I subscribe to Money Magazine, and the latest issue had an insightful feature entitled, “The Smartest Advice I Ever Got.”  It contained quotes from 40 prominent individuals who have done very well for themselves financially.

As I glanced through the article, I skipped the snippets of advice related to stocks (not my cup of tea).  There were some good bits from people like Tim Ferriss and John Bogle. 

But the one that stood out to me the most was from Chris Larsen, the founder of E-Loan.com and Prosper.com.  His words, in short, are something I already live by.  And it’s the BEST advice you, the reader, will ever get. 

This is what Larsen had to say:

Chris LarsenTake Risks When You Can

“‘Cut the lifeboats.’  I heard this from Jim Collins, who wrote ‘Built to Last’ and was the best M.B.A. professor I had at Stanford.  He pleaded with the class, saying, ‘You’re young.  You can fail two or three times, even lose all your money two or three times, and you’ll be just fine.  Taking that risk puts you in the path of wealth.’

If he hadn’t said that, I probably would have taken a job, like a typical M.B.A., instead of founding a company.  Starting my own business seemed so risky, but maxing out credit cards or even going bankrupt isn’t so risky if you do it at a young age.  You’ll never regret taking those risks, but you might regret it if you don’t.”

Starting Your Own Business

The reason so many people don’t start their own business is because it appears to be “risky” or require a lot of money up front.

The latter (i.e., that it requires a lot of money) is certainly not true.  I’m currently trying to put up two membership-style websites.  I have friends with technical skills helping me.  However, each one will cost a bit of money in terms of professional website design (upwards of $1,000) and, depending on marketing, could cost a few hundred dollars more.Best Advice You'll Ever Get

Costs of $1,000 to $2,000 seem high at first.  But when you take into account that people spend that kind of money in a flash on a widescreen television, for a down payment on a car, or on weekend vacation, it doesn’t seem like a lot at all.  Moreover, there are worse ways you can spend $1,000 (see the widescreen TV example). 

As for risk.  Well, I’ve explained before that starting a business is not risky.  Rather, living your live working 9 to 5 and saving for retirement is risky.  Starting your own business (and failing and losing money along the way) has the potential to generate passive income and help you become financially free.  The rat race just gives you frustration and misery. 

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