I got very good feedback from readers about my last post in which I compared passive investing to an active business enterprise. The responses got me thinking that there are lots of people interested in business as an alternative to investing in financial securities and in this post I will talk about striking a balance between the two.

Working to generate income, developing a consistent savings habit and investing in a diversified portfolio of assets is your best bet to becoming financially independent over the long term. But to many of us, that is not enough. We want to strike it rich and that means we need to take calculated risks.

For the purpose of this post, I am going to define a calculated risk as a venture which one undertakes knowing that there is probability that it can turn out wrong but accepting that risk for the possibility of earning above average returns. The fact that one is well aware that the venture can go downhill is an important distinguishing factor between taking a calculated risk and falling for a scam.

Examples of calculated risks could include starting a business, investing in someone’s business, taking a loan for higher education in order to increase your earning capacity, taking a loan to buy a vehicle for commercial purposes, taking a loan to develop commercial real estate and so on. These are all ventures that could go wrong but with the proper planning and research, it is reasonable to assume they could turn out to be profitable.

Before taking these risks though, it is important to have already built an investment portfolio which you make regular contributions to. This will serve as a risk management measure as it ensures that you remain on the path to financial independence assuming your scheme to strike it rich fails. It will also serve as a source of financing for your scheme but only if it’s going very well and you can’t find other financing to take it to the next level.

So while you’re doing all the right things in terms of personal finance and investing, take some time every few weeks to think of some venture you could try. As long as you have done the work to ensure that the losses will be contained at a certain level, you should give yourself a chance to make it big.