“I don’t want to risk it!” How many times have you said that or thought it. So, you don’t stand up for yourself or you don’t ask for what you want; maybe you think wistfully of your life dream but never take action. And in the meantime, life goes on and our precious time ticks away…
“Fortune favors the bold!” Virgil (70-19 bc)
A risk-reward analysis is a very simple tool that can help you assess the risk and reward profile of any endeavor in your life, personal or professional.
The four categories from the diagram above are as follows:
1. Equal Low: where risk and reward are both proportional and low.
2. Equal High: where risk and reward are both proportional and high.
3. Positive: represents a positive risk-reward balance, where a higher return can be achieved with limited risk.
4. Negative: represents a negative risk-reward balance, where a low return is the reward for taking on a relatively high risk.
People generally fall into two categories: those that are risk averse and those that take risks but not in any measured way. As you see by the chart above, there are degrees of risk, advantageous risks, as well as foolish risks. Without risk we don’t feel alive, and with too much risk we live in a state of anxiety. When we seek safety we are looking to lock it down so that we don’t have to worry, but we inadvertently take the life and the thrill out of everything. We go to sleep on life...
So, how do we decide what “reasonable risk” looks like? First of all, remember the thrill of rising to a challenge, and that, no matter what the outcome, you feel better for having done so. Risk gives you a chance to explore your gifts and talents.It puts you in the game. Risk puts you in charge instead of waiting for life to come at you. When you risk, you will grow, whether you achieve what you want or not. You will learn and you will become more fearless. Everytime you take a chance, you expand your personality and your sphere of influence in the world. Invite people in to your risk. It builds bonds.
So, take a chance...tell someone you love them. Commit to a project where you’re uncertain of the outcome. Start challenging your dreams and goals instead of waiting for life to come to you.