The power of separating your business, your life and your investments

Many business owners view their business as not only providing their income now, but at some time in the future they look to it to provide their major asset to retire on. However we all know that trying to predict future business asset values is not easy. Changing trends, new competitors or even council planning changes can significantly affect our businesses, and many of these impacts are outside of our control.

So it probably makes smart financial sense to not just rely on your business to deliver all of your future financial security. That’s where investing in property can come in. It is possible to concurrently build a successful property portfolio and build your business.

Separating your personal and business sides from your investment side really is the key to success.

Having the right finance platforms in place to do this, and keeping your different worlds from colliding is the secret to stress-free investing. It’s all about being able to separate your life into three or four ‘columns’.

For business owners the columns are personal, business, superannuation and investment. By keeping all of these areas separate, you can quickly gain control and find where any financial leakage is coming from.

Then you look at strategies to improve lifestyle because let’s face it, lifestyle is everything. First look at the perfect banking structure for all of the sections of your life and business and most people are amazed at the freedom that can be achieved purely by getting organised with their money and accounts.

Having the right finance platform and advice means most are not only on the path to 10 properties in 10 years, but they don’t have any investment costs coming out of their personal or business funds. Having a self-funding portfolio doesn’t require investing in higher risk, positively geared properties. Conservative properties that are negatively geared are just as easy to manage in the right system.

Unfortunately, most people get their banking advice from a bank. Often we go to the bank with hat in hand and we are just grateful they agree to lend us the funds and accept whatever the bank manager says. It’s like asking the mouse where to put the cheese really.

Having the right finance platforms in place… And keeping your different worlds from colliding is the secret to stress-free investing.

You need to look at how to make your money work for you, not the bank and concentrate on personal debt reduction, organisation, business cash fl ow and the ability to invest.

Separating your personal and business sides from your investment side really is the key to success. We start on the personal side of things, because this is the perfect place to start. However, the true magic starts when you can concentrate on the investment side.

True separation gives your property or investment portfolio a chance to mature and stand on its own. By setting up a ‘buff er fund’ you can also protect your lifestyle from the ups and downs of investing as well.

While you may be an expert in your own field, you may not have the experience in finance platforms, cash management and investing to formulate the perfect plan. It is important to take the time to work out what your plan is and what you have to do to achieve it. Have a fresh set of eyes look at your whole picture.

We often get so busy working in our business or jobs taking care of everyone else we forget to take the time to set our goals and put in place a strategy to be able to comfortably step off the mouse wheel when it’s time to retire.

It’s time to put your own oxygen mask on and work out your money survival plan.

CHRIS@THINKMONEY.COM.AU