Moneywise 12: The Art of doing Business with Understanding

Celebrity Blogger Gbenga Dan Asabe, a Dutch Business man and Kaduna State Governor, Nasir Ahmad El-Rufai 
It was a sunny Friday
afternoon. I had gone to one of my favorite bookshops on Victoria Island, Lagos, to observe what had become a
monthly ritual for me. Every month, after setting aside 10% of my salary for
tithe and another 10% for investment purposes, I usually deduct another 10%
from my salary for the purpose of buying books. I observe the same proportion
of deductions from any other income that comes my way.

But a habit I
cannot correctly classify as either good or bad is gradually creeping in. My
Mentor has warned me many times to shun impulsive spending and to a large
extent I have been successful in this regard. But when it comes to books, I
just can’t tame this habit. I often buy on impulse, sometimes far beyond what I
had budgeted. The compensation, however, is that when I buy good books, the
feeling that flows through me can be compared to what a romantic man feels when
he gets the wife of his dreams. You cannot fully describe it.

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Fortunately or
unfortunately, the owner of this particular bookshop appears to be aware of
this habit. She is a voracious reader herself. Once I enter her shop: she would
immediately leave everything she is doing and we would engage in long
conversations about books. She would ask if I have read so and so books, as
well as the type of books I have in my collection. For the ones I have, we
would spend some time sharing experiences and for the ones I don’t have among
the ones she has mentioned, she would give me a quick synopsis and my reaction
is always predictable. I would simply go on to collect the books. One
particular afternoon, I was caught between depression and excitement after
departing from the bookshop. 1 had exhausted the money I took to Lagos
on the books I purchased and I also picked some on credit and promised to pay
at the end of the month. I was in my car reflecting on this habit when my
mentor called. He wanted to inform me that he would be going for what he called
a “separation
for the weekend at a hotel on the outskirts of Lagos
and was wondering whether I could join him on Sunday afternoon after church
Of course, I had
to adjust my schedule to fit into his. I was at the hotel located at Badagry, Lagos State, on Sunday at
about 1.00 p.m. My Mentor had left an instruction with the reception that I
should join him in the beach area. That was my third time at the resort centre
and it was as cool as ever. I met him at the beach just gazing into the flowing
water. He was excited to see me. “I can
now see that you take this financial freedom project seriously. That is nice”
he said as we exchanged greetings. Some minutes later, one of the hotel
attendants came with two plates of fish pepper soup and two bottles of Eva
water which we took.
There is wealth
in silence. We eventually settled down for serious business. I could see a copy
of the personal financial plan I had given to him on the table in front of him.
I was there with my own copy as well. I broached the business for the day. 1
wanted to know what he meant by a “separation session” because he
confirmed that he came alone to the hotel. I had thought that it was a strategy
session between him and his business associates.

“The habit of what I call blind investment is common among
those who put their money in shares. Many people just give their stockbrokers a
blanket instruction to buy or sell on their behalf. What they don’t know is
that some of the brokers are as ignorant as they are when it comes to taking
positions in the market”

He replied, “This is yet another secret of informed
millionaires. All informed millionaires I know of regularly separate themselves
from the hustle and bustle of the environment and find a quiet place where they
can commune with the Infinite Intelligence. Some call it a spiritual retreat. Whatever name it
is called, the secret is that if you want to be successful in any area of endeavor,
you must learn to separate yourself regularly from the maddening crowd and go
to a place where you can be alone to hear the still, small voice”.
“Well that is by the way. It is good you were able
to make it to this place. Let me simply continue from where I stopped the last
time we met. As I said then, going by your story, it was clear that you
violated many of the rules for making, managing and multiplying money. All the
actions you took then as I said could be traced to financial illiteracy which
is what we have been dealing with since you joined my class last year. I am
very sure you now know better. But it is still important that I explain
everything to you so that you would be in total command of your financial
“The first rule you violated is that you got into a
business you knew next to nothing about. You are definitely not alone in this
malady. I have seen many Nigerians burn their fingers by investing in
businesses they were not familiar with. Informed millionaires across the world
put their money only in businesses they are either familiar with, or in
businesses where they trust the person running the affairs. They do not gamble
with their money as most Nigerians do. Warren
who is currently the world’s No.
informed billionaire invests only in businesses whose products he can
explain and he has been successful at that”.
“But for Nigerians this is different. Most people in
Nigeria are afflicted with this get-rich-quick syndrome. I am amazed at the
rate people put their money in businesses they can’t explain. For instance,
what motivated you to put your money in book business? Did you know anything
about how to sell books? I am very certain that you were attracted by the offer
of incredible returns. If you rush to be rich, you would be poor very quickly”
“The habit of what I call blind investment is common among those who put their money in
shares. Many people just give their stockbrokers a blanket instruction to buy
or sell on their behalf. What they don’t know is that some of the brokers are
as ignorant as they are when it comes to taking positions in the market. What
surprises me is that when these same people go to the supermarket to buy
clothes, they take their time to make good choices. They ask the shop
attendants relevant questions before they finally pick what they buy. But when
it comes to investing their money, they simply abandon their financial future
to somebody who may not be as smart as they are. If you married a wife without
knowing anything about her background, will you blame anybody if she later
turned out to be a Mohammed Ali, punching
you daily?”
“Many people who put their money in shares fail to recognize
that investing in shares is like buying into a company. Therefore, it should
make sense that before they put their money in shares they should ask the
questions they would ask if they wanted to buy a company. For instance, would
they invest in a company whose management they knew nothing about? Would they
put their money in a company without a proper due diligence that will reveal
the financial health of the company, its product range, its recruitment policy,
Its management team, its debt position and- other barometers of financial
well-being? Yet, this is what many stock investors in Nigeria do. They commit
their money into the hands of a broker who could be experimenting with their
retirement money. No wonder many stock investors are daily watching their
financial freedom money disappear.
Once information is in the newspaper, it can hardly
make money for you. A smart stock investor should call his broker only after he
has decided on the company he wants to invest in rather than allow the
stockbroker to dictate where he should put his money. A smart investor would
not rely only on what the newspapers are saying to take investment decisions.
It is usually already late by the time the information is published in the
newspapers. He would sniff around the company he wants to invest in and gather
relevant information that can aid him to take informed investment decisions.
Interestingly, this exercise is usually not as
difficult as many people think. Do you know, for instance, that if you know how
to read the Stock Exchange Daily Official List with some bit of analysis, using
the published accounts of companies, you can take intelligent investment
decisions all by yourself?”
”My message is
this: before you put your money in any business, you must either be
knowledgeable about the business or be sure that the person who is going to
manage the business is trusted and tested. I am very sure you were not
surprised that you lost all your money in the two business transactions you
described. But now you are wiser.
“Enough for
today, we will continue from there next time,” he said, bringing the session to
a close. We both went to his hotel room and I assisted him to pack his things.
I bade him goodbye as we drove out of the hotel in our cars. 
(Excerpts from
the book: “THE MILLIONAIRES CAPSULES” by AYO AROWOLO. Read “Doing Business for God till thy
Kingdom Come”
tomorrow on this blog)
Ayo Arowolo, Publisher The Millionaires’ Capsules


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