10 Major causes of failure in leadership: #8:

DISLOYALTY: “Perhaps this should have come at the head of the list. Leaders who are not loyal to their trust and their associates – those above and below them – cannot long maintain their leadership. Disloyalty marks people as being less than the dust of the earth, and brings down on their head the contempt they deserve. Lack of loyalty is one of the major causes of failure in every walk of life. (by: Napoleon Hill in “Think and Grow Rich”)

This very strong indictment by Napoleon Hill of the personality trait of disloyalty can only mark such a person as a false leader. A con-artist, a flim-flam man, whose leadership position must initially have come about through false advertising and undeserved braggadocio. Let’s think about this in the context of personal wealth and your journey towards being a Prince or Princess. Have you been exposed to such individuals?

Just ask yourself, have I been coerced into investing in something with unrealistic expectations of returns? Remember the “Ponzi Scheme”? According to the website SEC.gov(SEC is the acronym for “Securities and Exchange Commission”), a Ponzi Scheme is defined:

“A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors to create the false appearance that investors are profiting from a legitimate business. The schemes are named after Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s. At a time when the annual interest rate for bank accounts was five percent, Ponzi promised investors that he could provide a 50% return in just 90 days. Ponzi initially bought a small number of international mail coupons in support of his scheme, but quickly switched to using incoming funds from new investors to pay purported returns to earlier investors.”

An example of a recent “Ponzi” was Bernie Madoff, who pulled investors into a scheme with the promise of a 10% Annual Return on Investment.  Imagine that … only 10%, and he could not deliver on the promise with legitimate investments, so he used money from new investors to pay the promised dividends to earlier investors.  Only a 10% return was impossible for legitimate investment to yield.  Have you been promised more than that by your financial advisor?  I personally know investment bankers who are promising 25% yields and guaranteeing their clients that there is no risk involved.  Have people forgotten everything that has happened in the last 15-years?

I recently received a phone call from a Broker who was offering an investment to “Accredited Investors” only (which I qualify as) … translation: a “Private Placement” which is not required to undergo SEC scrutiny to ensure its legitimacy and the viability of its possible risk component. This broker suggested that the particular investment opportunity would likely yield 200%-300% return in its first year. I’d like to remind you that the S&P500 has yielded an average return of about 8.5% over the last 45-years.

If it sounds too good to be true, it usually is.

I explained to this Broker that 1) I don’t invest money with people who call out of the blue over the phone, 2) I don’t invest money with people with whom I have no personal relationship with (i.e.: with whom I have had dinner with several times, who’s offices are readily accessible to me, and who have already spent several years earning my trust with smaller acts of fiduciary, and 3) that as an accredited investor, I was well aware that investments with such yields seldom pay off. I asked him if he remembered the name Bernie Madoff … a man who guaranteed his investors a mere 10% annual rate of return, and went to jail because even that modest promise resulted in a Ponzi Scheme. The Broker quickly hung up the phone.

If you are a leader, a Prince or Princess, be true and faithful to your charge. If you are a follower, look critically at your leader(s) and do not tolerate following someone who does not act as a fiduciary in your behalf.  Leadership demands honesty and loyalty to your workers and that you always make decisions that will place the least amount of risk on the lively-hood and future of your followers.