Do you only make sure bets? Do you ever take any risks?
I’d guess the answer to these questions are no and yes. Life is a series of calculated risks. Everyone has to take risks every day. Whether they are as seemingly simple as whether to get out of bed or what to eat for breakfast to more complex decisions related to our daily lives.
Taking risks can help you stand out in your career. Doing it well is what can set you apart. The more you do it the better you will become at making decisions that involve taking calculated risks. Practice makes Perfect. As you practice going through the motions for the next one and the next one after that, your skills, your ability to calculate risks, and ultimately your decision making skills will improve.
Nothing Ventured Nothing Gained
I’m in Las Vegas this week and, of course, the thought of gambling comes to mind. However, I’m here for business. I’ve come to realize that many of the same rules as well as some of the risks and rewards are similar.
- For example, you need to understand the game you are playing. This is true whether you are playing craps, roulette, black jack or trying to identify your next business opportunity.
- You need to calculate the odds. In order to do this you need to have a solid understanding of the game you consider playing. Even if that game is a potential business deal.
- Eventually you need to decide what, if any, bet you are going to put down.
Sometimes you’ll need to consider the Law of Large Numbers. Which says, over time the frequencies of events with the same likelihood of occurrence even out, given enough trials or instances. Which means… you cannot give up at the first few attempts. Ironically, the Law of Large Numbers means you might “win” in your early attempts and “even out” over the long run.
To Recap… Three Simple Tips to Making Calculated Risks:
- Ask Questions – Understand the situation.
- Consider the Odds – What are the benefits and what are the risks?
- Make a Bet (or call it investment if that makes you feel better).
Invest wisely up front to gather as much information as you can, then consider the odds and make a bet. There are no guarantees, but the more you practice the better you will become at making decisions that involve calculated risks. I wish you more wins than losses.