Investing: The Second Career Every Business Owner Needs

Why business owners should learn to manage capital before they need to.

By David Fagan, CPA, CA

One of the most important investment lessons I ever learned came from a client who sold

her family business.

For more than forty years, she and her husband had built a successful company. It was their

livelihood, and the financial world they understood best. Eventually, they sold the company and received a multi-million-dollar payout. From the outside, it looked like the ideal outcome.

"David, sometimes I wish we hadn't sold."

The comment surprised me. Not because they didn't receive enough money. They did. Not because the transaction went poorly. It didn't. The reason was much deeper than that.

She had spent forty years learning how to run a business, but very little time learning how to live without one. Suddenly, her future depended less on managing employees, customers, and operations, and more on understanding investment portfolios, withdrawals, yields and market volatility.

That conversation taught me something important. For many business owners, investing eventually becomes a second career. Not because they actively choose it, but because one day, almost every business owner leaves their business. Whether through a sale, succession, retirement or an unexpected life event, there comes a point where accumulated capital must begin doing the work the business once did.

The question is not whether that transaction will happen. The question is whether you will be prepared when it does.

The Mistake Many Business Owners Make

I rarely meet a business owner who has accidentally become successful. Yet many approach investing as something they will figure out later. That has always seemed backwards to me.

Business owners understand that skills are built over time. No one becomes a good operator, leader, negotiator, or decision-maker overnight. Those abilities are developed through experience, judgment, mistakes, and correction. Investing is no different.

One common misconception is that investing becomes important after a major liquidity event. Business owners often assume they will learn about investing when the business is sold, an inheritance arrives, or they finally have significant capital to deploy.

The challenge is that some of the largest financial decisions people make occur during emotional periods of their lives. At precisely the moment when clear thinking is most important, uncertainty often takes over.

Over the years, I have seen people leave significant money sitting in cash for years while trying to determine what to do next. They are not being careless. In many cases, they are being cautious. But excessive caution can become its own kind of mistake.

Cash feels safe, and in the short term, it often is. But over longer periods, delay has a cost. Markets continue moving, compounding continues working, and opportunities continue passing by. Cash has risk too. It simply hides it better.

From Operating a Business to Operating Capital

Many entrepreneurs spend decades developing business skills while spending very little time developing investment skills. They know how to read their industry, manage staff, solve customer problems, control costs, and make operating decisions under pressure. But after the business is sold, the game changes.

They move from operating a business to operating capital.

A business owner may be comfortable making a $500,000 equipment purchase, hiring a key employee, or opening a new location. Those decisions fit within the world they understand.

But deciding how to invest several million dollars across public markets, fixed income, private investments, real estate, and cash reserves can feel entirely different.

Over the years, I have noticed that business owners are often more comfortable risking money inside their business than investing it outside their business. The irony is that the business is usually their largest single investment.

Running a business and managing capital are both forms of capital allocation, but they are very different games. In business, you can influence outcomes through effort, leadership, customer service, pricing, sales, and execution. In investing, control is far more limited.

Patience often matters more than activity. Discipline often matters more than intelligence.

That can be uncomfortable for business owners. Entrepreneurs are used to solving problems by doing more. Investing often requires the opposite. It requires the ability to stay disciplined, avoid unnecessary activity, and allow time to do its work.

The goal is not to become a professional investor. Most business owners do not need to become stock pickers, economists, or market forecasters. But they do need to understand how compounding works, why diversification matters, how volatility feels, and how their own behaviour affects long-term outcomes.

Investing is not simply about choosing investments. It is about learning how to make decisions with capital.

You Need to Feel the Wobble

I often compare investing to learning how to ride a bicycle. You can read about balance, watch someone else ride, and understand the concept intellectually. But until you get on the bike and feel it wobble underneath you, you have not really learned how to ride.

Investing works much the same way. You can read about market volatility and understand that markets rise and fall over time. But until you personally experience a meaningful decline in your own portfolio, the lesson remains theoretical.

That is why business owners should start learning before the stakes are high. Open a TFSA. Contribute to an RRSP. If appropriate, establish a corporate investment account inside a holding company. The size of the account matters less than the experience it creates.

Learn When the Stakes Are Lower

Most business owners have had financial lessons they would rather not repeat. Perhaps it was a business investment that did not work out, a partnership that failed, or a speculative opportunity that looked better on paper than in reality. These experiences are painful, but they can sharpen judgment.

The same principle applies to investing. It is far better to learn difficult lessons when the dollar amounts are manageable than when your entire financial future depends on the outcome.

Imagine two business owners each receive $4 million after selling their companies. One has spent years investing modest amounts and understands market volatility. The other has never invested outside the business. When markets decline 25%, one stays invested while the other retreats to cash. Five years later, their outcomes may be dramatically different, not because one was smarter, but because one was prepared.

Investing Creates Future Choices

Most people think investing is about earning returns. Returns matter, of course, but I think

that is only part of the story. At its best, investing is about creating future choices.

A well-managed portfolio can allow a business owner to retire earlier, sell a business when the timing is right, support family, give generously, or simply work less. It can create the ability to make decisions from a position of strength rather than necessity.

This is especially important for business owners because so much of their wealth is often tied to one company. The business may provide income, identity, purpose, and net worth all at once. That concentration can create tremendous wealth, but it can also create risk.

Building investment knowledge early gives the owner more confidence, flexibility, and control over the next chapter.

What This Means for Business Owners

If you own a business today, the practical lesson is straightforward: do not wait for the money to arrive before learning how money works.

Start now. Develop the discipline now. Learn the basics before the decisions become urgent. That does not mean making reckless investments or moving faster than your comfort level allows. It means beginning the education process while you still have time to learn gradually.

For some people, that may mean working with an advisor. For others, it may mean reading more, setting up accounts, or starting with broad-based diversified index funds. The exact path will vary, but the principle is the same: preparation reduces uncertainty.

Final Thoughts

Every business owner eventually leaves their business. Some sell. Some transition ownership to family or employees. Some retire gradually. Some face unexpected circumstances that force change earlier than planned. However it happens, the next chapter requires preparation.

The greatest benefit of learning to invest may not be the return you earn in the early years. It may be the confidence that comes from understanding what happens after the business is no longer the centre of your financial life.

One day, every business owner will leave their business. The question is whether they have prepared themselves for what comes next.