We all know the story of people that become rich beyond their wildest dreams and famous with it, only to lose the lot and end up bankrupt or back to where they began again. Often, boxers, lottery winners or business people.

Sometimes, this is due to some misfortune and sometimes due to poor planning. For example, with tax bills or choice of life partner leading to expensive divorces. But does it need to be like this?

Making a million (or ten) and doing it all over again

I love it when businesses are successful, and the founder is able to get out with a healthy bank balance. It's a lot of risk starting a company and also a lot of effort with no guarantee of getting anything out of it. 60% of businesses will fail within the first 3 years. So that's a tonne of heartache and losing money to boot.

Once people are successful, it is like a bug! They know they can do it and so often want to start a new venture and this time it will be bigger and better! They will make even more money this time around. They assume it will be bigger and better because they have learned from their past mistakes and now think they now have the winning formula.

This optimism / arrogance can lead to them taking bigger risks because last time it worked out fine. They have more money available from the sale of their first business and so may be less wary of costs.

Maybe they just got lucky?

It's hard to be humble enough to admit this, but, maybe they just got lucky? Perhaps, their business was just in the right place at the right time and managed to capitalise on it. Perhaps, they happened to meet the right person at the right time that was able to super charge their business. This may be a customer or an employee, or someone else that had an influence on the business. Or someone that could take their product and make a business of it... you might think like Dragon's Den here.

If you got lucky once, then why do you think it will happen again? Well, you don't, because you put this success down to your own abilities. We all do that to a certain extent; we overestimate our impact on things.

You may have been brilliant the first time around, you may have made all the right moves at the right time and got the success you deserved. Next time though, you may do it all again and do everything right but then... you just get unlucky. Starting a business before a pandemic, or example. Events you have no control over can destroy businesses and no matter how well you react; it might just be too much bad luck.

You don't need to risk it all again

Entrepreneurs resist this urge! I know it is strong inside you, but there is no need to end up at square one. It is possible to:

• Work out how much money you need for the rest of your life and keep that aside. Put the rest into whatever venture you want and if you lose that... stop. Do not raid your 'rest of life' fund.

• Plan for unjust loss of money and protect it as far as possible using legal structures.

• Planning for taxes is pretty simple! Do it, pay an expert that takes liability for it, keep them as low as possible and pay them on time. Low bills, no fines and no worries!

• Invest the money required in a manner where there is no chance or permanent loss of capital. Fluctuation of value, yes, but not permanent loss.

"Avoiding permanent loss of capital is the number one rule." Bruce Berkowitz

Luckily, there are people that can help organise all this for you (I know this as I am one!) to make it as easy as possible and so that you end up in a position where you can concentrate on your next venture, knowing you are secure.