Publisher, Success Magazine
- Darren decided to leave a job in the lucrative real estate business, after making nearly a half a
million dollars a year, because, as he says, "I didn't want that to define the rest of my life. I started a marketing firm in San Francisco. My first project was a bust, but it led me to the partner and business enterprise where I ended up making millions - launched a television network dedicated to success training - SUCCESS TV which made $50M annually."
- Darren never graduated college, instead he left school to start his first business, completely wiping out his personal savings to buy inventory for his real estate business. He also entered the market when it was at his worst.
- He took a several major risks, which included investment into an Oil well in Louisiana, ownership of a Jazz band, and he funded the production of a country music album. All of which were complete failures. But what is important is that he learned something along the way. Check out his 5 tips on how to (and how not to) take risks!
1 – Risk is Good
Risk is not only good, it is essential. Risk is the variable that separates the strong from the herd. If you want to step away from average and mediocrity, by very definition, you have to take risks.
Nature gives us clues – in order to win the fruit, you have to go out on a limb to get it.
2 – Swing for the Fences Early in the Count
When you are young and single it is OK to make bold and sometimes foolhardy risks. You are not that far off the starting line so having to go back to zero is not as costly. Besides taking big risks when you are young and losing can be chalked up to paying the necessary price of entrepreneurship tuition.
3 – Never Bet the House
When you are older, wiser and have the livelihood of a family on the line you need to now be smarter and more prudent with your risk choices. NEVER go all-in at the risk of your family’s wherewithal. Carve out a certain percentage of your assets, say 20-30% in the pursuit of a better future. The foundation and stability of your family is priority #1.
"We took huge risks when we had no cash. Now we have all of this cash and we take few risks." Google Founders: Larry Page and Sergey Brin
4 – Stick to What You Know
Warren Buffet said his number one business philosophy is he never invests outside his core competency. If he doesn’t understand the business or marketplace he stays away from it, no how alluring it might be.
When you don’t know the business or marketplace you don’t even know the right questions to ask. You have no idea where the trap doors and landmines are.
5 –Eliminate the Risk Altogether
You will find the greatest “risk takers” in our society actually take the fewest risks of all.
This is true of Richard Branson, Warren Buffet, Steve Jobs, etc.
Here is how:
1) They are extremely diligent in their risk assessment. They don’t jump at the first shiny opportunity presented to them. They will look at a hundred deals and say no 99 times, or more.
2) They look for what I call arbitrage opportunities where what they bring to the table solves the businesses greatest risk variable – whether relationships, infrastructure, resources, competencies, etc.
This can work for you too. Take risks where your skills, unique knowledge or key relationships is what will most assuredly make the project successful. You want to take risks where your leverage actually fills the gap of the greatest risk.