“Why not go out on a limb? Isn’t that where the fruit is?”
-Frank Scully Early 20th Century Author and Columnist.
The bottom line is that no self-made millionaire ever amassed his or her fortune without taking risks. Why? This is because all business ventures or investments carry a risk reward relationship. Generally speaking the higher the reward, the greater the risks.
Compare for example two common asset classes: stocks and bonds. In general, bonds carry a return between 0 and 4% with low to medium risk. In contrast stocks can average 15% returns, but carry medium to very high risk. To make your first million you’ll have to take some risk. So be willing. Absent family wealth there is just no way to make a huge pile of cash without it.
I’d be terrified to take the risks, since (with my luck), I’m sure it will get badly. Anyway, investment in my country is not yet such an established option, so we’re left with mainly saving the money or buying gold.
Sounds tempting but then I am a sore loser that is why I am very careful with my moves and yet there are times when failure seems inevitable. What more with risks taken? I guess I am chicken but I hope that doesn’t mean I won’t become rich.
Hey Jen,
Not a problem. There are lots of stocks which are less risky. For example I’m mostly holding blue chips. You can also hedge your risk but doing something like keeping 60% of your wealth in low risk investments like cash or bonds and the rest in higher risk investments like blue chip stocks. Plus if you adequately diversify you’ll find that your risk is reduced and your returns become more reliable!
Thanks,
James
Hey Dojo,
Well…I checked out your website – you are running your own business, right? I think thats about as risky as you can get! Good for you! I look forward to hearing more about your success in the next few months!
James