Not too long ago I sat down with my financial advisor.
We reviewed each area of my portfolio. Stocks, bonds, mutual funds, hedge funds, cash and all that other good stuff.
We looked at the real estate holdings and then got into a discussion of the markets.
I had some money in another business and told my advisor I was considering putting that into a holding account for the new business that was launching.
Partly as protection to pad against the rough spots a new startup often faces.
But also to go into marketing and promotion – which all businesses need in their early stages.
Doing this would mean I’d contribute less to my investments. And while my advisor doesn’t get a commission based on what I give him to invest (he’s on a salary at the firm), I was kind of expecting him to suggest investing as the best course of action.
However, he didn’t. Instantly he said “a business is the best investment you can make.”
That’s been my experience over the last decade and was happy to hear him say this.
While investing in your own business can often have more risk, the growth potential you can experience is huge.
With investments, putting $10,000 and getting 20, 30, 50,000 out in a few years would be considered an exceptional return.
Yet, when you start a consulting business it’s not uncommon to make 80, 100, even $200,000 plus in that same time.
Sure, you may argue that with an investment you don’t have to do anything other than invest the money – that’s true. However, the upside can’t even compare to running your own business.
In no way am I suggesting that you take your life savings and drop it all into starting a new business.
But investing in yourself can and often is the smartest investment you can make. And it offers the highest potential return.
So if you find yourself in the position of having some extra cash on hand. Before putting stashing it away for the future…think first whether it might be better used and give you a better ROI for today.
Disclaimer: This isn’t financial advice. I’m not licensed to offer anything like that so please do not interpret it as such. This is only my opinion from my own experience.