The Long Game
How To Invest As A Business Owner
Apr 5, 2024
Exploring the importance of diversified investing for business owners, how concentration impacts external investments, and the strategic approaches business owners should consider for financial planning and risk assessment.
21:44
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Quick takeaways
- Business owners often have concentrated investments in their businesses, diversification may not always be practical.
- Categorizing investments into 'war chest', 'core portfolio', and 'aspirational bucket' is crucial for effective wealth management.
Deep dives
Strategies for Business Owners' Investments
Business owners often have a large portion of their net worth tied up in their businesses, leading to concentrated investments. While diversification is a key strategy advised by many, it may not always be practical for business owners. The risk of over-concentration is highlighted, as exemplified by a client with 17 million out of 20 million net worth in one stock. Despite the high growth potential of concentrated investments, diversification is crucial to mitigate potential losses.
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