Many times in life we think success is achievement of a particular endeavour- graduating from university, getting a dream job, getting married, building an estate, acquiring handsome of money and many more. The pursuit of success is a dream of everybody, all human races. We all strive higher in achieving particular goals in our choosing career. This happens because we are built to conquer environment, solve problems, achieve goals, and we find no real satisfaction or happiness in life without obstacles to conquer and goals to achieve but sometimes even with the best thoughts and feeling, things just do not work or go your way. This time all your bones and muscles sing chorus of quitting, you turn left and right, everybody gives quit a nod. You are apparently frustrated with your job, business and all actions you have taken in the past that led you to current predicament. Mine is not an exceptional. All successful people at one time in their lifetime faced such plight of this mother nature in business and career, while they lost almost if not all of what they have, either due to wrong judgement of business ideas or lost of control of it along the line as a result of poor or inaccurate decision making.
As a young entrepreneur I understand that failure is part of success like many great minds will share with people that they succeed after many failed attempts which cannot be ruled out in business. But do you know that success also can be a great ingredient to one’s failure at one point. I am writing this because I have lived a life of success turning to be a great catalyst for my failure in business resulting into many millions of naira. Immediate success is a signpost of good performance when manage properly. This can as well blind us to little details. I will not be writing this if I have not accepted the responsibility for the lost, and buckle up in order to find where mistakes are made and how I could correct them. I know it may be difficult to believe this but I was able to realize this, and I want to be ‘truth to myself’ so that you can learn from me as you travel the voyage of business world whether in financial market or establishment of business without making same mistakes. Success can be catalyst to business failure:
Past Success
The worst thing that could happen to an entrepreneur or business starter is to succeed at the first. It could be fun and motivating because you would think you possess the magic hand for succeeding immediately as you start the business. Your body chemistry tells you, you can do it again and again. You feel you will soon ‘arrive’ base on your future projections. You feel good and confidence about yourself. Your first success blinds you like me and you think the little research you have done in the past is actually paying off now. This is where the unnoticing problems get started. It was obvious to me that I was going to be rich when I succeeded immediately when I started. I was as if the best analyst and I could run away with all the money. Fine it worked but for how long?
Success became an overnight thing and overconfidence set in. What I will refer as ‘Overconfidence of Ignorance’. The state when you don’t know but you don’t know that you don’t know. In this case you will not bother to know until you run to difficulties. Then you pay the price with you and investors hard earning cash. I lost because I thought I knew all the answers but the world of schools and colleges is different from business world. In schools and colleges you can only find one or two answers to a particular question but in business world there are hundred of answers to a particular question. I lost big because there are other answers that I need to know. Rick Warren says ‘The greatest enemy of tomorrow success is today’s successes. Past laurel will not take anyone above that, that is why Charles Handy also said ‘It is one of the paradoxes of success that the things and ways which got you there are seldom those things that will keep you there’. It was after I have lost that I knew that what took me to where I am today would not take me to where I am going again. The past success can be an instrumental to your success if you don’t rely totally on it but you remain flexible in your approach to doing things and focus more on continual learning other than past glory.
Learning is a process that can never be ignored in business. When achieve a goal that gives you that feeling of success, in order to move higher you need to set higher goal that will challenge your original paradigm and push you beyond the initial scope of knowledge. When I approached my mentor about my plight in business and I started lamentation. All I could hear him say is you just ‘grow up’ boy. Thus, when something goes sour in your life or business, look nowhere first except yourself because it’s more than likely that you might be the source of the challenge. Double check your attitude and belief system. Improve and acquire new skills to do better. Failure is an indication that you are growing.
Intuitions
Now that you know you don’t know and you strive for knowledge everyday to know. Do you take time to listen to your inner voice, do you take time to listen to yourself and act on that instead of what you know. Mind plays significant roles in success. I wish I could have listened to myself the more in some of the decisions I made that led business failure in the past. The gosh you feel in your stomach is an indication of something is wrong or sign of warning of cause of actions. This is what separate successful business people from others. They trust their guts through knowledge and follow it. Most of the mistakes I made in business world could be avoided if I had been more attentive to my inner minds.
Your inner mind can be an instrument to success if you practice the art of separation everyday. A time you remain alone for minimum of thirty minutes to think out the problems you want to solve with strong expectation of getting genuine answers.
Thursday, November 12, 2009
Sunday, October 11, 2009
How Safe is Your Investment in Today’s Dynamic Environment
After spending years of working while you save hard earnings for days when all allowances and paycheck are over in retirement and pension fund in a country like Nigeria where uncertainties are certain. I watched a news brief last week about Nigeria clamouring for retirement saving in pension fund. Thousands of these aged Nigerians were left in the scorching harsh weather because they need money they worked for all their life. I was really touched by the suffering of these adult. Is there no safe investment? Or must we wait until our saving is gone before we realise it? How safe is investment environment in Nigeria.
Investment environment metamorphosis from simple to complex situation in every part of the world, those who understand more make profit from the dynamism of the complexity. It is about time we got our brain working in terms of what to do when the working days are over so that we will not be stranded like our present pensioners. Same day I watched the telecast of pensioners and I also got my minute dollar cheque and annual report of one my investments in the foreign land. I started this with $100 few years back in gold investment although I have less investment capital but today when stock and other market crashed the commodities like gold is skyrocketing. An ounce of gold today is about $1,117 that’s reasonable enough. Just imagine those who have bought gold at $35 an ounce.
I have always talked about investment diversification not in the actual sense like mutual fund and other funds that still invest your money back to the stock market, except hedge fund because hedge fund is considered risky due to its own investment methodology. They can invest in anything that will yield profit that is why hedge fund manager are being paid for performance such as certain percentage of the profit unlike the mutual fund that receive commissions in both bull and bear time. When I talked about diversification, I mean investing something you have studied and understand the pros and cons. Don’t allow other people to that thinking for you. Be your own money manager is still the best and endeavour to pay for professional advice.
If you invest all money in stock market and it goes south for more than three years, how do you cope with life expenses that aggravate everyday if retire within the down time.
A better approach for a safe investment strategy for retirement is to first determine how much income you want to draw each year, taking into account all your living expenses including holidays and asset purchases. Multiply that figure by 3. That's how much you need to put away in 'defensive' assets. The rest of your nest egg keeps working for you in whatever 'growth' investments you are comfortable with and appropriate to your risk level.
Your income or pension drawdown is deducted only from your 'defensive' assets. Markets can go south for 3 years before you need to withdraw anything from your 'growth' assets. Too many financial advisers still use the 'risk profile' approach to investment strategies and rebalance the portfolio on a yearly or more frequent basis to keep the original asset allocation, crystallizing losses along the way if markets are in an extended downturn.
If you are close retirement and you are looking for safe way of investing if you are too old to learn about the intricacies of investment because the better way of investing is learning it, then invest in government bond and others. This seems to be safest if you want to take the easy pathway to building your retirement plan
The Federal Government has an investment scheme which is very secure. If you are keen to know more about just which are the best safe investments, you should have a look at the Government Treasuries. There are three types of treasuries, all of which are similar aside from the length of the term. Treasury Bills have a term length of one year or less, Notes are offered from one to ten years and Bonds for ten years and longer. The Government will use the money that you pay for these treasuries for investment and, in return, will guarantee you a fixed rate of interest.
Any schemes that carry the guarantee of the Federal Government are going to be the best safe investments. Although you may find that you are not getting a very high interest rate with this type of investment plan, as least you will know that you will have a safe and secured return on your hard earned money. In 2008, Lagos State Government issued bond with fixed interest rate. This is one investment you should be looking for if you don’t want to learn about trading and investing on your own.
At least if the Government does not guarantee absolute security you are looking with your money, you are still very sure and secure that it will yield little return. Other form of safe investment include: Certificates of Deposit (CDs)
Banks and credit Unions offer Certificates of Deposit for terms usually from 90-Days to 5-years. As long as the CD is offered by bank or insured credit union, your principal is guaranteed by the federal government. Because, they carry no risk (as noted above), certificates of deposit is an attractive and very safe investment. The interest from CDs is fully taxable. Most CDs are fixed for the term you select, but there are banks that offer callable CDs and even CDs linked to different market indices. Certificates of deposit generally offer yields that are better than Treasuries and Bonds, but you may want to do a tax analysis to see what the Tax Equivalent Yield is. In Nigeria, most banks issued CDs. You can approach your banker for better clarification. Don’t limit yourself to only one bank.
Treasury Bill
T-Bills are offered with a term length of 1-year or less. T-Notes are offered with a term length of 1-year to 10-years. Finally, T-Bonds are offered with term lengths greater than 10-years. We will collectively call these Treasuries. Treasuries are issued by the Federal Government and you are basically loaning them your funds for which they guarantee to pay you a certain interest rate. You will always get your principal back at maturity. Treasuries can also be purchased in large denominations. Their safety and ease comes with a relatively low rate of return. They can also be bought and sold in the secondary market. Treasuries are a safe investment, but as with any of these fixed income investments, they do carry the risk that interest rates and or inflation will rise during the term, thus eroding their spending power.
Every human has four endowments- self awareness, conscience, independent will and creative imagination. These give us the ultimate human freedom... The power to choose, to respond, to change says Steven Covey. You have the power to financial freedom over financial security through what you choose to do and respond in your environment.
See you next week
Investment environment metamorphosis from simple to complex situation in every part of the world, those who understand more make profit from the dynamism of the complexity. It is about time we got our brain working in terms of what to do when the working days are over so that we will not be stranded like our present pensioners. Same day I watched the telecast of pensioners and I also got my minute dollar cheque and annual report of one my investments in the foreign land. I started this with $100 few years back in gold investment although I have less investment capital but today when stock and other market crashed the commodities like gold is skyrocketing. An ounce of gold today is about $1,117 that’s reasonable enough. Just imagine those who have bought gold at $35 an ounce.
I have always talked about investment diversification not in the actual sense like mutual fund and other funds that still invest your money back to the stock market, except hedge fund because hedge fund is considered risky due to its own investment methodology. They can invest in anything that will yield profit that is why hedge fund manager are being paid for performance such as certain percentage of the profit unlike the mutual fund that receive commissions in both bull and bear time. When I talked about diversification, I mean investing something you have studied and understand the pros and cons. Don’t allow other people to that thinking for you. Be your own money manager is still the best and endeavour to pay for professional advice.
If you invest all money in stock market and it goes south for more than three years, how do you cope with life expenses that aggravate everyday if retire within the down time.
A better approach for a safe investment strategy for retirement is to first determine how much income you want to draw each year, taking into account all your living expenses including holidays and asset purchases. Multiply that figure by 3. That's how much you need to put away in 'defensive' assets. The rest of your nest egg keeps working for you in whatever 'growth' investments you are comfortable with and appropriate to your risk level.
Your income or pension drawdown is deducted only from your 'defensive' assets. Markets can go south for 3 years before you need to withdraw anything from your 'growth' assets. Too many financial advisers still use the 'risk profile' approach to investment strategies and rebalance the portfolio on a yearly or more frequent basis to keep the original asset allocation, crystallizing losses along the way if markets are in an extended downturn.
If you are close retirement and you are looking for safe way of investing if you are too old to learn about the intricacies of investment because the better way of investing is learning it, then invest in government bond and others. This seems to be safest if you want to take the easy pathway to building your retirement plan
The Federal Government has an investment scheme which is very secure. If you are keen to know more about just which are the best safe investments, you should have a look at the Government Treasuries. There are three types of treasuries, all of which are similar aside from the length of the term. Treasury Bills have a term length of one year or less, Notes are offered from one to ten years and Bonds for ten years and longer. The Government will use the money that you pay for these treasuries for investment and, in return, will guarantee you a fixed rate of interest.
Any schemes that carry the guarantee of the Federal Government are going to be the best safe investments. Although you may find that you are not getting a very high interest rate with this type of investment plan, as least you will know that you will have a safe and secured return on your hard earned money. In 2008, Lagos State Government issued bond with fixed interest rate. This is one investment you should be looking for if you don’t want to learn about trading and investing on your own.
At least if the Government does not guarantee absolute security you are looking with your money, you are still very sure and secure that it will yield little return. Other form of safe investment include: Certificates of Deposit (CDs)
Banks and credit Unions offer Certificates of Deposit for terms usually from 90-Days to 5-years. As long as the CD is offered by bank or insured credit union, your principal is guaranteed by the federal government. Because, they carry no risk (as noted above), certificates of deposit is an attractive and very safe investment. The interest from CDs is fully taxable. Most CDs are fixed for the term you select, but there are banks that offer callable CDs and even CDs linked to different market indices. Certificates of deposit generally offer yields that are better than Treasuries and Bonds, but you may want to do a tax analysis to see what the Tax Equivalent Yield is. In Nigeria, most banks issued CDs. You can approach your banker for better clarification. Don’t limit yourself to only one bank.
Treasury Bill
T-Bills are offered with a term length of 1-year or less. T-Notes are offered with a term length of 1-year to 10-years. Finally, T-Bonds are offered with term lengths greater than 10-years. We will collectively call these Treasuries. Treasuries are issued by the Federal Government and you are basically loaning them your funds for which they guarantee to pay you a certain interest rate. You will always get your principal back at maturity. Treasuries can also be purchased in large denominations. Their safety and ease comes with a relatively low rate of return. They can also be bought and sold in the secondary market. Treasuries are a safe investment, but as with any of these fixed income investments, they do carry the risk that interest rates and or inflation will rise during the term, thus eroding their spending power.
Every human has four endowments- self awareness, conscience, independent will and creative imagination. These give us the ultimate human freedom... The power to choose, to respond, to change says Steven Covey. You have the power to financial freedom over financial security through what you choose to do and respond in your environment.
See you next week
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