Becoming a Super Achiever is about taking Calculated Risks
Acquiring great success and achievement, often requires you to take on some level of risk. As most super achievers have taken a number of risks in their lives and it is very often that very risk taking that made them successful in the first place, it seems pretty obvious that super achievement and accepting some level of risk are synonymous. The secret though is to know the difference between taking a calculated risk and blundering into something that is just plain foolish risk. Every super achiever that I have studied understands the art of only taking only calculated risks and most certainly will never fall prey to the kind of hype and commercial propaganda created by Hollywood around risk taking. “Take calculated risks. That is quite different from being rash.” General Patton.
The Art of Taking Calculated Risks
Building success and following your entrepreneurial spirit will most certainly require you to assess many situations, opportunities and events and to take calculated risks that will move you to the next level of achievement. Any big idea or major goal you have, will require you to stretch yourself and to expand your activities and thinking beyond your current comfort zone. I have compiled a simple plan, described below, to allow you to mitigate the risk, whilst still allowing you to expand your horizons and to take calculated risks only.
Taking Calculated Risks is Essential
Knowing when to put your chin out there and to accept some level of calculated risk is an essential part of the process of separating yourself from the crowd. Knowing when to take a calculated risk is the one variable that very often separates the super achievers from the rest of the mediocre crowd. It is your willingness to accept some level of risk that will advance you to the next level of abundance and achievement. Accept that you must accept some level of risk to become abundant and successful, but never allow the risk to stretch you into realms in which you could lose everything. As you climb the ladder to ever greater levels of success and you have more and more to lose. It is wise to assess every risk that you intend to take even more carefully. When you are young and do not have too much to lose, you have not moved too far from the starting line, losing everything and having to start over is not as costly, as when you have created some level of success already. As you move further down the path to super achievement it is prudent to mitigate any risks that you take and to only ever put a small portion of your accumulated wealth at risk. I am conservative and I limit my risk profile as follows:
- Speculative risk – Max 10 % of your net worth.
- Moderate risk 10 – 20 % of net worth.
- Calculated risk 20 – 30 % of net worth.
I have found this ratio of high risk to moderate risk, a safe bet when exploring any new opportunities. As you get a little older and you have a family that depends on you, it is crucial that you are wiser and more prudent in your risk profile and choices. Take risks in only in areas where you have knowledge and expertise My experience has shown me that every time I have entered into a venture that is outside of my area of competency and taken a risk. I have lost my shirt. Never invest or take any risk in any venture that is outside your core area of competency. If you do not understand the business or the marketplace, steer clear and avoid taking any risk at all. The biggest challenge when you try to enter into an area that is outside your area of expertise is that you are taking a risk in an area, where you don’t even know, what you don’t know. You have no foundation to build on, who to ask the right questions to or how you should go about making the venture work. You can never take a calculated risk in any area where you do not have the competency to know what to calculate or how to weigh the risks.
Mitigate or remove the risk altogether
The secret of most super achievers and great risk takers is that they understand how to mitigate or remove the risk from the equation completely. The way to do this successfully is to never take on any risk that will overextend you, to the point of complete disaster if things do not work out. Conduct in-depth due diligence before accepting any risk and always assess any risk against the potential return. If something appears too good to be true and the returns seem to be just too incredible to be true. Then more often than not they are. Create a bottom measure or floor level where you will pull the plug on any investment. Do not fall into the trap of throwing good money after bad.
- Risk is necessary to succeed
- The more you have to lose and the more people that depend on you, the more prudent and calculating you must be.
- Only invest in areas in which you have expertise – stick to what you know
- Conduct in-depth, due diligence and create clear plans and measurement criterion before taking on any risk.
- Have discipline to pull the plug on any risk that has gone sour.