Driving a car is risky. It’s riskier than travelling on a plane!
But you still drive on a regular basis.
You can reduce the driving risks by always being fully attentive. No texting and driving. No drunk driving. Taking regular breaks on a long drive.
Risk is a fundamental component of life. Be it investment decisions, career choices, relationship preferences, travelling plans, lifestyle choices. Risk is always there.
It exists in every decision you take or decide not to take.
The mere existence of risk can’t be the sole criteria of taking (or not taking) a decision.
Risks can be managed. The more you are aware of a ‘potential risk’, the more planning you can do to mitigate it.
Risk management professionals see ‘risk’ as a combination of likelihood and consequence. Basically, asking two questions. How likely is the risk to occur? And, if it was to occur, what would be its consequences. The answers to these two questions help provide a risk rating.
A similar concept can be applied to real-life decision making.
Doing the exercise to better understand the risk, understanding its rating and then comparing it with your risk appetite to make the final decision.