How to Invest With No Money

Invest your time like the world’s most successful people.

Tim Ferriss has interviewed hundreds of the world’s most successful people. On the surface they are seemingly huge risk-takers, and luck propelled them to their elevated status. But in reality, Ferriss has observed, they are simply masters of “risk mitigation.”

Risk mitigation is the pursuit of opportunities where the potential upside is far greater than the potential downside. Those interviewed by Ferriss have a keen eye for opportunities in which they could win big or take a small loss if things don’t pan out. In many cases, even the “failure” scenario results in a positive outcome, such as having learned a new skill.

The key to investing like these top-performers is to treat your time as an investment, and only invest in opportunities with disproportionate upside potential.

After graduating college, I had no money to invest. If you have no money, there’s pretty much nowhere to go but up. But I did have time, and I viewed my time as an investment. I knew how to build websites, so I had two serious job offers in front of me when graduating.

Offer #1: No Downside, Low Upside Potential

Offer #1 paid a good starting salary for an entry level position. It was an established company where it would take me at least 5 years to work my way up to a significantly better position, and even if I did, the pay would be no more than double that starting salary.

Potential Upside: 2x salary in 5 years.

Potential Downside: None, as this was a safe option.

Offer #2: Moderate Downside, Unlimited Upside Potential

The other was a risky startup with a low salary (40% less than Offer #1), but the chance to work with a successful entrepreneur in a role that would include building an engineering team, designing a product and the technology behind it, sitting in on sales meetings, and helping shape the company. It included a massive stock option package, and unlimited future salary potential if the company did well. It had enough funding to last at least one year.

Potential Upside: Unlimited (if the company succeeds). Even if the company fails, huge learnings in one year.

Potential Downside: Lower salary than other offer, one year of time lost.

I chose the risky startup, and boy did it fail. In exactly one year, our funding ran out and we had little to show for it. We had a product that no one was using, and therefore no revenue. But even with the worst case scenario playing itself out, I had gained quite a bit. I learned more about startups in that one year than I did in four years of business school. I learned every red flag in the book, how to dig into what founders are telling you is happening vs. what’s actually happening, how to build a team, how to organize a group of engineers, and how to build a product.

Three years later, that investment of time has paid off. I am in my dream job at a successful startup. My salary is far higher than it would be if I had taken that safer job, I’m happier, and I have a stock option package that has the unlimited upside potential that I look for. This opportunity was only available because of the experience I had gained at the failed startup.

Whether or not you have money to invest, you are investing your time. You’ve invested in reading this article. You’ve invested in the school or company you’re at right now. How well you invest your time now will determine your future outcomes.

In 10 years, where do you want to be? What new skills would massively improve your future potential? Can you take a calculated risk today that could rapidly accelerate you toward your goal?

Your time is as precious as money, if not more so. Invest it wisely.