WEALTH CREATION

							       KAYODE AKIN-AJAYI
GROUP MANAGING DIRECTOR/CEO
  PROFUND SECURITIES LIMITED
YOU NEED TO PATIENTLY GROOM IT
YOU NEED TO WEED AND TRIM IT FROM TIME TO TIME
YOU NEED TO TENDER IT
YOU NEED TO CAREFULLY GUARD IT
Where W = Wealth Creation
      M = Wealth Mindset
      K = Wealth Knowledge
      P = Wealth Planning
      A = Wealth Action
     (A)  Is the process of adjusting your thought to think
          like the wealthy:
         ==> Seeing opportunities not failure
         ==> Perceiving abundance not famine
         ==> Imagining value creation for self and others
         ==> Thinking Big
      Examples: (a) Jeff Bezos - Amazon Internet Bookstores
                 (b) Bill Gates - Microsoft
                 (c) Otunba Subomi Balogun – FCMB
                 (d) Dangote - Dangote Group
                                   (C) SUCCESS GUIDE
(B) SUCCESS TEMPLATE               WHILST    YOU   CAN    FIND
HAVING RIGHT MINDSET - 80%         STRATEGIES IN TEXTBOOKS &
DEVELOPING CORRECT                 MOTIVATIONAL MATERIALS
                                   YOUR   RIGHT   MINDSET   IS
STRATEGIES                 - 20%
                                   FOUND IN YOU.
“The journey of wealth creation    NO ONE CAN CREATE AND
cannot be underestimated”          SHAPE A MINDSET FOR YOU
                    (E) WEALTH        (F) WEALTH
(D) WEALTH                                ACTION
                        PLANNING
    KNOWLEDGE
                                      > Translating
> The Economy /     > The 5 Ws          mindset,
  Business            * What            knowledge
  Environment         * Why             and plans
                      * When
> Finances            * Where               Into
                      * Who
> Psychology of                            Action
  Markets           > The H           > Focus
                      * How
> Investment                          > Steps forward
  Strategies        > Business Plan
                                      > Constant
> Risk Management                       Review
3.1   Create clear and well defined objectives
                                        Measurable
                  * Goals
                  * Objectives          Realistic and
                                        achievable

                                        Time Frame
3.2   Constantly review your goals
      Economic Environment
       * Internal
       * External
                                 o Periodic review
                                 o Modify if necessary
      Market Dynamics            o Rejuvenate
3.3   Become Your own Boss

=> Create your own enterprise based on risk/reward ratio

=> Adam Smith Golden Theorem:
“Every man as long as he does not violate the
laws, should be left perfectly free to pursue
his own interest in his own way and to bring
both his industry and capital into competition
with those of any other man”

ibid page 651 “The Wealth of Nations 1776 by Adam Smith
3.4   Exercise Caution with Advisors
      =>   Not all advisors are altruistic
      =>   Due diligence
      =>   Several references
      =>   Status inquiries

3.5   Allow Yourself to make mistakes
      => Practice makes Perfection
      => Most wealthy people have made a plethora of
         mistakes
      => Let go of fear and doubts
      => Be bold and seek challenges
      => See mistakes as propellers
3.6   Treat Hot news with Cold Shoulder

3.7   Be the Tortoise
      ==> Slow and Steady win the race
4.1   CRISIS TURNED SUCCESS
  => History is replete with how economic failures
     turned into bounties, new initiatives and stronger
     long-term recovery.
(A) 1929 Great crash led to
      => Dramatic improvement in economic policy
      => Financial regulation
      => Creation of better welfare
      => General economic prosperity

(B) The 1970s economic crisis served as catalysts for
     => Reforms for unclogging inclement capitalism
     => Rising living standards in China, Singapore,
         India, Europe, USA, etc.
4.2            NIGERIA’S ECONOMY INCHING TOWARDS
               REVULSION
        => Nigeria’s economy not shielded from global
            economic melt down
        => For reaching implications
           - Falling equity market capitalization
                Ma rke t Ca pita liza tion a s pe rce nta ge of GDP
Pr e t g G P
 ec na e D




               50.00%

               40.00%

               30.00%

               20.00%

               10.00%

               0.00%
                        2003    2004   2005   2006      2007   2008   2009
                                              Ye a rs
- Slackening risk assets creation appetite
- Growing toxic assets
         >> Margin loans over =N= 1 trillion
         >> Hard core trade finance loans
         >> Crystallized underwriting for issues
   - Balance of payment pressures and falling
      foreign reserves from $60 billion in 2008 to
      $48 in February 2009
  - Illiquidity and abnormally high interbank
      lending rates
==> The global economic melt down is affecting
    different countries in varied dimensions and
    impact levels
==> Consequently, different strategies are being
    applied by different Managers of economies the
    world over
==> Common Strategies
    - Fiscal stimulus to targeted sectors by US, UK,
      Germany etc.
      USA pumped $868 billion bank bailout by
      President Bush & $787 billion Automobile
      & Financial Sector bailout by President Obama
    - Improved regulations
    - Strengthen corporate governance
    - Promote trade and investment etc
                 (A)    CAPITAL MARKET                            (B) MONEY MARKET
                              ASSETS                                                           (C) BRICKS AND
                                                                            ASSETS                   MORTARS
                * Equities – Ordinary shares                      * Deposits
                           - Preference                                                    * Home Ownership
                                                                        –Term              * Real Estate
                    shares                                             Placement
                * Debentures / Loan Stock                                                       Investment
                                                                        - Call Placement       - Letting
                * Bonds                                           * B/As and CPs
                * Municipal Notes                                                              - Sale
                                                                  * Investment in Risk         - Brokerage
                                                                       Assets              * Sale and Lease Back
                                                                                           * Land/Property
            Primary                         Secondary                                           Speculation
            Market                          Market
                                                                        (D) SMES                   (E)
                                                                   * Manufacturing              PORTFOLIO
                                                                   * Agro-Allied               MANAGEMENT
                                Trading          Trading           * Service delivery
    Private            Public
    Placement          Offer    in Listed        in Derivatives
                                Stocks           e.g. Rights



                                                                       (F) NEGOTIABLE INSURANCE
                                                                           DEVELOPMENT POLICIES
*    Offer for Subscription
                                                                     (a) Life Policy
*    Rights Issue
                                                                     (b) Credit Bond
                                                                     (c) Education Endowment
OVER CONCENTRATION COCKTAIL OF INVESTMENTS
                   COCKTAIL OF INVESTMENTS

            LOSSES                               STABILITY




                              DIVERSIFICATION
            BANKRUPTCY
                                                 FLEXIBILITY

            LIQUIDATION


                                                PROFITABILITY
START-UP BUSINESSES – EMPHASIS ON SMEs
There is a growing recognition worldwide that
Small and Medium Enterprises (SMEs) have an
important role to play in the present context
considering their greater resources – use
efficiency capacity for employment generation
and promoting inter-sectoral linkages and
developing entrepreneurial skills.
    a)   Project Set-Up – viability, bankability
    b)   Entrench MBO
    c)   Move, Don’t crawl, Don’t fly
    d)   Sacrifice today’s gains for tomorrow’s growth
    e)   Sky is the beginning not the limit
INT
   RO

   GR
     OW
        TH

        MA
          TUR
              IT   Y

SATUR
     ATION

DECLINE
 EXIT
(a) Beware of predatory lenders
        *   Avoid loans aggressively marketed to you
        *   Avoid bargain terms and conditions.
        *   Shop around
        *   Do your maths no matter what.
        *   Think twice
        *   Avoid impulse decisions.
(b)   Be Good Risks

(c)   Plough back profit for growth and expansion to
      ease repayment

(d)   No fund diversion