And then the third one I think we can probably talk about quite a lot in our circles, is with mortgages. And what I call good debt. So, I don't know, maybe you wanna pick up on that a little bit.
- Yeah, so I guess the idea is, again, something I wish my younger self, or all younger selves, would be able to appreciate, is the difference between good and bad debt. Bad debt is just debt for debt's sake, right? So it's buying something you can't afford and putting it on a credit card, that is then accruing interest at 25 to, sometimes, you know, 80%. I mean, crazy rates, right?
- And that's compounding working against you.
- Exactly. And that's compounding definitely keep you stuck. And that is bad debt. Anything that is not creating productive assets or income for you. Whereas good debt is borrowing from, for example, a lender, who is giving you money so you can buy a property that is then going to generate an income for you over time. And that sort of debt is productive debt, because it's buying an asset that will probably increase in value over time, but also, in the meantime, is bringing in income. So it's not taking. Again, this is the simplicity of the "Rich Dad Poor Dad". Think of assets as anything that bring income in, and liabilities as anything that costs money and take money out. And, obviously, all of this is going to differ, based on your personal circumstances. And obviously neither one of us is and IFA or qualified to give specific advice.
- We're not giving financial advice here.
- Yeah, exactly, definitely not. But the idea is to just, again, be thoughtful about the type of debt you're going into. And is it productive and is it bringing in income, or is it another liability?
- Absolutely, perfect. I met a young man. I call him that, a young man, he's 19 years old, last Friday. And he's active in property. So, he's 19. He's also got himself a mentor, who's helping him, giving him advice and guidance. What do you think about that concept?
- So, I think, I believe very strongly, that to get to the top of your personal game, whether that's in physical performance, mental performance, business performance, everybody could benefit from a good mentor or coach. And this goes back to the idea that you raised earlier, about be careful where you get your advice from. You shouldn't be getting mentoring from someone who's never invested in property, just because they're successful, right? So, the idea is to get qualified advice from qualified people. So, if you want to invest in property, talk to people who have successfully invested in property. If you want to invest in the stock market, talk to people who've successfully invested in the stock market. And who can show you how they've been successful at it, and it's not just them advertising, "Oh I'm an expert, I'm an expert," but their own bank balances can prove that they are walking the talk and doing well with their own advice. But, yeah, again, I think no-one would expect... Look, Andy Murray would not have won any Olympic Championships if Ivan Lendl wasn't there to help him. A lot of Olympic athletes, or, you know, the sports analogies I love, because they're so, so applicable.
- We can relate, can't we?
- Yeah, and I think, for whatever reason, people think it's fine to have a coach to help you get to the top of your sporting game. But, for whatever reason, in business it's almost seen as a taboo. It's like, "Oh, why would you get a coach or a mentor." But if it's the right coach or mentor, they will help you both unlock your own potential, but then also help you short-cut some of the hurdles and the issues that you'll face along the way.
- Accelerate your journey.
- Yeah, exactly, exactly. And accelerate could mean instead of taking you 10 years, it only takes you eight years, right? We're not talking about fast-tracking, or get rich quick. But it's the idea that someone who's qualified, who's been in the trenches before, in that industry, knows things in and out, and has a track record of success, can then help identify the things that they got wrong and keep you from making those same mistakes.
- There was a Business Insider article I read some time ago, and it talked about the idea of mentors. And I think they researched CEOs of top companies. I don't know if you saw this piece of research.
- No.
- You probably don't know what I'm going to say. But basically, I think the idea was, 28%... This is the statistics, I might be slightly off, I haven't got it in front of me. I think 28% of CEOs said they use a mentor, which was actually quite a small percentage. But of those who did, I think it was something like 95%, it was a really high number, I'm guessing it's, It's certainly a high number, attributed a large part of their success to their mentors. So, I think what that tells me is, it's maybe not for everybody. And maybe if you're a CEO you maybe think you don't need help, I don't know, but...
- Yeah.
- Anyway, so maybe it's not for everyone, but for those who it is for, it makes a world of difference.
- Definitely, and I think, again, this gets back to the idea we talked about earlier on, about the five people you spend the most time with. If that person is a mentor who is helping you bring out the best in your personal performance, business performance, et cetera, you'd choose that mentor very, very carefully. 'Coz if you are spending any meaningful amount of time with them, as you probably will, in the relationship, then they can be a huge, huge asset. But it's making sure that you're choosing wisely and you're not just getting it for mentorship's sake. And you know, I don't have statistics to back this up, but from anecdotal conversations that I've had with people who are founders of property businesses or other businesses, they all have had some degree of formal or informal mentoring, coaching, whatever you wanna call it. They're slightly different, but often blend. It makes a world of a difference, it really does. But it has to be the right person. And you have to have the humility and the openness to be willing to take on board some tough lessons, some tough feedback, and be willing to take that and go with it.
- Well, I'm glad you've talked about humility, 'coz that's an example of a good value that we can have. I'm just getting a signal that maybe we're running a little bit short on time, Rupal, which is unusual for you and me, right?
- I know, gosh, we have nothing to say to each other.
- No. So, I'd just probably... I don't know if you've got a parting thought. I'll let you think about that, but my parting thought probably would be one of my favorite quotations. Comes from a gentleman called Charlie Tremendous Jones.
- Oh, wow, that's a name.
- Charlie Tremendous Jones. What a name, what a name. Charlie Tremendous Jones, who said, "You'll be the same person as you are in five years, "apart from the books that you read and the people "that you meet". Now, I could probably ex.. In the modern day language, he said this a while ago. Modern day language, that probably means, you know, "networks", the people that you meet. And then books probably means "all sorts of learning resources." But I think that's probably going to be my parting thought.
- I love that.
- If you wanna be different to how you are today, maybe in five years, get in the right company and consume the right information. That's probably my parting thought.
- Cool.
- What about yours?
- I've got one that speaks a lot to me, is, choose your goals not by what you will accomplish, but by who you will become along the way. So, it's all about being very thoughtful about what skills will you have to develop? What sort of personal and internal hurdles will you have to overcome to meet those goals, targets, whatever you want to call them. But it's not about the result, it's about who you become along the way.
- It is about the journey, and who you become. I agree with you. So, I'm just gonna, maybe, close into there.
- Sure.
- What did we say we're gonna call these little chats?
- Two Smart Buddies.
- Two Smart Buddies. That's two smart buddies who are talking, probably a little bit longer than we planned to, but, hopefully, that's good content for you all. And thanks, Rupal, for joining me.
- It's a pleasure to be here.
- And maybe we'll have another conversation in a minute. Who knows?
- Sounds great.
- All right.
- Looking forward to it.
- Me too, bye bye.
- Bye.
That's all from me this week, remember if you want to talk about anything from today’s show, or just talk property investing more generally, email me at podcast@thepropertyvoice.net, I would be happy to hear from you! The show notes can be found at our website www.thepropertyvoice.net
Thanks very much for listening again this week, so all that left to say is ciao ciao!