Saturday, July 12, 2003

ERP 4 me

A few years ago I was up in SLC at the Eagle Gate Plaza talking with my stock broker, Shree Sharma, at RBC Dain Rauscher (highly recommended, he's great). I was discussing the issue of high-risk vs. low-risk investments. Normally, a married man with children and such will want to create an 80-20 portfolio. 80 percent low-risk and 20 percent high risk. I inquired if this was the right thing for me to do. At the time I was 23 and single, had a healthy income from my new job at Banta Publishing and had no prospects of getting married - which is kind of mean to say, because I had a girlfriend at the time ... but that's a whole different story.

I was rather shocked to hear that he recommended against such a secure portfolio. He and I both ended up agreeing that I was in the stage of my life that I was perfectly able to take losses and so it was fine to make almost 100 percent high-risk investments. Long story short, in the last year I've made some big investments that turn my stomach at night.

First lesson learned - don't open a business unless it has the promise of making you millions. If the expected revenue from your new business will only equal about what a normal salary would be - assuming everything works out okay - that pretty much means that you will work about 12 hours a day and won't make enough money to even stay open. You'll lose your initial investment and a year of your life will go down the drain. I'm talking about The Hive, in case you didn't notice.

Second lesson learned - give up a bit of ownership of your company for instant cash that equates to peace of mind. (I think it's really funny when people typo "piece" of mind) Right now, if erentpayer fails then I will be out tens of thousands of dollars. I'm not sure what I would do. My life situation right now is such that I need a few thousand on hand at all times in order to cover mortgage payments and "female costs" - haha. I'm sure that I'll be fine and everything will work out in the end, but it is just scary to think that if our sale dept doesn't make any sales soon or if things dont' work out then I will lose big.

Seems to me like if you were going to invest $10,000 into a startup company, then it would be just as safe to go to Vegas for the weekend and put $10,000 down on one hand of black jack on a high-roller table. You'd either double it or lose it all - either way, you wouldn't have wasted a year of your life trying to make that $10,000 grow.

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