Before You Buy the Golf Course: Protecting the Wealth You’ve Spent a Lifetime Building
There is something deeply appealing about owning a “lifestyle” business. You love golf, so buy a golf course! Be the central gathering point for friends and family at your newly purchased restaurant, having private tastings at your winery.
The list goes on and on.
The Allure of the Lifestyle Business
For many successful business owners and professionals, these opportunities feel like the natural next chapter — a blend of passion, prestige, and investment.
But as wealth advisors, we have to ask a harder question: Are you investing… or are you risking the “farm”?
Charlie Lieder, former PGA professional and one-time owner of Arrowcreek Country Club once said, “our members are generally captains of industry, and are very successful. But they don’t know what it takes to run a golf course!”
Golf courses, restaurants, hotels, wineries — these are not just financial assets. They are emotional assets. And emotional assets are often priced differently in the mind than they are in the market.
When Passion Meets Concentration Risk
The danger is not the dream.
The danger is over-concentration.
If 60–80% of your net worth is tied up in one operating business, and you leverage additional capital to buy a capital-intensive lifestyle asset, you may unknowingly expose everything you have worked decades to build.
The Hidden Cost of Lifestyle Businesses
These Businesses Are Capital Hungry. Unlike asset-light advisory firms or professional practices, lifestyle businesses are infrastructure-heavy.
Golf Courses
- Irrigation systems
- Equipment fleets
- Clubhouse maintenance
- Seasonal labor swings
- Weather dependency
Restaurants
- High failure rates
- Labor volatility
- Food cost compression
- Lease exposure
- Thin operating margins
Hotels
- Cyclical occupancy
- Renovation cycles every 5–7 years
- Brand standard capital requirements
- Heavy fixed debt structures
These are not passive investments. They require consistent reinvestment just to maintain cash flow — let alone grow it.
I’ve seen successful entrepreneurs leverage real estate, brokerage accounts, and even retirement assets to support a struggling lifestyle acquisition.
That is when passion turns into panic.
Wealth Planning Before the Purchase
Before signing a letter of intent, I encourage clients to walk through five critical questions:
1. What Percentage of My Net Worth Is at Risk?
- If this investment fails entirely, what does my life look like financially? Do I have enough time left in this life to recover financially?
2. Is This Funded With Excess Capital — or Core Capital?
- Excess capital is investable surplus.
- Core capital is retirement security.
- Never confuse the two.
3. What Is the Downside Scenario?
Model:
- 20% revenue decline
- Two years of flat cash flow
- Major capital expenditure
- Higher interest rates
If the model breaks your personal balance sheet, the deal is too large.
4. How Correlated Is This to My Other Income?
- If you own a business sensitive to economic cycles, adding another cyclical asset compounds risk.
5. Is There a Defined Exit Strategy?
- Lifestyle businesses are often harder to sell than they are to buy.
Debt Magnifies Emotion
- Amplifies returns in good years
- Accelerates losses in bad years
- Removes flexibility
- Forces decisions under pressure
The Psychological Trap
A Smarter Approach
- Keep it to a manageable percentage of total net worth.
- Avoid cross-collateralizing core family assets.
- Maintain personal liquidity reserves.
- Stress test the numbers with conservative assumptions.
- Separate identity from investment.
Michael D. Bosma, CPA Brian Wheeler
Keystone CPAs Keystone Wealth Advisors
Better Together.