I just got off the phone with a friend of mine. We were discussing the misunderstanding many people have about the difference between risk and debt.

Risk is investing in something (preferably yourself) that has the likelihood of creating the value necessary to pay-back any monetary commitment that may have been necessary.

Debt is a one-way street. There is no possibility of growing value from the money spent.

Those of us who are in business for ourselves and those who take their careers seriously know all too well, the importance of investing in yourself. It makes you more valuable to your business or to your employer. Risk is a highly leveraged way to expand the potential return of your business and career trajectory.

On the other hand, spending money on things and experiences which have no value other than entertainment or distraction, is like hanging an albatross around your neck. The momentary distraction will be a forgotten memory by the time albatross begins to foul the air.

As the economy goes through a correction it’s important for you to not become insecure about investing in yourself.

This is always the safest thing you can do with your money. If you have to borrow in the coming months, you may want to consider whether you are creating debt or expanding your ability to create more wealth by taking a risk…

Take the risk!

-Bob Baran