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Question about investing in business (not only the stock market)

Nice_home

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Feb 19, 2019
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I have seen repeatedly in here (and also in MFL) that investing in the stock market is risky if it's the sole area for one to park funds.

And I believe either somewhere here or in MFL, that MJ mentioned that the best place he likes to put his money is back into his own business system.

So my question (hypothetical) is, let's say you exited from you biz to "cash out," then ideally how much % would be put into the stock market, and how much % would be put back into a new business venture?

And how would it be possible to secure the investment ROI from that business venture (especially if it's a brand new business venture, since you just exited from the old one)?

And what is the minimum amount that's needed to start that process? For example, if you can exit for 100k, then put 50k into stock market and 50k into a new biz, is that enough to start the process? Can that amount be smaller? Or is it necessary to wait for a "bigger" exit?

Is this a stupid line of questioning, and the answer is more like, "shut up and just do something/anything" first and then let's talk? I guess mentally I am still trying to understand how this all works.
 

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Rabby

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The question can't be answered quite so generally. And yes, you should "just do something" in a sense, because investing money you don't have yet will distract you from making money.

That said, the size of your exit would determine how much money you could make in purely passive investments. If you can make 5% on your money, then you need $1mm to make 5k per year right? So you're looking for more than $5mm if you want passive lifestyle income.

With a small exit you could still make a decent down payment on an investment property, or a small business to do a turnaround on. Look through the forum... there are a few people who have bought small businesses and fixed them up, and the prices were pretty low and the terms good (eg: 50% owner financing). If you can find deals like those, there's no reason why a $100,000 exit can't help you get to the next level.
 

Champion

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Theres no real answer to that question "if i had a exit, how much% should be invested in stocks and how much % into new business ventures".

It always depends on your situation and lots of factors.

What kind of business, what kind of industry etc etc....

Is this just a hypothetical question or do you have some concrete infos u can share?
 
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Kak

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Both the stock market and real estate are more stable investments than your own business. You are talking about single stock exposure in a company that has no stable market value. I like locking in my net worth moving earnings to more traditional investments with stable market value and liquidity.

The answer to basically every question you have up there is... It depends.

I advocate for spending enough your own money to tee up a company far enough that you can get outside investment. The farther you carry it yourself, the more stock you'll get to keep and the more attractive you might be able to make it.

There are times to pull the trigger on outside investments and there are times to work.
 

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