If you have plans to start a dream business that requires a capital of $20,000 and you were able to make a savings of $15,000 which obviously isn't enough to start up the business, what would be your decision or advice?
1. Invest the $15,000 into a smaller business hoping that the returns will yield the remaining $15,000 in a short period. Note that this has the potential of failing and wasting the already-saved $15,000.
2. Keep the $15,000 while doing other work that will yield the remaining money over a long period.
Would love to see your input or a better suggestion apart from the ones I pointed out above.
N/B
This is the typical situation a friend finds himself and we are just brainstorming in what best to do.
Investing at a capital of $15k and a capital of $20k has still no difference, losing is still inevitable. That's why I'd rather chose the first option but I won't invest the whole amount of $15k but just a small amount that I can easily manage to lose. If I get lucky, I will get some profits that I will add on my savings and continue to invest more for future profits. However, if become unfortunate and lose my capital, I think that's something that I don't need to regret since we all expect this when things happen not according to our plan.
The important thing here is we gain some significant experience because the success of an investment does not only based on its own sufficient capital but it gives more credit to the person who is going to manage the investment, that's why building experience is always a must.