HARD CHOICES ARE BETTER MADE WHEN PERSONAL RISK TOLERANCES ARE ADEQUATELY EVALUATED.

“Just taking risks for risk's sake, that doesn't do it for me. I'm willing to take risks that I think are worth it, and I've worked so hard to make sure that I survive”.  Chris Hadfield   ̴  Astronaut.

Life Changing decisions are never easy. I would define ‘life-changing’ to be any change of circumstance that affects your present health, wealth, social, geographical, political, religious, cultural style of living—any change that alters your good-standing or socio-economic equilibrium in the community.  Your definition of ‘life-change’ may not embrace all of the above, or it may include several more—but it should include all the things that bring you happiness, joy and peace, the aspects of living that we all seek to improve or maintain. Sometimes our choices will alter these dynamics.

A search for quotes on risk-taking will render a host of sayings that glorify risk taking as a way of life. I could not agree more. Life is all about taking risks—the secret to greater success lies not in the risk itself, but rather in the execution. Risk can never be eliminated but it can be limited.

The definitive action behind decision-making is opting for a choice that offers you the greatest peace of mind. The gut-feel is perhaps the most widely indulged influence that characterizes many decisions we make.  Often time and repetition proves our gut-feel to be a helpful instrument, but there is also a cost when it fails. My prognosis of gut-feel is that it is an intuitive sensing of failure or success that can be influenced by romantic notion, unbridled enthusiasm or cautious conservatism, depending on your character type. The positive side of gut-feel is that it can be guided by the five points of good decision making mentioned in  my previous post.

Risk is an unavoidable feature of life. If you want to get somewhere by improving your lot, then risk-assessment and risk-taking will be par for the course.  The foundation, supporting every choice you make, will contain the shifting sands of probability that range against the few absolutes you may find.

“Know thy self and to thine self be true”.  William Shakespeare.

We should all be armed with the knowledge of the risk that underlies any life-changing decision we are about to make.  All too often I have heard the lament, “I should have been more diligent!” It has happened several times in my own life.

Everyone has a certain innate Tolerance for taking risks. We are all different.  The high-stakes gambler has a very high risk tolerance factor—sometimes it’s an all or nothing attitude and the adrenaline rush is the over-riding influence. Win or lose is just a means of getting the high. Most of us are not like that. We are more cautious with our lives, assets and treasured possessions, but it is always a good thing to know what your risk tolerance is. What becomes obvious is the measurement of potential loss against potential gain. Gain is always the positive factor and loss is its negative twin brother.

The Investment Industry has several tests and calculators for financial risk tolerance but there is no real effective gauge for the wider issues in life-typical investments.

Remember that the decisions you make will not only affect your life but also the lives of those close to you.

Gut-feel guides that should be investigated:

·        Others have succeeded here, surely I will too.

·        Everyone’s doing it!

·        The potential is too great to turn this down!

·        Success is assured because of….

·        This is too good to be true. (You know the sequel to this statement—if it’s too good to be true then it probably isn’t true).

“I talk a lot about taking risks, and then I follow that up very quickly by saying, 'Take prudent risks’”.

Irene Rosenfeld

YOUR DECISION DETERMINES YOUR REALITY.