To Risk or Not to Risk? 2 Questions to Help You Decide
Thinking of making a risky move? Most of us are, most of the time. It comes with the territory when you have freedom of choice. On the topic of taking risks people fall into one of two camps. You either believe that risk is the other spice of life; or that foolish risks are why we’re all broke, scared and desperate right now.
But risk isn’t the problem or the solution. Some risks are good and some are bad. Everyone should take good risks and nobody should take bad risks. (Breathtaking insight, eh?)
The problem, of course, is telling the difference between the good and bad risks. Answering the two questions below will do wonders for your risk-evaluation skills.
1. Is this risk in the right direction for you?
The 8 Universal Personal Directions
My wife and I recently decided to sell our house to (gasp!) rent a smaller, more easily maintained place while living half-time in Minneapolis and traveling in the winter. Considering that we have a four year old and a two year old this path is peppered with obstacles and threats to our comfort and security.
However, if this plan works out, it will enhance our Freedom. If it doesn’t work out, we will have lost the Security of home ownership, the pride that comes from showing off your home to friends and family, and that ginormous symbol of Achievement in America. In a typical risk/reward calculation this makes no sense. Yet, this is a good risk because we both highly value Freedom–more than we value Achievement, more than Power, more than Security.
The point is not that everyone should do what we’re doing. At least seven out of every eight people probably should not do this. What matters is which Direction is most important to you?
2. Will you live to tell the tale even if your risk doesn’t pay off?
Harvard psychologist, Dan Gilbert’s research shows pretty definitively that we almost always overestimate the impact future events will have on our happiness. Super scary things never make us as unhappy as we imagine they will, and seemingly awesome events never make us quite as happy as we think they will.
So if taking that new job/starting that new business/moving to that new city/staying right where you offers a good chance of moving you in the direction of what you truly care about, and failure won’t lead to disaster of Titanic proportions, then take that risk.
It’s terrific that you both have the same idea about the sale of the house. Many couples would have a real problem with seeing eye-to-eye on this one.
Often I feel like doing just the same thing. Let’s see what happens…
You’re totally right, Lauri. The issue with most couples is that one (and often both) don’t seem to have a clear idea about what’s truly important to them. So the risks they want to take really are hair-brained ideas that their partner knows won’t make them happy. So the other partner constantly has to play bad cop–throwing the wet blanket on every new and exciting idea. Exhibit A: My motorhome.
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