Elle Kaplan | What Every Entrepreneur Needs To Know About Investing

16 Apr What Every Entrepreneur Needs To Know About Investing

Posted at 15:17h in Entrepreneurship, Investment strategy, Wealth Creation by Elle Kaplan

Entrepreneurs have different risk profiles than everyone else. Most entrepreneurs fail to take their career into account when considering their investment strategy.

Look beyond your bank and brokerage accounts. You need a holistic, complete picture of your financial situation in order to develop a smart investing strategy. Your bank and brokerage accounts don’t tell the whole story: being an entrepreneur means you have an inherently risky career. It’s like owning a concentrated position in just one stock.
Aim for balance overall. If both your portfolio and your career tilt toward risk, you’re unbalanced overall. Factor this into your asset allocation. Consider offsetting greater career risk -especially in volatile, early-growth-stage years – by placing more assets in less volatile holdings, like fixed income.
Don’t invest exclusively in your own industry. Investing in the same field as your career further concentrates risk. Diversification is key to a healthy portfolio.