{"version":1,"type":"rich","provider_name":"Libsyn","provider_url":"https:\/\/www.libsyn.com","height":90,"width":600,"title":"When success quietly creates too much risk","description":"You may feel diversified while quietly becoming more dependent on the exact same sources of wealth. In this episode of 20\/20 Money: The Business of Optometry, I explore concentration risk from two angles that practice owners often don\u2019t connect: what\u2019s happening inside an investment portfolio and what\u2019s happening on their personal balance sheet as their practice becomes more valuable. We start with the S&P 500. Because the index is market-cap weighted, the companies that perform best naturally become larger portions of the index. Today, the largest companies represent a significantly greater share of the S&P 500 than they have historically. That doesn\u2019t make the S&P 500 a bad investment, but it does challenge the idea that simply owning VOO means you\u2019ve built a complete, diversified portfolio. \u201cVOO and chill\u201d is an implementation strategy. It isn\u2019t an investment philosophy. The same phenomenon can happen with a successful optometry practice. You may never intentionally decide to put the majority of your net worth into one business. You simply grow a great practice. But over time, your income, distributions, enterprise value, and perhaps even your real estate can all become dependent on the same economic engine. Having a high net worth isn\u2019t necessarily the same thing as having diversified wealth. The solution isn\u2019t to stop growing the practice or abandon the S&P 500. It\u2019s to broaden the sources of your wealth. That means consistently harvesting excess cash flow from the practice and investing it outside the business while building a portfolio that captures more than just one segment of the market. We also discuss why this matters enormously when it comes time to sell your practice. The more financial independence you\u2019ve created outside of the business, the less dependent you become on receiving a specific number or specific terms from the eventual sale\u2014and the more optionality you have when navigating that transition. The Next Best Step: look underneath both sides of your balance sheet. Ask yourself how diversified your investment portfolio really is, what percentage of your family\u2019s net worth depends on the success of your practice, and whether you\u2019re intentionally becoming more diversified over time\u2014or simply becoming more concentrated in whatever has worked recently.   Have a podcast-related question? Contact our team here!   Resources: Podcast: Are you building wealth, or just feeding the machine Book a Triage call with Adam Download the Practice Owner's Financial Toolkit 20\/20 Money Ultimate Financial Success Masterclass OD Mastermind Interest Form Check out Adam's book: How to Buy an Optometry Practice   \u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014 Please rate and subscribe to 20\/20 Money on these platforms Apple Podcasts Spotify \u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014 For past episodes of 20\/20 Money with full companion show notes, please check out our episode archive here!   ","author_name":"20\/20 MONEY: The Business of Optometry","author_url":"https:\/\/www.integratedpwm.com\/","html":"