It’s challenging to launch and sustain a small business during a pandemic. While there’s a promise of huge financial returns in any growing company that’s managed well, you can’t fully rely on it for your personal security. You’ll have to make sure that you’re the boss of your own savings and assets, just as you are the boss of your company.
It’s a balancing act that can get tricky most of the time, and if you’re not careful, you might end up endangering the other when one sinks. This is why experts and seasoned business people believe owners should grow their personal finances at the same rate that they’re growing their business.
Even with the pandemic, there’s no shortage of investment opportunities in your path. Your job is to steer clear from hypes and won’t give you the right value for your money. In this sense, starting with the basics is your best move. Here are three personal investment options suitable for small business owners that you won’t regret making.
Get Into Real Estate
There is a myriad of ways you can get into real estate. You don’t always have to sideline as a realtor to get a huge amount of money out of properties. Busy people like you benefit most from passive incomes that grow with investing in the right property and marketing it based on your niche.
Suppose you buy land for sale. You should target families who want to live somewhere rural but with enough access to major cities like Melbourne. You can also market the house you’ll construct as a vacation rental for those who want to get out of the bustling city during the holidays.
The great thing about property management is that the process’s complexity depends mostly on the methods you choose. You have someone within the vicinity take care of the cleaning between each guest and give you updates online, or you can hire a company to manage the entire affair for you.
Just make sure that the locations you’re eyeing are promising in terms of growth. This can refer to tourism, businesses, and relocations, which can all shift depending on how the pandemic further affects people’s housing choices. However you wish to get into property management, make sure to do it in a capacity that you’re comfortable with.
Get Your Retirement Account in Order
You’re lucky if your business becomes successful enough or lasts long enough to support your retirement plans. For most small businesses that show great potential, there’s always the prospect of selling or merging with bigger brands when the offer comes. It’s also not a good idea to believe that the amount of money you’ll get from such arrangements will suffice to cover your needs throughout your retirement.
Many people who’ve walked this road before know that the sum you get may not even sufficiently cover your present needs. This puts you in the same boat as everybody else pooling their funds monthly to create an impressive retirement account.
There are many ways for business owners to go around this, depending on their specific goals. Talk to an expert so that they can lay down your options. You’re not a pessimist when you plan for the worst-case scenario, which is that your business won’t reach the heights you expect it to and grant you financial freedom in the process.
It’s a mature and realistic perspective that you’ll have to consider at some point, and having a backup plan to address this possibility puts you in a better position to lead professionally and personally.
Get Your Emergency Fund Ready
There’s no talk of sophisticated investments here like stocks and other diversification strategies like what you might expect. Why? Because a lot of people jump into those without laying down a stable foundation for their finances. Your retirement and emergency funds are basic investments you mustn’t overlook. Having this can better prepare you for more intricate strategies to make themselves available to you in the future.
An emergency fund, for one, will save you from any compromising situation as a business owner. In case of a natural disaster, an accident, or a health crisis, you can handle those without being tempted to (illegally) manipulate company funds. After all, it’s your money you used as capital, and you have the right to rebudget and redirect the flow of funds, don’t you?
That’s often not true, and depending on your business model, it can lead to legal problems. The reverse is applicable as well. Business owners don’t hesitate to touch their savings to meet business needs like overhead and operational costs during tough times. Instead of compromising your personal finances, having an emergency fund to dip your hand into will lead to smaller and more manageable consequences.
Stick to the Basics
Laying a good financial foundation is crucial for making further investments in the future. Pay as much attention to the growth of your personal assets so that you can continue to make sound decisions as a business owner. Avoiding conflict between these two will ensure more satisfaction and financial stability in your future.
