There’s a ton of advice floating around about taking risks. Most of the time, the advice primarily says that it’s good to be willing to take more risks.
That’s a kind of “one size fits all” advisory that might not apply very well to you, as an individual.
The reason is, these advice-givers don’t know your current risk-taking profile. They don’t know how prudent or imprudent you may be. They don’t know how accurately you can measure the risks of the course of action you’re considering. They don’t know what difficult situations might arise if you take that risk, or how well you react to unexpected circumstances, or how capable you are of handling difficult situations and “making lemonade” from whatever types of lemons a specific risk may bring you.
What’s more, your personal history may give rise to psychological and emotional components that may inhibit your risk-taking:
- Past risks you’ve taken that worked out poorly,
- Past experiences that landed on you like a ton of bricks,
- Past opportunities you passed up and now wish you had back,
and so forth.
These scars, feelings, and memories might negatively influence both your ability to assess some or all of the risks you’re facing as well as your willingness to accept certain risks, even when they’re small.
So the simple advice to take more risks is likely to be a loose fit at best, and potentially dangerous at worst.
That’s why my advice on risk-taking is a little more nuanced:
Carefully Calculate Risks and Rewards
Not all risks are equal, and sometimes calculating the degree of risk is difficult and complicated.
Your calculation of a risk should always begin with understanding the factual situation – not just how it looks at first glance, but also:
- What are the best and worst downsides and potentials for harm?
- What are the best and worst upsides and potentials for benefit?
- How well equipped are you to pull out a satisfactory result if the worst happens?
- How directly and how far would taking this risk lead you along your chosen path forward?
One good way to calculate a risk is to consider, on separate scales from 1-10, the possible severity of each unwanted outcome, and the probability of that outcome occurring. You can then compare these ratings to the potential rewards, calculated on equivalent scales of benefit and likelihood. This process often results in a fairly concrete basis on which to consider whether or not you want to proceed.
For example, a relatively low probability of a fairly harmless outcome is a risk you might be willing to take, particularly if you think it could lead to a fairly high probability of obtaining a reasonably beneficial outcome. Obviously, you’d want to stay away from a situation with a high probability of a severely damaging outcome, particularly if you think it could lead only to a fairly low probability of obtaining a pretty worthless reward.
Consider Intangibles
But risk-taking is even more complicated than the straightforward dangers and payoffs you can consciously consider. Taking imprudent risks is an invitation to emotional, physical, financial, and other harm. Even prudent risks can work out poorly and set you back rather than lift you up.
Although stepping up to take more risks obviously opens the door to more disappointments and outright failures, you may be willing to try for the unconscious, psychological benefits that can come with an assertive risk-taking profile, regardless of the actual outcomes.
Here’s why:
First, taking reasonable risks that work out well is a great way to strengthen your confidence and increase your resilience.
- Your confidence will increase from the payoffs that risk-taking will sometimes bring you, as well as from the actual experience of taking risks, gaining new skills, and testing yourself against unexpected and possibly difficult challenges.
- Your resilience will increase from learning to cope in new and potentially adverse situations, from the skills you develop as you learn to cope, and from the experience you gain in the process.
Second, regularly taking chances eliminates some of the potential for regretting lost opportunities. Psychological studies indicate that most people are more likely to feel bad over chances they haven’t taken than over chances they have taken that haven’t worked out as they hoped. In other words, “it’s better to have loved and lost than never to have loved at all.”
And this idea applies not just to romantic love, but to a whole panoply of opportunities.
What’s more, increasing your willingness to take prudent risks moves you farther from the “passive” side of the character spectrum and closer to the “active” side, which itself leads to more self-confidence, higher self-esteem, and a greater level of satisfaction with your work and your life, however well or poorly things may go for you at any point in time.
In the end, risk-taking is an important aspect of how you approach and deal with the opportunities and challenges you face, now and in the future. Rather than allow these choices to be made haphazardly, it’s worthwhile for you to carefully and consciously dial up the exact level of risk-taking you want to pursue, and to review this choice again and again, as your situation and individual character changes.
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