Entrepreneurs find it simpler than ever to start new businesses because of technological advancements and government efforts. Because of the present economic climate, serial entrepreneurs are starting businesses, growing them to profitability, and then selling them off to start the cycle again. Additionally, they’re providing significant lessons for high-net-worth individuals who aspire to emulate their success.
What Serial Entrepreneurs Do Differently
Investing your money is a no-brainer if you want to develop a strong financial foundation. ETFs and REITs and other types of equities and funds have all been shown to provide higher returns than traditional savings accounts and certificates of deposit (CDs). A wise investor’s portfolio will include even the safest investments, such as bonds, to counterbalance the risk. See also: The Importance of Diversification for further information.
Entrepreneurs who have built many businesses instead of depending on the stock market’s returns are more likely to succeed. Even if they don’t participate in the stock market, it doesn’t imply they’re not doing so. They do not only depend on it to expand their asset base, though. What’s the secret?
An entrepreneur’s typical path begins with a fantastic concept and ends with a commitment to expanding their business to the desired degree of success. Serial entrepreneurs are the exception after building a firm and handing it over to someone else while keeping ownership or selling it for a tidy profit. Doing this repeatedly allows people to take back control of their financial future and not be at the mercy of the market’s vagaries.
What Investors Need To Learn From Serial Entrepreneurs
Starting a business isn’t easy, but investors may learn a lot from serial entrepreneurs about creating wealth for themselves. A serial entrepreneur’s attitude can help you achieve a larger net worth. Here are some tips:
Get Help from an Expert
Managing a business and increasing one’s net worth are arduous tasks for anyone, even for the wealthiest of individuals. According to making financial decisions for their companies and Worth Survey, 69% of company owners in the United States consult with numerous financial consultants to the 2016 U.S. Trust Insights on Wealth and themselves (TIWW). 1 As part of your overall wealth-building strategy, engaging a financial advisor is essential.
Be Aware of Your Investments’ Liquidity
To make a solid investment strategy, you need to know how liquid or illiquid your investments. U.S. Trust’s study of entrepreneurs found that more than half predicted a large liquidity event in three years. To prepare for the tax consequences of these occurrences, 37 percent of respondents indicated they were working with their financial adviser or planned to do so shortly. 1 Thing like selling off stock can have a significant impact on your financial picture as an investor.
Keep Distractions at Bay
Distractions are common for new business owners, especially those just starting. It is a sign of company maturity to be able to focus on the most important aspects of the firm. Contrarily, one of the paradoxes of business is that young individuals frequently have more variables. Having a consolidated business system – a single business that generates revenue – can help. Take care of it, and don’t let anything harm it. You may put the money you’ve been given to good use by purchasing assets and cash, experimenting with new ideas throughout the medium term, and planning for the long term.
Instead of relying on investment returns, Singular entrepreneurs develop their riches by relying on the success of their businesses. Real estate, stock, and bond investments are part of their overall strategy, but they aren’t their exclusive source of income.
On the other hand, serial entrepreneurs prefer to start a firm and then either sell it for a profit or give it on to someone else while still keeping control of the company. To keep their financial destiny in their own hands, they keep doing this over and over again.
Have a Plan B in mind
If you’re serious about your business as a serial entrepreneur, you should have a plan in place for when you decide to sell your investments. Value and buy-and-hold investors alike must know when to dump a stock or mutual fund, regardless of how they invest their money. Without an exit strategy in place, you risk losing money if the stocks in your portfolio begin to fall apart.
Conclusion
The downsides of serial entrepreneurship are numerous. The vast majority of new companies fail. In the same way, investment is the same. There are no guarantees, but if you are ready to see your portfolio from a fresh perspective, it may lead to a greater reward than planned.