Entrepreneurship doesn’t have to be risky.

music selection:  “Voices Carry” — ‘Til Tuesday

Altucher devoted an entire chapter in his book “Side Hustle Bible” to dispelling the notion that going into business has to be risky.  If you do it right, it shouldn’t be.  Most traditional brick and mortar businesses fail within five years.  That is the beauty of the side hustle.  You do something with a high success rate and low cost of failure so you can try again and again.

Risk Reduction Strategy #1 – Diversify

Mr. Altucher notes he kept his old job for 18 months before quitting to join his side business.  It had 11 employees at that time.  When starting stockpickr.com, he continued to run his hedge fund.  Do something that is small and scale-able.  It is just old fashioned common sense not to put all your eggs in one basket.  That is good investing advice too, by the way.

Risk Reduction Strategy #2 – Multiple Streams of Income

The IRS notes the typical American millionaire has 7 or more sources of income.  To me, this is another powerful form of diversification.  Set a goal to create a new stream of income every year.  It might be as simple as a new section of your portfolio that is dedicated to income generation.  It might be a new side hustle.  It might be writing a book and putting it up for sale on Amazon.  Not every stream will work out but they will add up over time.

Risk Reduction Strategy # 3 – Angel Investing

James Altucher notes Angel Investing has been his primary source of income for the last six years.  This can be done badly.  But he notes some tips that lead to successful angel investing.

Tip # 1 – Invest with a CEO that has done it before.

Tip # 2 – Invest with co-investors that are smarter than you.

Tip # 3 – Invest in a strong demographic trend.

Tip # 4 – Invest in capital light businesses.

Tip # 5 – Never invest more than 1% of your networth (Important!)

Now there are two types of Angel Investments: Moonshots and Steady Earners.  The first has high risk and high potential.  The second has low risk and potential for acceptable return.  In either case, the 1% of net worth rule applies.

Devour your prey raptors!

In this series:

Focus on Side Hustles

Focus on Side Hustles # 2

Focus on Side Hustles # 3

Focus on Side Hustles # 4

Focus on Side Hustles # 5

Focus on Side Hustles # 6

Focus on Side Hustles # 7

Focus on Side Hustles # 8

Focus on Side Hustles # 9

Focus on Side Hustles # 10

Focus on Side Hustles # 11

Focus on Side Hustles # 12

Focus on Side Hustles # 13

Focus on Side Hustles # 5

Never miss another opportunity to devour prey!