27 June 2012

Take risks with your career, not with your money

Some good advice from Permanent Portfolio advocate Craig Rowland in this interview with blogger Big Fat Purse:

"I believe people should take the risk in their career and not take risks with their money."

If you are young, "I would say for you, invest your money conservatively and go out and try different jobs. Try to start a company, try to start your own business, try that crazy idea that all the experts say will never work, try to build these things, take your risks in your career because you’re young enough and you can recover from that experience. This is a lot opposite from investment books. A lot of investment books encourage a lot of risk-taking in stocks when you’re young. But the thing is, if the bet doesn’t work, your savings are not going to grow."

"I tell people to be conservative with their money and take risks in their career and try to build wealth that way. And if they don’t want to take risk in their career I understand that too. There are people who don’t want to, but at the same time don’t assume you can replace your money. I think most people will be better served with a stable portfolio that’s not swinging in value because when it starts swinging in value, your emotions are going to get in the way and you’re going to make bad decisions."

The Permanet Portfolio is:

25% – Stocks (S&P 500 Index)
25% – Long Term US Treasury Bonds
25% – US Treasury Money Market Fund
25% – Gold

and "designed to weather a wide range of economic conditions (prosperity, inflation, deflation, recession) to protect and grow your money."


  1. Interesting read, thanks for the link.

    I'm looking at ideas for a new "small" business. I will be looking at around:

    $25k for 12 month lease
    $30-$40k for equipment/fit out
    $100k working capital
    $30k for living expenses at startup

    So taking a risk with my career is also tied to taking a risk with my money.

    Of course there are ideas which you could implement for a lot less, especially in todays internet age, a new micro-business online could be started with as little as a few hundred dollars, but such a small entry barrier means that in many cases you are competing with a large number of people already or you may be open to competition if doing something new and people notice.

    I know someone who created an invention (they were on New Inventors), went through years and tens of thousands of dollars to get a prototype and limited run (and patent the idea) and then tried to shop the product around to potential sales outlets and they weren't interested.

    I'm not saying take a risk with your money instead of your career, but they are more often than not invariably linked.

  2. Fiat savings accounts for dummies