Investing outside of your business

Invest outside of your business

You wake up one day with a great idea. You decide that this idea is great enough that it is going to make you a lot of money. A lot of money that you are going to use to play with and live the life you have always dreamed of. So you begin the process, get the business going and start to make some money.
So now what do you do with the money? You take some as a salary, then a little to pay some of your business expenses, then, you decide that you are going to take the rest and dump it into your business. What a great idea! Now you have taken your business to another level. You have started to expand it and now it is making you more money than before. So you repeat the process. Take a salary, pay some bills and expand a little more.
This great idea really was a great idea. You are making more money now than you ever thought you would. So now what? You just bask in the glory of your greatness. Then you wake up the next day and that great and wonderful idea has dropped off the radar. Your market, and your niche either has gained a lot of competitors or is no longer needed as strongly as it was when you first began you adventure. You struggle for each dollar and wonder what is in store for the future. Will your business survive? Will you be able to continue to live the lifestyle you have become so accustomed to? What are you going to do?
You should have diversified. You should have taken a portion of the cash you were investing back into your business and invested it elsewhere so that when you did run onto hard times you would have another source, another area that was continuing to grow your wealth as you were working through the hard times with your business.
Is it bad to reinvest in your business? Of course not. You must do it if you want to achieve substantial growth. But you shouldn’t put all of your eggs in one basket. You must be learn the other areas of the money making spectrum and learn to diversify your portfolio so that when hard times do come around, and they will, you are prepared to face them. Otherwise, one small blow could cripple your initial money making abilities to a point where you may be unable to recover, or at least recover very quickly.