There’s an old adage: If you always do what you’ve always done, you’ll always get what you already got. It sounds good and makes sense; that’s what makes any adage both important and memorable. But while the adage is easy to talk about, it involves taking risks...and that can be risky.
Why risky? By definition, taking a risk means that you could be facing danger, failure or loss. Risk usually involves stepping into unknown situations, challenging your personal status quo, losing something that you value (personal comfort, security of job, finances, relationships), and more. But without risk, your changes are limited to what life throws at you.
The most common risks include asking for a date, choosing a college, taking a new job, getting married, buying a house, leaving one job for another, and getting a divorce. You can probably think of a dozen more “everyday” risks…including crossing the street and getting on an airplane.
You take risk everyday but sometimes the risks are more out of your comfort zone and feel a little scarier. Sometimes, because of the scope of the risk, you say ‘no’ to it and toss it aside without consideration. And, sometimes when you do that, you lose big. Hindsight is always 20-20.
If you want to make the best decisions, and have fewer regrets, the most logical thing is to learn how to take calculated risks. Once you calculate the “price” of a risk, you can make a better decision. Here’s a three-step guide for how to become a calculated risk-taker:
- Think it through. Think of all the pros and cons. Will the pros make you happier, better, more prosperous, healthier? What will you do if any of the cons happen? Take the pros and cons out to 5 or 10 years in the future. For example,
- “What happens if I take this job and I don’t like the travel?
- “If I continue this relationship, how will I feel about those jealous feelings down the road…will I feel smothered?”
- Set Goals. Based on the pros and cons as well as you and the people involved, are these doable goals or pie in the sky? Use a real estate investment as an example. You see a house in a so-so part of town but there is a lot of positive activity going on there.
- Your Goal: To make a 20% profit in seven years. To calculate your risks, ask:
- How much will it cost to move into this house?
- Do I need to fix it up? How much will that cost?
- Based on the current and past market (not a “maybe” prediction), how much will this property increase in value by the time I want to sell it?
- Analyze: Look at the numbers. Go back to Step#1 and ask the questions. Is it still look like a good investment?
- Take responsibility. Nobody is in charge of your life but you. Whatever decision you make, are you willing to take full responsibility for it – no matter how it turns out? And, if it doesn’t work out, will you want to blame, be angry at or feel resentful of someone else
Not every risk is going to work out; life happens. However, if you take calculated risks, you have a better than 50-50 shot that most of them will. If you take risks, life is going to give you ups and downs. If you never take a risk, life is going to give you ups and downs just the same.
What would you prefer – the risk that life throws your way and you have to deal with whether you like it or not, or the risk that you figure out and work through most of the bumps in advance with the idea attitude that you have a good shot at winning?
Victory Stretches are a bit easy when you assess effectively and choose calculated risks.