Are you cut out for starting things from scratch? Do you have the time and grit to take a vision from an idea to a reality? Do you enjoy the process versus only the result? Or you prefer to sit back and let money work for you?
Entrepreneurship and investing are really two different animals, but have some similarities (in terms of potential outcomes). Both can give you financial returns on your investment (both time and money), however, they are two different paths. Each is unique and provides its own path to yield positive returns.
An entrepreneur has to see the big picture and execute on a day to day basic actions they need to take to ensure the success of the business. One must be mentally strong and push through any potential challenges or hurdles, which will definitely come your way. Are you agile and adaptable? Business is an art as much as a science. So you need to stay grounded, yet adapt to market challenges, as well as feedback as a continuous loop.
Investing is really making your money work for you in a smart manner. There are high-risk investments (startups), and low risk (stable real estate, blue-chip stocks). A smart investor takes calculated risks on emerging trends and puts their money to grow an idea.
Entrepreneurship (Entrepreneur): The process of establishing a business in the hope of obtaining a profit is fundamentally what entrepreneurship is. Its output should create value for its recipients. Thus, in terms is the process of creating or extracting value for others. You are trying to solve someone else’s problem or need. A smart entrepreneur comes up with a vision and executes on making that vision a reality. They literally can visualize the future and make it happen.
Entrepreneurs are far and few between, but they are the bedrock of any economy. Without risk-taking entrepreneurs, we won’t have the comforts of the products and services we receive today.
Investments (Investor): The process of taking currency and putting it towards a business, organization in any domain or industry for profit is the definition of investing. The capital invested is used to help grow or expand a business with the hopes of yelling a positive return in the future. There are long term and short term investing styles (i.e. day trading), as well as long term (private equity, angel investing). The investor takes a risk in future profits by making their money work for the growth of another business.
Ahmed Bakran, (Entrepreneur and investor) says generally people want to grow their money through some mechanism. Not everyone has the skills nor mind to become a successful entrepreneur. But those that have the passion really can make a positive impact in the world, and make money at the same time. Investing is a great alternative for those that have capital, that prefers to let another entrepreneur or business help grow their money.
Which is better for you? Entrepreneurship or Investing?
As per Ahmed Bakran, this really depends again on the person. You should ask yourself what your goals are. Do you like to be the one in charge, making decisions, executing projects to completion? If you do, entrepreneurship may be a great avenue for you. If you enjoy analyzing other ideas and companies and have the capital to invest, then investing in businesses could work for you.
If you have the skills and want to make change for the greater good (social benefit)
In either case of investing or starting your own thing, consider the greater good you may have on society and the world. Are you helping advance the world, or are you doing more harm? It’s not always about the profits, it’s about benefiting society in a positive way.
If We Talk About Risk
If we compare both areas, there are risk factors in both. Entrepreneurship can be far riskier, since starting something from scratch is a tall order. When you invest, you have the choice to invest in stable low-risk areas, or you can diversify your funds from high and low-risk investments.
Whichever path you follow, educate yourself on what it really means to be a successful entrepreneur or business owner, as well as how to invest successfully. Education is a key ingredient to that, says Ahmed Bakran.