How to Invest as a Small Business Owner

Today, I’ve got something I’m super stoked to chat about. Investing. It’s not only a topic that I hold near and dear to my heart, but it’s also something most SMB owners know very little about. What are the biggest issues I’ve seen? Lack of knowledge around investing. Lack of time to learn about investing. But what If I told you, there’s a way to do both?! Que crappy infomercial… But guess what? I’m here to answer your investment prayers OR at least point you in the right direction. Even if you’re grinding away at a 9-5, this can be a game-changer for you too. So sit back, and soak it all in!









Key Takeaways







Investing isn't complex as a business owner




Follow an investment system and stay consistant




ETFs and REITs make investing SUPER easy




















What are the Two Main Investment Vehicles?



Equities (the stock market) Real Estate (in the form of physical real estate OR RIETS). More on this in a minute.





















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Pro Tip #1: Don't sleep on investing. The sooner you get started, the sooner you start to compound that interest!
- AJ Silber









Why Investing is Crucial as a Business Owner



The goal of investing is to get to a point where your monthly expenses are handled passively through your investments. Once you’re there, baby, there are so many benefits! Stress Reduction : If your monthly expenses are paid for, how much LESS stressful is your life? Am I right?! Risk-taking opportunity: With a sound investment strategy, you’ll have a safety net. This can encourage you to take calculated risks in your business. Diversification: You’ve heard the saying, “Don’t put all your eggs in one basket”, right? Investing allows you to spread your wealth across different avenues (not just your business). Retirement planning: Hey, we can’t hustle forever! Investing helps you build the cushion you’ll need when it’s time to chill out and enjoy the fruits of your labor. Lifestyle: What are you into? Clothes? Cars? Vacations? Once you have a sound investment strategy, all this (and more) can be yours.















How do I Invest My Business Profit?



Disclaimer: This is what I do; don’t copy this exactly. Do your research and do what works best for you. I know it’s not exactly the right definition of the barbell approach, but I think of my strategy as a barbell. Make money in my business (the bar). Invest in equities or real estate (the weights on the end). Here are all the steps (in order) that you should follow when thinking through your investment strategy. FYI – I’m making the steps so you can jump in wherever you’re currently in your process. Step 1: Get a written budget It’s time to break out the spreadsheets or download a budget app! The first step in investment is knowing what you’re spending and where you can save. Here’s how to budget if you’ve never done it.  Step 2: Save $1,000 This is your initial safety net, a buffer for unexpected events. Whether it’s a minor car repair or a sudden medical expense, having this cash cushion allows you to handle bumps in the road without derailing your financial goals. Step 3: Pay off all debt except your mortgage using the debt avalanche This method focuses on paying off loans with the highest interest rates first. This can save you a significant amount in the long run. Once you’ve cleared this debt, you’ll have more funds available for investment. Step 4: Save 3-6 months of expenses This is the ideal emergency fund. It gives you the peace of mind of knowing you could handle a significant financial blow without going back into debt. Step 5: Work up to investing 10% of your gross revenue into business growth You’re never going to make a better return than the investment made in your business. Typically, the 10% is in the form of marketing or sales. Now, you’re on easy street. You’ve got no debt, a beautiful emergency fund, and a thriving growing business. It’s time to turn on the afterburners. Disclaimer (again), this is what I do, and I’ll tell you why. Step 6: Max out a Roth IRA A Roth IRA is a type of individual retirement account that allows your investments to grow tax-free. You contribute with after-tax dollars, meaning you’ve already paid taxes on the money you put into it. In return for no up-front tax break, your money grows tax-free, and when you withdraw at retirement, you pay no taxes. Step 7: Save $10,000 in a 529 plan 529 plans are savings vehicles tailor-made for future college costs. They can be used to meet costs of qualified colleges nationwide. In most plans, your money will grow tax-free and can be withdrawn tax-free to pay for college costs. Step 8: Invest all additional cash into ETFs & REITS through a brokerage ETF: Just like a mutual fund, it pools the resources of many investors to track specific assets like indices, sectors, or commodities. But, here’s the catch – unlike mutual funds, you can buy and sell ETFs on a stock exchange just like any regular stock. Cool, right? REIT: Short for Real Estate Investment Trust, a REIT is a corporation that owns, manages, or provides funding for income-producing real estate. Taking a cue from mutual funds, REITs gather money from a multitude of investors. This approach opens up opportunities for individual investors to receive income from real estate assets, bypassing the need to directly purchase, oversee, or secure financing for properties. Step 9: Buy physical real estate Buying physical real estate involves purchasing residential or commercial properties to generate income either through rental or resale. This is a long-term investment strategy that can be highly profitable over time. However, it requires a significant upfront financial commitment. Before taking this step, it’s crucial to thoroughly research and consider factors such as location, market trends, and property condition.

















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Pro Tip #2: Investing is easier when you have goals and a strategy. Create both if you want to win over the long term.
- AJ Silber









Common Investing Mistakes to Avoid



While the path to successful investing may seem straightforward, it’s essential to be aware of common pitfalls that could compromise your returns. Don’t Invest in MEME Stocks: While meme stocks have become popular, they’re notorious for their volatility. Investing in these assets might seem like a quick way to make a big return, but the reality is that their value can plummet just as quickly as it rises. Don’t Invest in Individual Stocks: Investing in individual stocks requires a deep understanding of the company and its industry and the time to monitor your investment continuously. Even experienced investors cannot consistently predict which individual stocks will outperform the market, making this approach riskier than diversified investment strategies (like ETFs or REITs). Don’t Get Off the Rollercoaster: Investing can feel like a rollercoaster ride with ups and downs. But remember, it’s a long-term game. The key is to stay invested during the market’s highs and lows. While it may be tempting to sell when the market is down, history has shown that the market tends to rebound over time. Don’t Skip Steps: Our outlined investing process is structured deliberately to help you build a strong financial foundation. Skipping steps may feel like a shortcut to financial growth, but each step is crucial in preparing you for the next. Follow the steps in order and resist the urge to jump ahead.















In Summary



Remember, the goal of investing isn’t to get rich quickly but to grow your wealth over time. Avoiding these common mistakes can help you stay on track and achieve your financial goals. Let us know your thoughts in the comments below! 




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