Replacing Bad Wealth Preservation Habits with Good Ones: Three Suggestions
In continuation of our three-part series on some of the intangibles that help the wealthy maintain their wealth, this month’s focus is on bad habits, which, if not addressed and dealt with, can lead to financial stagnation.
Getting wealthy and staying wealthy requires eliminating bad habits first and then relentlessly replacing them with good ones. Let’s dig deeper into this discipline…
As most of you know, I’ve had the great fortune of working with an array of amazing high net worth investors and family businesses over the years. One of the many benefits of building these relationships is that it has allowed me to witness the high degree of discipline these families possess when it comes to managing their wealth.
One thing I’ve noticed repeatedly is how accepting many of our families are of recognizing the onset of bad habits and how willing they are to change. One of the best ways to avoid “settling” in life is by recognizing our strengths and weaknesses; this means spotting our bad habits and committing to getting rid of them.
Despite what you may have heard, it’s not just about following best practices, setting goals, and establishing a set of asset management strategies; it’s also about taking account of some of the things we may think of as good habits but are not.
So it may be time to ask yourself: What’s holding me back? What’s in my way?
As you consider your own life as an investor, I invite you to look through fresh eyes at your own habits and mindset to see if they still serve you and the goals you’ve set.
As a simple example, if you’re making the same kinds of investments just because that’s what you’re comfortable with, it might be time to start thinking about diversifying your portfolio or considering other types of private alternatives, especially if market conditions aren’t necessarily as conducive to your chose investment class.
Establishing a New Mindset: Setting Daily Goals
Making sure you have appropriate goals is not just about setting them annually. We’re all pretty good at that. Truthfully, it’s easy to get distracted with annual goals because we wrongly assume that there’s plenty of time to reach them. How about setting daily or even hourly goals?
This may sound like overkill, and for some it may be, but there are so many forces working against us as we’ve talked about in various forms in this newsletter over the years, that becoming more focused, more precise, is a necessary strategy in pinpointing how to get where you want to be.
As is the case with most high net worth families, we’re all a bit competitive, and so those goals can serve as critical milestones for us to push towards. Breaking up bigger, annual goals into bitesize chunks that make larger goals more manageable. If you think about it, we’ve been told this our whole lives: do a little at a time to reach your larger goal.
If you look at your calendar today, what tasks or appointments are earmarked towards advancing your wealth picture? If you don’t see enough tasks devoted to your wealth, changing what is on your calendar each and every day may be a good next step to consider taking.
There’s Only So Much Time, So Manage It With Purpose
While we’re on the subject of time, let’s take into consideration how effectively we all manage our time.
We must learn to protect our time at all cost. There are only 24 hours in a day, whether you’re a billionaire or just starting out; that’s all the time we have.
How we manage our time or how our time is managed for us dictates how successfully we achieve our wealth goals. Whether you’re working on deals, adding private investment assets to your portfolio, working with your power team, or devising wealth strategies, you need to consider if your bad time management habits are contributing to poor time management.
So, how do you manage your calendar? Do you need help doing so? I’m not just talking about having a personal assistant who helps you manage your schedule. What I’m talking about is someone who will be there to push you in the direction of maximizing your wealth potential.
Being able to manage your time effectively in part has to do with how you manage your calendar so that you can truly become the captain of your ship. As those of you who work with us on a regular basis hear me say, no one is going to be more interested in your wealth than you. Yes, your accountant, attorney, or even your financial planner are “there” for you, but, when it’s all said and done, nobody cares more about your money than you do.
Your Portfolio is a Business Entity, Too
It’s important to think of your portfolio as a business in and of itself, and it needs to be treated as such. I realize many of you are entrepreneurs running your own businesses, and that each of you is devoted to the success of that business. No doubt, your wealth requires every fiber of your business to make it work. Like your business, developing those good habits to manage your wealth is a critical component of long term success. What those tasks and habits are will vary from family to family, but whatever they are for you, you must watch them like a hawk and be vigilant.
The relationship with your wealth is yours and yours alone in that nobody will ever be more interested in your wealth than you are.
What are you doing with that relationship to feed it on a daily, almost hourly, basis?
Stay tuned next month where we conclude our three-part series on what the wealthy do to accumulate and preserve their wealth.
If you want to learn more about how our family business manages wealth or how our other families do it, be in touch. We look forward to having a conversation with you.
Here’s to a Great Summer!