Sharing Daily Discoveries About Personal Finance And Business Topics

Playing It Too Safe With Your Money Can Be Risky Also

When it comes to money and earning an income, in many ways it makes sense to simply handle it in a safe and traditional way such as working at a job and then placing it into an interest savings account to earn some extra money. At the same time, this can be risky as well if you think about it as you are being entirely reliant on the fact that nothing will ever change such as your current income source will always be there or that the dollar value won’t change. It’s always good to have some balance in terms of exploring ways to invest your money while being open minded to different ways on how you can make your money actively work for you as well. I guess it is like that don’t put all your eggs in one basket saying.

Now usually when I hear about topics like this, for some reason it often turns into an entrepreneur against a normal nine to five worker debate with the usual theme being a self employed person with a big ego trying to imply that their way of life is the only “smart” way to live, so to speak. Without getting too into that part as it is a topic on its own, I personally disagree with that as I bet those same people would be singing a different tune if one day they needed say medical assistants from all the “workers”.

But that also kind of leads me into the point where a lot of people tell me that they don’t want to “risk” their money in any way as they are not an entrepreneur and that those are the only type of people who should be doing such a thing. In my opinion, the keyword I think is that people are looking for “financial security” in their life. So if that is the goal, doesn’t it make sense to try and find ways to increase your revenue stream incase your current one dries up? At the same time, why not use the resources that you have now to effectively to try and build something greater while you can? Wouldn’t you think not taking advantage of what you have and what you can potentially do with it be considered a big loss on its own?

This example is more business oriented, but is a great one I think. There was a company that sold personal care products here and relied mostly on its traditional storefronts to get business. At the same time, they were the biggest and were actually the supplier for a lot of other personal care business operators as well. At that time, e-commerce was up and comming, but instead they thought the money was coming in constantly and so why risk investing in say an e-commerce site when no one will want to use their credit cards online? So instead of thinking of ways to further enhance their business they just kept doing what they did. Wouldn’t you know it, the other companies that purchased supplies from them actually did risk in creating e-commerce site and now they are so much larger than them and at the same time no longer need to get their inventory from them as well. So while they still have their savings, they definitely lost out in the excess of seven figures a year by not doing anything.

You can pretty much use this exact same type of example if you are choosing a nine to five lifestyle as well. If a company all of a sudden has to say downsize or even worse close the entire business down, by not really doing anything with the money you did have while still being in a comfortable position where you had ongoing income coming in, you are in many ways putting yourself at risk by not really preparing for the possibility of change. It might seem safer in the short term, but it is always important to think about the future as well.

It doesn’t always just have to be solely spending say thousands of dollars of your money as well in terms of taking a risk. If you are one of those people who just have to have an X amount of funds in the bank to feel safe, another example would be that now that you have that you can take some risk time wise by researching and doing simple things to try and make some extra money. Example, look at all those people who definitely made a lot of extra income on the side on top of their regular job by selling stuff on auction sites like Ebay.

In my opinion, if you really want to play it safe when it comes to money in your life, then you should be looking into ways to use your existing funds to help you create multiple income streams rather then simply not really doing anything with it.

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