Every day people die, relationships fail, accidents take place, careers sink, organizations dissolve, and businesses close because folks don’t want to look at the risks associated with certain behaviors, choices, circumstances, and actions. Aside from all the emotional upheaval, these situations cost money. Sometimes huge sums of money… It is sad. But it doesn’t need to be this way. While YOU cannot control each factor that plays a role in your life, YOU can take conscious steps to minimize the dangers, losses, and pains you experience. You can start now by following this guidance:
Acknowledge that risk is real. Reducing or eliminating risk begins with facing the fact that risk is everywhere. It exists in your home, workplace, and community. It exists on the road, during vacation, and at the drive-through. It is part of every conversation you have, every financial investment you make, every product or service you buy. There is risk in taking pills, having surgery, and undergoing routine medical procedures. There is risk in accepting a new job, supervising difficult employees, starting a different business, and working serious overtime. The use of electronic devices carries risks as does owning a furnace, microwave, or stove. Life is not risk free. The point is not to live in chronic fear but to simply acknowledge that risk surrounds you. Because you can’t get away from it, you need to find a way to dwell in harmony with it.
Identify your personal and occupational risks. Knowing what your risks are can help you begin to create harmony with the reality of risk. What are the risks involved with your; job, partner, children, house, car, finances, hobbies, educational pursuits, and community volunteering? What risks are associated with your extended family members, friendships, and neighbors? What health risks do you have? Which of your attitudes present risk to you or others? What are the risks affiliated with your short term and long term goals? Are there risks to your safety at home or at work? Are there risks to your happiness? Get in touch with these risks. Make a comprehensive and specific list of them. Don’t just store them in your head. Put them in writing.
Rate each risk according to its impact upon your life and the lives of those you love. On a scale of one to ten, with ten representing “extremely high impact”, rate all of your personal and occupational risks according to how much they impact you and your loved ones. A cancer diagnosis, a stock market crash, a job termination, and a move to another location would be high impact risks, for example. Losing an average functioning salesperson in your office or losing access to your computer for a day may be moderate impact risks A tiff with your next door neighbor over weeds on the property line or a one time incident of running late for a date may be low impact risks. Only you can determine the degree of impact. The important thing is that you actually do the rating exercise.
Determine the likelihood of each risk happening. Assessing the odds of certain events happening is another way to make some peace with risk. Ask yourself how likely it is that you will suffer a significant accident, have a fire, get married, father a baby, quit your job, or become sick. How likely is it that you will divorce your spouse, go bankrupt, experience a medication side effect, sell your business, get mugged, argue with your boss, or die prematurely? As you consider all of the risks on your list, categorize them according to “extremely likely, likely, somewhat likely, somewhat unlikely, unlikely, extremely unlikely”. This exercise allows you to look at these risks from another perspective. Keep in mind that there is a difference between losing your job and losing all of your assets. While the first may be a high impact risk, the second may be a lower risk. Why? Because you trust yourself to find a new job long before you spend down your last cent.
Calculate the cost of your risks. Taking time to figure out the price tag associated with each of your risks is a good investment of energy and effort. For example, how much will a divorce cost you? How much does term life insurance cost? What does six months without an incoming paycheck cost? What does a computer and printer cost? What does a visit to the cardiologist cost without health insurance? Or braces on your teeth? How much does it cost to fire a slacker, interview candidates for the position, and train the new hire? How about replacing a refrigerator, hot water heater, or washing machine? What is the approximate price of the house you want, the major car repairs you need, and the medical bills for the mailman who fell and injured himself on your porch? Research the individual costs associated with every single one of your identified personal and occupational risks. Write that number beside each risk. It gives you clarity.
Manage your risks. Learning to manage your personal and occupational risks has several benefits. First, you develop a realistic view of your risks. Second, you understand what they mean. Third, you put them into reasonable perspective. Fourth, you boost your maturity level in the process of focusing on this subject. Lastly, you decide how you will deal with each of your risks should it occur. How will you cope with a broken leg, a tornado, a furious boss, a dishonest business partner? How will you cope with the community volunteer who slanders you, the spouse who threatens you, the coworker who cheats you? Make a plan. Consult family members, mentors, and experts as you write it. Then file it so you know where it is. Dealing with risks that happen is a lot easier and less expensive if you’ve already thought about them and planned for them. Frequently, it’s the surprise element that costs you the most. Remember: risk is part of everybody’s life. No exceptions.
For more information on risk, check out my latest post on the 7 benefits of risk-taking at work.
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