(S4) E040 Rob Dix on Entrepreneurship, Investing and Increasing Your Earning Power
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Show Notes
Bio
Rob is the co-founder of propertyhub.net and the bestselling author of The Price Of Money (Penguin). He co-presents the UK's most popular property podcast, and has a weekly column in The Sunday Times.
Interview Highlights
02:30 Jack of all trades
06:00 Recruiting interested people
07:45 Life as a digital nomad
10:50 Getting into property
12:00 Podcasting – the magic ingredients
17:40 Property investment
20:20 Long term vision
23:10 The Price of Money
26:00 Inflation & interest rates
31:00 Diversified portfolios
34:00 The end game
36:40 Seeking advice
39:40 Systemising property investments
42:30 Sharing strategic decisions
46:20 Goal setting
48:40 Parenting perspectives
59:20 Increasing your own earning power
1:02:40 Consume less, do more
Social Media
· LinkedIn: Rob Dix on LinkedIn
· Instagram: Rob Dix on Instagram
· Twitter: Rob Dix (@robdix)
· Website: Robdix.com
· Website: propertyhub.net
Books & Resources
· The Price of Money: How to Prosper in a Financial World That's Rigged Against You, Rob Dix
· How To Be A Landlord: The Definitive Guide to Letting and Managing Your Rental Property, Rob Dix
· Property Investment for Beginners, Rob Dix
· 100 Property Investment Tips: Learn from the experts and accelerate your success, Rob Dix, Rob Bence
· The Property Podcast - YouTube
· Die With Zero: Getting All You Can from Your Money and Your Life, Bill Perkins
· How I Found Freedom in an Unfree World: A Handbook for Personal Liberty, Harry Browne
· Outlive: The Science and Art of Longevity, Peter Attia, Bill Gifford
· The Coming Wave, Mustafa Suleyman, Michael Bhaskar
Episode Transcript
Intro: Hello and welcome to the Agile Innovation Leaders podcast. I'm Ula Ojiaku. On this podcast I speak with world-class leaders and doers about themselves and a variety of topics spanning Agile, Lean Innovation, Business, Leadership and much more – with actionable takeaways for you the listener.
Ula Ojiaku
I'm pleased to have with me here as my guest, Rob Dix, who is the co-founder of Property Hub and he's also an author, investor, entrepreneur extraordinaire, and we'll be learning more about it. So Rob, thank you so much for making the time to be my guest on the Agile Innovation Leaders Podcast.
Rob Dix
It's a pleasure, thank you.
Ula Ojiaku
Yes. I usually start with this question for my guests because personally, I am curious. I love learning about people. So what would you say have shaped you, looking at your background, into the Rob Dix we know and admire today?
Rob Dix
Well, it's a well trodden career path. I studied cognitive neuroscience, went to work in the music industry, obviously, as you do. And then sort of ended up leaving that and going into property. None of that makes any sense, and I think that sort of sums up how I've got here, which is just by following my curiosity and doing whatever seemed like a good idea at the time, and so if something seemed interesting to me, I would do it. And property, which I got into by accident in my early thirties, was probably the first thing that I've really stuck with and it's held my interest for the long term. I'd always just sort of like, wanted to figure out how something works, once I knew how it works I got bored, moved on, but with property it's like you kind of never get to the end, there's so much to it, and then it's also served as a gateway into investing more generally and into economics, ended up writing this book about how the economy works and all this kind of thing, but it's the same old theme of just kind of going with whatever seems interesting.
Ula Ojiaku
A very fascinating background. It sounds to me, and I'm not trying to box you in or label you, but you sound like someone who's multi-passionate and multi-talented, would you call yourself a jack of all trades?
Rob Dix
Absolutely. Yeah. I've written an article actually, in defence of being a jack of all trades, because I think people fixate on the master of none bit, but I think that there's a lot to be said for knowing a little about a lot, and I think it's a natural tendency. I was saying to my wife the other day that I don't think I would be able to, if I had to like knuckle down and it's like if you just do this one thing for three years, then there'll be this incredible payoff at the end of it. I don't think I could do it, even knowing that that payoff was there. I'm just naturally a little bit of like, sort of taking bits from everywhere. So I don't think there's any point in fighting it. I think you kind of skew one way or the other, and so I'm trying to embrace that tendency and use that to pull in ideas from various places into what I'm doing now, and yeah, make the best of it rather than just being completely scattered.
Ula Ojiaku
I feel like I am the same. I tend to get bored with things, I learn things quickly and once I've learned it and it's kind of routine, I get bored, and the only way to keep consistent is just about broadening my horizons, so learning from different fields. I have an engineering background, but I love learning about philosophy, psychology, how can I bring ideas out there into the field? From all outward appearances, you are successful. So what would you say has been the benefit of being a jack of all trades and kind of understanding who you are, embracing it instead of fighting it? How has it benefited you?
Rob Dix
A good question. Not something I've thought about, but I'd say on a purely social level, knowing a little bit about a lot is helpful, because you can end up talking to pretty much anyone about anything, whatever they're interested in, you know something about it and have some kind of a way in, rather than just having your one topic that you can bore on about forever. And I think in general, it just means that I'm always excited to be doing whatever it is that I'm doing, there's never like a, urgh, I'm still in the grind, because even if, you know, everyone has grindy periods of their career, their business or whatever, and I don't think that's necessarily avoidable, which is how it goes. You can't be absolutely delighted with everything all the time, but even when that's happening, there's always something I'm excited about, even if it's just being able to watch a YouTube video about something that evening that I'm looking forward to, like learning about something completely random, there's always something that means that it just never feels mundane.
Ula Ojiaku
And actually what you've said here with the whole buzz about GenAI. Where are we going? How is it impacting us? And it kind of reminds me of the World Economic Forum, their Future of Work publications, they do this annually, and one of the key attributes that would be needed in whatever future roles or responsibilities that you're going to have, is the ability to learn and unlearn. So that curiosity, being able to look out, I think it's something that, well, I am trying to teach my children as well, which is yes, you can learn a subject, you can learn things in school, but what's going to sustain you and keep you relevant is going to be your ability to learn, unlearn, and relearn, so it's really key.
Rob Dix
Totally. When we're hiring people, we always look for people who are interested in something, whatever it is, it doesn't have to be work related, even if it's super weird, better if it's super weird, because people who are interested in something, and people who push themselves in some way and challenge themselves, whether that's in a physical way, like doing an ultra-marathon or just taking something and seeing how far they can push it, I think if you put those two things together, we've found, that those are the traits of the high performers who you want to have around.
Ula Ojiaku
Yes, because there's something in the bias of past performance, but it doesn't necessarily predict the future performance, but the attributes of being excited about something, being able to dig into something of one's own initiative, not relying on external motivators, that is a better predictor of future performance than what one did in the past. I don't know what you think about it?
Rob Dix
Yeah, totally, and that's why we put very little weight on a CV because you can bend your life story in all kinds of different ways, but yeah, I think those internal attributes, like you said, are a better predictor.
Ula Ojiaku
Hmm. Okay, well, I'm glad to hear I have someone who thinks similar in this path. So you did say, just back to your background again, which is fascinating. You studied cognitive neuroscience, then went into music, found that boring, you then lived as a digital nomad for seven years before falling into property. Can you tell us a bit more about that?
Rob Dix
Yeah, so that was another classic example of just doing whatever seems fun at the time, and so that was when I left the music industry, because I'd got to roundabout 30, and when you're into music, as a way to spend your twenties, fantastic, you get to claim it's work, but it's just, if you're out every night, then you're doing a really good job of work, but then I was looking at the people who were 10, 20 years ahead of me and had families and the rest of it and they just didn't seem to be having fun anymore. They didn't really want to be out every night doing all this stuff, and so I thought, well, I'll get out now, while I feel like I'm in a strong position to make a move, not knowing what I was going to do next.
My wife and I went to spend six months in New York, because she loved it, had lived there before, wanted to go back, so we were there and then we discovered, I can't remember how, but we discovered the whole digital nomad thing while we were there, and it was this real moment of, oh yeah, we planned to do six months here and then go back to London and get a job or start something or whatever, but we don't have to. You can just go and work from anywhere, anywhere you've got an internet connection, and now that's obviously mainstream, people work from home, companies have policies where you can go and work from another country, and it's normal, but as recently as sort of like pre-covid 2019 kind of time, I'd almost try to avoid telling people that I was abroad, because they'd think it was strange and whatever, but now it's just become normalised, but back then it was, yeah, it was weird, but it was just super cool, because it gave us an opportunity to just go and live in all kinds of different places, and when you go and live somewhere, even if it's only for a month to three months or something, it's still very different from going up there for a week's holiday. You get to feel like you know a place on a deeper level, and so that was really interesting.
Ula Ojiaku
Right. No, I completely agree. I mean, I wouldn't say I'm at the level you are at as being a digital nomad, but professionally, I've had the privilege of visiting 18 countries and counting and there is that real difference when you stay there for a month or so, being able to soak in the culture, understand the nuances, get to know people, and actually potentially form relationships. During the time you were with your wife in New York for about six months, did you by any chance come across Tim Ferriss' 4 Hour Workweek?
Rob Dix
Oh, of course.
Ula Ojiaku
Could that have influenced you as well, by any chance?
Rob Dix
Yeah, I think that was before we left, and so that was kind of like the conceptual read about it in a book, but then we encountered real people who we met, who we talked to, who were doing it. And so it's like, oh, this isn't just a thing in a book, this is a thing that people are actually doing, and that made it a bit more real, I suppose.
Ula Ojiaku
And then you fell into a property. Could you tell us how you fell?
Rob Dix
Yeah. So by the time I left music, I sort of got to the point where I had some savings.
What's the default UK thing you do when you've got some savings? It's by property. So, I got interested in it and in the process of researching that investment, I just got super into it, and I suppose in the same way as I, and by the sounds of it, you, get into things, it's something new, it's exciting, you want to learn everything there is to learn about it, and there were, back in those days, there weren't all the same resources there are now, but there were message boards that I'd read through and things like that, and so I did all that in the process of buying my first couple of investments, but then, where that would normally I'd hit that point, right onto the next thing now, that never happened, I've retained that interest, and while we were abroad, I thought I want to learn more about this, I want to go deeper, but don't really know how, it's not like I want to go and get a job working property or anything, but I also got interested in podcasts, and so I thought well, I wonder how you create a podcast, and so I started a podcast and a blog talking about property, mainly as an excuse to get other people to talk to me. So if I just call someone and say, I don't really know anything, but would you have a chat with me on property for an hour, of course they're not going to say yes, but if you say it's an interview, and they don't think to ask if anyone listens to this thing, then they're going to say yes, and they did, and so, then it was episode number two or three of that that I recorded, where I met Rob Bence, who went on to become my business partner, and we've been doing a podcast together for about ten years now, but it was purely that. It was just, again, starting something without really knowing what the outcome of it was supposed to be, that then led to this whole career that was never the plan at all.
Ula Ojiaku
You know, the reason why I was laughing is it's similar story, but just different settings. I started my podcast, I was looking to get into a different field or career, and I quite didn't know how, and there was someone I wanted to work with, like you said, just rocking up to the person and saying, give me a job because I'm good, the person probably wouldn't have given me the time of the day, but when I now thought about it, framed it, kind of said, okay, how do I plot my cunning plan, I'll invite him for an interview and I'll say it's about this, I didn't know anything about podcasts, I didn't know how to set it up or anything, I just said well when we get to that bridge we'd cross it. So we had the interview, had conversations, and once I pressed stop on the recording, he said, I want you to work with us.
Rob Dix
Works every time.
Ula Ojiaku
But it's impressive though. 10 years, you and your partner have consistently been recording and releasing your podcast, how do you do this, because it's impressive.
Rob Dix
So I think there are two magic ingredients to this. One is to record at seven o'clock on a Monday morning, because there's not much that's going to stop you. If you try to do it at midday on a Wednesday, who knows what kind of business thing would come up or whatever, so doing that means it just happens. And the other is having a partner, because we both had podcasts previously on our own where the upload schedule was all over the place, because being consistent on your own is so hard, but when there's the accountability of someone else to turn up we just, I guess in those early days when you could easily waver, we were both turning up for each other, and now we've been doing it so long that it's just something you do. It's just inconceivable that you wouldn't turn up and do a podcast, and it's a lot of fun, and so I wouldn't want to miss a week. So yeah, we put out a podcast literally every week for 10 years, including through the births of various children and other family events, and we had episodes go out on Christmas day and New Year's day, not recorded on those days, but we put them out because it's like, it's a Thursday, the podcast comes out, that's how it is, and I think a large amount of the success that we've had has been early mover advantage. We were lucky to be early, definitely far harder today, but also consistency.
Ula Ojiaku
And would you say that you have some sort of administrative help in the background? Because I found that, two years ago I hired an assistant and I have outsourced like the production, it's not my strength, just having people to do that. Do you have that sort of help and has that made any difference?
Rob Dix
It's definitely helped. So we had an editor from the very beginning who would literally just take the files, take out the mistakes and that was it, nothing super high end, but it's just removed another barrier to doing it, and then for probably the last four years or something, we've had a proper producer who sits on the calls with us and does some research and all the rest of it, so there's a bit more to it, but we were doing it for six years before that, but being able to focus on the bit that you're good at and that you enjoy and remove all the stuff around it. I mean, I think I know people who are very successful, who've been doing it for a very long time who still edit their own audio. I don't quite understand it, but they clearly they get something from it. Maybe going back and reviewing the material is helpful to them, but for me that would take it out of the fun zone, I suppose.
Ula Ojiaku
So what have you learned in these 10 years of hosting the Property Podcast with Rob Bence and being in partnership in business with him?
Rob Dix
Well I've learnt an incredible amount, and I think a lot of that learning comes from being forced to talk about it, I think really helps, because I think everyone's learning stuff all the time, but it's very easy to learn stuff, but not be able to, and maybe you internalise it, but you can't verbalise it because you never have, and I like writing because that's how I kind of help develop ideas, but I also develop ideas in conversation, and because I'm forced to take those ideas and put them into a form that other people can understand on the podcast, it means that I've learned a whole lot more than I otherwise would have done because it's just made me it think about things more deeply, I suppose. So that process has been incredibly useful.
Ula Ojiaku
What have you learned about property?
Rob Dix
I think that my view on property has completely shifted over the years. I think I started from the position that most other people start in, which is not wrong, but it's that you sort of see property as something that, you're looking at it at the level of the property itself, it's all about that particular asset. You're very fixated on the precise layout of that property, location of that property, you're thinking very deeply about that itself, and you're thinking about the rent that it brings in and it makes you a profit and that's great, and none of that is wrong at all, but through being exposed to property at, I suppose, a larger scale and also thinking about the economy a lot more, and how everything fits together, I now think about property not so much at the individual property level, but at the sort of the macro level of well, what is this, what is this as an asset class, where does it fit into everything, where does the ability to buy with debt fit into it, which is a huge, huge thing, and what about the growth of that asset over time, as opposed to just the rental income? So I've kind of gone from one extreme, which is where the majority of people will start, where you're doing everything yourself, you're thinking very hard about what colour paint to use or whatever, to now I'm like the last, however many properties I've bought, I've never seen, I just haven't visited them, I want to make sure it's good, but I'm not fixated on every last detail of it, because I'm more thinking about, well, you know, taking into account the overall economic context, where will this asset be in 10 years, and if I think that's a good place, then the colour you painted the living room doesn't make a big difference in that investment case. So I think I've now ended up at an extreme version of the other end, but being somewhere towards the middle of that spectrum, rather than just looking at the individual property level, I think is helpful. So we try to take people somewhere along that journey through what we do on the podcast.
Ula Ojiaku
And on your podcast, the thing about you and Rob Bence, or Rob B as he is fondly referred to, is that you have this unusual quality or ability to break down typically complex topics into simple step by step, easy to follow concepts. I aspire to communicate like you both do. So
what's your take on the taking a bigger picture approach towards property, kind of looking at your purchase of properties as from a perspective of how they can serve a longer term goal or a bigger vision?
Rob Dix
Yeah, I've come to see property as very much a long term thing and property, it kind of forces you to be long term, because it's such a pain to buy and sell it, and that's one of the drawbacks of property, but I think it's actually one of the hidden advantages, because you could pick any asset class and if you just bought it, held on to it, and didn't mess around with it, then you'd probably do okay, but obviously if you're investing in the stock market, then it's incredibly easy to mess around, like sell when you panic and sell when you shouldn't be, and buy when you shouldn't be, and get carried away, and so you can almost be your own worst enemy. With property, it forces you to think long term, and when you take that perspective, but especially when you consider the fact that if you're buying with debt, then the value of your debt stays static and yet inflation will lift the value of the property itself, so even if property only ever goes up in line with inflation, but your debt is static, then you end up winning just through the natural process of inflation existing. So that makes no difference over a year or two, but over a decade, it makes a big difference. So when you start looking at it through that lens, then you say, oh, well, it's almost rigged in my favour and it's almost, and it's going to play out in this way, and so the details don't matter so much. If you're trying to make money from property, if it's your job, you're flipping properties or you're refurbishing and you want to pull your money back out again, then you need to get everything right, and you need everything to go in your favour and need that to happen quickly, and you can do that. It's hard work, but you can do it, but if, rather than using property to make money, you're using property to store and compound wealth over time, then it just works in such a way that you don't have to worry about so many of the things that you normally would, and you'd have to, after you've been doing it for a decade, you see it and you go, oh yeah, I bought the property for this much, and now it's worth this much, I had 25 percent equity in the property, now I've got 50 percent equity in the property, and you see it. It's hard to see for the first couple of years because it happened so slowly, but then when you believe it happened and you see it happening, then it gets really exciting.
Ula Ojiaku
Gosh, I could take this to several directions, but I will hold myself. So your book, the latest one, I know you're in the process of putting together another one, and I know it's going to be excellent, and of course, if you'd like to tell us about it later on, you can, but in your book, you did mention the thing about inflation, and it's not intuitive, but that's property holding, the value, but I was kind of thinking of the gold standards, because gold, if you were to buy property back then, maybe 50 years ago, 100 years ago, paying in gold, you would probably more or less, you need the same amount of gold to pay today, but it's not the same with fiat currency, like the paper money. Could you explain a bit more about that?
Rob Dix
Yeah, inflation, it's another one of those things that happens slowly. So, obviously, over recent years, everyone's been talking about inflation, and it's been particularly high, but most of the time it's not, and it's not supposed to be, there's this 2 percent target, which is pretty arbitrary, but it's meant to be at a level where you don't notice it happening, no one complains about it that much, but over time, that 2 percent compounding really adds up. So even if inflation were under control, the effect of this is that the same number of pounds or dollars or whatever else will buy you progressively less and less over time, and everyone knows this, but doesn't think about it, in that you're used to the fact that everything costs more now than when you were a child, but why, that doesn't make any sense. If anything, it should have got cheaper, because we found more efficient ways of producing whatever it is, but you're just used to that being the case, and it's not because it has got more expensive to produce everything, it's because the value of the money that you're measuring it in has fallen, and that's what inflation effectively is. So where it comes back to gold is that everyone thinks that property is this asset class that's had runaway growth, but it's incredible, if you go back to the 70s, and you measure it in gold instead of in pounds, then it's pretty much the same. It would take you the same amount of gold to buy a house today as it would have done 50 years ago, and that shows you that it's because, it's not like gold has stayed completely still, so the analogy is not perfect, but what it kind of drives at is that it's not the property that's moved, it's the pound that's moved, that hasn't gone up in value, the pound's fallen in value, and so that's just, so if you own a hard asset, something that there's a limited supply of, of which gold is one, property is another, Bitcoin's a third if you're that way inclined, then over time, that will go up in value compared to the pounds that is shrinking. The next level of that is that if you buy that asset with leverage, with debt, then it means that the debt is measured in pounds, and so over time it has this effect that you might have borrowed £100,000, and 50 years ago, £100,000 would have been a vast amount of money. Now it's just like, yeah, I'll take out a mortgage for that, no big deal, and then another 50 years, well, what's it going to be then? It's going to be not quite pocket change, but getting on for it, and so you get to benefit from the fact that like I say, even if the asset that you own, the property in this case, only goes up at the same pace as everything else, then you win, because the debt that you took out is static. So you could have a property that you bought for £200,000, it goes up to be worth £300,000 purely because of inflation, well that extra £100,000, that's all yours, you still own the same as you did in the first place.
Ula Ojiaku
So is it despite the interest rates, would you say the inflation still, would there be a point in time where it wouldn't make sense?
Rob Dix
It's a great question and it's actually got better now interest rates have normalised because if you could take out a fixed rate mortgage for the entire time that you're going to own the property, which in America you pretty much can, then it's all good, because you know exactly what your outgoing is going to be, and if you're making a monthly profit from that property, then your interest cost is kind of irrelevant, it's been covered by the rent, so the interest that you're paying is never coming out of your own pocket. So that's like, great, sorted. The problem is if interest rates go up dramatically, which of course recently they have, which means that if you bought something that made sense when you're borrowing at 2 percent and now you're borrowing at 5 percent, that can be a painful adjustment, and eventually rents will increase to such an extent that it'll all make sense again, but there could be a number of years in the middle where it just doesn't really work for you, but for the whole time, the whole 14 years, the interest rates were pretty much nothing. We knew that that was unusual, we knew that wasn't supposed to be the case, and one day they would go up again. We didn't expect them to go back up to where they were so quickly, but we knew it was going to happen at some point, and so that made it tricky to go, okay, well, how much of a margin do I need to build into my calculations? What do I need to assume that interest rates could go up to, that'll still be okay, but now it's happened, let's say that you're borrowing at 5 percent today, I'm not saying it's not going to go up further at some point, it could do, it could go up to 6 percent, but interest rates have gone up by about 250 percent over the last couple of years, that's not going to happen again. If you're borrowing at 5 percent today, it's not going to go up to 10 percent. Come back and clip this if it happens and make me look silly, but it's not going to happen, because the world is so indebted that everything will fall apart. So you still need to have a margin, but it's not the same as it was before.
So that's the silver lining view on the fact that interest rates have gone up so fast. It's a painful adjustment, but it means that you can make future decisions with more certainty.
Ula Ojiaku
Is that why you made the statement that investing can be seen as a leveraged bet on inflation?
Rob Dix
Yeah. So the simple way of describing this is if inflation lifts the value of your asset, whatever that asset is, property in this case, by 2 percent a year, which is what inflation is supposed to be, if you've only put in a quarter of the money, then that means that it lifts the value of the money that you've put in by 8 percent, so you're getting an 8 percent growth on your own money based on just inflation being at the rate it was supposed to be, and the way it tends to play out, as we've seen, is that if inflation overshoots, then you say you get more inflation than you're supposed to, yeah, that's not great as a central bank, you'll try and bring it back down, but it's not the end of the world, whereas if inflation goes below 2 percent, they'll pull out all the stops, print money, slash interest rates, do everything they can to get it back up. So the effective rate is, the average over the last 20 years has been 3.8, and it's met, and so even though the target is two, so if that's the case, and your asset keeps up with that, then again, multiply by four, if you put in a quarter of the money, and that's where you get to, and the only assumption you need to make is that inflation continues to exist, and of course it is because it has to, because it's explicit policy, and if you ended up with deflation, then the government is in the same position that you are as an individual, the government has debt and an inflation makes it that more manageable, deflation would make it less manageable. It's still barely manageable as it is, so it just can't be allowed to happen. So that's why if you're pinning your investment on one particular concept, that's the one I'd feel pretty confident about.
Ula Ojiaku
You are an advocate for a having a diversified portfolio. Could you explain or share how you go about doing that and why it's important?
Rob Dix
Yeah, I think that everyone will have their own view when it comes to how much diversification they want or need, and there is an argument that if you deeply understand something, then there's almost more safety in investing 100 percent in something you deeply understand that most people either don't, then sort of diversify across a whole load of things that you don't understand. I've got some sympathy for that view. If someone said to me that they were 100 percent in property on the basis that they had all the right safety measures in place, they weren't over leveraged, they had emergency funds, all this kind of stuff, then I wouldn't be like, you're crazy, and I think it's also, to a large extent, the best investment is the one that you actually make. People are scared of investing in things that they don't understand in many cases, rightfully so. So if there's a particular investment that you're happy with, and it means that the alternative would be doing nothing, then that's fine, but personally, I'm heavily in property, but I also invest in other assets, stocks, bonds, gold, Bitcoin, you name it, but I sort of split my portfolio in two in terms of the way I think about it. I've got property, which is the bit that I'm supposed to know about, and so I'm kind of, I'm not actively making decisions. Everything else I'm going, well, I can't possibly know about all this other stuff as well, it's not possible, there's not enough time. So I split my non property part of my portfolio across everything, on the basis that whatever happens, there'll be times when bits of it are doing well, bits of it are not doing well, and it will all average itself out in the end, and so the important bit there is being truly diversified, because investing in just the UK stock market, if you're just tracking the FTSE 100, you might think, well, great, I'm diversified across a hundred companies, but it's all one geography, right, and if something happens to the country, that affects everything, and it's just one asset class, it's just the stock market. If something affects all stocks, then that affects, so even just being globally diversified across stocks isn't enough, so you need to bring other assets into the mix as well, you want some things that are doing well when other things are doing poorly. So if you're going to go for diversification, then I think most people need to be more diversified than they might assume, because there are times when stock markets across the world all do very, very badly and do for a long time, at which point you want to be owning something else as well.
Ula Ojiaku
I believe I've heard you and Rob Bence (that is, Rob B.) say this, you know, in several of your episodes of your podcast, it's all about your end game, because it's senseless to go copying people or imitating people indefinitely without knowing the rationale behind why they're doing what they're doing. So if one has that clarity of, this is where I want to be in 10 years, 20 years time, then you work backwards. It might make sense, given the example you gave us, oh, maybe someone having 100 percent of their investments in property, but they have all the stop gaps and the safety measures in place and yourself going into, okay, I have part of my assets in property, but I've also diversified, I think it's all about the end game.
Rob Dix
I think that that's completely true, and it's also the hardest thing to figure out. You can go and research investments for all day long, but then knowing what you actually want is, that's hard, the self-knowledge piece of being able to predict the future and knowing how you'd react to different situations. I think it's very easy to, for example, go oh yeah, well, you know, I'm investing for the long term, so if my aggressive stock market portfolio goes down by 50 percent in a year, that's fine because I know it'll come back again. All right, but how would you really feel if that happened, and actually knowing that in advance is not an easy thing to do.
Ula Ojiaku
So for someone like me, it's not just about me, having children changes your perspective about things, because if it's just me personally, I think I can survive on beans and toast indefinitely, but when you have people you're responsible for, so some of the things I aspire to is for them to still be able to work and do meaningful work and add value, but not to be distracted by unnecessary things. So if it's music or art they want to major in, they can do that, but they have to be productive and bring value to the world through it, and not have to think about the money, but not too much that they wouldn't also know the value of work.
So that's the sort of end goal I am working towards, and of course, to be able to give to causes and create opportunities for people or demographics that are underserved or that typically wouldn't have the sort of opportunities compared to their contemporaries would, so that kind of drives me in terms of the way I choose things. So I'm wondering, though, where does going for expert advice come in? So you are an expert in property by all ramifications. If you talk about the number of hours you've put into it, the practical experience, but for the other parts that you don't have as much hours invested into it or experience, do you think it's a useful thing to seek out the advice and perspective of experts or people who know more about it, but of course keeping your end goal in mind?
Rob Dix
Yeah, I think that I'm unhelpfully independent in that I always want to do things myself, and that's not necessarily the best way. I think it's a good idea to bring in other people with more knowledge than you do, but with two things in mind, and you've mentioned both of these already, but first is knowing what you ultimately want, because any decent advisor is going to start by saying, so what do you want? I can't make a plan for you unless you tell me what the outcome is, and so you need to know that anyway. And then also I think having enough knowledge on your own to understand what you're being told and why you're being told it, and if it makes any sense, and I would personally never be comfortable making an investment, just because somebody with lots of diplomas on the wall or something said to me, I said, yeah, this is what you should be doing, trust me, it works for all my clients. Maybe they're right, but I just wouldn't be able to do it that way, so I think doing enough research and understanding enough about it is something that everyone should do, because no one's going to care about your money more than you do, but that doesn't mean you have to just plough ahead and do everything yourself.
Ula Ojiaku
No, definitely that critical thinking and not switching off your own thinking and analysis and doing one's homework, I completely agree. How much of it do you do when you consider investing in these other set classes?
Rob Dix
I've spoken one-on-one with professionals, but never got to a point where I feel like I want anyone to do anything for me. I feel like I'm investing in such a way that I can do it myself, because there's not much to do, I've deliberately set it up in a way where you just, again, diversify and leave it, but outside the context of speaking to people one on one, I've read vast amounts of other people's thinking on this topic because it's something that I find interesting, and so what I'm trying to do with my books is to come up with something for people who aren't that interested, so they can just read that one book and get sort of like the 80-20 of what they need, because I'm going to go deeper on it because it's fun for me, but I'm not judging, not everyone finds it fun, that is fine, and so yeah, I kind of researched it, all this stuff, but far beyond the point that I need to almost as a hobby, because it's enjoyable, but for everyone else, I don't think you need to take it to that kind of extreme at all.
Ula Ojiaku
Thanks for that, Rob, and it kind of brings me back to the point you made about, you've kind of systemised your, will I say your business, your wor