© Elliot Essman 2005. All rights reserved.

These pages contain the complete 2005 revised text of Building Yourself, public speaking trainer Elliot Essman's guide to living the successful life.

Elliot Essman Public Speaking Training
Building Yourself Table of Contents
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• Economy does not consist in saving the coal, but in using the time while it burns. Ralph Waldo Emerson (1803–1882)

When Emerson tells you to use the time while the coal burns, he wants you to use your assets economically, in the best possible way. Because of opportunity cost, failing to take sensible risks with your money is itself risky. Inflation will combine with lost opportunities to eat into what you have.

Earlier we discussed risk in a more general sense. We found that there is no achievement without some risk. With investments, as in life, the fear of failure, of losing money, keeps many people from realizing true gains. Risk entails taking responsibility for the uncertainty that makes up reality. Responsibility brings with it the potential acceptance of failure. But when a winner fails, he or she just gets up again and chalks the failure off to the law of averages.

The one failure that can't be redeemed is the failure to act at all. People who fail to act, who are always risk‑averse, themselves risk the world passing them by. This particular risk has very poor odds. In the case of investments, the risk is opportunity cost magnified by inflation, with the high costs of credit factored in. There is no such thing as being totally risk‑averse. Reality will find you no matter where you hide.

The skier who is consumed by fear of falling almost certainly will fall. The person consumed by fear of failure has nothing else to contemplate but failure. He or she will fail. An investor who takes no risks is not an investor, but a fool.

Risk in investment can be managed. At any one point, you can diversify your holdings. If you keep a consistent strategy, over time you'll absorb your losses. You'll be way ahead of the investor who cringes at taking the smallest risk.

That's right—I used the term losses. Successful home run hitters have high strikeout percentages because they risk. Successful investors lose now and then because they risk. We're talking here about a lifetime investment psychology, not just one big deal. If you can't handle risk, then please put this book down. I personally don't want to be responsible for damaging your vision or causing you any undue stress.

When you take a managed risk, you contemplate a reward in proportion to the risk. The one‑big‑deal psychology is gambling. You get a hot tip on a stock. Looks good. But instead of buying a hundred shares, you put everything you have into it. That's right—this is going to be it. Well, we all know fools who make mistakes like this. And we also know fools who never get anywhere because they shy away from even reasonable risks.

As in most aspects of life, there is a middle ground. People who think straight and who keep building themselves can take risks—and reap rewards—all the while standing on solid ground. The solid investor investing for long term growth is the opposite of the gambler.