Cost Of Making Money
Summary
- The cost of making money is often losing some first. To earn $100 million, expect to lose about $10 million. For a billion, losses could be between $50 to $100 million.
- Losses could be due to lost opportunities, wrong decisions, or company value fluctuations.
- There's a strong connection between how much you're willing to risk losing and how much you can gain.
- Focusing solely on not losing money restricts your ability to see and seize opportunities to make more.
- Be careful with money, but also be open to risks that could lead to greater gains.
Video
How To Take Action
I would suggest implementing a mindset shift where you balance caution with openness to opportunity. Start by assessing your current approach—are you too focused on avoiding losses? If so, try to reframe the way you see risk. Instead of thinking, "I don't want to lose money," ask yourself, "What opportunities am I missing by being overly cautious?"
A good way of doing this is to set aside a small portion of your resources, like time or money, specifically for exploring new ventures. This approach limits potential losses while still allowing room to grow. For instance, if you're an entrepreneur, invest in a new idea or habit with a low cost of entry, such as testing a new marketing strategy or dedicating a few hours per week to learning a new skill.
Another action point is to conduct a quarterly review of opportunities you might have overlooked. Use this time to identify patterns and reassess any missed chances. Ask, "What was my thought process, and how might I adjust it in the future?"
Also, seek feedback from peers or mentors who can offer an outside perspective on your risk-taking. They might see opportunities from a different angle, helping you to refine your strategy.
Finally, mind your emotional reaction to losses. Understanding that some loss is part of the growth process can ease you into being more receptive to potential growth avenues.
