As a small business owner, you’re always going to have a lot
more control over your financial future than those that don’t have quite as
much entrepreneurial blood in them.
And while you’ll be the captain of your own ship as far as your business finances are concerned it isn’t a bad idea to look to build
passive income streams outside your business, leveraging investment vehicles to
help make sure that your money is growing all the time.
Here are some tips and tricks to help you invest smarter as
a savvy small business owner.
Keep your powder
The number one thing you have to do as a small business
owner getting into the world of investing is committed to keeping your “powder”
totally and completely separate.
The biggest mistake small business owners make is investing with company money, looking to parlay large
sums of operating cash into financial windfalls on swings of the stock market.
There’s no faster way to bankrupt your business than speculating with your cash
Have certain buckets of money that you operate your business
out of and other buckets of money that you invest from. Keep the two completely and totally separate at all times.
Think about working
with a financial advisor
Your time as an entrepreneur is precious and you have to make sure that you are
leveraging each and every minute as much
as humanly possible. There’s never going to be enough time each day to get
everything done you want to in your business, which means there isn’t going to
be a lot of time left over to learn everything there is to learn about
Don’t scrape by with mediocre results just because you don’t have the time or energy to pour into mastering this skill set on top of building your business. Think about working with financial advisors like those at Excel Capital Management to help you grow your money almost on autopilot.
Fall in love with old
standards as a small business owner
It’s easy to get sucked into the whirlwind excitement of
something like BitCoin, for example, particularly when that this investment
vehicle looks like it’s going straight to the moon with plenty of profit
potential along the way.
And while there is room to make these kinds of investments
for sure (betting big while only risking a small hit), the overwhelming
majority of small business owners see a lot more success when they invest in
“old standards” like stocks and bonds, index funds, mutual funds, and the like.
There’s a reason why these old-school investment vehicles
continue to be leveraged time and time again. It’s because they provide
reasonable, consistent, and dependable returns you can set your watch to.
While you want to narrow down your business to a very
specific niche and serve a very specific segment of your market base for the
fastest road to success, when it comes
time to invest as a small business owner you want to diversify, diversify,
Diversity protects you from the swings and seasonal activity
of the markets on a regular basis, helping to make sure that if you take a hit
on some of your investments it never
sinks your portfolio battleship.
This doesn’t mean that
you should spread your money around haphazardly, diversifying just for the sake
of diversifying. If you feel strong about
an investment you shouldn’t be afraid
about pushing all in (or about as close to all in as you are comfortable).
Diversify to mitigate risk of all else.
Invest in yourself
At the end of the day,
no greater investment can be made than investing
in yourself, your business, your skills, and your financial future.
Investing (particularly when funds are tight) can be tricky
to get a handle on in the early stages. But once you get your investment
strategies set up it becomes pretty much
set it and forget it and over time you’ll find that these decisions always pay