This was a conversation my business partner and I had on several occasions for a while now: when do you know it’s time to take some chips off the table and start investing in other vehicles? Stocks, real estate, funds, maybe even something more exotic like another startup.
I know in practice a lot of business people, the answer feels simple. Diversify. Protect against risk. Don’t put all your eggs in one basket. That’s Finance 101, right? But I’m finance stupid. That’s where my business partner comes in. I know it sounds crazy but I don’t have a grasp of our finances the way he does. He often worries for the sake of our trust to be involved in our tax planning and audit discussions with our firm. He wants my weigh in, and the truth is I do so with some mild contempt because I also dislike listening to the vendors we hired. This really comes from my lack of interest in our finances. I focus on top line. I bring in money. I focus on what I’m good at, my own sweat, my vision on my responsibilities. I completely trust my business partner in how he chooses to manage our finances, but he’s right. The very least I can do is be completely aware of what’s going on in case he’s indisposed. A big sticking point of our discussion is expansion of our liquidity.
I don’t see our small business as an asset. MOre like a living organism. It needs constant feeding, time, attention, and capital. Every dollar we could put into another asset is a dollar that might accelerate growth here. So it’s not just about risk tolerance. It’s about momentum. If we take money out now to hedge, do we end up starving the thing that could yield more than any fund or ETF ever could? I don’t know.
At the same time, our business is still risky by nature. Watching people and entities in our network claiming their smart plays outside of their businesses sometimes makes me wonder if I’m being reckless by doubling down only on ourselves. Are they even being truthful?
The hardest part is there’s no clear signal. No bell that rings to say “it’s time to diversify.” No spreadsheet that perfectly balances growth vs. security. Some founders diversify too soon and miss out on their company’s breakout. Others wait too long and get wiped out when the winds shift.
If I’m honest, I don’t know the right answer (yet). I’m leaning on my business partner on this one and if something comes up that sounds pretty good, I say we just do it. I don’t like the blind move but I am just not educated enough to make the call. Maybe that’s stubbornness too. He makes good points that it opens up our network for other opportunities that drive business back.
And if nothing else, the uncertainty is a test of judgment calls, risk appetite, and timing.Three things I always want to master by practicing.
It’s not a lie. Just delayed honesty.
December 12, 2019
This is kind of a rant log. I feel so mentally disconnected from so many areas I started reading Schuller’s book just for some hope of understanding what’s going on with my head..
Another year is nearing and there’s no sugar coating how much this year sucked in terms of personal effort. There are so many things I didn’t get around to that I should have. I kept taking on more things my mental capacity just couldn’t manage. Someone would call for assistance or something would happen in front of me, and I know I can’t deal with this right now BUT like an idiot, I took it on anyway. What ends up happening is everything as a whole becomes delayed or lost. And that my friends is what I call a shit show. So rather than just declining and being an arrogant asshole, I’m now a misunderstood lazy liar. Here’s where all the areas went wrong for me:
Family
If you know me, you know I care deeply about my family. When I say family, I don’t mean just my immediate family, but my aunts, uncles, cousins, 2nd cousins, extended relatives, and so forth. When there are 40+ family members, their concerns in some way become yours as well. This takes up quite a bit of mental capacity. This year was a trying time for my family. We had lost my dear uncle who was one of the funniest and kindest family members. My memory of him was always when I was a kid and how he spent so much time with my grandmother in her later years while living in his household. His passing hit my family pretty hard. My concern for them was paramount but I didn’t know where to begin aiding.
In the middle of all the disarray, I haven’t been around to pay tribute on the passing date of my grandmother for some time. I feel shitty about this. Her birthday is on December 4th. Who knows where I’ll be but hopefully I’ll remember to go and pay respect if I’m in NYC
On the other spectrum, my Uncle #5 has been immensely supportive in so many areas. We spent a lot of time together this year introducing me to foods, re-introducing me to friends I haven’t seen in 20 years for business opportunities, and keeping me motivated and level headed with work. There’s a brutal wisdom he delivers I find astonishing. Sometimes I get irritated because he doesn’t quite listen attentively before dropping his knowledge. He simplifies everything that I find complicated. When he says it, it’s like a wake up call:
You want to do it – do it. You don’t want to do it – don’t do it and stop talking about it.
Work
This year I definitely took on more than I should have with work. I spread myself incredibly thin and I am now eating the sour fruits of my ambitious leverage this year. I am now in full survival mode mentally as to trying to focus on 10 different directions at once. I am now seeing the result of how one decision can trickle into how I feel on a daily basis.
When I tell people what I mentioned above, many who don’t understand assume it’s financial pressure. It’s not. Money is not the issue. It has everything to do with where my mind, body, and soul wants to be. It feels like I’m busy and moving but not in the direction I want to be. So I try to move in more than one direction at once and over extend yourself so far that you run out of moves. As a result, I have physical time but mentally, I am trying to play catch up while fixing something within myself.
Day job aside. My portfolio of startup investments sounds cool but not as fun as VC’s make it look. I’ll be honest, I don’t know what I’m doing in this area. My accountant just said invest into something in lieu of gain… I’m tax stupid so uhh… ok. Kinda cool being an investor tho.
Personal
Should I even bother to continue promising myself a vacation in 2020? Haha. This is delayed honesty at its finest. My travels are always driven by work and I find time to get away to explore, so I’ll take what I can get. This holiday I plan to spend some time in Florida or Texas. I also need to find a physical activity I will enjoy that will give me the motivation to create a new routine.
I had a chance to speak with a very smart individual recently about developing a new association group. I am looking forward to seeing how this will transpire with the little time I have spent with some of the lead members. So far, I’m confident with their resolve and trust some manifestation of a community will develop from their efforts. This will be good for my soul.
Resonating to the previous point, as a leader personally and professionally, I want to step up more in aiding others to improve their professional or personal well being. If a community can see value in our experience that can result in their success, we can facilitate.
My social life has been erratic this year whether it’s meeting friends or meeting women. The effort hasn’t been the best but I am happy seeing my friends growing from a distance succeeding in their own way. I’ve lost touch with so many people after leaving social media on April fools this year. I plan to return in the new year under a new agenda rather than social behavior and entertainment purposes.
Exciting times ahead. Curious of your 2019 reflection and plans for 2020. Let me know!
Introducing Erwin 2.0.2.0. NEW AND IMPROVED!
January 25, 2020