How to Invest Like Richard Branson
Sir Richard Branson — knighted more than 15 years ago — is known for his long golden mane and infectious smile. He is one of Britain’s most famous entrepreneurs and for good reason. Branson is a self-made billionaire.
Branson launched Virgin Records when he was just in his early twenties and sold the company in 1992 for $1 billion. But before he left, he signed icons like the Sex Pistols and the Rolling Stones, ultimately making Virgin Records one of the top record companies in the world. Today, Virgin Group operates in more than 50 countries and holds numerous companies, including Virgin Atlantic, Virgin America, Virgin Money and Virgin Hotels. And, its global branded revenues total $24 billion.
With stakes in Virgin brands such as Virgin Atlantic and Virgin America — as well as 35 percent ownership of Virgin Money, according to Forbes — Richard Branson’s net worth is an impressive $5 billion, placing him No. 330 on Forbes’ billionaires list. If you want to invest like Richard Branson, take the following five investing tips to heart:
1. Don’t Be Afraid of Startups
Similar to Mark Cuban, this billionaire is a fan of startups. Richard Branson’s leadership style is to invest in startups that offer a smart, simple solution that will improve customers’ lives.
That’s why he invested in Square, a system that allows entrepreneurs to accept credit card payments via smartphone. “If I understand a startup’s product or service on first glance, then customers will too — and if it solves a problem that needs fixing, there’s a good chance that someone will buy it,” said Branson in a 2013 article for Entrepreneur.
2. Limit Risk Exposure
In a separate 2014 article for Entrepreneur, Branson said you need to do everything you can to limit your exposure to risk by protecting the downside. Branson gave this example:
“The only way I got my business partners at Virgin Records to begrudgingly accept the risks involved in running a new airline was by getting Boeing to agree to buy back our 747 airliner after a year if things didn’t work out as we’d hoped.”
Investors must always look for ways to protect the downside by implementing strategies.
3. Invest in Your Community
Branson believes that every business has the potential to make a difference — whether it’s locally, nationally or globally. For example, Branson invested in Twitter early on because it’s a platform that generates awareness for causes that are close to the billionaire’s heart, like ending the war on drugs.
Investors should look for companies to invest that have services that will help their community or leave a positive impact on the planet. One option is socially responsible investments, also known as ethical investments or socially conscious investments.
4. Evaluate Your Decision-Making Process
In Branson’s 2014 article Entrepreneur article, he also explores decision making. “I’ve learned that even when an idea immediately strikes you as a really good one, you must push aside that first reaction and carefully and objectively weigh the potential new businesses pros and cons,” he wrote.
Even if no cons come to mind, it doesn’t mean they don’t exist. As an investor, it’s an integral part of the investing process to consider potential negative outcomes. Ensure that you weigh everything carefully before moving forward with any decision.
Keep reading: How to Invest in Great Companies Like Warren Buffett
5. Remember That the Biggest Investments Can Be Priceless
Richard Branson’s island, Necker Island, is his famous home in the British Virgin Islands. According to CNBC, he said many years ago that he saw the island in the Caribbean, and it “was the most beautiful place I’d ever seen.” Although it was selling for $6 million, Branson only offered $100,000 because it was all he could afford. The sellers received no other offers, so it was Branson’s one year later.
“We’ll never sell,” said Branson. “It’s priceless.” He has been offered upwards of $200 million for the island, probably making it the best money Branson has ever invested. Sometimes it pays to go with your gut and invest in something that you truly love.
