How Warren Buffett Builds Wealth Without Selling a Single Share

Adrian: In terms of wealth creation, I mean, there's so many verticals and industries. I mean, you've you've got real estate or property, there's, you know, you know, the investment, you know, like stocks and shares and crypto and those types of pl platforms. But then there's just general technology, right? And I think if you look at the people that built the wealth the most, or maybe the richest people in the world right now, ⁓ I like to call it old money new money. So you got old money if you look at like the Americans, right? If you look at old money, sort of like a Warren Buffett, you know, who's built their wealth through, you know, I mean, owning companies and compound interest and all sorts of things and having like a a group, right? He's done amazingly well. ⁓ shout out to rest in peace Charlie Mungo as well. One of his hi his his his ⁓ r his running mate, right? But now, in terms of the new money, I see like the Jeff Bezos is ⁓ the Elon Musks who both own technology based companies and are probably the richest people in the world right now. Yeah. It's amazing. ⁓ having said that, could you talk me through the transition from d old types of wealth creation into new kind of types of wealth creation. So now we're seeing people build wealth yeah using like crypto and, you know, stocks and shares and things like that. And then you got more traditional based people who They don't necessarily want to invest in things like that. They don't want to invest in anything that they can't see. Yeah. I remember I've got a cousin of mine who I remember telling him about something. He was like, ⁓ I I don't invest in anything I can't see. But he's doing really, really well. That's In w in terms of wealth, he's doing really, really well. ⁓ so talk me through your perspective in terms of like I like to call old money new money. Yeah. In terms of wealth creation, you've got the old and then you got the new. Well yeah, I think if you look at ⁓ wealth back in the day, there was always a lot more emphasis on property. And pensions. Sure. When I was last looking at the kind of the wealth in the UK and and some of the ⁓ research they were talking about, you know, total wealth was about twelve trillion dollars pounds or so. And about forty two percent, I think it was about forty two percent of it is in ⁓ property. Wow. And I think a larger closer to that, the other kind of forty odd percent was in ⁓ pensions. ⁓ so property has always been maybe one of the bigger aspects of old money. ⁓ wealth over time, ⁓ you know, properties accumulating over time. And ⁓ you know, this whole idea of kind of being ⁓ asset rich and and cash poor for some people. ⁓ and I think things are changing now because people, especially the younger generation, are questioning whether they even want to own a property. Whether and there's a lot of conversation around whether they should be renting as opposed to buying. ⁓ but also I think the younger demographic are now thinking about liquidity. Yeah. And that's one of the risks of ⁓ investing, liquidity risks. And that's all about being able to access the money. ⁓ so property is great because it does ⁓ or it can accumulate wealth over time. ⁓ but I think the other side of the coin is whether you're able to access that wealth. Yeah. And we're almost seeing that now with the talks of the inheritance tax changes with ⁓ the farmers as well. That conversation. It's ⁓ interesting one for sure. Because they're now ⁓ I think the conversation is now stemming around the idea that they may have to pay inheritance tax. ⁓ but if they are asset rich and cash poor, then the question is, you know, where's the money coming from? The question might even be do they have money? You know? I'm sure they do, but you know, I think people ⁓ always ⁓ tie wealth into the idea of having access to using that money. And for some people wealth is ⁓ wealth itself is a store of value, it's a store of money. ⁓ th I think the real value of having these assets is what you get from it. Not not pulling from the asset itself if that makes sense and and diminishing the value of that asset. Yes, yeah. Yeah. No absolutely yeah because You could own maybe a part of Apple, right? And you know, it goes up and down in value every day. ⁓ you may not necessarily be able to pull out cash the next day, but you sure can sell the shares, you know, ⁓ or the stocks wherever it is, and then make a ton of money. Or get dividends. Or get dividends. And ⁓ you know, this is where the investment aspect of things kick in, you know, when they talk about ⁓ you know, Warren Buffett receiving You know, millions and millions of pounds of dividends off some of these shares. You know, the whole reason why he's able to do that is because he's not selling the shares. He's he's taking the dividends from holding that position. Yeah. And that's when you can say essentially that an investment becomes an asset or a wealth builder at the time. Okay. Yeah. It's amazing. Yeah. On that same topic of where the world is going, you know, we just talked about old money, yeah, the new money. Old traditional, still valid ways of wealth creation. You know, just kind of stability. ⁓ yeah. Uh-huh. And then we've talked about a little bit about the new. Where do you see future of financial planning in terms of where it's going? Terms of the industry and where it's going. I think right now we're focusing a lot more on kind of ⁓ transparency, a lot more on ⁓ client interests. Yeah. You know, ⁓ with the consumer duty ⁓ updates that's been coming in place. And people are ⁓ I guess the advisors, you know, in my I'm thinking that ⁓ niching i is quite important because, you know, I I wrote about ⁓ finding your tribe in my most recent ⁓ newsletter on on Link on LinkedIn called Nice Moment. It's fantastic, yeah. and I think there's there's now this kind of ⁓ demand for people to find their tribe and find their community effectively. So I think there's gonna be a lot more ⁓ focus on kind of people n you know ⁓ in the advisory space kind of niching down and figuring out ⁓ who they wanna work with, what kind of clients they wanna have on board and and kinda growing ⁓ their business like that. Okay.