Knowledge Marketplace
My First Million

My First Million

The best business ideas come from noticing what's working and doing it better, faster, or for a different audience.

Back to Mental Models

Personal Capability as Safety Net

Viewing your own skills, knowledge, and earning ability as the primary financial safety net rather than relying solely on savings or investments.

Decision Rule

When evaluating financial risk, ask 'If I lost everything, could I rebuild it?' rather than 'Do I have enough savings to weather this?'

How It Works

Reduces over-conservative financial behavior by recognizing that human capital is often the most valuable and resilient asset, enabling more aggressive wealth-building strategies.

Failure Modes

Overconfidence in ability to rebuild during health crises or major life changes

Ignoring industry-specific risks that could impact earning ability

Underestimating psychological impact of losing accumulated wealth

Example Decision

Entrepreneur decides to invest aggressively in growth assets because 'even if I lose this money, I'm confident I could rebuild it within 3 years using my business skills.'