If you run a business, then you may work hard to keep your personal and business investments separate. However, this may not be as clear cut as you may think. This is because all investment decisions you make could have an effect on your business.
Having a mortgage could be a very wise idea as it means that you will not be paying rent and you will have a home that you own once you have paid it off. However, if you borrow too much money, you may be under big pressure to pay it off. You may find it difficult to manage the repayments and with the threat of your home being repossessed it could be tempting to take money out of the business to make the payments. This could mean that you will not be investing in the business in the way that you should.
Buying insurance is important. Making sure you have life insurance, health insurance, house insurance and car insurance, just for starters, will give you peace of mind and help you to look after yourself and your family. It can be tempting to not pay for these as they can be expensive. However, this could have a detrimental effect on the business. If you suddenly need health care, need a car repair after an accident, have your home burgled or die, then those insurances will help. Without the money from them, it may be necessary to sell the business or take money from it to pay out the necessary expenses.
Investing in the stock market can be a risky thing to do. Many people enjoy doing it, but even the experts get it wrong and can lose a lot of money. This is why it is extremely important to make sure that you do not use any money that you may need elsewhere. If you lose too much money, it may mean that you cannot make the business investments that you need to make or need to take money out of the business.
Investing in a pension or some type of retirement fund is very wise. If you do not do this, then you will be relying on the business to support you through retirement. Although this is better than having no retirement plans at all, it is better to be able to not work at this time. You never know what your health might be like for one thing and you want to make sure that you can afford health care and take time off if you need to.
Bonds are a less risky investment which may seem like a wise idea. The problem with some bonds is that you get tied in for a certain time period. This means that you cannot get hold of the money very easily. This could be very bad if you need the money to invest in the business or if the business is not paying you, then there may not be enough money to fall back on to help you.