A middle-aged woman requested a consult on website documentation for her new business. The first question is always about the business. In this instance, she intended to invest $150,000 into a business that sells custom made phones to the elderly. I asked her about her experience in the cell phone industry. She said she had none.
That immediately raised a red flag. Cell phones are highly technical and require knowledge of, among other things, FCC regulations controlling cell phones.
I then asked her what she knew about the manufacturer of the phones. She said she had seen them on a website and that they looked good.
I asked her one question:
“If an elderly person falls down, can’t get up, tries to call her children using your phone, and the phone doesn’t work, do you have any idea what those kids will do to you?”
Her eyes opened wide, and she said that she had better rethink this investment.
The moral is that it is more important to know what not to become involved with than it is to know what it is ok to become involved with. The reason is that the negative consequences of a mistake can be far more serious and long lasting than the benefits received from a good investment.