When you forward exercise, you're putting all of your financial eggs in one basket. This is the best way to get majorly rich in a hurry. It is also a good way to lose your shirt.
A large fraction of your income is already tied up with the success of the company. Standard financial advice is to seek to diversify at every opportunity.
By exercising early, you effectively own stock at the date of exercise. If the company goes public or gets acquired, your gains are already long term capital gains as long as it's been a year. Also, you don't have to wait once the company goes public to exercise your options, then wait a year... you can sell right away, lock-up periods aside.
To summarize, early exercise is a cheap way to avoid paying taxes on your options until you sell the shares later. And then you're paying the long term capital gains rate on cash earned, instead of short term capital gains on a volatile stock which could easily go down in value.
The #2 piece of advice about investment (after #1, which is to make sure that you are living within your means first) is to diversify your investments.
The missing bit here is a definition of "next to nothing". What's the normal scenario here? How much money are we talking about? Is "next to nothing" still in the tens of thousands, or could it actually be a few hundred bucks?
The principle of diversifying investments, etc. is good advice when you're talking about your primary investments, but irrelevant here if it's really "next to nothing" that's under discussion.