Smashing stereotypes come naturally to the statuesque Saana Azzam. A trained economist (she is a postgraduate from the esteemed Stockholm School of Economics), Saana was awarded the prestigious title of Sweden’s ‘Female Economist of the Year’ in 2010, while still in her early twenties before embarking into entrepreneurship full-time in 2016. She admits she never expected the award- “I struggled with economics and math in high school but I made up for it by studying really, really hard”- but her trajectory is one full of surprises, right from her entry into this world.
The youngest of eight children born to a Palestinian refugee family, leaving Lebanon for Sweden, Saana was born “in transit” while the family was driving across Germany! “We literally went from super wealthy one day to survival mode the next. One summer we’re flying business class to Lebanon for our family vacation and then the next few years, there was no vacation in sight. What I learned was the art of resilience and to always be hungry and actively seek opportunities.”
Despite her banking career, Saana admits she began investing “late” at the age of 26, primarily because she had imbibed the conservative investment mindset of her family which valued real estate and gold. “The younger you are, the better it is to start dabbling in stocks with whatever small amount you can afford. You’re already starting off with very little so you have more of a nothing-to-lose mentality.”
Saana’s mantra when it comes to investing and wealth creation?
“Be the master of your wealth and destiny. Money gives you power: the power to influence, to build, to experience more. Investing is a tried and tested mean of creating that power for yourself.”
I caught up with the former investment banker to break down some investing myths. Here’s the low-down:
1) Think of money as something that works for you vs. something you work for
She emphasizes that financially successful people have a different mindset and approach towards money and financial success. “My core belief is making your money work for you, not the other way around. In the beginning, you work really hard to make money and then you take a chunk of that and invest it across the board; in stocks, bonds, ETFs, buying a house, other business ventures…something that will generate yield,” explains Saana.
2) Create multiple streams of wealth-generation vs. just a single river
“If we consider the rich, only 0.7 percent of the world has over $1 million in assets,” shares Saana. “Millionaires have at least 7 streams of income. They are completely diversified, not relying on one basket only. Having diversified income streams allows wealth to come to you without you having to work for it every day and without you being overly dependent on one or two sources of money.”
Saana consciously applies this philosophy in her own life. “I’ve always maintained a parallel business with my job, either investing in business ventures with my family or friends. But not all of them worked! I once invested in an eCommerce venture with a friend to sell belly dancing accessories, which fizzled! What I was left with was a whole apartment filled with glitter and sequins and the realization that you should never venture into a business you’re not passionate about.”
3) You do not need to have a lot of money to start investing. But you do need to ask a lot of questions
Instead of being held back by a mental block when it comes to investing, start reading up on financial success strategies and talk to people in-the-know because “knowledge is freeing,” advises Saana. “The formula for financial success is out there. It’s not a secret. There are tons of bestselling books like Rich Dad, Poor Dad or blogs (like Sarwa’s!) where you can easily access key information that just might change your financial destiny.”
Once you begin investing, continue asking questions. “You are fully entitled to ask your advisor about custodian charges, advisory fees, FX (foreign exchange) fees, etc. Anyone who gives you a vague answer or worse, no answer at all, is not someone you should work with. Remember, no one will ever care about your money as much as you.”
4) Start and stick to a “loss” policy
Saana admits she has lost while investing too. “It’s all part of the process” but the fear of losing shouldn’t hold someone back from entering the market. “First, I always recommend that you never invest more than you’re willing to lose. Second, before you invest, run a best case and worst case scenario and know that the worst case can be a multifaceted situation. Third, and most important, create a cutoff…what I call a stop-loss mark. This is the lowest value you are willing to hit before you exit the investment and potentially pre-empt any further losses. This is disciplined investing.”
5) Don’t marry your un-diversified investments
In relationships, being emotionally detached is probably not the way to go. But in investing, it mostly is. “Don’t marry your undiversified investment. Just because you’ve invested into that one thing for a long time, you get attached for a lot longer than you should even when you see signs that it is going south,” advises Saana.
Especially when it is a one class asset that can expose you to a lot of risk.
“A lot of people do this when they hire someone for a job, and really like the new hire, but know that they’re not performing up to the mark. There’s only so many chances anyone gets before you let them go. It’s the same with investing. This is when you strictly follow your stop-loss policy.”
6) Your money is not always safe in the bank
For those who only feel assured by saving their money with a bank, Saana offers food for thought: “Sometimes even keeping all your money in a bank can be risky because banks default all the time. You will need to check that your money is protected, and most advanced jurisdictions protect your investments in a bank up to a certain amount.”
7) Create an investment ideology and pivot it from time to time
“Every investor should understand where they stand in terms of their investing traits”, explains Saana, “and then find the financial products and trading philosophies that work with your preferences.”
“I take quite a moderate, long-term approach versus high risk/high reward or day-to-day type trading,” shares Saana. Saana also encourages investing in line with your values. “Invest in something that you would consume and whose value proposition you believe in.” If you believe in a certain product/industry classes or impact investing, look up potential companies and invest in ones who you consider promising. I’ve always believed in organic, clean eating and once did a Whole Foods trade shortly before it got acquired by Amazon…which worked out well!”.
But do that only with a small amount you are willing to risk. You can also look for these diversified portfolios that are sustainable and have positive impacts on the community.
Ready to invest in your future?