I recently told a close friend about a personal investment I made. We’ve always had a shared interest in the area. It’s not the type of investment I’ve made in the past, so he was curious. Why do I think it’s a good investment? he asked. What were my thought processes leading up to the decision to invest? How did I get comfortable with an investment far outside my comfort zone? Here are a few things I told him:

• Close-to-unique opportunity – In 2020, I told myself that I want to take advantage of a certain kind of opportunity. I listed my criteria and have been looking for matches. I felt this investment is one of those opportunities, which don’t come around regularly.
• Confidence – I wasn’t 100% confident before pulling the trigger. I asked myself if this opportunity met my criteria. It did. Even so, I was still only 70% confident. Most investments carry risk, so I’ll never be 100% comfortable and I’m OK with that (for now).
• Upside – As with lots of investments, this one could drop to zero. If it does, I’ll lose what I invested—nothing more. On the other hand, I knew there’s a big upside potential—if I didn’t invest, the gains I would lose out on could be enormous. I’m focusing on the upside, not the downside.
• Calculated risk – I didn’t bet the farm—only an amount I can bear to lose.
• Learning – Regardless of the outcome, I’ll learn more having made the investment than I would have watching from the sidelines. I guess I could look at it as an expensive education if things go wrong. I’m OK with that too. It could help set me up for a great investment in the future or avoid a disastrous one.

I’m glad my friend quizzed me about this investment. Explaining it to him highlighted some things I hadn’t thought about. I hope this turns out well!