Let’s dive in on how to cut out all the NOISE that exists in the entrepreneurial and investment communities, and drill down on the number 1 most important piece to ANY business, investment, and thing in your personal life.
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The key to EVERYTHING is GROWTH.
Consider the current economic situation. If you have money in a savings account, you might get 3 percent—if you are lucky. For the last few years, savings accounts and even CDs have offered rates closer to one percent. On the other hand, inflation is between 10 and 20 percent, so your savings account can’t keep up. To get ahead, you must grow your money. Like a shark that swims even during sleep, you need your money to keep growing all the time, or you will fall behind. If you put your investments into place properly, you can GROW YOUR WEALTH WHY YOU SLEEP. This is the goal.
But what if you are concerned about losing money? It’s a fair concern, but you must take risks to reap the rewards. Still, some investments are riskier than others, and some are more rewarding. For example, you have probably heard of a 60/40 portfolio, which is often recommended for growth and safety. That portfolio consists of 60 percent stocks or growth assets—the growth part and 40 percent fixed income to hedge against possible losses from the potential investment risks.
How much growth will a 60/40 portfolio provide?
A “safe” portfolio allocation like a 60/40 split has been successful over time for investors. For example, since the end of the 2008-2009 financial crisis, this mix with stocks has returned annual average growth of 11.5 percent. But if you needed funds from your portfolio at an inopportune time, you might have seen much worse results. For example, in 2022, a stock bond 60/40 portfolio lost an average of 16 percent.
Remember, growth investments like stocks and real estate are long-term investments. Over the last 95 years, that 60/40 split portfolio has averaged an annual return of just under 10 percent. But if you took a little more risk and crafted a portfolio with 80 percent stocks and 20 percent bonds, you could have enjoyed an average annual return of just over 11 percent. Each option experienced a similar number of years with overall losses (22 for the more conservative approach versus 24 for the more aggressive fund.) It’s also interesting to note that in almost every SINGLE year that stocks dropped, they more than made up for the losses the following year.
If you go in the other direction and use a 50/50 allocation, the return drops to 9.3 percent.
That’s great unless you need to cash out your funds in one of the poor performance years.
How much difference does one percent make?
The short answer is that it makes a lot of difference over time. For example, if you invest $1,000 for one year, the return differential is small: $100 at 10 percent versus $110 at 11 percent. But take $100,000 and invest it for 25 years, and the difference is staggering. At a steady ten percent rate of return with no additional investments, that $100,000 will generate $733,471 in 25 years. But if the investment returned a steady 11 percent instead, the return would be $983,546—a difference of over $150,000.
Remember that 50/50 conservative portfolio with a 9 percent return? That same $100,000 investment returning 9 percent for 25 years, will only earn $537,308. Again, a sharp discrepancy in profit over the long haul.
OK, but how does that apply to my business or career?
The fact is that your business also needs to grow to stay healthy. Your employees expect increased compensation, your customers expect new product improvements, and if you have investors, they expect to earn a return on their investment.
One surefire way to fail at your business is by refusing to adapt to the market. Suppose you start your company with an innovative product that sells well. That’s good to get started, but in a year or so, you will need to add a new product or improve the one you started with. Listen to the customers because they are the ones paying the bills, and they will often give you the best feedback. They may have ideas you didn’t ask for that can help you jump to the next level. Another important note about customers is to ensure that you offer an outstanding response to their needs and issues. Customers have options, and if you don’t treat them with courtesy and respect (whether in person or online), they will take their business elsewhere. On the other hand, customer retention is one of the EASIEST ways to boost revenue and continue a strong growth trend. It’s typically MUCH easier and cost effective to market, sell, and keep existing customers than acquiring new ones. So keep the ones you have happy.
At Saint, our strategy to keeping our investors happy to be extremely open and clear with communication, so that our investors always know what they’re getting. And from there it is managing an insanely detailed acquisition process where we find and access investments that ARE NOT ON THE MARKET typically. Which means our investors have first investment options no one else will have. This allows us to keep offering the WOW factor to investors, and keeps them coming back for more and more investment options because we always have something new that offers different benefits.
I don’t have time for personal growth if I’m busy growing my money and my business.
The truth is ALL OF US only have time for what we make time for. So Make time for personal growth and yourself. Investing in your emotional and physical well-being is critical if you want to enjoy the rewards of your success in business and investing. It’s a great philosophy to try and improve every day. Remember the shark; if it doesn’t move forward, it dies. People are similar in some ways—we need to grow to thrive.
Consider ways you would find greater satisfaction and pursue them. Perhaps you want to travel. Don’t wait for retirement; make time now. Sadly, the amazing trip you’re imagining in your head might not be as fun in 30 years when you have less energy to enjoy it. Or God forbid aren’t able to go at all.
Maybe you wish you knew more about a certain topic whether it’s history, politics, or ancient Egyptian religions —take a class, buy an audiobook, or subscribe to a podcast NOW. FEED THAT GROWTH URGE THAT YOU HAVE AND DON’T RISK LOSING THAT INSTINCT. Modern technology and resources have wiped out every excuse for a lack of learning. If you want more time to exercise, listen to the history podcast while you work out or even walk around the block. Incremental change is progress, and once you get on the right path, you will likely find that your motivation increases and leads to more change. From there CONSISTENCY is the #1 factor that will carry you to your goals.
Achieving your personal growth goals will swell your self esteem, pride, and satisfaction in your business and financial success.
After the life basics, growth and improvement will ALWAYS be the top priority. This INCLUDES your investing. The end goal is to INVEST IN THE BIG LEAGUES for real estate, which inevitably means investing into the highest return projects with the biggest tax benefits, which can lead your financial life to incredible growth as well. To unlock these massive investment opportunities, most often you need to be what’s called an ACCREDITED INVESTOR.
With this knowledge you can move towards becoming accredited yourself, and investing into amazing projects either with us at Saint, or with many other amazing operators.
President of Saint Investment Group
Nic is a two decade seasoned expert in investing and capital raising, specializing in Real Estate and debt markets. With Saint Investment Group, he leads large-scale distressed asset purchases and innovative syndications for investors.