Matt Malouf

Control is probably the most important part of wealth-building. There are lessons all over right now about what happens when you don't control your investments. The Bernie Madoff ponzi scheme, the stock market and the failing of some 529 college savings plans are a couple of recent examples of what can happen when you give up control.

Let's start out with my definition of control:

Investing Control: The ability to directly influence or impact the future value and net income of the investment.

Investing control is important for any type of investment you consider.

For the stock market, this means controlling a majority of a company's shares. Now, this is extremely difficult for average people, like you and me. This is why we should invest a smaller portion of our money into the stock market. The SEC even has rules in place to prevent the common guy from owning or controlling more than a set percentage of the outstanding shares anyway.

However, you could invest and obtain control of smaller, non-public companies through joint venture agreements and the like. By having control, you can directly impact the growth, income and expenses of the business, hence your return of investment.

For real estate, the best investors want active control over their properties. Active control can be obtained in partnerships and individual investments alike. Most people would rather be passive real estate investors. The tiny few who grow wealthy prefer to be active investors.

The majority of families focus their investments into assets they do not control. This is why they struggle to accumulate "real" wealth. This is also why many people will not have enough money accumulated when they retire.

In fact, it boggles my mind that most people prefer not to be in control of their investments. They would much rather have an mutual fund planner, stockbroker or someone else control their money. "Done for you" wealth is not available. You are going to have to do much of it yourself. You do it by controlling assets.

It is perfectly fine to invest a small portion of your money into investments you do not control. But I would be very careful investing large sums of your money into uncontrollable investments. I have investments in assets that I do not control. However, these investments now represent a small portion of my net worth. I have control over the assets in where most of my money is invested.
These same assets also represent the largest portion of my net worth.

If you study wealthy people, you'll quickly see that they do the exact opposite of everyone else. They desire, fight for and cherish control. Everyone else desires, cherishes and pays big money to have no control. Notice the difference.


I remember reading a biography on billionaire investor Kirk Kerkorian. In every single investment Kerkorian made, he fought for control. When he didn't have control over an investment, he quickly divested himself of the investment. Same goes for Wayne Huzienga, who built three separate billion-dollar companies (Waste Management, Blockbuster and Republic Industries).

Experience has shown me that most people prefer passive investments because they are easier. Passive investments allow the investor to invest without having to take any responsibility. Passive investments do not require the investor to be decisive. Passive investments do not require the investor get his hands dirty.

Control requires that you take responsibility for your investments. Control requires you to be active. Control requires that you pay attention. Control requires that you be decisive. Control requires you to roll up your sleeves and get dirty every once in awhile. Some believe control is risky. I believe lack of control is risky.

Once you have control of your investment, you should work hard to increase its value. You increase value by increasing its income.

One of the most valuable wealth-building skills you can have in life is the ability to increase the net income of your investments. With this skill, you can literally write your own ticket.

For example, Kerkorian purchased enough stock to control MGM Studios in the late 1960s. By the early 1970s, he had built the MGM Grand hotel in Las Vegas. This hotel and casino dramatically impacted the value of MGM's stock. Guess what happened to Kirk's wealth? Within three years, his wealth was in excess of $100 million.

This is how powerful control can be. Could Kerkorian have created $100 million if he wasn't in control? No.

You must strive for control over your investments. Control is critical for true wealth. Don't be lazy. Take the time to educate yourself so that you can ask better questions. Don't copy the masses and happily turn over control to your hard earned money.

Control is probably the most important part of wealth-building. There are lessons all over right now about what happens when you don't control your investments. The Bernie Madoff ponzi scheme, the stock market and the failing of some 529 college savings plans are a couple of recent examples of what can happen when you give up control.

Let's start out with my definition of control:

Investing Control: The ability to directly influence or impact the future value and net income of the investment.

Investing control is important for any type of investment you consider.

For the stock market, this means controlling a majority of a company's shares. Now, this is extremely difficult for average people, like you and me. This is why we should invest a smaller portion of our money into the stock market. The SEC even has rules in place to prevent the common guy from owning or controlling more than a set percentage of the outstanding shares anyway.

However, you could invest and obtain control of smaller, non-public companies through joint venture agreements and the like. By having control, you can directly impact the growth, income and expenses of the business, hence your return of investment.

For real estate, the best investors want active control over their properties. Active control can be obtained in partnerships and individual investments alike. Most people would rather be passive real estate investors. The tiny few who grow wealthy prefer to be active investors.

The majority of families focus their investments into assets they do not control. This is why they struggle to accumulate "real" wealth. This is also why many people will not have enough money accumulated when they retire.

In fact, it boggles my mind that most people prefer not to be in control of their investments. They would much rather have an mutual fund planner, stockbroker or someone else control their money. "Done for you" wealth is not available. You are going to have to do much of it yourself. You do it by controlling assets.

It is perfectly fine to invest a small portion of your money into investments you do not control. But I would be very careful investing large sums of your money into uncontrollable investments. I have investments in assets that I do not control. However, these investments now represent a small portion of my net worth. I have control over the assets in where most of my money is invested.
These same assets also represent the largest portion of my net worth.

If you study wealthy people, you'll quickly see that they do the exact opposite of everyone else. They desire, fight for and cherish control. Everyone else desires, cherishes and pays big money to have no control. Notice the difference.


I remember reading a biography on billionaire investor Kirk Kerkorian. In every single investment Kerkorian made, he fought for control. When he didn't have control over an investment, he quickly divested himself of the investment. Same goes for Wayne Huzienga, who built three separate billion-dollar companies (Waste Management, Blockbuster and Republic Industries).

Experience has shown me that most people prefer passive investments because they are easier. Passive investments allow the investor to invest without having to take any responsibility. Passive investments do not require the investor to be decisive. Passive investments do not require the investor get his hands dirty.

Control requires that you take responsibility for your investments. Control requires you to be active. Control requires that you pay attention. Control requires that you be decisive. Control requires you to roll up your sleeves and get dirty every once in awhile. Some believe control is risky. I believe lack of control is risky.

Once you have control of your investment, you should work hard to increase its value. You increase value by increasing its income.

One of the most valuable wealth-building skills you can have in life is the ability to increase the net income of your investments. With this skill, you can literally write your own ticket.

For example, Kerkorian purchased enough stock to control MGM Studios in the late 1960s. By the early 1970s, he had built the MGM Grand hotel in Las Vegas. This hotel and casino dramatically impacted the value of MGM's stock. Guess what happened to Kirk's wealth? Within three years, his wealth was in excess of $100 million.

This is how powerful control can be. Could Kerkorian have created $100 million if he wasn't in control? No.

You must strive for control over your investments. Control is critical for true wealth. Don't be lazy. Take the time to educate yourself so that you can ask better questions. Don't copy the masses and happily turn over control to your hard earned money.