Section 1.1: My Failed Business Venture

In 2014, the Harvard Business Review raised an important warning about the allure of entrepreneurship. I wish I had heeded this advice sooner, as I spent nearly ten years on a venture that left me with little more than a decade-long gap in my resume and mediocre finances.

Years ago, a friend and I decided to establish our own investment fund after becoming disillusioned with our careers. We felt confident in our ability to generate sound investment ideas and believed we could raise sufficient funds from our families to kickstart our initiative.

We thought we had enough resources to begin investing with our initial capital and savings, planning to expand our fund once we had a track record to attract outside investors. While it all sounded promising, we made two significant errors in our reasoning.

Firstly, private investment funds were scarce in our country. We dismissed large corporate funds as too slow and bureaucratic, naively believing we could outperform them due to our agility in decision-making. Secondly, we overestimated our training and discipline, assuming we could outsmart the market. We failed to grasp the challenging economics of the industry.

Ultimately, we wasted years developing a research infrastructure for investment ideas that garnered little interest.

How I Recovered

This failed venture cost me almost a quarter of a million dollars, spent on direct expenses like training courses and subscriptions. However, I didn’t significantly dip into my savings, as I maintained a writing side hustle that covered my living expenses.

This side gig became my saving grace. Had I not had that income, the financial blow would have been devastating. Instead, I shifted from being "potentially broke" to simply "not growing my wealth." While not ideal, it was a manageable situation.

Section 1.2: Time Wasted on a Non-Growth Side Hustle

It feels odd to classify my writing side hustle as a financial error, especially since it helped me after my entrepreneurial venture. However, I realized that some side hustles can lose their utility over time.

During this period, I primarily earned money as an academic ghostwriter, assisting individuals with their dissertations and papers. While this was beneficial when funding my failing startup, the limitations of this work became evident once I no longer needed the extra support.

Academic ghostwriting is not a scalable business; each project required unique knowledge, making it hard to turn it into a product. Additionally, the stigma around outsourcing academic work hindered my ability to build a recognizable brand.

How I Recovered

I acknowledged the limitations of the academic ghostwriting business and made the decision to exit. It’s been nearly two years since I left that field, and to my surprise, my income has not diminished. I redirected my focus toward broader online writing opportunities.

This shift allowed me to avoid the issues associated with academic ghostwriting, enabling me to establish a more sustainable income stream.

Section 1.3: Losses from Trading Meme Stocks

Admitting this is challenging, especially with my finance background, but I lost a significant portion of my capital trading GameStop stock in 2021. Perhaps it was pandemic-induced boredom that made me feel I had to participate, but I entered the trade at a terrible time.

Despite setting strict risk limits, I became emotionally involved and exceeded my thresholds as the trade progressed. I ignored my initial plan, which ultimately led to a 50% loss on my GameStop investment.

How I Recovered

While I failed to adhere to my risk management rules, establishing those limits was not in vain. They reinforced the necessity of maintaining discipline. When I recognized I had exceeded my limits, I instinctively knew I needed to exit the trade.

By normalizing risk discipline, I limited my loss to 5% of my capital, avoiding a far worse scenario. I have since recovered from that loss through gains in other investments.