The Risk Of NOT Taking Risk

About a year ago I was trying to convince a business partner of mine to invest in another company with me. At the time things were going extremely well in our own business that we were partnered in. She looked at the investment I was proposing and came to the conclusion that it was too risky and that she did not want to get involved.

I invested without her even though I too thought the investment was a pretty high risk. However, the rewards were astronomical. So the money I invested was just a fraction of the money I had set aside for investing purposes.

A year later the business my partner and I are in has fallen apart. We are barely making any money from it at all. However, from the investment I got involved in I have made hundreds of thousands of dollars.

My business partner has had to go work for $30 per day just to pay the rent and to survive. So here is the question I pose:

Which was riskier? For her to invest or not invest?

If she had invested she might have lost the couple of thousand dollars she would have invested. She would have been in a “Loss Situation”. However, because she did not invest and therefore did not make the thousands of dollars I have made, she is out working now and is in an even bigger “Loss Situation”.

There is always risk! Since there is risk in doing nothing and there is risk in doing something I always recommend doing something. Life is about doing, living and taking action not just lying there and wasting time.

Off course there are certain general rules you can use when investing and taking risk:

Rule # 1- If it seems to good to be true – Do A Ton Of Due Diligence, but don’t just pass it up.

Rule # 2- Don’t put all your eggs in one basket. When you spread out your risk, you should expect that some things will go wrong, some will go right and some things will just stay the same.

Rule # 3- Don’t invest everything you have in one deal or even in a combination of deals. Always make sure you have something left just in case the world goes to hell in a hand basket. Look for more on this topic in my next post “Treat Your Money Like Seed”.

Get In The Game

If you have been reading this Blog then you know that we have been talking about getting a financial education and setting up a Financial Freedom Fund.

I sincerely hope that you have been doing both of these things because they are the cornerstones to becoming wealthy.

The next step, if you have not already done so is To Get In The Game, Take The Plunge and invest in something or start a business or buy a franchise or joint venture with someone.

If you have been getting a financial education and already have even a small fund to get you started and you have not taken the plunge, then maybe you are still dealing with the dragon.

Remember those Fairy Tales where if the prince wanted to marry the princess he first had to slay the dragon?

Your dragon is fear and unless you slay it you will always stay paralysed in poverty. So how do you slay the dragon? The answer may sound simple and may surprise you.

You slay the dragon by taking action. One small step at a time!

If you have to join a group of people for support as you take those first baby steps, then do it. Joint venture with someone more experienced than you. Do whatever it takes but get in the game.

And if you strike out – so what! The game ain’t over! Just get ready to go out and bat again.

That is why I say make sure you never invest more than 20% to 25% of your fund in any one investment or business. Because if you strike out, no problem, you still have funds to start again.

Multiple Streams of Income

To be truly financially free and secure you will have to develop multiple streams of income. I live completely off my multiple streams of business and investment income some of them passive.

The problem is keeping your focus!

I suggest that you build one stream and give it your complete attention for a while. Then as it starts to operate 50% to 80% of the time without you, then you can go start another stream.

This system has worked well for me and helps me not to lose focus. The key is to always keep your fingers on the pulse of streams you have all ready started so that they don’t spiral out of control. If they do, your profits will dwindle and all you will be doing is starting new streams while older streams dry up.

What you should end up doing some day is like a mini-venture capitalist who sits on the board of each of your companies. Okay, maybe you will be a little more active than a board member but I think you get the picture.

Imagine yourself someday having streams of income coming from Real Estate, the Internet, Business and Investments like stocks, options and Forex. Even if each stream only brought in an average of a few thousand a month, think how much money and time and freedom and security you would have.

If you are curious about all the things I do, the businesses I am involved in, the investments I am invested in or anything else I am doing to become mega wealthy, then just check out and dig around my many blogs and websites.

Stay tuned and tell your friends about this site because there is a lot more to come.