Wealth Creation: Keith Cunningham’s Lessons on Financial Strategy

Keith Cunningham learned a conservative financial strategy in one of his favourite lessons during the week of May 23 in 1989.  The following list sums up all the points that were taught him in the financial strategy lesson and was created by Keith himself.


  • Emotions, when mixed with unbridled greed, produce economic disasters.
  • Land eats three meals per day.
  • A good market tends to hide mistakes. Nothing takes the place of being actively engaged in the running of your business and being thoughtful as well as sceptical about the future.
  • Doing a marginal deal to keep the staff busy is stupid. Do not do marginal deals.
  • Last week’s marketing report has absolutely nothing to do with where the market is headed, what the economy is doing or what the demand will be next year.
  • How you run your business during the good times is the only true predictor of how well your business will cope with the bad times.
  • You must keep a conservative strategy during the good times because you generally don’t know you’re in a bad time until it’s too late.
  • No team has ever won the game with an ‘offense only’ strategy. Great teams, the ones who win championship rings, all have fantastic defences.
  • Not all progress is measured by ground gained…. Sometimes progress is measured by losses avoided.
  • True wealth is built slowly. Speed and greed necessitate aggressive leverage and increase the odds of catastrophe.
  • The successful people we admire are not the ones who made it…. We admire the ones who kept it
  • It is better to go slower and avoid the do-overs
  • Partners MUST be hands on and involved in every aspect of the business
  • Do not be afraid to say, “NO!”. Too many deals got done because it was easier to say yes
  • It is a mistake to believe the quality of our people and the quality of our projects can overcome a bad market. Our occupancy is 30% above market, our rental rates are 50% above market and we are still 75% below pro-forma.
  • Litigation is expensive, time consuming and to be avoided
  • The best way to avoid losses and to stay financially healthy is to “sell too soon.” The old real estate maxim of, “In the history of the world, the seller is always wrong” is outrageously stupid!
  • Don’t fall into the trap of believing you can get more for it tomorrow. Regardless of which direction the market is moving, never hesitate to sell for a fair price today
  • Never buy something because you think you might need it someday. Have a definite purpose or use in mind TODAY!
  • Keep working all your alternatives until something closes
  • Putting all your energy and focus on one lender or one buyer or one tenant is a disaster if the one you were focused on disappears.
  • Success does not make you invincible or bullet proof.
  • What success does best is it makes you complacent and egotistical, which by themselves are sufficient to create disaster.
  • The euphoria of a hot market usually results in ignoring marketplace fundamentals.
  • Prudently gathering and evaluating market based economic information is the only prescription for avoiding smoking your own exhaust.
  • Never delay taking corrective action once the problem has been recognized. Hoping for better conditions in the future so the problem will solve itself is a fool’s game.
  • Failure to recognize reality is delusional. You might be smarter and better than your competition, but when the market shifts, you’re still broke. Don’t confuse ability with economic reality
  • Never rely on only your consultant’s recommendations….
  • Do the study and analysis yourself based on your familiarity with the market…. If you don’t have the familiarity, don’t do the deal
  • A lack of rules and discipline caused every mistake we made
  • We did not run our business as a business, but rather as a series of discrete events which we assumed had little bearing on each other. We did not pay attention to the aggregate fundamentals of the business
  • We did not narrow our focus when we knew times were getting worse. This was due to two things: 1. The distraction of our prior track record and 2. A lack of maturity necessary to drawback and review the situation with a discerning eye and thus gain control of our direction.
  • A small percentage of a large number is a large number.

Thinking carefully about every step, involving all members of the team and going slower to avoid any disasters like do-overs are some of the main points of the financial strategy lessons Keith Cunningham got to learn. Just try to follow these points and your financial strategy will lead you in the right direction.

Next: Keith Cunningham’s Lessons on Deals…Read More Here

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