In one of the hallways of the Petroleum University, Abdulmohsen Al Omran was steadily moving toward his first professional experience: a summer internship at Indochina Bank in its offices between London and Paris. Little did he know at the time that this small step would later lead him to manage fortunes exceeding USD2 billion and become one of the most prominent figures in the world of finance and investment in the region.
Al Omran was born into a household that understood the value of money and discipline. When he was in high school, his father was chairman of the French Saudi Bank. He not only passed on his name but also a complete philosophy of life: "Look to the long term; don't be tempted by quick gains," he stated in a recent interview with Saudi TV.
Al Omran founded The Family Office in 2004, after years of working at several international and regional banks, including Goldman Sachs, Investcorp, Gulf Bank, Saudi International Bank, and Riyad Bank. He now manages more than $2 billion of Gulf families' wealth.
Although Goldman Sachs' offer wasn't the highest in salary, Al Omran chose the harder path, after consulting his father, who told him: "The salary is lower, but the value lies in the experience." Eight interviews, a rigourous schedule, and an unforgiving environment that only those with a sharp mind and a patient heart can work at Goldman Sachs, which has carved its name in the global banking and wealth management industry for more than 150 years. There, amidst the skyscrapers, Al Omran learned that relationships are the most valuable currency, and that those who sow trust reap opportunities.
To this day, he remains in touch with his former colleagues at Goldman Sachs, some of whom founded their own companies, while others became leaders in major institutions. Al Omran says: "Relationships can't be bought, they're built," considering them "the most valuable currency in the world."
In the world of wealth management, Al Omran believes that trust is the cornerstone. "Seventy percent of work is trust, and if it's gone, the work is lost," he always repeats. He adds: "Trust isn't given, it's earned, and built over time, with every sound decision, and every honest position."
Al-Omran doesn't believe in speculation, but in long-term investment. "All wealthy families in Saudi Arabia were investors, not speculators," says Al-Omran. He warns against borrowing to finance investment portfolios, believing that greed is the number one enemy of investors.
In 2005, when the Saudi market was at its peak, Al-Omran warned of an impending bubble. At a conference, he presented a chart comparing the dot-com bubble of 2000 with the Japanese market correction of 1990, enlisting the help of a market expert at Goldman Sachs, who placed the Saudi market index on the chart to reveal the extent of the overlap. However, some accused him of lacking understanding. Unfortunately, when the market later collapsed from 21,000 points to 4,500 points, they asked him again, "How did you know?"
Al-Omran relies heavily on Saudi Arabia's Vision 2030, which hit the nail on the head in addressing the lack of financial literacy across a broad sector. Al-Omran said that although there are no official statistics or studies measuring this matter, he estimates that less than 10 percent of people are aware of the importance of proper financial planning.
Al-Omran identified two questions that people dreaming of becoming wealthy should ask themselves. First, he says its important to develop a roadmap before investing. Second, they should assess their behaviour in a simple way by asking: "Am I spending more or less than half of my income?" and "If I don't exceed the limit, then I'm fine."
Al-Omran said that the three questions people should ask themselves are, "How much do you earn? How much do you spend? And how much do you want your wealth to be in the future?" Al-Omran believes that answering these questions will be the biggest factor in the financial planning necessary to achieve your goal, but there are things you must know to calculate the required return to achieve your goal.
Al-Omran said that knowledge of economic terminology, an understanding of inflation, and calculating zakat would affect the required return. Furthermore, family growth and expenditures often grow faster than the growth of wealth, so determining the required return on investment should not neglect the growth of future needs and the standard of living that you are raising.
Al-Omran does not doubt the ability of new generations to preserve or grow wealth, but the crisis lies in the excessive support of children. He advises that people should spend what they earn to learn the importance of money and how to build and preserve it. He believes that new generations are plagued by a "fear of missing out" motive, and as a result, their decisions become hasty and focused on immediate gains.
Al-Omran warns against greed and borrowing to finance investment portfolios, as this increases pressure and makes mistakes in decision-making more common.