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How I Approach Taking Risks (Especially Financially)

This is something I’ve thought about some in the past, like, I know that I’m not risk averse. But sometimes when you’re a certain way, you forget that other people aren’t the same. If that makes sense? Like something comes naturally to you, so you just assume everyone is the same way, which obviously isn’t the case lol. The other night a girlfriend of mine and I were at dinner and I was telling her about this new business that I’m working on, how much of an investment it was going to take, etc. She made a comment about how much she admired me for being able to take risks like that, and also invest that much when at the end of the day you don’t really know if things will “work out.” This got me thinking about taking risks in general, and how I approach them.

In general, I do think some people are naturally more risk averse than others. For some people it is just more difficult to tolerate or be comfortable with taking risks, and the unknown. Not that taking risks is ever “comfortable” per se, but some people can just tolerate the unknown more than others. This isn’t a knock towards anyone on either side, it’s just an objective fact. We are all wired differently. However, I do think that taking risks is something that everyone needs to get more comfortable with. Why? Because I truly believe that the most impactful and meaningful things in our life come from taking risks. It’s easy to stay within your comfort zone, and keep going with the status quo. To me though, that’s a pretty boring life. As I type this, I also realize that part of my personality is one that craves change, and challenges (related to work especially, hi enneagram type 3!) give me purpose. And while I know that isn’t everyone’s personality, I think that getting more comfortable with being uncomfortable is beneficial to everyone. Not every risk needs to be something as big as investing a lot of money, starting a business, etc. But it’s about just getting out of your comfort zone in general.

For this post though, I am going to talk more about how I approach bigger risks. Ones that require more time and/or money than you may be comfortable with.

Let’s start with investing money into something. And when I say this, this means investing into something that you may not be able to get back/recoup if things “don’t work out.” I’m not talking about investing in a house that you’re buying. So this could be related to investing in a new business, investing in stocks, etc. The main thing that I think about is if this didn’t work out and I didn’t make any back, would I/we be okay? If the answer is no, then I do not do it. A term for these events is called “mortality events” (this is something Tom Bilyeu spoke about at Rachel Hollis’ Rise Conference). So you never want to to invest so much in something, or take so big a risk, that if it doesn’t work out you’ll loose your existing business, not be able to pay your bills, loose your house, etc.

That being said, I don’t take risks just to “take risks” — they have to be calculated risks. So if everything checks out from a financial aspect (if this doesn’t work out and is a total flop, will I still be okay?), I then do my research to see if that risk in particular makes sense. Of course no matter how much research you do, you will never be able to know with 100% certainty if something will work out. If you knew with absolute certainty, it wouldn’t be considered a risk 😉 For example though, with the new business (sorry, I can’t give more details right now, I know that’s annoying lol), I looked around me — Does this exist? Is there a market for it? Who is my competition? Is there a way my product/service can be better? What will I have to charge to be profitable? Etc. These are just some preliminary questions and research you can ask yourself before taking things a step further and actually investing.

From a mental standpoint, I approach it with the mindset of “no risk, no reward.” What’s the worse that can happen? Usually, it’s you’ll loose whatever money you’ve invested, you’ve “wasted time” (but was it really a waste if you learned something? I don’t think so) and sure, maybe your pride and ego will be bruised. But like we talked about above, you’re not investing into something that could cause a mortality event. So is the worst thing that can happen really that bad?

I also like to approach things with the mindset of, but what if this did work out? How would my life change? How would other people’s lives change? I’m a realist but I always have looked at the unknown as potential opportunities for success versus assuming it will be a failure. If it doesn’t work out, I’m sure I’ve learned a lot along the way and challenged myself in the process. But if it does work out? That can be life changing.

I didn’t always used to be like this, and have this perspective. And I mean, it’s still uncomfortable at times. Like, when I think about how much money we’ve spent on businesses (that haven’t necessarily worked out), I’m like, damn that is a lot of furniture, or well, that could have bought me that Lexus! LOL. But at the end of the day, those are just material things, and money comes and goes so I don’t hold onto those things too tightly. I know (at least for me and my personality) that I get a lot more fulfillment on going after what I truly feel passionate about even if that means having delayed gratification in other areas. It’s also not just about big investments. For example, I think back to when I took a risk, and left nursing to work as a blogger full-time. Was that a risk? Absolutely. But it was a calculated risk that a lot of thought when into beforehand (you can read how I handled the transitioned from turning a side hustle to a full time job here), and at the end of the day what was the worst that could happen? I’d go back to nursing. *insert shrug emoji*

What you’re comfortable with when it comes to taking risks is really a personal decision, and there isn’t a right or wrong answer. But, if you’ve had something on your mind that you’ve wanted to pursue and you’ve been wondering if it’s “too risky”, hopefully this blog post gave you some perspective (and encouragement)!

does one of your girlfriends need to hear this? Share away…

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