Wealth creation and preservation are not the result of chance or single moments of brilliance. They are built over decades through a set of disciplines that endure across market cycles, political regimes, and personal circumstances. For the investor who seeks not only to grow capital but to preserve it with integrity and purpose, these 20 principles provide a compass. They are not fads, nor are they theories that collapse when tested. Rather, they are enduring truths—reliable, sometimes uncomfortable, but always essential.
1. Begin with a plan: Every enduring wealth journey starts with a financial plan. A plan is not a spreadsheet filled with numbers, but rather a framework that gives structure to aspirations and ensures that every investment serves a clear purpose. Without one, investors tend to drift—reacting to headlines, following fads, and ultimately losing sight of long-term objectives. A plan clarifies direction, defines benchmarks, and ensures accountability.
2. Invest with intent: Every asset in a portfolio should have a defined role—whether for growth, income, diversification, or liquidity. Random collections of investments rarely coalesce into meaningful outcomes. On the other hand, investing with intent means resisting the temptation of shiny opportunities that promise quick wins but offer little alignment with one’s goals. From our experience, we know that intentional portfolios build coherence and reduce the risk of regret later on.
3. Stay the course—time, not timing: Markets reward those who endure. While the temptation to time entry and exit points is strong, evidence consistently shows that staying invested delivers better results than attempting to predict the market’s next move. Remember, the cost of missing even a handful of the market’s best-performing days can be devastating to long-term returns. The principle is simple: time in the market matters far more than timing the market.
4. Diversify across borders and asset classes: Keep in mind that no economy or asset class holds a permanent monopoly on growth. Diversification ensures that the fortunes of a single company, sector, or geography do not dictate financial destiny. It is the closest thing to a free lunch in investing—a disciplined way to mitigate risks while capturing opportunities across a spectrum of outcomes.
5. Respect the power of cash flow: Capital growth is meaningless without cash flow. A sound plan ensures that investors understand inflows and outflows at every stage of life. In retirement, particularly, cash flow determines quality of life far more than asset values on a statement. Preserving liquidity is critical—not only to meet obligations but also to avoid being a forced seller in difficult markets.
6. Understand risk, don’t avoid it: Risk is inseparable from investment returns. Remember, the objective is not to eliminate it—an impossible task—but to price it correctly and accept it knowingly. Every investment carries a trade-off, and enduring investors learn to balance the risk they can afford with the risk they need to take in pursuit of their goals.
7. Tax is inseparable from return: The headline figure of an investment’s gross return tells only part of the story. True wealth creation depends on how much of that return you actually keep after tax. Remember, tax efficiency is not a side issue or mere administration—it is central to a sound investment strategy. By structuring your portfolio to minimise tax leakage, you allow the power of compounding to work in your favour, rather than in favour of the fiscus. To ignore tax is, in effect, to give away a portion of your future wealth unnecessarily.
8. Honour the principle of compounding: Compounding is relentless and unforgiving—magnifying both good habits and bad. Investors who consistently save, reinvest, and stay disciplined harness its exponential force, whereas those who interrupt compounding by withdrawing, chasing fads, or panicking in downturns forfeit its greatest gift: growth over time without additional effort.
9. Watch the cost of capital: Fees, if left unchecked, silently erode wealth in the same way inflation erodes purchasing power. A percentage point may appear insignificant in a single year, but compounded over decades, it becomes sizeable. Astute investors pay for value—expertise, guidance, and strategy—but remain vigilant against costs that destroy compounding.
10. Resist lifestyle creep: Wealth is more often eroded by spending habits than by disappointing investment returns. As income grows, so too does the temptation to upgrade one’s lifestyle, often at the expense of savings. Without restraint, expenses rise, debt accumulates, and long-term financial security is compromised. Successful investors make sure their wealth grows faster than their lifestyle, thereby protecting their freedom and choices well into the future.
11. Transfer risk strategically: Insurance is not glamorous, but it is foundational. By transferring risks that could devastate capital—illness, disability, death—investors can protect their long-term strategy. Keep in mind that without appropriate insurance, a single event can unravel decades of discipline. In our view, insurance is not an afterthought – it is the bedrock upon which all other financial strategies rest.
12. Estate planning is non-negotiable: A financial plan without an estate plan is incomplete. Dying intestate or with poorly drafted documents creates uncertainty, conflict, and unnecessary costs. Wills, trusts, and succession strategies ensure that wealth is preserved across generations and that loved ones are spared avoidable hardship during already difficult times.
13. Use debt sparingly and with purpose: Debt is neither inherently good nor bad—it is simply a tool. Used to acquire appreciating assets, it can accelerate wealth, whereas used to fund consumption, it can destroy wealth. Intelligent investors keep debt strategic, measured, and aligned with long-term objectives, avoiding the trap of habitual borrowing.
14. Stay globally exposed: Local markets are narrow and vulnerable to domestic politics, regulation, and concentration risks, while a globally diversified portfolio spreads opportunity and insulates against local shocks. Exposure to global innovation, industries, and currencies can broaden the horizon for growth while reducing vulnerability.
15. Guard against illiquidity: Illiquid assets can offer attractive returns, but flexibility has its own value. Portfolios overly exposed to assets that cannot easily be sold can leave investors vulnerable when circumstances change. As such, it is important to balance long-term commitments with sufficient liquidity to weather unforeseen needs.
16. Behaviour is decisive: Portfolios often fail not because of poor construction but because of poor behaviour. Panic, greed, and impatience destroy wealth more effectively than market downturns. Successful long-term investors cultivate discipline, perspective, and emotional intelligence to ensure their behaviour remains aligned with their strategy.
17. Benchmark against your plan, not your peers: Comparison is a dangerous distraction. Remember, wealth is personal, and the only relevant measure of success is whether you are on track to meet your own objectives. Chasing returns to outperform friends or neighbours is a sure path to abandoning strategy in favour of noise.
18. Inflation is relentless: Inflation is the silent destroyer of wealth. If left unchecked, it can erode purchasing power and undermine one’s living standards. As such, every long-term strategy must build in protection against inflation through growth assets, inflation-linked instruments, and disciplined planning.
19. Maintain reserves: Cash reserves are not idle capital; they are the margin of safety that prevents short-term crises from derailing long-term strategies. An untouchable emergency fund buys time, protects compounding, and preserves dignity during unforeseen setbacks.
20. Wealth must serve life: Money is not the destination; it is the means. True wealth includes health, relationships, and purpose. When investments are aligned with life’s deeper goals, discipline becomes easier, and wealth takes on meaning beyond balance sheets.
Have a fabulous day.
Sue
