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Colin Lawson on why business owners make the worst investors

Over the past 15 years I’ve had the privilege to advise clients from all walks of life on how to protect and grow their wealth. In that time I’ve uncovered something; there are a group of people who, unexpectedly, are awful when it comes to managing their finances… business owners.

23 January 2012

Many of the business men and women I have met often neglect their finances, and to top it off some of the greatest portfolio losses that I have seen (sometimes in excess of 50 per cent) have been in portfolios of previous business owners.

So why is it that the business brains of Britain, who make thousands of pounds for their companies, don’t do the same when it comes to personal wealth?

Risky strategy

I’ve noticed some themes which might help shed some light on this:

1) Too busy making the money to manage the money.

When you are running a business it can often take up a lot of your time and energy, the business is usually worth considerably more than any wealth built up outside of it and so managing personal assets is usually a low priority.

2) An aversion to pensions and pension planning.

At the moment, it is rare that you see the word pension in print without the wor...

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