Independent business builders are independent investors: How to maximize your investments? The Independent Investor

Wednesday: Speak on the Shoulders of Giants FROM THE DESK OF MILES EVERSON: Being an independent professional is no easy job. While others may think it’s easier than being a traditional employee of a big company, taking the “independent” career path entails considering a lot of factors to success. One of these factors? Financial planning and management skills! Keep reading to know more about the different investing disciplines that will help you as you go along in your independent contractor journey. CEO, MBO Partners Chairman of the Advisory Board, The I Institute

Independent business builders are independent investors: How to maximize your investments? The Independent Investor The Independent Investor Professor Benjamin Graham is known as the Father of Value Investing. He was one of the people who developed the global certification in finance, the CFA (Chartered Financial Analyst) certification. Aside from that, Graham was a professor at Columbia Business School in New York. Trivia: Many of the world’s famous billionaire investors and investing giants were students of Graham! These giants included the following: Warren Buffett Charlie Munger Walter Schloss William Ruane Sandy Gottesman Partners at Tweedy Browne … and many others! Graham values the importance of having discipline in investing. This has been reflected not just in his own life, but also in the financial skills and successes of his students. In his own words: “The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.” One of the books that offer great insights about investing disciplines is the Investing Disciplines of the Giants. This contains training, tools, research, and guidance for employing the seven important disciplines of the greatest investors in the world. As an independent professional, these disciplines apply to you, too, because financial management plays a critical part in your role! In today’s article, we’ll talk about the first giant investing discipline: Commit to maximize your investment wealth. Many billionaire investors started with very little… but that didn’t hinder them from achieving their investment goals. Instead of focusing on what they didn’t have, these people committed themselves to these principles: Spending less money than they made Investing as much and as soon as possible in business ownership or owning equity Let’s first talk about spending less money than you make… Most successful investors were very careful with their spending especially when they were just starting out to build their wealth. They know the importance of wise spending. After becoming wealthy, these investors had so much that many of them became philanthropists, donating far more than they ever spent. What does this tell you? Your compensation in your career is what funds your initial investing activities. Don’t just focus on generating wealth and harboring all those things for your own benefit. Focus on your career and the role you play, spend less than you make, and do the right things with your savings so you can maximize your returns. These quotes from Warren Buffett reflect this investment principle clearly: “The fact is, you can’t build wealth without ensuring that you first and foremost make more money than you spend.” “Ultimately, there’s one investment that supersedes all others: Invest in yourself.” Practical advice, right? It’s important to remember that the money you use to fund your investment comes from the money you earn from your career. By focusing on your career, you can boost your earnings as well. How do you do that? By investing in yourself! This is an important factor in an independent professional’s career path. The second vital aspect in maximizing your investment wealth is saving and investing. “In the long run, it’s not just how much money you make that will determine your future prosperity. It’s how much of that money you put to work by saving it and investing it.” - Peter Lynch, an American investor, mutual fund manager, and philanthropist Just like how Lynch said it, saving money alone is not a path to wealth creation. You can’t maximize your wealth by simply stashing away your cash. Do you want to know one of the proven ways you can maximize your wealth? Become a part-owner of businesses or equities! The easiest way to own shares of businesses is through the stock market. The good thing about the stock market is it allows individuals and families to buy into the profits of businesses and become owners of the world’s great companies, little by little. It doesn’t matter how small or big you invest! Regardless of the size of your investment, you are entitled to receive the same returns as the billionaire owners of those companies. Every stock you buy expands your business ownership. In other words, you become an owner of the capital that builds companies. That means you own some of the future profits of those businesses in the long run. So, even if you start investing in small amounts, your investment can grow significantly over time. It’s like working hard to earn money and at the same time, allowing your hard-earned money to work hard for you! This first discipline of great investing is a great lesson not just in business, but also in life. As an independent professional, you have to consider how you manage your spending. Keep in mind that in reality, the bare necessities in life won’t cost you much to stay alive. The rest of your spending is excess and sometimes, even unnecessary. Save, spend, and invest wisely! Every dollar you save and every dollar you put into good investment funds your commitment to maximizing your wealth and ultimately, financial freedom. Hope you’ve found this week’s topic insightful and useful. Follow us on LinkedIn. Stay tuned for next Wednesday’s The Independent Investor!