Risk Management: Where We Draw The Line

Introduction:

Welcome my friend,

As you know, the good feeling of spending this time here with you every weekend never gets old.

Which could be because each one is a new experience, offering us the opportunity to discuss something entirely different; as we point out new truths and lessons.

Hence, when we're done, we'd be able to say that it was worth our time; which is a sufficient reward for giving up other activities to be here.

In today's conversation, we'd be looking to understand risk with regards to how it shows up in different aspects of our lives, as well as ways we can curtail it.

Which for sure is a big deal, since it concerns self care, self preservation and protection.

Discussion: 

The word risk is associated with danger and loss which means that taking risk is considered an exposure of one's self to situations that can be otherwise costly.

However, the reason we'd go ahead to try is because we feel it's worth it since there's always an expectation of a corresponding reward.

What this means is that in the absence of such rewards, we become mere victims, bearing the consequences of what has now become damaging actions.

This is why risk management is important, as we actively seek out ways to mitigate the cost and impact of the said risk in case things go unprecedentedly wrong.

■ The Courage To Take Risks 

It takes boldness to make tough decisions even if there's something to gain on the other side of it.

This is why it's not everyone that's willing to take risks regardless of the ceiling of it's upside.

As humans, we always want to play it safe, sticking to what we already know and are comfortable and familiar with.

However, this may also mean that we'd continue to get the same results, which is limiting.

For instance, being employed can be a sure way to earn a fixed income over a period of time, with which we can prudently plan our expenses and lifestyle around that amount; gaining some form of stability in the process.

Whereas in entrepreneurship, we can be faced with more uncertainty and challenges especially in the beginning, which makes generating a fixed income much more difficult.

However, in the long run, if we don't quit on the way, we'd most likely build our business to the point where it's gained enough balance to properly bring in more funds than whatever our salary would have been.

This is the upside of risk.

When it works out, we're ever likely to get more reward than our input, but then, none of it happens until we find the courage to move into unfamiliar situations with just faith and optimism.

■ Courage And Foolhardiness 

While courage pushes us to confront situations with self confidence, pushing ourselves to the limit, foolhardiness on the other hand, is taking up unnecessary risks which are mostly unrewarding.

This is how we become victims.

It's one thing to be seen as fearless or thought to “have big balls” because we're not afraid to take up the difficult tasks, but letting these praises get to our heads such that we begin to expose ourselves to more hazards than our coworkers is not the smartest thing to do.

So even if we try to convince ourselves that we're being diligent, we know deep within that it's just poor usage of our body motivated by our pride and desire to be seen as “hard working” or “doing most of the job”

Truth is, just like machines, the human body breaks down too and when we continue to subject it to high stress levels without optimal care in the form of adequate rest, we increase our chances of getting sick.

While we're encouraged to take our job seriously, we're reminded of our responsibility to also take care of ourselves while at it.

First, as a way of giving ourselves a better chance at functioning effectively, achieving more with short meaningful work rather than long stretches of overworking the brain until it begins to do shabby work.

Then as a way of improving our durability; because, it's better to remain readily available by regulating and managing our availability with proper scheduling and planning than to avail ourselves all the time only to break down from the stress that comes from that kind of work practice.

To be down and out can be costly especially with no one to stand in for us while we're away even if it's for a short while.

Which makes it the wiser thing to manage the workload in order to stay fit instead of waiting till our rest is eventually forced by sickness.

■ Understanding Risk To Reward Ratio 

The perceived or actual value of what we risk with respect to the value of our reward when everything goes well, is what we refer to as its risk to reward ratio.

In business and trading where this is represented by actual figures, it's easier to calculate and tell because it's tangible and clear.

For instance, if we risk a dollar in a business that'll return four (4) dollars, the risk to reward ratio is 1:4 which makes it a good business.

In the same vein, if we risk more and get less such that we in another instance, out of a higher expectation, risk three (3) dollars, only to have it return a dollar at a risk to reward ratio of 3:1, what we have is an unprofitable or bad business.

For risk to be worth it, the reward has to be more in the end, after the entire outcome has been played out.

Which also applies to other aspects of our lives even if they're not definite or actual numbers aren't involved.

The fact is, whether we accept it or not, when we make certain real life decisions and actions we get involved in some risk to reward trade offs such that we:

▪︎ Risk Our Future For Current Pleasure

When we behave in ways that guarantee our instant gratification at the expense of a better future, the risk to reward ratio is negative which makes it a bad business.

To get involved in different vices and crime can provide a means of livelihood for survival but we're capable of so much more than that.

When we lay aside the immediate pressures of satisfying our desires by doing anything it takes to make money, we set ourselves free from the burden of doing some dirty things we'd forever regret after we've made it.

Which also saves us from the possibility of having to bear the damaging consequences of our actions when the law eventually catches up with us.

To be honest, to suffer the retribution of losing years of one's life behind iron bars can be too much of a price when compared to the gains made, which makes crime an unrewarding business.

On the other hand though, the good thing is that as humans we're capable of acquiring high paying skills through learning.

All we need is hard work, perseverance and patience.

Which means that in a matter of years we can become eligible to consistently earn enough to suit a comfortable lifestyle without having to steal for it.

This is the good business of self development.

It's the same for our health.

When we consume unhealthy substances that make us sick in the long run we shorten our lifespan after spending so much more on medication.

This is both physically and financially exhasting which affects our psychological well being too.

▪︎ Risk Certainty And Comfort For Potential Growth

If we're comfortable with where we're at, then we may not see the need for change which hinders our growth.

Until we're willing to risk the certainty and comfort of being in familiar surroundings and leaning on others, we may never really know the strength of pushing ourselves beyond limits; because we're faced with the reality of having nothing to fall back to if we dared fail.

▪︎ Risk Logic For Faith 

What makes us believers and children of God is our willingness to readily risk reason for faith in accordance to God's will for our lives.

The most rewarding risk we can ever take is that of trusting God when he says “Go!” without waiting to see how the road will appear.

Truth is, if God showed us the end from the beginning, it's no longer faith, but good planning and strategy since what we're doing is sticking to our best choice, as we've already seen it.

This is why he demands us to simply trust Him because He said so, and to lean totally on Him for this assurance until he eventually keeps each of His promises.

God teaches us to trust Him more, as He builds our faith each step of the way, by coming through for us in ways we know we never could.

A realization that following Him and relying on His power is no risk at all.

Summary:

It's such a risky thing to put our faith in another person because all of man's abilities can be nullified by death.

When we risk building a good and intimate relationship with God in order to be available to others and please them, we involve ourselves in an unrewarding business.

Which is why even as parents with dependent children, too much work and being busy isn't enough excuse for us not to set aside some time to pray for ourselves and them.

It's risky business to do everything for our children except the most important one which is commiting them to the ultimate protection that supercedes our best watch.

No mater who we are and what we do, living without God is the most risky thing we can ever do.

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