Why Betting Everything on Your Business Could Be Your Biggest Financial Mistake
Creating a Financial Future That Doesn't Depend on Your Exit Strategy
As a business owner, you're a dreamer and a doer. You've created something from nothing, and your passion drives you to pour everything back into your venture. But while you're busy building your business empire, there's a silent risk growing in the background—one that could jeopardize everything you've worked for.
Living Your Dreams (While Keeping Them Secure)
You've built something extraordinary. Your business is your legacy, your passion, and potentially your ticket to financial freedom. The dream of growing your company into something valuable enough to fund your ideal future is powerful and worth pursuing.
But what if there was a way to pursue that dream while creating a safety net that ensures your personal financial success regardless of how your business journey unfolds? By building personal wealth alongside your business growth, you're not abandoning your entrepreneurial dreams—you're securing them.
Why the “All-In” Approach Needs to be Refined
It's easy to justify putting everything back into your business. After all, each reinvestment feels like it's bringing you one step closer to that big payday when you eventually sell. You tell yourself: "This is my retirement plan. This is my investment strategy. This is the smartest use of my capital right now."
By the way, these are all true! Your business is where you have the most knowledge, control, and potential for outsized returns.
But there is something beneath the surface of these noble thoughts. It puts all your eggs in one basket.
No matter how successful it appears today, your business is still a single, highly illiquid asset in an unpredictable market. Even Apple and Amazon face unexpected challenges; your business is no different.
Have No Fear
The thought of diverting money away from your business might trigger fear. What if taking capital out stunts your company's growth? What if you miss out on the big opportunity because you didn't reinvest that extra $50,000?
These fears are valid, but consider the flip side: What happens if your industry faces disruption? What if health issues force you to step back unexpectedly? What if the perfect buyer never materializes?
By building a personal financial foundation parallel to your business, you're not abandoning it—you're creating options. Having liquidity outside your business means you can weather storms, seize opportunities, and make decisions based on strategy rather than desperation.
Listen to Your Gut
You've probably heard the stories: the business owner who couldn't find a buyer, the one who sold for far less than expected, or the entrepreneur who had to finance the sale themselves only to watch the buyer run the company into the ground.
These aren't just cautionary tales—they're everyday realities. According to BizBuySell, only about 20% of businesses listed for sale actually sell. Valuation expectations often don't align with market realities. Finding the right buyer with both vision and capital is challenging. And timing truly is everything—economic downturns can decimate business values overnight.
Not to mention the possibility that business owners sometimes die or become incapacitated before they can sell, forcing a firesale so their families don’t lose everything.
Your instincts are right to question whether betting everything on a successful business exit is wise. A business sale is not a retirement plan; it's a potential bonus to a well-structured financial strategy.
Status Quo Financial Advice is a Threat to Your Business
The conventional wisdom surrounding entrepreneur finances isn't just flawed—it's potentially dangerous to your long-term wealth in multiple ways:
First, there's the "all-in" approach, where every dollar goes back into your business, creating a single point of failure for your financial future.
Then, when advisors and CPAs finally convince you to diversify, they push you toward problematic alternatives:
Qualified retirement plans that seemed attractive because of "tax advantages" actually create several hidden traps:
You're forced to fund employee accounts to participate, draining capital from your own wealth-building
Your money becomes locked away until age 59½, creating a liquidity crisis if you need capital for opportunities or emergencies
You're deferring taxes from a historically low present to an unknown future (no one I’ve asked thinks taxes will go down)
You surrender control of your money to market fluctuations and government regulations that can change at any time
Non-qualified market investments represent another misguided approach:
After taking enormous risks to build your business, you take profits and immediately risk them all over again in volatile markets
Wall Street benefits from your money while you assume all the risk
Market cycles can devastate your wealth just when you need it most
You surrender control of your financial future to economic forces beyond your influence
Both approaches violate the core principles that made you successful as a business owner: maintaining control, ensuring access to capital, and creating predictable outcomes. The financial industry has convinced entrepreneurs to abandon these principles the moment they start thinking about personal wealth.
The Path Forward: Control, Liquidity, and Guarantees
Smart entrepreneurs are now rejecting conventional financial wisdom and instead prioritizing strategies that offer:
Control: Maintaining decision-making authority over your capital at all times, just as you do in your business.
Liquidity: Ensuring access to your money when opportunities or challenges arise.
Guarantees: Building wealth on contractual promises rather than market speculations
Properly structured whole life insurance solves so many of these problems. With whole life, we can create:
Tax-advantaged growth without government restrictions on access
Guaranteed increases in cash value regardless of market performance
Liquidity through policy loans that don't interrupt the growth of your money
Protection from creditors in many states
The ability to self-finance opportunities without bank approval
Greater flexibility in passing on the business to heirs who want it without “disinheriting” heirs that don’t
Remember, you didn't build your business by surrendering control to others or gambling on uncertain outcomes. Why would you ever build your personal wealth that way?
Your business should be one chapter in your financial story, not the entire book. And the financial principles that guide that story should mirror the same values that made you successful as an entrepreneur: maintaining control, ensuring access to capital, and creating predictable, positive outcomes.
Watch this video
Check out this video where I whiteboard a few ideas on how business owners can get ahead on their personal balance sheet without sacrificing the growth of their business:
StackedLife Podcast
Episode 9: The Tax Advantages of IBC
Most people know life insurance has a tax-free death benefit, but that's just scratching the surface of tax advantages.
In this episode, I break down the three powerful tax advantages of whole life insurance and explain how the Infinite Banking Concept leverages these benefits to create tax-efficient financial strategies. I'll teach you about tax-deferred growth, tax-free access via policy loans, and strategies that can dramatically improve your financial picture - all within the framework of whole life insurance and IBC.
I’m John Perrings, Authorized Infinite Banking Practitioner and founder of StackedLife. Instead of taking high risk to get a high return, we help our clients implement strategies that create multiple safe returns with the same money. It’s geometric compounding that we call Stacked Interest Acceleration and IBC is the first step.
I’ve implemented IBC for hundreds of my clients and educated thousands more via my podcast, articles and courses at StackedLife.com.
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