How to create long-lasting wealth as an entrepreneur

Creating long-term wealth has no one-size-fits answers. From considering low-risk, fixed income sources to planning appropriate asset allocations, entrepreneurs can pick and choose a financial growth pathway to suit their long-term goals.

When it comes to money, the internet is replete with information and advice. A single Google search will reveal myriad results; right from quick tips on how to get rich in six months to becoming a millionaire by investing in stocks, the information is endless.

However, what happens after this wealth is gained? No one really knows because there is a glaring information gap when it comes to the topic of creating long-lasting wealth.

Creating long-lasting wealth is a challenge and there are no shortcuts or one-size-fits all answers. For entrepreneurs, the task is even more arduous because a lot of their personal financial success is intrinsically linked to their business.

So how does one create long-lasting and sustainable wealth? For entrepreneurs, the answer lies divided into two buckets: personal and professional.

To kickstart their startup journey, a lot of entrepreneurs use their personal savings and family’s assets. And while this a common practise for entrepreneurs who are just starting out, there comes a point when the personal and professional cannot intermingle.

Entrepreneurs should strictly consider separating their personal wealth from their company’s finances. In doing so they ensure that their fate is not constantly tethered to the success or failure of their company.

No matter what financial crisis a company is in, an entrepreneur should have sufficient personal assets to be able to continue to provide a comfortable lifestyle for themselves and their family.

Also, it is important to balance out sectoral risks and ensure that there is no crossing of paths in terms of a company’s area of operation and personal assets.

For example, for a real estate startup founder to have heavily invested in REITs would be a mistake because if the sector were to face any volatility, both his/her personal and business finances would take a hit.

On the professional front, there are several ways for entrepreneurs to create long-lasting wealth.

Diversify portfolio

In order to avoid the risk of near financial haemorrhage, it is imperative to explore a variety of investment options such as Mutual Fund, ETFs, REITs, Index Funds and Equities. Diversification can help create a balanced financial portfolio of investments with varying rates of returns.

Additionally, startup founders shouldn’t shy away from exploring the international financial market horizon in order to protect their investments from domestic market volatility.