posted on September 13, 2013
Executives often have a hard time translating their dreams into reality. The reasons why most executives fail to create personal wealth usually have something to do with overspending, time constraints, and/or concerns about independence.
Overspending: Our rationalization for overspending usually comes in two forms. Either we believe that there is no point in saving because tomorrow may never come. Or we are having such a hard time paying for our current lifestyle that there is simply nothing left to save. Whether these assumptions are wright of wrong, there is one thing we can be certain of; if we believe we can’t save, we never will save. It’s a question of mindset. Easier said than done!
Time Constraints: Executives are often so focused on their careers that they pay little attention to their personal finances. While the absence of time should never be used as an excuse to defer financial planning, time limitations can paradoxically be turned to our advantage. In fact, the less time we spend on managing our portfolio the better. Anyone with a lot of time on their hands will find themselves constantly tinkering with their investments. This is a sure way to achieve sub-optimal returns over the long run.
Concerns about independence: Executives who work in highly regulated industries must respect strict independence and conflict of interest rules and regulations. Many people working in these professions use this as an excuse to avoid financial investments altogether. These people are missing out on a great opportunity. It is very easy to avoid independence issues by investing in a basket of companies indirectly through a fund instead of directly investing in individual companies.
The Executive Investor skips over the typical saving techniques available to executives in order to focus on investments which accommodate businessmen and women who do not have the luxury of time and who work in regulated industries.