Principle #9: Conviction is the #1 Trait of Successful Investors

Conviction in business is a rare trait. In order to hold firmly to a belief or opinion in spite of rapid changes in market forces requires study, expertise and introspection. The most successful businesses are run by managers with this rare commodity they leverage to make decisions to profitably allocate capital. It should not be […]

Principle #8: Investing is not a Zero-Sum Game

Many investors lose because they try to win. That is, they try to outsmart other investors by trading their investments based on short-term predictions of the future price of their holdings. A recent study, published by Forbes magazine shows the “average” investor had underperformed a wide range of asset classes by a very wide margin. […]

Principle #7: Understand the Difference between Value & Price

“Buy Low, Sell High” is likely the most common of all investing adages. The implication, of course, is to purchase an asset (e.g., shares of companies) and sell it to someone else for a higher price. This is difficult to achieve since lows and highs in price only become clear in retrospect. In the equity markets, […]

Principle #6: Time is Your Most Valuable Asset

Procrastination is a mysterious force that keeps many of us from completing the most important tasks in our lives. Often, we put off something we deem important simply because we believe it may not necessarily be urgent. We know it is important to save for our future, but we typically underestimate the damaging effect of […]

Principle #5: Abhor Risk, Embrace Volatility

Chances are, when you first met with your financial advisor, she asked you to fill out a questionnaire to assess your risk tolerance using a question similar to the following: “Given your financial goals, how much risk are you willing to assume to achieve your portfolio’s expected return?” At best, this type of question is […]

Principle #4: Owners Make More Than Loaners

Financial assets can be classified into the following two groups: “Loaner” assets such as interest-bearing accounts, treasury bills, GICs (Guaranteed Investment certificates) or bonds. These are assets where interest payments are collected from a borrower based on a lending contract (a debt instrument); and “Owner” assets such as shares of businesses (small and large company […]

Principle #3: Strive to Earn Passive Income

Money buys happiness. Not because of the things it can buy. In fact, it’s likely the more money you have, the more you realize you can’t buy anything material that will provide you with sustained happiness. Rather, money buys the freedom to pursue your dreams. Money empowers your ability to jump out of bed each […]

Principle #2: Value Creation is Making Money

The secret to making money is to: Add Value; and Find a context to deliver the value you added. Ultimately, making money requires both your ability to add value combined with a context to add that value whether it is in a job or in a business where the customer is the consumer of that […]

Principle #1: Make, Save, Live

“Pay yourself first” and “Spend less than you earn” are popular themes in personal finance which means savings a portion of your earnings (e.g., from each paycheck) before you spend a dime. Practicing Make → Save → Live, in this order, is the most important habit for wealth creation. If you only spend the money you […]