Wednesday, September 7, 2011

Has your investment group lived up to all the hype?

Firstly if you haven’t asked yourself this question at one stage or another, then it could only mean one of two things. Either the group is performing extremely well or you don’t really care if it drops flat on its face. Sadly the second scenario is true for many of us and to find the reason for this all we need to do is take a quick glance in the mirror. You see, it is likely that ‘we’ are the reason our investment groups have stagnated.

Am I bad for my investment group?

There is no question that the rationale behind investment groups is sound. Shared risk is music to any investors’ ears. Pooling resources, skills & knowledge is good for business and having diverse membership means a wider network of business contacts to tap into. The success of the group depends entirely on
the productivity of the members and unfortunately this is where we are let down by those of us who earn regular paychecks every month. It seems that many people simply don’t have the self-discipline to be productive without the constant fear of being sacked looming ominously over their heads. What happens to these masterful corporate strategists when they are tasked with transforming the investment group from a mere bank account into a solid investment fund/SME/corporate empire? Perhaps it’s because when compared to their payslip the returns from the group in the early years are insignificant, or maybe it’s because our ‘day job’ doesn’t allow us any free time to invest in the group. Whatever the case, it is clear that we shouldn’t expect our investment group to thrive unless we make the conscious decision to rank it at par with our ‘day job’.

Is it too late?

So you’ve penny-pinched for 12 months, denying yourself some creature comforts along the way, all in the belief that financial nirvana a la Transcentury will be yours. The reality is that the founders of our best know investment group were committed to their dream and deliberate in their approach. Most of them were already business owners and clearly understood the importance of embracing multiple revenue streams.

The first step towards turning things around is for members to be frank with each other in their assessment of whether they are happy with the status quo and if they genuinely feel something should be done. The next step is to identify someone who can run with it on a full time basis, whether a member or an employee. Whoever it is will need to be compensated with performance linked elements. The regular meetings now become performance appraisal and target setting sessions and all members must recommit to attend every meeting and participate actively in discussions.

If the only reason you are still part of the group is because the money you have invested is now worth half what you put in, then stop sitting around whining and do something about it. Ask yourself if being apathy is rational for someone who has been diligently making monthly payments on time every month for all this time. In doing so it is very likely you will find that apathy is the reason why the group isn’t living up to the hype and not the other way round. 

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