(S4) E040 Rob Dix on Entrepreneurship, Investing and Increasing Your Earning Power
Agile Innovation Leaders
English - May 12, 2024 15:26 - 1 hour - 89.6 MB - ★★★★★ - 1 ratingBusiness Technology entrepreneurship leadership agile business continuousimprovement digitaltransformation innovation leaninnovation scalingagile technology Homepage Download Apple Podcasts Google Podcasts Overcast Castro Pocket Casts RSS feed
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 work, your life, such that you spend less than an hour a week on your portfolio. Can you share the thinking behind it and how did you get to this?
Rob Dix
Yeah, so this is specifically to my property investments and so there's, I'd say three elements to this, and the real secret is in the third one. So the first is in the strategy. So it's a hands off approach. You buy something, you rent it out, you leave it, that's it, so there shouldn't be much to do. The second is, it's about the type of asset you buy. So if my goal is to be in it for a long time, all I want is for time to pass, then I don't want property that's going to be a hassle, because then it's going to take up my time, I'm probably going to give up on the whole thing and sell just out of annoyance, and so I'm buying assets deliberately that are relatively new so they don't need loads of stuff doing to them, and that's quality stuff so I can be very selective about the tenants that we put in there, so they're going to look after it and stay for the long term, and I've got properties where I've had tenants in there for five years, possibly more. It's like, well, that's the dream, that's fantastic. Then the third thing, which is the real secret is having a PA, because that then is like, okay, well, obviously of a portfolio of any size, even if you're using letting agents, things will happen, things will come up, things will need your decision, mortgages will need to be applied for things, just stuff will happen, and so having a PA to handle all that is just incredible because this whole, it’s actually an hour a month, I think I put an hour a week, but it's an hour a month, and I tracked this to make sure that I was actually telling the truth, and I am, I tracked my time for a few months, and the only things that I did were transfer funds, sign things and occasionally answer a WhatsApp message from my PA saying, are you okay with me doing this, and that was it, and it's like, that's a position that you can't be at from day one, because it's not worth having the overhead of having that in place if you've just got one or two properties, but when you get to a bit more scale, that's the benefit of getting to scale, because you can put in place things like that that just make life so much easier.
Ula Ojiaku
Well, I definitely aspire to that. You say you run an open book management and profits share. Could you tell us what do you mean by that?
Rob Dix
Yeah, so this is something that we only started doing very recently, within the last six months at the time of recording and what we'd always had previously, so we've got a team of across the business, can I say somewhere between 30 and 40 people, I'm not quite sure, I should probably know that, but we've always had, like before, an executive team at the top, made up of maybe five, six people, and they would have access to the financials, the numbers, so they'd make all the strategic decisions off the back of that, and then go back to everyone else and say, right, this is it, this is how we're going to execute on it. The change that we made was that we gave access to all the financial numbers and everything to the entire business, and the benefit of that is that everyone can then be a part of those strategic decisions, because everyone, of course, knows their own area better than anyone higher up in the business does, because they're in it day to day, and so if they can see the numbers and how what they do can affect those, they can propose better ideas, they could act more effectively. We've had multiple, multiple instances, even just within those six months, of individuals coming up with ideas for people, things we could do better, things we could do cheaper, like cost cutting, and this is the other part of it, because the profit share element means that everyone's extra motivated to run the business better, because they directly benefit. And I thought that the benefit would be there in the longer term, I thought in the short term, it could actually be disruptive because you're almost distracting people from the day to day with all this other stuff, and it's a lot to take in if you don't come from a business background, you're not necessarily going to understand what EBITDA is or something, but now, actually, there was very little of that and we started seeing the benefit immediately. So, I'm not going to say I wish we did it sooner, because I think you need to have a certain type of maturity of team to be able to deal with that, we haven't always, and you need to have the business in a certain state to do that, but I'm very glad that we've done it now.
Ula Ojiaku
Hmm. And when you say you need to get to a certain level of maturity and state, is it more about having operational systems in place or something else?
Rob Dix
I think it's a couple of different things. I think the business needs to be in some form of stability or steady state in that if you're still trying to find your model, you're doing like a startup where you need to get the product market fit or whatever, you can't be led by financial numbers in the same way, you'll be led by data, but it's a different way, running lots of experiments, it's a different thing so you need to get the business to a certain point, and I think there's also a maturity of the people involved, and that's not an age thing with maturity, we've got very, very young people in our business who are sort of super mature. It's just an attitude. We've developed the team over time. We've got better at hiring. We've got better at finding brilliant people and holding onto them, and so we've now ended up with a team that is in age range all over the place, but in attitude wise, very mature and able to, I suppose, deal with this information and treat it the right way. I suppose the stereotypical negative view on this is you're talking about numbers in the millions, and someone's sitting there going, well, I'm only getting paid 40 grand, this isn't fair, but you've got to understand revenue and profit, not the same thing, and all this kind of stuff, and so there needs to be, yeah, you have to have the right mindset to really get it, I suppose.
Ula Ojiaku
Understood, it makes sense. And the thing about you saying, okay, opening up the financial information across the board to your employees, it aligns with this lean agile concept of decentralising the decision making and kind of bringing that decision making closer to people who are actually doing the work. Of course, there would be guardrails, and I'm sure you have that, so that that's a great concept. So how do you go about setting goals business wise, or you can start with personally and then business wise, because it's kind of ties into opening up the numbers to your team and then coming up with ideas, but how do you set goals generally, and how do you measure if you're achieving those outcomes you set out to?
Rob Dix
So I'll start with business wise, because I think it's easier, in that we, in the past, I think we've been guilty, and this comes from the top, it's me and Rob, we've been guilty of biting off too much, trying to do everything that seems like we could do it, and because the podcast has done so well and lots of other things have worked well for us, we've had situations where we could do a lot of things, I think we've had to learn that could do and should do are not the same thing, and there's only so much you can do a really great job at. So we've now got to a point where I think as we've matured as individuals as well, we just set goals that are based around growth, but not crazy growth, not hyper growth, and whenever you've got a financial number, you're balancing it with a service number, so you're not always just going for profit at the cost of anything else, and setting goals that are a stretch, but achievable. So we've again, made the mistake in the past, having super bold goals, which sound motivational, but then when you get half the way through the year, you go, there's no way we're going to do this, then it’s actually demotivating for people. That's the business side, on the personal side it's not that different, we can come back to the jack of all trades thing, probably think about goals in the context of different areas of life. So I'm looking at all the different roles that I have and trying to have a, not just having business goals, but having fitness goals and family goals and friend goals and all that sort of thing, and trying to find some kind of balance, and again, I don't know if that's for everyone, I don't know if it's for every stage in life, I'm sure there'll be times when it makes sense to have a complete focus on your business so you can get to a certain point, or have a complete focus on your family and then go back to the business stuff later. There'll be times when that's the right thing to do, but for me, I'm in a position where I can and I want to sort of have a balance across everything.
Ula Ojiaku
And how would you say parenting has changed your perspective, comparing life without children and now?
Rob Dix
That’s a really interesting question. I think it's shifted my focus in a way that before, because I enjoy work and things that seem like they could be work, you could argue whether they are at all, so doing more research on something or whatever, it's like, yeah, this is work but is it really work, so there was a tendency for that to just dominate everything, especially because I wanted to achieve, and so I just wanted to work all the way up till bedtime or whatever, because it was kind of fun and I’d tell myself it was necessary. But then when you have to finish at a certain time and you want to finish at a certain time because you want to see your kids, then it means I'm making a far more efficient use of the time that I put in, so in terms of a productivity hack, I think it's a good one, but also I think it's all the stereotypical stuff about being less selfish and more outwardly focused, I think I've become a lot more empathetic. I think I was possibly not massively deficient, but a little bit deficient in that regard before, and it's given me more empathy in general. And again, with the stereotypes, just kind of realising what really matters, and so whenever there's a business setback or challenge or whatever, it's just like, yeah, okay, but it's not the end of the world, is it, still with your family, it's all good, we'll deal with it.
Ula Ojiaku
Puts things in perspective, doesn't it?
Rob Dix
It does, and yeah, that's not an original insight, but it's completely true. So whenever you hear people saying this stuff before you're a parent, it's like, yeah, well, I don't know, maybe, maybe not, I don't know if that would be that way for me, but I didn't feel ready in the same way that, I don't know, some people I think know that they want to be parents or whatever. I probably waited a bit too long because I never felt ready, but then there comes a point where you just, you have to be ready, biology isn't going to wait, and so it's like, ah, yeah, I kind of thought everyone talks about all this stuff, is this going to be true for me? Surely not. But then it was. So there you go.
Ula Ojiaku
Well, thanks for sharing that. It's always a life changing decision, and I don't think it's an original thought, but parenting is like the job you get, and then you can get the experience afterwards. That goes against the natural law of things, at least you, you should have some sort of experience and proof that you're qualified, but parenting, being a parent is something that you typically get it and you learn on the job.
Rob Dix
Yeah. Well we had babysitters and stuff from when our kids were quite young and some of my friends would say like, oh, are you comfortable leaving them with babysitters? Are you kidding me? They actually know about this, I don’t have a clue what I’m doing, they're far safer with them than with me.
Ula Ojiaku
I remember having my first child in the hospital, was one day and they were like, okay, yeah, now you can pack the baby and you're ready to go, and I'm like, what, and my husband then, and we're like, what, I mean, you're letting us go with this baby home?
Okay. Yeah. Well, 13 years on, he still lives, so I think there's something to say about that. Well, it's been great. So what if we shift gears a bit more and then going to books, it's obvious you're an avid reader, learner, and what books have you found yourself recommending to others? I mean, apart from your very thoughtfully written book, The Price of Money, I can't recommend it enough. You break down economic concepts and kind of bring the whole big picture in, so it's something I've enjoyed going through and I will be referring to again and again, and you've also written books on property, like How to be a Landlord, which I have on my Kindle and others. Are there books that you found yourself recommending or gifting to others, and if so, can you share some of these?
Rob Dix
Yeah, well, the thing about parenting, as you'll know, is it reduces your time for reading, so I've read far fewer books over the last six years than I had done previously. I find myself listening to a lot more podcasts than watching YouTube videos and stuff, but in terms of books, the one that I can mention that's made a real impact on me in recent years is called Die With Zero by Bill Perkins, and it really ties back into this whole goal setting slash knowing yourself slash what's the point of it all, and it's very relevant to investing as well, because the basic thesis is that you're always swapping something for money. So you're giving up your time, you're giving up your life energy, your focus, you're swapping something to get money, so if you live the ideal life, then you should be swapping enough of that to get all the money you want, to do to have all the experiences you want to have, and then die with zero. So you have nothing left to do, which means you've got it exactly perfectly right, but what most people do is they get fixated on the money part and always chasing a bigger number, so you end up passing on far more than you need to, dying with all this money in the bank, but you've missed out on having experiences, and there are some experiences you could only have in your 20s. So people talk a lot about how important it is to save from a young age and the compound interest and all the rest of it, and it's true, but it's got to be balanced against the fact that there are some experiences that you'll look back on fondly, later in life, that you can only have in your 20s. You wouldn't want to go clubbing in your 60s, or maybe you would, but I doubt I will, I wouldn't want to do it now, so that book, it's another one of those where it's super obvious when it's put to you in the right way, but he does such a great job of making that idea really connect, and I've made changes as a result of reading this book, and for me, that's the mark of a good self help book, right, does it actually help you?
Ula Ojiaku
The action, what action do you take afterwards? It's not just about, yeah, it's a good idea, I feel good, no action. Wow. Okay. It's definitely on my to read or listen to lists. What other book would you recommend?
Rob Dix
I've got another weird one, which is called How I Found Freedom in an Unfree World (Harry Browne), it's another of these books that kind of make you question your assumptions, I suppose, and the theme of it is about kind of doing what you want to and not doing things purely for other people, and this book does take it to extremes at points, it takes it further than I'd want to, but the point is often, I think people find themselves holding them back or limiting themselves based on either what other people think or what they assume other people want, and often it's just that other people don't really care that much, so you just do what you want to do, and so it's another one of those that gets you thinking in a different way.
Ula Ojiaku
Thanks for sharing, anything else?
Rob Dix
There's a book called Outlive by Dr. Peter Attia. It's about health and fitness, but it's coming at it from the perspective of what do you want to be able to do in the last decade of your life, well do it. So a lot of people, because of modern medicine, can live for a long time, but the quality of life in the last 10 or even more years is pretty shocking. So what do you want to be able to do, and if you get clear about what you want to be able to do, like you want to be able to pick up your grandkids and go for a long walk and all this kind of stuff, then work back from that to what you need to be able to do now, because there's going to be a drop off in terms of what you need to be able to do. So if you want to be able to walk a mile when you're 80, you need to be able to walk a lot more than a mile now I think from looking at it from that way, I found it very motivational compared to, well, yeah, it'd be nice to be able to have a bit more muscle or run a bit faster or whatever, but does it really matter that much, and I've found that quite eye opening.
Ula Ojiaku
Okay, well, and the thing about what you said about the book, Outlive, I haven't read any of the three books you've recommended yet, but I'm going to put them in my to-read list. There is this one I'm currently listening to, which is The Coming Wave by Mustafa Suleyman. It's really talking about technology and he was one of the people that founded what's now the AI arm of Google, but talking about the intersection of AI with biotechnology and the sorts of advancements that this is going to push us into new frontiers, but kind of going back to what you said about thinking about in old age, what would you like to be able to do? The advancement is such that they are looking into how to defer aging, keep us fitter, longer, have a better quality of life, even in old age, and probably pushing our life expectancy even more, but there is that danger as well economically, because it's only those who have that certain level of affluence, or are comfortably financially that probably will be able to afford that, and those who don't the gap would widen. So it's just, you're mentioning it reminded me of the book and just halfway through, but if you've not read it, that is probably something that you might want to look into as well. That's my recommendation.
Rob Dix
Similar to that, that's reminded me of a book by Azeem Azhar called The Exponential Age, which I must admit I haven't actually read, but I interviewed him, so I watched loads of interviews with him in preparation for that, so I feel I've got the general idea, but that's about the accelerating pace of technology and even things like with 3D printing being a great example, like when that first came out, it was rubbish for years, and it was, ah, this will never turn into anything, and then they cracked it, and now it's incredible, and so many more technologies like that and the exciting side of that and the opportunities it brings, but as you highlighted, some of the dangers of that as well, and the challenges that it creates, so that's really interesting.
Ula Ojiaku
Yeah. Well, thanks for that. Any words of advice for the audience? Now, my audience are typically leaders in organisations, you know, entrepreneurs or leaders in large organisations who are usually looking for ideas of how to do better, implement better or live better, so generally, what would you leave the audience with?
Rob Dix
I think I'd hit on a point that I didn't mention earlier, but should have done when it comes to talking about investing and all the rest of it, which is a point that I'm going to be making in my next book, which is that all this investing stuff is great, but the most powerful thing that you have is your own earning power, because there's only so much you can save, based on how much you're earning - you can cut your costs, that's fantastic, but there's a limit, you can't live on zero. There's also a limit to what investments are going to do for you. You're not going to be able to make 100 percent returns every year forever, not possible, but the only thing that is uncapped is your earning power, so you can, if there's nothing stopping you from earning 10 times more than you are now, a hundred times more than you are now, I'm not saying everyone can, but it's theoretically possible, and so I think everyone gets very excited about investing, because it sounds like, oh yeah, I can invest in this thing and make a big return, but the only thing that you can really make a difference with, and the thing that you actually have control over, is your own earning power. So I think that's something that, although I talk about investing a lot, I think investing in learning new skills, taking a conscious approach to your career, I'm sure your audience will be doing this already, but really taking control of your career progression rather than just kind of like bumping along and hoping someone gives you a pay rise or something, that's far more valuable than any investment you can make, and finding something that you want to do, and will enjoy doing for a long time, because people are retiring later than ever, it's getting harder and harder, you're not going to be by default, get to age 65 and have your house paid off and have this pension that's been paid into for you. So obviously you want to do what you can investment wise to get to a point where you are able to retire when you want to, if you want to, but far better to never want to retire, and so if you just find something that you just love doing, so you can just happily, as long as your health permits, do it forever.
Ula Ojiaku
Wow. Increase your earning power, there's no cap to that. I am looking forward to your new book, definitely. Do you have any idea of when that is likely to hit the shelves?
Rob Dix
My publisher's been asking the same thing.
Ula Ojiaku
Okay. Well, no pressure, he or she didn't pay me, but I'm just wondering.
Rob Dix
At some point in 2025, these things I’ve got the write the thing first, but then even after that, it takes a while until it comes out, but yeah, at some point in 2025 is my hope.
Ula Ojiaku
All the best with the process, I know it's going to be something excellent, and I look forward to it coming out. So how can the audience find you?
Rob Dix
So they could go to robdix.com, that's where you'll find stuff I've written and links to everything else that I do, and there are links there to my social channels that I go through periods of being more active on than others, but that's probably the best place to start.
Ula Ojiaku
Any ask of the audience? For me, my ask is they should go check your website, buy your books if they're interested in property and economics and all that and read your blog, but any other ask of the audience?
Rob Dix
I guess my ask is if you've heard something that has sparked a thought, which I hope is the case if we've done our job, then do something with it because, again this is advice to myself here, but I listen to podcasts as entertainment almost sometimes, and it's really interesting and then you’re onto the next one and you never do anything with it so I think consume less and do more with the stuff that you do consume is advice that I'm trying to give myself, and that's what I'll pass on to the audience as well.
Ula Ojiaku
Consume less, do more. Thank you so much, Rob. It's been a pleasure having you on this podcast and I thank you for sharing your wisdom, your insight, and you’re as generous in this live virtual session, as you are in your newsletters and your podcast, so thank you again.
Rob Dix
Yeah. Thank you for having me. It's been a fun conversation.
Ula Ojiaku
Yes, I agree. Thank you again. That’s all we have for now. Thanks for listening. If you liked this show, do subscribe at www.agileinnovationleaders.com or your favourite podcast provider. Also share with friends and do leave a review on iTunes. This would help others find this show. I’d also love to hear from you, so please drop me an email at [email protected] Take care and God bless!