How much can you risk?
In Jim Rohn’s wise words, the minute you were born, it got risky. Believe it or not: you and I live each day trying to better our odds and win the game of life.
Some days you win, some days you lose. But you’re always playing, even though you may be unaware of it as you live life.
Interestingly, everything you do — or don’t do — is a risk.
Walking down the street is a risk. Climbing down a flight of stairs is a risk. Getting an education is risky; ditto having an orgasm (you may suffer a stroke while climaxing, for real).
Even just reading this piece is a risk — I could brainwash you ( chuckles).
If risk is, therefore, an inherent part of our lives, what should we do about it?
You can’t just fold your hands and not try just because things may go wrong. If you do that, you risk even more.
The dangers of not trying at all are worse.
The key is not to avoid risk altogether, no. The key is to embrace, manage and minimise risk for maximum rewards.
Below, I share a tip or two that has worked for me and many other high achievers.
What is your idea of risk?
When most people hear the word risk, they think it’s something bad. This negative connotation means such folks aren’t even willing to take any risk at all. They’re always thinking of risk as what if something bad happens.
But then, nothing ventured, nothing gained. No risk, no reward.
Safety is good; security is desirable. Yet, risk is needed for success and growth.
The plane is safe in the hangar, but its purpose is not to be perpetually parked. Its usefulness lies in risky flights that facilitate transportation and business. It’s through risky flights that the plane gets to explore exotic sites and beautiful sights.
Risk is essential for a fulfilled life. In the absence of risk, there are no great adventures and no remarkable memories — no notable lows and no spectacular highs.
A riskless life is a boring life, a forgettable existence.
From a creative perspective, risk is an all-important ingredient. Without risk, the artist remains mediocre and may never stand out.
To be authentic is a risk. To explore new territories is risky. Yet, authenticity in adventure is the essence of art.
Doubt is sure to come during the creative process. When it does come, be kind to it, hear it out even. Then acknowledge its contribution, offer your gratitude for its concern and reassure it afterwards that you are an artist, and risk is essential.
Do this first if you want to maximise risks
Well, you can’t maximise risks if you don’t know what they are. First things first: identify all the associated risks with that particular endeavour.
It’s only after you’ve identified the risks that you can decide what to do with them. Whether it’s in investment or creativity, research what the risks are. Take time to know and understand these risks.
Don’t stop there.
Analyse each risk in terms of potential for loss or profit — for damage or reward. Doing this helps you to see the risk for what it is and in its entirety.
This perspective of risk is essential for the next step which I explain in the succeeding subheading.
How achievers manage risk
Once you have identified the relevant associated risks, proceed to define your risk appetite.
How much are you willing to risk? How much can you lose, in pursuit of profit/gain, without going under? You must know this in clear terms and use it to guide your investment in or commitment to any endeavour.
Risk appetite is a business term that means the degree of uncertainty that an investor is willing to accept in respect of negative changes to its business or assets. It’s also defined as the amount of risk, on a broad level, an entity is willing to accept in pursuit of value.
Whenever you are after some profit or gain of any kind, first determine how much you can lose without any serious damage to you. This is your risk appetite and you shouldn’t go above it, no matter what, for your own good.
This way, when you win, you’re happy with your victory. And when you lose, you’re able to take it in stride and move on to the next opportunity.
The major step to turn risk into rewards
You have identified the risks and defined your risk appetite, then what next?
Next is to find strategic ways to minimise the risk and maximise your reward. If the identified risks are above your risk appetite, it’s time for risk management. This calls for a critical strategy.
Find those things you can do to reduce the risk to an acceptable level and do them.
Do you need to put in more hours to reduce the risk of failure? Or should you be more careful in your process or change the process altogether?
For instance, do you need to test multiple ideas first with a small audience before a mega launch? Or should you run a beta model before releasing the real deal?
How about experimenting with different methods or routes before settling on the one with the lowest risk and highest reward?
In short…
Risk is not a bad thing.
Risk is what it is; it’s what you make of it that matters.
It’s not your job to worry about risks. Rather, what you have to do is identify them, define your risk appetite and find creative ways to maximise rewards regardless of identified risks.
Let me know your thoughts in the comment section or let’s talk here. You can also join my inner circle to receive insights like this and other useful updates directly in your email.
Originally published at https://williamsoladele.substack.com on November 7, 2021.
