Have you ever found yourself lost in the labyrinth that is IKEA, fumbling between a potential POÄNG or KALLAX purchase and wondering how this Swedish behemoth has not just survived, but thrived dramatically over the years?
Selling everything from meatballs to office desks, IKEA is often likened to “an adult’s Disneyland” and, quite paradoxically, “a nightmare hellscape”. The prospect of spending a whole afternoon navigating through a one-way maze, only to eventually build your own bookshelf, might not particularly strike your fancy. Yet, these peculiarities are precisely what IKEA’s late founder, Ingvar Kamprad, had envisioned.
His story is an interesting read. It unveils five characteristics that were instrumental in shaping IKEA’s astronomical growth and success. These traits hold significant lessons for all of us in the realm of investment.
Reign in the costs – always
Ingvar excelled at cost control. His innovative flat-pack design revolutionized the furniture industry, allowing customers to save money by assembling the products themselves.
As I often emphasize, mastering cost control can accelerate the growth of your investments significantly. The problem is that most investors struggle with comprehending aggregated costs or identifying standard benchmarks for unbiased cost measurement, primarily because they are usually quite obscured.
I have developed some presentations that can guide you on this aspect. Feel free to reach out if you are interested.
Ingvar’s philosophy was simple – “Expensive solutions to any kind of problem are usually the work of mediocrity.”
Perseverance is key
Ingvar’s journey is a testament to unwavering determination and commitment. Starting from humble beginnings, he rose to become one of the world’s wealthiest entrepreneurs – a success he credited to relentless perseverance.
When investing, it’s crucial to be ‘systematic’, which entails a long-term, disciplined, rule-bound, and as emotionless an approach as possible. Make conscious efforts daily to stay on the right path.
As Ingvar put it: “The aim of our effort to build up financial resources is to reach a good result in the long term.”
Make prudent spending decisions
Despite his colossal success, Ingvar was known to live below his means. He bought clothes from thrift shops, drove an old Volvo and ate in IKEA’s cafeteria. He always chose to reinvest his money back into his business instead of spending it.
While I don’t advocate being frugal, it certainly pays to be mindful of your expenditure. Install financial safeguards to ensure you stay on course, especially during life’s spending phases. Spend less than you make and invest whenever possible.
Ingvar believed: “It is not just to cut costs that we avoid luxury hotels. We do not need fancy cars, titles, tailor-made uniforms or other status symbols. We rely on our own strength and our own will!”
Simplicity has immense value
Ingvar, being dyslexic, found numbers challenging. He found a simple solution – he named his furniture using Swedish words. This strategy greatly assisted him in remembering items and completing paperwork. His adherence to simplicity was instrumental to IKEA’s growth.
It’s a myth in the investing world that complexity yields better outcomes. That simply isn’t true. More often than not, complexity only masks risks and costs.
Ingvar warned: “Complication paralyses!”
Second opinions can be enlightening
Ingvar used to masquerade as a salesman in his own stores and ask customers for their thoughts to enhance his decision-making process.
Getting an unbiased second opinion can often provide valuable insights.
According to Ingvar: “Progress can only be achieved by constantly questioning if what we are doing today can be improved tomorrow.”
Whether or not you are at the helm of a multi-billion dollar enterprise is irrelevant. As a successful professional, you stand to gain greatly from evaluating your spending, costs, unnecessary complexities and your conduct towards achieving a prosperous future.
In Ingvar’s words: “We will move ahead only by constantly asking ourselves how what we are doing today can be done better tomorrow.”
IKEA’s story reminds us that complexity isn’t a prerequisite for success; rather, simplicity and clarity often lead to the most profound outcomes. If you’re looking to adapt these principles to your financial journey, we’re here to guide you towards achieving your goals. Together, we can navigate the complexities of your wealth management with simplicity and insight. Email or call us today to discuss where you need support.
