Don’t trade with too little capital

Businesses fail because they don’t have the financial reserves to keep going whether times are good or not so good. Trading without adequate capital is like opening a business without adequate capital – it’s not going to last long. So, what is the right amount to begin with? It all depends on the market in which you are competing. Opening a small restaurant with a hundred thousand dollars might work in an area away from the city but opening a restaurant in Manhattan that seats two hundred people would probably cost a million dollars. Furthermore, another consideration is what can you afford to lose? And you may have to lose it again and again in order to get it right. But who can resist taking a small sum and turning it into a fortune?

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