Joe Smith owns a small but very profitable, residential home construction business in a local community. Every time Joe was approached to adequately diversify his savings plan by setting up either a retirement program, a 401K, an IRA or a deferred compensation program, Joe decided that investing the money in his business was going to give him a better return.
Thus Joe continued to re-invest 100% of his profits in the business and did not diversify his retirement portfolio. Within the last six months, an extremely large national builder started building in the area.
Joe had run his business successfully – put all his money back in the business – and always assumed that it would be his retirement plan because he would sell it someday. Now that the national builder has moved in, the value of his business has diminished immensely. And when declining contracts forced Joe to approach the competitor to see if they wanted to acquire his business, he found out that they would only buy the business for 10¢ on the dollar.
If Joe had consulted Concentrix earlier, we could have helped him invest only a small percentage of profits on an annual basis to create a deferred compensation plan, emergency fund and retirement program that would have ensured financial comfort no matter what unforeseen circumstances occur.
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