| Real Life Strategies for Building Wealth

Stop for a second and imagine that you’re running your own business (or perhaps you’re already a business owner?). With the title CEO comes a wide range of responsibilities, a jam-packed schedule and a variety of tasks at hand. Undoubtedly you lead a busy life and faced with daily decision making as the face of the company, so it comes without saying that you’re also faced with issues to solve.

Do you for example find yourself missing essential employees; you won’t just hire the first person who walks through the door, right? No, of course you wouldn’t! Instead, being a leader and business owner, you’ll start by making a thorough list with the essential skills you are looking for in new candidates, assess the type of backgrounds you are on the lookout for et cetera.

Then you must spread the message far and wide that your company is looking for new candidates. When you begin receiving stacks of applications from potential new employees, the next step will be to carefully start carrying out a screening process, selecting only those candidates you want to have coming in for an interview. And then for another conversation and maybe even another one after that… You want to be selective. You want to find the best of the bests.

To do so, many companies are asking applicants to perform an IQ or personality test, the result of which can help you choose the right one for the job. And if you have a larger company, it pays a lot in the long run to invest in quality HR staff whose primary task is to find promising new employees that will help take your business to the next level. Because getting the right people to be a part of your business is by no means important and if done right, this can be your key to long-term success.

And here comes the big question: Why don’t you take your investments just as seriously?

The relationship with your bank – how important is it?

Humans are bound to safety and routines, hence we often stick with what we’re used to and feel confident about. Almost all customers I’ve met have had the same bank for more than 10 years, and this never fails to shock me. When I ask them why, they answer:

  • Because my family has always had this bank.
  • Because I’ve always had the same bank.
  • Because my business has always had that bank.

In most cases, people do not like to step too far out of their comfort zone when it comes to their relationship with the bank or their financial adviser. They have had the same bank for many years, and oftentimes they put the relationship before the quality; not feeling comfortable digging deeper in to how thorough the bank has actually done their work. Having this mindset can be dangerous for so many reasons and the same goes for when you are a business owner and find yourself comfortably reasoning:

  • I’ve had the same employees forever.
  • I have never tried anything new.
  • I haven’t investigated whether there were more profitable roads to pursue in order to find the people my business needs.

Neglecting the importance of the bank’s performance sure is dangerous, and as a result it is essential to assess just how important the relationship you have with your bank really is to you. Remember, your manager does not necessarily have to be your friend. You wouldn’t keep an employee in your company solely because you feel too comfortable, right? But do you even need to change bank just because you want to change manager?

Bank and manager – what is the difference?

Most of us are not yet fully aware of the difference between a bank and a manager. The manager is the one who manages your money. The manager invests your money and stands to execute the strategy put in place. And then, we have the bank; the place where you keep your money, take a loan for that new dream house, etc. But the bank can also act as a manager, and that’s probably why many are a tad confused about what the difference is between the two.

The main thing is that just because you keep your money in one bank does not mean you also have to use that same bank the be your asset manager. So you can easily continue to use your bank as a money deposit (and thus maintain the good relationship) but get another (and better) manager to manage your capital

“But how do I find the right manager?” You’ll find yourself pondering over.

Choosing the right manager

Just as you (hopefully) wouldn’t hire at random when it comes to your business, it’s essential to remember that the same goes for deciding on the person who will be managing your precious capital. Bear in mind too that building a fortune does now come without putting in hard work over a long period. So why don’t you want to make sure then that your hard-earned money is being looked after only by the very best and most trustworthy manager. If you’re the CEO of a company, you’d also be using a variety of tools and methods to assess whether things are going the way they should.

You’d have a budget account and you want to keep an eye on how your employees perform, keeping a set benchmark to stay on top of the company’s success, etc. Likewise, you should use a variety of methods to find the right manager and spend time evaluating his or her work.

In order to take your investments seriously, you could, for example:

  • Measure your manager against relevant benchmarks.
  • Make sure your costs are not too high.
  • Evaluate whether you run the right risk.
  • Make sure that the manager you choose fits the investment strategy you want.

Having the right manager can mean the world in the long run. I would therefore recommend that you’d be as careful with your investments as possible, just as careful as you would be with your own business. I hope you can use this post as motivation to look at your investment set-up more clearly so that you can make the most of your capital.

AUTHOR BIO: Johann Laux is the Founder & CEO of Proveo. Proveo is a fast-growing company offering an impartial service for investors who are looking for the best possible management for their assets. Creating freedom and a peace of mind, Proveo specialize in monitoring their client’s asset manager to create transparency, helping clients to understand their investments and to get the highest quality and security possible. For more information, please visit: https://www.proveo.dk/en/index