850 – Wealth Building with Salena Kulkarni – Part 1

Podcast: Download (Duration: 27:05 — 24.9MB)

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Episode highlights:

03:04 – Some insight on partners and financials. Is your partner more money-savvy than you are? Here’s why you need to fix that.
05:35 – A caveat for this episode. Just so it’s clear, James and Salena lay out their roles.
07:58 – A compelling message for listeners. What stewardship is, and why you’ve got to get it right to be wealthy.
10:15 – Are there geographical boundaries to this talk? Does this stuff apply to everyone, everywhere?
11:22 – Why cash flow is not wealth. James and Salena probe the common misbelief that trips people up.
13:16 – What you might not know you can do with money. There’s a world out there you haven’t seen.
20:22 – Knowing who to trust. Before you give someone charge of your wealth management, consider these things.

Build real wealth with help from Salena

Wealth is something many of us aspire to, but relatively few know how to achieve.

Our guest today is a chartered accountant and a certified property investment guide who has built out her own wealth portfolio. Her background gives Salena Kulkarni insight into wealth building that a lot of people don’t have, which is why James has brought her onto the show.

This won’t be the last time you hear from Salena. She and James plan to field questions from listeners over several episodes. So if you have questions about the way to wealth, let James know.

Some insight on partners and financials

Investing wasn’t something Salena entered on purpose. Her husband had a bigger interest in it, she says, and she used to blindly sign what he put in front of her.

When she decided she should actually understand what she was signing, she saw the power in it, and it lit her up. Her husband let her take things from there, and she thoroughly enjoyed it.

That’s a typical scenario, says James, where one partner may be more involved in the financials than the other.

Exactly right, says Salena, and she’s come across it too many times. The stereotype, unfortunately, is of women who feel it isn’t their expertise or interest, and leave the money management and wealth building to their spouses. In the worst case scenario they find themselves in the second half of life having to start from scratch, with no experience to help them do so.

Salena encourages people, regardless of their age, to participate in the wealth journey as a couple. Because in any partnership, if you both row in the same direction, you will get there 10 times faster than if one person is trying to do it on their own.

James thinks this is very important. He himself has a very close relationship with his wife. They talk a lot about finances, in which she’s quite interested. And part of their ease of moving forward is both knowing what the goal is.

A caveat for this episode

Wealth building is a topic, says James, that can wander into legal areas. So he’d like to make some disclaimers at this point, to make sure the information they provide isn’t misconstrued.

Absolutely, says Salena. The first thing, she says, is that nothing they talk about should be received as advice. If you’re doing anything around money, you should get proper professional advice before you take action.

Her job, she says, is more that of a guide. You can call her a wealth coach. The journey of wealth creation is fraught with pitfalls and complexity. And her role is to try to simplify and make it more palatable for people.

There are a lot of sharks out there, says James. He’s had his own investments that didn’t pan out well, and deals he’s entered that were more in the interest of the other party. Ultimately, he says, we have to take responsibility for our own financial wellbeing.

If the ideas they talk about stimulate thought, or compel you to research further or seek help from professionals, that’s great. But he’s definitely not giving advice. His participation is probing and asking questions and sharing his own opinion on things.

Some of the things he’s done were suitable for him, but may not fit someone else. People listening are at different stages in their life and business cycle. So we have to pick our own path and be responsible for it.

A compelling message for listeners

What is one thing Salena wishes people would understand, that would help them for the rest of their life when it comes to building wealth?

Salena speaks a lot on the topic of wealth with younger people, teenagers and kids, and they’re so hungry, she says, for this information. And the biggest challenge she feels that modern day business owners and others face is there’s too much information out there.

So at the heart of really good wealth creation principles is a concept which she think is a dying word, at least in Australia: stewardship. If you can’t get your stewardship of money right, it’s really hard to springboard into the realms of talking about wealth.

A lot of people confuse high income with being wealthy. They’re definitely not the same things. Salena could probably talk for an hour on that topic alone.

Salena works with people who have bought lots of properties, and who have a high net worth. They’ve gotten there through the sheer force of having earned a ton of money. But really, when you look overall at where they are and what they’ve earned, they should actually be a lot further ahead.

So she would really encourage people to treat how you care for money, and look after it and manage it, as the cornerstone of wealth building. Stewardship is that, fundamentally. It’s not about coveting money, or squirreling it away, or operating from a place of scarcity. It’s about having a healthy relationship with money and knowing how to look after and respect it.

Are there geographical boundaries to this talk?

Salena mentioned Australia, says James. This show has a lot of international listeners. Are the things they talk about going to apply to any particular geographic area? Or are they going to be universal?

Salena thinks the fundamentals of wealth building are universal. And she thinks where people often go wrong is they’re focused on the tactics. What’s the next deal? What’s the investment?

Yes, the Australian real estate market, for example, is quite unique in many ways. It’s one of the best in the world and one of the worst in the world all at the same time, with lots of different aspects to it. But she thinks the fundamentals of wealth building are completely universal, whether you live in Europe, or the Americas, or Australasia.

Stewardship doesn’t matter where you live. If you can’t learn how to, number one, live within your means, and number two, learn how to take $1 and amplify it and turn it into assets that generate income, then you’re sort of screwed.

Why cash flow is not wealth

Let’s break that down a bit, says James. Salena mentioned before, some people confuse cash flow with wealth.

James thinks a lot of people confuse Instagram pictures of rented Lamborghinis and watches as wealth as well. They’re missing a whole step. Some of these people haven’t even generated a big income.

James knows someone who does a million dollars a month selling information on how to do a particular business model. He asked the guy if he does that business model. He said, No, it’s too hard.

So he thinks a lot of people are in that very early phase where they haven’t even figured out the how-to-make-the-money part. James has probably said it about 500 times. It’s really important to focus on your offer. Get an offer that converts. You’ve got to get the money coming in before you have the problem of how to deal with it.

The next phase, though, is a really interesting one. That’s where James is now, where he wants to put his money to work. When you have a surplus, what do you do with that money?

Many listeners may have that question. There’s definitely discussion inside SuperFastBusiness. What do you do with your money? Do you buy Cryptos? Do you do DeFi? Do you put it all into rental properties? Do you put it into mutual funds? Do you invest directly in a share account?

What you might not know you can do with money

These are the things we typically hear about, but one thing that Salena has mentioned to James is, there’s a whole other world out there that people aren’t even seeing in terms of what you can do with the money.

Absolutely, says Salena. And James has hit upon a really important point. Part of the reason business owners go into business is they want to have some degree of control about what they earn, how they earn, and how they work. Unfortunately, a lot of the people she’s worked with over the last 12 years end up with a high-paying job.

The importance around wealth building isn’t lost on them. They get it. But Salena thinks a lot of them are confused. It’s a problem universally, that they think trying to build high net worth is the goal. There’s a huge difference between aspiring to be a high net worth individual versus aspiring to build a capital base that you can then, very carefully and strategically, convert into annuities or income streams.

In terms of the vehicle, Salena’s number one rule for investing is, do not invest in something you don’t understand. If you don’t understand it, just don’t touch it. Salena has worked with any number of people who had jumped onto a get-rich-quick scheme, or invested in something they didn’t quite understand but their friend said was a good thing, or midlife decided to pivot into something like hospitality, which they had no experience in.

It all comes back, she says, to having a game plan. The execution of the game plan, and what particular investments will align with that, becomes clearer when you know where you’re trying to get to. If you know that you want to get to this point with this level of passive income in this period of time, then it’s really easy to say, Well, these investments are congruent with that game plan. And these ones are not.

Part of the challenge is, as she said, the avalanche of information out there. If this is not your area of expertise, how do you tell what’s real and what’s not? What’s hype and what’s political? How do you know what to do with your money? She thinks that’s the biggest challenge – where do I put my money? Because I don’t know what’s real and what’s not.

Such a valid point, says James. He read a post recently about an army veteran who spent $150,000 with internet marketers building a funnel to run a webinar, and produced zero results. He had no knowledge of the market, and should not have been in that space.

He himself was scalped by someone who recently was jailed for fraud. Luckily, he realized this person’s overzealousness and moved his business elsewhere. There are baddies in every single industry, just as there are goodies.

James typically takes a low-risk approach to things. He has very fundamental beliefs, for instance, that he should spend less than he makes. He doesn’t like lending too much risk to things that could backfire, and so forth. And he doesn’t mind playing the long game. He doesn’t need to be rich tomorrow.

A lot of people, he says, when they start coming into money, ask, how do I just not pay any tax? Should I just go offshore? Should I buy an ostrich farm and write off all my tax that way? All these schemes and scams, and they always come unstuck.

James guesses at some point, we have to decide, what’s our position on our risk tolerances, our timeframe, how much responsibility we want to take for our own wealth destiny, and who we want to get help from.

He’d like to mention at this point, Salena has a website, freedomwarrior.com.au. It’s a kind of club for people who have got money that they would like help with, just to get some game plans.

If you’ve got a question for Salena or would like some guidance, she’s open to receiving emails at [email protected].

And if you think wealth building takes up time that you don’t have, look up James. He’s all about working less and making more.

Knowing who to trust

The biggest challenge from, what should I do, says Salena, is partly who to trust. And one of the things she knows 100 percent is if someone is paid on both sides of a ledger, it’s really hard to put trust in that person.

So one of the things you should be asking people you rely on to make decisions around your investing is, how do you get paid? Because if they get paid based on what you invest in, there’s immediately a conflict of interest.

There are some really great financial planners out there. But there are also a lot of people who position themselves as being top of the wealth advice tree, who actually don’t make money because they’re good investors. They make money because they get paid based on what you invest in.

And one of the biggest mistakes business owners commit is abdicating decision making around their investments to somebody else because they think, it’s all too hard, or, I don’t have time.

Salena tried to take the complexity out of wealth management, to make it fun and enjoyable. And, she says, when you know you’ve got a plan, you know you’ve got access to the right kinds of investments, you know the person who’s on the journey with you doesn’t have a conflict of interest and that they understand the goal is to create this position of autonomy, having the choice to work in your business or not – that is life-changing wealth.

You’re taking control of the decisions yourself. Hence the disclaimer: it’s not advice. Because people ask, Salena, are you going to tell me what to put my money in? Her response is no. It’s not her place to tip you off on the best investment opportunities. Because by the time you understand everything that she thinks you need to understand, you won’t want her opinion, you’ll know what to do.

James has a similar philosophy to some extent. He often has to guide his clients to a level of awareness where they’re in a position to make their own choices, but informed choices that minimize risk. He can paint a great picture for them, but they ultimately have to move forward with it. And they get to choose and be responsible for their decision.

You can’t expect free education either, you’re going to pay somehow. But there is a difference between paying a trailing commission for a product someone recommends, versus paying a fee for their coaching or guidance.

Salena thinks it’s a global phenomenon, that there are hidden commissions and kickbacks and things that don’t get declared. So as a consumer of investment products, or someone who’s looking to build wealth, you need to just ask the questions.

And it’s good, says James. Even in his case, he puts a notice on his website that some of the content on the site can generate income for him. People listening to this should know that there is an interest for him if some of his guests do well. And he does have clients on the show often. He’s currently helping Salena with her business.

He does want to say, if you’re listening to this, do your own research on the topic of wealth building.

And send in your questions, if you’ve got a wealth question. Because if you’ve been following Work Less, Make More, if you’ve built your own racecourse, if you’re going well with your business, and you find there’s a little bit left over at the end of the financial year, and you’d like to get some ideas on what to do with it, then send in your questions.

He and Salena are not going to give advice, but they might talk about it and bounce around some ideas that could stimulate some thought, and see where you go with it.

The key takeaways from this episode are:

And it may not take as long as some people might think.

If you’re a tradesperson saving up in the bank, waiting to put a deposit on your first home, and then spending all your income on that, it might be a very slow way to wealth. It’s a possible way, but it would probably be very slow compared to other things you can do.

James is sure he and Salena will discuss some of those things in future episodes, so look for that.

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Want help building your wealth? Get hold of Salena at Freedom Warrior

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