[WI] Decision Making 101: Taking A Look At The Different Between Risk And Reward

We as humans are almost universally so much less than stellar when it comes to evaluating risk and reward.

Will you bet $10 on a game of chance such as roulette or slots even when you know the odds are much higher than 50% that you will lose your money? And what about the lottery?

If you look at it with any form of logic, are those wise decisions?

But on the other hand, how willing are you to take social risks such as going up to a member of the opposite sex to say hi?

The risk is almost zero, but the potential payoff is massive. But not many people are prepared to take this so-called risk, even though this is a nearly perfect situation: a very low risk with a very high reward potential.

The question is: are you assessing your life choices in a wise manner? Just like with a magnifying glass in the sun, actions are mostly determined by where you choose to focus your attention. If you upsize the positive side of something and downsize whatever make you feel uncomfortable, you probably will take that action. If your focus is on the opposite side of the spectrum, you probably won’t do it

Here is an easy way to beat this. So when you next have to take any big decision, try going through the next exercise and see if and how it gives you a new perspective.

The Positive Side:

As Wealth Creators we don’t take any risk or minimize the risk as best we can. Are you taking into account all the ways the risk could possibly pay off? In the example above (walking up to an attractive member of the opposite sex), it could be the start of a new friendship. You might even get a new career out of it, or meet your spouse or a new golfing buddy. But keep in mind all the potential benefits of taking that risk. Write it down if that will help.

Some people subconsciously minimize the upside as an excuse for a reason not to move forward. You should try to be as accurate about yourself as possible. Don’t give in to anxiety and play down the potential rewards. People who allow fear to guide them, normally have smaller, less satisfying lives.

The Negative Side:

Are you blowing up or playing down your decision? Does the fact that it may embarrass you or that you might be rejected hold you back? Do you focus on that, or do you tell yourself that it doesn’t matter and that at the very least they’ll probably be flattered? The one approach will get you there; the other will probably keep you right where you are.

Blowing up the perceived risk is a sure way to remain stuck. Playing it down will make it much easier to move forward.

Again, be accurate. If you are 100 percent honest with yourself, you will see that you probably have nothing to lose but everything to gain.
Let Go of your Ego

Just imagine you are not bothered at all by what anyone thought about you. Think about it for a moment. What would you probably do that you are not doing now? How would your life be? Just think of the freedom you would have to do as you want according to your deepest needs and desires.

If you can laugh at yourself and not take this too seriously, you will be so much better off.

You can either laugh now and smile when you get older, or kick yourself because you allowed so many opportunities to slip between your fingers. Come on, be true to yourself ‒ be brave!

The next time you need to take a decision that might hurt that precious ego of yours, think again and weigh up the real risk as opposed to an imaginative risk. Most people loathe to embarrass themselves, which prevents them from reaping all the great things that life has to offer.

Stand in front of a mirror and look yourself in the eye. Do your best to accurately assess the risk and do what needs to be done. Not lying to yourself gets easier every time. Before you realize it, your friends and family will call you the bravest person they know.