Every decision or choice we make in our Money & Life has a certain degree of RISK associated with it; & is reflected in the outcome of that particular decision, as a deviation (positive or negative) from the expected result
Sometimes, we can estimate this risk, but other times, we just don’t have a clue.
Can we ringfence or control these ‘risks’? YES & NO – e.g. we can possibly minimize the Income Risk / Investing Risk / Liquidity Risk but, can we do the same for Life Risk (eventually, all of us press the exit button) / Time Risk / Unknown Risks?
So, should we or should we not take Risks? – ha ha, there is no ‘one’ choice. Every decision made in the frontal lobe of the brain has ‘a risk’ associated with it.
Risks as I depicted in the above illustration –
Career Risk – Always at the mercy of a third party. Is this a necessary evil? an essential evil? or a habitual evil? At the end of the day, everyone needs Money & aspires to make a comfortable living. But, can we ringfence this?
Investing Risk – all that happens in the journey of investing. We keep discussing this all the time
Liquidity Risk – not having ‘enough cash’ at disposal, especially when needing it the most; is the worst possible situation for one to end up with.
Life Risk – “The Inevitable”, but, when does this inevitable happen to us? That is the important ‘time variable’. Can we ringfence our family against this loss? Can we ringfence ourselves?
Routine Risk – the daily grind risks. Apparently, an adult makes approx. 35,000 decisions in day. How do we handle these routine risks? Can we keep thinking about pros & cons for each of these 35,000 decision making points to continue with life ?
Time Risk – the ability to not do the right thing at the right time, Money or Life decisions. Time Never Stops, but, “the risk of not doing is far greater than the risk of doing something positive in Money & Life decisions”
Unknown Risk – “The Never Known”, it just hits us from any direction, in any way, onto either our Money or Life, or as a package. Nicknamed, black swan, blue swan or grey swan etc.; our life is shattered, if one is not mentally prepared for this.
Succession Risk – ‘Time in our Life is converted into Money’, & then, that Money is not distributed as it needs to be. What is the plan here? Let it get squandered? Let it get decided by the whims & fancies of agencies / other people/ entities / law etc.?
Health Risk – anything to do with the ‘not so’ normal functioning of any human’s external or internal systems. Health is Wealth, too.
Income Risk – Wake up one morning to find that, there is ‘no income’ coming from this day, week, month? Have we designed a contingency plan? Is it executed? How long more do we need to struggle for the daily rat routine of finding the cheese?
Bottomline, Nothing in Life is worth without taking risks. As I came across a speech made by the Hollywood actor, Denzel Washington – If you fall, fall forward & Aspire to make a difference & not to just make a living.
Risk – Known or Unknown – One has to face it & handle it (with care)