Capital Preservation for Business Owners: Baby Steps Toward Financial Stability

Guest post featuring Ryan Ackerhalt, Financial Advisor at Ameriprise Financial

As a business owner, you’re used to taking calculated risks—but when it comes to your personal savings or retained earnings, playing defense can be just as important as growth. In a recent Benton Oakfield guest session, financial advisor Ryan Ackerhalt shared a smart, step-by-step approach to capital preservation for entrepreneurs who want to protect what they’ve built.

Why Capital Preservation Matters for Business Owners

Many business owners focus all their energy on growing the company, often leaving personal finances or surplus business cash in ultra-conservative places—like basic checking accounts or money markets—out of fear or inertia. But idle cash can quietly lose purchasing power over time.

Ryan breaks down how to preserve capital without sacrificing opportunity, using a concept he calls “baby steps”—gradual transitions from ultra-conservative to moderately conservative strategies that still emphasize safety, but allow for meaningful returns.

Step 1: Ultra-Conservative Cash Holdings

Most business owners start with bank deposits, CDs, or money market funds. These are safe and familiar—but yield little. However, Ryan points out there are CD-like instruments tied to market indexes that protect your principal while allowing for some upside potential. Some annuity products also offer annual guaranteed growth, giving you safety plus incremental gains.

Step 2: Fixed Income Instruments

If you're ready to move slightly up the risk ladder, consider fixed income investments. Treasury bonds are essentially loans to the U.S. government, while corporate bonds—like those issued by Apple or IBM—offer slightly higher yields with minor added risk.

Instead of buying bonds individually, you can opt for bond mutual funds or managed portfolios. These offer diversification and potentially higher returns but don’t come with a guaranteed maturity date. It's a smart step for business owners with medium-term planning horizons, such as building reserves for expansion or acquisitions.

Step 3: Add a Strategic Slice of Equity

Equities might sound scary if your focus is on preservation, but Ryan explains how a small allocation—say 10% of your holdings—can serve as a hedge against bond underperformance, especially during rising interest rate cycles.

For example, if you have $200,000 in retained earnings, placing $180,000 in fixed income and $20,000 in equity can balance risk while opening the door to growth. Historically, equities often rise when bonds falter. This inverse relationship can soften the blow in down years and improve long-term returns—without putting your entire nest egg at risk.

Tailored Allocations for Your Risk Profile

Many institutional managers recommend 70/30 or 80/20 bond-to-stock ratios for conservative clients. But business owners often have unique cash flow needs and varying tolerance for volatility. Ryan emphasized that the “right” allocation is one you’re comfortable with. If you’d lose sleep watching your portfolio dip in a rough market year, a more conservative split is appropriate. If you can handle temporary downturns, a bit more equity exposure might be worthwhile.

Are Your Reserves Working as Hard as You Are?

Entrepreneurs are wired to build, but when it comes to financial reserves—whether for personal use or business reinvestment—many fall into the trap of inertia. Accounts sit under-optimized, unallocated, and underperforming. Ryan sees it every day.

That’s where a structured, baby-step approach comes in. You don’t need to go from zero to risky overnight. Instead, build a laddered strategy that preserves capital, grows conservatively, and supports your long-term business and personal goals.

Need Help Designing Your Preservation Strategy?

While Benton Oakfield doesn’t offer direct investment management, we partner with trusted professionals who do. Ryan Ackerhalt specializes in working with business owners and professionals to craft capital preservation plans that match their risk profiles and goals.

Contact Ryan Ackerhalt:
Phone: (212) 540‑9875
Email: ryan.ackerhalt@ampf.com
Website: ameripriseadvisors.com/ryan.ackerhalt

You’ve worked hard to build your business. Make sure your money is working just as hard for you.