Why diversifying is important
This page is made for those who have done well in business. I want to remind you why diversifying is important. Personally, I have gone all in when it comes to business, and luckily it has gone very well. But, there were times where it got very shaky. Times when I wish I would have diversified a little bit more or even just held a bit more cash instead of having it all tied up in business equipment.
I encourage to try to increase cash holdings, diversify, reduce debt, and also keep growing! Overleveraging, or debt, is one of the biggest reasons that businesses go under. I would rather have taken it a bit slow instead of being so aggressive when it came to business growth as it would have made things a lot less stressful.
Putting time limits on all my goals was an unhealthy habit and I’ve had to learn to take a step back, analyze everything, and realize that as long as we are making small steps forward then everything is going to plan. Diversifying is also important in the event that there are economic or political variables at play.
Sometimes things really can get out of hand and for that reason it is good to put some eggs in different baskets. Even having a few different businesses can help keep cashflow coming in from all angles. As exciting as it is to go 100% in on one thing or even doubling down, I believe the risk is not worth the reward. One of the best stories when it comes to diversifying and not going 100% in on one thing, is the story of Scott Galloway.
I very much like the beliefs of Scott Galloway and I can resonate with what he says a lot of times. Below is a video he posted on his you tube channel on how powerful diversifying is.
Investing in a Low Cost Total US Stock Market Index Fund is absolutely a great way to diversify! It feels good to take some risk off the table and buy shares every week of VTSAX. It also gives me something to look forward to, it’s exciting knowing with time the value of this portfolio will grow!