Take a risk

by Admin
Updated: November 2, 2018

Should I take a risk? Advice about risk is usually bad. If it feels risky you should probably not do it.

The idea that risk leads to success is very popular. It is also wrong.

Successful people do not like risks and try to avoid them as much as possible. Contrary to popular belief, entrepreneurs are not interested in taking risks and concentrate on what they believe to be sure things.

Gamblers take risks. Entrepreneurs - and anyone who lives long - are not gamblers.

The key issue is, of course, what you believe...

Risk is a matter of perspective

Most people - myself included - who are considered by others to have done risky things do not consider themselves to be risk takers. Every time we took a “risk” we were certain (or almost certain) that we would succeed.

This is true whether we are talking about some crazy stunt as a teenager or taking a position on an investment as an adult.

Take, for example, base jumping: Is base jumping risky? Consider these three possible scenarios:

  1. You have a lot of experience and really know what you’re doing.
  2. You have some skydiving experience so you can make an informed decision.
  3. You have almost no experience but someone told you the risk of injury is slight.

What all of these have in common is that you’ll only jump if you believe you’ll be OK. It’s all or nothing, 100% or zero.

Although an observer might consider all scenarios somewhat risky and #3 to be total madness, it is your own assessment that determines whether or not you jump.

Even if you are able to assess your risk of injury, you cannot do a partial jump.

Risks and rewards

It is possible to win big by taking a big risk.

If 100 people attempt something that has a 99% risk of failure it means that 99 of them are expected to lose. Smart people don’t go in against odds like those, however, of the people that do, the one who succeeds is celebrated and the others are forgotten.

Entrepreneurs and smart people in general will attempt a venture only if they are able to reduce their exposure to loss down to an acceptable minimum.

If you put all your money into something everyone else considers to be a bad investment, it’s not impossible that you could realize a profit but it is a huge risk unless you have some kind of plan.

More info

“Good Risks vs. Bad Risks” at huffpost.com.

“Not a Risk-Taker? Why That’s Totally OK” at themuse.com.

“Why Are So Many BASE Jumpers Dying?” at nationalgeographic.com.

Internal links

Changing direction Should I play the lottery? Winners and losers All articles
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