Tell me.
Have you considered your family business as an investment?
Does your family business represent yours and your family’s entire investment portfolio? or do you have investments outside of your family business? Is your family business comprised of land holdings and the business itself?
Perhaps it is time to consider your family business from an asset mix – investment perspective.
Some known investment philosophies:
– asset mix yields the best long term returns, based on risk – reward
– investment in your business can be considered an asset class
– rate of return, risk v. reward
Here is one approach to consider:
– assess your family’s overall investments (risk, liquidity, expected rate of return)
1. Business
2. Other = alternate investments (private equity, hedge funds etc)
3. Stocks/bonds
4. Real estate
– identify your family’s long term financial goals
– ensure the asset mix is consistent with your Long term investment goals.
– rebalance your portfolio as needed.
Take some business chips off the table.
As an example, in today’s frothy real estate development market, developers are investing in long term cash flowing assets such as purpose built residential multi-family rentals.
Learn, consider, apply!
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