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Starting a business takes a lot of savvy. Many entrepreneurs border on genius when it comes to their particular niche, and that’s why people are willing to invest in, buy from, and do business with them. While a particular entrepreneur may thrive in her\/his field, they may struggle in one common arena: Personal wealth management<\/a>.<\/p>\n Entrepreneurs spend so much time garnering investments<\/a> that they often don’t take the time to make any of their own. If you’ve ever started something you probably know all too well how easy it is to invest in a project, with no promise of a return. You pour all your time, energy and in this case money, into a venture hoping that it takes off (and eventually pays off).<\/p>\n One founder has set out to solve this problem. Paul Adams, CEO and Founder of Sound Financial Group<\/a>, has a passion for helping fellow entrepreneurs reach personal financial success. As a result, his Seattle-based investment firm manages millions in capital for its clients. Paul has some great insights on where and why founders often struggle to manage their own personal finances.<\/p>\n When most of us think of retirement, we think of vacations, houses and no debts. Adams and Sound Financial recommend an alternative perspective. Instead of putting your focus on how you’re going to spend your savings, think about the legacy you plan to create. \u201cFirst, cast your vision of the future; then set an intention for any financial advising relationships you engage in, establish a plan and strategy and track your progress going forward.\u201d Having this mindset helps vision driven founders find purpose in their financial planning.<\/p>\n Adams also details that \u201cAnticipating a lifetime of withdrawals from a defined asset pool over an indefinite period of time is a complex challenge for which there is no simple solution. Pursuing this challenge can require creative approaches and persistent vigilance.\u201d<\/p>\n Once you retire\/exit\/sell you\u2019re essentially out of a job, so you\u2019ll need to have saved well.<\/p>\n Solution? Plan for market fluctuation and have clear expectations of what your desired retirement lifestyle is going to cost. You\u2019ll need to ensure that your investments are able to meet those expectations.<\/p>\n The other mistake entrepreneurs make when relying on their businesses for personal success is banking on a sale price down the road. \u201cI know entrepreneurs that have based their retirement plans on the current value of their business. The problem is, 10 years from now when they plan to sell, no one might be willing to purchase it for that price. It\u2019s important to create a strategy that doesn\u2019t rely on such variables.\u201d Adams shared.<\/p>\n Loving your business is great. It’s natural for founders to believe that their ventures are also worthy of personal investment, but startups are risky and markets are volatile by nature, so you shouldn’t just rely on your ventures for retirement funding<\/a>.<\/p>\n So much of getting a business started is pitching to the right people and selling the value of a venture. It’s not uncommon for entrepreneurs to present the best version of things in order to get people on board. Unfortunately when it comes to self-valuation things get a little tricky.<\/p>\n Often entrepreneurs simply calculate the most current value of the business and use that as a baseline for their own net worth. Adams shares that \u201cThere\u2019s a difference between your personal balance sheet and that of your business. Entrepreneurs who are new to financial management also make the mistake of including the wrong assets in their calculations.<\/p>\n Vehicles, homes and similar assets have real value, but they shouldn\u2019t make it into your net worth calculations unless you plan on selling them soon and not replacing them.\u201d<\/p>\n Measuring your net worth is a critical part of your financial strategy because it helps you determine what investments you need to make to plan for retirement. An inaccurate assessment of your current worth may lead to shortfalls down the line.<\/p>\n Adams shared \u201cI can\u2019t tell you how many entrepreneurs get themselves into trouble by committing to things without including them in their financial strategy. Expenses like vehicles, college tuition or a better house are easy to aspire to or promise, but planning for them is a whole different game. Whenever you want to commit to something in the future for you or your family, start including it in today\u2019s plans.<\/p>\n The key is having the patience to incorporate these goals as a part of your long-term strategy. It also requires a degree of self-awareness and self-control. You have to be able to realize a want or a desire and postpone it until you can assess its impact.<\/p>\n So to recap, Adams recommends that you:<\/p>\n Many leaders and founders spend more time managing the success of their business than their own finances. The fact of the matter is you\u2019ve worked hard to achieve the success you\u2019ve earned, so you owe it to yourself to manage it well.<\/p>\n Investing<\/a> Photo via Shutterstock<\/em><\/small><\/p>\n This article, “Here\u2019s What You\u2019re Getting Wrong About Investing<\/a>” was first published on Small Business Trends<\/a><\/p>\n While a particular entrepreneur may thrive in her\/his field, they may struggle in one common arena: personal wealth management. Here’s some tips to help.<\/p>\n","protected":false},"author":37,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59],"tags":[],"class_list":["post-13170","post","type-post","status-publish","format-standard","hentry","category-finance"],"_links":{"self":[{"href":"https:\/\/businessnewsbox.com\/index.php?rest_route=\/wp\/v2\/posts\/13170","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businessnewsbox.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businessnewsbox.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businessnewsbox.com\/index.php?rest_route=\/wp\/v2\/users\/37"}],"replies":[{"embeddable":true,"href":"https:\/\/businessnewsbox.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13170"}],"version-history":[{"count":0,"href":"https:\/\/businessnewsbox.com\/index.php?rest_route=\/wp\/v2\/posts\/13170\/revisions"}],"wp:attachment":[{"href":"https:\/\/businessnewsbox.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13170"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businessnewsbox.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13170"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businessnewsbox.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13170"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Personal Wealth Management Tips<\/h2>\n
1. Legacy vs. Retirement Dreams<\/h3>\n
2. Selecting the Right Kind of Assets for Long-term Withdrawals<\/h3>\n
3. Your Business is Great, But it Might Not Be Great for Investment<\/h3>\n
4. Mistakes in Calculating Net Worth<\/h3>\n
5. Don\u2019t Make Commitments Without Having Them in Your Existing Plans<\/h3>\n
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