David speaks with Rob Dix, a co-founder of Property Hub. Rob is a co-host of The Property Podcast, which is one of the biggest business podcasts in the UK, and the author of 3 popular books about property and investing including The Price of Money which was a Sunday Times Bestseller.

They talked about:

๐Ÿ“ˆ The secrets of wise investing

๐Ÿ“Š Investing in stocks

๐Ÿ’ผ Choosing the right investments

๐Ÿ’ฐ Role of gold and bitcoin in wealth preservation

๐Ÿ’ธ Earning more over saving more

๐Ÿ“ Importance of financial discipline

This is just one part of a longer conversation, and it's the second part. You can listen to the earlier episode here:

Part 1: ๐ŸŽ™๏ธThe Price of Money with Rob Dix (Episode 89)

๐ŸŽ™ Listen in your favourite podcast player

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๐ŸŽง Listen on Spotify:

๐Ÿ“น Watch on Youtube:

๐Ÿ‘ค Connect with Rob:

Twitter: @robdix | https://twitter.com/robdix

LinkedIn: https://www.linkedin.com/in/rob-dix/

How To Be A Landlord | https://amzn.eu/d/eQWISE6

The Complete Guide to Property Investment | https://amzn.eu/d/4LNvmcd

The Price of Money | https://amzn.eu/d/4rVBuHw

Website: https://propertyhub.net/

๐Ÿ“„ Show notes:

00:00 | Intro

01:57 | The secrets of wise investing

04:46 | How to invest in stocks

06:22 | Choosing the right investment

09:10 | The role of gold and bitcoin in wealth preservation

11:18 | Earning more over saving more

15:19 | Importance of financial discipline

23:58 | Strategies for saving and managing finances effectively

27:04 | Automating savings and investment

29:13 | Managing finances within a relationship

31:21 | Different way of thinking money

33:50 | Concept of inversion

34:58 | Importance of learning from mistakes in investments

36:27 | Strategy of avoiding commitments that limit flexibility.

๐Ÿ—ฃ Mentioned in the show:

Equity Investment | https://www.investopedia.com/terms/e/equity.asp

Cryptocurrency | https://theknowledge.io/what-is-cryptocurrency/

Bitcoin | https://bitcoin.org/en/

Adidas | https://www.adidas.co.uk/

Kanye West | https://en.wikipedia.org/wiki/Kanye_West

Yeezy | https://en.wikipedia.org/wiki/Adidas_Yeezy

Vanguard | https://investor.vanguard.com/corporate-portal

FTSE 100 | https://www.hl.co.uk/shares/stock-market-summary/ftse-100

Rich Dad Poor Dad | https://www.amazon.co.uk/Rich-Dad-Poor-Teach-Middle/

Die With Zero | https://www.amazon.co.uk/Die-Zero-Getting-Your-Money/

Charles Munger | https://www.forbes.com/profile/charles-munger/

Full episode transcript below

๐Ÿ‘จ๐Ÿพโ€๐Ÿ’ป About David Elikwu:

David Elikwu FRSA is a serial entrepreneur, strategist, and writer. David is the founder of The Knowledge, a platform helping people think deeper and work smarter.

๐Ÿฃ Twitter: @Delikwu / @itstheknowledge

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๐Ÿ“ฝ๏ธ Youtube: https://www.youtube.com/davidelikwu

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๐Ÿ“œFull transcript:

Rob Dix: [00:00:00] The first thing that I think about is I don't look at investing as a way to get rich. I look at it as a way of staying rich. So like investing is a great way of storing wealth and preserving its value and compounding its value over time. But you shouldn't look at it as a way of making money in the first place.

This week I'm sharing the second part of my conversation with Rob Dix, who is a co founder of Property Hub and the co host of the Property Podcast, which is one of the biggest business podcasts in the UK. And Rob is also the author of three popular books about property and investing, including The Price of Money, which was a Sunday Times bestseller.

Now, in this part, you're going to hear Rob and I talking about the secrets of wise investing.

We also talk about investing in stocks, how to choose the right investments. We talk about the role of Bitcoin and gold in wealth preservation. And whether or not you should prioritize earning more over saving more. And finally, we talk about the importance of financial [00:01:00] discipline.

So you can get the full show notes, the transcript and read my newsletter at theknowledge.io. And you can find Rob on Twitter and LinkedIn @RobDix and his website is propertyhub.net.

Now, if you love this episode, please do share it with a friend and don't forget to leave a review wherever you listen to podcasts because it helps us tremendously to find other listeners just like you.

David Elikwu: During that same period, you also saw lots of startups blow up, but because they were investing in crazy stuff. So, you know, maybe you have people that are investing their company, they're investing in Bitcoin or they're investing in other cryptocurrencies which blow up overnight, or they're investing in crypto funds, or they're investing in lots of different things that all of a sudden could go up in flames and that creates a lot of knock on effects, it creates a lot of problems. But historically, bonds are supposed to be safe.

And so now we have this problem, and I'd love to know how you reconcile this, where, okay, we've said you shouldn't hold your money in cash 'cause that's not safe, [00:02:00] 'cause inflation's gonna be higher than whatever you're getting from your bank. Especially if it's not in a savings account. If it's just in your current account, your checking account, you're getting nothing. And so you are losing money just by holding it there. And then potentially there's some risk even in bonds because what happens, I mean, unless it's like a US government bond even then, you know what happens if the yield curve inverts or something like that, you know, bonds have some risk even though they're presented as being the least risky thing.

And then of course, equities as well. Equities can also be risky where you're essentially investing in the stocks of companies. Something could happen to a stock overnight that is completely random, seems almost unrelated.

I can imagine, for example. If you were a shareholder in Adidas, when suddenly Kanye West starts saying some random stuff, day to day, he feels very unconnected from the company. But actually the Yeezys that he makes make a lot of money from the company. You might have been investing in Adidas on for completely different reasons. Or you are invested in a fund that holds Adidas stock and then suddenly it all goes down because, you know, [00:03:00] someone over here said something that people don't like.

So it's crazy that there's a lot of places you could put your money that all seem volatile in their different ways.

Rob Dix: Yeah, and that's it. They are all volatile in their different ways. And so the first thing that I think about is I don't look at investing as a way to get rich. I look at it as a way of staying rich. So like investing is a great way of storing wealth and preserving its value and compounding its value over time. But you shouldn't look at it as a way of making money in the first place.

So if you start trying to chase returns and you start trying to make the highest return possible, that leads you towards riskier investments. You are investing in some kind of weird coin that like someone's told you on Twitter is gonna blow up or whatever, and but you don't really know. Or like you take a punt on one particular company 'cause you believe something's gonna play out. Like it can work, but it could also not work, and it can be significant. So if you're instead in like focusing on earning and that's where your retention is, then you are ultimately gonna do far [00:04:00] better, and you've got control over that. You've got control over your earnings in a so where you don't with your investments.

But then with investing, what you said was they're all risky in their own way and that's completely right. But if you combine a lot of different types of investment, then they're all risky in different ways. And so generally speaking, if you diversify as widely as you possibly can, then you are spreading your risk out across lots of different things. So like the obvious example is, well say you invest in Adidas and something random happens, but if you invested in a hundred different companies or a thousand different companies, then doesn't make so much difference, 'cause another company will have a good day and it will average itself out. But then if all of those companies are in the US, then the US could have an issue compared to the rest of the world. So you diversify out further and go, okay, well I'm gonna own companies spread across the whole world. But then like something can shake their whole market in general, and the whole of equities everywhere can have a bad time. [00:05:00] So that's when you want to be holding something like bonds that are supposed to move inversely and question whether they do, but at least they're generally not subject to the same forces at the same time. You can own things like gold that in theory will do better when there's uncertainty. You can have assets that do well when there's inflation. You can have assets that do well when there's deflation. Basically, if you own a whole bit of everything. Some of it, they'll all do well at different times and under different conditions. So on the whole, it all averages itself out.

So I think really that's the best most of us can hope for is just go, I don't know, I'm just gonna have all of it.

David Elikwu: So a quick one I wanted to ask on that actually, because, you know, it'll partly be useful for me, but I think it'll also be useful for a lot of people listening.

Is there any particular way that you think about investing in equities in general? So speaking specifically about this asset class, just because, I've taken a lesson in the last few years from investing. I definitely tried to diversify my investing, so as much as I gave added as an example, I only [00:06:00] invest in funds that have loads of stocks. I couldn't tell you what all the constituent pots are. But I do check sometimes, and I have a vague idea of, okay, this is the split between different geographies and different sectors, different industries, et cetera.

But this kind of ties back to what we were talking about where there was one fund, just a Vanguard fund that was invested in that. Because I'm in the UK, it's largely UK denominated and it's just been, it hasn't been terrible, it's actually done okay. But compared to then, I was looking at like a US version that's pretty similar, but a lot more weighted towards the US or a lot more weighted towards the rest of the world.

Then suddenly there's a drastic difference in the outcomes because as much as I thought this had gone well over the past, let's say five plus years, because the UK economy hasn't been doing that great. Suddenly I'm leaving a lot of returns on the table. So even though I've got this diversified fund I'm investing in, it still is maybe diversified in the wrong ways relative to how well the economy's done.

So is there any way that you think about that?

Rob Dix: Well, the way that I would look at that is [00:07:00] that, that is almost an inevitable consequence of diversifying that you'll always be able to look at things that have done better. Because if you could pick the best and you knew in advance that it was gonna be the best, obviously you do that. But then by diversifying or deliberately saying, well, I don't know. And so if you'd invested like a hundred percent in the S & P 500 in the US over the last 20 years, it's like beating the hell out of everything. And that's largely driven by a few big companies.

So If you know that, yeah, of course you'd do that. But the trouble is people assume that the future is gonna keep on looking like the past, and it's not. So just because the US has dominated for the last 20 years, it doesn't mean it is for the next 20, it's probably making it less likely that it's gonna dominate for the next 20.

So you can take the opposite view and you could go, well actually the UK is looking cheap right now. If you look at the relative valuations of the two, UK companies look cheap, especially outside the FTSE 100. Therefore, I'm gonna invest in that because then it's [00:08:00] got a, if everything reverts to the mean, it is got a higher chance of going up. But that could be wrong. So then, so then you go, well actually maybe I should just diversify and have a bit of everything.

It's almost like you have to come to terms with it. Like if you are making the active decision that you don't know, then you are always gonna be able to looking around and going, ah, I wish I'd invested in that. But what you have to ask yourself is that, well, would I have invested in that? Really? Like, did I know that that was gonna be the winner or would I have just been lucky?

So that's something that I like to do is, I take 90% of my portfolio. I just spread it as widely as I possibly can and I go like, I don't have a clue. And then I keep 10% of my portfolio to just do random stuff with, to get things out of my system because then it feels like, if I think I'm a genius 'cause I've spotted this thing that's gonna do really well, then I get to do that. And sometimes I'm right, sometimes I'm wrong. Normally I'm wrong, but it doesn't matter 'cause it's only 10%. But that gives me my, like an outlet. It's like a pressure release valve to go and like [00:09:00] feel like I'm having fun with this kind of thing. 'Cause it sounds like you are similar to me in that like, you actually enjoy this stuff. Most people don't. But if you do, then there's always the temptation to fiddle and try and be clever. But I'll, I restrict that so I still get to have my fun, but it's like it doesn't blow up my portfolio if I'm wrong.

David Elikwu: Yeah, exactly. I'd love to know, I mean, for clarity, this is not financial advice for anyone listening, but what's in your 10% right now?

Rob Dix: Oh man, I can't even remember. This is the, this is the thing.

I go through phases of being like, of like getting interested and this is why I can't do it properly, because I go through phases of being interested and now get busy with other stuff and completely forget about it. But I've got a few, I've got a few random companies where it's just like, I have not done my research, but based on a little bit I know I think it's gonna do all right. And I can't think of an example. And I have had companies that have literally gone to zero before, so I've had others that will do okay.

And then I've got others where it's like, Japanese equities. So it's just like, to me it seems like they're ludicrously cheap and at some [00:10:00] point it's gonna sort itself out and they'll go up. I might be wrong. I really, I don't have the macroeconomic knowledge to have a view about this, where I'm going to like, go and take a big gamble. But it's just, just stuff like that.

And it's the same, it's the same principle I take to crypto. Like, I really believe in Bitcoin, the technology. I think it's really interesting. But I think there are, there are risks that I don't quite believe in like the whole, it's impossible for the government to shut it down argument. I think they could.

So that's why I'll happily go like sort of 5, 10% in that because then I think there's more upside than downside and it'll do well. But if it doesn't and it does go to zero, then it's not the end of the world.

David Elikwu: Yeah, I think that's also another great segue because you mentioned gold before, and you were talking about, thinking of your investments as stores of wealth, and obviously that's something that people talk a lot about both with gold and with Bitcoin. I think you also own a bit of gold, so I'd love to know how you think about those two things and the balance between them.

Gold seems like, especially in today's day and age, most places don't even take cash anymore. So [00:11:00] we've moved very far away from actually having any gold coins. I don't remember the last time I saw some gold. And so why is that something people might still consider, and is Bitcoin a serious alternative to that?

Rob Dix: The thing about both Bitcoin and gold is that the things have value from being scarce. So if there's a limited quantity of, of something and that's something is worth having, that kind of puts a flaw under its value.

So the think great thing about Bitcoin is that the supply is fixed or like it's on a certain schedule, you know what the cap's gonna be and roughly when it's gonna be reached. So that means that no one can just go and like double the quantity and therefore dilute the value of it. And so if that thing is worth having, because you can trade with people, people believe in it, whatever, then you know that it's gonna be worth something.

Gold is the same. Like there's only so much gold you can pull out of the ground. So like, unless an asteroid crashes into Earth and it's got a load of gold in it, the supply isn't gonna grow by more than about 2% per year.

The interesting thing about both of those [00:12:00] is that, well, you can't really do anything with gold. Like there is some industrial use, but it's really, it's only purpose is to be a store of wealth. And it's largely the same for Bitcoin. Like you can build transaction layers on top of it, and that's really interesting. And I think there could be a use for that. But essentially it's a store of value thing. It's like people hold it cause they believe in it and they know that other people believe in it. That's basically the point. And gold has been fulfilling that function for thousands of years.

And so that's why even though you can't do anything with it, it costs you money to store it, it's no practical use, it's like something you are, at least I know that as long as bit like, it's the whole thing like, the longer something's been around for, the longer it's likely to be around for. So it's like, well, people have valued it for thousands of years, therefore if everything went horribly wrong, I'd probably be able to trade with it, be people and get what I want.

The distinction there is between assets like that and just cash. Cash like denominated into some government issued currency. Because the government can go and [00:13:00] boost the money supply by 20% in a year. Done it recently. They can just go and print more money. And with the more money that gets printed, the more units of something that there are, the less valuable each of those units becomes.

So that's why there's always the potential for inflation eroding the value of your cash, but you're not gonna have inflation eroding the value of your Bitcoin or your gold. The issue, of course, is that Bitcoin and gold don't pay you anything for holding them. So whereas if you've got like a property or a bond or something like that, it's actually of some use to someone, therefore someone will pay you for the use of that thing. Well, you don't get that with those. So if you stuck everything in gold, then you're not gonna lose anything over a long that period of time. But it doesn't pay you anything either.

So that's why I'm drawn to property and do the podcast about it and everything else because it is ticking a lot of boxes for me. It's got the, it's a hard asset. There's a fixed quantity. You can't double the quantity of it overnight. It pays you an income [00:14:00] and it's of actual real value to someone. It's not 'cause it's never gonna be worth nothing because people always need somewhere to live.

I still diversify, I still invest in a bit of everything, but I got the majority in property because it ticked so many of the boxes for me.


David Elikwu: In your book, you talk about this idea of prioritizing earning more over, saving more, and I think that connects to what you were just saying in terms of the way you think about your investments. There are really about preserving wealth rather than ways to make wealth.

So I'd love to know more about how you think about making wealth and how you earn more in the first place.

Rob Dix: Yeah, I'm working on this for my next book at the moment. So, I think it's something that's really overlooked because it's hard to give generalized information about. It's very easy, like most books go on and on about saving because it's really, it's very easy to give people five practical tips to save money, and it's pretty much the same for everyone and you know, it's gonna work. But when it comes to earning more, there's just a million different ways of doing it. But when you start talking about earning more, then it naturally guides you towards entrepreneurship.

Like, that's the way for most people to sort of like generate serious wealth is through ownership of a business because it's got so much [00:16:00] embedded leverage. It's not like you turning up for work every day and you have to be there or you don't get paid and you can't have 10 of you turn up because there's only one of you. If you've got a business, then it's doing something that people want, then you can be spending the same amount of time on it, but you've got a hundred people working on this thing, therefore you are producing that result for more people. Therefore the business is more valuable.

So if you want to like know, well how do I get a hundred million pounds? The answer is gonna be start a business. It doesn't mean you're gonna be able to do that. Most people won't. But it's the only way you can do it. You can't do it by getting a high paying job. You can't do it by investing really cleverly. It's basically the only answer. So that's naturally where earning more guides you.

But having a job is kind of underrated, like people look down on, on having a job, but you can have very highly paid careers and you can be, you can be strategic about your career as well. I think mistake that a lot of people seem to make is that they just almost like let their career happen to them and they hope they get a pay rise or they hope they get [00:17:00] a promotion. But I think it's possible to be far more intentional about it. Whether that's by like draw of deliberately applying for new jobs every couple of years, paying companies off against each other and trying to like maximize what you can get, developing skills that you believe are gonna be in demand and are gonna give yourself more. And just generally like making yourself invaluable because companies as a general rule, are gonna pay you as little as they can. Because I'm not going, oh, of course the capitalism's evil, but it's just kind of, that's just how it works. And so, but we've got people in our business who are, we would not want to lose under any circumstances. And so we'll pay them very well and treat them very well, because we do not want them to go elsewhere. And so that's something you can do, you have the ability to do that.

And so obviously I'm pro entrepreneurship, entrepreneurship's, like it's the sexy thing and it's great, but it's not necessarily for everyone. And so there are other ways of doing it. So by focusing on earning, you could spend, if you took the same amount of [00:18:00] time that you would like faffing around with an investment portfolio, call it like five hours a week or something, and put that five hours a week into like developing a new skill or something like that, that will allow you to earn more in the future. That's ultimately gonna be a far bigger payoff.

David Elikwu: I think I'm kind of 50 50. Well, I'm not really 50. I'm a hundred, a hundred. So on the side of entrepreneurship, I am a hundred percent agree. I definitely think that's great. It's pretty much what I do now, and couldn't agree more. You build skills, you invest in skills. They're a way of investing yourself so that you know whether you also have a job or you don't. It gives you a ton of optionality that at any point, you know, I've built lots of different businesses in the last, you know, 10 to 15 years or so, and they can all be different but you retain the same skillset. So no matter what it is that you are working on, you can always apply yourself to something new.

And it's hard to, you know, you could have a job and then get fired. But as an entrepreneur, if you've built the skills of entrepreneurship, your business could crash and then that could go away. So it's [00:19:00] not to say that it makes you, you know, immune to economic conditions, but if you build that skillset and you build the know-how you build connections, then you can start a new thing and you have something that you can take with you in a sense.

So I'd say that, one pushback I would have, and I'd love to hear your thoughts on this just in terms of, I'm thinking about this within the context of having a job kind of, the balance between, okay, earning more versus saving more. And loads of people that I know say, oh my gosh, like you should only focus on earning more. And a lot of them already earn a decent amount. And I think that's great. But I think the issue, this is again, just me personally, I don't think most people save enough. I don't even think most people know how to save that well. Not that everyone should squeeze themself to the final day unnecessarily, but I think that is also a skill in my view. And I think learning how to squeeze your finances very tightly and manage everything, at least for a few months, if not a year or a few years, for me, has been invaluable.

And I'm so [00:20:00] glad that early in my career I learned how to do that because now, later in my career, I don't always have to do that. And now, like I don't have necessarily a always have a month to month budget where I'm specifically counting each pennies. But when I do have to crunch things. I really can. And I can give you some examples.

So, in terms of the saving thing I remember, and this is one example of like the earning more versus saving more. I remember, so this is when I first started training at a corporate law firm, and I was talking with one of the other trainees that came from quite a wealthy background. So they had like a house in the country with stables and all that kind of stuff. And I remember one day, you know, you come in and you're having a chat and they happen to have bought a boat over the weekend. And obviously that is not the average life for most people. And I remember asking them like, how much they save each one, and you saved half as much as I did. And I got paid so much less. He didn't necessarily know that, but so much less that it would be almost embarrassing to say, but I was saving twice as much, which is insane. And I don't even know how that's possible, but it seems [00:21:00] to be a recurring thing. I know lots of people that earn over six figures a year and they tell me how much they save, and I just say like, where's the rest of it? Like, what happened there?

And so I think that's part of the problem. You have this lifestyle inflation where if you never learned how to manage money in efficient way, or I think your framing of what efficient saving looks like and efficient money management looks like scales up and down based on like what's the lowest that you've had to do it at.

So if you think, oh my gosh, I'm really squeezing myself, but you're going to eat at like fancy restaurants only four times, four times a month instead of, you know, every other night, then that feels like, oh, tremendous financial hardship. Whereas for another person it might not. So yeah, I'd love to know what you think about that.

And okay, the other example I was gonna give you of how that has then been useful for me personally is that. So obviously I was kind of playing like this mental game of how much I can save as a proportion of like total income. So maybe you start from, I dunno, five or 10% that you can save and then you keep going up, it goes to 30%, it goes [00:22:00] to 50, 60%. And then on the side of working, I was also then running some businesses. And so even in my previous job, at one point I got to a hundred percent of my net income that I could save because I was also making money outside of work. And then I was like, oh, I could push that even more then I, can I make a hundred percent of my gross income.

And so now from the gross income that I'm not even receiving some of it, I can save that much as well. And so obviously that that's completely outlandish to the average person. So I'm not saying that that is true, but the reason I bring it up is 'cause I quit that job and so suddenly my income went down by half or you know, slightly more than half. And so suddenly I'm in a position where, if I had not learned how to manage my finances and stuff, it's great that the entrepreneurship gave me the optionality to then quit that job and only focus on what I wanna do. But if I didn't previously learn how to manage my finances, I can't imagine the position I would be in if I was spending a lot of that money and now had to suddenly adjust my income by half.

Rob Dix: So how do you think you do that? Because like, my, my standard thought about how [00:23:00] you, how you do all this, it's like, well, what you do is you, you like put the basics of saving in place and so like do the 80/20 on it. So like all you've got a few big decisions that make up the most of the difference. You've sort make sure you've got decent habits. Then you don't have to think about that anymore, then you can like take what's left over and put it into investments. You don't have to think too much about the investments because it's a long-term thing. You don't have that much control over it anyway, so just go and invest and then put most of your time into earning.

And I think that makes sense as a framework, but there's quite a big embedded assumption in the first place, which is a, oh yeah, just like put basic savings habits in place.

And I probably undervalue that because it comes easily to me, like I'm like a natural saver. And I think a lot of this goes back to our childhood and all the rest of it. And like what you're brought up with. So how do you think you could do that if it's not like your natural tendency and it's not just like, oh yeah, just go and do this. Like do you think there is like a, almost like ways of, I don't think people are struggling for practical tips. I think everyone kind of knows what you're meant to [00:24:00] do, but it's almost like having to rewire your brain in a certain way to do it.

David Elikwu: I definitely agree. I think for me, and again, I dunno how widely this will apply, but I think it might be more useful in my current situation because I'm not, like early in my career, I was rigidly, I had the budget, I had the spreadsheet, I had everything, you know, fastidiously managed. Whereas now I don't really, partly because I've learned to be decent at it.

But I think one thing that has been consistent is I just save first. So whatever percentage you have decide that you are gonna save, you just do that first and then you suffer with the rest. At least that's been my approach. So however ambitious you want to be with deciding how much you want to save for me it's just making sure that that goes out automatically and then you just pretend it doesn't exist and you never look at it ever again. And so either it goes into a savings account or you can also set it up to go into an investment account, so the same thing happens with my investments. Usually you'll probably have to set up two different things. So one is going from your current account to the investment account and then setting up a separate automation for [00:25:00] it to invest a particular amount in whatever funds you choose once the money arrives.

So that's how I've done it. 'Cause then I don't have to think about it. And then what I think about is what's left in my account based on how ambitious I've been with how much I want to save. And then that's what I worry about. So now it's like, okay, this is the money I have left, then I can figure out what to do with it. And then depending on how ambitious you've been, you can figure out if you need to budget or not. So some people from that remaining amount, they're gonna go to, I dunno, like a fancy restaurant and they're gonna spend half of it and they're gonna say, oh my gosh, I can't pay my bills. But some people might be like, okay, it's kind of all right, I can manage it.

So that's kind of what I do now, where from the remaining amount, then I just figure out how to use it. It never really goes down to absolute zero, but you know, I think that's how I think about it.

Rob Dix: I think it makes a lot of sense. It's like it goes back to Rich Dad, Poor Dad. Pay yourself first. Like it works, doesn't it? And it's like, it's making the decision when you're at your best and like, that decisions then taken out of your hands and you are left to deal with the consequences, which I think is a smart way of doing it.

Something else that I've think about a lot [00:26:00] is conscious spending. Because when you are, whenever you're making a decision about spending money, you're saying that you are valuing the thing that you're spending money on more than you value the money. If you didn't believe that you wouldn't be making the trade. So in like in a perfectly optimized world, you would be only making good decisions because you'd be thinking about everything and going, well, yeah, I'd rather have this than the money. But in practice I think we are really bad at knowing what we want. And so it's like, well, do I really want this thing or am I just spending this because it used to make me happy and it doesn't make me happy anymore, it's just a habit. Am I doing it to impress someone else or am I doing it because it's what other people say will make me happy? Is there a load of spending that's just set up on autopilot and I've forgotten about it? I'm not even getting any benefit from that's gonna be the case for almost everyone. I'm sure it's for me.

So if you can like really be conscious about it and make that decision, just like for every bit of spending, like, does it actually make me happier? Do I value it more than the money? Then that should automatically lead to making better decisions. But of course, it does involve knowing what makes you happy, which is harder than it [00:27:00] sounds.

David Elikwu: One thing I did wanna ask you specifically, because you are married, you have kids, a lot of people, the reality is they're not just making financial decisions for themselves. They have to make financial decisions with their family or on behalf of their family. And I think you've been married for something like 13, 14 years as well.

So I'd love to know how you think about, you know, specifically, actually one thing a lot of people struggle with these days, particularly I think how people feel about money management has evolved where people are now trying to figure out, okay, do I share an account with my partner, do I not? How do I do that? And I think you guys, you share an accounts. So, I'd love to know how you think about financial decisions in your household? What's worked? What maybe hasn't worked?

Rob Dix: The trick here is pick the right partner. Like if you get that right, everything's easy. And if you don't, then you've got problems. And a lot of that is about having alignment, 'cause like people are weird about money. Everyone's weird about money. It's, like I said, it goes back to childhood and it's like people are completely irrational about this.

And you don't have to get into the psychology of why, but it's true. And so you want someone who's kind of wired in the same way as you are [00:28:00] but can also like, similar enough, but different enough I would say. So like if you've got two people who are both like hyper frugal, then you're probably just going to like push each other to get more and more extreme and you'll end up just like, I don't know, living in a box or something.

But then if you've got got two big spenders, then that can be a problem as well. So you probably want people who you are gonna just like, push each other a little bit. Like my wife pushes me a little bit more towards, bit towards spending without going too far. And talking about it and like not being afraid to have conversations about money is the absolute key to the whole thing. I don't have a strong view about whether you should share accounts or not. I don't know if it matters. I'm sure different things will work for different people, but there are so many cases of people who are like deliberately hiding things about money from their partner, or they don't know anything about their partner's financial situation. I'm just not convinced that's healthy. I think it's such an important thing, like you spend most of your day working to get money. It's a pretty important topic. You might feel like it shouldn't be, but it is. So it's something that I do think you need to be able to talk [00:29:00] about.

David Elikwu: Do you have any way of thinking about your goals or what you're trying to achieve financially? Whether that's in terms of saving or investing or when you put all of these things together?

I think that's another thing a lot of people struggle with is trying to figure out like what is it actually for? What do they actually want? We talked a bit earlier about, okay, I want to buy a house. I want to get on the housing ladder. Why do you want that? 'Cause my granddad said so, or you know, because I see people on Instagram and everyone has these things and so I want these things. So I wonder how you think about that.

Rob Dix: Well, this is the ultimate question because the secret is, the ultimate secret, everyone wants more. Everyone however much they've got, always wants more. And they always want roughly double what you've got now.

And this has been true for me, and it's been true for everyone I've ever spoken to about this. It doesn't matter what your level of wealth is, you always go, if you've got a million, you go, if I just had 2 million, then that would be enough. At that point, I wouldn't have to worry about it anymore. I'd be satisfied at that point. Then you get to two and you want four and it's, but it literally [00:30:00] scales up to billions and it's goes scales down to hundreds. It's crazy. So the ultimate secret is to try to break outta that and, 'cause what you really want. Have you read the book, Die With Zero.

David Elikwu: Yes. Yeah, I love that.

Rob Dix: I love that book and I think it does that, it puts it in the best possible way, which is that whenever you are earning money, you are basically going, you are exchanging your time, you're exchanging your life energy to get money.

Therefore, the correct way of doing things is to have, like, work just enough that you can do all the things that you want to do and then at the end of your life die having spent everything. 'Cause that meant that you would've exchanged exactly the right amount of time and life energy for money. And it doesn't quite work out that neatly, but I think that's a really good way of looking at it. So the goal that I have is really simple, like the core goal is just like, I want enough money that I can do what I wanna do and not have to think about money. But it also helps that, like, I enjoy doing the type of [00:31:00] things that end up making money, I enjoy business and I enjoy investing.

So you will then, end up like going off on side quests and like have, and like wanting to go and like make more money 'cause it's fun and like, almost like the game of trying to do something is more important than the money itself.

But that's what it's all about really when it comes down to it, it's just like, can I do what I want to do without wiring about this too much? And for me, if you get to that point, then you've won. You might go and create new extra goals after that because it's so hard to break out the cycle of want, want more, more, want more. But you kind of deep down know that you've won at that point.

David Elikwu: So one of the last things I wanted to ask you was about mistakes. And so, funnily enough, so Charlie Munger talks about this idea of inversion. The phrase that he had was, you know, tell me where I'm going to die, so I never go there. And it's this idea of, you know, instead of trying to be smart, trying not to be stupid. So I guess the two parts of that question that I wanted to ask you is, first of all, is there anything in retrospect that you like a mistake that you made or a war story of your own or something that you've [00:32:00] learned from? I think there's probably three types of mistakes.

So one type of mistake is about the facts. So there's something you didn't know that you then learned afterwards. Another type of mistake is maybe one of emotions. So you knew what you should have done and you just didn't do it. And then the third is just a pure error, like all the facts were right there in front of you and you just did the wrong thing.

So I'd love to know if there's something in those categories. And then the final part of that is just are there any anti goals that you think people should have? Like things that people should definitely avoid at all costs.

Rob Dix: Really good questions. Hard to do justice too. I think that I've made like loads of mistakes, loads of invested mistakes. Like we did a property development that we lost a million pounds on that wasn't great. But, and that was just like pure, just like thinking we knew more than we did though, and get getting outside of our area of expertise.

I think if you can, the idea is to learn from other people's mistakes. I find, at least for me, I can only learn from my own. So I have to make the mistake from myself. I can hear someone else talking about it. I'm like, oh yeah, but it's different because of this reason I've just made [00:33:00] up.

So like, I think the, the only way to go about it is to try to, similar to taking 10% of your portfolio and like putting it into fun stuff just like do it at small enough stakes that you don't completely blow yourself up, so you get the lesson without having like absolutely ruined yourself over it. Yeah, I've invested in companies that have gone to zero. I've lost a million pounds on property development I've made, yeah, every mistake there is, but that's okay. That's how you learn.

And that's why I don't know maybe Charlie Munger had it all sorted out in his thirties, but by the time you get to 90 plus, then by that point, you've had, you've had the chance to observe a lot and make a lot of mistakes, and by that point, you've got it all figured out.

David Elikwu: Okay, perfect. And is there anything specifically you'd say to avoid?

Rob Dix: I'm big on reversible decisions, so I try to avoid anything that ties me into a particular course of action or a particular thing. So cause then if you know that, if you know that you can go back on it and you can undo it, then nothing is that scary. So I think people obviously are scared about you've done like quitting a job to do your own thing.

[00:34:00] That seems scary, but the truth of it is, it's actually a reversible decision because you'll always be able to go back. You can always go back and get a job and you'll probably have learned so much from doing your own thing that you can go back and get a better job and be in a better position. But people think about it as an irreversible decision.

So I just try to avoid things that tie me in.

That's the way I think about it.

David Elikwu: Thank you so much for tuning in. Please do stay tuned for more. Don't forget to rate, review and subscribe. It really helps the podcast and follow me on Twitter feel free to shoot me any thoughts. See you next time.

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