When it comes to building wealth, no two investors are the same. However, we can categorize most people into two distinct mindsets: business owners and traditional W-2 employees. These two groups approach saving, investing, and long-term planning differently, and understanding where you fit can make all the difference in how you prepare for your financial future.
The Business Owner Mindset: All-In on the Business
Business owners often operate with one core belief:
My business is my best investment. Cal Christensen, SVP Business Banking Officer, says, “Rather than diversifying into stocks, bonds, or traditional retirement accounts, they tend to reinvest profits into operations, expansion, or real estate. Cash is kept liquid—not for personal use, but to respond quickly to business needs.” For them, a 401(k) isn’t top of mind. Their focus is on revenue, growth, and ultimately, the value of the business itself.
He says that an all-in mentality can pay off, but it also carries a risk. A downturn, a market shift, or an unexpected obstacle can dramatically impact their retirement outlook.
The Turning Point
At age 40, a business owner still has room to pivot. They can ride out unproductive years or recalibrate the business. But as they near 60 or 65, the options shrink. The focus shifts from growth to succession:
Will I sell? Scale down? Pass it on?
“This is where financial clarity becomes crucial. The value of the business must eventually convert into personal retirement income, or risk falling short,” explains Christensen.
The W-2 Employee Mindset: Slow and Steady
On the other end of the spectrum, W-2 employees typically follow a more structured, conservative approach. Retirement planning is built on regular contributions to 401(k)s, IRAs, or other investment vehicles. Stock and bond performance is tracked with apps, dashboards, and even casual check-ins on Yahoo Finance.
Diversification, asset allocation, and long-term compounding are the pillars of this strategy. There’s less volatility, fewer surprises—but also fewer chances to “hit it big.”
A Matter of Time
Younger W-2 investors have more time to recover from market dips or career changes. But if they haven’t saved enough by their 50s, they may face tough decisions: delay retirement, increase contributions, or take on more investment risk than they’re comfortable with.
The Teeter-Totter: Two Paths, One Reality
Christensen says you can think of the investor mindsets like a teeter-totter:
- On one side, business owners are heavily weighted toward private capital and enterprise value.
- On the other hand, W-2 earners balance traditional investments, portfolio tracking, and long-term savings habits.
Each side carries its own risks and rewards. Neither is “better,” but both require self-awareness and intentional planning.
Where Do These Paths Meet?
Eventually, both investor types face the same questions:
- How do I generate income in retirement?
- Is my strategy sustainable long-term?
- What’s my legacy?
For business owners, the answer often lies in selling or transitioning the business and ensuring the liquidity and tax strategy to make that transition work. For W-2 employees, it’s about whether accumulated savings, Social Security, and possibly part-time income will be enough.
Final Thoughts: Aligning Your Strategy with Your Stage of Life
Christensen says, “The younger you are, the more flexibility you have. The older you are, the more every decision counts.” Regardless of which path you're on, it’s never too early—or too late—to assess your money personality and align your investment strategy with your goals.
Ask yourself:
- Is my current investment approach aligned with my future needs?
- Am I too concentrated in one area, or too spread out without a clear plan?
- What will retirement look like for me, and how will I fund it?
Whether you’re all-in on your business or committed to a 401(k), the endgame is the same: financial independence and peace of mind.
Take the time to plan now. Your future self will thank you.