FOUNDER #43. £100M+ Genius from East London To Living Tax Free In Monaco - Paul Smith

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1:59Visit Ernesta.com today. That's E-R-N-E-S-T-A dot com. I've got a question for you. If I was to give you£10 ,000 today and you're going to start from scratch, where would you invest that money and why? The same as I did before, property is the way to start. I left home at 17, 170 quid and the only way for a normal person is property Because where else can you borrow the money, but all of the upside is yours. Looking at all the different asset classes, the safest asset class is property. You're worth£100 million. No, more. Are you here to help people financially set themselves free? My business is very, very clearly about making millionaires.

2:40Let's move on to your book here, The Art of Wealth. Break that down to me. This is how you should create wealth, how you should protect and grow it, and how you should transfer it to the next generation. If I had to put it in one sentence, it's the language of money. I believe the vast majority of people don't know what to do once they've got money. Each and every one of us in the UK is allowed to earn a million quid a year tax-free. Go on.

3:08Hey, guys. We've been running this podcast now for five and a half years. We've had some most amazing business guests on here. Simon Squibb, Daniel Priestley, Barry Hearn. And the list just goes on and on from billionaires to people who have built brands. If you want to come on the podcast and talk about your business and sit here with me in the studio and tell your story, go check out dodgewoodall.com forward slash guest and check out the three minute video. We've also left the link below as well. Paul, welcome to the show. Thank you, Dodge. Kind of having me. Yeah, I'm very much looking forward to this one.

3:38I've got a question for you. If I was to give you£10 ,000 today and you're going to start from scratch, where would you invest that money and why? same as i did before i spent nine grand actually on my first property bought it outright 269a roman road e6 east ham and i made a ton of money on it and it very very simple process you can still do it today i bought it lived in it did it up and i probably need to give the listeners a bit of notice because they're probably not all as old as i am um it was i'm 62 so what year we talking roughly here when you 1982 82 okay and i bought it for nine grand lived in it for about a year and a half while i was doing it up something my dad had taught me and i sold it 18 months later for 33 000 pound which probably listening today 24 grand that's not a lot well it was then people were earning the average wage i would say probably about six grand a year so 24 grand tax free yeah was like five six years money because it's four years money yeah take your tax off yeah so yeah and i've i've got a very good friend she's called gia she's only mid-20s and she's just done the same thing essentially she she had about 19 grand and she's put that as a deposit and she's bought a 200 000 pound place and she's doing it up so absolutely no question dodge i would take 10 grand yeah and i would buy property i absolutely love property yeah it's it's i think it's where 99 of people should start interesting and but that 10 grand today is not going to get you that far it's a deposit okay so are you saying because it is tax-free once you do it up and you leave there's no capital gains that yeah that's your best bet as we sit today in 2026 well yeah i mean i love gold i've got gold love bitcoin got bitcoin i love gold bloody bloody yeah gold's the way forward for me personally in in as well as yes yes correct balance portfolio and all that but to make money in gold you gotta have money yeah so let's say you put your 10 take that 10 grand put it into gold and if i go back five years gold's gone up roughly 140 or percent 140 150 yeah so your 10 grand would now be worth 25 that's nice yeah but you can't retire on it can you take the same 10 grand put it into a house which you could as long as you live in it 95 mortgage 10 5 deposit 10 grand's going to get your 200 000 pound house i don't think it's impossible if you get the right one to then do it up and sell it for maybe 300 okay but it ain't going to take you five years or i don't know get one where it's got big garden do a little title split which people get freaked out when i start talking it's like 200 quid to do a title split and then get planning on the garden or something and then just sell it as a building plot yeah i agree and you can do things with property that you just can't do with stocks and shares or whatever well you're in control have you ever been in a bank and said i've got this brilliant idea i love gold i'm going to buy a ton of gold uh can i get a 95 mortgage before you finish yeah or have you ever taken a bar of gold yeah and so i'm going to do an extension i'm going to double the size of this bar of gold that's there's some criminals yeah but it's not very it's frowned upon yeah you can't put like you know a loft extension on a bar of gold so my point is to make money in gold you need money yes and my logic is for most normal people i don't know but i don't come from money i left home at 17 170 quid and everything i've got i've had to like work for same grafted from the 10 year old only selling tickets to the nightclub next door to where i am today lovely which is just a bigger scale yeah yeah yeah well we're all selling all the time aren't we so um the first stage for me is to make a million and once you made a million then you can do other stuff yes and the only way for a normal person and i mean normal in the context of you know they're not born as a king or something i blew that one i wasn't um so um is property.

8:15Because where else can you get, fancy name, leverage? Where else can you get 70%, 80%, 90 % of the money? Where else can you borrow the money, but all of the upside is yours? Yeah. All of it. See, when you break it down like this, and the listener will be going, yeah. Because people just think, oh, I put it into property, how does it all work? The average person will go, well, how does it all work? Yeah. Where's my money going to be? But when you actually break it down, saying, well, you've got the S &P 500, you've got the NASDAQ, you can invest in stocks and shares, which is, I think, dangerous right now because it's so volatile.

8:47But then I kind of look at the gold, like you say, you've got to put that money, once you've earned the money and got the money in the bank, What are you going to do with it? What are you going to do with it? Yeah. But actually in property, there's no capital gains tax and that's your biggest probably asset that you can have. For the one you live in, yeah. For the one you live in, yeah. And any person right now, a clever person, I think if they go and live, do it up, earn the money, go into the next one, if they're prepared to live in a place while doing it up, what a great way to earn money. Do you want to know where I learned that?

9:12Go on. My dad. And. Was he in property, was he? No, kind of. I mean, he wasn't a professional. He dabbled. No, the only thing he ever did was buy a house, like a knackered one. Yeah. Do it up and sell it. And I did it with him for as long as I can remember. I'm the oldest of four. Mum and dad were both teachers. I was born in 1964 and back then it was very normal for mum to become a housewife. So four kids, mum, dad's bringing us all up on one teacher's salary. Now that's not a king's ransom. So the way he like made the money up was every, not every 10 minutes, but every three or four years, buy a house, do it up, sell it.

10:02and I could see from before I was even 10 probably that he was making more money from doing the one property at a time than he was from earning what he never did and I when I thought about this over the years I don't know why he didn't what he never did was buy more than one at a time the only thing he did was do up the property that we lived in and a lot of my sort of practical skills i learned with him i'm an engineer my first job ever was dagenham uh ford's making engines but from the age of probably you know seven eight nine i was physically doing the refurbs with him because um i'm strange in many ways aren't we all but i i got to six foot by the time i was 11 and i've not grown since yeah so this big massive 11 year old was doing house refurbs and yeah i mean the sort of give everybody an idea the sort of stuff we were buying it was generally old victorian stuff generally an outdoor toilet and we were doing fancy modern things like you know indoor bathrooms and central heating even one house we put double glazing in it was like really pushing the boat out yeah and yeah so that's where i learned it so what about today then paul if someone's out there today and everyone's talking about how bad the uk is at the moment with inflation and the cost of living and everyone's putting their houses on and apartments and flats on the market and not very many of them are selling what would you look at today where's the opportunity today for someone oh careful careful careful i hear what you say and that's what most people would think yes because that's what the media says yeah i'm an engineer i'm married to an accountant um and i do numbers so when you say nothing's selling for the last 18 months there's been plus minus two percent 100 000 properties sold so there are a hundred thousand people saying i want a house yes just because 200 000 people stick their houses on the market i see okay so the numbers have changed the amount of people on the market rather than the selling okay so just because you double supply doesn't mean you double demand yeah so that's thing one thing two you talked about inflation well people have just got this most people don't know what inflation means i don't think they do how would you explain inflation to a 10 year old to a 10 year old i would explain inflation as essentially it's your money getting burnt is the way i visualize it and I did a little I put together a little table a few days ago and five years ago a dozen eggs versus today 60 % up bread 30 % up so the way I'd visualise it is say a loaf of bread I would say to the call it save us a pound yeah but I'd say to I would put a loaf of bread in front of a 10 year old and say you know five years ago you would get that for a quid yeah now and I would take off I'd take 10 slices yeah that's what you get yeah I think is a better way to that's a good way of looking at it yeah yeah yeah and I've done that from an early age with my own children I've had plenty of practice I've got six so you've got six kids yeah same missus no how many missus just two just two just two calm down calm down I mean it didn't go entirely to plan the first time but I tried to get it right second time i mean yeah yeah yeah not go too far down that road but i've also got uh two fantastic grandchildren lovely so educating the next generation is a massive massive part but then coming back to inflation if that's all right no no i want to hold on to this because this is what i do educate my boy about money right and how money is a good thing how old is he's 12 okay so i teach him to read right to left okay when you get read the menu or he's about to buy something and value for money.

14:09I thought you were going to tell me you were teaching him Chinese. That's how they do it, isn't it? But I bet it's important that he reads right to left. So he goes into a restaurant and he wants a steak. Well, what is that steak? 42 quid. He goes, no, that's not good value for money for me. So he understands that because at the moment we all grew up with cash. So my old man would always have a grand in his pocket back in the day and we'd see who can count the quickest and he would teach me how to count the heads up and that's how we got brought up to understand the value of a pound note. And the kids today to understand the value of a power note because everything's tap.

14:39So nothing is like hand over 20 quid and you buy something and you've got six quid change and you've looked at your change, you counted it, you've checked it. Now kids are just going tap, bang, bang. So it's really important that we teach children. 100%. A little technique I use is I say nothing actually costs money. It costs time. And it's different for all of us. So let's say someone wants to buy a book or a table or a car or I don't know, TV. How many hours do you work for that? Correct. Yeah. After tax. Yes. So everything that you're buying, how many hours of your life has it taken? 100%. And I find that people make really different buying decisions as opposed to, I want it because it's nice.

15:21Jesus, I just worked for it. If I buy that, that's three weeks money. No, I'll leave it. Because people, we've all heard this, time's your most valuable asset. engineer over here says well yes it is but if you don't measure it you can't manage it agree so how many people actually measure what they do with their time and one thing you do with your times you turn it into money another thing you do with your times discretionary you could argue you watch telly you scroll you whatever most people don't know what they're doing with their time agree if you don't measure it you can't manage it most people don't know what they're with their life it's the same thing same thing you don't how many people actually plan their life for what i want to where i want to be set some goals out most people are just wading through life correct and and acting and reacting correct you know in the chaos and if you listen to the mainstream media you can get caught up with the negativity and the chaos let's go back to inflation love to yeah that's my thing yeah let's go so inflation is it good or bad now you ask most people, they're going to say bad.

16:32I'm not sure they really know why. But compare it to my favourite asset class, houses. What does inflation do to the value of a house that pushes it up? Does your mortgage go up? No, it stays the same. So if the asset increases, I mean to be ridiculous, over a long time, let's say it goes from 200 ,000 to 400 ,000, your mortgage has stayed the same. The value of the house has just doubled. That's your money yeah all of it yeah and okay let's say it's an investment property if you sell it you will get capital gains tax whatever whatever coming in at what percent roughly top rate capital gains tax at the moment is 26 yes and separate subject i love tax as well yeah i don't like paying it but i'm understanding it got a question for you i'll come back on we didn't now no no no we'll go back to it yeah all right so inflation it's pushed up the value of the house all of that increase is yours so if you're a property investor do you want five percent inflation or ten i'll have 10 please absolutely yeah what's that what else does it do your mortgages stay in the same it pushes up the value of the rent you hope your mortgage stays the same well why wouldn't it because if you're sorry if you're enough fixed or what you call it and it goes up with yeah yeah yeah sorry what I meant is the amount that you owe on the mortgage stays the same.

17:54The interest rate could change. Yeah, yeah, yeah. But the amount that you owe stays the same. And if I think about that 269A Roman Road, when I first bought that, that was about nine grand. Well, it was nine grand. Now, 300 and something. I was going to say 300, 400 at Eastland, yeah. 300 plus. And people say, oh, you've got to pay tax on it. Well, okay, so what? But you don't actually, because I sold it and i put that money into other properties and i went flip flip flip flip flip did you live in that one you've done it out bam and did the same again like your old man did did it i did it four times in a row yeah by the time i was 25 i've done it four times yeah but let's say you keep it as a buy to let and let's say you just increase the mortgage how much tax you got to pay nothing so equity release is tax free yeah so just break down equity release for the listener out there well let's go with that one yeah nice easy one i'll round it you've paid nine grand but let's call it ten yep years and years and years ago today it's worth three hundred thousand and that means you're the value of the property's gone up by two hundred and ninety thousand you can just go to a bank and say well actually i'd like to take a 75 mortgage on that and 75 of 300 is 225 they are so you've got 75 you can pull out in that example you got 211 you got 210 000 plus you can pull out 200 i mean are we talking 75 i was sick yeah yeah yeah yeah you paid nine ten ten grand for it and it's valued at 300.

19:30it's now worth 300. yeah you can remortgage it yep and then take the equity out to go do something else yeah so the the correct number will be 215 000. yeah and if you look at that from a behavioral cultural point of view the number one thing that most people in the uk are taught to do it's kind of in the blood let's get a house then what they talk to do they talk to pay off the mortgage yeah why oh it's stress-free really so the average house in the uk is now worth 300 000 roughly plus minus 10 including london the south edges the whole of the uk that's the average okay very very different average an average price inside the m25 is about 650 but the average for the uk is about 300 and it and the magic age is 56 once you hit 56 the average person has paid off their mortgage and that means that they sat on 300 grand yeah and they're saying it's stress-free because they ain't got any debt but what could you do with that 300 grand and without going mad let's say the average person put 50 mortgage on their property especially in their 50s still working 150 grand's not a big mortgage these days or i don't think it is and five years ago they put that 150 grand into gold that gold would now be worth best part of 400 000.

20:52so they've had this stress-free because that's what everyone says you should do but what you've actually just done is you've just chucked away best part of a quarter of a million quid but how many people in their 50s who have who are asset rich and cash poor so many a load so many most most six out of ten yeah like if you go and buy a for argument's sake a million pound now for someone and they've sat in that house for 30 years and they haven't been able to do anything and now in their 70s 73 74 they've sold the house they've sold and sold and they've sold it for two mil they've got all this money they've done what to do they've left it too late correct what they're going to spend it on well there's for me in my head and the way i model the world there's three stages there's create wealth there's then compound and protect yes and there's then transfer by which i mean to the next generation and you've got a son i've got kids and i know not everybody has sadly in many cases they can't um but most people still want to transfer the money to something could be medical research it could be a charity could be one of their other relatives you know whatever and they to do it properly i think you need to do two things you need to plan for it but i also think you need to educate the next generation i recently i've just started working um american brother and sister and you can't make this up mum and dad um started making furniture built up a business and very successful business making furniture in the US.

22:23Became clear that son and daughter in their 30s didn't want to become part of the business. So mum and dad were thinking, we're in our 70s, we need to... So they sold it. $115 million. And then very sadly after that, a couple of years later, they passed away. So this brother and sister end up with$115 million. But they really weren't ready for it. immediately surrounded by a lot of people this happens to that suddenly get money. They're surrounded by sharks. Sharks in suits, generally, is what I call them. And family members with their hands held out. And this 115 million, they were advised to put it into this restaurant and put it into literally a casino.

23:11You can't make it up. Not as in gambling, but as in buy a casino. One year later, the 115 million was six. and because they didn't know what they're doing. That's the same with a lot of professional sportsmen. Exactly the same. 100%. I've got a handful of professional sportsmen who have gone bust and they've gone bankrupt after earning copious amounts of money, maybe three years even. Two, three years, four years. It's like, wow. The figures are nuts. Wow. I don't know if you've ever looked at the figures, but if you look at, the Americans are actually worse than the Brits. If you look at Premier League footballers, it's about 40 % of them go bust.

23:46I'm not surprised. and like the NBA basketball players and all that is close at the 60 % more sharks in America yeah but also a lot of sharks but also not a clue about the value of a pound note and the money they're earning I've always said I've always said a professional sportsman at the end of the week if he's on 70 grand as a West Ham footballer or whoever he may be playing for he gets paid 70 grand that'd be a cheap one average is about 70 is it yeah 60 70 but you get paid at the end of the week cash so you see what you've worked for what you're getting for your money for the training in the game you played because at the moment if the money's getting put in your account 70, 70, 70 each week you're going to the hole in the wall and you're seeing these numbers it doesn't mean anything to you and when you're buying a car for 150 grand or you're going shopping it doesn't mean anything it just happens so when you stop this and that money stops and you still live in that lifestyle and you can see how it goes so quickly and on top of that obviously the sharks tell you to invest in certain areas as well which is generally benefit them not yeah absolutely sad it's very sad it's sad i wonder if there's anything to help professional sportsmen or professional footballers or rugby players on their journey in theory there is like you know the pfa and i actually work with someone in the pfa and something i offered because especially in the academy younger players the idea is to give them an education in case because not everybody turns into a first team player do they so it's kind of well you've got to keep up your studies 0.001 % do alright I don't know into the yeah world that's as a professional footballer I think academy is still very very low in the academy whether you're actually going to break through into the Premier League you know yeah but you've got to have I think two or three different things in mind say you're the parent of one oh say you are one of those people you've got to be like okay well I want to be a footballer but what am I going to do if it doesn't work out and a formal education but let's say it does work out well what am I going to do with the money it shouldn't be oh Jesus I've got the money what shall I do you should have been trained about that for the last five years and there's people I'm sure you've been in and out of Anfield a few times we all live in Robbie Fowler's houses yeah yeah yeah he's got hundreds hasn't he he has so has Frank Lampard there are Frank's done very well in Surrey and over else in London.

26:12But there's just a handful of them. Yeah. You don't go to most football grounds and all the star strikers and players, they've all got tons of houses. Yeah. And I'm not saying you have to, if you're a footballer, you certainly don't have to go and buy houses, but you should have a plan. And I think for, if we bring it down to a more kind of, not everyone's a footballer, and I think that the number one thing that most people try and do is they try and save some people, save some money to invest. after they bought everything wrong you should invest first and then spend second and then i completely believe as human beings we're tolerant to plus minus 10 percent and what i mean by that is say you're on 500 a week or a grand a week or whatever it might be if you said to yourself right as soon as the money hits the bank i'm going to take 10 i'm going to put it here yeah stocks and shares gold property whatever it might be you will do it if on the other hand you spend what you need and that need expands a little bit to include Starbucks, takeaways, Netflix, whatever it is, I ain't got any money left.

27:19But my fault, save first. Is property the number one as you sit today? Anyone listening to this should invest in property but the key to it is what you buy it for as we are today. So for example, you say the average house price is 300. say the average price you mentioned in London was$650 ,000. Let's just talk$500 ,000. Would you encourage people to invest their excess money if they have a$20 ,000 or$30 ,000 that they can use as a deposit to go and put it on a property and just make sure you go and cut the most amazing deal buying that property and sit on it? I think we've got to be very careful.

28:02I think to give specific advice completely depends on the circumstance. But in general terms, looking at all the different asset classes, the safest asset class, in my view, is property. It's got the longest track record. It's in the language, safest houses. And throughout the studies I've done over the years, I'm drawn to an argument that's actually a Japanese argument that says the only two sustainable forms of competitive advantage are brands and people brands and people yeah yeah and why is that relevant it's relevant because let's say you want to go put your money in the stock market or i know people have put the kitchen sink on nvidia technology doesn't last if you think about it especially for any of the like younger people listening um they all think that the iphone typically has been around forever it was actually 2006 2007 and if we think about what what was there before the iphone the main phone brand was a nokia blackberry nokia nokia yeah yeah what a nokia do now make car tires yeah and what did blackberry do now yeah cry yeah whoever had blackberry they didn't move with the times no no but my point is that if you're anything to do with technology that's great while it's great and then it's not change very quickly and it's not so i had this not argument i had this discussion with somebody who was telling me that you know meta was this great company facebook blah blah blah and if you actually look at meta because i just pull the data whenever anyone starts arguing with me i'll just pull the data and if you put money into meta a year ago versus today you'd be down 25 round numbers is that a great investment of course it's not and it's so easy to trip up and whatever now i'm not saying if you've spent your entire life studying the stock market and you know the ins and outs of it that you shouldn't do that that would be good if you know what you're doing because buffett says doesn't he risk comes from one thing not knowing what you're doing yeah you just shouldn't do what you don't you should go learn about it find someone's better than you homework and yeah bloody blood yeah but for most normal people i would say yes a house but what type of house where should it be is it investment property going to live in it even those are sort of fairly basic questions and after the property that they live in because the stats are seven out of ten brits own their house three out of ten rent is that right yeah but that must be baby boomers that's a 60 plus surely if we've got a high percentage of that 70 own their house and 30 rent yeah okay it's it's fluctuated by yeah two or three percent over the last 30 years and yeah yeah you're right the older demographic owns more but if you compare that to say germany uh germany's on its head versus that it's 30 only germany 70 rent okay so yeah i i don't know listening to this or what country they're in but you need to know your own country and uh demographics are also key because you mentioned baby boomers i'm the last of the baby boomers i was 64 is the last year of the baby boomer so you're in that category the baby boomer okay just yeah fingernails but i'm in and they're all retiring like crazy because you've got the foot this year the first baby boomer is 80.

31:38now they're probably thinking about downsizing not you know so depends on your age depends which part of the country you live in and but after your property that you live in where you've probably got a ton of equity and maybe a little piece of am i allowed to give homework yeah yeah if if people are living in a property and they work out how much equity you got yeah and then ask yourself a question so how much just again to break it down how much profit you've got in that house if you've got it valued again yeah what's the what's the value of it take away the mortgage that's it and it's dead easy if you ain't got a mortgage it's just what's the value of it so how much value have you got how many pound notes you got in your property that's question number one question number two is how much you got your pension because after your property most people's biggest asset is their pension 26 years ago i went up to scotland for my last ever job where i was working for someone else and just as i was on the way even though i was the managing director they closed the pension fund so i couldn't join it so 26 years ago they said oh sorry uh since we made you the job offer and you've accepted and started with the pension fund's shut yeah so you're gonna have to start your own pension if you want a pension and they were good to me i mean it wasn't like nasty and moaning or anything they said well there's your salary we'll give you 20 on top of your salary as your pension contribution so i got left and most of people that on my grade or you know doing what i was doing they were all like oh lovely i'll have a bigger house or a bigger car or they just blew it i went and studied about things called sips and sasses so self-invested personal pensions and small self-adventure schemes and i discovered that you could manage your own pension investments and through your own pension that anyone can set up you can buy stocks and shares you can buy gold and you can buy property i was like oh that's interested i'm a property investor and now to be clear you can't put residential property in it but you can put commercial property okay so 25 years ago i started buying commercial property with my pension okay and the figures are stunning and what i actually i went one further than that dodge and what i did is i cashed in or transferred is the technical term my previous pensions i'd got three i used to work for for ford and then whitbread whereas other places and i put all them into my private pension which you're allowed to do and if i added together in the year 2000 those three different pension schemes by the time i was 60 so that would have been 2020 not 2024 i would have got 8 000 pound a year but i took the money instead in a private pension scheme and i bought a shop an office above it and straight away instead of waiting 20 years to get eight grand straight away i was earning 34 grand a year okay and that just went back into my pension scheme okay so the eight grand is what that pension would be giving you per year yes okay and then what you've done you've gone and snap sum it up and hold on a minute that can be 34 grand a year correct okay brilliant and it's again in terms of homework go and find out what's in your pension everyone because there's only tax on pension no well depends what you mean um there's tax when you take pension money out yes but you can use that to generate as long as it stays inside the pension fund so take my shop i still own it where is it uh scotland it's a place called helensborough so just take that particular shop forget the office that shop from day one paid me 25 grand and if you want to understand can i do this is it relevant to me the first thing you need to ask for as a transfer value and they'll say well yeah you projected value when you retire is whatever so much a month yeah or you can have a bag of cash you can have a lump now okay and for me the figures were eight grand a year but i've got 396 000 pound as a transfer value okay now i can't spend it so you might as you meet me individually but in my 40s what i can do is go and buy commercial property and i bought this commercial property and if you think about and the numbers there to be again share transparent because i love sharing particular numbers yeah from my 396 to buy this shop and this office was quarter of a mil yeah so i still had 140 000 pounds spare ish and after four years i've now got another quarter of a mil yeah so i bought another one okay and so my initial if i keep the numbers simple let's call it 30 grand between the two became 60 grand okay four years later what do i do go again buy another one yeah so now i've got three yeah okay that means i've got 90 grand is this your best ever move i'm not talking best ever move because as you're find that like at the time like listen it's out there in public but you're worth 100 million pounds yes and that still makes me laugh when i hear that yeah in a good way in a good way and massive respect by the way thank you boy done good love it absolutely love every every doing all right yeah no it's wonderful to see because it's quite easy for people to tell they's worth i know you live and breathe what you do you live and breathe your numbers you live and breathe houses and you live and breathe helping people to educate people to go on this journey what you're Thank you.

37:06You've gone for yourself. All right. Yeah. So huge respect on that.

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38:20That moment of finding that information out and what you're teaching people now, can people do can people do that today and follow your journey what you did to making sure they're not getting their eight grand a month or three grand a month they can actually triple that or quadruple that each month they can let me give you an example because i'd love giving examples so what i did was 25 years ago and the number one complaint i get is well you can't do that now it's easy in your day you're a baby boomer but that is the general kind of the reason i'm not doing it is because you had it good so there's a lovely lady that i work with she's fantastic she's called beth bird all right great name it is she's a great lady yeah and she's all about her son he's called theo and he wants to be an airline pilot and has wanted to be for all the years i've known her about five years so five years ago she was an amazon delivery driver like you know during in lockdown because before lockdown she had one of these businesses that just got killed by lockdown because it was a service business it was people so she what am i going to do so she starts driving for amazon but at the time theo's now 18 so he would have been say 13 and it costs a lot of money to become an airline pilot you're talking hundreds of thousands yeah amazon drivers haven't got hundreds of thousands so she asked me well what can i do and one and to your particular point one of the things that we talked about was pension now her pension she's gone and bought a thing called a one-stop shop so it's like a little mini market but it's a branded mini market i know the ones yeah and her figures i'll give you the exact figures because i can remember them um if she'd left her pension where it was it would have given her four and a half thousand pound a year when she retired so not yet it's not a lot is it no that's normal is that what normal a pension is yeah five grand a year remind me i'll come back to it i'll tell you the exact number so she said all right to the pen this was a bank so when she was a like a teenager she worked at a bank for five years i don't know which one it was so no i don't want the four and a half grand give me money so she got a couple hundred thousand she goes and buys this little grocery store and boof just like that it starts paying 20 grand a year okay and that's now going back into a pension fund yeah yeah and she's not 60 she's nowhere near 60 yet yeah imagine what she'll have by the time she's 60 yeah because even if you just do the maths on that basis 20 grand a year 10 years 200 000 Go and buy another one.

41:09Yeah, amazing. Go and buy another one. Would you today invest in commercial property or residential property? Both. That's a question I believe fundamentally something my wife taught me. She's taught me a lot of things. She's taught me to be nice. Yeah. She has. Do you know who you remind me of? Go on. You remind me of a good mate of mine, Barry Hearn. Barry Hearn. All right. Matrim Sport. Yeah. The owner of Matrim Sport. Eddie's dad. Yeah. You speak like him. Do I? Yeah. Okay. Same accent, same... Thank you. Yeah. I don't know what the hell my accent is. Brought up in Yorkshire. Yeah, no, but you've got that...

41:46I feel like you've got that sort of calm London accent. Well, my dad was in London, and my dad, born in the East End, was born in Bow. So I suppose I've got some of his accent. And then I did all my secondary schooling in Hertfordshire, so a bit of Estuary English. Yeah, yeah, yeah. And then from the age of 18 to mid-20s, I was living in East London or Essex. And also the part of that is Baz is very factual. You're very factual. When it comes to numbers, he's an ex-accountant. And he's a billionaire. He's done unbelievably well with the boxing and the darts and the snooker. I like him already.

42:22I know his name. Yeah, he's wonderful. When you go out, do a bit of homework on him. He's been on the podcast, in fact, a couple of times. But have a listen. He's a fantastic, fantastic businessman. Lovely. So going back to it, if you had to pick one with a gun to your head, yeah would you pick residential or commercial property to invest in today knowing what i know now yeah commercial yeah easy yeah and why commercial over resi certainty simplicity and lack of competition okay because um and there's a specific niche i focus on within commercial property so commercial property is really tough really competitive you've got to be really super smart much cleverer than me if you're talking about property that's five million plus because the big boys want it because the pension funds want it but as as soon as you're under five million certainly under two million nobody knows what to do with it yeah it's too small i'm sure it'd be too small for barry and pension funds and all the city of london and all them and the people that watch homes under the hammer i'm not saying this in disrespectful way but they don't know what it is yeah they don't know how to do it and again going back to my first little shop i tell me what commercial property is so the listener out there yeah what is commercial property and how does that business model work and why is it something you would choose today is it because you can sign someone in for five and ten year contract and you're guaranteeing your money each month sorry part of it yeah okay is that a big part no the biggest part is i for me anyways lack of competition so all the people that watch your homes under the hammer they they're not going to go buy commercial property and um i happen to be a leeds fan and there was this auction at ellen road and somebody had put an office block into a residential auction that mistake so there's like 99 houses or whatever and one office block and this office block was bought not by me it's bought by one of my students fantastic deal it's a place called scunthorpe um and the value of oh sorry the price that the property went for was 134 000 pounds for the whole block yeah it's a five five roughly a five thousand square foot office block a couple of tenants i think four tenants in total thousands 1200 square feet each something like that and that was bringing in on day one 36 grand a year so you've got this mispricing yeah and And Buffett, again, one of my heroes, says price is what you pay, value is what you get.

45:14So the biggest reason for me to do commercial property is, especially at the lower end, it's mispriced. The market doesn't understand it, therefore it gets the wrong price. And if you compare that to residential property, and you were trying to achieve an income of let's 30 35 grand a year you would have needed to have spent 10 times more money yeah easily so pound for pound the income that you can generate at the lower end is huge the second element is management many many people at the lower end are trying to manage the commercial property themselves so i was in the late 1990 i was i was working in scotland and i was doing this factory renovation for this guy called terry another londoner tell yeah so anyway the block next door came up but i didn't have any pounds in my kitty at the time so i said to terry do you want me to buy it for you and he's like why would i want that and i said well the next thing by the way which i'm happy to talk about is most commercial properties are off market yeah that's right they're not on right in the night yeah yeah so one of my surveyors comes to me and says got this block uh anchor tenant is howdens you know like the kitchen people and then you've got this rag tag of people doing mots and car body shops and spraying things and other things they're probably not supposed to be doing but anyway it's one of them kind of places and they said we want 400 for it and it was bringing in at the time 90 odd thousand now that as the get goes quite interesting yeah yeah best part 25 return on your money and so terry says yeah all right and i said well obviously terry if i'm going to do this for you then yeah i'd like a little weigh me in yeah a little sweetener and so we agreed a fee and that fee was performance related and if i could get it for less than 300 it'd give me 20 grand and if i could get the income above 100 then it'd give me another 10.

47:41so this one deal which probably took me three or four phone calls 30 grand yeah perfect so i'm happy with that anyway we bought the thing for just just shy of 300 about 290 something and then i got my commercial surveyor a guy called gregor to go and visit all the tenants and talk to them because normally nobody talks to these little commercial tenants and asking questions like do you want to stay for the next five years the next 10 years because they were all on week to week they were all on like cash payment and they're like yeah yeah yeah we want to stay here you're like well okay if you want to stay for five years here's a lease and it costs this much and so suddenly it's all going straight in the bank and long story short bought it for just less than 300 and the rent roll uh after a couple of months is about 130 happy days so that's proper money yeah proper money yeah yeah and i think the vast majority of people that have got 300 000 in their house could probably do that because next thing people don't understand is you can still get a mortgage i mean maybe it's only 60 sorry um so for a 300 000 pound thing what you're going to need let's call it even 150 that's more than you need which is like half the mortgage on your house if you then invest it correctly i mean that was a good deal but you bring it in 130 grand a year even if you want to pay your mortgage off on your house that's like 15 months and you paid it off again yeah it's a question for you but can you not now retire on that no you're yeah one deal yeah yeah yeah absolutely i've got a question for you what mine's been in there if you are retired and you've got and you're renting a property and you don't have a mortgage and you're retired and you're 70 odd years old and you've got 400 grand in your bank say what would you do uh well again it's going to be dependent isn't it if i've got no kids three weeks to live i'm probably off to vegas yeah and ibiza it won't wear everywhere yeah no but if you've got if you're healthy in your 70s you've worked all your life yes you don't own a property yeah but you've got a load of money sat in the bank yes but you're paying two grand a month rent on a nice apartment would you go and use that 400 or just let it sit in the bank oh Christ no get it out of the bank out of the bank straight away where would you go and invest it would you want because you can't go and say you wanted to buy a property that's 500 grand but you've only got 400 grand you don't want to put all your money in that property but you can't get a mortgage because you're 73 or you can get a mortgage okay you can what percent do they want down then uh normal you would set up a limited company yeah or if it's commercial property probably an llp limited liability partnership and say if you just wanted to go you want your dream home for the next 20 years yeah bungalow somewhere what would you do so what's my residential how much money am i trying to make you're not trying to make anything you're trying to say where for the next 20 years of my life, I want to own a property, I've got a nice garden, a nice three bed home, but I don't want to use up all my 400 because that's my spends, that's my holiday money, that's my fun money.

51:08Would you just carry on renting or would you go out of your way to buy a property with that 400? No, I wouldn't because it's not going to earn me any money. If you own the property without a mortgage, that to me is a liability. Yes, I agree. Because it's taking money out of your pocket every month yeah let's say you put that 400 into the stock market forget it's only this it's a it doesn't want to do stock market oh you're getting more difficult yeah i know but i'm trying to home in i'm trying to home in here all right but say that person wants to own their own property where they've got a nice garden and they can potter around the garden for next 20 years and i've finally got my own home yeah you're either going to be cash rich and keep renting or do you go and buy something and reduce that 400 down to i'd imagine what they want 50 down at your age resi yeah you're not getting a mortgage you're not getting a mortgage that's what i'm saying at 70 yeah well you'll get a mortgage until 75 yeah but it will be a repayment mortgage over five years so if you're 73 could they still give a five-year mortgage i'll give you a two-year mortgage no you've got to be fully paid up by the time you're 75 oh my god okay so what's the answer well if i was set that particular challenge i would look at you want to okay so job one stop leaking money yes and i know you're saying not stock market well balanced portfolio getting money working and if the s &p or the nasdaq for the last 10 years nasdaq's about 12 smp's about nine yeah so let's say you end up with 10 on your money well suddenly you've got 40k coming in that'll cover your rent so at least you're not bleeding anymore next thing i'm going to be looking for um probably my possibly one of my friends did this i'll be looking for my dream home with a massive garden yeah and what they did is they got uh planning permission and they sold the site for 100 grand so i'm looking for angles where i can make some money what angles in terms i found somewhere but there's a garden there which i wouldn't want i'll buy a house and i can flip the garden to someone else yes okay yeah or if i take you back to 2015 2015 was a bit of an epiphany for me because i'd always been very very resistant using other people's money then i thought to myself oh jesus i've been using the bank's money that's other people and it's not emotional with the bank though it's emotional with people can be you really well you need to know what you're doing so i looked at prop this is in donkerson south yorkshire i just want to hold you i want to carry on with that story we're telling there because we were so close yeah going back no this is the answer oh it's the answer okay okay it is the answer promise okay go so i found a way to uh and this this works for periods of time in particular areas so i found a way to buy three bedroom houses end a terrace terrace whatever and turn them into five bed hmos okay doesn't work now because the economics are all wrong yeah but it did then i did it for two years so this was 2015 i started buying houses for 70 80 grand which is what you would have paid for a three-bed semi or enter terrace up north in Doncaster in particular um it's about 90 minutes from London Kings Cross get to Kings Cross jump on the train you're there you ain't selling Doncaster to me I'm not trying to keep Donnie can stay there I'm not trying I've got some good mates up there to be fair good um and then I was turning them into five bed hmos so for anyone don't know what an hmo is that's where you're renting a room by the week all your bills are included and i was typically converting the garage or you know building out a single store extension at the back whatever and my average cost per room with furniture everything all my rooms were on suite was eight grand so do up yeah yeah okay perfect so five eights of 40 so i'm buying for eight 80 yeah spend another 40 on it so i'm at 120 yeah but then it's valuing up as an hmo at about 250 wow okay and from that 60 70 loan to value i'm pulling out 150 160 to go again i'm doing again so i've done four or five for myself perhaps i did three this guy called nev nev's like after daily i hope you're still there i'm still there nev whenever you go see nev you've got put side an hour because he makes you drink tea and have biscuits so um he runs a suntan shop he makes sunbeds and he's got a mark he's got a jag as well so anyway i did a few with nev and then i thought if someone's got 120 130 grand i know what i'm doing i can turn it into an hmo helps with people in it get back 160 170 grand so how about if i do one for me one for you yeah so i start and do one for me one for you and for anyone doesn't know what that is someone would give me 120 130 grand it's secured on the house that i buy so they've got first charge security on the house and i then turn it into an hmo release the money so i've now got an hmo giving me a say a grand a month roughly and i've got an extra 20 or 30 grand yeah i give them back their 120 130 i pay zero interest give them a drink on top no nothing nothing yeah but now what i'm going to do is going to do one for them okay so same and typically this was a year six months six months six months six months so by the end of the year we've both got an hmo each fully mortgaged an extra 20 or 30 grand each and in the first year that i did that i did 48 yeah so 48 times 20 would you is that near enough to a mil yeah you'd take that all day long so if if i'm your boy with 400 000 i would find a strategy like that where i can recycle my money and we already talked about it huge part for me is training the next generation so what do you do that what do you do today are you here to help people financially set themselves free are you here to make people wealthier are you here to make people understand property to make them wealthier what is your business as you sit today my business is very very clearly about making millionaires because I believe that your life changes once you've got a million.

57:57A million in the bank? Yeah. Or a million floating in property, liquid that you can use? Liquid. Okay. And I believe for the vast majority of people, property is the way to start. Yeah. I believe the vast majority of people don't know what to do once they've got money because who's trained? I wasn't. I had to learn the hard way. so taking your first million and your first million is very different to your second and your third and your fifth it's harder can be because you don't know what you're doing so to turn one into five to turn five into ten that's the compounding and protecting phase and I think any of us would have to be badly advised to put it politely nearly used a naughty word to have all of our eggs in one basket have all of our money in one asset class property in one country, the UK.

58:50Because, you know, who knows what they're going to do? They being... And I'm not particularly political. I don't live in the UK, so why would I care? But I've lost count. Is it six prime ministers in five years? Yeah. And they all want to do different things. Six in ten. Six in ten, isn't it? Embarrassing, really. It is what it is. Yeah. Still embarrassing. Well, all right. Imagine having six CEOs of a business. That would be... And then you're underneath it. Again, a new CEO's coming in. New CEO's coming in. New CEO's coming in. Where do we stand? Well, that's the point. Yeah. Because this summer, now as we're recording this, is there going to be a wealth tax?

59:27There's so many things up in the air and uncertainty is one of the biggest enemies. So I still believe passionately, as hopefully you can hear, that property is the right thing to get your first million. But once you've got a few million, don't leave it all in property. But then your average property person doesn't know anything about stocks and shares or gold. gold or eis scheme or seis scheme yeah or for me bitcoin and people say what are you doing with bitcoin well got to be in it to win it it's part of the portfolio yeah i agree so i know nothing about bitcoin but i again i put it into bitcoin yeah let it sit there i said i don't want to know it says my wife i don't even look it i don't know what's going on with it to another five six seven years and then see yeah correct where do you live today monaco oh nice and how long you've been for uh just uh coming up five years and what made you move to monaco that is an interesting question and not the answer probably most people would think it's the british government and in particular it was locked down i don't like being locked up and it was almost an overnight thing my fabulous wife and I go she's from Hungary and I was giving her a lecture in our kitchen we were living in Doncaster at the time oh you were living up there were you when lockdown the very start of it ok I think we moved I'll take that back about Donny then I think we moved there you must get a good value for money up there not bad did you have a nice home up there yeah yeah place called St Wilford sold it now um um yeah it's a place called besica there's a particular road in doncaster there's a very nice gorgeous village outside donkast called bortree and there's this thing called the bortree road in donny and there's a lot of houses on it that a million plus so that area of doncaster is for a million plus up there would be unreal i'd imagine what i paid give you a feel for it i bought a six bedroom detached house sat in about two thirds of an acre what did cost me uh brain failure about 650 650 say and it needed work doing yeah which we did yeah um what'd you spend on it roughly not a ton 100 okay um and then we sold it for 800 or something um but anyway point is i'm in the kitchen and i'm more or less lecturing the missus because she's she was brought up under communist regime so she had to learn russian at school to get to university it was almost impossible unless you joined the communist party and all this and she would have been 18 19 years old when the berlin war came down so we often have discussions about what was it like in your day and versus being brought up in the uk and i was like there is no way on this god's earth that they're going to lock up british people it's not happening been through two world wars you know it's just not happening that's not how you do things in the uk and she's like i'm telling you they're going to lock us all up and when the news came that we're all going to be locked in our houses for God knows how long, it fundamentally broke my trust in the UK system, the social contract if you like.

1:03:03My general belief is that my freedom to swing my arms stops where your nose begins. So I'm absolutely not for imposing my will on anybody else or bump along together. I do not and will not ever subscribe to anyone telling me how to live my life when it's as basic fundamental human right as going out in the sunshine. What is it like going from Doncaster to Monaco? Well, it's one of my friends, as one of my friends calls it, it's from Donny to Monny. Yeah. And he calls it Donnico. Well, we didn't quite do that. the route there was I spent a year in the south of France whereabouts a place called Thiel-sur-Mer it's gorgeous flying to where nearest airport would be Nice yeah and anyway we were at that fortunate stage in life where we could get like a home in the sun so 2019 we'd bought I think we completed on it January 2020 or something still got it and it's uh it was a project because i'm a property guy um very run down but gorgeous views six bedroom villa swimming pool all the bits um looking out over the med what do you pay on that uh 1.65 million euros unbelievable deal though yeah that was um in france you get a mortgage for the term of well it's basically a repayment mortgage but it's fixed for the term so i've got a mortgage with bnp uh bank national de paris um for 80 of that for 20 years i think uh they wouldn't give me 25 how much how nicer is it when people in portugal and france they're giving you these long termers yeah you can you can actually settle and actually plan right yeah and my more my interest rate is 2.2 oh wow and it's fixed for i don't care what happens to well so yeah what's the most expensive thing you've ever bought

1:05:14she's out there she killed me i'm a boy she'd have to know i'm bored no um yeah with that we we read the france property no no we recently have you ever heard of a boat called the world no it's a 50 000 ton boat big boat length uh 200 meters 200 meters yeah i bought all of it for christ's sake it's the only one in the world it's called the world so if if anybody wants to search for it if you search for um what would it be m stroke s motorship the world you'll find it gorgeous website 200 meters yeah it's like a cruise ship yeah privately owned yes by an arab no who buy me part of so there's a whole part a hole no there's 160 apartments on it okay so i think cruise ship now think fancy cruise ship yeah okay now think no cabins apartments okay so the studios up to three beds so oh wow i've got a three bed apartment on a cruise ship on a ship yeah a private yacht private yacht yeah so there's um at any one time there's probably 200 owners on board and there's about 600 staff um seven restaurants swimming pools whatever so it's got all that um so yeah that's the most expensive thing we've bought what did you pay on that uh 10 mil mod.com is changing the way people battle excessive fatigue.

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1:08:36Round numbers. Mortgage on it or outright? No, you can't get mortgages. I'll have some of that. Is that for your retirement? Do you know what? once we're done and wrapped up we're going to just keep going around no no no i'm i am retired but i'm not yeah work for me is a very simple thing it's receiving money in exchange for something you don't want to do agree because if you wanted to do it it's not work yeah i agree and what i do i don't consider it to be work um i get money for it but that's good we're very lucky we are we're very very lucky well we are now to do something you love every single day yeah do you I don't know if you follow golf at all.

1:09:13Do you remember what Gary Player said when someone said he's lucky? The harder he tries or the more practice he puts in. I think the more risk you take, the luckier you get. Potentially. Potentially. But I love that environment. We only bought it in April. I'm dying to have a look at this. Caden, can you find that out? The world. The world. Yeah, I'm dying to have a look at a three-bed apartment for 10 mil. Wow. Who owns that then? I do. No, no, but who owns the business model to say? we do so you've all taken a share within that yeah and how many apartments are there 160. okay um how do they value it at 10 mil market just said that's what it is that's what it costs us to split this up if it's is it sold out yeah it's unbelievable yeah do you go on it yeah once a year or no i we only bought it this year dodge okay so it's all a bit new how exciting it is exciting but January February we went for a look see and I'm just going to say what it is it's just the truth you're not even allowed to be considered to potentially purchase an apartment unless you can go through all the due diligence and prove that your net worth not your assets your net worth so minus any debts and mortgages is 10 mil so you have to do that first so you're vetted yes professionally that they will then let you go aboard um for three weeks maximum to see if you like it because it if you're thinking cruise ship please it's not that it's that's part of it huge amount of education um huge amount of travel obviously but think national geographic don't think Ibiza yeah or nothing wrong with Ibiza no I get you you're going but it's the Caribbean going around but it's to learn yeah so three times a year there's what's called exhibition expeditions not exhibitions expeditions and they will literally bring on PhDs in this marine biologists so in April we spent six weeks on it going around French Polynesia which I didn't even know where it is yeah turns out it's in the pacific um and then up the line islands pretty much every day in the water is that french polona is that is that your cook island your fiji it's on the end of that samoa's it's on the end of that okay so if you start at new zealand yeah go out into the middle of the pacific okay you you're right in the middle of the pacific went up a chain called the line islands which is over 2 000 miles long there's only 8 000 people live on it and ended up got off in hawaii but it's you you can look at the itinerary well now actually i could volunteer i could be part of the itinerary committee but i can actually look at where the boat's going to be go and meet them there two and a half years ahead and next time we're going is the middle of september joining the boat in japan going around the northern islands of japan lovely then down to south korea then up to china and then we're about six weeks flying back from china and in new year we're going back to the boat it's going to be in singapore and then there's a exhibition expedition can't get that word right um off the coast of thailand wonderful but there's 60 fully qualified divers on board of the residents which i want to be one i'm not but have you got your paddy license no but there's a dive master on board um the 17 zodiacs so the the ribs um which i love water i i am qualified up to 85 feet on motorboats um so yeah i love water um lots of scuba lots of photography what sports they got on this yacht golf there's a Scottish golf pro and there's a simulator on the top deck you can play any courts in the world or any championship and wherever it is paddle tennis there is paddle tennis there's a full size tennis court on the top deck I'm dying to I'm dying to have a look at this yacht you've got it I'm actually dying to see it oh good can you rent it out are you allowed to rent it out well friends and family or is it just family or is it friends and family yes no problem just put them in yeah the only rent i'm allowed to do you can't do airbnb or anything like that yeah the only rent i'm allowed to do if you're an owner i can rent it to you or you can rent okay to me okay so kind of but it that's more about you know i i've got six kids when when we're all together my clan is 18 of us yeah with the husbands and wives and whatever so say and my apartment i can put seven people so say i wanted to bring the entire 18 i'd have to rent a friend's apartment okay have you got any annual fees on this yeah how much are the annual fees it's gonna break my heart isn't it a mil my god but it's not that bad what do you mean it's not that bad so it's only dollars but still what we're talking seven eight hundred eight fifty yeah one point three five so yeah yeah 700 my god you've earned some coin haven't you do me best yeah love it i'm stopped i love it not dead i'm still are you worth 100 million pounds today no more 200 more than 100 okay what's that feeling like knowing you're worth more than 100 million pounds depends where you live I mean

1:15:06I firmly believe and have done since very young age that your network is your net worth people very often just associate with people they associate with by accident they give it no thought and you are the average of the five people you hang around yeah and in the circles I hang around normally I'm the skint one yeah well not skint but I'm i'm not well off compared to what luxuries do you like to buy time but can you really buy that quality time with like um last week my oldest boy jack and his wife lisa and their son harrison came over how old's jack your son he is 36 um and harrison's four the luxury that i bought was a week with them yeah perfect and but i think for me it's never about money it's never been about money it's about the choices that money gives you yeah and i in my head you might think this is weird but i've always thought money's like oxygen and until i said the word oxygen you probably never thought of is there enough oxygen in this room or all but if you think about the things that are going to kill you or lack of is going they kill you oxygen is first i think if you run out of oxygen that'll kill you quicker than anything else but people never think about it because there's so much of it and in my head all i had to do was make money like oxygen get more than i need and then i can do what i want and pretty much for the last 10 years but it is only 10 years it's not 50 years yeah yeah it's it's been the last 10 years you've really boomed is it yeah and is that for you is that you in the property world is that you training what earns you more money the training part of your business or the property part of your business today i would say the two things that earn me more money than anything else would be my portfolio yep next would be m &a mergers and acquisitions i buy and sell other companies next would be private equity i never thought next is training and property about the same okay but both of them are quite low down yes compared to where i make the real money yeah so so you're making the money in the lower down one and as your circles got bigger and bigger you've had opportunities come your way where you can invest and do certain stuff yeah i mean many people possibly wouldn't know what private equity is but um there's a break down private equity to a 10 year old yeah okay um think about the stock market that's not fair 10 year olds wouldn't know that but you think about companies companies can either be privately owned like i'm sure you own companies i own companies or me and the messes own companies uh or they can be owned by the public and so if it's a 10 year old i'll probably talk about barclays bank or tesco's or something and and you can go and buy shares in that um private equity is kind of in the middle it's bigger than most normal single companies but it's not big enough to be on the public market and it's a company that's going on it's going to be like tesco's but it's not yet so private equity is the one to invest in many businesses well what i invest in is individual businesses so there's a business um for instance called uh one of my pe plays is a business called quantum and by the way sorry but you can't do this unless you're what's called high net worth or sophisticated um high net worth meaning that you've got like half a million quid or more sophisticated that you've run multiple businesses and you have to self-cert and all that half a million in the bank yeah um yeah i mean basically but if you're in those kind of circles i've i've put um about half a mil into uh quantum which is quantum is card services it's a fintech car services card card okay okay yeah yeah um so they've got a card called voloper they do business expense management whatever whatever um they're on track to um float on the nasdaq q1 next year and all being well i'll probably 10x plus probably 12x wonderful my investment wonderful how much you put in off a mil so i'll be my happy days so that one does time 10 you can do your five five mil yeah yeah but you got paid is that eis game you got any tax on that uh it's not eis but that i mean depends on your structure i'm i'm structured out of lichtenstein yeah so why lichtenstein um multiple reasons very um people talk about trusts i hear people talking about trusts i watch this stuff on the internet i'm thinking you don't know what you're talking about and well not you but a lot of people don't know what they're talking about and lichtenstein is particularly good for foundations as opposed to trusts okay and i prefer foundations to trust and it's got various other benefits but um we're primarily structured out of lichtenstein and this is the sort of thing when i'm talking about legacy or passing on to the next generation having us as well as them being educated which is the most important thing you could have a structure that supports that in my view and um yeah so foundation's my preferred model and for monaco for lichtenstein trusts concepts like eis that's very relevant if you're based in the uk but i've been out of the uk for six years six years i'm nothing to do with the uk from a financial point of view and the the tax impacts that i'm looking at are probably not like well they're not like a they're not like i was looking at 10 20 years okay okay but from that point of view rather than just say you can't do it and irritate people the thing that i think most people should be focused on in the uk is capital allowances and if people just would do me a favor and just google capital allowances what is capital allowances to do with commercial property okay what's to do with business um each and every one of us in the uk and i did it for many years is allowed to earn a million quid a year tax-free go on it's through capital allowances okay so not many people know this no how would you break that down simply for someone who's listening right now Well, we're in a studio, commercial property.

1:22:05This is in quite a large building. And I haven't been in here long enough to know how big this building is. But I'll tell you what I can do. I own a property in Doncaster called Synergy House. It's in a street called Heaven's Walk. Nice name. Nice name. Yeah. And Synergy House. I didn't rename it. That's what it was called. I think that's quite nice. it's 10 000 square foot office block which is probably not as big as this one but it's not 10 times smaller it's kind of mine's two floors this one's three i think so i'd be guessing this one's probably 15 to 20 000 i paid for a redundant empty shell it had been the american express call centre for Europe but then it had shut down and it had no one in it for three or four years I bought it in 2020 so relatively recently and I paid 810 ,000 for it and I then modernised it put all the partition walls in put in aircon and whatever and I probably spent another quarter of a million doing it up so the relevance of which is my capital spend was probably about a quarter of a mil and my physical spend to buy the building was about 810 so call it 1.1 yeah i then sent in a capital allowances surveyor and that capital out survey is looking at things like lifts or aircon units or the infrastructure of the building the heating whatever and I got capital allowances of£550 ,000 on that building.

1:23:50Now, because it was structured through an LLP, LLPs don't pay corporation tax, they pay income tax. And at that time, I was still a tax resident of the UK then, that was my last year, which meant that me and my wife could make 550 ,000 pounds in that LLP tax-free. There is no corporation tax. It's not even a concept that exists. We can then put that money straight in our bank account, no tax because of the capital allowances. So it's like a business investment relief. Yes, okay. it was brought in in 1870 by gladstone if everybody remembers their history gladstone disraeli and all that so it's been around for is this something you're telling people who're listening to go and check this out yeah i'm saying i'm saying google it and specifically google capital allowances yes and you'll find a bunch of stuff from hmrc whatever and also google annual investment allowance and you will see that it's gone up and down over the years but for the last seven eight years i think it is it's been a million quid a year yeah okay and that's per person tax free per year that's amazing and you can get it why is no one talking about this i talk about it all the time really i make a lot of noise about it okay and it it's why have the government done it well it wasn't this government all the one before it was 150 hundred and sixty years ago yeah and the general principle was if you've got entrepreneurs that want to put their money on the line and they want to invest in factories or warehouses or commercial property um we want to reward that yeah and it's a tax break yeah but it's not a good tax break it's not some dodgy you know on the borders it's absolutely it's allowed yeah and i suppose you could think of it like a business personal allowance yes because as a taxpayer in the uk you've got a personal allowance yeah and it's not a lot necessarily 12 grand 12 and a half or whatever it is that should be 20 plus i think but it is what it is yeah but if you're a business owner you can invest capital and what the government says is we will give you a proportion of that capital as a tax break so the cleanest way i could probably say it for anyone lots of things what the hell is he talking about is it's like a personal allowance for businesses for businesses let's move on to your book here yeah home the art of wealth yes which is a fantastic book anyone out there definitely go and check it out people go and check out on amazon they can yeah tell me the reason why you wrote this book and why you've condensed it so much to just have every single nugget in here in a small easy to read 80 page book yeah um at school my strongest subjects were maths physics chemistry whatever i'm not actually interested in that i'm interested in history my dad was a historian brightest person I've ever known, spoke salmon languages, just a genius.

1:27:15And he got me this thirst for history. Now, I've always been particularly interested in military history. And for anyone that's interested in military history, they've almost definitely read The Art of War, which is by a guy called Sun Tzu, Chinese general, two and a half thousand years ago, but it's still used in modern military theory. So it's about principles. It's not about technology. It's not about drones or artificial intelligence or whatever. It's about principles. And I, for years, I've been fascinated by the idea of, could I take his principles, strategy and tactics? He talks about things like attack by fire.

1:28:05so he's got in there essentially 13 chapters and could i take those ideas could i take those principles and translate them into wealth and i've been i started playing with it 10 years ago i got serious about it five years ago and i wrote a book but it's far too big far too many words people don't read it all best from front to back yeah well and you've asked me what i think is a brilliant question several times you've said how would you explain that to a 10 year old and i think often people get so carried away by subjects they use 10 words when one would do agree so what i've really tried to do and it's probably taken the last two years is what i started with i set myself the task of reducing it to 20 of what i started with but really keep the core.

1:29:00So you started off right at the beginning of this, I don't even know what to call it, it's more like a conversation. And you said you're a big believer in gold. So strategy. The outcome of the war is decided before the first shot is fired, essentially. what do we know about money we know that in 1971 nixon took the united states off the gold standard so for anyone that didn't know and the uk came off the gold standard 60 well 40 50 years before that so you used to be able to take your pound into the bank and say i'll have swapped that for some gold please and that only stopped in america in 1971 and it was the french that stopped it did you know that no i didn't know that the then president of france was like i'm not sure these americans are good for it and he actually wrote as you do to the president of america and said i want to send you all your dollars back can you load up a few container ships with gold and have them delivered to paris and old tricky dicky nixon over there was like, he's a little bit uncomfortable, needs a change of underwear.

1:30:18And a few other governments around the world caught wind of this. So he had no choice because they didn't have the gold to back up the dollar. So he took them off the gold standard overnight. And what have they done since then? They've just printed more and more and more money. And it doesn't really matter what it is. If you produce unlimited quantities of it, and people don't need it, it's going to go down in value. The national debt of America is now approaching$40 trillion. That means nothing to me when we talk trillions. No. It's just another number. I know. It's not a number that I can sort of have tangible.

1:31:01It's$40 trillion,$70 trillion. It's all fluff. All right. Well, if we try and turn that into something that might mean something, the total America's the biggest economy in the world by a mile the total tax take of the whole of America we're talking 5 trillion however the interest on the debt is now 2 trillion so they're not really taking 5 they're taking 3 and since 2008 great financial crisis most of their government borrowing has been almost for free because most people remember that interest rates mortgage rates from 2010 to 2020 were almost zero yeah it was great it was it was but it wasn't real even if you're a government yeah yeah so they got most of this 40 trillion finance for not much.

1:32:04Yeah, peanuts, yeah. When, as they now have to start to refinance it, that's going to add about another trillion to their interest bill. So think of it as a household. Yeah. You're earning five, but before you get out, you know, do anything, you've got to give three away. Away. Yeah. So they're trying to run an economy that requires five on two. They're stuffed. yeah is the short version now if you consider that against gold which is what i made this decision heavily in the year 2020 i could just see that their interest costs were on the way up they would have to print more and more money and then of course lockdown happened and essentially they paid everyone like most countries to do nothing for two years well that ain't free someone's got to pay for it and so i could see the real value of money just getting demolished i saw that too yeah so strategy in this sense was to use the fancy word for it fiat currency so government currency that's just printed is going to devalue so from a wealth point of view where should you put your money gold yep never waste a good crisis and you can't lose yeah i And I'm not saying...

1:33:27I don't mean horribly, never waste a good crisis, because a lot of bad things happen, but you've got to be the one swimming up the stream the other way of salmon rather than going down. Yeah, and I'm not saying that gold prices couldn't go down by 10 % in the next year. They could. That's okay too. But over the next 10, 20, 30 years, unless something fundamentally changes, like I'm not even sure how they would do it, but if the US put itself back on the gold standard, I don't I haven't got a clue how they would do that but my point is unless something seismic changes then gold is going to way outperform everything else and we've been talking about different asset classes but if if you look over the last five years since I did that gold's up 147 percent even the Nasdaq which is the best performing of the share index is only up 78 yeah So gold.

1:34:22S &P 500, 70 odd percent up. So gold is doubling everything. And Dow 50. Yeah. So gold is almost three times the Dow. So what I'm trying to give. Break this up. This book here, The Art of Wealth, break that down to me in 20 seconds. What's in here if someone was to buy this and read it? This is how you should create wealth. how you should protect and grow it and how you should transfer it to the next generation. These are fundamental strategies. There's not one word in there about property, stocks and shares. It's the fundamental principles that you should apply to everything. If I had to put it in one sentence, it's the language of money.

1:35:09There we go. Paul, I could speak to you for hours, by the way. I'm really enjoying this chat. We're like an hour and a half in and it's flown. Oh my God. I know we could go for two hours, two and a half hours, three hours, because I love these conversations. Me too. I really thank you for coming on and giving your knowledge and also your history of what you've done and the experience you've got and the wealth you've created. And I'm sure if there was ever a part two, we'll talk about the highs and also the lows, what have happened. We never spoke about the lows, you know. There's plenty of them.

1:35:39And I'm sure there's plenty of them, but if we did that, we'd be going on for two hours. But maybe there's a part two in this. But I really appreciate you coming down and helping people and also giving your stories about certain things. And there might be one or two nuggets in here that someone watching or listening will either go and get this, The Art of Wealth, or they might Google search or definitely go and Google search the yachties invested 10 million. Go and have a look. I can't wait to see that, by the way. Cannot wait. Paul, you're a gentleman. I really appreciate you coming on. Thank you very much, Don.

1:36:08Appreciate it. Thank you. Good man. Take care. Hi, guys. I really hope you enjoyed that as much as I did. Can you do us a favour and leave us a review as it massively helps us grow the show. Cheers, guys.

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