I told David, “Go look at every store and its entire inventory, who we would sell it to and what we would get for it, in case the deal goes south.” I… - Sam Zell

Risk is the ultimate differentiator. I have always had a deep and complex relationship with it. I am not a reckless person, but taking risks is really the only way to consistently achieve above-average returns — in life as well as in investments. My father proved that when he left Poland. I am probably more comfortable with risk than most people. That’s because I do as much as I can to understand it. To me, risk-taking rests on the ability to see all the variables and then identify the ones that will make or break you.

In exchange for their capital, I made a commitment to give them the best return possible on their investment. That was my primary obligation. Nothing stood before that.

The third acquisition was a big single-family house. I found an architect, a small local general contractor, and we created a design for four separate units. Then I went to the bank and got loans to do the renovation. I was twenty-three, with a BA in political science. I didn’t know anything about financing. But it never crossed my mind that I might be too young to start an investment business or that I couldn’t do it. I didn’t know any better, but was able to sell the banks on my ability to get it done. Our management company took over the property, did the renovation, and rented the units. The asset did very well.