What are the pros and cons of starting a small business?
I have an idea for a small business and I'm thinking about quitting my job to pursue it full time. That's terrifying. What should I consider before taking the leap? How much savings should I have first? Should I start it on the side before going all in? What's the most common reason small businesses fail?
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3 Answers
Be very skeptical of anything that promises high returns with no risk. If it sounds too good to be true, it is. The dot-com bust should have taught everyone that lesson. Slow and boring index funds beat hot stock tips over the long run.
I'm not a financial advisor but I've learned a lot from personal experience. The most important thing is to start early and be consistent. Even small amounts add up over time thanks to compound interest. Don't try to time the market.
The simplest advice I ever got was: spend less than you earn and invest the difference. Sounds obvious but most Americans don't do it. Track every dollar you spend for a month — you'll be shocked where your money goes.
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