Strategies on How to Grow Your Money
Early last week, one of the founders of the studio I work with, left for a trip back home in UK. During his almost a month of stay here in the Philippines, he has made everyone in the studio feel important just by giving his Hi’s and Hello’s every morning. By asking how we were doing and how we spent our weekends is something that I appreciate a lot. He’s got the energy of a ten year old curious enthusiastic aggressive little boy. Well, he was crazy when he played “Battleship” with our quiet but most respected creative director, who’s 20+ years older than him, one lunch time! He says we are his favorite group in the studio because we have the money that runs the company. What else do you expect? =)
One day, in his usual playful and comic behaviour, we were exchanging jokes about me not giving him the money he wants to buy him a Louis Vuitton. With just one remark I gave made him open up and share his personal financial stories.
Kaine told me that he and his father has not taken a single penny from this studio that they have founded over a year ago.
“Where do you get your money?” I asked.
Growing Your Money by Investing
He shared that he owns around 40 properties all over UK which he rents out and he has not seen 30 of his occupants for years yet they all are good payers. He gets his weekly allowance from this income which he earns passively and has told me that he lives only within a fixed budget per week. I forgot the exact amount, but it sounds like he’s one of the frugal rich men around today. Since we were talking about the studio’s money, he, as the investor, told me one very important discipline in building businesses. He shared that out of all businessmen out there, only 10% understand the secret to wealth.
The 90% fail to practice this discipline and have gone poor if not bankrupt. When I heard that ratio, I suddenly remembered the Pareto Principle and the concept “The vital few are far more important, than the trivial many”.
He said that only a few people understand that once you invest your money in business, you must not touch it but rather leave it there for at least five years to grow. He further explained that an average businessman takes out his business’ income; withdraws it to buy shoes, clothes, gadgets, bags and so many other things. They take out money from the business in the wrong time, instead of keeping the earnings within to generate more profits. He said, “the key, is waiting”. Year after year, within five years, instead of taking out the money, reinvest it. That’s how wealth is grown. Then, after five years, selling a good business with healthy financials for an IPO will bring an even greater sum of wealth for the company, its employees and of course to those who have risked their money for this undertaking – the founders and investors. This is his vision.
I agree with him. What he shared is true! I have friends who have put up a business which earned well in the beginning but are now almost bankrupt. They are now having a hard time to sustain the business that once had given them everything. Only if they knew and understood, only if they waited patiently for five years, their business could have been a good infinite source of wealth.
He really caught my attention. You know how interested I am about this subject. You can rarely find people like them – those who belong in the “10%”. I learned these ideas from the books I read but that day, I received the wisdom directly from one of them. I felt very lucky to have him talk about how they run their finances. I will never forget that day – a day of free brain picking from our founder. And by the way, he is not as old as Warren Buffet or Bill Gates. He just turned 31 and is bold in taking that much of a responsibility.
What makes him different from the rest of us? He likes the responsibility he was given. He enjoys it so much!