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First-Time Investing: 7 Safe Investments for New Entrepreneurs

Posted: November 5, 2018 at 1:30 pm   /   by   /   comments (0)

Are you a new entrepreneur trying to break into the millionaire ranks? Stay on the safe side with these seven safe investments for brand-new entrepreneurs.

Are you a new entrepreneur trying to break into the millionaire ranks? There are some investment dos and don’ts you need to know now. The biggest of these is to stay a little on the safe side.

Don’t burn the project before it gets off the ground. While we know it’s against your entrepreneurial nature to be patient, by going slow you can grow big. Check out our seven safe investments ideas for entrepreneurs to see how.

First-Time Investing: 7 Safe Investments for New Entrepreneurs

As a new entrepreneur, your investment needs are a bit different from others. You are likely pouring most of your cash into an attractive, high growth company.

Advice about spreading your investments is rarely the right answer for you. Your business is likely to be not only your current wage and growth strategy but your retirement plan, too.

It’s for this reason that much, but not all, of our investment advice focuses on ways to manage your business wisely. Let’s take a look.

1. Invest in People

We don’t mean hire the most expensive option you see in the recruitment round. Hire those with potential and transferable skills, not necessarily those with the most experience.

Then invest in their learning and job satisfaction. Pay them adequately, but reward them with challenges and non-monetary rewards. Organizational psychology tells us that money only motivates employees to a certain point.

Beyond this, it’s not a motivator. So what are the things that motivate us? Research says it comes down to new challenges that allow us to grow.

Giving back to the community in some way through our work drives us. In essence, it’s finding a deeper ‘why’, a deeper meaning in our work that keeps us happy in a job.

2. Schedule Staff Motivation

Keeping your people engaged and motivated is a constant pressure and ongoing need. Often, it’s not the biggest priority among business-focussed or tech-absorbed individuals. It can be easy to forget the emotional health of your staff amidst the chaos of a startup.

Our advice? Schedule it. Calendarize regular check-ins with your people, motivational staff meetings, and team-build days.

This gives you a chance to ensure that employees are finding the challenges and deeper meaning in their work. And they’ll give you valuable insights on the business from their perspective.

If you don’t schedule these sorts of catchups, they don’t happen. Then you’ll only remember their importance when a resignation letter hits your desk!

3. Shake Hands with Productivity Technology

When you’re growing the business and keeping expenses to a minimum, think of the technology that improves productivity as a smart investment. It needn’t be the biggest and brightest of available technology yet.

You can upgrade later. In the early days stick to tools that cost little or nothing, like digital marketing tools.

Other great productivity and communication tools include Slack for staff communications and file sharing. The Google suite is great for document creation and sharing. Use Dropbox for large file storage.

Doing this early helps avoid too many adjustments later. Staff learn this as ‘the way’ from the beginning. Adopt more expensive programs like Salesforce once you have a healthier bottom line.

4. Keep Your Investment Safe (From Yourself)

As a small or growing business, there are inevitable cash-crunches. These are the moments when it’s tempting to dip into shares or other investments for quick cash. That’s why we advise you to build a portfolio that is harder to access.

Look for accounts or bonds that have penalties for removing money within a certain timeframe. Penalties are likely to take away some of that temptation when pulling money from shares and savings aren’t quite your last option.

5. Eye on Assets

A good accountant will help you get some of your assets filed under your spouse or children to spread your financial risk.

This will keep the family finances healthy. Even in the event of an unforeseen financial impact. Done right, this can lessen you and/or the business tax impact too.

6. Be Conservative – Even Though It Hurts!

As an entrepreneur, you’re likely comfortable taking financial risks where you see a payoff. You’ll need to fight this mindset when building a portfolio outside the business. You should have a safe, slow growth share portfolio similar to one that someone nearing retirement would have.

Avoid the type of high-risk high payoff portfolio generally advised for younger people.

7. Invest in Sound Financials

To keep the company growing you’ll need to be smart with your growth strategy, with both your company and personal investments. This is not the time to get stuck with a big tax bill for doing things the wrong way.

Avoiding the IRS’ wrath makes every dollar you spend on an accountant or financial advisor money well spent. This may well be your best investment. Check online forums for suggestions for advisors like investormint.

Ask trusted friends and associates for recommendations for accountants or financial advisors. Fight the urge to see this as an expense. If you’ve gone with a great recommendation, it’s a solid investment.

Some Final Advice

In directing investments into the company or into your personal portfolio or assets, follow the safety net golden rule. You should always have three months of cash to cover business and personal expenses. Keep these two lots of three months of cash separate.

Anything less is putting too much risk on your business or personal financial health.

Time to Get (Safe) Investing!

That’s it for our seven tips for safe investments for entrepreneurs. Think of slow growth as steady, long-term growth. As long as you follow these tips and keep that three-month financial safety net, you’re set for success.

If you enjoyed this article, and want to see more like it, check out more of our blog here. Or better yet, listen live to entrepreneur podcast network to rocket your business to success today!

 

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