Investments that benefit from inflation and uncertainty w/ Manish Kataria

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The purpose of wealth talk is to educate, inform, and hopefully entertain you on the subject of building your wealth. Wealth builders recommends you should always take independent financial tax or legal advice before making any decisions around your finances.

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Welcome to Episode 150 of wealth talk. My name is Christian Rodwell and membership director for wealth builders. I'm joined today by our founder Mr. Kevin Whelan. Hi, Kevin 150. Woohoo. I didn't know I liked you that much, Chris, I could stand talking to you every single week for 150 weeks. I think 2019 We kick this off. So yeah. Well, well, that's interesting. I mean, it's good to know that we're

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giving messages that are being well received, or at least well received by many. Not by as much you somebody's probably will listen to all of these episodes. Chris, what do you think about that? Yeah, maybe there's a good time if someone's listening now has listened to all 150 and hasn't left a review yet. Why not? Tell us what your what you think. And that would be a nice little birthday anniversary present for us. Yeah, well, that would be good. Happy anniversary, Chris. So we're face to face together today. You can probably hear that at wealth builders HQ. And we're continuing the theme. So we kicked it off last week with seven ways to tackle inflation. We know obviously, prices are rising out there. You can see when you go and get your coffee or Costco or you do your weekly shop, or your petrol electric cars survice. We don't get hit quite so badly there. But we know that obviously cost is is really significantly rising at the moment. So go and check out last week's episode seven ways to tackle inflation. But today we've got our wealth coach Manish Kataria, who is obviously an expert in the area of finance and stocks and things market based, so a bit of a broader look at how inflation is affecting the markets. Yeah, so I mean, look, he's a man of credibility. So we must listen to what he has to say. And I think you'll pick up some themes going through there, particularly, you know, a style of what he says are inflationary pressures in all markets. And we'll debrief that at the end you the importance of using tax free things, you know, wherever you get a gift, as he calls it, you know, you could use that. And simplicity over complexity, Chris, some really good messages coming from Manish today. Yeah, so let's dive straight into it then and head over to our conversation with Manish Kataria and each Welcome back to wealth talk today. Hi, Chris. How you doing? Very well, very well. Thank you. And we've just looking back to see when when you were last the guests, and it was actually all the way back in the summer of 2020. So right in the middle of the COVID crisis. And I know we were talking about similar things, then we've, you know, the economy and, you know, lots of concern out there. And there's a bit of concern out there at the moment isn't there?

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There is you know, there's there's always concern, you know, whether we're talking about the economy or politics and markets, and you know, there's always a concern and what we call, you know, how we refer to these kinds of concerns. You know, we call them a wall of worry. So markets climb a wall of worry. And there's always something around the corner, right? So there's pandemics, there's war, there's inflation, there's recession fears, and there's somebody always points to something to to deter investors, you know, to invest and then without those concerns, I guess, you know, markets wouldn't keep going up. We kind of need those concerns to keep people on their toes and to enable markets to keep going up over time. So there's always something Chris. Yeah, that's right. And obviously, our members will know you very well, Manisha, one of our wealth coaches have been for over two years now. But tell our listeners a little bit about yourself before we really get stuck into the the main conversation today, which is going to be focused mostly around inflation.

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Yeah, sure. So I'm a wealth coach with with wealth builders. And, you know, I've been I've been doing that for a couple of years now, I think, is that right, Chris? A couple of years. I've been with wealth builders. So that's really good. I really enjoy working with your members and sort of providing guidance around business and investing. So So you know, I really enjoy doing that. I have a background in investment management. So I'm, I'm a professional investor by training. I used to work with JP Morgan, managing money with JP Morgan and I've worked at other blue chip investment houses. So that's my kind of background. I'm still doing that on a part time basis. I still work in the city on a part time basis. But nowadays, I get to sort of choose my own hours. So so I'm not I'm not sort of working full time. In the corporate life. I sort of run an investment

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programme I run invest like a pro, which is a network of investors, it's the home of passive investing, as I call it, because we're talking about all things, investing in markets in secured loans and other types, other types of passive investments. So, so that's really sort of what I'm doing now is really helping investors to invest better. That's how I would describe it. Yeah, and just maybe tell us a little bit more about the investment Academy programme, because I know all of our members who have attended that, over the last few months are just being giving rave reviews. So what actually do you cover on there?

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We cover sort of investing in financial markets. And really, my job was to kind of demystify that world. And, you know, I've got I've got, you know, deep knowledge in that area, but what I used to come across was investors who, you know, who kind of, almost deterred from investing because they, they saw the perceived complexity. And, and for me, you know, my job is to as a, as I mentioned, to kind of simplify how people can invest and you know, that my mantra is, The simpler you keep it, the more effective you'll be. And, you know, I've been sort of full circle, I got the got my CFA qualification, which is chartered financial analyst. And, you know, I took things to, you know,

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pretty complex levels, when you're working in the city, but you don't actually need that, you know, and there's this whole thing about the financial industry, which is, you know, deliberately complicates, you know, using jargon and using various different techniques. And, and, and they only do that, because the whole financial industry is so competitive. And, you know, how do you differentiate yourself, with your competitors by trying to trying to sort of create this perceived complexity, and then I just came out of that, and I said, Look, really, the best way to succeed in investing is to keep things simple. And that's that's how I sort of structure my programme to demystify investing, to show people how they can invest in a structured, passive low cost way into ETFs, and stocks and funds, really, to sort of beat inflation, and to get them money working harder for them than you know, currently, maybe. And to keep things low cost, of course, because that's one of the key, one of the key leakages, which I know we'll talk about later, it's, you know, the three leakages. I'm trying to encourage people to to avoid fees, taxes and inflation. So that's a big area of focus. Yeah. So

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yeah, let's start there, then. So you've talked about this concept of wealth leakages, and as you mentioned there, number three is inflation, you know, we're going to focus on that, but, you know, reducing your fees, we know what a massive difference that can make. And there's some really interesting graphs and tables on your website invest like a pro, which illustrate that right, just how much that eats into your future profit, and then taxes as well. You know, obviously, we know the benefit of utilising those, you know, efficient wrappers such as ISIS and things like that. Is there anything else you want to cover there? Just briefly, so people understand, you know, what they should be focusing on? In terms of taxes? Yes. And the two of those first two, yeah.

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Yeah, so you know, tax is a fairly a relatively easy to avoid, that's kind of what I call low hanging fruit. So you know, we have an annual ICER allowance. Everybody has an annual ice allowance, which is, enables you to invest

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in order to protect future gains, future investment gains, and future investment income, protected from tax. So these are tax shelters. So if you can try to make the most of your ICER allowances, same for your pension allowances, so you have, you know, annual allowances in pension, so in SAS, and Sep, and regular pensions, so again, these are free gifts from the government from HMRC. And you don't often get those rights. So, you know,

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always I'm always encouraging people to try and make the most of these allowances, if you can, and as I've mentioned, these are low hanging fruit available to everyone not complex. You know, all of the platforms out there enabled you to sort of very quickly open up pension accounts.

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You know, in insects or in ISIS and SAS is I know a very popular amongst your members and property investors and that's an amazing wrapper if you can sort of get get exposure to SAS as well, so but they all achieve the same thing, which is to enable you to enjoy your investment gains in a tax tax efficient way. So that's taxes.

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In terms of fees, that's a really big one. So, you know, we're all paying high fees, you know, or we have at some stage have paid high fees. And that's because we don't necessarily know better, right? Most people that are, you know, they trust their pension provider, they trust their existing schemes, and especially if you've got a pension from work, you think that's automatically the best thing to be invested in, but not necessarily, right, you often get high fees, and you often get put into investments which aren't suited to your own risk profile. So what we do in academies is to kind of show people, you know, ways in which you can invest,

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you know, whilst minimising your fees, and invest better in in passive investments, and ETFs, and stocks, which have been proven to outperform in the long term. So that's what you know, is a key area of focus. So on average, you know, if somebody comes along on the academy, and I, you know, we have a sort of, you know, everyone gets an opportunity to go through their existing investment strategy, wherever they're invested in, and we do a live analysis on the programme. And, you know, on average, people are, you know, typically paying 1.5 to 2% per annum to their pension provider. And that might not sound like a huge deal on a sort of percentage basis. But it equates to around sort of three to 4000 pounds per annum, per individual. And when you compound that up over 10 years, you know, we're talking potentially up to 100,000 pounds for depending on your pension size. And, you know, what I've been able to do is, you know, people come along, say they're paying three and a half 1000 pounds per annum to their existing scheme, you know, I can very, very quickly show them a way in which they can slash that down to below 1000 pounds per annum, just by investing passively in low cost platforms. Again, pretty straightforward to set up. And, you know, once you once you're set up in the right way, in using low cost platforms using low cost ETFs. And and, you know, using a strategy which is suited to your own risk profile, that's pretty much a set and forget system, which you can sort of just have running in the background passively. And enjoy that compounding over the long term. Yeah. Great. So we know that the news is full of talk of inflation at the moment. But where does this all come from? Why are we suddenly seeing this all of a sudden? And what can we do about it, Manish?

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Ah, where's it come from? Well, I guess we have to go back a couple of years, I guess, when we last spoke on this podcast, you know, back to March 2020. When we all know what happened, then, you know, is the pandemic kicking off, and I guess the roots of this current inflationary episode are planted in in in in COVID. We had the lock downs. And then when we came out of lock downs, there was huge, huge supply shortages. And when the economies were returning back to normality,

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demand was increasing. And we were still having these supply shortages, in energy markets, in oils in cars, secondhand cars, you know,

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technology, semiconductors, you name it, there were supply shortages going on, right. And so what what happened was that there was a supply squeeze, and people were returning back to normality. And, and prices were shot up, prices shot up for most most things, most goods and services. So that's, you know, that's almost like a sort of temporary dislocation. And then we had the Russia Ukraine situation, which just added fuel to the fire to us, so to speak, and we just had an acceleration in inflation. So all of these things are kind of supply side related issues. Primarily, and, you know, that's what's causing this sort of inflationary spike at the moment. So that's the cause.

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And, and I know that you're quite passionate about, you know, some of the figures that we see in the press and on the news and might not quite be as accurate as the truth be told. So there's three types of inflation to be aware of, what are those? Oh, yeah, well, I've been a long standing disbeliever of inflation of official inflation data. And, you know, you know, back when, in the good times now, you know, a few years ago when inflation was officially at sort of one or 2% I was saying at the time what this is, this is impossible. Right? You I was just looking at my sort of annual sort of price increases, you know, in terms of food and energy and you know, my telecom bills, right utility bills and broadband and all the rest all the rest

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When that was going up well in excess of 2%. So I was saying at the time, look, inflation is really more like sub seven 8% In reality, and, and we're there now we're at 7%, officially right now, but I still don't believe that number. So I would say, look, it's safe to assume it's 10%, at least if not 15%. And and there's good reasons why the government would want to be hiding the real rate of inflation, right. And if you think about it, the government is the biggest debtor in the country, it owns the most debt in the country. And if the real rate of inflation was disclosed, there'd be pressure on interest rates to go up even more than they're going up now. And who's going to lose out the most? It's, it's the government, and it's their own debt bill, which would just balloon out of control. So yeah, I would say investors should assume it's more like sort of 1015, maybe even 20%. Right? It's it's impossible to know, and everyone has a different different inflation rate, of course, because the average inflation rate doesn't apply, doesn't apply to everyone.

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There are three rates, right, so there's the official rate, which is what we hear about, there's the central bank rate, which is what the Bank of England forecasts in terms of what the what the next 12 months is likely to bring. And there's the investor rate and that for for you and I for for your members, for your audience, that's the most important rate. It's the investor rate, which is the reality rate, right. And that's the amount that our cash balances are being eroded on a day by day basis. And, and so that's really important to know that, you know, what, what that rate might be, and mentioned, we don't know precisely what it is, but let's say it's a 15% 10, let's say 10%. So that means, you know, every year, your money is being eroded by 10%, at least every year, and it's, it's the silent killer, right? It's the cash is the only major asset class, that's guaranteed to lose money on a day by day basis. So it's really dangerous to be sitting on a lot of cash for a long period of time, because of that inflation, erosion, you know, which just happens on a day by day basis. So there's lots of things you can do about it. You know, there are inflationary beneficiaries out there, you know, property is a good inflation. beneficiary. Stock markets are a great inflation beneficiary, you know, naturally, because if you think about it, when you're investing in stock markets, you're actually investing in real companies, and real companies out there are increasing their revenues by inflation, if not higher, and and when that happens, you know, their profits increased by inflation or higher. And when their profits increase, stock prices go up, right to reflect that. So there's a very natural sort of sequence of events. And that's why a lot of people get surprised by why stock markets keep going up. And because they are a good inflation beneficiary historically, that's been proven to be the case. And and, you know, Within equities, and we cover this in the investment Academy, actually, so we cover a whole range of different investment, inflation beneficiary, so we're talking about commodities, we're talking about infrastructure assets, we're talking about REITs, which are property related equities, value equities, momentum, equities, you know, so all of these things are kind of, you know, available to investors, essentially. So there's lots out there that you can do about it's not it's not it's not a lost cause by any means. Yeah, no, again, no, there's an article I was reading on one of your blogs, mination, you were showing that with inflation, even up to 15%, the equities still produce results. So that was interesting. And, you know, there's the tight term us hyperinflation, maybe you could just explain that for our listeners as well.

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Yeah. So just going back to your, your previous point. Yeah, look, I mean, historically, you know, going back 100 150 years, it's inequities of

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appreciated by on average, eight to 10% per annum. And, and, and there is a linkage there is a historical linkage between inflation and equities doing well, in the absence of hyperinflation. So I think the study that you're referring to show that as long as inflation stays sort of below 15%, inflate and equities have always returned positive, real return. So by real returns, I'm talking about inflation adjusted returns. So so there's always been a positive linkage. The only time things get a little bit uncertain is when there's what's called hyperinflation. So you know, typically that's greater than 15%. And when that

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happens, you know, all asset classes

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are at risk, right property included, because then what happens is that bond yields starts going up, interest rates will start going up, and then no asset class is safe, the only asset class that might be safe, there is gold, potentially.

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But, you know, I don't expect inflation to reach 15%. I know things are bad right now, but I don't think we're gonna get there. I think this is a temporary

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spike, because of the supply side issues that we're seeing right now. I think, by the end of this year, we'll start to see inflation sort of stabilise and sort of come down from here. And that's a good environment for equities to be involved in.

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And what are your thoughts, Manish on the interest rates? Do you believe they will have to rise to respond to try and combat the inflation?

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Yeah, I mean, they are rising, they have been rising, you know, across the world, slowly, you can argue that central banks have been a little bit slow to raise rates. And I think that's right, they should have probably raised rates earlier, but they were a little bit uncertain about what was going on in the world, but now they're playing a bit of catch up. But, you know, I think UK rates will probably go up to around 2% By the end of this year. But we're not going to get to three, four or 5%, I think that is, you know, you know, an unnecessary

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unless inflation becomes really sticky and sticks around at these levels, which, as I mentioned, I don't think it will. So I think we get to around two, Max, two and a half percent, and then we kind of, you know, pause for breath. At that point. In fact, the Bank of England has recently come out and said that, you know, this study expressing concerns about potential slowdown in growth, and in that environment, you know, they're not going to keep raising rates aggressively. So I think we get to two, two and a half percent and, and pretty much, you know, that will probably be the peak for for interest rates in the UK.

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So many of our listeners manage, they'll be business owners, either traditional businesses or, you know, property investors as well. So, you know, any other impact for those two classes of people that they should be, you know, thinking about things they can be doing now, just to kind of protect themselves?

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I mean, look, if you're really concerned about interest rates, spiking, you know, even further than what I've just mentioned, so, you know, I think we'll get to two and a half percent, if you think we're going to sort of get to three, four, maybe 5%, then, you know, look to look to fix your mortgages. For a start. That's, that's the first thing you can think about doing, you know, go for five year fixes, you know, longer term fixes to protect yourself from interest rate hikes, that's the that's the most obvious thing you could be doing.

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You know, what else if you're, if you're a business owner, then you've got to be mindful if you're taking out business loans and things like that. We've already seen, you know, student loans, which is different assets, a different sort of situation altogether, but student loans have really spiked in terms of interest rates, but you know, if you're, if you're, if you've got a lot of debt on your balance sheet, as a business owner, or as a, as a, as an individual, if you've taken on lots of debt, just be mindful that interest rates, you know, there is a risk that interest rates could go up, you know, if those if inflation was to prove to be sticky, and if if Central Bank's decided, well, we'll look, we really need to be aggressive in our fight against inflation. That's not my base case. But if you think that's going to happen, then you might want to protect yourself by fixing, fixing your mortgages or loans for a longer term on a longer term basis. So that's the obvious thing you could be doing. Okay, so that's given us a good summary then Manisha, is there anything we've not covered? Anything you've been writing about recently, or questions you've been getting asked that you think it'd be useful to cover?

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I think, I mean, a lot of people who I talked to their property investors, and

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in fact, around 80% of at least 80% of the attendees on the investment programme, I run their property investors, but when they come along, what they want to be doing is to be diversifying, you know, they kind of see property as a great asset class. Look, don't get me wrong, I'm in property. I like I like property.

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You know, that's one of my main asset classes, but I think people need to think about diversifying and most people who attend the programme are looking or they're to, you know, sort of learn ways in which they can diversify and, and, you know, stock market options is another asset class I cover, you know, these two, these two areas are really good ways to diversify alongside

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property not away from property, but to be diversifying alongside property. And, you know, some of the common concerns I get, are and I and I get this, you know, you with property, it's not passive, right. And it's a, it's stress. If you get if you get some funny tenants and I call tenants, toilets and boilers, those are the big three stresses with property rights. And, you know, you get called out with property, and there's effort required, right? You can't just sort of run property, from your laptop, for example, with stock markets, you can and in a stock markets can be very, very passive. And, you know, there can be tax efficient, right, and you don't get the same tax efficiencies within property, there's, you know, in fact, the tax changes we saw a few years ago, I think they're just the start. And those will just be increasing over time, because property investors are an easy target, right, and let's face it, there's a hole in government balance sheet in government finances, they need to raise taxes, and, you know, property, investors will be an easy target going forward, and the regulations will probably keep increasing as well. And that's why property investors are looking for ways to diversify. And stock markets are a natural way to do that. And the only kind of concern people have historically had with stock markets is about volatility. And, you know, I show investors how you can invest whilst minimising that volatility, and earning decent and earning decent returns at the same time, so people sort of come along, and they have very balanced, diversified portfolios, I show them ways in which they can sort of be be balanced, and sort of reduce that risk. And you can invest in things like factor ETFs, which give you

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exposure to low volatility, equities, but which have also sort of historically made decent returns, you can get exposure to income, producing equities, which again, are very stable in nature, but they give you a really good dividend yield, you know, we're talking between four to 8% per annum. And, and people are getting really interested in options, which is also part of the investment Academy programme. So we have a whole module on options. And, and people get very excited by options, and I do and it also happens to be one of Warren Buffett's favourite strategies, because it's such a, it's such an incredible asset class. And, you know, we're getting I'm getting some of my investors are getting, you know, anywhere between two to 3% per month, returns on options. So, so that's another sort of area which people are seeing a lot of interest in. Yeah, yeah, it's, you know, great way to generate recurring income. And that's the name of the game of wealth builders. And it's so good to have you as one of our trusted partners with all your expertise in certainly around pillar to the investment pillar, which we've been discussing today. MANISH So, Where can someone go if they want to find out more about the programme that you run? Um, so, website is invest like a pro.co.uk. And that's, that's the, that's the main website. If you want to find out more information on the programme itself. I know you'll be sending out some information, Chris, and there's some stuff on the wealth builders website. But the direct link is invest like a pro.co.uk forward slash investing, which kind of gives you you know, all the information around the programme itself. Brilliant. Well, thanks so much for sharing with us today. MANISH good to speak to you as always. We'll catch up again really soon. Great. Thanks, Chris. Speak soon.

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Hey, so lots of points there for us to debrief on in just a moment, Kevin. Before we do that, let's head to Trustpilot and read out one of our latest reviews. This one is from Dooley boy, who says it was whilst researching all things SAS that I first discovered Kevin Whelan, and then the wealth builders excellent podcast, which always delivers great weekly content, you really must check out the back catalogue. I have since joined the academy and wow, what a great idea. There is a clear roadmap in place with a fantastic level of detail that is adaptable to suit all existing levels of experience. It is backed up with truly genuine and accessible support from Kevin Christian and Richard CO, along with Chris Paul and Gary from their wider team, and also from within the wealth builders community itself. And with the help that we have received, we have set up our SAS and we now stand at the start of what will be an incredibly exciting journey, and one which will go on to provide an excellent legacy for our children, all three of whom have now started to embrace the possibilities that the SAS offers as well as seemingly adopting a wealth builder mindset in an osmosis like manner. Wow.

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It's the longest I've ever had. Well, this I think

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Things are rubbing off there with Davey boy. Well, I'll tell you what, Dooley. Boy, that sounds a bit like Dell boy, but he's very articulate fantastic members of Moses. I don't think about the word does Moses. But I like osmosis, because it's sort of like a transforming impact permeating his paws, from within, which is enabling him to sort of get his mindset. Right, not just for himself, but to be a brilliant steward for the next generation. I mean, that's just a wonderful review. Yeah, we love that one. So thank you. Thank you once again for that. Okay, so what did you pull out there from the conversation with Manish? Oh, absolutely nothing that's ended there.

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I mean, what I would say is, you know, he's, he's coming from a place of clear understanding of how markets work. And while he and I might have the occasional disagreement about the role of the market, in building wealth, I believe that, for the most part, when people are investing in the market, they're not doing so deliberately. They're not doing so with the intention to create cash flow, they tend to fall into the accumulation model, which is sort of buy in hope, as opposed to hold and deliberately diversify and deliberately create ways to sort of mitigate risk, however, so he and I might disagree on that. But there is a role for the stock market. And I think if you listen to what he had to say, he's really talking about inflationary pressures, both in terms of or in terms of fees, inflation tax, so if you just use what I normally do, Chris, and kind of find an acronym, and that is your investment, fit fees, inflation tax, and of course, the big issue right now is inflation, but we mustn't minimise our understanding of the impact. And the reduction therefore in the value from fees, and also from tax, but just to touch on militias viewpoint as well, that he talked about the current problems with inflation or supply side driven. Now, I'm an economist by training. So let me give the counter view as well, that inflationary pressure, the pressure on prices, yes, can come from either the inflation side, or the demand side, which is when there is so much pent up demand that what tends to happen then, is when the demand is very, very high, and the supplier of the product service or whatever says hang on a minute, there's a huge demand, they put the prices up. So that's because they want to make more profit. And of course, he mentioned that, that in inflationary times, companies almost accidentally can make more profit, which means the stock market at least big companies, you know, who are participating in those services where that inflationary pressure is there can be making more profit, and therefore, their value can be a hedge against inflation, because they're making more profit in line with inflation. So definitely I agree with Manish as far as that's concerned. And I definitely agree with him, that you've got to pay attention to the tax side of things, use it or lose it, as they say, and take advantage of your eyes and take advantage of your pensions. Because wherever you can invest, where there's no artificial reduction in somebody's taking money out of your life, basically, then it's important to do that. So all tax free allowances should be used. So I agree with him on that. And I think the other point he mentioned when he talked about tax was enjoying tax free returns, I want to flip that a bit and say you should enjoy returns, enjoy it, or find pleasure in investing, whereas so many people find fear investing. And the only way you can find pleasure in investing is to know more about how investing works, and know more about yourself. So many people get caught up in investing in standard things that somebody else is designed by accident by ease, really employers set up schemes and funds that are designed because well it's just easy to offer the same thing to everybody, which may have no reflection on who you are as a person. So I would say spend time with somebody who knows more than you do about market and help you understand how you can invest in line with your own personal DNA, whether it's value investing because you like certain companies, whether it's building kind of a core holding in low cost investments as Manish mentions, and then build some

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almost ideas around the outside. So you might hold a a range of passive funds because you want to keep your costs down but

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You might want to dip into what what do you think is happening with the world? As far as electric vehicles concerned? What do you think about nitrogen cars? What do you think about green energy? What do you think about so that your opinions can reflect your investment choices? And that way, you're bringing your investments to light to reflect who you are? Not somebody else. Yeah, Manish mentioned about ETFs. But perhaps we can explain a bit more about what an ETF stands for. Yeah. And I think ETF exchange traded fund is just another way of being able to buy into the stock market. So just as you go by your shopping, you can either buy it from a local store, buy it from a supermarket, or go and buy a cash and carry it wholesale prices, centrally, and ETF as a wholesale priced stock or a fund. And they can be very, very narrow and very specific, which means instead of buying a big big fund like footsie 100, or the s&p 500, Standard and Poor's the American version, you can narrow down say I want to own gold stocks or mining stocks or something very specific. So you can zero in and focus on the areas where you might be interested. So ETFs, just another way of holding money in the market, narrowed down where you want to go at a fraction of the price you would normally pay for big funds or in America, they call the mutual funds, where they tend to be heavily loaded in terms of fees and Enki spot on about fees. Most people are paying 2%. And I'm going to repeat my challenge that I did a thing last time, Chris, which is we believe that anybody who gets in touch with us who's got money in the market, possibly not reflecting who they are, possibly by default, we believe we can save you 50% In charges. Now, in inflationary times, if you can reduce something about 50% He's done a good job. If you can reduce by 10% and a good job 50%. All you need to do is drop us an email at Hello wealth builders.co. UK, and we will do our best to do that. And if we can't do it, so free anyway. Yeah, nothing to lose. Yeah, definitely take advantage of that Johnson email, as Kevin says, just put a clear subject line there reduce fees, wealth talk podcast, and we'll definitely get back to you and pick that up. So okay, that was interesting. And obviously, one of the things Manish talked about was diversification as well, yeah, talking about perhaps, you know, property investors looking to diversify into pillar three investments. But of course, we know the seven pillars. So diversification definitely gives people peace of mind security, it kind of smooths things out, especially when it's difficult times. I think, if you can find a way that over time, you can build your wealth deliberately and conscientiously in multiple pillars, you will become financially bulletproof. And that's the idea of diversification. Most people, I have conversations with people and say, well, diversification is really important, and not not at any cost. But they say, oh, yeah, but I'm already diversified. What do you mean? They will I've got 20 stocks or 30. stocks? Well, that's not diversification. That's diversification. If you don't know what you're doing, you've just bought more, and you think you're doing better, when actually you don't know what you're doing. And this is where I like the Buffett definition of risk, which is when you don't know what you are doing. So the risk is always a new. And what we believe is if you learn more, and take some time to be taught, be humble enough to be open to it, you can learn not just the enjoyment side of things. But I believe that Manish and others can teach you in a month.

Unknown Speaker  38:58  

What an IFA would know about managing funds that they charge you for a lifetime.

Unknown Speaker  39:06  

So a few hours of learning can remove the fees that somebody's going to put in for life, because it is quite simple. It's not as complicated as anybody thinks. And that's the reason why, as an iPhone myself, I pride myself on keeping costs down, show people what to do, then they know how to do it, even if they don't choose to do it themselves. It's always better to know what needs to be done. Because as I I believe there's no investment that's passive. You've got to know what needs to be done in order to delegate the work. But if you don't know what needs to be done, the delegation becomes abdication then you're hoping and hope is not a good plan. And we've got numerous stories of members of our community who we've saved 1000s and 1000s of pounds for

Unknown Speaker  39:54  

some just go to our Trustpilot reviews. But the other thing I've mentioned that sort of ties up what

Unknown Speaker  40:00  

When he said in my little quote there with Mr. Buffett is the issue of how do you create an income stream from the stock market. And it's good to know that. And while not be, might not be right for everyone,

Unknown Speaker  40:17  

Warren Buffett and anomalies teaches this as well, about options. And while I'm not going to go into the technical details of options, let me give you a simple analogy, Chris, if you know about pillar number four, which is owning a portfolio property, if you imagine, you're going to buy property, and you think about, I'm going to buy some property, and I'm going to build my wealth through property, but you buy the property, and you leave it empty.

Unknown Speaker  40:46  

So you're only gonna get one stream of income, which is the increase in the capital value of the property. So you buy something for 100 grand, and in the future, you may sell it for 200 grand, yes, you pay some capital gains tax, because when he said there are less benefits in the tax side of things, and owning residential properties and other types of commercial property can work differently, particularly if you combine that with your pension. However, going back to the story,

Unknown Speaker  41:16  

you wouldn't dream if you're a property investor and saying, Well, I'm just going to leave the property empty, you'd want to get two streams of income. Number one, the capital appreciation, or you hope for capital appreciation, and over the long term, you'd expect it. But number two, is you want to rental income.

Unknown Speaker  41:34  

Or that's what Mr. Buffett does. So he has a high holding of stocks, which is keeping for the long term, when you hold a lot of stock. That's called a position. So when you have a large position of money in stocks, other people who don't have that position, want to temporarily borrow that position, or some of your position they want to borrow your stocks. Why do they want to do that? Well, they want to try and create some revenue from the sale of an option or the purchase of an option. So they'll think the stock is going to do want to create a value from it. So they'll borrow your stock

Unknown Speaker  42:18  

if they need to, or buy it from you. So if they borrow it, so they've got the money to fulfil an option, you get a premium a rental. But if you did exercise the option they're going to buy from you. Well, if you've always set the option price, to make a profit, you're going to make a profit either way. And this is teachable, not for everybody. Definitely not for everybody. But it's teachable. And it isn't complicated at all. So you can learn it. You can embrace it, I went on a course to learn it. understood it

Unknown Speaker  42:56  

didn't think it was for me. But that's me, you might be different. MANISH would definitely be different, somebody else will be different still. So by understanding these things, you get to determine what you like, what you don't like. And that's better than being constantly in the dark. And that fits really into our recurring revenue roadmap is about understanding the different pillars that are available, the different strategies within those pillars, and then turning the wheel of wealth. And that's the process of little bit of education, some support connection. And as you say, sometimes you might turn the wheel decide it's not for you exactly right, but it to one side and try something. And that's part of it. You know, that's the whole part of the wealth building thing is when you can go somewhere, and I'm delighted and proud of wealth, wealth builders being as far as I know, Chris, and anybody who could correct me by sending me an email with the only completely holistic and impartial organisation that deals with wealth in its totality, the 360 degree view of wealth, not the myopic view of stocks, property, funding, you know, commodities. So because we take that holistic view, and we partner up with the best people we know, then we're able to bring that knowledge and bring that integrity as the safest place we can be for people trying to build their wealth, rather than, I suppose, leaving the shore and getting into shark infested waters. So we want to be a nice safe harbour for people and I'm proud that we continue to do that. Yeah, and we offer all different levels of membership you can begin as a free member just head to wealth builders dot code at UK forward slash membership, sign up won't cost you anything get access to some of our videos, our books, and for those that perhaps want a little bit more coaching support, then we've got the academy. Yeah, you know, but other things coming soon, including wealth builders, families, and I know you've written a fantastic 200 page workbook for people who want to perhaps go on a self guided tour.

Unknown Speaker  45:00  

Nothing wrong with that either. So it just, we needed ourselves didn't need to create the whole picture. Before we could then say, well, here's how to navigate yourself through these waters as opposed to us actually steering them through it. And that will mean very soon we'll have a lower cost offering because we won't be coaching them. And I think I'm looking forward to that. And that will be sometime pretty soon or new soon. Absolutely. Okay, good. Well, I think that wraps up our 100 and 50th episode. That was a good one.

Unknown Speaker  45:31  

Indeed, it was. So thanks again to Manish for his insights on today's episode. I hope you enjoyed listening. If you haven't left us fat review. Now's a good time. Just head to wealth builders.co.uk forward slash reviews. Take a couple of minutes out. Just let us know that you're enjoying it. We would really appreciate your feedback. Yeah. And if you've enjoyed the podcast, my name is Kevin Whelan, if you haven't is Christian Rodwell.

Unknown Speaker  45:56  

All right on that note, we'll catch up Same time, same place next week. Until then, my friend so yeah.

Unknown Speaker  46:05  

We hope you enjoy today's episode. Don't forget that we are constantly updating our resources inside the wealth builders membership site to help you create, build and protect your wealth. Head over to wealth builders.co.uk/membership right now for free access. That's wealth builders.co.uk/membership

Transcribed by https://otter.ai