Want to hear a “No Dumb Question” of particular interest to successful business owners, executives and similar business leaders?
“Nancy, how should I transform my business and career success into personal success … especially when it comes to the money?
This question is a tough one, because those of us who thrive in leadership positions face an investment dilemma: Your best on-the-job talents can actually end up playing AGAINST you as an investor. Tune in to today’s segment and I’ll tell you more about why that is, and how to make the most of your money once it becomes your personal fortune.
Have you got other financial questions on your mind? Feel free to leave them in the comments below or send me an email.
The other day, one of my clients reminded me of a dilemma that those of us in leadership positions often face. He’d done quite well with his business and came to me to discuss what to do with the proceeds. He’d been looking into a private venture of interest. The stakes were high, but so were the opportunities Should he buy in?
This thriving entrepreneur was trying to apply his on-the-job-expertise to investing the fruits of his labor. The thing is, there are better ways to convert your financial success into lasting personal wealth.
As business owners or similar professionals, we understand: There is no bunny hill in the mountains of the corporate world. To advance, we must conquer our own courses, move swiftly as we go and react rapidly to changing terrain. There’s an expression for those who don’t get that, and get it fast. “He or she is pursuing other opportunities.”
Or at least it should be if you want to manage your money instead of having it manage you.
Many successful business owners and professionals think about investing in the same way they think about running their businesses. From this vantage point, investing becomes another way to generate profits on your profits.
But let’s look at what it takes to reap these kinds of rewards. First, you need to consistently get in on the action at just the right time. Then you need to recognize when the tides are about to turn and sell before it’s too late. By the way, you also need to win more than taxes and other expenses will lose you.
It’s also hard to call the right shots to begin with. As you know, a lot of the events that can make or break a carefully selected venture are well beyond anyone’s control: natural disasters, personal upsets, geopolitical events, shifting markets, etc.
In short, if picking, choosing and timing individual holdings were the only way to invest, I’m not sure I’d ever recommend a business owner get in on the action! If you take some of your business profits off the table, only to place them at equal or greater risk elsewhere … what are you really accomplishing? At least in your business or profession, you have a little more direct control over the outcome and can insure against some of the risks.
For investing, I recommend an entirely different mindset, Investing is not another way to venture more of your money. It’s to preserve the profits you want to keep as your own, after you’ve removed them from the high-stakes table.
How does that savvy investor mind-shift work? Fortunately, my own work here is almost done, because I’ve talked about that in one of my past videos … “What’s a smart strategy when investing?” The trick is to collaborate with, rather than compete against our highly efficient “group think” stock markets. Instead of concentrating your holdings in lucky picks, you can earn expected returns that reflect your risk and return goals by simply investing in large swaths of the global market; diversifying your holdings widely to manage the risks that remain; doing all this as cost effectively as possible … and sitting tight for the ride.
This may not sound as sexy as getting in on the ground floor of the next big stock market boom, but it’s the best way I know of to make sure the nest egg you’ve worked so hard to earn won’t end up going bust. It also frees you to devote the bulk of your time and energy where it belongs — in your business and your life.
If this dual mindset for managing your business and personal risks and rewards sounds good to you, keep watching for more “No Dumb Questions”.
