Rule Number 5: Avoid Speculative Ventures

Too many athletes have lost their fortunes by trying to help family members and friends fund their speculative ventures. Your uncle, cousin, and best friend may mean well but they probably don't have any experience in running a company. There is no time for them to undergo on the job training with your precious money. If you decide to back a business venture, follow these 3 rules.

1. Be sure to check the background of all parties involved if you do decide to back a business venture. Check out their financial history, credit, and work background. You want to know as much as possible about everyone that you are going into business with.

2. You should always require a business plan from anyone whose venture you are considering backing. Have your attorney, financial advisor, and other professionals take a look at the plan. You need to know how feasible the business plan is and how long it will take you to recoup your investment.

3.Only commit as much money as you can afford to lose. We all hate to think that a business venture may not succeed but this is a distinct possibility. You should only risk what you are comfortable with losing.