The New York Times runs an exceptionally smart article on the proper investment strategy the small business owner should follow in his personal life. The short answer is: a conservative one, with specific picks made by experts. The problem is that small business owners are used to calling all the shots and feeling like they are the best at whatever it is they do--a great entrepreneurial mindset, but a lousy one for investing, particularly when the small business owner in question is consumed with his or her own business and has little time to analyze the stock market, too. More precisely, the article's advice is: "You take plenty of risk in your business; as an investor, you should keep it simple, spread your eggs among many baskets, keep fees and taxes low, and tilt the odds in your favor with indexed mutual funds and exchange traded funds." If you cannot completely stanch your entrepreneurial mindset from bleeding over from your business life to your personal-investing life, then try to use no more than 10% of your total investment money on gutsier plays. The article provides a wealth of more specific advice on specific funds to look at, indexing strategies, ways to deal with taxes, and the like. The whole thing is well worth a read. The big, single takeaway from the piece is a tried and true one: diversify, diversify, diversify. Usually when that advice is given in an investing context, it refers to the investing itself: spread your money among different industries, different types of investments, and so on. And to be sure, that is smart advice for the investing small business owner, too. Take another step back, though, and you see that a conservative investment strategy represents diversifying one's life. There are few riskier and high-stress things, after all, than starting and running your own business. Why not temper that with the safe bet where you can? Finally, this article appears to herald the start of a new Times small-business blog, You're the Boss. Welcome to the party, guys! American Express OPEN brings you the latest insights from noted business authors and experts in our special promotion with Slate BizBox.
Where To Put Your Money
Published: June 23, 2009
Updated: September 05, 2023
Summary
The New York Times runs an exceptionally smart article on the proper investment strategy the small business owner should follow in
