I like looking at the "risk" of buying a new car vs. starting a business. When one buys a new car, they may spend $35,000 and as soon as they drive it off the lot, the value rapidly drops. When you talk to the average salaryman, they never say "buying a car is risky" when in fact, its one of the dumbest financial risks that one can take.
When starting a business, that same $35,000 investment actually has a chance of increasing in value, even if 95% of businesses fail.
Most people who say business is "risky" are just not comfortable with ambiguity. Buying a car is very well-known. Building a product that has never been built before means that you're venturing into the unknown, a very scary proposition for most people.
If you buy a car for its utility value, you can get a perfectly usable car for $10,000-$15,000. Say you spend that $15,000 on the car, you still have $20,000 left over that you could invest in a business.
You completely missed the point; this thread is about people who say "starting a business is risky". If you measure risk in terms of ROI in dollars: purchasing a deprecating asset vs. starting a business is a no-brainer, yet most "average joes" that tell you "starting a business is risky" won't think twice about blowing lots of money on a brand new car.
Comments
I like looking at the "risk" of buying a new car vs. starting a business. When one buys a new car, they may spend $35,000 and as soon as they drive it off the lot, the value rapidly drops. When you talk to the average salaryman, they never say "buying a car is risky" when in fact, its one of the dumbest financial risks that one can take.
When starting a business, that same $35,000 investment actually has a chance of increasing in value, even if 95% of businesses fail.
Most people who say business is "risky" are just not comfortable with ambiguity. Buying a car is very well-known. Building a product that has never been built before means that you're venturing into the unknown, a very scary proposition for most people.
You don't invest in a car, like you invest in a business. You buy it for it's utility value, like you buy a gallon of milk.
If you buy a car for its utility value, you can get a perfectly usable car for $10,000-$15,000. Say you spend that $15,000 on the car, you still have $20,000 left over that you could invest in a business.
But what if investing in a business isn't a priority, but a flashy new car is?
Utility value isn't a one-off constant, it depends on the user.
You completely missed the point; this thread is about people who say "starting a business is risky". If you measure risk in terms of ROI in dollars: purchasing a deprecating asset vs. starting a business is a no-brainer, yet most "average joes" that tell you "starting a business is risky" won't think twice about blowing lots of money on a brand new car.
you are not taking "opportunity cost" into account....