In the mid-1600s, Dutch society experienced an economic boom spurred on by international trade happening through the Dutch East India Company.

Flush with cash that was burning a hole in their pockets, the well-to-do began purchasing Tulip bulbs at ungodly price tags as high as 5,000 guilders (about the going rate for a house at the time).

Looking to cash in on the pandemonium, thousands spent their year’s wages on particularly rare Tulip bulbs with hopes to flip them for two, three and four times their value.

When Dutch society as a whole finally got their wits about them and decided to stop spending a fortune on flowers, those looking to get rich quick ended up broke instead.

In order to get ahead as a creative person, you have to be willing to take risks both creatively and monetarily. The difficulty is that it’s not always easy to differentiate between “good” and “bad” risks.

In Real Artists Don’t Starve, Jeff Goins writes about how at the height of Michael Jackson’s career, he took what appeared to be a very bad risk. He spent $47.5 million of his hard-earned money to purchase the Beatles music catalog.

People thought he was crazier than a loon. Jackson was already writing hit after hit after hit… why not just focus his attention (and his finances) on writing and promoting his own music?

But, Jackson knew that the Beatles catalog was priceless (and that it was only going to become more priceless). So, he went ahead with the purchase anyway. Today, that catalog is worth $500 million.

Warren Buffett helps us differentiate between good and bad risks by advising folks to be fearful when others are greedy and greedy when others are fearful.

Good creative and monetary risks, more times than not, are obvious to us but non-obvious to everybody else. Good creative and monetary risks generally require a much longer time horizon to pay off because it takes a while for everybody else to see the obvious.

In this way, creatives who catch fire are able to see the obvious before the obvious is obvious. But, this is easier said than done.

There’s a reason thousands of people spent thousands of dollars on Tulip bulbs while only one person spent millions of dollars on Beatles songs.

By Cole Schafer.

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