🔒Here’s how businesses and individuals can build wealth long term

After hitting several all-time highs earlier this year, the markets have been on a wild ride — falling sharply, bouncing back, and now continuing to fluctuate. For many investors, this level of volatility can be unsettling. But as Warren Buffett reminded us at the recent Berkshire Hathaway shareholder meeting, if you’re rattled when stocks are down, it may be time for a different investment strategy, because “the world (of investing) is not going to adapt to you, you’re going to have to adapt to (it).” Buffett’s point is spot-on: volatility is part of the market’s DNA. But with a well-structured, adaptable plan, you can stay grounded through the ups and downs. Here are some investment strategies through key decades of life:

Investing in your 30s: Building a strong foundation

• Establish financial basics:
• Build an emergency fund and manage high-interest debt.
• Contribute to retirement accounts (e.g., 401(k), IRA, SEP IRA, Roth IRA, etc.) to harness the power of compounding.
• Embrace a higher-risk allocation early on to learn by doing, while understanding that time can help smooth out volatility.

For business owners, at this stage you should invest in your company:

• Reinvest in growth by prioritizing technology, talent and market research.
• Lay the groundwork for scaling your business with sound financial habits.
• Develop a strategy to pay down debt while still investing for the future.

Investing in your 40s: Optimize for growth and managing risk

Maximize contributions/diversify and safeguard:

• Increase your retirement contributions to build your nest egg as your income grows.
• Rebalance your portfolio periodically to reflect your evolving risk tolerance.
• Incorporate a mix of investments (e.g., stocks, bonds, private investments, real estate, etc.) to spread risk.
• Utilize tax-efficient strategies and appropriate insurance products to safeguard your assets and your ability to earn.

For business owners, enhance your business strategy:

• Assess your business’s financial performance and explore opportunities for expansion or operational improvements.
• Consult with tax planning and restructuring experts to ensure your business remains robust.
• Revisit estate planning documents, including wills and trusts, and adjust coverage as family or business responsibilities evolve.

Investing in your 50s: Downshifting risk and coordinating your complete portfolio

• Downshift the risk profile of your overall portfolio rather than completely pivot to capital preservation.
• Align your traditional investments, business holdings, real estate, private investments and alternative assets to provide a stable income.
• Evaluate how each asset class contributes to your long-term financial stability and income.
• Identify asset classes and income-generating investments that can offer stable cash flow during retirement.
• Consider and evaluate insurance options to protect against future long-term care needs.
• Fine-tune your portfolio to ensure that all pieces — from personal investments to real estate holdings — are aligned toward generating a reliable income stream in retirement.

For business owners, plan for a business sale or transition:

• Obtain a professional business valuation, clean up financial statements, and begin reducing owner dependency.
• Develop a structured exit plan that aligns with personal financial goals.

No matter where you are in your financial journey, your strategy should evolve in tandem with your life and career. For business owners, thinking beyond daily operations can help establish your business as a strategic asset in your wealth plan — whether that’s scaling for growth, preparing for a transition, or creating durable income streams. Carlos Salmon is a partner and wealth manager at New Haven-based Wooster Square Advisors.