5 Things Most Ultra HNI Investors Do Differently
Ultra HNI's have usually carried an important business lesson into their investing lives - that is, following the herd can only destroy value in the long run
The globally accepted definition for an Ultra HNI (High Net Worth Individual) is one who has a net worth of at least $ 30 Million (roughly Rs. 200 Crores) across financial and physical assets. Factoring in purchasing power parity, this would translate to around Rs. 50 Crores for an Indian Resident.
When retail investors or HNI investors stargaze at Ultra HNI's, they assume that the latter employ some special "secret" investing tricks which help them grow their investments at a supernormal pace. In reality, they mostly stick to basics, while taking measured risks with their investments. Here are a few things that I've observed Ultra HNI investors doing differently.
They prefer to err on the side of conservatism
Ultra HNI's do not usually take big risks with their investments. This tendency could be attributed to a multitude of reasons. One, many Ultra HNI's became wealthy by taking on significant business risks; and therefore, prefer to secure their hard-earned money rather than try to multiply it through their investing endeavours. Two, most Ultra HNI's, especially first generation entrepreneurs, have already dedicated a sizeable portion of their lives (usually two decades or more) in creating their wealth. Therefore, by the time many of them end up creating sizeable corpuses, they may have entered a life stage that warrants passive investing. Three, many Ultra HNI's actually prefer sitting on cash to fund new ventures or potential "black swan" opportunities; therefore, the idea of locking their moneys into longer term, high risk investments doesn't appeal to them very much.
They look at their investments as a 'project'
Ultra HNI's take investing seriously. In many ways, they consider their investment portfolio to be a unique project, warranting a sizeable amount of their time, effort and understanding. Many Ultra HNI's pre-schedule meetings with their Wealth Managers or Family Office Fund Managers and block off their calendars, so that they can stay atop their investments in a disciplined manner. In these meetings, they quickly cut past the banter and focus on important facts and strategies. They want to be sure that their money is working as hard as they are! Ultra HNI investors usually do not display the flippant approach to their investments that many HNI clients who are newly rich tend to.
They instinctively sniff out unusual investments with supernormal return potential
While it's true that Ultra HNI's are typically conservative investors, they can switch their risk appetites unusually fast if they spot what they believe to be a sure-fire opportunity to make winning gains. Be it a new IPO, an angel investment in a breakthrough start-up idea, a distressed asset or a new upcoming residential project that others haven't spotted yet; Ultra HNI investors have a nose for investments that are set to outperform others in the long run. Perhaps this can be attributable to their canny business acumen that has most likely led to their wealth creation in the first place. Their strong instincts are perhaps the reason why they often seem to be rushing headlong into investment opportunities that others would approach with caution. Once they're in, the new investment becomes part of their portfolio of "projects", so they tend to be hands-on and deeply involved in its progress to the extent possible.
They don't cry over spilt milk
Ultra HNI's have typically hold very little regret over investments gone awry; neither does the adage "once bitten, twice shy" apply to them. If an investment risk that they took doesn't pay off, they try to evaluate what went wrong, and typically sharpen their processes ahead of the next investment - instead of shying away from the asset class in question altogether.
They are quintessentially contrarian
Ultra HNI's have usually carried an important business lesson into their investing lives - that is, following the herd can only destroy value in the long run. Which is why they are usually sworn contrarians who stay away from overheated asset classes, while scouting for value picks when asset prices reverse to the mean.
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