Trying To Avoid Investment And Business Risk? Forget It

Trying To Avoid Investment And Business Risk? Forget It - Its Impossible

Financial and business risk is unavoidable because there is risk in anything you do, including -- and especially -- doing nothing.

Theres market risk -- the risk that adverse market moves will cause you to lose money.

Theres opportunity cost risk -- the risk that you let a great opportunity pass you by.

Theres interest rate risk -- the risk that you will try to be conservative by investing for income only to see interest rates go much higher while youre locked in at a much lower rate.

Theres inflation risk -- the risk that your investments will loose value over time due to the loss of purchasing power.

Theres business risk -- the risk that you will lose money in a business.

So choose your poison. Choose the kind of risk that you prefer because you cant avoid it.

In order to make money, you should be a little worried. Because if youre not worried, youre not risking enough. Adventure is part of what makes life worth living. So dont be afraid to take risks. In fact, if you want to get rich, taking calculated risks is absolutely necessary.

Dont invest in a way that makes you feel comfortable. If you play for meaningful stakes youre going to be worried. Someone said that worry is the hot and tart sauce of life. Once you get used to it, you can actually enjoy it. If youre not at least a little worried, youre probably not risking enough.

Of course, playing for meaningful stakes does not mean that you should be reckless and ignore sound money management principles. It simply means that its hard to become a successful investor if youre making small bets in order to sleep better at night. You have to risk enough for it to be meaningful but you also have to preserve your capital if you want to stay in the game.

And dont over diversify -- the kind of diversification that is recommended by many financial planners who say to put a little money here, and a little over there, and a little somewhere else, until youre spread out all over the place. You may not lose much, but youre not going to become a successful investor either. Over diversifying also means that it is tough to get rich in bonds, CDs, and other fixed income investments.

Conventional wisdom says to not put all your eggs in one basket. But my experience is that truly successful people do the opposite -- they put all their eggs in one basket and watch that basket like a hawk.

So to achieve financial freedom, take risks. Make it meaningful -- meaningful enough that youll may be a little worried. But youll be living life to the fullest. And, who knows, you may end up being very successful.

And, above all, enjoy the journey.

Larry Holmes invites you to visit http://www.Money-Management-Wisdom.com/ You will learn how to become debt-free, save and invest money, cut taxes, manage risk, and achieve financial freedom in a much shorter time than you dreamed possible.

Why Youre Better Off With A Long Term Investment Strategy

Many people are rushing to get onto the day trading bandwagon. Hearing stories about the potential to make millions, they are rushing out to trade stock after stock, going for small fluctuations in daily prices. But is it a good idea in the long run

Probably not. Day trading can get you some quick gains but the real question should be how much time it takes you to do that. Most people who day trade have to do it full time as a job, and even then they only make about what they would at a regular job. For some people, this is still worth it, but it takes a certain personality. You have to be willing to accept risk to understand and be able to live with the fact that your income could be dramatically reduced for long periods, and that you could be forced to make cutbacks or even temporarily wiped out. A long run investment strategy is best for those who dont like those kind of risks if youre trying to build a nest egg, you dont want to go anywhere near day trading. You should be gradually investing, building up your capital for the day when you retire. This is going to be the best option for most people. It doesnt take much time you can just buy the Dow, and you will still get good returns. You wont be making ten percent in a day, but you wont be losing it, either.

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