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How to become a Millionaire – the Complete Guide

How to become a millionaire in 5 years?

Many people dream about having millions in their bank account, but only a few make it a reality. If you want to learn how to become a millionaire, you have come to the right place.

A study of successful millionaires reveals a constant theme which repeats itself. Millionaires are made through one or more of three very simple methods. You can start a business and make your millions, invest your way to become a millionaire, or do a hybrid of the two. Anyone who tells you otherwise has no idea what they are talking about. Yes, there is the odd chance of inheriting millions or winning the lottery but let us look at something more realistic and more achievable.

Wondering why you should believe a word of what I say? The answer is pretty simple. I am a self-made millionaire and this article is a collection of the things I have done. I am living proof that using these methods, you can become a millionaire, too.

Millionaire Mindset – The First Challenge to Overcome

The biggest problem that most of us face is not the lack of ideas or the knowledge. It is the lack of the will to follow through and the heart to never quit no matter how hard it gets. I call this the millionaire mindset – the absolute ability to do whatever it takes till you reach the goal.

The fact of the matter is, everyone wants to make millions but 99% stop even before starting once they realize the amount of hard work, dedication, focus, and persistence that is needed to become the person you want to become. If you are one of the very few who always asks, “how do I become a millionaire?” and if you are ready to overcome whatever obstacles get in your way, 50% of the challenge has been overcome.

Answering The Most Important Question

Yes, I get it. You want to be a millionaire. Everyone does. But have you thought why 99% of people fail in doing whatever it takes to become one? Why is it that only some people have the ability to take massive action, put in the sleepless nights and never give up? What is the difference? It is not that they have special abilities or were gifted. So what is their secret? Most Self Made Millionaires know the answer to the holy grail – “The Why.”

Let me explain this a bit in detail.

The answer to the question why you want to be a millionaire is the most important part of the Millionaire Mindset. It is knowing why you want to make it. It is the “why” that will ensure you do not quit no matter how hard it gets. Becoming a millionaire is not something that is going to happen overnight or in a month or a year. You need to commit and follow through for as long as it takes. This can only be done if you know why you want it. If you want it as bad as you want to breathe, then you will make it.

Ability to Look at Failure as a Result, Not as the End

Most of the millionaires are entrepreneurs as they are the ones taking risks in their life. If you are brave enough to start your own business, be brave enough to accept the fact that there is a possibility of failure. If you fail, re-analyze, re-create and go back. Do not quit. The success of your business depends on the way you make it.

Overcoming Excuses

It is easy to make excuses to hold back from anything that you are not interested in. But you have to realize that every excuse should have a solution. Therefore, you want to find a way or a solution to set aside your excuses. Overcoming excuses are not very simple. The first step to overcome excuses is to identify your excuses and find suitable solutions to overcome them. A tight time schedule along with a strong work ethic will definitely produce the targeted results.

Here is How To Become A Millionaire

There are only three methods by which most millionaires are made.

  1. Starting your own Business
  2. Developing Passive Income and Income-Producing Assets
  3. Hybrid of running a successful business and building passive income simultaneously.

In the next few sections, we will learn how to become a millionaire by starting your own business, by developing passive income and by creating your own hybrid way to do both these things.

Method #1: How to Start Your Own Business

The factor at the crux of the difference between a regular 9-5 job and a business is growth. An employee’s growth in a business is linear whereas the growth of a business owner is exponential. To truly unlock such exponential growth, every business owner has to start from a position of independence and self-sustenance. But doing so is not as simple as walking into a pre-existing business infrastructure.

Starting a business pins you at the top of the hierarchy and bestows the creation of the entire system from scratch on your shoulder. To manage the complexity of this task, you must understand the key departments required to make a business work. Here are some solid recommendations to help you start a business.

Website Hosting and Website Design

Online presence is mandatory in the internet age. There are two steps to the process of building yourself a powerful online presence. The first step is to find reliable and excellent-quality hosting for your website. Do yourself a favour and invest in an established and renowned hosting provider. It may look like a big investment when you are short on cash, but if your vision is to become a millionaire, you will need hosting that can handle traffic worth a million dollars. After conducting some thorough market research, we have concluded that Kinsta can provide exactly that. Kinsta is one of the rare hosting services that uses Google Cloud Platform as their base, enabling it to provide you with a highly secure and speed-obsessed website. Kinsta also provides enhanced support along with a highly user-friendly and powerful experience.

The next step to creating your online presence is to create a website with drool-worthy design and seamless functionality. Choosing the perfect theme is key in cutting down development time and setting up a solid framework. You can find a rich gallery of custom WordPress themes on ProteusThemes. They offer a multitude of beautiful designs with clean, simple, and UX-friendly templates catering to niche functionalities with 40+ unique widgets. They also hone their themes for quick loading speed and do local SEO optimisation.

Legal and Insurance

As the owner of a business, it’s up to you to ensure compliance with all existing laws so that your business doesn’t run into trouble later. However, the legal framework within which you have to operate can be rather complicated. To save time and ensure that you get everything right, it’s best not to try doing all the compliance work yourself.

Don’t dismiss the importance of expert advice on legal matters, especially if you’re looking to become a millionaire in five years. You will personally need to focus on various aspects of the business, so it makes sense to get help from Incorporate to do this grunt work for you.

However, there are times when you may run into legal brick walls that you can easily dismantle on your own. In such situations, Nolo is the best tool to help you get through. Nolo gives you access to its extensive legal encyclopedia filled with information to answer everyday legal and business questions. It is a simple and trusted legal help platform with a range of DIY articles. If you need something beyond what Nolo already provides, it can also match you with local attorneys in the US.

If you are in a region with complicated privacy and security laws such as the GDPR, IT Governance is the expert you need. They are a leading provider of cyber risk and privacy management solutions in the UK. They also hold expertise in helping organisations successfully prepare for the ISO 27001 (information security standard) certification. So far, they have helped over 600 organisations in doing so.

Securing your business can also take the form of insurance. Protecting your business and planning for the unexpected can ensure that the growth of your business is never stunted. Sorting out your insurance is an essential step to secure yourself against the uncertainty of starting a new business. To apply for fast and affordable coverage, check out Hiscox, America’s leading small business insurer. They provide coverage for defending and safeguarding small businesses, keeping in mind their priorities and budgets.

Accounting and Finance

Money is the blood supply of a company. Companies like Kapitus Business Financing and Main Street Finance Group provide a large variety of funding solutions that can help get your business going.

Once the initial financing is taken care of and your business operations begin to grow, there will be a whole bunch of accounting and tax work to do internally. Having a strong hold on the management of your accounts and finances allows you to use your funds optimally. For a small-scale business, software like QuickBooks Canada can do wonders. For growing and larger-scale businesses, software like FINSYNC can handle all financial needs.

Services like NorthOne Business Banking can cater to all your banking needs under one roof. To add flair to your transactions, check out the products offered by Deluxe Business Products.

Finally, you need to keep track of your business credit score at all times. This is the financial face of your business. Try to make it look green and happy at all times. You can use My Business Profile to monitor and track your score as well as to understand what’s affecting it and how you can improve it.

Human Resources

To run a successful business, you will need a strong HR department. From ensuring legal compliance to facilitating optimum employee productivity, HR will prove to be the backbone of your business.

One of the key functions of the HR department is recruitment. They determine the new energy and mindsets that enter the ecosystem of your company. To ensure that the supply of employees entering your system is healthy, a pre-employment screening process is essential. You can outsource your pre-employment screening process to TransUnion ShareAble For Hires and get results within minutes.

The personnel of a business or organization is regarded as a significant asset in terms of skills and abilities. Managing the entire payroll for them can be a daunting task with high pushback on errors. OnPay is an online Payroll management tool to help you manage at one place. It comes packed with payroll management and HR tools to make monitoring, tracking and administration of all resources a breeze.

If you’re running your business in the US, you will need to set up 401(k) accounts for all your employees. Human Interest is a great way to help you manage these accounts easily.


This is one of the most important departments in terms of business and brand growth. It is the final item on this list because it takes the lion’s share of any business owners’ time and attention. One of the most effective methods of marketing in today’s world is digital marketing.

Over the years, the digital space has evolved greatly and a myriad of marketing approaches have come into existence. Here, we will take you through some of the most widely-used marketing strategies and show you how you can implement them yourself.

The main objective of most marketing operations is to generate leads that the sales teams can then follow up on. Creating super-effective landing pages is one of the best ways to do this. LeadPages helps you create impactful landing pages that are very effective at capturing leads. LeadPages also connects to your email account, CRM, and more to help optimise the way you process your leads.

Another way to effectively capture leads is to create chat bots. A service like ManyChat helps you create great chat bots that generate quality leads.

Once you’ve got leads, it is important to follow up and give them consistent updates about your company. The most effective way to do this is through email marketing. Landing in the inbox of potential customers with an appealing offer is an incredible marketing channel. AWeber and GetResponse both offer some incredibly powerful email marketing solutions.

If you need a more comprehensive toolkit which encompasses many of these strategies in one place, you can check out Keap. It is a CRM, sales and marketing tool to help you automate various marketing strategies. Keap can help you save a lot of time and energy by bringing all your marketing operations under one roof.

Finally, if your marketing is effective enough to make online sales, you must make sure that the users’ purchase experience is seamless. Areto and Pagseguro are both excellent ways to ensure that purchases made on your website go through smoothly. Just make sure that your payment gateway is relevant and accessible in the countries where you run your business.

Method #2: How to Develop Passive Income or Income-Producing Assets

This is the kind of money-making system that requires limited involvement on your end. It is when you invest time and effort in the beginning to create a self-sustaining system that keeps generating income without needing your attention. Here are a few ideas on how to earn money without extra work:

1.       Rent Out Extra Space or Property

If you have any kind of extra space that you are not using, it can be rented out as a way of building wealth from nothing. Extra space can be your guest bedroom, lawns for small parties, any closed area for a group workout, yoga, kids’ activities. If you have an extra room in your house that you can rent out, check out services like The house shop or HouseWeb to help you find reliable tenants. Depending on where you live, you may have to pay taxes on this extra income.

You can also invest in real estate and rent it out through these services:

  1. Corporate Housing by Owner
  2. All Property Management
  3. Buildium
  4. Vacasa
  5. Blueground (US)
  6. Yopa (UK)
  7. City Relay
2.       Rent out Your Stuff

This is an especially good idea for those who have a lot of stuff lying around that is barely used. It is a way of literally creating wealth from nothing. You can rent out your party materials, large cooking vessels, furniture, etc. for small parties, gatherings, or corporate events. You can even put your vehicle on rent. There are many sites and agencies that can help you do this.

3.       Buy and Rent Out Vending or Gaming Machines

If you can figure out the right place to install the vending machine, you will be able to gain a good passive income. You can customize items dispensing through your vending machine, by surveying the people where you are going to install it. You can hire people to look after the machine. If you have a play station, you can make it available on rent too. These are great solutions to how to build wealth.

4.       Laundromat Services

Laundromat services are the self-service laundry, coin laundry where clothes are washed and dried without any professional help. Consider buying an existing set up if you have the resources. Although the initial investment in this set up is high, it is a turnkey business idea for passive income.

5.       Write a Book

Use services like Jutoh to write a book or eBook, then try to get it published through an existing publishing company such as IngramSpark. Either way, you can keep making money as long as the book sells. Put it up on marketplaces like Amazon and promote it through social media channels for better sales.

6.       Database Sales

Many businesses need leads to develop their business. You can build databases using surveys, Google Forms and the likes. These databases can then be sold as leads to companies if the data about these leads is clear and easy to sort. If you’re good at database management, you could easily make money doing this.

7.       Create Mobile Apps

If you’re good at building mobile apps, consider creating apps of games or utilities that can be downloaded far and wide. You can earn passively from the ads that run on your app!

8.       Drop Shipment

Drop-shipping is becoming a popular business nowadays. You just need to take customer’s orders through your virtual stores, pass them to either the manufacturer or wholesaler. These manufacturers/ wholesalers then ship the order directly to the customer by using the details provided by you. You need not stock up the products. The only thing you need to do is, organizing the customer’s orders and details regarding it. You will earn good money, as an initial investment and other responsibilities are less.

9.       Create a Course on Udemy

Udemy is an e-learning platform where you can launch your course by merely creating videos on the specific subject of your interest, and allow users to buy it. This is an excellent option for those who are highly knowledgeable in a particular subject or topic. It’s a great way to turn basic tutoring into passive income.

10.   Sell Your Photos

If you are good at photography, then stock photo websites are the option you can consider. The beautiful photographs at sites, blogs, etc. get their photos from stock photo websites. You need to submit your photos to these websites and quickly earn a commission when someone purchases one of them. Here are a few stock photo sites you can sell your work on:

  1. Shutterstock
  2. Freepik US
  3. Freepik UK
  4. Alamy
  5. Depositphotos
  6. Bigstock
11.   Affiliate Marketing

Affiliate Marketing is the technique of collaborating with a company (becoming their affiliate) to earn commission on a product. If you have popular social media accounts, websites, blogs, or other online properties, you can sign up for affiliate marketing programs with various companies.

12.   Peer To Peer Lending

When it comes to earning money, more is less. Peer-to-peer lending, also known as P2P lending is an online system that allows you to directly lend money to individuals as well as businesses who are in search of funds. It provides you better returns than a bank will offer you on your deposits.

Rocket Dollar, which allows P2P lending, matches borrowers and lenders with matching needs like interest rates and terms of loan. Once you find borrowers you want to lend to, Rocket Dollar facilitates the lending process and helps you ensure you get your money back with interest. You can also check out NextSeed for similar opportunities.

13.   Make Your Car an Advertising Tool

Nowadays, businesses leave no stone unturned for marketing their products and services. They offer to pay the individuals who place their advertisements on their cars. If you own a car and travel a lot, this option is worth giving a thought as you can deploy your car for earning income for you by just placing advertisements on your car.

14.   Register Your Car with a Taxi Aggregator

If you have recently purchased a car but are not using it anymore you might think it’s worthless. Well, it can help you earn some regular income. All you need to do is register your car with a taxi aggregator. The aggregator companies even help you find a driver that would be driving your car for you. This helps you generate income on every trip that your driver completes for you.

15.   Open a High Yield Savings Account

Some may argue that investing in saving accounts is not going to make much difference to your wealth. But we differ in opinion since with digital banking coming as a revolution in the banking world, earning higher interest on your online savings accounts has become possible now. So you must choose a banking channel that not only provides you reliable services but also offers you a higher interest rate. CIT Bank is a great option providing a 1.25% Annual Percentage Yield (APY).

16.   Invest in REIT

Apart from directly investing in real estate, you can invest in trusts that own and manage the real estate properties and then reward their investors with the returns. These trusts are known as Real Estate Investment Trusts (REITs). Not everyone has the time and knowledge required to safely invest in physical properties. That is why you can choose to invest in the units of REITs like Real Estate Wealth Builder (REWB). The income REWB earns through rent, interest, capital gains, etc. is distributed amongst the unit holders based on their holding.

17.   Run Ads on Your Website

If you own a business and have a well-recognized website, you are lucky not just because you have a good level of audience but also because having such a popular website can help you earn some really good amount of passive income. Some businesses would be ready to pay you well for placing their advertisements on your website. You need not limit yourself to just one ad since more ads mean more money. However, be wary of overpopulating your website with ads since that may make your website less authentic.

18.   Resell Domain Names

Investing in domain names can be a profitable deal in today’s tech-savvy world. Buy a domain name using BigRock that involves some generic names of products or services. This will help you increase the worth of the domain name at a later stage. But make sure you are not infringing any copyright while you select a domain name. After a while you can carry out an online auction and get a good deal for your domain name.

19.   Invest in Dividend Stocks

Some companies around the world manage to pay dividends to their stockholders consistently every year. Investing in these is a great way to earn passive income. Services like Trading Lesson and Top Dog Trading help you learn how to find such companies and invest in them. Once you know the basics, you can head over to Scottish Friendly, Motley Fool, Algo Signals (Italian), Morningstar Inc., EasyMarkets, Public, or WealthSimple to start investing.

20.   Acquire and Sell Websites

Acquire a website for a lower price and later on sell it after adding a little value to it. You need not work on the website yourself. Instead, you can use services like ProteusThemes and upgrade the website yourself. An improved look will gain more value for the website. You can then sell the website for a profit.

21.   Deal in Certificates of Deposits

Money market instruments like certificates of deposits (CDs) are a great deal to earn passive income. CDs are issued by the banks for raising short-term finance. They are low-risk investment options and provide you with good interest rates. The tenure of the deposits usually ranges from one to six months. The interest rates will be higher when you let the banks use your money for a higher period, and vice-versa.

22.   Invest Amounts in Annuities

When it comes to securing a source of regular passive income, annuities are a sound option. It is an investment product offered by insurance companies in which you get regular income (say monthly) on your initial lump-sum payment. The payouts can either start immediately or after some time, depending on whether you choose an immediate annuity or a deferred annuity. You can decide a term for which your annuities are to continue and you can also choose a lifetime annuity.

23.   Become an Angel Investor

Being an angel investor means choosing a company that is worthy of investing keeping in mind the potential of the business idea that it is based on, and investing capital in such a company. You earn returns on the capital that you invest in. Get connected with such companies that are looking for cash flows for their expansion and have sound prospects of growth.

24.   Trade Licensing Rights

You need not be a singer or an artist to sell and make money out of your rights over music or the artwork. Alternatively, you can connect with singers and other artists to buy licensing rights from them. You can then select an audience that has similar interests and earn a profitable deal by placing the licensing rights in an auction.

25.   Invest in Bonds

A smart investor always looks for diversification in his portfolio. Investing in bonds not only diversifies your portfolio for good but also helps you achieve a steady flow of income. Companies sometimes instead of borrowing from banks, issue debt instruments such as bonds. The holders of bonds become entitled to the interest that is paid in regular intervals like monthly, quarterly, yearly, etc. Bonds carry a specific tenure after which the holder gets repaid the principal amount as well. You must take a look at the services offered by Public, EasyMarkets, Scottish Friendly, Algo Signals (Italian), Motley Fool, Morningstar Inc., or WealthSimple for help in this regard.

26.   Explore High-Income Generating Mutual Funds

Mutual funds are better for those who don’t have much experience in trading. Mutual funds invest in various investment products such as stocks, bonds, indexes, government bonds, etc. Thus, by investing in mutual funds, your investment is automatically diversified. Since the funds are managed by professional fund managers, it doesn’t require your efforts, and the income that is generated on the funds is appropriated towards the unitholders. You can take advantage of Scottish Friendly and Motley Fool for this.

27.   Go for Index Funds

Indexed Funds are passively managed in the sense that they invest in the stocks that form part of a particular stock index and in the same proportion as contained in the index. The fund is thus able to work on a similar pattern as the index and earn similar returns. Thus, they are a good choice when it comes to earning passive income.

28.   Park Money in Fixed Deposits

Do not let your money sit idle. Fixed deposits are indeed one of the safest options for generating extra income on your idle funds. You can decide the tenure for which you want to invest in the deposits based on which the bank will offer you the interest rates. Also, banks offer you options regarding the receipt of interest payments. You may opt to receive it during periodic intervals or you can opt to reinvest it. If you choose to reinvest the interest portion, it will increase your principal amount and yield more interest which seems to be a smart choice. You can compare the interest rates being offered by various banks and choose a trustworthy one that provides you the highest interest rate.

Method #3: Hybrid of Starting a Business & Investing Smartly

Make no mistake — starting a business is not easy and neither is investing your money. Both require a massive investment of time and seriously hard work. If you’re thinking about doing a hybrid of the two, be advised that you may be biting off way more than you can chew. Here are two things to think about if you’re planning to create your own hybrid method of running your business and investing simultaneously:

1.    Manage Finances Carefully

Remember that both these methods come with a comprehensive set of risks tied into their very nature. While it is good to hope for the best and go all-in after your goals, you also need to be practical about the possibilities. Make sure you have enough of your capital kept safe from risk or loss so that you can get back on your feet even in case something goes wrong with your business or your investments. You will need to run a tight ship on both accounts if you want to be successful.

2.    Time Management

As I said earlier, both these methods are extremely time consuming, at least at first. Make sure you have a realistic idea of how long things take to get done so that you are protected from the risks that come with overenthusiasm. Find ways to delegate things in both, your business venture as well as managing your investment portfolio. That will leave you with more time to do other things. Believe me, no amount of time is ever enough when you’re looking to become a millionaire. So it makes sense to try and free yourself from things that others can perhaps do better than you would.


As mentioned before, these are some of the simple tips and tricks I used to become a millionaire on my own. I hope this article has helped you understand the various options you have to make enough money to become a millionaire.


The Business Case for Sustainable Wealth Creation: A Conscious Mindset Approach

The Business Case for Sustainable Wealth Creation: A Conscious Mindset Approach 1

By Mirjana Boznovska

The scale of the planetary crisis is so big that a fundamental shift is needed from business leaders and all stakeholders including investors, human resources as well as consumers. There is a new way of thinking emerging, one that is shaping the future of sustainable wealth creation with a focus on conscious mindset.

Humanity’s prosperity is linked to expanding our definition of wealth to include a respect for the environment and empathy for others. All of these come together and are the source of true innovation. Our future depends on learning to create wealth in sustainable ways.

Money and wealth are tools which help create opportunities. Opportunities for those who have it to do “good” in their environment, their community and globally. Serving society is the most inspiring and never-ending source for economic activities, creating value for humanity.

Sustainable Wealth

Sustainable wealth is future benefit that sustains future life. Sustainable wealth means consumption or the using up of benefits must equal additional investments that increase wealth, so wealth is maintained and sustained. When the spiritual dimension of wealth is interjected in the economic equation, physical wealth expands on two counts: a) there would be a lowered desire to consume materialism and b) the spirit of service would inevitably lead to increased wealth. Balancing ecological and economic consideration is an acceptable short-term goal of co-creating sustainable wealth, but in fact ecological restoration must be the long-term goal.

This would be possible only when unsuspected sources of clean energy are tapped and scientific research in ecological restoration is pursued. This is one way of looking at co-creating wealth that can help humanity pay back its ecological deficit. It’s about creating value without destroying value. The systems we create need to serve all individuals and the system itself.

Today our systems are increasingly feeding only the super-wealthy, and everything we understand about the human psyche is that we are creating a class of super selfish, super greedy people who take at the expense of individuals, society and our ecological systems. The depletion of social and environmental capital weakens our social systems. The world is interconnected, and different parameters are having an impact on our lives, our profession and on the worldwide economy.

The question that arises is how can we as an individual and as part of the global economy create sustainable wealth, balancing economic and ecological priorities?

The question is closely depending on how we start and manage a sustainable economy based on strong and long-term industry. The global economy remains market-centred, even though the evidence has been mounting that these markets are failing us and the planet. Tweaking this model isn’t good enough We need a new paradigm which will provide a new theory that fits our unfolding reality, a new environment-centred economics that can maximize not profit alone but the well-being of living things – it’s about conscious business which requires conscious leadership.

The Three P’s

Conscious business supports the idea of the three P’s: People, Profit, Planet. The authentic motives behind such choices are self-mastery, love, care and the desire to serve.

What is Business Sustainability? Business sustainability is often defined as managing the triple bottom line, a process by which businesses manage their financial, social and environment risks, obligations, and opportunities. We can extend this definition to capture more than just accounting for environmental and social impacts. Sustainable businesses are resilient, and they create economic value, healthy ecosystems, and strong communities. These businesses survive external crisis because they are intimately connected to healthy economic, social, and environmental systems. They require conscious leadership with a conscious culture and conscious service. A paradigm is a set of interconnected ideas that have a logical cohesion.

The Business Model for the 21st Century

In most discussions about the business case for sustainability, the emphasis has been on the bottom line. The value of sustainability has been analysed from every direction—revenues, profits, and share prices. However, sustainability is more than just about firm-level benefits. Businesses, business schools, and society recognize that the current course of production and consumption cannot be sustained within our natural resource limits.

Businesses develop the products and services consumed by individuals around the world. The vast resources extracted by business for society’s use have created waste streams that find their way into our land, air and water and compromise human health. New businesses are being built on an understanding of the problems that have emerged through the 20th century. Increasingly, old businesses are evolving to use fewer resources, intensify the resources they do use, and renew and reuse the products they sell. New relationships are forming between businesses as firms realize synergies from interdependence; one firm can profit from another’s waste, or several firms can benefit through flexible supply chain relationships built on common interest.

The 21st century is revealing a new paradigm in which business is no longer separate from society. Realizing the new “business-as-society” paradigm will require the efforts and ingenuity of organizations across sectors and industries. It will challenge the current generation of business leaders to apply their hard-won knowledge to novel problems, and the next generation to evolve into conscious leadership and address issues of unprecedented importance and complexity. Those businesses that identified the hurdles and challenges described in this article, along with those businesses that aim to overcome them, will help to shape this new business landscape. The concept of sustainability is undeniably compelling.

Let’s consider for a moment the move towards a paradigm whereby the business decisions were aligned with the best ecological decisions, ie conscious business and conscious service. The business case for sustainability draws on several core arguments. Pro-environmental practices create positive brand associations among consumers, politicians, and regulators. They also anticipate regulatory trends and position the company favorably when such policies become law. The mindset shift required that seeks to further efficiency in materials and waste carries over into other realms of conscious leadership. Similarly, the innovation required to overcome environmental challenges promotes innovation generally. And employees have high morale when they believe in what their company is doing.

However, there are still many barriers to sustainable wealth creation as it would appear. When we take a step deeper into the definition of service, fear usually comes up, uncertainty, and a moment of self-definition. Who am I and what do I serve? Whether inside or outside the business world, the same questions arise.

“It doesn’t fit the business model” or “How are we supposed to measure the impact” are common examples of why it requires a mindset shift to start building sustainability from supply chain activities to HR practices.

Mirjana Boznovska

Mirjana Boznovska

Ordinarily such principles fall into the realm of self-awareness, self-mastery, and spirituality, separate from, and opposed to the world of commerce. Essentially a desire that comes from within, to have a positive impact and make a difference in the world which comes from the highest calling to serve. Leaders seem conflicted. It is time for this separation to end. Everyone, even the most jaded corporate executive, yearns for it on some level, yearns to align his/her productive life with his deepest care and highest values. Essentially it is the human condition, that we each want to know that we have made a positive difference in the world. This does not mean to ignore business realities and throw caution to the wind. It means to take the next, slightly scary, slightly outrageous, next step. It is the step for which there is no credible “business case.” It comes from a different motive – it comes from within.

In fact, the “business case for sustainability” does hint at something true. When we take a step into service, the world eventually reciprocates our generosity, albeit in a form and timing that is impossible to predict. A business “case” involves numbers and predictions, but the general principle that it is trying to convey is that the gift moves in a circle. As you do unto the world, so, in some form, will be done unto you.

To take this next step always requires at least a little courage, because it goes against familiar practice and predictable financial self-interest. Someday, hopefully soon, we must change the business environment to end the opposition between profit and ecological well-being and promote the alignment of ecology and money.

Herein lies a vastly different sort of “business case” for sustainability. It comes from questions like, “Who are you, really?” “What do you care about?” and “What do you serve?” “What are your values and belief systems?” “What is your unique self-expression you bring to the world to serve others?” From a deep consideration of such questions, courage is born to overcome the hurdles.

Hurdles to Overcome for Business Sustainability

  1. Measurement of sustainability.

Sustainability initiatives can be particularly difficult to measure because they often affect people and society at a macro level, and their organizational implications are unclear. Further, their impacts are not immediately obvious, and they depend on who implements them and how. Many suites of metrics and measurement systems—such as the Global Reporting Initiative, ecological footprint, and life-cycle assessment—currently exist to help managers measure their sustainability. Government policies need to incentivise outcomes and be more clearly connected to sustainability. Governments have several tools at their disposal, such as taxes, regulations, and markets, to encourage businesses to steward environmental resources.

  1. Consumer choices do not consistently factor sustainability into their purchase decisions.

Understanding how consumers value sustainability in the context of other product attributes would help businesses develop products that meet their needs. Further, there may be a role for business in educating consumers on issues and product attributes, resulting in more informed purchasing decisions. It also applies to investors. Shareholders and lenders must decide where to invest their money. How do they choose between different companies, which requires trading off one set of corporate attributes for another? Understanding how people make trade-offs will help businesses make sustainable choices.  

  1. Sustainability still does not fit neatly into the business case.

Companies have difficulty discriminating between the most important opportunities and threats on the horizon. Better guidelines are needed for engaging key stakeholders,

  1. Research shows employees would rather work for sustainable firms—and some would even forego higher earnings to do so.

Firms must better leverage this knowledge to attract and retain the best employees. These mechanisms should allow firms to leverage their sustainability initiatives and values, building the right capacity internally and ensuring progress is made towards sustainability goals.

  1. Current financial decision-making does not fully capture the value of sustainability-related investments.

These investments are often based on long-term and intangible rewards, whereas many investments made are based on the short-term impact on the bottom line. Sustainability managers need to be well informed exactly how returns on sustainability investments can be measured and seen. What are the short-term and long-term ways to assess and justify these investments? How can sustainability executives demonstrate the value of sustainability within the decision-making language and framework of finance executives? Until sustainability becomes accepted as a legitimate—and value-creating—activity, it may lose out to projects that are more easily understood and evaluated.

  1. Businesses need guidance on how to evaluate the materiality of an issue, both for disclosure purposes and for strategic planning.

Equipped with an understanding of which risks and opportunities are most material to their organization, managers can then prioritize material issues, translate them into internal strategies, and communicate them to stakeholders. There is no common set of rules for sourcing sustainably.

  1. Businesses want to purchase products and services that are environmentally and socially responsible. But the process of identifying sustainable suppliers is not always straightforward, and the means for comparing products is not always obvious. Sustainable sourcing decisions may also require industry-specific knowledge and practices, or data that just may not be available. Identifying a set of best practices for sustainable sourcing would provide organizations with targets for benchmarking as well as guidance on managing their supply chains. It would also yield an opportunity for leading businesses to showcase their good practices.

The Old Money Paradigm and Why It’s Not Sustainable

While conventional investing only focuses on the traditional risk and returns considerations in making investment decisions, socially responsible investing considers other ethical factors .The world needs to focus on mutually beneficial partnerships, fostering sustainable development across the continent, targeting the continent’s inhabitants as its primary consumers. Reports such as one published recently by the Business and Sustainable Development Commission, show that sustainable business is an untapped $12 trillion opportunity, making sustainability the most lucrative business sector there is.

What Is Money? Why Was It Created?

Money, in some way, shape or form, has been part of human history for at least the last 3,000 years. Before that time, historians generally agree that a system of bartering likely used. Money derives its value by virtue of its functions: as a medium of exchange, a unit of measurement, and a storehouse for wealth. It is merely an exchange of energy.

A New Paradigm Shift in Wealth Creation

Creating and amassing wealth is more than just a necessity. For centuries, the practice of climbing the ladder to richness has led to wars, influenced literature, and shaped cultures. Whether wealth comes in the form of money or food, all civilizations have pursued it.

The system of wealth creation is based on the current worldview, which in turn is based on the way science is studied and perceived. Most people will not be aware of existing paradigms of wealth creation. They will be too busy accumulating and creating wealth rather than being concerned with the process which they and their wealth underwent.

The paradigm is all about teamwork – to create wealth, everyone must help each other succeed. No longer are the lesser indebted to make the greater richer. Everyone has to run the race, but everyone must hold hands to reach the finish line together.

Sustainable Wealth Creation addresses three very important questions:

  • Do financial statements accurately reflect a company’s position?
  • Do shareholders have protections and adequate controls?
  • Can company leadership make decisions confidently?

Sustainable Wealth Creation principles help answer these important questions by investigating the accounting, legal, regulatory, adjudicative, and economic structures of a country.

Economic systems change at a surprisingly fast pace. Since the information varies over time, the information needs to be monitored and refreshed to gain important insights when making investment decisions involving international equities.

An iceberg is a metaphor for traditional investment analysis regarding international equities. Most international analyses parallel domestic analyses by focusing on the traditional metrics that are akin to the visible part of an iceberg. The hidden information is like the submerged portion of an iceberg. It is key to success (or even survival) but not readily discovered.

What Lessons Are You Teaching Your Children About Money?

Modelling a way of being to our children.

If you don’t take the opportunity to educate your child how to manage money, the value of money and sustainable wealth creation, somebody else will. They will fall within the collective way of thinking. Conscious parenting involves sharing with our children the awareness of our environment, our power of choice, personal responsibility and self-mastery.

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The latest rise in gold is just a function of the recent weakness in the dollar

The latest rise in gold is just a function of the recent weakness in the dollar 2

By Rupert Thompson, Chief Investment Officer at Kingswood

Last week was really a week of two halves as far as equity markets were concerned, with initial gains subsequently reversed, leaving markets down a little over the week as a whole.

A further escalation of tensions between China and the US, with the tit-for-tat embassy closure, was the most obvious reason for the change in market tone. But the continuing uncertainties over the prospects for the economic recovery may also have contributed.

Last week’s economic data on the face of it looked encouraging but in reality was rather less so. Business confidence recovered further in July and is now back above pre-Covid levels in the UK and Europe. However, these surveys basically just ask businesses whether conditions are improving or not. Given how dire the position was a couple of months ago, the fact that most businesses are now saying things are getting better is hardly a sign that the economy is back to normal.

Retail sales have also shown a sharp V-shaped recovery and in June, in both the UK and US, they had regained almost all their collapse in March/April. But again this is not as reassuring as it first looks. It is far from clear how much of this bounce just reflects one-off pent-up demand and will not be sustained going forward. Retail sales also only account for around 30% of total consumer spending. The recovery in spending on services etc. is likely to have been much more subdued.

In short, the debate over the strength of the recovery from here is alive and kicking, not least because the outlook is so dependent on how soon a vaccine is developed and rolled out and whether there is a major secondary spike in infections. Recent news has been encouraging on the former but discouraging on the latter, with infections still not under control in the US and also now picking up again in Europe.

The outlook hinges not only on the virus but also on the government’s policy response. For Europe at least, there was good news last week. At the eleventh hour after a marathon summit, EU leaders finally managed to overcome resistance from their more frugal members and agree an economic recovery package totalling €750bn or 5% of EU GDP. For the first time ever, the EU itself – rather than just individual countries – will issue debt to finance a mixture of grants and loans to EU states.

This week, it will be the turn of the US to try to agree a new fiscal stimulus package to replace the current support measures which expire at the end of July. As with the EU, the terms of the new package are being fought over tooth and nail, this time by the Democrats and Republicans.

One asset which has performed very well this year has been gold and its price rose a further 5% last week, breaking above $1900 and its previous high in 2011. The gold price is now up over 25% so far this year. Gold is the archetypal safe haven risk-off asset and one would expect it to do well in a time such as now of heightened economic uncertainty and geo-political tension.

However, the scale of its gains are down in good part to the super low level of interest rates. Government bonds used to be an obvious source of protection for portfolios in the event of a major sell-off in risky assets. Now, by contrast, the scope for further declines in yields is minimal with rates already so low, and the ability for bonds to provide such protection is much reduced. In addition, with government bonds now yielding virtually nothing, the fact that gold pays no income is no longer a particular disadvantage.

These various factors mean gold should remain well supported for the time being and could well rise further. But one shouldn’t forget that gold is volatile. If and when we do eventually see a return towards normality, gold could well retreat significantly. After all, the gold price more than doubled in the three years following the global financial crisis, only then to unwind half of those gains over the following couple of years. Finally, for UK investors, there is also currency risk associated with investing in gold with part of the latest rise in gold just a function of the recent weakness in the dollar. Gold may be a risk-off asset but it is a risky one.

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Digital adoption and wealth management in 2020

Digital adoption and wealth management in 2020 3

By Will Bailey, Chief Strategy Officer at InvestCloud.

Finance has slowly been “going digital” for over a decade. Now it has been forced to rapidly accelerate in light of current needs.

Different aspects of finance are at different stages of the adoption curve. Retail banking, for example, is one area where digital is very much a necessity in order to fulfil today’s consumer requirements. Wealth management is perhaps a good example of an area that is in flux – the pace of digital adoption has been increasing but there is still tremendous opportunity to innovate and differentiate with digital offerings that can provide managers with a competitive advantage.

A recent report on client experiences found that 46 percent of wealth managers were either partly or not at all satisfied with their digital offerings. Yet there remains reluctance by some wealth managers to undertake further digital transformation to deliver truly innovative client experiences. This is because of concerns around cost, time to deliver and the incorrect assumption that in order to innovate digitally, one must re-architect or replace existing legacy processing engines.

The current climate has demonstrated a rift within the industry, causing firms to be split into two camps. The first are those who embraced a “digital or die” culture in recent years and are completing – or have completed – development of digital offerings. The other is now realising the imperative for urgent adoption of digital.

Historical adoption

In the past, many firms saw digital as a means to solve specific business pain points. This included point solutions for client onboarding, portfolio management, and report generation. Driven by the desire to grow and retain clients or find operational efficiency, managers made these changes to keep with the times or to offer specific add-on functionality to remain relevant to clients. But those that get it right are firms that recognise digital as a core component of their client engagement and servicing strategy. Managers that have proven successful, view digital as an extension of their brand and as such eschew point solutions for a holistic and consistent dialogue with clients.

Demonstrated by the successful growth and impressive valuation of fintechs like Plaid, sold for over 5 billion USD to Visa; Personal Capital, sold for a reported 1 billion USD to Empower Retirement; and Galileo, sold for over 1 billion USD to Sofi. As well as the strong performance of incumbents that launched products that embrace digital like Goldman Sachs’ whose Marcus offering now has over 72 billion USD in deposits, the performance of financial institutions with strong digital products drives success even with the challenges of today’s market.

This highlights the shift in attitudes amongst clients. They now require instant access to information and the ability to take action; accessible at any time, anywhere and on any device of their choosing. Firms who make the effort to improve their digital offerings will continue to earn their place to compete in the market — whilst those who do not will be rendered obsolete.

From important to essential

Attitudes prior to the pandemic were that digital was an important means of supplementing pre-existing business practices, but not as the essential channel for client communication and management. These attitudes have changed.

We know that wealth managers pride themselves on delivering great client experiences, historically through face to face interaction. But lockdowns and social distancing have meant managers must find new avenues to offer the same empathetic environment for their clients through digital channels. This is a common theme that has emerged in many conversations, which is now leading to the notion of delivering holistic wellness advice.

Digital tools allow managers to take a holistic view of a client’s financial life and beyond. It does this by capturing information about their clients’ that goes far beyond simply finances. This includes health, wellness, and life goals. Holistic advice demands that the manager have a complete view of the client. This can only be achieved by deploying digital tools that allow the clients to share information in their own time over the course of their relationship with an advisor. I have seen that clients who successfully take this holistic approach do so with an integrated end to end experience. This will include dedicated pre-client portals that facilitate engaged prospects to seamlessly become clients and provide advisors and clients with digital tools to provide a holistic view of the future. This combined with behavioural science, machine learning and amplified intelligence tools that allow the adviser to quickly and intuitively foster deep relationships with clients rather than taking months to build up acquired knowledge via traditional means.

Ultimately, this empowers the client with community, knowledge, and a sense of relief — which is crucial at a time of unstable financial markets and where advisers cannot build physical face time with clients.

Recreating the workplace at home

In the current climate, digital is essential in the client communication space but also as a means to drive internal operational efficiency. Office closures have reshaped the way wealth managers work. For some, this is a simple transition – either they were remote by design, such as virtual family offices, or they had robust systems in place to manage the transition.

But one area that has come under renewed focus is the back and middle office. For many firms today, back and middle office operations are still manual-heavy processes; from client onboarding to regulatory reporting. If the goal is to ensure managers are increasing the number of clients they serve and only focus on adding value and profitability, then these tasks are ripe for automation.

But even more valuable than pure automation, is augmented intelligence – where automated processes include the lessons of the past and learn for the future thus delivering value across the wealth management value chain. A great example of how augmented intelligence has delivered major value across the value chain is Westwood – who not only automated their back office processes, but improved reconciliation accuracy by 98%, saved 80% of time in reconciliation and reduced cost by 50% by utilising the combination of process automation and augmented intelligence (Westwood Holdings Group, Q2 2019 Earnings Report).

Will Bailey

Will Bailey

The aim here is to not just to make lives easier during a time of remote working and into the future, but to redefine how managers work for the long haul – serving more clients, better.

Overcoming the common misconceptions

From discussions with several firms, there is a common consensus that wealth firms need to provide internal users with a digital experience that reinvigorates excitement about their brand. But many erroneously embark on multi-year digital transformation projects before seeing a return on investment.

This approach is one that we like to call “old think”, where one starts their digital transformation by changing processing engines, making embracing new technologies feel like a pipe dream.

Managers must challenge this orthodoxy. They must embrace “new think.”

This manifests in a simple principle: that digital transformation must start with the user. Whether your target user is engaging with a Client Center or Advisor Center, a successful digital journey must start with your digital user. Getting advisers and their IT departments to embrace “new think” can be a challenge, but when the penny drops, the increase in client engagement, retention, growth and operational efficiency creates new believers and new opportunities.

Future gazing at the ‘new normal’

The digitisation of the wealth management industry must continue on course – it is an inevitability for any firm that wants to attract the next generation of investors.

But how they do this will change. Today, we are seeing a large number of firms using digital to protect revenue streams. Successful firms must look at how they can create new revenue streams and unlock efficiencies via digital enablement. This naturally leads on to full digital transformation.

This also ties into another significant and global trend: the need to provide holistic wellness. To resist the dual threats of fee compression and commoditisation in the client’s mind, wealth managers will be looking to grow in this area to ensure they keep close to clients and create “sticky” experiences that yield brand entanglement and translate seamlessly across online and offline environments.

Increasingly, wealth managers will integrate gamification, decision theory and behavioural science dynamics to achieve this. With these integrated into a hybrid, human and digital offering, wealth firms are in a good place to demonstrate competitive differentiation – ensuring a greater degree of loyalty and profitability from clients long into the future.

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