The general reaction of any businessperson or entrepreneur towards savings/investing is that his/her business generates huge returns that no investment can ever match. They believe that it is highly rewarding to reinvest all their earnings in their existing business. It is certainly correct that good businesses generate attractive wealth for their promoters and investing in one own’s business should be the first priority of any businessman.
However, we recommend diversification into other financial assets as well:
- Meet Personal Financial Goals
- Diversify to succeed
- Tap Market Opportunities
- Create capital externally for future use
A businessman/entrepreneur who is growing his/her business passionately and investing all his/her earnings in business would do well by not putting all eggs in one basket. By investing in other businesses through equity mutual funds he/she can look for diversification of his business, can participate in other business opportunities available in the market, create capital at attractive returns for future use and can create wealth to fund his/her personal financial goals.