Risk taking the smart way: 5 Types of Risks That Affect Your Ability to Achieve Goals

Your ability to achieve goals is affected by the risk taking strategies you use in all areas of your life. Whenever you engage in any action where the outcome is uncertain, you are taking a risk. You are taking a risk whenever you venture into the unknown, where your possibilities and probabilities cannot be determined to an exact degree. From the time you get up in the morning until you go to bed at night, and even when you are sleeping, you are taking a risk to some degree. It is how skillful and confident you are in taking the right risks for the right reasons to achieve goals that are right for you.

Intelligent Risk Taking to Achieve Goals

It is a fact that every great leap forward in human life begins with risk taking and a giant step of faith into the unknown. Men and women who achieve goals and accomplish wonderful things are invariably men and women of great faith in themselves and their abilities. The better you become at analyzing and assessing  before taking a risk, and then avoiding as much of the risk as possible, the more competent and more capable you will become, and the more successful you will be.

Five Types of Risks

There are basically five types of risks for you to consider. The first type of risk taking is the simplest. It is the risk that is not yours to take. It is the decision that you do not have to make or the gamble that you do not have to engage in. Every action has a consequence and often creates the need for further actions, either to follow up on or to remedy what happened. Whenever you can delegate an act entailing uncertainty, you can reduce your risk of losing time and money and can increase your likelihood of long-term success.

The second type of risk taking is the risk that is unnecessary. You engage in taking a risk that is unnecessary when you act precipitously, without sufficient information or without taking time to think it through carefully in advance. Peter Drucker said, “Action without thinking is the cause of every failure.” Many of the mistakes that you have made have occurred because you acted without thinking—that is, you acted without taking the time to minimize the risk taking that was involved.

The third type of risk taking is the risk that you can afford to take. Calling on a new prospect, following up on a lead, and exploring a new opportunity all are risks that you can afford to take. In these cases, the cost of failure is very low, while the rewards of taking a risk and succeeding can be very great. Buying an inexpensive product or service, trying a new restaurant, and going out with a new person all are risks entailing uncertainty that you can afford to take because the down side is limited.

The fourth type of risk is the risk that you cannot afford to take. In this case, the consequences of making a mistake while taking a risk would be too enormous. You cannot afford to bet your whole company or your whole bankroll on a speculation of any kind. You cannot afford to commit all your resources to a single project and have your entire success or failure hinge on the outcome of that project.

People in the world of investing talk about the importance of spreading one’s risks. No individual and no company should be dependent upon one or two people for their financial well-being. One of the best ways to minimize risk taking is to develop alternatives to what you are currently doing. The more alternatives you have, the lower your risk, and the higher your likelihood to achieve goals and reach success.

The fifth type of risk is the risk that you can’t afford not to take. The down side may be costly, but the up side is so exciting that it is very much worth taking a chance to go after it. If you are working on a big prospect whose headquarters are a long way from your main office, it’s certainly a risk to travel all the way there and back several times, but it’s a risk that you can’t afford not to take to achieve goals you have set for your career. If the prospect materializes, it can make a major difference to both you and your company.

Taking a Risk the Smart Way

You learn how to take intelligent risks without fear by taking a risk intelligently and then by analyzing what happened. When you have clearly identified the risk involved, you can plan and prepare to maximize your opportunities while minimizing those risks. Your ability to confidently take calculated risks in the direction of your goals will ultimately help you achieve goals you set for yourself and lead you toward success.

culled from http://www.briantracy.com

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By toluayo

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