You bear great risk. Your wealth is concentrated in a single investment — your business. Your personal investment portfolio lacks diversification.
Are you listening? Do NOT rest your entire financial future on a single investment. At the very least, fund retirement accounts to their maximum. Investing in real estate should also be an absolute priority, and the best opportunity is the facility your business occupies.
If you don’t own the land and building your business now occupies, now’s a great time to make it happen. Real estate values are down. Way down. Ditto for interest rates. They’re not going to stay down forever. Far from it. The time to act is now.
With the rent you now pay you should be able to pay the interest, principal, taxes, maintenance and upkeep on a facility you purchase and with every payment you build equity and grow your personal net worth.
Scary? Of course. Charge forward with courage. The move makes so much sense. It’s not like you’re buying a second home. It’s less risky than that and the odds are — if you can be sure to not overpay — it’ll pay off handsomely.
Remember, though, it will take many years to pay down the principal portion of the debt you borrow to make the purchase, so buy as early as possible. Let time work its magic.
This article originally appeared in The Business Owner Journal, the periodical of choice for owners of small and midsize private businesses. All rights reserved, D.L. Perkins LLC. © 2012.
This publication is intended to provide general information on the subject matters covered. It is sold and distributed with the understanding that neither the publisher nor any distributor or advertiser is engaged in providing legal, tax, insurance, investment or other professional advice. The advice of a qualified professional should be sought before any reader applies a concept presented herein to his or her particular situation or business.
D.L. Perkins, LLC is solely responsible for this content.
