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Many investing opportunities may resonate with you but not work for others. In order to lead your team most
effectively, you must choose members who work best, given your investment disposition. An accountant who
strongly recommends investing in stamps makes no sense to the investor who thinks stamps are for canceling, not
collecting.
Due Diligence

“I don’t know” doesn’t play well in the world of wealth building. If you and certainty have been somewhat
estranged lately, it’s time to invite it back over. You need to change “I don’t know” to “I’ll find out” and shift
limited thinking to decisive thinking. Certainty is just confidence that comes from experience and knowledge. I’ve
heard too many people tell me that they think investing is too risky for them, before they’ve even studied or
explored their options. There are many people who do not ski because they believe it is too risky. Yet for those of us
with the skills and experience to ski, this seems a shame.
Risk can be measured, quantified, and often removed, but too often it serves as permission to be lazy with one’s
life and money. In fact, I think some of it is the subconscious mind saying “I don’t deserve it,” “It’s too hard,” and “I
don’t know.” That’s where I advise you to spend time with the wealth community and elicit informational
interviews and conversations. If you communicate only with people who are doing the same things you’re doing and
achieving the same results you are— you’ll stagnate.
It’s time to stretch and expand your thinking. “It’s too risky” is no longer permission to not try something. In
building your wealth, I want to help you to redefine risk as something that has to do with experience and education
more than anything else. The more you educate yourself through due diligence—that is, through research,
investigation, inquiry, and exploration—the more knowledge you have about something. And the more knowledge
you have about something, the less risk it seems to have. You can start by reading as much as you can about a given
area of investment. Sources include investment and finance books, financial sections of the newspaper, financial and
investment newsletters and magazines, and online, print, television, and radio finance and investment programs.
Every world has its own language, and you’ll need to start to learn the finance and investing vocabulary. For
example, the language of real estate revolves around occupancy rates, local property values, current rental ranges,
loan-to-value ratios, mortgage terms, and management costs. It will seem daunting at first, but once you realize it’s
just tribal language such as any group tends to create, you’ll be deciphering the words in no time.
It’s important to keep your critical eye open when conducting research. I’ve read articles in respected newspapers
that tell people not to invest, but to save their money because in retirement they’re going to have to live on less and
they can’t afford to take any chances. I don’t know about you, but I do not want my life to narrow—I want it to
expand. And to me, savings, with the ever-present potential for inflation to outrun my returns, is more risky than
investing. I’ve also seen advisors who suggest you pay off all your consumer debt before you even think of
investing. To me, that’s fear-based advice that will keep you from ever creating the opportunity for your wealth to
erode your debt as the Wealth Cycle does. Another great way to gain knowledge is to attend courses, lectures,
workshops, and seminars. Again, you must lead your wealth by being particular about those groups or organizations
to which you give your time and your ear, not to mention your entrance fee. If anyone tells you the money is going
to roll in fast, let me remind you that it will probably roll out just as fast.
The next step after collecting knowledge is to conduct due diligence on every single investment you ever
consider. Never skip this step. Ask any investment banker or equity analyst how he or she studies the value of a
company, and due diligence will be the answer. You must do due diligence.
Traditionally, due diligence referred to the review and verification of certain details in any given deal and was
usually performed by lawyers and accountants. As individuals began to make their own deals, outside of the
investment banking and brokerage firm inner circle, they started to conduct their own due diligence on investments.
And though you will rely on a team of accountants and lawyers to help you with your due diligence, as the leader of
your wealth team, you always want to do some of the initial inquiry and research yourself. But that’s not as hard as
it sounds. There are plenty of people who can help you learn and perform due diligence, especially those in the
industry or those who have done similar transactions. Your lawyer probably has a checklist to which you can refer,
but ultimately the responsibility is always with the investor, that is, you.
Due diligence usually begins with a checklist of certain financial, operational, organizational, and sector details,
but it can run a gamut of specifications, depending on the type of business and the industry in which it runs. It’s not
a standard checklist and usually takes some experience to compile and execute. There has never been a better time to
collect information. Just a few short years ago, investment information was available only to the few who had access