By the thinkBIG Team
Justin Beeton is a successful entrepreneur and investor, a sought after public speaker, author, and climate change campaigner. He speaks to thinkBIG about wealth management and becoming a millionaire by age 24.
Having bought his first share at the age of 14, Justin Beeton has gone on to create his entire wealth from the share market. This initial million dollars allowed Justin to follow his dreams and establish his own stock broking firm in 2004. In less than five years he has grown his net worth from being a millionaire to multimillionaire. Now as a professional investment manager, Justin manages approximately $430 million in assets.
Justin's stock broking company, JB Global was recently ranked in the 2009 BRW fastest growing companies in Australia and was ranked as the number one fastest growing finance and investment firm in the country for the second year running.
Think Big: What do you believe is the key difference between those who become wealthy and those that don't?
Justin Beeton: The wealthy have an ability to recognise an opportunity and more importantly the ability to seize the moment, take action and do something with the opportunity.
TB: What vehicles have you used to build your wealth and how did you use them?
JB: Making money is like playing sport and investing is exactly the same. To create wealth you don't just need to make money, you also need to learn how to keep it. When it comes to the share market creating wealth has more to do with minimising losses.
As a share market investor whether you are a novice or professional you will invest in a company that falls in value. To be successful you just need to have a good defence strategy and minimise the loss when this occurs.
When I stopped focusing on quick profits and focused on minimising the loss, I made a lot more money and became wealthy.
My secret defence formula is very simple. In fact all of Australia has been using this formula to reduce risk in many areas of their life. You just need to insure your share investments whether that is in your own name or within super.
My stock market formula has protected the majority of my capital and my clients throughout 2008 and early 2009 when global share markets crashed over 50% as a result of the Global Financial Crisis. I successfully avoided all the pain associated with losing money because I held insurance. When almost all other stock brokers, fund managers, financial planners and share market investors were losing sleep – and probably hair because of losing money – I and my clients had peace of mind knowing their share investments and superannuation was completely protected.
TB: What do you think holds people back from achieving their goals or becoming successful and making millions themselves?
JB: Most individuals do not have the required patience or discipline to accumulate wealth. When it comes to the share market the majority overestimate what can be achieved in the short term and underestimate what can be achieved over the long term. Most chase the quick buck and suffer from the unfortunate outcome of losing their money. They then chase the next quick buck scheme in the hope of a different outcome which only ends in more financial pain. The definition of insanity is doing the same thing expecting a different outcome.
Warren Buffett explains the rules to investing and creating unlimited wealth as:- Rule No. 1 "Never lose money"
Rule No. 2 "Never forget Rule No. 1" Investing is that simple.
TB: You have been a champion for investor rights by being the first company in Australia to eliminate trailing commissions to financial planners, why did you make this move and how do you see the market moving forward?
JB: There is a huge conflict of interest that exists when financial planners and fund managers are remunerated irrespective of the value they create for the end investor. In 2008 the average superannuation fund fell approximately 30% as a result of the GFC, yet financial planners and fund managers still made their healthy commission. This situation needs to change. I believe the only way to avoid such conflicts of interest is to replace trailing commission with performance fees. If the financial planner or fund manager doesn't make you money then they should be rewarded with nothing. If they are only paid when they perform then you should see significantly higher returns moving forward.
TB: Your company is ranked as one of the fastest growing investment services firm in Australia. Why?
JB: I believe all investors are the same; we want to make as much money as possible with very little risk. Usually such an investment does not exist but at JB Global we have invented one. By offering investments which offer all the upside potential of the share market we can make high capital gains, but due to the capital protection feature we take on very low risk. We prove modern investment theory wrong. In 2008 when the market crashed over 55%, the majority of JB Global clients' investments were completely protected. All of our clients are now well positioned to profit from the upside in the share market as the global economic conditions improve.
TB: What are your predictions for 2010 and beyond?
JB: History has shown that the years following the biggest market crashes have provided the highest returns and 2009 has confirmed this observation. In the next three years I expect the Australian Share Market to go back to the highs reached in 2007. This will require the ASX200 to rally to approximately 7,000 points or approximately 55% from current levels.
TB: What are your four top tips for others to reach a greater level of success?
JB: Tip 1 –surround yourself with a team of experts
Business and investing are team sports. The average investor or small business person loses financially because they do not have a team. Instead of a team, they act as individuals who are trampled by very smart teams. When it comes to creating wealth it is even more important to seek professional advice.
Tip 2 – Don't be an ostrich and stick your head in the sand
Stop putting your head in the sand and just make it happen. Stop deferring your business idea, stop putting off investing, stop telling yourself the story that you can't become wealthy and go out there and just make it happen.
When it comes to the share market opportunities to become extremely wealthy are presented every day, every hour, every minute. If you do not have a business idea, if you do not know what your passion is, or are fearful about investing in the share market then you need to invest in further education.
Tip 3 – Be the tortoise
When it comes to investing the tortoise approach always wins. Slow and steady wins the race. Just start early, keep plodding and don't lose focus on what really matters. That is your longterm goal.
Tip 4 – Invest in the share market
Just make sure you insure your share market investments just in case the market falls like it did in 2008. Remember investment success has nothing to do with the money you make when you are right but minimising the loss when you are wrong.
Justin Beeton has offered a FREE copy of his latest book The JB Way to every reader looking to improve their finances, valued at $29.95 Just log onto www.jbglobal.com.au/thejbway to register for your book.
