James: Welcome back to the Dentists Who Invest podcast, where we have returning Face Shabbar Kassam. Shabbar recently fell into my field of vision once more when he appeared on the Me and Money Podcast with Andy Hart, which is one of my favorite podcasts. And I was rather surprised to be browsed to the podcast one day and then hear your voice chater over the blue, because it’d been quite a while since you’ve spoken to each other.
How are you buddy?
Shabbar: I’m very well, mate. I’m very well nice to be back here, and in front of your wonderful face and the pattern shirt. That’s the thing. I feel like I’m being a typical financial advisor. I’ve turned up in a blue polo. My man’s wearing,
James: It’s happy art over here. That’s why I’m so giddy.
Shabbar: Great to be back and looking forward to this episode.
James: Absolutely it always a pleasure. And can I just say something interesting? When people talk about content and constantly creating content and putting the effort in, because effectively it’s these little hooks and these little things that put you back in someone’s perspective.
And like Shabbar, I enjoyed our podcast so much. We hadn’t caught up in such a long time. And then that popped into my vision and I thought I haven’t spoke to chaperone. I just need to get back in touch with them. And that’s the magic of making content right there for anybody’s business.
It just puts you back in someone’s perspective. Rekindles. Rekindles their thought process on you as a person or as an individual in what you do. And that’s how these conversations can be picked up again, or business opportunities can arrive from them. The magic of content, the three Cs of success on the internet.
Content, Content, content.
Shabbar: There you go. You heard it from the content specialist himself. I’m still there. I’m still learning, but when I get invited, my actual philosophy is if someone asks me to do something and I’m sort of slightly, I don’t know, that means I should do it so if there’s something that I’m thinking I shouldn’t put this out, or I don’t want to attend this event, or I don’t want to speak here, that’s a sign that I need to do it.
That’s my philosophy.
James: I love that.
Shabbar: Which might mean I take on more than I can chew at the moment, but I think that’s a good thing to then actually wind it back and say no. For the time being, I’m sort of adopting that mentality.
James: I love that. The thing about it is if you have that natural kneejerk reaction to something, then generally, that can sometimes come from is fear, on a personal level, and that’s the thing that holds us back.
It’s a limited belief, so it’s a nice rule of thumb to bust through that. And that fear can take many forms. Maybe it’s gonna be the fear of being in front of an audience, or maybe it’s going to be the fear of dealing with overwhelm and dealing with too many things. That’s where the personal growth occurs, and I actually really like that and I do a lot of that myself.
Going back to what you were saying about taking on too much, Here’s a really interesting thing that I went through personally, and I never really appreciated this until I saw it from the other side. If you put a lot on your plate and you have to deal with it constantly within reason, of course, not like a hundred million things that you’re never gonna be able to do, but actually, if there’s no give, if there’s no relent on that side of things, the only way that you can adapt is to actually become better at handling all of this stuff and thinking faster.
And that is 100%. If you would’ve said that to me before I started doing all this stuff, I would’ve said, What is that mumble jumble? What the heck does that even mean? But it is totally a thing. You become a stronger, tougher, more resilient person if there’s no give on that side. And if you keep pushing yourself in that direction, obviously there has to be an upper limit on it somewhere.
We can’t go too crazy, but it’s just another perspective. It’s interesting
Shabbar: I guess it is. It’s increasing your capacity. You don’t really know what your capacity is until you’ve been stretched. So I guess it’s, okay. We were just talking about this. It’s that whole balance between you’ve got to care about yourself enough to not put yourself in a situation where you then burn out, because then you’re no use to anyone.
So I guess it’s being big smart enough to know where the boundary lines.
James: This is it. This is it, and where’s the line? And here’s the thing. Not everyone’s going to agree with what I’ve just said, but being someone who went through that personally, all I will say is that I’m so much more of a more resilient, strong person because that happened to me and I do think that whilst you maybe don’t have to be to that extreme, there is something to be said for that.
There’s a place for that in everyone’s. To a degree because of the person that it makes you into. We digress because we’re supposed to be talking about finance today so we should probably do that at some point. And I had a little bit of a discussion beforehand about what is.
Podcast episode might entail and we were going to do something really philosophical along the lines of the concepts of wealth and how to break them down and analyze them from the point of view of two stages, of course, which are in this very podcast booth. But we decided that the very last minute that we might put a little bit of a twist on it and just offer if we could have a conversation with ourselves when we were younger.
What are the five coolest things, the five most enlightening things that we could say to a younger version of each of our respective self that would propel them so much further and faster along the financial journey, their financial journey, which is a lot of fun and very interesting.
If you could turn back the hands of time and do something different and give yourself some advice that’s probably going to save you or earn you thousands of pounds and make your journey to wherever you gain a lot smoother then. It’s nice, but sometimes you’ve gotta just learn for yourself right, as well.
So whilst it’s all very well in good with hindsight and saying what would you tell your younger self? Actually you need to go through a lot of stuff as well. So sometimes it’s probably better that you didn’t know things. Because you Learn the hard way maybe.
James: And human beings really, we really do only learn the hard way. The best essence you can ever learn are the lessons that you have learn. From your own perspective, because you’re never going to take someone’s advice until you actually to the same degree, until you experience it that yourself and it actually comes back.
It ties in a little bit to what we were talking about earlier, which is pushing yourself outside your comfort zone. Feel hard and feel fast. That’s how you learn the most. Most people try to avoid those scenarios.
Shabbar: I’ve actually put down, so like number five for me has become comfortable with failure, which is something that, I really wish I had been told, or even sort of just educated around that it’s okay to fail.
I grew up in a very perfectionist household where it was very, very strict. It was almost like you can’t make mistakes. And that was detrimental to my business journey. And really kind of like restricted me early on because I just didn’t want to put anything out. I didn’t want to, I wouldn’t come on here.
I wouldn’t just the old SHA would’ve not have just come on to a podcast and then you changed the sort of the subject and say, Right, should we do this? And I’d have been like, No. This recent I got be like, Now it’s like, who cares? Honestly, what’s the word? No, you’re not going to look back at this in a week or a month and say, That was a bloody disaster.
And that’s ruined my life. So it’s actually be comfortable, be comfortable with failure and learn how to fail. And Steven Bartlett, who I really respect a lot, and I’ve got a lot of time for him, he perfect the art of quit. Which is, you’ve gotta know that there are certain situations and we’re always told, Don’t quit.
Don’t quit. Stick it out. And it’s a great skill to know when to quit because the earlier you quit and move on to something else. And it’s about differentiating between are you quitting because it’s hard or are you quitting because you just realize that there’s no potential in what you are doing.
And that’s, that’s a real skill and an art, which sort of ties into the be comfortable with failing, walking away and starting again. That there’s no problem with that as long as you’ve learned.
James: I love that. And you’re actually right there because I have this huge propensity to just keep blindly plugging away at something, even though I’m not always necessarily getting results.
And that served me like 95% of the time in my life. But in retrospect, there’s been 5% of the time where that didn’t really serve me. So it’s all well and good, pontificate and never give up. Give your all work your hardest. Never quit. You never lose unless you give up and all of this stuff. But actually there is that 5% of the time and it’s making that call.
Just like what you said a second ago. I’m just going to say one quick thing to supplement what you’ve just said before we move on to the first of my five points. I have a friend, she’s a headmaster in a school, in her school. She wants to normalize kids feeling. At anything, at whatever it is that’s outside their comfort zone.
Because nobody can be good in anything or nobody can be good at everything is what I meant to say there. So what they do at their assembly, whatever it is, every week or every month or something like that, they make all the kids stand up on the stage and each one of them takes it in turn to say one thing that they feel that in the previous month.
Everybody applauds them like this to normalize failure and to say, Listen, well done for putting yourself out there. You tried something, it didn’t work out. Or you’re improving and that’s fine. That’s okay. That’s a good thing. And Gary V has something really interesting on this as well.
He talks about so many people in life, they want to create a side gig, create a side hustle, or do something that puts themself out there on the internet. And he says, the mean reason that holds people back is failure. Because if you think about it, failure is the fear that others are gonna point and laugh at us.
So if effectively it’s actually rejection, it’s social rejection at a really fundamental level. And he says when you’re 90 and you look back on that point in time where you feel in your business, really, what’s your perspective going to be? Is it gonna be, Oh wow, I tried this thing, it didn’t work out, and therefore, it’s kind of a funny story and I laugh at it now, or it’s going to be, Look, I created the next Microsoft or the next flip in, whatever.
The next Tesla, the next, any big company. And really, those are the two possible outcomes, and both are fine. And your perspective from how it feels in the moment will be totally different. Further down the line, you’ll be more upset that you didn’t do it, in my opinion. Just to supplement what you were saying, those two things popped into my head.
I’m going to go onto my first lesson of the five lessons that I would tell a younger version of myself and the very, very, very first lesson for success in investing and more philosophically life, because some of these things tie in to our broader perspective on life as well, not just investing as we say, and that is patients have patients.
We live in an era where everybody thinks you have to be a gun slinger, and if you don’t get success tomorrow, then it’s not good enough. Or if you don’t do something today and the success came yesterday, that’s quite literally some people’s mindset because patience is in flipping shortage these days, and it definitely used to be when I was younger.
That in itself is a massive lesson. One of the biggest virtues, one of the biggest skills that you can have is the ability to keep plugging away at something because you believe in it, because you know that the results are going to come by and large. When you build your wealth and you grow it, it’s a brick by brick process.
It doesn’t happen quickly like that. All of the media out there about things like crypto and NFTs are have making us all think that we can get rich tomorrow. In reality, that’s only true for like 0.0001% of people. For most people, it’s a building process and it takes a long time, and the only way you’re ever going to get there is if you have patience.
I wish I could’ve told myself that when I was.
Shabbar: That’s a great lesson. And just tied into the investing thing, the whole idea of compounding and this goes for anything, even if you look at compounding, if you doubled a penny every day for 30 days or gave someone a million, quit to start off with.
It’s only around sort of day 25, 26 that the penny doubling every day actually overtakes the million quid. So it’s such a great example just from a case of how compounding works. And even like you speak to any of like the real big content creators, like you look at their curve of growth and it’s almost like flat for so long, for so long, and it’s like.
And then it shoots off eventually at some particular point in time. But that’s just because they were patient and they, smugged it out for like two, three years producing a podcast or a YouTube channel that no one listened to. And then, compounding effect just kicks in at one particular point and then it shoots off and it’s like.
They could have quit at any time during that period and not had anything. So patience is a huge asset and a muscle needs to be practiced.
James: A muscle. I love that. And something powerful that somebody else said to me about compounding was actually most things do compound.
Most things act. It’s actually hard to find things that don’t compound. Because that most things compound, whether that be knowledge, whether that be a following, whether that be money, whether that be relationships. Now that you view things through that lens, you know that 90% of the results come towards the end.
Off the relationship or towards the end of that timeframe, then you know that that gives you the extra wind in your sales to put the effort in most things compound as opposed to only some things. And when you have that framework, you’ll understand the importance of putting effort into all of these things in life because the real fruits come further down the line shabbar, what is your second lesson to your younger son?
Shabbar: So second lesson for me. Again, one that I didn’t grasp until I read Rich Dad Poor Dad, which is one of my favorite books. And you got a copy there, Right here, right here. I’m self confessed. I have not yet read this book and it’s got to the point where so many people have asked me.
James: James, have you read this book? And I actually feel a little embarrassed to say no at this point. Then I’m making myself read it. Cause I’ve read so many books on finance, but just not this one.
Shabbar: Probably picked up most of the lessons, but there’s a couple, on my list.
But it was really understanding the difference between getting rewarded for your time as opposed to getting rewarded for the value that you’re delivering. And if you’re only going to get rewarded for your time, you’re playing a finite game because obviously unless you’re in a super, super well paid job, you’re always gonna be trading your time for money.
Whereas if you move to more of the value based model where you are getting remunerated based on the value or the impact that you’re having, Then essentially the sky’s the limit. And that was a real eyeopener for me. And that’s fine because You could be doing a great profession and getting paid for the number of hours that you turn up.
And at the end of the day, if someone was going to pay me a million pound to dig a hole for an hour, I’m gonna dig the hole for an hour of my time. Don’t get me wrong, but in general, that concept of trading time for money and breaking. Was really quite eyeopening for me.
James: Something that a lot of people are wittingly or unwittingly indoctrinated into thinking. And for me, I was exactly the same. And I used to look at people who were life coaches and think, how can he charge, he or she charge a hundred thousand pounds for three months of their work, or a million pounds or for three months of their tutelage?
And that used to just stomp me, but when you see it, when you understand the value that they give people and how it’s life changing and how people can make that money back quite literally in that three months with the right mentorship, it’s crazy. And that was earth shattering for me. So I’m fully on board with that one.
My number two is, if I could speak to myself when I was younger, I would say, James, learn what money is and learn how it works. Because the second you understand how money works is the second that you understand that actually it’s really easy to grow your wealth over long periods of time. Not always because the asset is going up in value, but actually partly because money is going down in value.
And it’s constantly being printed and created, and that just flipped everything on its head for me, because then I understood things from the right perspective. And that is the fundamental first concept that everybody should learn. Who wants to invest their money and build their wealth?
Shabbar: Money. It’s a fascinating topic, but people associate money with currency. That’s the most sort of common, and it’s not money. Money’s purchasing power. It’s just a tool for purchasing and at the end of the day, whatever you’re using, whether it’s gold coins, bottle caps or seashells, whatever it is. If that doesn’t allow you to have the same level of lifestyle, then you’ve got a problem so that really understanding that is crucial.
James: Huge lesson. Number three, from your self shopper.
Shabbar: So again, coming from Rich Dad, Poor Dad is understanding the difference between assets and liabilities.
And this is something that I’ve tried to just tell my kids that, You’ve got things that are either going to put money in your pocket where you’ve got things that are going to take money out of your pocket, assets and liabilities. And creating wealth is all about increasing the asset column.
Making sure that you don’t have unproductive liability. So a liability which is allowing you to grow your assets is good debt. But you don’t want to pay for shiny things. That impress people that you don’t even like, which is what a lot of people are going around doing is spending money that they don’t have on things that they don’t need to impress people that don’t like them and they don’t particularly like, and so I wish I’d started my asset journey a lot earlier because that was a game changer for me. That’s what I need to be doing. That should be the focus build, building the building assets as opposed to taking on liabilities.
James: And the goal in rule is to never borrow money to buy something that is a liability, because that is never actually going to generate you that wealth back and you’re going to wind up paying handover.
I believe to get that back. But if you are going to do it, figure out how you can get some good debt and invest in some assets. But that is a whole other ket of fish that we’re not going to get into today. My number three, and this moves a little bit beyond finance.
Be kind. It’s massive. It makes its way back to you in dividends. How’s that for an investment? Every single person, every single time, you are not kind to someone. It literally costs you money. Here’s why. That is a potential opportunity to work with someone, for someone to help you, for someone to say something positive about you when you’re not present in that room and narrowing with someone else.
That would potentially cost your business opportunity or anything else in life. And the more times that you’re kind to people, the more it compounds as well is absolutely massive. Kindness and empathy is superpower the people who do the best in business, 100% in my experience, were the people that have the best eq.
Business is just people. People buy from people. If you have got an amazing EQ and you can make people, you have the ability to bond and click and gel with anybody and you’ve got an insane level of empathy. You’re a businessman or a businesswoman, because that is one of the most fundamental superpowers to that world.
And also as well as that, to tie it back into investing. That’s how you’re going to allow yourself to create more wealth. Because one of the things that’s literally going to put wealth in your hands straight away, the soonest is the world of business. It’s not going to be the world of investing. That’s where you build your wealth, that’s where you put your money, and it compounds over many years, as we’ve just said before. It is huge.
Shabbar: Agree with that. What do they say? It Doesn’t cost anything to be kind.
James: And it’s free.
Shabbar: Being kind to others is very underrated. And I think if there was more of it, I think the world would just be a better place.
James: Here’s the thing. There’s a misconception that everybody thinks that to get ahead in life, you have to have sharp elbows. It’s actually more about. pushing people out of the way and pushing them underneath you so that you can excel and succeed maybe once upon a time to a degree, but in the era of the internet where everyone has a voice and it can very quickly disseminate that you’re not someone that reputable, it’s really not a smart way to be.
It literally costs you money and opportunities. The kinder you are, the more people that like you is, the more potential avenues to have business opportunities and the more cool things and nice opportunities and brilliant stuff come your way.
Shabbar: And science has proven there’s loads of studies that even the hormones that get released in the body when you’re kind and when you’re experiencing life with more joy and happiness by doing things for others.
It’s just a better state to be in all around. It’s good for you physically and for your bank balance as well.
James: I think there’s something out there, and it don’t quote me on this. There’s some evidence to say that when you have a huge amount of oxytocin in your brain, you can think faster.
You’re literally more intelligent. Maybe don’t. Don’t quote me on that. I’m not a scientist, but there is research out there that’s along those lines. Maybe something to look into. Number four, let’s freestyle. I’ll do the number four and then I’ll bounce back on to you. Let’s mix it up a little bit, just for a little bit of fun.
My fourth one is remove the preexistent paradigm that you have for retirement and here is why everybody thinks that when you get to retirement in Verta comas that you just stop working and you sail off into the sunset and you’re happy forever. And that’s how conventional financial planning is. There’s a start point and there is an end point where you just draw from your assets.
Now, if we think about that for two seconds, 90% of the time that’s not even true because how many people do, you know, have hit 60 sevens the state retirement age, and then they’ve suddenly just decided to dawn tools and never work a day again in their life. I actually don’t think you need something to sustain yourself mentally and to keep you going.
And my point is, why we it to be happy. When that’s not even necessarily true anyway when you get there, because actually you’re waiting to the point where you don’t have to, you have to stop working, and then you can supposedly be happy, but chances are you’re going to continue doing a little bit of work anyway.
And that’s why we need to shift our perspective. Here’s another way of looking at retirement, retirement is the point where you stop exchanging, present on happiness for a future promise happiness. What do I mean by that? So most people don’t like their jobs, but most people believe if they continue to work at their jobs, eventually they’ll save enough money via their pension, via their investments that they no longer have to work.
But we know that most people continue to do a little bit of work anyway because they want something to do. So think about it like this, if that’s our definition of retirement, then actually there’s three ways that you can potentially have that freedom. The first one, because here’s the thing, why would you do something you hit unless you felt like you had to?
And in order to get that money to be free, so if I give you a billion points tomorrow, you never going to spend that anyway. So you’re actually retired at that point, because you no longer need to work, so therefore you’re supposedly going to be happy from that point forwards.
But that’s not realistic, that’s my whole point that realistically, that’s not going to happen. The second way is if you become a hermit, you reduce your outgoings to nothing. You live off the land, you figure out a way to do that. You don’t spend any money. Therefore you can supposedly be happy.
Therefore, you can be happy in the moment and you don’t have to wait. Or the third way, which is when you love what you do so much. That you’re not unhappy in the moment you’re actually happy and then what it means is you’re not exchanging present unhappiness for that future promise of happiness,
which by the way, may or may not ever come. Because we know that people continue to work anyway when they hit that flipping edge. So how the heck does that make sense? Plus, as well as that there’s too many eventualities that could occur between now and then. For that ever to be the case, I know someone who worked his whole life 70 hours a week, never saw his case, never saw his family retired at 60.
Two weeks later, he got lung cancer, and the two weeks after that, he wasn’t alive anymore and seeing. No one really knows what’s going to happen. That’s why I feel like, we have to take ownership over happiness. . There needs to be more of a conscious effort in the here and eye to try to be happy rather than deffaring this happiness to a point in future where we supposedly will be because we’re stopped working, we stop working.
But in reality, we’re going to continue anyway. So how does that make any sense?
Shabbar: It’s a mindset, as in terms of, retirement I think definitely needs to be rethought. I don’t think there is the sort of the traditional retirement.
Anymore. I think there’s a point of financial freedom that reaches. Which is where work becomes optional.
Shabbar: But like you said, and I try and use that sort of financial freedom or making work optional as a landmark. Like when could you achieve that particular point in time?
But for a lot of people, the average, person might live to the age of 90. You retire at 60, you’ve still got a third of your life. Now it’s unquestionable to think that you’re going to sit around on a beach for that period. You’ve got to have something to sustain you.
And there’s studies that most people that give up work and don’t have any interests or passion, Deteriorate at a rapid rate compared to individuals that are still working, are involved in some sort of community. It could be charity, it could be anything that they’ve got a passion or a hobby that serves them when they leave the workplace because that’s a massive part of someone’s life.
So I definitely think that this idea of pinning your happiness at a point in the future when you no longer work. is almost like a false errand, because it’s never going to come.
James: It’s a terrible idea. And when you get there, there is no guarantee that that’s even what you want.
As proven by the fact that most people continue to work and do things. And I’ll use my two parents, not anecdotally, both of them retired inverted commons, but they still do three days a week.
Shabbar: Now they’ve got the option to carry on if they want to.
Which is a nice place to be. And I think most people find that when it becomes optional, it becomes more enjoyable, and just to sort of like Ali Abdel, who’s the YouTuber, he talks about this a lot in terms. When he spoke to other medical professionals and they said, do you want to be a doctor and carry on working the ridiculous hours?
And they’re like, I’d love to quit it tomorrow. But if you had a million pounds, would you quit? But. A lot of them said that they would continue doing it on a part-time base. They’d still want to make an impact,
And I think there’s a huge need to still want to make an impact to be involved in community, etc. And the workplace provides that for a lot of people. So, it’s interesting to sort of reframe retirement
James: It made me see things from a different light and it made me realize that that was a bit of an illusion.
However, most people are still gearing everything they do towards that. But if we unpick that for two seconds, it actually doesn’t make sense. But I’ve said my bit on retirement. Number four, for yourself.
Shabbar: So for me it’s being grateful. So sort of from your kindness one. But there’s something about if you’re constantly looking at keeping up with the Joneses and looking up, comparison is the killer of joy.
If you’re constantly comparing yourself to other people, as soon as you flip that and you actually start being thankful for the things that you’ve. It makes a complete difference to your outlook to the way you feel to your interactions with other people. And actually, I think you attracted more.
As you start to be more thankful for what you’ve got. And so for me it’s like actually compare yourself to people that are worse off than you, rather than compare yourself to people that are better off than you. I think it’s much better for your mental health than for your soul. And actually, when you start to look at people around you, and you actually realize you.
We’re the blessed ones. Living in the Western world, you kind of hit the lottery, Jack Pop by just being born. Because you could be somewhere else, which isn’t very nice. So, just the fact that we don’t have, bombs going off around us, that’s something huge that you’d like when you think about, it’s just like I get to sit here and have a conversation with you and I’m not worried about getting home.
Big blessing. So being grateful is just really important for me now as well. So I tell my younger self.
James: It’s massive. And for me, that’s another way that you can choose happiness in the moment rather than a supposed promise of happiness further down the line.
Because actually if you just stop for two seconds and look around you, there’s so many things that are here in the moment. That can make you feel positive. But it’s just being aware of them and one of those vehicles to do that is gratitude. I fully believe happiness in most scenarios, and I can’t say this all of the time, but in most scenarios is actually a choice and a perception.
Think about it. If someone had nothing, Like literally nothing lived on the street for 20 years and then find themselves sat where you or I am. They’d be grateful for the rest of their lives. But because this is what we’re used to, then that same level of gratitude we can only ever fathom, because this is been the normal for day zero for us. And it comes back totally to your analogy of people who are less fortunate in other parts of the world. 100%.
Shabbar: And just to add on to that, they’ve done a study, and again, I can’t quote it, but they look at people that experience a real boost or injection of income or inheritance or something that takes their lifestyle to another level.
And we always think, it’s just going to be so much better and then I’ll be happy. Or that’s the place I want to be. That’s the house But they say that human beings become, that we’ve become so accustomed with the new norm so quickly that we forget about where we came from.
And actually that new level is where we base our comparisons from. And then we’re looking at the next rung up. And, it’s so futile to think that actually a big check could land on my doorstep. It could change my life forever. But six months or a year down the line, the chances are I’m kind of going to be neutral about it because I’ve moved to that next rung and then that I’ve become accustomed to that life.
And where’s the joy in that? Like that’s a scary thought. So being grateful, I think is the antidote to that.
James: Isn’t the term for that hedonic adaptation?
Shabbar: It could well be something like that. Adaptation. The pursuit of wanting more, more, more,
Shabbar: But then they’re not being satisfied with it when you get there. So some is definitely a form of that.
James: Tough stuff. Sha Bar, Let’s not let anybody know our next move. Let’s keep people guessing. You do your number five and then I’ll do my number five just to mix it off again.
Shabbar: So being a financial professional, mine had to be to do with money and it’s pay yourself first, which I think is like the one thing that I wish I’d been taught like early on, which is you are the most important. Think, and that’s not from an egotistical, but it’s for you to be of use to other people and to your future self, which is really important, you’ve got to look after your future self.
Then you need to pay it yourself first, which means that you put money away for your future, whether that’s in any type of investment, something that’s going to grow and something that you’re not going to end up just spending it and sort of pissing away, paying yourself first, and it just sends out a great message that you are actually important because you’re looking after your future. By putting money away for you and not anyone else. So that’s one of my most important philosophies to live by.
James: I’m going to read between the lines and I suspect there is some sort of deeply personal experience in there Shabbar, which maybe we’ll see it for a podcast and another day, but it’s one of those things you really do only learn something like that.
Something like that, the hard way until you’re putting everybody else. First, accept yourself until. The chips are done and the cards, everybody shows their cards. And then there’s nothing really there that is in the piggy bank to bail you out or that serves as something to show for all your hard work.
Totally relate to you on that one. And there’ll be people out there who are listening to this podcast who can absolutely see a previous version of themselves in there. And also people who I hope don’t make the same mistake. Powerful lesson. I’m going to run things off with my number five and that is financial success is 80% behavior and 20% knowledge, not the other way around.
Because you can feel so accomplished and as if you’re a massive financial expert and that you have a shoe in to be rich for the rest of your life because you’ve read all the books. But the problem is if you don’t actually action it, if you don’t behave yourself whenever it comes to spending, there has to be an upper limit in there somewhere, no matter how much you earn.
That’s where the behavioral side comes in, and that’s why that is actually the biggest factor that determines you to be successful when it comes to your finances in the future. And one brilliant story on that is the story of Ronald Reed, have you heard of Ronald Reed?
Have you heard this analogy before?
Shabbar: No. Go for it.
James: It’s a really long story, so I’ll give you the summary of it today and I’ll implore anybody who is listening to look up the story of Ronald Reed. He is a janitor that was born in America in the 1940s. Guy never earned more than the equivalent of 20,000 pounds a year his whole career when he died, because he was so consistent at saving.
They did. No one had any idea. This guy had a huge amount of wealth. He wore the same pair of dunes for like 30 years. He used to patch it up, stitch it back together, any old way that he could, Red and black, lumberjack, all of those things. When he died and someone was reading his will, they thought that he’d.
Gone a bit delusional in his old age because he said that he had 8 million in his estate and that he used to go to the library every day and read books. And he donated like 2 million to the library and 1 million to each of his step kids. And they were like, he’s lost the plot. But then when they checked his accounts, the guy had like 8 million because he’d consistently saved over a huge period of time.
And anybody who’s earning more than that level of wealth, which will be lots of people listening to that podcast. What’s your excuse? You can do it if that guy can do it. Anybody can. And I feel like in part it comes from having some sort of upper limit on how much cash we splash. Not always trying to impress the Smiths and the Jones.
Being able to talk away a little bit and do it consistently. I see your behavior, and I love that story. Ronald Reed. Feel free to check out the full story in your own time. You’ll be able to find it on YouTube Shabbar. Thank you for your pros and wisdom today.
Shabbar: Thank you. My friend it’s been enjoyable and that story, I think I did read it and it was in the Psychology of Money Morgan House.
Around behavior and this obsession with tinkering and doing stuff with our portfolios and our investments and not being patient, This is a true. Fidelity in the US did a study on their most profitable clients. I, the ones that had amassed the most wealth in their accounts.
And so when they were doing this study, they wanted to find the secret behind who were the best clients from a wealth creation point of view. So when they started ringing around, They found that the majority or top people that had accounts with fidelity were actually dead people and because they hadn’t tinkered with their account for so long that it obviously had just compounded and no one had done anything about them.
And these accounts were worth, however much money. Because they belong to people that had passed away. And when you’re not actively tinkering. The second most wealthy account holders were, when they phoned them, were people that forgot that they had an account with Fidelity.
Shabbar: Just to emphasizing that whole point about behavior, discipline, and patience. Is really your biggest asset when playing this game
James: spot on. And I actually feel the media are partly to blame for this misconception that investing is this frantic thing where you’re dipping in and out of the market.
You’re buying this, you’re selling this, uranium’s got up on price, so you’re taking profit or you’re jumping in and you’re doubling Don and you’re doing all of these crazy, wacky things. because in this frenetic way is really not like that. And that’s why Nuro was patience.
Shabbar, thank you so much. Once more for your time my friend. Feel free to reach out to Shabbar in the group everyone. Shabbar Cassam, you’ll be able to find him by searching the members. He is more than competent FA, AFA, I believe, Shabbar, is that correct?
Shabbar: Correct. Lumos Financial. That’s my baby.
James: Top stuff. So you know where to find Shabbar in the group. Shabbar. As I say, thanks so much for your time today. We will catch up super soon.
Shabbar: Thank you James.