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My question is if your net-worth is basically 80% related to the value of your business, how do you manage that 20%? Assume all the other checkboxes are being met as far as IRA, Emergency, etc... So if my natural risk tolerance skews toward an 80/20 3-fund portfolio, how would I weight the fact that the 80 is taken up by a single stock (my business)? Utilizing 80/20 on the 20% left seems too risky for me at least, just interested to hear others opinions.
FWIW I have always managed my financial assets (essentially liquid assets) as if all the other assets didn't exist. Other primarily consisted of real estate and NQ stock options. Mine probably never exceeded 25% of our total asset value. We did try to take into account (without specifically valuing) our human capital exposure and made some adjustments accordingly to the allocation of liquid assets.
When you discover that you are riding a dead horse, the best strategy is to dismount.
We owned a sucessful C-Corp privately held service business for thirty years and always valued it as a net zero in our net worth. Our investments were split 60/40. The rationale was the business at it's worst was worth the salvage value of the office furniture.
The first thing is I would question how you estimated the value of your business. I would hazard a guess that most people do it wrong and grossly overvalued it.