Entrepreneur’s Wealth Digest
How is wealth management different for business owners? The more accurate question might be, how isn’t it different? Business owners control their time and capital to a greater degree than the 91% of non-entrepreneurs in the US. Most of the research and writing on personal finance is targeted toward the 91% who work for someone else and operate in a very traditional work environment. They generally collect wages and benefits and have fairly predictable income. Entrepreneurs only make money when their business does and those numbers change drastically over time.
So how should entrepreneurs manage their wealth differently? We lean on our 4 Pillars of Entrepreneur Wealth Management:
Get Clear is all about being able to clearly articulate your vision for your life, specific goals that involve money, and the values you have as a family. Who are you when you are at your best? Where do you physically want to spend your time and who do you want to spend it with? What things do you want to be and what do you want to avoid?
Grow Wealth is focusing on your biggest asset and highest returning investment, your business. How do you ensure that your capital reserves are adequate for the business today and in the future? If you want to invest outside of it, how do you ensure you keep enough liquid capital available for the unexpected that may pop up in the future? Are all of your investments coordinated together with your business equity and tied to the specific goals you and your family have?
Manage Risk focuses on legal agreements, insurance contracts, and understanding what your liability could be for both business and personal activities. Do you have enough liability coverage and the proper entity structures to protect your personal assets outside your business? Have you looked at each of these as your wealth continues to grow? What happens to your business and your family if you pass away or become permanently disabled?
Entrepreneur Equity Planning takes the vision you and your family have and designs a strategy for your business or businesses to transfer on the timeline you want. Are you wanting to sell in one, ten, or thirty years? What do you want your role in your business to be throughout that time? How much do you want to be involved after an exit?
These four pillars work together to give your remarkable life the foundation that it needs. Just like pillars holding up a Greek Temple, we need all of them to interact and carry the weight they need to carry. If pursued individually, you risk them working against one another or at the very least, not working as intended. Employees can afford to segregate their income, cash reserves, and retirement accounts into separate planning processes. They can get by with a very minimal estate plan and standard liability and life insurance contracts. Entrepreneurs have a higher responsibility to do the work and close those gaps between areas of personal wealth. Even better, you can share the work with our team at Entrepreneur Aligned! We make sure that nothing slips through the cracks and help you manage your wealth to create the life you and your family work so hard for!
If you have a question or simply want to talk through your financial planning, we are here to help.
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DISCLOSURE: Jarrod Musick is an officer of Destiny Capital and Entrepreneur Aligned, a DBA of Destiny Capital. This article is for informational purposes only and should not be relied upon as a basis for your investment, business, or personal financial decisions. We recommend consulting with your wealth advisor, CPA/tax advisor and/or attorney, as applicable to your situation, prior to implementing any new tax, legal, or investment strategy.
Jarrod was born into financial planning and solving financial problems. With his financial advisor father Steve telling stories about finance around the dinner table from an early age, the idea that everyone has a different financial situation was always there. After an early professional career spent in nonprofit and government, Jarrod came back to his roots helping people plan and invest in 2011. Since then, he has worked with individual clients, led internal teams and ultimately became partner and the CEO of Destiny Capital in 2017. With a passion for helping entrepreneurs change the world, Jarrod ultimately oversaw the creation of Entrepreneur Aligned in 2020. With both Destiny Capital and Entrepreneur Aligned, Jarrod leads teams that help people live lives of abundance where money is simply a tool to let everyone be a positive force for the world around them. When he isn’t working with the talented teams for EA and DC you can find him chasing his twins, wily trout or a podium spot at an OCR race.