Now, you have to keep in mind that Ed had already attempted this climb twice, and backed off both times. This was the last 8,000-meter peak he had left to conquer before attaining his goal of summiting all 14 peaks. Annapurna is arguably the most dangerous and most difficult of all of the 8,000 meter peaks, with the possible exception of K2. He had already tried and backed off twice.
Ed’s team chose a route that required them to be above 26,000 feet, the death zone, for an extended period of time. However, taking this route allowed them to avoid the huge avalanche-prone faces of the foreboding mountain. Well into their summit bid they came to a corniced face that “just did not feel right.” Ed and Veikka chose to go back down the mountain, but two other climbing partners decided to press forward.
In an amazing climb, those other two reached the summit successfully. Some people watching the climb called Ed and Veikka weak-kneed. They received an enormous amount of criticism for turning around when their partners summitted. However, they did not waver and offered no regrets. They had the courage and fortitude to “go to the tent” despite receiving peer pressure, despite it being the final summit, and despite the world watching.
I know of a local partnership that exemplified the need for this principle. After experiencing success at the outset of the venture, each partner was able to take huge disbursements rather frequently. Not sure of the upcoming terrain, the first partner chose to invest in some real estate and tucked money away for the future. The other partner built a gorgeous home, requiring him to take out two mortgages. He filled the new house with top-of-the-line furniture and increased his monthly burn to match the increase in the amount of money he was bringing home.
As often happens, technology and the market changed. The business hit a transition period requiring the partners to lay off employees and cut expenses (including disbursements) while they took time to regroup. They determined it would take at least six months to retool the business to a level where the cash flow would allow both partners to take a salary. The first partner had the resources to wait out the tough time and keep climbing: slowly, but steadily. The second partner was forced into the tent at a dead stop. He went back into corporate America seeking a salaried job that would support his new lifestyle.
Different choices have different consequences. There is no way to predict the future, and you must be prepared to accept what changes may come. In the above example, the second partner cannot be considered a failure. He accomplished a great deal and chose his own priorities. However, if you want to experience true entrepreneurial freedom, your priorities need to reflect your goals.
When things are going well, make sure you don’t burn up all the reserves. Put some away for the slow time. A good rule of thumb is to maintain three months of buffer, no matter what. This gives immense peace of mind when times get tough. It’s smart to be a little conservative now for peace of mind later; I’ve said it before and I’ll say it again: live like others won’t now so you can live like others can’t later.
Getting to the top is optional, but getting back down is mandatory.
Porter’s Points – Seven Years of Plenty, Seven Years of Famine
- Live on less than you bring in.
- Do not buy the extras on your basic earnings; buy them on your extra income.
- Get your personal financial life in order and avoid putting your loved ones at risk.
- Save and maintain a three-month buffer of financial reserves.
As you start your business, make sure you’re saving enough resources that you can survive if things get tough. Next time we’ll talk about achieving balance, using the mountain climbing principle ‘climb high, sleep low’.