Risk Tolerance
4:42 AM at 4:42 AM Filed under: Author:
November 14, 2011
So, are you all in or it's time to just be on the safe side? Remember, high risk, high rewards but high losses as well and no risk might mean lack of or no growth at all.
Are you willing to risk it all? Are you risk averse? Are you somewhere in the middle?
These are very important questions we need to ask ourselves to know what kind of people we are when it comes to risk and when we decide to enter a particular endeavor.
This is true when it comes to work, career, business opportunities and to the thing we call love.
In deciding whether to be employed, to be an employer or to be both, it is essential to know what best fits our risk profile. There are many who would like to have a permanent employment since it needs no capital and might be considered the risk free choice. Nowadays though even someone who graduated from the best university with the greatest credentials can't be too sure because of the volatile business environment. On the other hand, there are those who are not content with a fixed income and would rather be an employer themselves. This involves risks and it can fail or do well depending on many factors. Some can withstand losses for a certain period of time before they realize profits and others accept defeat and close during times of economic downturn. Furthermore, there are some who would like to have the best of both worlds. A fixed monthly income to be sure that there is something that comes every month while having their own small business on the side that may possibly add to their expected monthly income. In this instance, time management and prioritization is key to making both things work well. Some may experience success for both and some might just want to try having a small business while having a fixed expected monthly income to know if a business is something they would want. There are some who do such and when their business grows they then decide to give up their employment and focus on the business while there are some who do not do well in business and decide to focus on their day jobs instead.
Risk is a part of life. The question is what kind of risk are we ready to handle and manage. Low, medium or high or non at all. In facing risks, we should be ready to win and the hardest part is to lose. If we lose, we should know when is the best time to get out and cut losses.
In entering something whether business, a job or love, we should prepare ourselves for the worst while hoping for the best. As such, we cushion ourselves if and when we fall or exceed expectations when we are victorious.
Let us thus get to know ourselves more. Always remember that not everything we decide to embark on will result to success for us. There are times that we may fail and there are times we need to fail consecutively to be able to appreciate life more, be stronger and to find what is best fit for us. Risks make us better people and by risking, we lead ourselves to growth and betterment.