As you continue down the path of being a nurse practitioner entrepreneur and building wealth, you need to get to a point where you are able to assess opportunity quickly. The better your businesses do and the more wealth you generate, the more opportunities for investment and business ventures will increase. Therefore, it is critically important you know what and what not to do in terms of pursuing opportunities. Here are some tips that will help guide you, because it is inevitable you will need them. I guarantee it.
- What is the upside for the opportunity? Basically, what is the return on investment? I get asked all the time to invest in someone’s practice, a real estate flip, or a land development project. I always ask, “what is my return?” The typical answer is 10%. I am sorry but loaning you $100,000 and only making $10,000 off it a year later is not worth it. It does not change my life in any significant way. A $10,000 return is great, but it will not change my life in any impactful way. Losing $100,000 will though… So, always look at the upside and the return on investment.
- What is the time investment needed for the opportunity? Listen, you are going to be stretched thin as a nurse practitioner entrepreneur. The more successful you become, the more your time is worth. Therefore, you need to determine if you even have the time to pursue certain opportunities. Personally, I don’t have time for much anymore unless the upside is worth my while. This was one of the reasons why I quit the urgent care and went 100% in on myself.
- What is the risk surrounding the opportunity? Essentially, do the benefits outweigh the risks? Often times, they do NOT. If I can loan someone $100,000 and make $500,000 back and the risk is minimal, then it is worth it. Most of the time though, the risk is too high, and the benefits are too low. So, ask yourself if the risk is worthwhile or not. Investing $10,000 into a niche practice though is totally worth the minimal risk because the upside and benefits it can produce are VERY high.
- How much capital is needed for the opportunity/investment? It is a VERY BAD idea to put all your eggs into one basket. I know people who have invested their entire life savings into Bitcoin hoping and praying that it will pay off big time… Guess what? Some of those people bought at the top and have lost more than half of their investment. This is just asinine. Never go all in on an opportunity from a capital point of view. Never invest every dollar you have into just one opportunity. Remember, you want to be as financially redundant as possible. I had someone who wanted me to co-sign on a million-dollar apartment deal which would have required a significant amount of my free capital as a down payment. Sorry, I don’t play those games at this point in my life.
So, when opportunities and investments present themselves in your life, you need to ask yourself these 4 questions: What is the upside? What is the time investment? What is the risk? And how much capital do I need to invest in this opportunity?
If you go over these 4 points, you will make smarter decisions in your financial and professional life!