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5 Investing Tips For Small Business Owners

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 separate

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 flow.

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 investing.

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.

Diversify, diversify, diversify

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, 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 off.