Wealth Management

Voted #6 on Top 100 Family Business influencer on Wealth, Legacy, Finance and Investments: Jacoline Loewen LinkedIn Profile
Showing posts with label Manulife Michael Lee Chin Loewen Money Magnet. Show all posts
Showing posts with label Manulife Michael Lee Chin Loewen Money Magnet. Show all posts

June 18, 2010

Why I Use Other People's Money says Michael Lee-Chin

“Do you know a wealthy person? Hold their image in your mind and I will show how there are a few golden principles to how they grew their wealth,” said Michael Lee-Chin, one of Canada’s billionaires at Airsprint Jet’s client reception. Michael shared that there are rules to getting rich and that he would bet that this person of wealth you were imagining, used these rules. He challenged that the answer would be "yes" to his five questions. So here are Michael’s five questions which are the golden rules to growing wealth:
  1. Did this person of wealth own their business and a few other businesses they knew very well?
  2. Did they know these businesses were in a good long-term industry?
  3. Did they own these businesses for a significant time?
  4. Did they manage the tax implications?
  5. Did they use other people’s money to grow their businesses?
Question number five is the most critical – how to use other people’s money to grow your own wealth.  It is also the most challenging for business owners.
To think about using other people’s money and then to grow the business is talking higher risk than many owners can handle. Rather than investigate further, they throw up road blocks. First is an initial gag reflex to sharing control and decision making power, which comes with using other people’s money. 
There is fear of inviting in financial experts who are weasels and who may steal the business. 
Then there is satisfaction with how the business runs today; the owner may not feel a pressing need.  Most owners meet their level of revenues that they can manage, and they stop there. Why risk any of their personal money to grow? Rather take it out and buy property, stocks and other --frankly--lower return investments.
Michael Lee-Chin would remind you that the time for opportunity is when everyone is afraid – like right now. He also talks about how some level of success invites complacency. Michael says that the the winners learn how to other people’s money – private equity--and understand their road blocks. these are often fears. Understand these fears. 
Decide if you really want to create wealth. If you own a business and you want to become wealthier, learn how to use other people’s money – private equity money. 
Lee-Chin learnt this in 1979 when he came across a copy of John Train’s 1980 book The Money Masters—and was exposed for the first time to the buy-and-hold value philosophy of investing guru Warren Buffett, the chairman and CEO of Berkshire Hathaway Inc. “All of a sudden I was twigged on to an investing strategy that made sense to me,” says Michael. He borrowed money to purchase $500,000 of Mackenzie Financial stock. After four years, this stock appreciated seven-fold, and Michael used the profits to own his own business, a small Ontario-based investment firm called AIC Limited. At that time, Advantage Investment Counsel had assets under management of just $800,000. Within 20 years, AIC grew from less than $1 million and – at its business peak – posted more than $15 billion in assets under management. In September 2009, it was purchased by Manulife. At all stages of the business growth, Michael used other people's money and is now on Canada's Billionaire's list. As Michael ended his talk, his helicopter out on Airsprint's runway began to crank up, and then he was gone but he left behind a great deal of energy in that room of business owners.

Jacoline Loewen, expert in private equity and author of Money Magnet: How to Attract Other People's Money to Your Business.