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Building Wealth and Losing Weight-The Amazing Parallels
Sunday 7, October 2018

Building Wealth and Losing Weight- The Amazing Parallels

YaniqueF

If you took a poll using a large or even a small sample size, you would not be surprised to find that most people wish they were slimmer and had more money.  While these concepts go hand in hand in New Year’s resolutions, they have a lot more common than you might think!  Let us look at some of the parallels and see if we apply it to tick off two less resolutions next year.

Principles are straightforward, application is difficult

If you have ever spoken to a very fit person, and I know a few, they will tell you that it is very simple, in fact they will say that weight loss is simple arithmetic.  You have to take in less calories than you expend to lose weight.  In the same way, to build wealth, you follow the formula, save 10% of your salary and invest the money.  If it is so simple, why is it so difficult to achieve?  I am sure you are already thinking of all the reasons that it can’t work. Maybe you can’t save 10% of your salary, or when you save it, you have no idea how to invest it?  Furthermore, you may feel that your savings are too small to work with.  But take comfort in the fact that it will add up.

Finding what works

Have you tried ten different diets?  Did the grapefruit diet work for you?  Atkins?  Keto?  There are way too many to name.  However, I am sure that many of the experts would beg you not to diet, but to make lasting lifestyle changes.  In the same way, maybe you tried buying stocks when everyone was excited about them, you may have bought at the height, got burned and sworn off them.  Maybe you had bonds and panicked when the prices fell and sold at the wrong time.  Either way, it takes time to figure out the best workout, some people like gyms, others group activities, others work out at home or walk.  There are so many options.  In the same way, most seasoned investors, against our advice, stick to one asset class that they understand.  So, they only invest in bonds, collective schemes, Jamaican stocks or U.S. stocks, and others just have a passion for real estate.  Either way, they find something, and they stick to it.

Knowledge

It is always so impressive when you are talking to these very fit individuals who can cite the various studies, and authors and give you best practices regarding nutrition, workouts and a healthy lifestyle.  These individuals are not fit accidentally, in fact the opposite is true, they have spent countless hours studying to ensure that their strategy is the best and most effective for them.  Likewise, the successful investor is generally very knowledgeable about their favourite assets and in fact, what is more marked is that they know what they DON’T want.  Investors will tell you, look-that might make money for other people, but it is just not my cup of tea.

 

 

Long term thinking with discipline and focus

There is a tremendous drive behind fit individuals, they take pride in their bodies and most times want to be healthy, live a long time, and age as well as they possibly can.  This is what motivates them to get up and exercise early in the morning when the rest of us are just getting comfy, leave parties early, as well as exercise restraint at places where food is being served in abundance.  Similarly, the successful investor will have foregone a nicer car, possibly a bigger house, more expensive furnishings and a lavish wardrobe to ensure that their money is working for them.  Every day, they keep their eye on the prize, and they resist the temptation to keep up with the neighbours/Joneses.  Instead, they take all available income to invest.  The PIOJ recently reported that 2.2 per cent GDP growth was recorded in the April to June quarter, and was the largest such quarterly growth rate since 2009.   I can assure you that many of those successful investors are seeking out opportunities to take advantage of the growth in the economy to further increase their wealth.

You probably will agree that these things may be easier to write about than to achieve but being aware of the mindset required for success can go a long way to achieve your weight loss and money goals.  Don’t be afraid to seek out others who have been successful in their quests-compare strategies and keep refining your approach till you get what you want.  Happy Investing!

 

 

Yanique Leiba-Ebanks, CFA, FRM is the AVP, Pensions & Portfolio Investments at Sterling Asset Management. Sterling provides financial advice and instruments in U.S. dollars and other hard currencies to the corporate, individual and institutional investor. Visit our website at www.sterling.com.jm Feedback:  If you wish to have Sterling address your investment questions in upcoming articles, e-mail us at: info@sterlingasset.net.jm

 

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