Diverging 401(k) contributions to invest in my business instead?

[Archipelago]

Hi there!

I have an established E-commerce business that has been growing steadily. It's been over 2 years now with ~$60k in profit over that period. Now I'm starting to think about investing some more capital into it. I've always needed about $10k to keep it going for cashflow. I'd like to invest another $25k.

If the business produces a solid return, is it worth investing in the business in lieu of making 401(k) contributions (besides a company match)?

[mistymoney]

what happened to the profits? I think that would be the bucket to draw from, and then your profit would be lot less, but more realistic.

[terran]

The mustachian answer is to max out all tax advantaged accounts, the entrepreneurial answer is to not give a damn what anyone says and go all out on the business, including maxing out credit cards and mortgaging your house. Which answer is right no one can say and depends entirely on how good an entrepreneur you are. If you choose the former you will probably be successful, but it could take awhile depending on how much you save. If you choose the latter might not be successful, but success could come much faster if you are (of course, failure could also come very fast).

[SwordGuy]

what happened to the profits? I think that would be the bucket to draw from, and then your profit would be lot less, but more realistic.

Is this a side business?  If so, stop squandering the profits and pump them back into the business!

If it's your main business, well, that's a tougher call.    Does "$60K in profits" mean you netted $60k BEFORE or AFTER you paid your own wages?

[Archipelago]

what happened to the profits? I think that would be the bucket to draw from, and then your profit would be lot less, but more realistic.

I invested them, but not in the business. I used them to contribute to tax advantaged retirement accounts.

[Archipelago]

what happened to the profits? I think that would be the bucket to draw from, and then your profit would be lot less, but more realistic.

Is this a side business?  If so, stop squandering the profits and pump them back into the business!

If it's your main business, well, that's a tougher call.    Does "$60K in profits" mean you netted $60k BEFORE or AFTER you paid your own wages?

Yes, it's a side business.

$60k before I paid myself wages. It's an average of 15 hours per week.