Case Study · Business Owner
When the Portfolio Was Riding the Same Cycle as the Business
How a grading company owner stopped doubling down on the same risk twice.
This is a hypothetical case study created for illustrative purposes only. It does not represent an actual client, and any resemblance to a real person or business is coincidental. It is not indicative of future results and should not be construed as a guarantee of any outcome.
The Situation
One risk, showing up twice
The owner, 49, runs a grading and earthwork contracting business tied closely to the local construction cycle. Most of his net worth sat between the business itself and a handful of investments — equipment, local real estate — that moved with that same cycle. Nobody had ever looked at his personal portfolio and business exposure side by side.
Age
49
Industry
Grading & Earthwork
Primary Concern
Concentration Risk
The Challenge
Three ways the same risk kept showing up
- The personal portfolio was unintentionally correlated with the business — a construction slowdown would hit his income and his investments at the same time, for the same reason.
- No dedicated Business Buffer existed — excess cash either sat in the business earning nothing or got invested with no clear rule for how much should stay liquid.
- No plan existed for an eventual sale — if a large chunk of concentrated value converted to cash at once, there was no framework for how it would move into a diversified portfolio.
The Approach
Separating the business risk from the portfolio risk
- Built counter-weights into the portfolio, deliberately underweighting sectors tied to the same local construction and housing cycle.
- Established a dedicated Business Buffer, separate from the long-term portfolio, sized to cover several months of payroll through a slow season.
- Sequenced excess cash into a 401(k)/Cash Balance plan to build tax-deferred savings outside the business.
- Began a tax-aware transition plan for how future sale proceeds would move into the diversified portfolio.
Illustrative Outcome
His net worth is no longer riding on the same construction cycle twice — once through the business, and once through the portfolio sitting right behind it.
