Own Nothing. Control Everything.
Do you need to own something, or is it okay to only control it?
Discover how controlling an asset can yield the same benefits of owning, examples of how this model is tending in society and how this concept can be applied to property investment….
“Own nothing, control everything” - Rockefeller
In today’s money Rockefeller would be the worlds richest man exceeding the net worth of Bill Gates and Jeff Bazos. In this episode, I want to explore his concept and discuss whether it is okay to control an asset and not own it. The quote resonates with me and my thought process around the Rent-to-Rent property investment model.
Let’s look at some examples of areas where this is happening outside of the property industry.
Netflix/Spotify - consumers can now listen and watch without owning the cd or dvd.
AirBnB - does not own any properties. Instead, they only control the process earning a commission on each booking.
Uber - does not own any cars; they control the process through their platform using independent contractors.
There is a clear trend moving away from ownership, another example I don’t own my car, I lease it. You can control whilst still enjoying the same benefits.
If I apply this to property, I can control the property to get the same result. Listen to the podcast episode to find out how this concept can be further applied to property investment, including a recent example of two opportunities I had to buy or rent a property on the same street.
In this episode, you will discover
How it applies to property investment
How you can achieve the same benefits whilst only controlling
Why you should not get transfixed with owning
When owning can have more advantages
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Podcast Transcript↓
[00:00:00] I'm Simon. And a few years ago, I decided I wanted to make a change. I wanted to create a passive reoccurring income to support me and my family today. And a legacy for the future, a future fast forward two years, and I've managed to generate over 10,000 pounds worth of monthly passive income. I've set up the business, scaled the business, and now I've systemized the business to free up my time.
So join me to find out how I've done it. How well does it dominion every day and how you can do it too.
[00:01:00] Simon here and welcome to another episode of the show where we talk all things property. Creative cashflow. And of course, how to be financially independent to day, not in 25 years. And on today's episode, I'm going to be looking at the age old debate. I'm constantly getting asked this. I'm constantly seeing it on line.
And in many ways, this podcast is a response to some of the things I hear. All the time. Do you need to own something or is it okay just to control it now, I want to sort of pre face this with a saying stroke, a quote from the great. So Rockefeller who in his day, he was essentially worth more than bill Gates, more than Jeff basis in today's money. He was worth 285 billion.
[00:02:00] I think it is. And he famously said own nothing, control everything. And I want to explore that concept today because it rarely, rarely. Resonates with me, uh, my thought process and rent to rent specifically property. Do you need to own the property, the investment property, the property you live in, or do you just want to use it?
Use it? You know, I currently rent where I live and I use all my money to invest in cash flowing property and I do own. Property, but today I want to explore why that is. And if I need to, I mean, don't get me wrong. There's times when I have these battles with myself, do I need to own it or do I just want to use it?
[00:03:00] So first things first, let's just explore today in terms of where we're at in society and what the patterns are, because I personally believe. Things are going further and further towards controlling, you know, digital services, you know, music, get out, go and get that CD no more. You don't own the music.
You just have the license to listen to it, to use it. So do you need to own that record? Are you just happy listening to it? Whenever you want to? Same with film Netflix, you know, you don't go on by. The DVD anymore. I don't even know if they do DVDs. So as you can see, there's a thread here. Then you've got these tech businesses such as Airbnb.
[00:04:00] They don't own any of the properties. They just control the process. Uber. They don't own the cause they just control the process. Okay. Some of the biggest businesses you Facebook's. Um, your other social media companies, once again, they don't own the intellectual property. They don't own the information, they control it.
And I feel like that's the way it's going. You know? Um, I don't own my car. I lease it. I, you know, it's just ridiculous guys. You don't need to own. Things anymore, you can control them and get the same benefit. So, first thing says, I just want you to really resonate with that and have a think, think about the things that you like, the things you do, the things you enjoy and ask yourself, do you need to own this?
[00:05:00] Or could you just be using it, enjoying it, controlling it. So that's kind of where we're at in society. And. Then when I actually applied that to property, I feel like, look, if I can control a property to get the same end result, I want to be in property to generate passive income, to be able to do X, Y, and Zed have financial independence financially free as they call it.
Do I need to own it or do I just want the result? Cause for me, I'm a results-based person. As long as I get the outcome, I don't really mind how I get to it as long as it's ethical and I feel good about it. And I'm being kind, I don't mind how I get to it any means necessary, but there's still some people out there that obsess about owning, you know, They obsess about it and they look down on people to clean property.
[00:06:00] Uh, don't get it. They're like purists. And I just feel like I'm afraid. I don't even think it's a case of like coming to grips with where we're at today because these concepts have been going on for years, rent to rent is a commercial strategy. You know, it's a leasing strategy. That businesses industries have been doing for years.
So this is not a new thing. And something really interesting happened to me last week. I've essentially had a rent to rent for awhile and I'm coming to the end of the term and the landlord's considering selling, but simultaneously I also got offered another neighboring property. On the same road, a few doors up it's literally like for like to be on his movie.
[00:07:00] And it was the first time when in reality I was a, and being the difference between me purchasing a property and rent to renting the property in real life right there. And then, and it was scary in order to purchase the property. That the landlord wants to sell. It was going to cost me 185,000 pounds.
And in terms of deposit and stamp duty and fees, it was around 50 K investment and I'd get a mortgage for the rest, the other property, the one that is available for me to just do a rent, to rent on, to control it for five years guys, five years. It was going to cost me or should I say it will cost me? Cause I'm going to definitely do that deal regardless. Five K. So 10% of the investment for essentially not exactly the same cashflow choose be told that the monthly guaranteed rent on the rent to rent is slightly higher than the mortgage would be on the purchase, but essentially the same cashflow.
[00:08:00] For 10% of the investment. So then I thought to myself, wow, I really want to own that property. It's so nice. And I, you know, had conversations with my ego and I thought to myself, well, why is that? Why, why do I need to own this one? When I could do 10 of the 5k rent to rents now as discussed. The property I was considering purchasing still am, by the way, is one that I've done a rent to rent deal for the last two years.
So I know it works. I know exactly what the property is. I know the cash. No, but you know, but he's like, well, you know, you won't get the capital appreciation. I actually spoke to the landlord. He purchased the property for 170 odd grand over 10 years ago. I think it was 179 grand. He's now willing to sell it for around one eight, five, five grand.
[00:09:00] And there's going to be fees on that. Well, I, I would earn more in the cashflow on a rent to rent in six months, so that's not a reason to own. So it's an interesting one.
I personally believe that, especially if you're depending on where you're at, what you don't want to do is sink all your capital into one thing which cuts off your capital. You've got 50 grand, you spend it on a car, you got 50 grand. You put it in one house to live in. You know, you don't want to invest all your money into one thing that then just stops you dead because that's it, you get caught in the rat race.
[00:10:00] You have to do the job that cashflow will not be enough to sustain you. So that's why controlling assets, controlling cars could hit liabilities, you know, controlled and certain other things. Is very, very powerful. It shouldn't be looked down upon. It should be celebrated because with that same 50 K I could make 10 grand a month versus just putting it in one house.
[00:11:00] I'm making one grand a month. And if I'm making 10 grand a month over five years, that's more than you, whatever earned from owning one property. And that's before I even get into the other things, such as. When you control the property, don't own it. It's not your responsibility in terms of the mortgage, in terms of the roof, in terms of the boiler.
You know, if you decide you want to open leave and just travel, you don't have to worry about it. You can just hand it back, but what's more, and this is one of my biggest pet hates. Okay. Is that we talk about owning property, but the fact is. The bank, you know, they've got the first charge. And what that means is the moment we do not make the repayments, they just come and repossess.
Yes, our house. So you don't really own, it. Got a small amount of equity. Has this a hundred grand, you put 25 grand down. You own 25 grand of it. You've got 25,000 pounds worth of equity. The bank owns you have a 75. Don't pay. We'll take it away. Simple as that. Um, uh, another key factor is that most purchased investment properties are done on interest only mortgages to reduce the payments, to maximize the cash flow.
[00:12:00] So it means the capital appreciation you get is generally, you know, a lot lower than you would on a repayment because you're not chipping away at the mortgage. You're not paying down the debt. So it can be really marginal and it goes back to my mantra. We want to get financial independent today, not at the end of a mortgage term in 30 years, that's not going to help us.
And then there's always that one person that chips in and says, you know, I like to call them mortgage maniacs, and they are absolutely obsessed with the fact that they've got no mortgage. Oh, I'm living no mortgage brought it out, right? No mortgage. You know, they're working tirelessly to one day, pay off their mortgage.
[00:13:00] Now look, if you're getting on you're over 50 and you want to live mortgage free props. I get that. If you're under 50 and you're talking like that, it's app, solutely mental. It's the worst leverage. And the premise is that if you've only, if you've got 200 grand in one house, and if you live in it that's even worse by the way.
But let's say you've got a 200 grand investment property and it's bringing you in a grand a month just because you want it to be. Mortgage-free why not actually split that into five deposits and generate five grand and capital appreciation of five properties. It's the biggest myth ever. Um, so, you know, if you're one of those people, then please take heed.
You don't want to own something that much that you're holding yourself back is crazy. I just feel that I really wanted to share that with my listeners today, guys, don't be worried about owning. Owning will come. You know, I own five properties or I'm about to own five. I own three, but two going through at the moment.
[00:14:00] And we're looking at a six, but I do have to have on his conversations with me, Simon, do you need to own this Simon? Is this the best way of leveraging your capital right now? Is this just your ego? And then I write everything down. I look at the figures and then I make a decision. No, do you know what. I want to own this one, because I know that if I do that, I'm going to get this relief.
I'm going to buy it at a discount. I'm going to add value. I'm going to recycle my money and then I can go again. But in principle, please, don't get transfixed with owning. Don't do it, you know, just, just don't do it. Everybody's leasing cars right now, unless they're an investment, a car that you think is going to go up in value or unless they're fully tax deductible.
[00:15:00] So I've been looking at electric cars, um, cause they're fully tax deductible. That makes sense, you know, but go in and just buying, you know, a BM or whatever. Cash 50 grand. No, nobody's doing that no more. That's a silly, you'd never do that. What you do is you would secure a property, whether that be buy or control, and you would use the cashflow from that to fund the car lease.
And that's what we do. Um, I do that with where I'm currently living and I might buy somewhere to live in, but when I do, it's going to be for other benefits. Not for the cashflow, not just for the sake of owning it. It's going to be because, Oh, okay, well, I'm going to get certain relieves. This is going to happen.
[00:16:00] That's going to happen. I'm going to do this. I'm going to do that. And there's good. It's going to be part of a bigger plan. The plan isn't just to own. So yeah, a bit of a rent today. Guys had no notes than just straight from. The dome I've been up since I couldn't sleep last night. I mean, I slept, I try and go to bed about half, nine, 10, and then get up about five.
But I was wide awake at three, tried to sleep through till about half three. And then in the end I just got up. But yeah, I'm recording this. Uh, what time is it is so quarter to eight. But yeah. Brilliant. All right then guys. Well, that's it from me every single Monday. If you like this, please subscribe. Hit me up on social media.
[00:17:00] Let me know your thoughts. Do you agree? Do you disagree? Um, but whatever you think don't take my word for it. Listen to Rockefeller. It's not all about owning as a matter of fat. Oh, nothing. Control everything. Don't wait 25 years, guys. Don't wait to own. Get creative.
Thanks for listening. For more information, check out Simon Smith, online.com. See you next time.