Is it time for you to take some risks?
As many of you know, in addition to rambling about how to buy a car, I’m a bit of a poker junkie. I find it both intellectually stimulating and a mildly profitable hobby. It’s also a great source of personal finance analogies!
Professional poker players and entrepreneurs have many things in common. Both take risks to achieve the lifestyle they want to live and succeed financially. Poker players take a risk on every hand they play, while entrepreneurs take risks by investing their time instead of spending it other places (like a traditional job).
The key to winning at poker and entrepreneurship is not giving up when you lose a bet or an idea doesn’t pan out. Dan Harrington (my favorite poker strategist) explains a fundamental rule of wagering:
“All successful gambling is based on one simple idea: making good bets at favorable odds…over time, if you kept making the same bet, you would win money.”
A successful poker player will consistently make bets when given the proper odds. And over the long run they will be profitable. The same goes for an entrepreneur. If you take risks and invest time (and occasionally money) on good ideas, over the long run you should succeed, even if there are a few lost wagers along the way.
Three types of risk takers
Extending the poker analogy, entrepreneurs can be divided into three categories based on the amount of risk they are willing to accept:
The Grinder…works some type of side hustle, to supplement her income or to express herself creatively. She’s not actively looking to quit her day job, but has extra energy and wants to apply herself to something stimulating. Bloggers are often grinders and can make a decent amount of extra money with a little bit of traffic and luck.
The Semi-Pro…has initiative and wants more freedom (and money) than her day job can provide. But she’s somewhat cautious and wants to keep her safety net intact while she tests the waters. She may want to establish a foundation in a new venture and reduce some uncertainty before making the plunge full time.
While the Semi-Pro and Grinder are very similar, the Semi-Pro wants her side hustle to become her full time gig and is taking steps to achieve her dream of becoming…
The Shark…drops everything and learns to swim…QUICKLY. This lifestyle is not for the faint of heart. The Shark usually has a ticking clock to make something happen before she runs out of money to pay the bills. You need to have a lot of gamble in you, but this option can end up with the biggest payback.
What type of entrepreneur are you going to be?
I choose the path of the Shark ten years ago. I left my 8-7 job without a safety net and an overwhelming drive to run my own life. I’ve found the freedom to be both invigorating and terrifying at the same time. And while I’ve yet to make enough money to stop watching the clock, I live comfortably and am happy to know that I still hold a lottery ticket that may someday payoff big.
But while becoming a Shark is exciting, often times the smarter approach is to try your hand at being a Grinder or Semi-Pro first. If you keep your day job and put in some nights and weekends the risk is minimal. You only give up a few hours of free time for the potential of a new life. What are your interests? See if you can turn a hobby into something profitable. Do you like writing? Maybe blogging is for you.
If you’re not satisfied in your day job, maybe it’s time to consider taking a few risks to lead the life you want to live. I’m not suggesting you become a Shark, but anyone can run a small grind. It only requires a little risk and a lot of hard work. Even if you never achieve an obscene pay day, think about whether you’d be happy just being able to support yourself while being your own boss. Or see if you can simply generate enough income from your hobby to pay for a night on the town once a month.
Going out on your own can be a path to wealth and living the lifestyle of your choice. All it takes is a wager on yourself. I’ll leave you with another favorite quote:
“Entrepreneurship is living a few years of your life like most people won’t, so that you can spend the rest of your life like most people can’t” – Anonymous
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Nice article! I would consider myself a Semi-Pro when it comes to my entrepreneurship. I never think it’s wise to just drop a job without a plan, but I often test the waters of other options. I’m just started to learn about all of the money that’s floating around the web and am very encouraged! But, until I start making some good coin, I’ll continue to watch the clock at my day job.
Testing the waters can be a very smart strategy. Keep playing around with new ideas until it looks safe enough to dive in.
Sounds like a good plan to me! Hopefully I’ll be diving soon! :)
Love the quote!
I guess I am a semi pro, slowly becoming a shark and after the reading I am more positive
Which one? I love both quotes! :)
Geoff, AWESOME ARTICLE. I absolutely love the 3 analogies. You described me to a T (A GRINDER). I’ve mentally considered myself a singles hitter versus a home run hitter, but I love the grinder analogy. Over the years, with smart consistent investing, some side hustles, and a flexible day job, I have met my financial goals. Babs :)
Babs, give yourself some credit, looks like you’re hittin’ double and triples from here.
Wow I felt like I was reading my situation when I read the Grinder definition lol
Cool post Geoff! I started off as a Grinder and now I’m a Semi-Pro!
Great article! I would wall into the Grinder category as I love my day job, but do have extra energy that I would like to apply! I used to spend my “free” time playing video games, and now at least I feel productive and am making a small amount of side income!
@Evan & @Mike, I’ve noticed the entreprenuerial spirit in both you guys. I think the pregnancypool.com and howtomakeawebsite101.net both have some legs and will take off!!!
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I quickly went from grinder, to semi-pro, to shark in a matter of weeks. I was laid off and now I’m building up my own business, hoping to supplement and eventually surpass the income I was making as an employee. Wish me luck!
Good luck! When it’s sink or swim, all the juices start to flow and sometimes great things happen!
Cool post :) I think I definitely fall into the grinder category.
My evenings and weekends are full of blogging activities now, but I still love my day job!
Nothing wrong with loving your day job. In fact, i think that’s what we’re all striving for. One of my professors used to say, “if you find a job you love, you’ll never work a day in your life”
I guess I’m a semi-pro then! I like the analogies. At the very beginning of launching my site, I told myself that I had an 8 year goal to blog consistently. And, if after 8 years, I can generate at least 25% of my full-time income, I’ll be ready to go.
We’ll see. I think ANYBODY who blogs consistently for 8 years should be able to make a good chunk of change!
Sam, I really like your goal. Realistic and attainable. Not many mention that the top bloggers have many years under their belts!
Sounds good Barb. Let me rephrase then…. I believe anybody who blogs for 8 years can make $100-200,000 a year from their sites. Still agree?
Within 8 years if you’ve networked and made your presence known within your genre, I don’t see why not.
How many sites do you think you’d need?
I definitely have a low risk threshold. I’m much happier making a steady stream of income and not worrying about losing a lot of money on risky moves/investments. I also lose out on the potential for big gains but I just can’t stand losing money.
You quit your job and went full bore into blogging. I have got to give your credit. That is an incredible ballsy move. I would consider myself a semi pro.
Mark, I didn’t actually go full bore into blogging, I went full bore into entreprenuership and creating start-up companies. Blogging is actually relatively new to me…the last year or so, but it seems to go hand in hand with entreprenuership.
great analogies. def a semi pro – but i beg the question, why become a shark when you can become a semi? is the race against time really that critical? or is it more about personalities and adrenaline rushes?
Sunil, it certainly has to do with your personality. But is also has to do with how satisfied you are with your current work and what you’d really ratther do with your time. If there’s a large enough discrepency between the two things, the jump becomes easy.
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I think right now I’m a grinder, and I’m not sure if I’ll ever take a step up from that (in the blogging world, anyway). There are other things I want to do out of the day-job I have now, but I’ve got to get squared off first.
While I admire you for jumping directly into the Shark category, I couldn’t bring myself to do that! I’d be a wreck after a couple of weeks!! I did however go the Grinder route and just like to supplement my income from my day job. I don’t find my day job too creative and like to do the other stuff on the side to pass the time. If the “other stuff” takes off then it might be time to get more aggressive with it!
I like that approach. I try to have a few different things in the hopper at once. If one of them starts to show some promise and revenue potential, then that’s what I push on really hard. If you try a bunch of different things you may be surprised by the ones that show promise…but that’s why it’s good to experiment. It’s just like an A/B test on a website. Try two landing pages and if one converts better, use it!
Brilliant article. I’m totally a semi-pro … I want to get out of the 9 to 5 but I’m definitely wanting to put a strong safety net in place first. Seems like the Shark is the fastest route, and people who make it work are ultimately the most successful. I applaud you sharks for your courage!!!
This was awesome, great job Coach! While at first I think of myself as a shark because of the way I dive right into other projects, I still hang onto the day job so I’m Semi-pro. The day job is just too flexible for me to be uncomfortable doing both things right now, but I want to eventually be able to say, this is flexible but I don’t need it anymore.
Nice article! Started as a grinder and now I’m a semi-pro stock investor! It’s a lucky thing my day job is just as flexible when it comes to timing but these days I spend about 2/3 of my awake time focusing on stocks instead of my job.
Semi-pro stock investor, you are a true gambler! Best of luck I know how challenging it can be to whether the ups and downs of the market as a trader.
i mean weather!!!
I may need psycho-analysis (emphasis on psycho!) before deciding my category. May day job pays too much and is too much fun to want to quit.
But I really enjoy blogging, investing, and yes even gambling!
I’m a semi pro, but within 3 years I’ll be a full grown shark. I’m just in college now and plan on using corporate america as a starting ground. From there I hope to work for myself and generate my own revenue.
Jeff, best of luck! Starting out in Corp America is a good idea. Get a year or two with a real company to put on your resume so you have something to fall back on. It’s also great to learn how real companies work and see all the things they’re doing wrong…so you can do it better on your own.
The great thing about real life is that it is positive sum — when you have a flush you still have a good chance of losing to a full house if the other guy as a set, but in real life you and the guy with the set can both win, because wealth can be created and shared, enriching both players in the process.
BTW love the poker analogies!
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Nice analogies, almost similar to the Blackjack professional players gradation.
Regards. Tessa
I would definitely consider myself a grinder. I couldn’t see myself taking that big of a risk in starting a business with no security blanket! Maybe after I test the waters first. Baby steps…
Awesome article! I suggest testing the waters first by choosing to be a Grinder or a Semi-Pro. It really is a huge decision to be a Shark, leaving everything behind, not sure of what’s going to happen next. In Poker, this move can be related with “All In”, huge, huge decision (gamble) to make!