The Serial Investor

Geordie M. Hrdlicka and Ali Nasser

We have all met people that love to spend, and in some cases, may even have an addiction to spending. But what about the serial investor, the individual who cannot say no to investing all of their cash into a business, new venture or investment opportunity? Some of the most successful business owners in the world made their fortune because they went “ALL IN” on something they believed in. We often hear stories about risk taking and the potential rewards it may offer. However, less often do we hear the flip side, where many have lost it all because they had everything in one basket. Taking risk can be one of the most exciting and rewarding parts of life. However, along with risk come challenges- lack of liquidity/cash reserves and security in exchange for increased opportunity.  Although this may create more wealth, there is a balance between reinvesting and taking profits that needs to be considered.

In some cases, individuals with a multi-million dollar balance sheet have little to no liquidity. This can cause significant problems if cash flow declines or the business owner passes on. The federal estate tax can reach 40%, potentially forcing your heirs to sell the family business or real estate in order to generate the necessary liquidity for taxes, Result- the loss of your life’s work.

As you grow older, you may want to re-evaluate your appetite toward risk. It is important to ask a few questions to determine your personal balance:

  • Can I afford to lose it all?
  • Do I have enough time to rebuild?
  • If something changes with my business or income, do I have the resources to provide financial security?
  • What happens to my family if I am no longer around?

Risk taking is what adds excitement and opportunity to life’s journey. However, you may want to establish safeguards to protect your legacy and ensure your financial security.

Prior to investing, you should consult a financial advisor and read all available information. The examples given are hypothetical, for illustrative purposes only. The product features mentioned must be sold by prospectus and carry investment risk. Investment advisory services offered through Verde Wealth Group, LLC, a state registered investment advisor. Securities offered through ValMark Securities, Inc. Member FINRA, SIPC. 130 Springside Drive, Suite 300, Akron, Ohio 44333–2431. 1–800-765‑5201. Verde Wealth Group, LLC is a separate entity from ValMark Securities, Inc. © 2016 Verde Wealth Group, LLC. All rights reserved. This article was initially published February 2013.

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