I.M: Invest Only What You Can Afford To Lose? ... Really?

23 replies
People can no longer refinance the equity in their homes - or get cash advances on the credit card to invest in there Internet Marketing ventures. Now what? The age old wisdom is now back in vogue, which says to "only invest what you can afford to lose."

Here's some questions to ponder as food for thought ...

- Do you think it's negative thinking or wise decision making?
-or-
Is it a case of lazy people thinking or hoping money can solve their I.M marketing problems?

And if you invest only what you can afford to lose - Does that limit your success in the long run?

For example, study the history of many past and present self made millionaires. You'll find most invested more than they could afford to lose. In fact, most bet the farm on a business or even an idea. Many lost their shirt many times before succeeding, Walt Disney, PT Barnum, Donald Trump to name a few.
#afford #invest #lose
  • Profile picture of the author Coptech
    All in all, it boils down to ONE word that people do not know enough about.

    RISK.

    I think when people invest, they usually do not calculate the risk they take. With NO knowledge or LITTLE knowledge of the chance they are taking, it does not matter what they can afford to lose because it is as good as gambling.

    When a person sets aside a sum of money for something, he should think of
    1. What is the potential return at this cost?
    2. What is the likelihood of success?

    These 2 questions are what constitutes wise decision making.

    Successful people are willing to put money into things because they can see the success in it. If there is a high enough chance of success, most people are willing to put more then they can afford to lose because the likelihood for success is high enough for them.

    Without thinking of the % success rate, we would all be gambling.
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  • Profile picture of the author jnxaim1
    Only one word is important. RISK! you must take a risk in order to achieve what you really want.
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  • Profile picture of the author CDarklock
    Originally Posted by The Niche Man View Post

    You'll find most invested more than they could afford to lose.
    Some of us have different definitions of "afford."

    Working on my IM business has cost me my house, my car, my wife, my kids, my cats... pretty much everything.

    Did I want to lose that stuff?

    No.

    Could I afford to lose it?

    Well, yeah. I'm still here. Still alive. Still moving forward. Kind of slowly, at the moment.

    What's lost is lost. Playing coulda-shoulda-woulda over it is pointless and gets in the way of pursuing what you lost it for in the first place.
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    "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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    • Profile picture of the author Amitywill
      Originally Posted by CDarklock View Post

      Working on my IM business has cost me my house, my car, my wife, my kids, my cats... pretty much everything.
      Wow, I hope things work out well for you in the end. Imo
      family comes first although I know I forget this rule sometimes
      myself!

      To be honest I think the saying should be to "Only invest
      what you don't mind losing.
      "

      Will
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      • Profile picture of the author CDarklock
        Originally Posted by Amitywill View Post

        Imo family comes first
        Sometimes family have other ideas. They're other people. You can't control them.
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        "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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  • Profile picture of the author Dapper Fellow
    Exactly, CDarklock! There is no point at all trying to control the ideas of those around you, including family members. In fact, the time and effort spent trying to gain control is better spent trying to build another product or write another article or blog post.

    I know that sounds very tired, but I needed to write it for myself this morning. Thanks for giving me the opportunity to set myself straight.
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    • Profile picture of the author Amitywill
      Originally Posted by Dapper Fellow View Post

      In fact, the time and effort spent trying to gain control is better spent trying to build another product or write another article or blog post.
      OMG are you saying that it's better to write some articles and
      ebooks instead of spending time with your kids and family???

      It obviously didn't work out too well for CDarklock now did it
      because like he said he lost his family and everything else.

      I really hope you're not in the parenting and relationships niche.

      "Hey, don't spend time with the kids.. Go and write some articles.."
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      • Profile picture of the author cypherslock
        Originally Posted by Amitywill View Post

        OMG are you saying that it's better to write some articles and
        ebooks instead of spending time with your kids and family???

        It obviously didn't work out too well for CDarklock now did it
        because like he said he lost his family and everything else.

        I really hope you're not in the parenting and relationships niche.

        "Hey, don't spend time with the kids.. Go and write some articles.."
        From what I remember, CDs wife was actively trying to sabotage his business. Wasn't supportive at all.
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  • Profile picture of the author Dapper Fellow
    No, no. I'm simply saying that there are just so many hours in the day and spending them trying to control family members' ideas are not, perhaps, the most productive way to spend them.

    That's all.

    Sometimes things don't work out with families no matter how much time is spent trying to convince them of something.
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    • Profile picture of the author Amitywill
      Originally Posted by Dapper Fellow View Post

      No, no. I'm simply saying that there are just so many hours in the day and spending them trying to control family members' ideas are not, perhaps, the most productive way to spend them.

      That's all.

      Sometimes things don't work out with families no matter how much time is spent trying to convince them of something.
      It would be nice if home based businesses and families mixed
      together in perfect harmony but I think most of us here know
      that it's not always like that.

      I didn't mean to jump down your throat but in my personal
      opinion family is all we really have in the end because
      material possessions are fleeting so don't risk losing them!
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      • Profile picture of the author TopKat22
        Regardless of the semantics and the importance that each person places on different aspects of there life, this could be argued forever.

        That is indeed I think the point of the difference between people who take these types of risks and those who do not.

        What I have observed over the years are the number of people who do not get the risk/reward concept.

        They want the big reward but are not really willing to risk and are really upset and blame everyone else for the failure. The truth is, the biggest successes you have ever read about, failed many times and lost a lot before they "made it".

        I always said, as long as I have my health and the love of my family, I can lose everything else and will risk it for the reward. Many failures and a couple really big successes later, here I am.

        Given all my years and experience, I tell new people in offline businesses, I do not advise borrowing any money at all to start any type of business unless you would not be devastated if you lost it all (including some relationships) because that is what it might take.

        My parents gave me this guideline---think of the absolute worst thing that can happen to you if you decide to do this and if you can handle that, everything above that is gravy so go for it. But if you cannot handle the worst thing, don't do it.
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  • Profile picture of the author HeySal
    I've lost it all in a relationship, too - and didn't give a rat about it because the person I was with wanted me to make lots of money for HIM to spend, but he was anything but supportive in my efforts to try to do so. When you spend your time answering questions about what THEY are going to get out of your business, then throw fits every time you try to focus on it, it makes it real easy to decide where the best risks lie.

    I've been willing to take the risk in the past but couldn't find someone to lend to me to take the risk. Back in the days, nobody lent money to the "little woman" of the house. I had an idea for tapes like Pillades a LONG time before they came out. I tried to get a few loans and was told to have my "husband" finance me. I wasn't married and when I made the point so then I was told that I should be. I was called "cute" by one man. Years later pillades came out and made a killing. Wonder how "cute" the dickhead thought I was then? Oh-- my point.........

    It doesn't always matter what YOU think the risk is. If you have to finance your idea, it's the financier that has to think the risk is low. That's not easy to do any more. Small Business Association help? In some areas you have to be a pal of the guys running the show or they won't give you the time of day even to discuss proper steps you have to take to get financing help because they have their earmarks for the cash already lined up.

    For those just starting that have even a terrific idea, they have to start from scratch most of the time whether there is low or high risk involved because there are no financing resources for them. Starting a business a whole new game again. You either have the cash in hand to risk, or you aren't going to get your chance.

    If you have a supportive spouse who's willing to foot with you through getting the small stuff in to put toward getting the big stuff, you can probably get through it - but if you don't, you can be ruined real fast.

    Risk, to me, is just becoming a more and more moot issue. At this point in the economy it's more of a how much time and cunning do you have than how much risk will you take.
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    Sal
    When the Roads and Paths end, learn to guide yourself through the wilderness
    Beyond the Path

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    • Profile picture of the author TopKat22
      Man or woman, it is always highly unlikely that an outside funding source will ever fund a start up or brand new business.

      That is why startups usually, bootstrap it, use their own personal credit or funds, or get help from family and/or friends.

      You can always try for angel investors but they get thousands of businesses presented to them all the time so unless yours looks extraordinary, that is unlikely.
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      44 days in and we broke the $10K a month recurring bench mark.

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  • Profile picture of the author gushy0202
    Reinvest in your business with the profits you've earned. Maybe a service initially could help in making the initial investment needed for your service. A service in hand will always help you to get some quick cash..

    Thanks.
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  • Profile picture of the author art72
    What do any of us really have to lose?

    How many of us had crappy jobs with no promise of retirement?

    or

    Those like myself; who sustained an honest small business for years that abruptly died because a shift in an economic algorithm damned our efforts to near death, and left 20 years of work rendered useless?

    Better still, how many of us have awaken to the realization; there is NO security in working for someone else, at any level?

    I have 'risked' everything, and will sell, sacrifice, and replace every single meaningless thing I own (less my laptop and internet connection) to attain the freedom to work from anywhere I choose with a dream and a cheap $300 laptop.

    Yes, it takes work, effort, discipline, and a die hard will to succeed.

    Currently, I am 1 step from from being homeless, yet I am sober, possess 6 (offline) trades of which I have all but mastered, and find that competing for a $10 per hour job is NOT an option, nor even a solution to anything less than surviving another day.

    Many of us long to live, while waiting to die. I choose to risk death, in order to live, rather than just survive!

    We are programmed to believe merely existing is living...BS!

    Sure, get a job, work your @$$ off like I did for 20 years believing that lie!

    If your going to amount to anything, you better be ready to risk it all, and change hats on a dime, because at the end of the day your boss don't care about you, he cares about making his mortgage and car payments.

    I have 3 demanding teenagers, and a women (my partner) of 20 years nagging the life out of me, because they cannot "SEE" beyond the typical antics of controlled reform, sophisticated slavery, and the fact; you will NEVER be FREE working for someone else!

    *Not to be confused with that by serving others, you are indeed still obligated to stand accountable for the results, and in essence working to assist others in finding their desires, wants, needs, or version of freedom.

    Am I gambling?

    You're damn right I am!

    Going out on a Friday night is a gamble that some drunken idiot might side-swipe your family vehicle. Singing in the rain can lead to being struck by lightning!

    Point being, don't let the fear of success stop you!

    I did, and it's my only true regret, yet it was a humility no teacher can teach.

    Probability and the mathematical equivalent only applies to those who take action. The numeric value is not my focus, the literal interpretation of being free to live anywhere I want, work as much or as little as I choose, to sleep in, wake to a cheap laptop and a cup of coffee is the end goal.

    If my kids, my wife, my friends, my old boss, or God himself can fault me for pursuing my dream to be self-sufficient, then that's their choice, and it will not stop my desire to climb this mountain, even if it feels I am going it alone!

    People will NOT believe until they see results... like money. That binds and blinds people to quit before they even start the climb. No wonder over 90% of internet marketers fail, they won't sacrifice anything, less they get instant results.... yet they'll show up for a 9-5 job that holds 1/100th of the potential their laptop and mind holds!

    Funny thing being, I am doing this in sacrifice for my family, in order to teach them by example that if you can believe it, you can achieve it.

    While I may be neglecting their mentality of play now, work later, I know; if I work now, I can play as much as I want later... or I'll die trying!

    I am ALL-IN... this is it, DO or DIE time. And that time is now!

    Meanwhile, I am being drug out the door to entertain the kids begging me to go to Wet-N-Wild for a few hours, and honestly, they have to pry me off this damn computer to say WTF, why not?

    And I feel guilty, as I feel I have work to do first!

    Find the balance and ride it!

    There's a positive and a negative to every living thing... I stand in the know; until you can stand with a clear conscience, you'll fall for anything!

    I don't know about you... but I've fallen enough to know I saw the path to the top, and rather than exhaust myself with fear, I'm climbing that bitch!...bloody, broken, scars and all...baby!

    See You at the Top!

    All the Best,

    Art
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  • Profile picture of the author HeySal
    Ah - well all this gives me an idea. Maybe I'll go buy property with cabins on it and develop an IMer's commune where everyone can pitch in for the cost of the property and utilites to keep everyone's costs low so they can save the rest for investment. Anyone want to back that one? It's low risk. LMAO.
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    Sal
    When the Roads and Paths end, learn to guide yourself through the wilderness
    Beyond the Path

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  • Profile picture of the author shane_k
    Originally Posted by The Niche Man View Post


    People can no longer refinance the equity in their homes - or get cash advances on the credit card to invest in there Internet Marketing ventures. Now what?

    I think if a person has dug a hole so deep that they got themselves into this position then they need to focus on building the skillset of cashflow management.

    Becuase no matter what business they start up, how potentially successful that business can be, if they don't have the skill on how to manage the cashflow they will just end up digging themselves into a deeper hole.

    i think that refinancing the equity in your home is not the smartest idea, depending on what you use that money for, of course.

    And I think that getting a cash advance through a credit card is one of the worst ideas, putting the person at risk of astronimical interest rates.

    Learning to manage your cashflow, making sure we are using the cash to make more cash, whether it is cash from your current job, business, or internet marketing adventure is a core skill that all of us need to apply if we are going to succeed.
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    • Profile picture of the author The Niche Man
      [QUOTE=shane_k;4877843]
      i think that refinancing the equity in your home is not the smartest idea, depending on what you use that money for, of course.

      And I think that getting a cash advance through a credit card is one of the worst ideas, putting the person at risk of astronimical interest rates.
      QUOTE]
      --------------------------------------------------------------------------------------------
      I agree, that's not the "best" way to go. But you'd be shocked at how many businesses that are household names today that was financed with home equity, credit cards and even payday loans. When a person has a burning idea, sometimes it comes down to a "whatever it takes" attitude. If it was an easy decision, everybody would be doing it. That's my take.
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      • Profile picture of the author myob
        Always be prepared to pounce on opportunity, because it always comes. I have done this my whole life; often risking everything I have on what may seem the proverbial roll of the dice. That is the great secret to all of my failures - and to my success.
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  • Profile picture of the author BennyTheWriter
    Great thread. As a newbie, I've begun to fall into the bad habit of "investing" too much before I make any real money--for example, in WSOs and information products. I now have a library of information in my head that I've gathered over the last couple of years, but unless I start acting on it, I'll continue to think I need one more piece of essential info--and deplete my bank account in the process.

    I do believe that, in any business, even in IM, some investment needs to be made and risk needs to be taken. Or else it's not "business" at all. But for me, it's time to stop risking so much and start reaping some rewards :-)
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