Deciding How Much Risk You Can Take. It Is Not Just About Personality, Knowledge Plays A Big Role As Well

Deciding How Much Risk You Can Take

Deciding How Much Risk You Can Take. It Is Not Just About Personality, Knowledge Plays A Big Role As Well

Most people believe that risk taking tolerance is based solely on personality. That is not true and it is, in fact, one of the biggest mistakes someone can make. It is one of those mistakes that will get you trapped, lying to yourself every time you see a good opportunity to earn some good money, to stand still, do nothing and blame the universe for not having the guts to pull the trigger.

Knowledge is a big-player when it comes down to risk tolerance level

But guess what, risk-taking DOES NOT depends solely on personality. Most part of it comes also from knowledge. Think about it this way: even the toughest, strongest and most brave of all men would be scared to death when entering a dark and wide cave, where he couldn't see a thing and he knew that inside, there could be huge falls that could potentially kill him. It would be way different, it he had a light or if someone could pin-point the exact locations of these falls so he could avoid it. Do you see the difference? The threat is still the same, but KNOWLEDGE made the RISK way more acceptable to take it.

Let me give you another example to clarify: say you and I decided to set up, separately, a hot-dog company to sell small hot dogs on games or concerts. Then, I would go out and do a proper research on what kind of sausage I would be using it, what bread should I be using it, what is the best place and time to be selling hot-dogs. You, on the other hand, just buy a machine and start selling hot-dogs whenever you feel like it. Which one of us has a better chance of succeeding? The risks for us were both the same when we started, but since I was diligent and made my research, I could decrease the amount of UNNECESSARY RISK that I could have. KNOWLEDGE, once again, made it so.

Conclusion

So, deciding on much risk you can take usually comes down to personality and knowledge. Both are important and both will have a huge impact on your decisions. Maybe you believe you do not have to guts to follow through? That is ok, you are not alone on this. Then, in order to become successful, what you might need is more knowledge.

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