We all have to take risks in life, because we can’t possibly know what the future holds for us. We risk of heartbreak when we go into a new relationship, we risk of financial security when we change jobs, and some of us risk our life by pursuing dangerous sports. The successful risk taker, though, doesn’t take risks without thinking about it first. They way up the pros and cons before they take the plunge and they don’t take unnecessary risks. You can never know for sure if a risk will pay off, or it wouldn’t be a risk at all, but you can take steps to ensure that your risk taking doesn’t leave you with nothing. Here are ten ways that you can manage your risk and become a successful risk taker.
1. Understand that you could fail
It is important that you don’t take risks blindly and just assume that everything will work out OK. If you take a risk, you have to be prepared for failure and you need to have a plan in place to help you cope with that failure. It’s not a matter of assuming that you will fail, but you should be prepared for that eventuality and have a plan B.
2. Arm yourself with the facts
Before you take any risk, you should consider what factors may cause you to fail. You can’t know every possible outcome, but you should at least understand the risk that it is you are taking. If you were starting up your own business, you would investigate the competition. If you are getting married and moving in with someone, we would hope that you get to know the person before you sign a joint mortgage agreement. There is a big difference between a calculated risk and rash decision.
3. Never take a risk when you are drunk
You shouldn’t take any big decisions when you’ve had a few too many to drink. Everyone is more prepared to take risks when they have been drinking, but they won’t be really thinking things through properly. If you have had a few drinks and you are presented with a choice, leave it until the morning before you make your decision.
4. Be prepared to lose what you are risking
You have to realise that there is a real possibility that you will lose what you are risking and you have to be happy that you can live with that loss. If you put your home up as security on a business venture, are you really prepared to lose that home if the business fails? It could well be that losing the property is a risk that you think is worth taking, but you have to be sure.
5. Don’t take risks to impress other people
One of the worst reasons for risk taking would be to impress other people. If you take a risk, then it should be one that is for the benefit of you and your family, or to achieve a personal dream. If you do take a risk simply to impress people, those people that you are trying to impress are very unlikely to come to your rescue if things go wrong.
6. Trust your instincts
Having said that you need to be careful about taking risks, you still trust your gut instinct. Once you’ve weighed up the pros and cons as best as you can, the final decider will be your own heart. You can’t wait until you have all the facts in front of you, because you never will. At some point, you will have to take the plunge.
7. Make a risk worthwhile
If you are going to take a big risk, then it should be for something really worthwhile. The potential rewards should far outweigh the risk, or the risk isn’t worth taking in the first place. Business people will conduct sophisticated risk rewards analysis before they take big decisions and you should go through a similar process. It’s really just a case of weighing up the chances of success against the chances of failure. If you were a gambler, you wouldn’t risk $10,000 for a chance to win $5.
8. Don’t be put off by failure
So, you weighed it all up, you took the risk and it didn’t work out; what do you do next? The successful risk taker will look closely at what happened, learn from it, and try again. If you really want to achieve your goal, then one or two setbacks shouldn’t put you off trying again.
9. But do know when to quit!
It’s all very well being persistent, but it is important that you know when to stop. If you have risked money on a business venture, for example, and it isn’t working, don’t throw away more money to keep it afloat. A good risk taker knows when to quit, because then he can regroup and try something new.
10. Don’t be afraid to take risks
Taking risks is what makes things happen, so don’t be so risk averse that you never try anything. The degree of risk that people are willing to accept varies from person to person, but we all have to take some risks to get the things we want.