01/20/2012 02:55 pm ET Updated Mar 21, 2012

Romney, Risk and Retirement

Safe bets are not profitable.

In order to make serious money -- the kind of cold, hard cash that can thrust an ordinary child of privilege solidly into the 1 percent -- risks must be taken. Sometimes they pay off big. Other times, things go badly. Successful businessmen are the ones who losing bets outweigh the loss.

Mitt Romney is one of the success stories. The heir apparent to the Republican nomination started a business, Bain Capital, that now manages more than $60 billion in assets. They helped start Staples and bailed out Toys 'r' Us, Burger King and the Burlington Coat Factory. And he was rewarded handsomely for it.

People can get hurt when you try to add value, save a company, tear down a company, or anything involving one party trying to make money. Many times these are the sort of Salt of the Earth people with faded trucker hats, frizzy perms and Midwestern drawls featured in the hit job documentary, "When Mitt Romney Comes to Town."

I wish it were different. I wish the real world could work like the federal government. More than half of our federal budget entitlements, guarantees, or whatever you want to call it, benefit that comes with no risk to the person getting it. Businesses cannot operate in this fashion; they would be as broke as the federal government.

Even those Americans who don't feel the entrepreneurial spirit have to take risks. It's impossible for the average private sector worker to retire only investing in Treasury bonds (that pay less than 2 percent to hold your money for 10 years) or keeping it in cash. I wish I could lie and tell you that investing was a sure thing and the tooth fairy wasn't your mother. Welcome to adulthood.

You may think that you, Joe Investor, don't have such weighty concerns. You don't have to decide whether to buy Filene's in bankruptcy or let it fail. The only investment you make is sliding a few dollars from each paycheck into a 401(k) or some other retirement account, so you don't have to the octogenarian rolling to your desk job in a wheelchair.

But you are powerful. You are a mini-Mitt. You are given the power to decide where to place the money. Put your money in emerging markets and hope to strike it rich, or slide it over to a low-yield account as you pass through your upper-middle age.

In these decisions, you are trying to make sure that you are being rewarded for the risks you are taking. Financial markets sell risk for a price. To be a little Mitt Romney. If an investment isn't worth the risk, sell it (and appreciate how great it can be to fire people).

I'm not here to have a debate about what market is better than the other. They are just markets that sell for risk for a price. For long-term investors much of this means nothing. For those that want to have money to spend in the next 10 years when they stop getting a paycheck these small subjects matter more. Meet with a financial adviser and figure out what investment options are appropriate.

These are personal decisions. As a country, however, we need to step back and realize that in capital, success is not guaranteed. And that it's perfectly reasonable to make bets in the hope of winning.