Scenario: Jack considers an investment

Jack’s trying to decide whether to invest in his friends’ new start-up company. Given his situation, which choice do you think is best?


Jack is off to a good start financially. He has minimized his expenses, built up his savings, and recently started to invest. Some friends of his have a fantastic new business idea and have asked him to invest, but don’t have a business plan yet. He’d have to quickly sell the investments he’s made so far to give them the money they need. His investments are low-risk but haven’t earned much. Is this his chance for a huge profit? Should Jack sell and make this new investment?
Yes! The whole idea of investing is to make a profit. He shouldn’t pass up this unique opportunity.

The consequences of your choice

See the consequences of this choice for Jack. Then hear what your guide has to say.


“I believe in my friends. Even though I had to pay some fees and also took a loss on a couple investments I sold, I invested everything with them. Now I’m not sleeping real well. Maybe my other investments were too low risk/low reward, but this one’s just too high-risk for me. They’ve already spent most of my money, so it’s not like I can get it back right now.”
No, it’s too risky. He should get a cash advance on his credit card and give them 50% of the amount.

The consequences of your choice

See the consequences of this choice for Jack. Then hear what your guide has to say.


“I’m glad I kept my other investments, but what was I thinking taking a cash advance on my credit card? What a lame idea. I have to pay a huge amount of interest on the loan, way more than the return I might get on my investment. And if I can’t pay it back, I’ll damage my credit. So now I’m more focused on paying off a debt than I am on investing. And who knows if and when my friends’ business will earn a profit?”
No! It’s too risky with no business plan. He needs to “wait and see” … this new business may fail.

The consequences of your choice

See the consequences of this choice for Jack. Then hear what your guide has to say.


“This seemed like a ‘once-in-a-lifetime’ opportunity. Then I remembered that if something sounds too good to be true, it probably is. My friends are really psyched, but they don’t even have a business plan yet. I might be willing to take a little more risk for more potential reward, but I’m going to stick to my plan to divide my money between different types of investments, companies, and industries.”
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