Midlife Entrepreneurs

Escape the day job - True story of one bankers escape from the 9 to 5 to become financially free.

May 04, 2018 Season 1 Episode 4
Midlife Entrepreneurs
Escape the day job - True story of one bankers escape from the 9 to 5 to become financially free.
Chapters
00:00:53
Met banker Christian Michael
00:02:25
So Christian, when you read The Job Delusion, uh, what were some of the ideas that you took from it?
00:03:04
Introducing the concept of leverage
00:04:31
I don't want to work until I am 65
00:05:30
I feel financially free
00:06:40
Using other people's time and other people's money.
00:07:37
Your network is your net-worth!
00:09:10
Sponsor - Audible free audiobook offer
00:10:31
Buy assets, not liabilities
00:12:59
The power of mortgages
00:14:46
You can't buy youth, but you can buy freedom
00:15:35
How banks work
00:17:19
Opportunity Cost
00:17:52
Conclusion
Midlife Entrepreneurs
Escape the day job - True story of one bankers escape from the 9 to 5 to become financially free.
May 04, 2018 Season 1 Episode 4
Business Coach Kevin H. Boyd
Banker Christian Michael, talks to Financial Coach Kevin H. Boyd how he escaped the 9 to 5 to lead a life of financial freedom and to finally follow his dreams of becoming a professional football coach.
Show Notes Transcript Chapter Markers

Show notes at http://midlifeentrepreneurs.net/season-1-episode-4/

In this episode of the Mid Life Entrepreneurs podcast Business Coach, Kevin H. Boyd talks to ex-banker Christian Michael, about how he escaped the 9 to 5 to lead a life of financial freedom and to finally follow his dream of becoming a professional football coach.

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Speaker 1:
0:00
[inaudible] upward spiral catching what cost number for breaking free of the day dog by using other people's time and other people's money.
Speaker 2:
0:17
So here I am with the Christian. Michael did you used to uh, work as a banker and uh, then he read my book the job delusion. So Christian, what was life like when you had a job?
Speaker 3:
0:31
Well, um, when I did lab monitor first falls home page or at the bank, it was fantastic because it was where I lived all my life. It was in my home town of Brighton. Had everything, if I asked for in a job or we'd go up for 7:00 AM I put my suit on and traveled to work on the eight 23 trained to Brighton, I would get to my desk at eight 45 and work on the phone at the computer and in meetings I felt great. Then when I realized that it was the same routine every day with the same nonsense. Friday you from above hierarchy, um, different, uh, criteria is coming through each week with more rules, more regulation, basically more things to do and every day was stressful. Like there was no, there was not a single day where I've gone all I really enjoyed today. It was stress free. So Christian, um, when you read the job delusion, uh, what were some of the ideas that you took from it? If time a thing that working in a ice five job isn't the be all or end all. Hmm. Once I read the job delusion, I started to realize that I could then borrow money from the bank,
Speaker 2:
2:09
which would give me more money, which is obviously there's and not money, which is there I can use to buy and property to rent out to tenants who will pay me while they go out to work. Exactly. Yeah. So there's like a key principle here is sort of talking about sometimes it's called leverage. Sometimes they've got a gearing, which is the, you know, with any mortgage these days you put about 25% of the costs down and the bank gives you the other 75%. So this is like, this key principle that wealthy people do is that they use other people's money.
Speaker 3:
2:42
Hmm. Uh, yeah. And this is exactly why I've done so. Um, it was kind of running at the same time and I was going to work. I was miserable. I wasn't getting a pay rise. Um, I was in the same routine behind the scenes know I have my first investment property. Like I said, it was unencumbered. And then I read the top delusion. I realized that by gearing and using other people's money, the bank, um, I could then use that money, get attendance to start paying me with their income, that FSA becomes my income. So they gas or works to that. And I'm not doing anything to do that.
Speaker 2:
3:30
And the beauty of this model in a way, so that is scalable. I mean when, when it's you working, you only, there are only 24 hours in the day than you can ever work. But with using other people's time and other people's money, it's kind of, it says you can scale it as much as you like. Sure.
Speaker 3:
3:47
And what I realized is that I did not want to be working till I'm 65 and a job, which is let's face it, probably not going to go anywhere. Um, the increase in the salary was 2% of my gross salary, which is, you know, an extra 700 quiz before tax 10 million pounds a year. Yeah. Yeah. I was, I saw this is not the way forward for me. And then, you know, whilst I was reading the job delusion, I realized that with the income and getting in from the two investment properties I have, it was time to call it a day at the bank, which was this February. And it's been the best decision I've made in my life.
Speaker 2:
4:48
So how are you feeling now? Now you're not doing the nine to five.
Speaker 3:
4:52
Alright. It sounds Cliche, but I feel as though I've won the lottery. But it's a lottery of knowledge, like the wealth of knowledge of knowing that with a few clever techniques make him money work for you. I have a wealth of freedom and a lot of people don't have that in the world. The world of paying bills, paying down mortgages, we've captain interest, et Cetera, et cetera. I have more time. I have less stress, if any. I don't have any stress or twice. I just feel so peaceful. And it is incredible how two months ago I was really stressed out. You know, if everything was fast paced and everything was now, now, now, and it was a lot of noise, you know, there, there was no time to just look out the window and I'd just feel free financially free. I'm actually free. Exactly. Yeah.
Speaker 2:
5:59
And I think that's great. You know, what you're demonstrating is, and the reason I wrote the book was to try and convey some of these ideas which I got from many other books I'd read. And some of them are very simple ideas, but very powerful ideas. You know, that simple one of like using other people's time and other people's money has transformed your life in a relatively short period of time. A year or two. Uh, so that now that you don't have to do a nine to five job unless you choose to be still do and they don't have to do anymore.
Speaker 3:
6:26
Absolutely. I mean, I feel extremely lucky that I've been able to gain this information as such a young age. I'm 26, I've got to investment some properties, I've got great family, he's got great friends, but effectively I'll look right network and without looking at this book or having the right people around me, I wouldn't be able to infer what I've created.
Speaker 2:
6:55
I mean, you're, you're touching on a key idea here as well. We talk about in the book about your, your net work being your net worth and you know, sort of simply put is like the people you hang out with, the people you spend time with. Well, the fact how you behave and if you're with people who think, oh, the only way through life is to have a job and just put up with what life gives you, then you too will think the same way. It's human nature. Um, but it sounds like you've started to kind of branch out to that into surrounding yourself more with people who have a more expansive mindset. I'm like, well this is where I'm at, but how can I change it?
Speaker 3:
7:30
Yeah, absolutely. What I feel extremely privileged in as well is that I've been looking after having Harrison's, I've used that money to get a the first investment property, uh, two years ago. I then read the job delusion, unmet yourself and I've used a banks time and money to loan me the funds in order to buy the property. And then now I'm in this position where I'm financially free. So is, is, is like, you know, those steps to get to this stage here. You know, obviously it didn't happen overnight, but like you said, I can easily go and get a job now if I wanted to earn more money, if I want to have a new chapter. But at the moment I've, I'm enjoying this free time.
Speaker 2:
8:30
And I think we identified a really key idea there as well that when you received your inheritance, especially being at a young age and been could have been very tempting to go out and just sort of, hey, let's blow that money. Let's buy a fast car and go on holidays and stuff. And it's something I talk about in the book about the difference your assets and liabilities that you actually chose to buy assets. And basically an asset is something that brings money to you and a liability, something that takes money from you. So, and of course, you know, buying a, a nice car, it's lovely, but it's costing you money. It's, it's depreciating by the day, but you didn't do that. You went and bought assets and now they've gone up in value and they're also creating income for you every day. And these are some key ideas that people need to really start to grasp. It's like start filling your life with assets are not things that keep taking money away from you. Liability.
Speaker 3:
9:24
Absolutely. I mean, as time went on, um, my parents said to me, Christian, do you want to come and have a view in for a flat? In my head I was giving up 150,000 pounds to go and put into bricks and water and also, well, I could use that money as flash out of it or a nice car on I told a day or some new clothes or trainers or, or whatever. And, and then it all changed and my mindset had changed. Um, over time. I mean, I think what prompted that was not only the market was starting to go off a little bit. The property market. Exactly. Yeah. Um, but also the interest rates are obviously going down and I wasn't getting that interest that I was every year. So when interest rates hit zero, I started to panic and I was like, Whoa, I'm looking at doing that because of the capital's not make me any money. So then I started to think about property and I took the plunge and I put a offering for a one bedroom flat, 460,000 pounds. And it was currently earning 600 pounds per cans a month. I thought, right, I can use this money to put into this flat bar, still have a little bit of money leftover to something else with. So I did it.
Speaker 2:
10:55
So you're only putting like 25% down for the cost of the the property. Exactly. Yes. So this is a key idea, isn't it? That some people think, oh, it's good to have no mortgage and own the property right. Outright, which is, which is fine, but it means all your money's stuck there.
Speaker 3:
11:12
Exactly. And this is exactly what I was under the impression that if I was going to put all this money is this property, that's it. Like there's no more budget. I'm still going to have to go to work to earn money and make live in. Yes. I had um, and money coming through through the, the tenants pay me for income. That's great. You know, that was like a, a little bit of a bonus after my salary, but I was still going to go to work. I'm still having to use my time, um, and my energy to, so obviously, yeah.
Speaker 2:
11:47
So what changed your mind about keeping all the money in there and switching to getting a mortgage? When you
Speaker 3:
11:54
have a mortgage, you don't have to pay off the capsule and interests at the same time every month for 30 years of the template. Like what you could do is just pay the interests.
Speaker 2:
12:07
Well hold on, hold on. You, but you've got to pay off the loan at some point. How does that work?
Speaker 3:
12:12
Uh, well a lot of people think that the price of the prophecy today, it's going to be exactly the same price as a prophecy in 30 years time. When the bank wants his money back, the capital,
Speaker 2:
12:27
it'll be the same number. But because of inflation, that 200,000 will be in 30 years from now. What will turn to thousand feet? Probably what most people are in, in a, in a year in their job. So it'll be a smaller, some of that money.
Speaker 3:
12:40
Exactly. So let, let's, let's be clear. You can't by youth, but you can have by freedom effectively. So, so basically what you're doing is your holding that 200,000 pounds that you owe the bank for 30 years time. But in that 30 years you would have income, the property price would go up and you've had freedom.
Speaker 2:
13:08
Yes, I moved because cause we're basing that on in the UK that house prices double ran that every seven to 10 years. Yes. For Your Schumer to 250,000 pound house in 10 years would be 500,000 in 20 years would be 1 million and in 30 years, but actually be 2 million pounds. But you only have a 200,000 pound loan, which is tiny.
Speaker 3:
13:30
So, so when the bank says, okay, would you like to Murray pay us back that loan that your hours or would you like us to extend the line? The, from the bank's perspective, obviously because I used to work for a bank, the bank look like this, they earn money from interests. Effectively the bank owned the asset. However, your asset as now doubled if not tripled in value. Therefore, when they give you the option, would you like to extend the loan for another 10 years thing?
Speaker 2:
14:11
Yeah. You're not going to say no. It's interesting the way banks work because we were talking about earlier about assets and liabilities. Assets pays money to you like that. It is taking money from you. From a banker's perspective. Lending money is considered an asset because that's going to bring some money to live. And actually having the money in the bank is a liability because there's not making them any money. Um, so the other thing that banks always want to know is that their money is secure. So if they've lent you money against an asset, uh, when you first buy it, and it's like 75% of the value of the asset they've lent money on, but at times 25, 30 years have gone by, that will only be something like 10 or 20%. But [inaudible] secure. So flipping it, flip,
Speaker 3:
14:52
flipping the loan of value and that side of it. Yes.
Speaker 2:
14:55
And so the bank, I, you know, I can't predict what the banks will want to do in 30 years time, but just based on that fundamental idea, I'd be surprised if any bank didn't want to keep lending you more money, particularly with investment properties because they're not your own home there. They're a commercial product. So they're more likely to extend that though. This is what we like to talk about is opportunity cost. It's like, yes, you can of course pay that mortgage down, but that's money you're taking away from yourself that you could do other things with.
Speaker 3:
15:27
Exactly. And what Kevin was saying to me was, okay, how about you just pay the interest and then the money that you would have paid for the capital you can do with something else and spend it to live, you can spend it again and do something you want to do
Speaker 2:
15:46
or acquire more assets. Exactly. So yeah, so it's a really simple idea. Start paying down the capital on your mortgage. Keep, keep the extra money and do something with it. Do something to increase your wealth, increase your assets, and ultimately increasing amount of fun you can help with your life.
Speaker 3:
16:03
Hmm. I agree. Thank you for listening. This has been Kevin Boyd of upward spiral pension. Please subscribe to my podcast and follow me on Youtube and get in touch if you want to discuss how I can help you transform your life. Yeah.
Met banker Christian Michael
So Christian, when you read The Job Delusion, uh, what were some of the ideas that you took from it?
Introducing the concept of leverage
I don't want to work until I am 65
I feel financially free
Using other people's time and other people's money.
Your network is your net-worth!
Buy assets, not liabilities
The power of mortgages
You can't buy youth, but you can buy freedom
How banks work
Opportunity Cost
Conclusion
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