Every week I will call out to my network of investors, business owners and media personalities to ask them my 2 minute Money to Wealth questions.
This week I have the pleasure of speaking with Lindsay David. Lindsay David is the founder of LF Economics and a co-founder of clean technology company GreenRigCo. The former strategy & business development consultant holds an MBA from IMD Business School. Lindsay is the author of “Australia: Boom to Bust“ and “Print: The Central Bankers Bubble“.
Lindsay along with Philip Soos recently made a well thought out and much publicised submission to the 2015 Parliamentary Inquiry into Home Ownership, which I would encourage you to read up on.
Over to you Lindsay…
1.Who is your role model when it comes to money?
LD: Cash is king… When it comes to money my biggest role model was my grandfather who was a librarian. His view that ‘if you can’t afford it, don’t buy it’ is a motto I have always stuck by. Throughout my life I have seen too many people get financially burnt by trying to live beyond their means.
2.What types of investments do you currently hold?
LD: It’s no secret I am very bearish on the global markets.
I have what I guess could be best described as a high-risk/defensive portfolio. I have 2 relatively new startup businesses (GreenRigCo in the USA & LF Economics in Australia). New businesses always hold a very high level or risk throughout the development stage. And it’s very common in the startup world for things not to go as planned.
Outside of my companies, I have always held primarily a debt-free cash portfolio in $USD and now to a much lesser extend Swiss Franc following its de-pegging against the Euro. This is now particularly the case as the impact from money printing by global central banks is really starting to wear thin.
3.What has been your best investment decision and why?
LD: I have the opinion that if you always continue to buy and sell in the same asset class you are essentially investing in a zero-sum game.
To be frank, the best investments I have made purely came down to luck in terms of making significant capital gain and/or investing in, or pulling out of the right asset class at the right time and walking away from that asset class altogether.
Another example of luck was by spending too much time twiddling my thumbs figuring out where to invest in 2008. In the end I invested in nothing and the markets crashed making my world a lot cheaper which significantly improved my purchasing power as both a consumer and an investor for years to come.
4.If you had a spare $100,000 you would …
LD: At this current point in time based on the macroeconomic headwinds, would probably keep it in the bank and invest it two or three years down the line in an investment class that offers a meaningful income source.
5.What does ‘wealth’ mean to you?
LD: Asking what wealth means to me is like asking what financial security do you have. Are you wealthy if you live in a $1.5 million house but hold a $1.1 million mortgage whilst living paycheck to paycheck? At this point in time Australian’s think this is wealth, but is this secure? In my opinion security only lies in one’s balance sheet when they are personally free of any liabilities. Until then (besides the cash in your bank account minus liabilities) there is no real wealth.. just leveraged paper wealth.
Australian’s will unfortunately sooner than later realise what wealth actually is. And high levels of household debt is a component of speculation…not wealth, and definitely not security.
Australia is one of the only countries in the world where its land holds more value than its people #ausbiz
— Lindsay David (@linzcom) July 13, 2015
Thanks Lindsay for your insightful answers and good luck with GreenRig and LF Economics.