Smart Investment Choices: A Guide to Private Equity and Business Ownership for Growth

Over the past two months, I’ve had the pleasure of engaging in dozens of conversations with medical professionals, business owners, and executives about their investment goals. Out of these discussions with 30 individuals, only one wasn’t interested in investing in private equity or a partnership. It seems everyone is eager to maximize income and growth beyond what their day job provides.

From an advisory perspective, here’s how I help my clients reach their investment aspirations without becoming overly concentrated in one area or taking on too much risk.

Step One: Build a Cash Flow-Based Financial Plan
The foundation of any investment journey is a solid financial plan. This starts by managing cash flow and expenses effectively. I advise clients to allocate at least 20% of their income toward investment, retirement savings, and paying off debts.

Step Two: Seek Opportunities to Create Income and Liquidity
In this phase, we look for ways to increase income or reallocate funds across asset classes to create the necessary liquidity for their investment goals. It’s not just about saving; it’s about moving assets strategically.

Step Three: Commit to Private Equity or Real Estate Investments Annually
Once income and liquidity goals are clear, we establish a yearly allocation plan to either private equity investments or real estate opportunities. This creates a balanced portfolio with the potential for growth.

Establishing Guidelines for Asset Allocation
A balanced portfolio can reduce overextension into any one investment area. Here’s a breakdown of a recommended asset allocation:

• 50% to 60% in investment and retirement accounts

• 20% to 40% in real estate

• 10% to 15% in private equity or limited partnership in a business

If you’re a business owner, much of your net worth might already be tied to your business, with real estate as a secondary asset and retirement or investment accounts third. For those in the real estate sector, focusing on non-real estate private equity and retirement investments can provide diversity and risk management.

Exposure to Business Investments Without Daily Involvement
A common theme I encounter is the desire to invest in a business without managing its daily operations. Many people are drawn to private equity because it offers potential income and growth without the demands of hands-on management.

If these are the discussions you’re having with coworkers and friends, I’d love to be part of that conversation. I can provide access to investment opportunities that vary each year, helping you diversify your portfolio and build wealth.

The Bottom Line: Trust the Process
Establish a financial plan, set investment goals, and stick to them. Trusting the process is key to achieving long-term success in private equity and business investments.