00:07:73 – Important Lessons about Money

00:10:09 – Survival to Stability

00:11:18 – Philosophies on Money and Building Wealth

00:15:57 – Making Compromises on Life and Income

00:20:30 – Beliefs on Assets Outside of Business

00:26:43 – Overcoming Struggles Around Building Wealth

00:30:21 – Outro

Q: How do you think your upbringing then shaped your views of money later in life?

• I mean, massively. 
• The short version is, I had a good upbringing and went to a nice school – although I was one of the less wealthy kids at the school I went to. 
• After school, the only thing I could get into at a University was Food Technology – and I didn’t want to learn how to make peanut butter. 
• So I decided to enrol into an Accounting Associate Diploma course at TAFE – they do a two-year course. 
• I started that, and then I got glandular fever, so I had to quit that. 
• I ended up doing all sorts of odd jobs – I worked at an accounting firm on Fridays, I worked in a timber yard, and I was a landscaper. So at this point, I started my own business and gained lots of experience working for different people. 
• That was around 1989. 
• I re-enrolled in the accounting course at TAFE in 1990 and did a year of that. 
• In 1991, about halfway through the year, we pretty much ran out of money. 
• My father was made redundant from a developing company that he was with. He had to hand the car back, which I think was out of equity – so he owed more than what it was worth. 
• They had to sell the house in Mosman. 
• I actually moved out before them – I went to live in the backyard at my grandfather’s place in Cremorne. 
• He had a shed in his backyard, which we knocked down and built a tiny one-bedroom apartment with a bathroom. It wasn’t disastrous – just new and small. It was interesting living away from home at that age. 
• Anyway, then my parents sold the house and came and lived with my grandparents too. So it was my sister, myself and my parents all living at my grandfather’s place (my grandmother had passed away by that point). 
• So we basically went from having everything to having not much at all. 
• I ended up quitting my studies and got a job in debt collection. Working as a debt collector took my education to a whole new dimension because Australia had accelerated into this recession, and I got to see the other side of the coin – the people were scraping by to make their payments. 
• I also watched my parents go through some pretty difficult times having to read a lot. 
• From having a good upbringing to suddenly having to be independent – I learnt alot from that. 
• It wasn’t long after that that I moved out and started my life and started having kids and all of that. I was married by 23 and had my first kid at 24. So, I was really on the “need to earn money train” for at least a decade or two.

Q: So that was a pretty serious fracture in your life at a very young age… It sounds like it would have been a very challenging five-year block. What were the big lessons around money at that time? What were the big takeaways?

• Well, just an influx in responsibility. 
• I went from complacency and entitlement to responsible and accountable – it was game on. 
• I didn’t have a safety net anymore, and I felt a lot of pressure. 
• So, if I look back at my younger self, I was under an enormous amount of pressure. I would say even up until probably five years ago, I still carried trauma from that pressure. 
• It wasn’t easy for me to see ways out of that. I felt like I was locked in, and I didn’t have a choice but just to earn the most I possibly could. 
• And remember, this was pre-internet. 
• I navigated through my first job on a wage of $18,500 per year and then worked my way up through the corporate ladders. At each level, I took on more learning and more responsibility. I reflected and benchmarked against my peers. 
• When I went to my 10-years school reunion, I had the most kids, had one of the earliest marriages, and I was doing reasonably okay in my peer group. 
• But then, at the 20-year reunion, I was virtually retired from the corporate world – I packed a lot of years into my years – I always think of it like dog years! 

Q: What age do you think you were at when you felt you made the transition from survival to ‘I’m going to be okay, and there is wealth to back me up.’ Like how old were you?

• Probably 45 years old. 
• I guess I would be reasonably conservative because I’ve been through the recession, the big economic fallout that happened around 2009, and now I’ve seen a pandemic – I’ve seen hardships three times now!
• And many of the people I work with, the younger people, haven’t seen it or been exposed to it. So, I guess I would like to build up a bigger armoury or bank before declaring that I feel like I’m okay now. 
• At the age I’m at now, I’m working a lot more on things that I wasn’t focused on when I was younger, like health and longevity – eating quality foods and moving a lot more. I really feel like I could live a lot longer than what I might have thought I could live in. And as each decade goes past, maybe technology will improve. So, I also expand the timeline as to how long I would want to have reserves for. 

Q: Would you agree that building wealth and earning money are two separate disciplines? What’s your philosophy and world view on that?

• Well, it is easy for me to make money now because I’ve got experience, wisdom, resources and momentum that I can work with. 
• I can go out and make money straight away. I could send out an email to my audience and make an offer and bring in money. I could create a relationship with a partner who will see what I’ve done and want to work with me. So, the game gets easier the longer you play it. 
• I think back to some advice I got from my uncle, who, at the time, was the advisor to Paul Keating (who was the Prime Minister of Australia) and just an economic genius – he sat on the Reserve board of Australia and used to be the Washington correspondent for the Sydney Morning Herald. So he is a very wise man.
• Anyway, he taught me when I was young to work on making an income because you can easily build assets and wealth if you have a high income. 
• So, I put more energy into getting better roles and getting paid more. 
• I still have a friend, who is the same age as me, who has worked for Sydney City Electricity for 35 years – he has been there since he was 15 years old! 
• He told me that his peers at work, who have low incomes, invest in properties and so forth. They were doing a very smart strategy early but have never actually focused on creating a high income. 
• Whereas I focused more on just having income capacity because if you have income capacity, then you can quickly demolish debt and start from scratch again if you need to. 
• And then, I focused a lot on diversifying the way that I earned income. 
• Having a job was a massive point of failure that almost everyone has, and I needed to get out of that situation. 
• So, in 2008, when I left my employer and dedicated myself to my own business, my mission was to get paid by lots of different people from different markets, in different currencies, doing different business models. 
• I wanted some diversification within the speciality that I had so that I would never have to worry about it collapsing. 
• I’m making the most money I’ve ever made now because I have the benefit of all my experience, my contacts, my resources and my knowledge. I’ve tried lots of things and seen what works for me. 
• So, I’m in the prime zone. 
• I would say that I’m happy with the strategy I had – which was just to be really good at what I was doing and get myself in a more bankable position for later. And that’s when you can hit the gas. 
• I’m in a fortunate situation now, where I can control how much I want to invest in terms of my time. I’ve been able to flick the switch from obsessing about making a lot of money to now, spending as much time, if not more, investing the money that I’m making. 
• One very important thing that I teach my own customers is to separate the time and money equation and get rid of this idea that the only way you can make money is by giving up time. And to get off the idea that the only way you can make money is to work hard. I’ve found that that’s not true. 

Q: How much is enough? At what point did you go, ‘Well, I’m prepared to make those compromises on income and design the life I love’. For you, what is enough?

• For me, enough is just pretty much a simple formula: if I stop doing everything now, could I live out the rest of my years without actually having to do any active work. 
• Now, I’m not hashtag van life (#vanlife) – I’m not living in a van on a budget. I’m not an expat living in a foreign country and have minimum criteria of what my lifestyle and routine look like. 
• I have a lot of kids, too, and kids have this responsibility attached to them, at least till they’re about 20 years old. 
• I do muse at the advice espoused by 20 something-year-olds on how to create a wealthy life. And I’m like, “what do you know about life?” It’s hard to go wrong in their books. 
• But I’m not prepared to couch surf my way around to exist. 
• I’m living the Golden Rule: my cost of living is way less than what I bring in, and that’s an equation that most of the public still have the wrong way around. 
• So, that’s step one. If you can, at least spend less than what you earn. But then you can extrapolate that out and establish whether you can put the surplus to work in a way that could deliver a consistent income for the rest of your time. 
• I’m not that worried about legacy, but that has started to become more of an interest. I think you go through phases. Firstly, it’s survival and the selfish requirement to make money. Then you go through the phase where you’re set up and can start playing with things that you didn’t have an interest in before, like interests, for example. 
• And then the next phase is what happens when you pass. Where does that money go? 
• There’s a funny story in my family history. My great grandfather was incredibly wealthy – he was one of the members of the Cynics Stock Exchange. He owned acreage in Gordon, which is an exclusive suburb of Sydney. He had gold and silver mines all around the world. He would buy land in Russia and sell it in America. He was getting people to invest in iron ore mines, and then he would float them on the Stock Exchange and sell them. 
• So, he had all this wealth. But then, after several generations, it kind of dwindled to nothing because in his will was something about it being in some non-interest bearing account. It all got contested and then split up – everyone got a little bit, and then it was nothing. 
• So, I thought that was an interesting and valuable lesson for me – you do have to give some thought to the next stages – especially if you have kids. 
• I’m not a financial advisor or anything, but these are just the basics. 

Q: From a business coaching point of view, what you are known for is keeping it simple when it comes to business. Has this also been true when it comes to your approach to investment? What assets do you believe in outside of business?

• Well, I do like business as an asset. I’ve sold my own businesses a couple of times, and it’s one of the most thrilling things to do. 
• It’s pretty flattering when someone sees value in the idea that you’ve brought to life and created. Beyond that, I just find it amazing that you create something of value and sell it. 
• So I do like business, but I’ve thankfully got a business model that doesn’t really require investment like a financial investment. 
• I’ve forged ahead with a business model that is so elegantly simple where I help grow other people’s businesses for a percentage of revenue as a royalty or a licencing fee – so I don’t have to put any capital in. 
• Earlier on, I tried some more sophisticated things. I started with a very conservative accountant, and he said, “take out a personal loan, go and buy a five back of blue-chip shares, pay the loan off and we will tax deduct it.” It was a straightforward strategy.
• Then I had a more risky financial planner/accountant, and he was too edgy. We did things like buying residential unit properties in certain areas and depreciating those. But then he was also into things like forestry schemes and wine and grape schemes – they all came undone. He ended up getting audited, and I think he recently got sentenced for fraud and misappropriation of funds. 
• I could tell he was going off the reservation at some point, and I bailed him a long time ago. 
• Then I ended up with my Goldilocks style accountant, who is just right. He’s not the cardigan-wearing Toyota driver, and he’s not a fancy floury sort of SL driver with a butler. He is just right there in the middle. 
• He has set himself up quite well with his investment portfolios. He understands the rules and regulations and has some strategies around it. 
• My core stance is that I’d rather pay a little bit of tax and do everything by the book, keep it relatively simple and know that I can sleep at night and never have to worry that one day down the track, I’ll get a knock on the door or that the whole thing could come undone. 
• A question almost everyone at my level is looking for a shortcut or angle – and I think you have to be careful. So, I keep it fairly simple. 
• I do invest in different asset classes, like property. But I’m not passionately in a love affair with property. 
• I’ve found it a bit grinding doing the whole unemotional thing and having it just be there on paper – especially if you’re only getting a small percentage of yield in some cases. And then some if it was just a pain in the arse, even with a managing agent. So, sometimes I just didn’t feel like it was the greatest use of my energy. 
• I’m better off investing in other things where I’m more interested in it or get a better return. 
• I’ve enjoyed educating myself in some different areas. So, for example, I’ve trained myself in the mindset around Forex trading. I’m not a big-time Forex trader, but I’ve learnt so much about me when I forex trade – especially the way I trade and my strategies around trading. 
• Even though I do it on a small scale, it gave me the muscle that I needed to take advantage of things like 2020 because I could be very active with Australian shares and with the US share market – it gave me an opportunity. 
• You often hear or read about how many fortunes are made in downtimes. In my case, it was a perfect environment for me to work in areas where I can get a substantial return doing active things where I’d normally be passive. 
• And at this stage of the timing cycle, I’ve pretty much pulled a lot of my chips back off the table because I went there in April 2020 and was able to convert what was cash at the time into shares, and most of them doubled – so, I was able to take it back out into cash. 
• I developed a nice little method for myself working with technology stocks and pairing them with hedge stocks. Every time they went up and down, I was able to buy and sell off the peaks. I found that fun. I was able to do my research, place my limits and then just let it play out. 
• The best thing was that it was all happening while I was asleep. I spent two or three minutes setting up my system, and then I let it go. 
• I’m interested in what’s going to happen with blockchain technology and cryptocurrencies. It’s still hard to tell, but I’m certainly happy with how I’ve been able to manage around that. 
• I think one of the underlying themes that were kind of blind to me – that I’ve become much more aware of in the last five or six years – is that you often have a choice in your method of payment. 
• You can have a choice in the entity you operate with. You can have a choice in the currencies where you put your money. You have a choice of where and when you take it out. And these are the things I’ve enjoyed learning about and developing. 
• Besides having a small surfboard collection and other bits and pieces, I’m not investing in a hundred different asset classes. 
• I’m not the first person into a market – I wait until things settle down a bit, and then I’m in the early majority, I usually cash out in the late majority, and I’m generally not around by the time it’s the laggard zone. 

Q: What is your wisdom or final pearl of thought that you would give to business owners who are floundering to find the time or feel overwhelmed about building wealth?

• I think we might be in a short stasis period. So, this is the time to get your stuff sorted out. 
• While I’ve been preparing for this event for ten years, for a lot of people, the pandemic took them out from the side – it was totally unexpected. 
• Almost every one of my clients had an exceptional 2020 because they were ready. I mean, I work with online businesses, so in general, that category went quite well. 
• But the market has moved, and it won’t snap back to the way it was before the pandemic – so I would say that we are in a “new normal.” 
• I’m going out on a limb here, but I feel like the record property sales are a bit unrealistic because we don’t know what will happen when all the stimulus stops and when inflation starts to happen. 
• My parent’s interest rate was like 21% in 1988 or 1989 – it just got out of control, so let’s see what happens. 
• I’m taking the conservative position right now because I feel like by the end of this year, a lot more could move. But, I certainly think that things will stay pretty stable over the next few months. 
• I reckon you have three months to sort stuff out, and then the game will change again. 
• And then, of course, in 2022, we might see things open up a little bit more. It’ll be interesting to see if people end up making up for lost time. 
• But either way, I think we’re in for several changes. 

Q: Final input from James 

• I wouldn’t change any part of my story. Everything had to happen for me to be in the position I’m in now.
• But I will say this: within ten years from now, pretty much every single aspect of your life could be completely different – every aspect of what business you’re doing, where you live and even who you’re hanging out with. 
• Ten years seems like a long time, but it can sneak up on you. I see many people have such significant transformations that they wouldn’t even recognise the previous version of themselves. So hopefully, that’s encouraging to someone who’s not feeling like they’re in the perfect zone right now. 
• I know it’s kind of irritating to listen to people like me talk about how good things are, but I certainly went through challenging situations to get there. 
• I hope that there is some takeaway in our discussion, at least, that could help somebody!