This is my last year of actively buying investment properties, and saying that out loud feels like more of a milestone than I expected.
The guiding principle through my twenties has been to invest in assets rather than liabilities. That has meant saying no to a lot of things that would’ve boosted my lifestyle. Over the last five years, the majority of my disposable income has gone into property. Every year since graduating, I can account for exactly where my savings went, and why.
What made that strategy work for as long as it did was the circumstances I was operating in. Initially living at my family home in London meant I had no real liabilities. Then working full-time in Dubai meant I had no taxes to pay which also boosted savings. Then living in South Africa meant no rent (because I paid for the apartment in cash). Each of those phases created conditions where putting large sums into property made complete sense. The cash had somewhere useful to go, and the opportunity cost was low.
A strategy does not work because it is good in the abstract. It works because the conditions around you make it the right move at the right time. When those conditions change, the calculation changes with them.
I now have a solid passive income base which will continue to grow over time, which means my risk tolerance is higher and I can afford to be more deliberate about where I deploy capital. There are uses of cash that offer better returns than property in my current situation, and it would make no sense to keep ploughing money into the same strategy out of habit when the circumstances that made it sensible no longer apply.
This is not me walking away from property entirely, if a good deal presents itself and it makes sense, I’ll be there. But actively pursuing (especially in the UK) for my personal portfolio is something I am done with. The tax environment and the sheer administrative weight of it make the numbers harder to justify, and I would rather put that energy somewhere with a cleaner return.
It’s a graduation from one wealth building phase unto another. The strategy served its purpose well. Now it is time for the next phase.
Speaking of alternative ways to make money from property, we have a new opportunity available - Click here to read more and if you’re interested you can respond to this newsletter
This week’s guest is Bode Odetoyinbo, a lawyer turned investor who goes by The Finance Dad. “If it doesn’t put money in your hands, it is not an asset” is one of the notable quotes from the conversation. We also had the Property vs Stock Market debate. He takes the position that the stock market has done what no piece of real estate can match over a 30-year horizon, and he backs it up with the kind of numbers that make you rethink the whole conversation. We also go in depth on how he taught his kids about financial literacy from the age of 4, with both of his children going on to build multi-6 figure portfolios in their 20s, and one of his daughters now being one of the biggest personal finance creators in Canada. If you’re interested in any of these topics, tune in.
In this week’s episode we tackled the below wealth woe where a couple in their late sixties, with a $10 million net worth built almost entirely in stocks, are planning to leave their son $5 million in a trust. Their son and his wife earn $100,000 combined and have virtually no savings, and even a conservatively managed trust could generate $150,000 to $200,000 a year, well above what they currently earn. They want to know whether there is anything they can do to stop the inheritance from ruining his life. What would you do in their position?
POLL — insert using Substack’s poll tool:
Keep the trust as planned with tight restrictions
Use the trust income to fund financial education first
Give smaller amounts now so they learn to manage while you’re still here
Other (tell us in the comments)
If you want to speak to a professional about your financial situation, you can book a free consultation with our team and we’ll match you with the right specialist. Whether it’s your investment portfolio, pension consolidation, or long term financial planning, it’s worth getting a proper review. Book Here.
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