The other day I was thinking back to when several years ago I had wired my (modest) life savings into escrow to secure a piece of land for development. The moment I hung up the phone with the escrow agent, the room was very quiet. I gulped. A modest amount or not, I had just transferred every penny that I had saved into a financial holding pen, and now I was faced with the challenge of truly convincing myself that the investment was in fact worth pursuing.
It was a scary moment — a moment of self-doubt regarding every assumption and calculation I had made up until that point in pursuit and analysis of the investment. Was I being too optimistic? What didn’t I know? What was I overlooking? What questions should I have asked that I didn’t ask?
It is at that moment that I was relieved to have a detailed financial model. It provided me with a way to methodically go through a checklist of every assumption and every calculation that went into the investment in the first place.
Have you had similar moments of sheer terror? I hope I’m not alone!