Reflections on risky business
- B.J. Yoder: Young Money
- August 4, 2021
- 653
If I would write an article about Tom Cruise sliding in his socks across a hardwood floor, I am sure more people would read it compared to talking about personal finances, if only that was the case. The reason for the title is because I am talking about risks and how scary they can be. The first thing people think of when they hear risk is financial, but it can be something as simple as life, dating or just jumping out of a plane with a parachute.
Of course, we’re going to talk about the financial risks and how they can help or hurt. Have you ever heard of a situation where someone took a risk a year or two ago (or longer) and then they made a ton of money — something like buying land that was “way too expensive” at the time it was bought but they turned a nice, tidy profit down the road or when people thought it was nuts to invest so much money in breeding dogs and now they see where that put some people financially? Being an outsider when it comes to successful risks always hurts and is annoying, but being an insider on a risk sometimes feels worse when you’re in the thick of it.
Risks can be one of the scariest things in life, and they become much scarier when they aren’t calculated risks. If money is just thrown to the wind because your buddy has a hot tip on a stock or “there’s no way this business idea will fail” and it does, that makes risk taking very stressful and will close off the chances for better risks in the future.
One of my biggest rules is unbelievably simple and makes risk taking a little easier. It is to know what you’re doing. I have not done overly well in stocks, flipping baseball cards or cryptocurrency because I didn’t know fully what I was doing, and it came back to bite me. Thankfully, I didn’t invest my life savings, but those lost dollars helped teach me lessons about investing, and that is worth its weight in gold.
What if you’ve been burned in the past by risk taking and lost a lot? Take a break to learn, to reflect on what you did wrong and plan to start again. If I am speaking of myself, I am extremely risk averse. I like my bubble and where it has landed me, which makes it very conflicting for me to want to be successful (in the financial sense) versus knowing I will stay where I am if I don’t take risks. Learn and move forward.
Going back to the last paragraph, I do believe that statement. I am not going to be cheesy and say, “You never grow in your comfort zone,” but it does have some truth to it. Think about the area we live in. What if a gentleman hadn’t quit his cheese route to make something bigger? What if someone wouldn’t have decided to make furniture in their chicken barn? What if a preacher hadn’t decided to start selling insurance door to door to support his preaching habit?
That’s the beauty about where we live, especially for the younger generation, because it seems anything the younger generation is currently going through, there has been someone in the area that has already gone through it. The love of risk has brought successful businesses to our area and made us what we are today.
Not all risks should be taken, but if you know what you’re doing and have done your research, feel free to consult someone who has been there and go forward. It may be terrifying, but it will hopefully pay off in the long run.
Holmes County native BJ Yoder is an insurance agent by day and a finance enthusiast by night. This column is for informational purposes only. He can be emailed at benjamin.john.yoder@gmail.com.