5 Financial Risks Self-Made Millionaires Must Take — Are They Worth It?
Written by
Nicole Spector
Edited by
Molly Sullivan
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Though becoming a millionaire from scratch isn’t the norm, we have more examples of self-made millionaires today than ever before. According to The 2024 National Study of Millionaires conducted by Ramsey Solutions, 79% of millionaires didn’t receive an inheritance or financial help from anybody.
Building and maintaining a seven-figure fortune requires impeccable discipline, razor-sharp focus and smart financial strategy. This much is pretty well-known; but there’s another ingredient that we don’t talk about nearly enough: risk. No self-made millionaire made it to the top of the food chain without taking a financial risk of some sort.
What are examples of financial risks self-made millionaires take? Are they worth it? Here’s what entrepreneurs making millions through their own business ventures told GOBankingRates.
Marketing Yourself So Much You Risk Being Annoying
Some of us feel shy even doing so much as networking (critical!) when looking to go out on our own with the goal of generating millions. The idea of marketing ourselves or our business venture to a point that feels totally excessive can feel terrifying. And that’s a normal feeling, given that when we get in people’s faces constantly, we risk being perceived as a nuisance. But this is a risk that Joy Gendusa, founder and CEO at PostcardMania, deems essential for aspiring self-made millionaires.
“The best thing you can do for your business is market way more than a normal person would view as sane,” Gendusa said.
Spending More on Marketing Yourself Than You Pay Yourself
Gendusa also recommended taking on the risk of spending more on marketing yourself than you pay yourself. Especially if your business venture is in its infancy.
“I drove the same, paid-off Nissan Pathfinder until my company hit eight-digit revenues, all because I knew that the magnitude of my marketing had a direct impact on our growth — and growth was my No. 1 priority,” she said. “I still spend more (a lot more) on marketing than I pay myself. Today, my company PostcardMania generates over $100 million annually and we’re continuing to grow because I continue to market more than what 95% of people think is sane.”
Hiring People Early in Your Business Venture
When turning a business idea into reality, you may think it’s best to hold off on making hires. Better to wait until the business is fully off the ground and making big money before investing in top-notch talent, right? Not necessarily.
Phil Alves, founder and CEO at DevSquad, took what he believes is one of the most strategic financial risks a self-made entrepreneur can take: hiring experienced, high-performing talent early on.
“It’s tempting to save money by hiring less experienced staff, but in my experience, investing in top-tier talent pays dividends in the long run,” Alves said. “When I built DevSquad, I prioritized bringing in experts in SaaS development and product strategy, even though it stretched our budget at the time. The immediate ROI wasn’t obvious, but over time, it became clear that this decision laid the foundation for scalable growth.”
Putting Profits Straight Back Into Your Business
“One of the biggest financial risks I took with Nautilus Marketing was putting nearly all the profits we had back into the business,” said Tom Jauncey, CEO at Nautilus Marketing. “It wasn’t easy at the time because there was no guarantee things would work out, but for self-made millionaires, you’ve got to bet on yourself. We used the money to hire the right people, upgrade our tools and really build the brand. It was risky, but those moves laid the foundation for the success we have today.”
Saying ‘No’
Many of us (especially women due to social conditioning that starts in childhood) have a tough time saying no. We may feel like we’re going to disappoint people or miss out on future opportunities. But saying no is a risk worth taking if you’re on the journey to becoming a millionaire.
“Successful individuals know when to pass on opportunities,” said Melissa Murphy Pavone, CFP, CDFA, founder at Mindful Financial Partners. “The risk here is that you might miss out on a potential winner, but saying ‘no’ to projects that don’t align with long-term goals helps you stay focused and allocate your resources wisely. It can protect against overextension and lead to a stronger financial foundation.”
A Risk Is Worth It When It’s Right for You
It looks like all of the financial risks we’ve covered here are worth it — or are they? Yes, the risks were worth it for the self-made millionaires we consulted, but they may not be worth it for you. Do your research and have a plan that your trusted peers and, ideally, your mentors feel is solid. Don’t take a risk just for the sake of taking one — or because someone you admire did.
“In the end, the financial risks self-made millionaires take are calculated, informed and aligned with their personal and financial goals,” Pavone said. “Taking these risks strategically can open doors to exponential growth and lasting wealth.”
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Sources
- Phil Alves, DevSquad
- Joy Gendusa, PostcardMania
- Tom Jauncey, Nautilus Marketing
- Melissa Murphy Pavone, Mindful Financial Partners
