Little Bets, Big Bets
You’ve got $20,000 to start a new business. Do you spend it on a massive marketing campaign in week one? No. You don’t. You’d lose all the money.
How about taking that $20,000 to the stock market. You want to maximize your return but do you place everything in volatile penny stocks right away? No. You’d lose all your money.
This is what happens when you make big bets without experience. You lose because you don’t know the pitfalls. You might walk into a massive mistake and not even know it.
Making these ‘Big Bets’ too soon has consequences.
Something will likely go wrong and you won’t have enough time to figure it out before everything collapses.
You don’t learn much from one big decision that goes wrong.
You won’t have leftover resources to try again.
Big bets lock you in for long periods of time, limiting your choices of your smarter future self.
It’s obvious that you shouldn’t spend all of your money on your business in the first week if you’re just learning. It’s also clear that you shouldn’t put all your money into risky stocks if you’re just beginning to trading.
So why do we hear about people taking these ‘big bets’ all the time and losing? It’s so clear they’ll lose their shirt!
It’s a misunderstanding of timing. We all want to reap big rewards, but before we can do that there’s a definite time period when we shouldn't focus on cashing in.
Sowing The Field
The first step is to invest in your learning. This can take anywhere from months to years. Having a mentor can help accelerate your learning.
You can invest money, but a $200 lesson can teach you just as much as a $20,000 one. You invest $200 hoping to double it to $400 (not very exciting) but you also limit your downside to $200. You're not focused on the money, you're here to learn.
Only once you have adequate experience should you attempt to…
Reap The Reward
Once you have the skills to intelligently go ‘all in’ you can make bigger and bigger bets and reap bigger and bigger rewards.
Having repeatedly turned $200 into $400 you can then invest $2,000 and then $20,000 and then $2 million. You’re less likely to lose and able to win more easily. Economies of scale kick in and achieving massive results becomes even easier.
Both Steps Are Vital
Making big bets without experience can lead to a big loss. You will need to learn too much too soon when crisis hits and you won’t be able to keep up.
But, when the timing is right you need to go all in and bet on the opportunity as much as you can. This second step is just as vital as the first!
The skills you gained will slowly become less relevant, others will learn what you know, and then opportunity will slowly go away. You can't miss it!
Timing Is Everything
It’s smart to avoid big bets at the beginning, choosing instead to build up your skills. But, be on alert for cues that it’s time to jump on the opportunity.
You might realize you excel a current mentor in a few key areas.
You might spot a market opportunity you’ve seen others take advantage of.
You might meet someone who compliments your skill-set perfectly.