How to Invest Like an Entrepreneur to Outperform the Norm. It’s no secret the majority of entrepreneurs boast a strong feeling of self-reliance and self-confidence, particularly if they’ve already achieved success in their business. That’s why it makes sense that, when it comes to investing, many accomplished entrepreneurs entrust themselves with money management over an advisor at their local bank or neighborhood financial firm—or even a high powered Wall Street broker for that matter. For committed entrepreneurs, money is not a luxury, but the very lifeblood for their vision—it’s what sustains them in the here and now, and what fuels their dreams, aspirations and future goals.
“For the successful entrepreneur, achievement is not something that’s just possible; it’s an outright expectation, even when it comes to something as volatile and inherently risky as investing,” notes seasoned financial analyst Phil Ash, Co-Founder and CEO of Baton Investing—a company setting a new standard of transparency and performance for investing companies.
Below, Ash details the nine key traits of the entrepreneurial investor:
1. Determination. Making the decision to take a specific course of action, setting appropriate goals and then having the grit to go accomplish those goals are the keys to successful business execution. The same is true with entrepreneurial-minded investing: calculate your financial goal, pick a proven strategy with the necessary average annual returns to get you there, and stay the course.
2. Risk-taking. Successful entrepreneurs are natural risk-takers; however, they are also smart about the kinds of risks they take and the method in which they are taken. Knowing when and how to separate from the herd and break away from norms and rules makes all the difference. That is the secret sauce for wildly accomplished “contrarian investors” like Warren Buffett.
3. Confidence. Being wishy-washy and indecisive rarely yields any positive results. Confidence comes from trusting a system, methodology or approach that has a proven track record—evidence that it can deliver desired results. So when it comes to investing, they seek out proven, tried-and-true systems that boost their odds of success.
4. Adaptability. Financial markets are fluid and your investment choices must be too. Successful investors no longer subscribe to conventional strategies like “buy-and-hold” and “broad diversification” to try to beat the market. Rather, they often use automated and other systems to constantly analyze markets and pick the handful of best investments in any market conditions and to buy and sell stocks monthly as the numbers change. Being nimble and knowing when to zig instead of zag can help you take advantage of tremendous buying opportunities.
5. Passion. Everyone falls in love with a story stock like Apple, Whole Foods or Tesla from time to time. And, like a passionate fling, they can be amazing for a while. But both the successful entrepreneur and the fruitful investor know how to moderate their passion and eliminate emotion from key decisions. And if they can’t easily do that, they’re smart enough to surround themselves with people or systems that can.
6. Money mastery. Even entrepreneurs who hate numbers eventually learn to understand and master them. Not understanding key investing metrics like returns and expenses is a sure-fire recipe for never hitting your goal. Entrepreneurs further understand the importance of budgeting, CapEx analysis, and protecting their hard-earned capital—all of which are important skills for improving your personal finances.
7. Vision. Entrepreneurs and savvy investors both know where they want to go and how they plan to get there. Entrepreneurs aim for their “Big Hairy Audacious Goal” (BHAG), as popularized by Jim Collins. It’s a goal that may take 15 years or more to achieve but if they hit it, life will be infinitely better. Likewise, smart investors set a clear goal that may seem impossible to others but is totally achievable with the right plan.
8. Networking. Visionaries like Steve Jobs seemingly blaze new ground with iPods and iPhones, but in large part they’re just building on what other successful people have done before them. These “visionaries” rely on their network to guide and help them along the way. Investing is no different. Just look at exactly how and why the greatest investors of all time like Buffett, Lynch and Graham have been successful and do that!
9. Lifelong learning. Like cultivating an entrepreneurial business acumen in an ever-evolving marketplace, continually honing finance and investment skills is an imperative. Commit yourself to the ongoing process of learning about myriad investment techniques and types. Remain a seeker of new wisdom. There is a wealth of information available that is always growing and changing so your knowledge base needs to grow and change with it.
”Entrepreneurs and investors are quite alike in the sense they are willing to take calculated risks for which the payoff can be substantial,” Ash notes. “It’s this shared spirit that can help the entrepreneurial-minded investor cultivate a profitable portfolio that outperforms most other investors and achieves your financial goal.”
