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Investors’ Code
“There is a thin line between a superstar financier and a criminal” — Nonso Okpala.
(Ben Enwonwu 1977)
I have always aspired to be an investor. The earliest memory I have of this aspiration is from when I saw the movie, “Pretty woman” for the first time
Recall these lines?
Vivian Ward: “What do you do?”
Edward Lewis: “I buy companies”
Vivian Ward: “what kind of companies?”
Edward Lewis: “I buy companies that are in financial difficulty”
(And of course make a profit)
It was in this moment that something shifted in me. I was mortally seduced and inspired to become an investor. And so the question became, how do I get on the path to becoming an “Edward Lewis”? I wasn’t a trust fund baby and my only viable path was education and career, with a long shot option of aggregating capital to sit on the prestigious table of Investors.
On my career journey, I had the privilege of KPMG (Secondary School)=> UBA (too short, spent only 45 days) => BGL (University) => Heirs Holdings (Masters). I believe it’s time to update this to reflect that VFD Group Plc is my Ph.D. program. Having gone through all this, I now had to overcome the challenge of aggregating capital. How do you invest without access to capital?
My experience in these organizations represents the core of my formative years as an entrepreneur and an investor. I acquired veritable skills, made remarkable market contacts, and learned the implication of leadership successes and failures. The highs and the lows of these experiences helped me forge what now represents my “Investors’ Code”. This Investors’ Code provided direction for me on my journey to becoming a successful financier and investor. It has served me, it is still serving me and I believe it can serve you too on your journey.
1. The foundational step is to develop a solid numerical mind and commit to enhancing it over time. This is one of the equalizing characteristics of an investor — the God-given ability to breakdown real-life opportunities and scenarios into numbers, and process them in ways that help you distill patterns, trends, rules, and frequency to aid cutting edge decision making. Needless to say, it requires a commitment to skill acquisition and enhancement. At the end of the day, “numbers” is the rule of the game. I don’t want to bore you with examples but as you immerse yourself in it, you will get to identify its dimensions and relevance.
I had the opportunity of learning this at KPMG. It wasn’t easy but it was absolutely necessary. It was like those compulsory courses that you had to pass but never enjoyed. I passed it and so far, it has served me well. Take on the challenge and gain the required edge you need as you go on your journey.
2. You need to build the capacity to resist the urge to just spend money. Funds should only be released when you are certain that it will return with profit. This can be further referred to as the ability to say “No”. It is your most potent defence around your investment portfolio. You must not do every deal. Refuse to be pressured to take on a deal you don’t understand and/or don’t believe in. At the end of the day, every deal holds an opportunity and a threat, and your ability to say “no” to the threat and “yes” to the clear opportunity keeps you on the safe side of the line. The guiding light is simple, if you fail, you will be called a criminal.
This was a lesson I learnt in all the places I worked in, especially in BGL.
3. Develop an ability to exhibit trust and transparency that easily convinces people to willingly save and entrust their funds with you. Trust, honesty, transparency, and integrity are the currencies of our trade. The key here is to consistently deliver on these attributes regardless of where you find yourself because every service of trust lends to a higher opportunity based on the recommendation of the previous. In the course of my career, I had never given anyone a reason to doubt my trustworthiness, I definitely won’t. leave money on the table but I certainly won’t take a counterpart’s due.
My big break was when I had the opportunity of serving as Chief Financial Officer to Mr Tony Elumelu at Heirs Holdings. It was an opportunity I didn’t take for granted and the turning point for me, as his subsequent reference opened countless doors.
4. Develop an ability to seek out cutting edge opportunities, effectively communicate them, and reasonably deliver on all the promises made. This is another aspect of integrity. If this is done consistently, you’ll be able to join the elite league of investors with a track record. This was another skill set developed in BGL and Heirs Holdings, especially Heirs Holdings.
5. The last and most important is a conservative and austere way of life. I have a simple rule for this called the “one/ten rule”. You only spend on an item of luxury or “mere want” when you have ten times that amount in idle cash. This rule has served me countless times because, as in life, investment is an undulating plane. Sometimes you are up but most times you are down. The reserves you create is your only assurance for the times your portfolio is down. So keep building that reserve, regardless of the good times you experience.
These codes will keep you on the success path as you aspire to be an investor/financier. As I pass these codes to you, you have to appreciate the fact I learned from observing the successes and failings of my predecessors. When they succeeded, I reinforced the steps that ensured their success and when they failed, I learned how not to conduct my business. It doesn’t mean I am smarter than they were, I’m just standing on their shoulders. I stand on the learnings of their successes and their failures. I certainly won’t fail in the ways they have failed and I don’t need to test or reinvent their wheels of success. It is the burden of a pioneering father that makes the son better and the grandson smarter than the son and so on.
In all that you do, always remember, “There is a thin line between a superstar financier and a criminal”.
