Recently some friends asked me what I did. I explained that twenty-two years ago I started a small business as a consultant in the factoring industry. From there I expanded into actively investing in the stock market. I continued to grow my business by purchasing REOs from banks, and having them remodeled and sold. Eventually I grew into financing residential construction projects.
I explained that the vision I had always had for the business was to not have any employees, inventory, receivables, equipment, fixtures, company owned vehicles or a brick and mortar presence. In other words, I shared with my friends, that the vision I have always had was to keep overhead at an extremely low level. I went onto explain that my wife and I shared equally in the business, and both had offices at home. I was very transparent about the fact that I firmly believed keeping expenses at a ridiculously low level contributed to my ability to persevere in the business.
My friends asked if there was risk. I answered directly that indeed there was risk; but, because I was able to keep my overhead extremely low, it was manageable risk with which I felt comfortable.
Later in the day I reflected upon the conversation and the nature of risk. While I greatly appreciated the fact that my friends appeared to have a certain modicum of respect for what I had achieved, I began to feel their question relevant to risk was somewhat odd. The reason I felt their question was somewhat odd was because I felt their question ignored the obvious reality that there is risk in everything we do. There is certainly risk involved in working for someone else. They were all in their sixties as I was, and had a lifetime of experience. Surely they knew as well as I there was risk in being in business for yourself, as there is risk in working for someone else.
Upon reflecting upon the conversation further, I admit that a darker side of my personality wanted to ask them if there was not risk associated with working for someone else . . . risk of being laid off, fired, having your hours cut, having your wages or benefits reduced, having your pension funds misappropriated, having to relocate to a different part of the country where you and/or your family are not comfortable with or having to travel outside the country for extended periods of time on a regular basis? Is there not the risk of having to share an office or cubicle with someone whom you dislike or with someone who dislikes you? Is there not the risk of having to work for a boss who takes credit for what you do, or expects you to do things which you believe to be unethical. Is there not the risk of having to work for a boss or an employer who disrespects you, passes over you for a promotion or doesn’t give you the pay raise you think you deserve?
I believe my friends knew as well as I there is risk in working for someone else as there is risk in being self-employed. I believe a better question might be that which Simon and Garfunkel ask, “Would you rather be a hammer than a nail?”
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