As a BIG fan of MJ and his books, I'm a firm believer that true wealth is created by making smart investments in yourself, and your business as opposed to the compound interest fallacy. But I'm curious, how do entrepreneurs invest their excess cash? I'm not sure there's a definitive answer, but wonder what techniques are being used by business owners.
For me, I look at retirement plans (i.e. 401(k)s, SEPs, etc.) as a way to mitigate tax liability and have my investments grow tax-deferred using a variety of highly liquid, low-cost index funds. However, I also balance the need to have liquidity in my business and personal life to allow me the flexibility to reinvest back into my business or another alternative investment, i.e. real estate. Thus I've been looking at money market accounts through online, FDIC insured banks with rates hovering around 2.3% to park my cash. But when I review my financials YoY and see that my business has increased 40%, it's hard not to want to reinvest everything!
Interested to hear your thoughts on this and any strategies used that have proven to work well. Thanks.
For me, I look at retirement plans (i.e. 401(k)s, SEPs, etc.) as a way to mitigate tax liability and have my investments grow tax-deferred using a variety of highly liquid, low-cost index funds. However, I also balance the need to have liquidity in my business and personal life to allow me the flexibility to reinvest back into my business or another alternative investment, i.e. real estate. Thus I've been looking at money market accounts through online, FDIC insured banks with rates hovering around 2.3% to park my cash. But when I review my financials YoY and see that my business has increased 40%, it's hard not to want to reinvest everything!
Interested to hear your thoughts on this and any strategies used that have proven to work well. Thanks.
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