Why Taking Risks is Good?

JUNE 3, 2021

“People will choose unhappiness over uncertainty.”

—Tim Ferriss

A common principle in the financial markets is: “Higher the risk, higher the reward.”

It’s the same with life. 

Without taking risks, we can’t grow, try new things, live up to our fullest potential, and achieve success.

A life without risks is meaningless, mediocre, and boring.

Would you want that?

What are risks?

No one wants a mundane, boring life that lacks joy and fulfillment. We all want something interesting, fun, and exciting going on; for that, we need to take risks. 

But, what does “risk” actually mean? 

In simple terms, risk means the possibility of an outcome turning out differently than expected, usually on the negative side. In the 2008 financial crisis, people lost a lot of money as prices collapsed. But that did not stop people from investing, even though the risk of a collapse remains the same today. In the COVID-19 pandemic, people lost their jobs and their lives, but that did not stop us from living, right? We still survive by taking the recommended safety measures, even though the risk of infection continues to exist. When you hit “tweet” on Twitter, people not liking your tweet and criticizing you is a possible risk. When you share that picture on Instagram, people pointing out – “why does the right side of your face look weird?” – could be a risk.

You get it. Risks define the possibility of ending up with a different outcome than what you expect. 

It seems simple, right?

Then why are we afraid of taking risks?

We fear losing certainty. In our jobs, families, paychecks, insurance, televisions, smartphones, and computers, we find a sense of comfort and security. 

Our jobs and paychecks help us pay the bills, keep food on the table and survive. 

Our families provide us the comfort of being around people we can trust and rely upon.

Our insurance assures us that we won’t have to break the bank in case of any mishappening. 

Televisions offer us the assurance that we are just one click away from escaping our reality and the problems we are surrounded with. 

The computers in our pockets make sure we can connect with others anywhere we go and offer us the same distraction as televisions. 

These are just a few examples. In reality, we rely on many things for a sense of certainty, and it makes perfect sense that if these things were to go away, we would become vulnerable, insecure, and potentially more exposed to dangerous situations.

We need to rely on that certainty. I rely on my laptop to post my YouTube videos twice a week, attend my classes every day, and write blog posts like this every week. Since the beginning of the pandemic, 95% of my interactions happen through the 15-inch screen in front of me. To do my tasks and connect with the world, I need to be certain that my laptop will start the next morning when I hit the power button. 

This kind of dependency is necessary, and without it, our lives would be too disorderly and confusing. 

It becomes problematic when we depend too much on this certainty and step away from making the right decisions. 

A few examples are:

1. The workplace is too toxic for you, and the work you do isn’t your passion, but you stick to it because of the certainty your salary provides.
   
2. You have better chances of growing more in your career in some other city, but you aren’t leaving because you feel your family will be left behind.
   
3. You know that your browser is lagging because it has enormous search history and login information stored, which you aren’t cleaning because you don’t want to log in again and spend time recovering your passwords.
   
4. You’ve always wanted to go on a special road trip but aren’t doing it because your insurance doesn’t cover the route you’re taking. 

We don’t take action just because of the slight possibility of losing some certainty ingrained within us. 

How can we start taking risks then? 

Again, it’s simple!

How to start taking risks?

All you need is a calm mind in the state of acceptance (without a calm one, you may jump too early or too late, neither of which will end well).

First off, you need to be aware of why you are afraid to make a decision: Is there really something you’ll lose, or are you simply procrastinating? (e. not clearing your browsing history and login information)

This can be a difficult question to answer. No one wants to accept that they’re procrastinating, but it’s essential to mark this distinction clearly and honestly, which is why it is necessary to begin with a calm mind.

If some uncertainty is associated with the risk or action, it needs to be given further thought. Reflect over how powerful the uncertainty or the change is and if it will impact you negatively or positively. If the effect of that uncertainty is temporary and trivial, then it need not be deeply analyzed. Let’s say that my laptop won’t turn on, so I have to send it for repair for two days. The uncertainty caused by this simple event is that I won’t do my work for two days. Not a lot of thought is needed. 

Let’s consider this scenario: If your insurance doesn’t cover the route you want to take for that epic road trip, you need to analyze and think of how likely you are to end up in an accident or a dangerous situation. 

First, you will research how dangerous the route is and what possible dangers are prevalent. Then, gather a basic idea of how likely you are to be involved in any unexpected situation and how much it may cost you financially or healthwise. If the cost is higher than you can incur without insurance, it is better to take another road trip. That would be a simple, easy and practical decision. 

Let’s consider another realistic situation: deciding whether to quit a job or not. 

If the job is becoming too toxic or unbearable, you need to set out on a different path, whether it is taking on another job that’s similar or doing something different. 

That’s easy and quick to decide. But you also need to consider the financial risks. Do you have enough savings just in case you don’t get another job quickly? If you earn less in your subsequent work, how will it affect you or your family, and will you be able to cope with that? These are all questions you need to think over and answer honestly. 

This way, you will create a plan that will help you take the right actions, minimize the harmful effects of taking any risk, and give you the strength to make stronger, wiser decisions that lead you to success!

You need to think rationally, consider all possible outcomes, and analyze if you can bear the costs or uncertain events that may occur because of the risk you take. We can’t plan out everything for the future, but by taking informed and well-thought-out risks, we can minimize the effect of those uncertain events and still achieve success. You need to take risks because that’s what gives you the wings of curiosity to try new things, gather new experiences, and grow!

Partnering in your success, happiness, well-informed risks, and growth,
Prabhsimrat