Why Risk-Taking Is Required To Achieve Your Goals
Your ability to achieve goals is affected by the risk-taking strategies you use in all areas of your life.
Taking risks involves moving beyond the status quo to take advantage of new opportunities and gain more rewards. This often requires overcoming our personal emotions and sacrificing time, energy, and even money to create a better life.
Being a risk taker doesn’t mean you are reckless–when you take calculated risks. Learn more about positive vs. negative risk-taking, the benefits of taking risks, obstacles that typically cause us to take fewer risks, how to be an intelligent risk-taker, and tips on developing your ability to take the right risks and reap great rewards.
Why Do People Take Risks?
People take risks when they are faced with a decision and uncertain about the outcome. When we go through the decision-making process, we typically think of the possible choices we can make, weigh the pros and cons of each choice, and make the decision that we think will have the best outcome.
Some people play it safe and make low-risk decisions—decisions that will have only minor negative effects if something goes wrong. Others purposefully take higher risks because of the high potential benefits.
These are examples of positive risk-taking, but sometimes people engage in negative risk-taking. They either will not think the decision through and take impulsive, risky action or they may make a choice regardless of high potential negative outcomes.
Good vs. Bad Risk-Taking When Setting Goals
Ideally, your life goals should involve some risk so you can progress from the state you are into a better one. But there is a difference between smart risk-taking and unnecessary and uncalculated risk-taking when setting your goals.
What Is Positive Risk-Taking?
Positive risk-taking requires gathering information and taking time to think things through. You will weigh all possible outcomes and plan solutions should the worst-case scenario happen.
Positive risks are also called opportunity risks because of the potential to catapult you into a better situation for business growth or personal development.
Risky goals are typically not easy to accomplish but can have big positive outcomes. They require effort and push us to realize big dreams and step out of our comfort zone.
Examples of positive risk-taking include:
- Investing in expensive, new technology that could make your business process more efficient, resulting in greater gains
- Taking a new job in pursuit of a higher quality of life even though it offers lower pay
- Modifying product designs to include more sustainable materials in hopes of appealing to a broader customer base
- Seeking out and engaging with a mentor to help you advance your career
What Is Negative Risk-Taking?
Negative risk-taking often involves not thinking through potential negative outcomes before making a decision. You might be excited about potential high returns on a new idea, but fail to take into consideration what you might lose if things don’t go as planned.
In other instances, you might think of possible consequences but not have an acceptable solution if the worst-case scenario happens. You don’t create a safety net and are not prepared to handle the fallout. This results in loss of some kind, such as money, time, reputation, happiness, progress, and so on.
Benefits of Positive Risk-Taking
Without taking risks, we can rarely achieve the kind of life we want. Lasting success and happiness do not happen by chance; we must often embrace change and new ideas to achieve a fulfilling life.
Successful entrepreneurs, for example, take calculated risks and make smart decisions to turn their innovative ideas into profits. Becoming a new business owner is a risk that could potentially replace your full-time job and create financial independence for you and your family.
As you contemplate the idea of taking calculated risks for positive outcomes, consider these five benefits of positive risk-taking.
Greater Personal and Professional Growth
Going back to school or pursuing an industry-specific certification will take time, money, and effort, but you will inevitably grow personally and professionally from such risks.
Trying new things can increase the opportunities that become available to you and expand your potential. You may qualify for a new position, advance to leadership roles, start your own business, or experience great satisfaction from a talent you develop.
Increased Self Confidence
When you do something that pushes you to overcome fear or doubt, your confidence grows exponentially.
This is especially true when you succeed, but even the act of embracing change and stepping out of your comfort zone can expand your mind. Taking calculated risks can then become more second nature with your increased self-confidence.
A risk-taker is more likely to find their purpose in life. Taking risks helps you learn what kind of life you really want to live and the steps it takes to get there.
Better Leadership Skills
Taking risks helps you grow, and in the process, you naturally develop better leadership skills. The self-confidence you cultivate makes it easier to teach and lead others.
You develop the personality traits that make a good leader, including empathy, creativity, decisiveness, and accountability. For instance, facing potential failure can help you understand how others feel when you ask them to take on a new role or lead a team project.
As a risk taker, you will draw on your past experiences to help others overcome risk aversion, learn the aspects of careful planning, and differentiate between a bad idea and one that is worth the risk.
Positive risks are called opportunity risks because they expose you to increased possibilities, whether in your personal or professional endeavors.
Risking your money in an investment can increase your net worth and provide you with new opportunities financial stability brings. Overcoming uncertainty to apply your novel ideas to a new business venture can make you a leader in your field.
Improved and Newer Skills
Moving outside of your comfort zone as a risk-taker can help you develop new skills and improve those you have. This applies to your career, sports and fitness, academics, the arts, relationships, and other aspects of your life, including writing a book, being a public speaker, and learning to skydive. The list is endless.
Successful people embrace the potential positive outcomes that can result from taking risks to overcome obstacles.
Roadblocks to Risk-Taking
Despite the advantages of positive risk-taking, most Americans tend to be conservative risk-takers or not risk-takers at all.
One research study conducted by a major life insurance company found that the average comfort level for taking financial risks in order to get financial gains is 4.9 out of 10, with 1 being very conservative and 10 being very aggressive.
The study further found that 65% of Americans prefer the stability of staying in one job instead of pursuing new opportunities, and 76% prefer the consistency of living in one place even if moving meant potential career growth or other positive outcomes.
72% of us pursue personal interests that don’t involve risk, while 66% avoid taking risks socially and finding new friends or relationships.
Fear of failure is one of the major reasons for avoiding risk, but there are additional roadblocks that get in our way, too.
Fear comes in many forms. You might avoid taking risks for fear of failure, embarrassment, criticism, or rejection. Some people even allow the fear of success to keep them from progressing forward because of the changes they’ll need to adjust to and the new perspective in their mind that’s required.
Fear can be debilitating and cause us to overlook or rationalize not accepting positive outcomes and keeping our focus on the potential negative outcomes.
You might avoid being a risk taker for fear of letting someone down, hurting their feelings, or disappointing them. When we give into these fears, we are essentially allowing others to dictate our choices and limit the path we want to take.
Perfectionism is an irrational habit that causes us to think we need to do something perfectly in order for it to be worthwhile. But this way of thinking is debilitating.
It can cause us to not try at all for fear of making mistakes. It also causes us to get so lost in the details that we can’t finish a project, make a goal or take the risks necessary to progress from point A to point B.
Putting off the pursuit of opportunities to a later date–or never–is a common roadblock to being a positive risk-taker. Procrastination keeps us in a state of limbo, telling ourselves that we’ll start our business later when the market is more fluid or we’ll learn a new skill when we have more time.
The truth is, the best time to pursue something that can make your life better is almost always right now. You have the abilities and resources available to you, and being a calculated risk-taker is better than not taking any action at all.
Getting caught up in the details instead of focusing on the big picture is a symptom of overthinking. When you dwell on fears or worry about the same thought repeatedly, you are allowing debilitating thoughts to prevent you from taking action.
Overthinking prevents you from not only making important decisions but also enjoying the moment and achieving success.
Signs of overthinking include fixating on things from a risk perspective instead of a reward perspective–thinking too much about what could go wrong while overlooking what could go right.
Overthinking also included imagining the worst-case scenario without coming up with a plan to handle it should it happen, questioning but never making a decision, and allowing past mistakes or experiences to dictate future opportunities.
When you are faced with a problem, you often have to take some kind of risk to solve it. However, denying that a problem even exists will mitigate any progress you might make toward being more successful, happy, or satisfied.
Denial is a defense mechanism that can bring us temporary peace of mind, but it gives us a false sense of security because the problem never really goes away.
Signs of denial include refusing to talk about a problem, justifying your behavior, or blaming others or events for being the cause of the problem.
To overcome a problem and reach new horizons, you must have the courage to admit there is a problem and then take responsibility for solving it. While this may involve taking risks, the biggest risk you could make would be taking no action at all.
Dependence on Security
Risk-takers understand the value of making uncomfortable choices that can lead to better returns. But dependence on security can cause us to take fewer risks or no risks at all.
A mental health expert will tell you that most people like things to stay the same, even when they are in a bad situation. Familiarity is often more appealing than the unknown.
It feels safer because we are used to it, but it’s a false sense of security when the change would bring far better outcomes than remaining where we are.
Your willingness to take risks can not only improve your daily life but create an enriching future filled with greater career success, better relationships, higher pay, increased cash flow, and greater satisfaction.
How to Practice Intelligent Risk-Taking
The more you understand how to take calculated risks, the better you will be at distinguishing a bad idea from one that is worth pursuing. Experienced risk-takers understand there is a process to taking intelligent risks that increases the success rate and reduces the chance of failure.
Follow these seven steps when you are faced with a decision that involves uncertainty to practice intelligent risk-taking.
1. Know What You Want to Achieve
The first and essential step to taking risks is knowing what your end goal is or what you want to achieve. You can think of this in a broad sense based on the kind of life you want to live as well as look at the outcome you desire from specific decisions or problem-solving.
Identify your core values, and make sure the outcome you desire aligns with them. This will not only help ensure you stay on your path to what a successful life means to you, but it will give you the confidence and courage you need to take risks.
2. Brainstorm Solutions
Next, think of all the possible solutions to the issue that you can. If you are contemplating risk-taking in your workplace, team, family, or other groups, involve everyone impacted by the decision. There is great value in brainstorming as a group because it helps you generate and evaluate a variety of ideas from different perspectives.
To brainstorm effectively, don’t place a value or judgment on any idea at this point. An idea that may at first seem too risky or unconventional may turn out to be the catalyst for your best solution.
3. Assess the Risks Involved
When you have generated as many ideas as possible, rank them based on the criteria you set forth, including keeping them in line with your values and what you want to achieve.
Now is the time to really evaluate your ideas by thinking through all of the possible outcomes of each one, including the worst-case scenario.
The goal for this step is to come up with three to five of your best solutions that can lead to successful outcomes. Rank your ideas based on high-risk versus low-risk as well as high returns and benefits versus low returns and results. Consider long-term gains as well as short-term success.
4. Think About Past Lessons Learned
Experience brings wisdom, so contemplate the lessons you have already learned. This includes experiences that may not be directly related to the issue at hand as well as times you have faced uncertainty or risky decisions.
For example, ask yourself if you have done this before and how it turned out. What mistakes were made that you can learn from and avoid this time, and what have you learned from the experience?
It is also wise to draw on the experiences of others. Research the resources that are available to you–including the internet, colleagues, mentors, associates, and others in your life–to see how others have handled similar situations.
Getting advice from trusted sources and other risk-takers can make a significant impact on your ability to mitigate bad risks, overcome uncertainty, and achieve success.
5. Decide If the Risk is Worth Taking
As you have assigned a value to each risk and contemplated possible outcomes, you are ready to decide if a risk is worth taking.
Focus on the facts you have gathered rather than the emotional aspects involved in taking risks, such as the roadblocks we discussed earlier–fear, perfectionism, procrastination, overthinking, denial, and dependence on security.
Think about the upside of change and be sure to have a plan of action for your worst-case scenario and other things that might go wrong.
6. Develop Your Action Plan
Now, create a plan that will get you from where you are now to where you want to be. Write out your plan in detail so it is easy to follow with a step-by-step process.
Think about the tools, information, and people you will need to support your action plan and arrange for those to decrease your risk of failure.
As you are developing your action plan, including the steps you will take if things don’t go the way you want them to.
7. Evaluate the Outcome
When all is said and done and you have completed your action plan, it is vital to evaluate the outcome. This will lead you to greater success in the future as you continue to take risks.
Whether your plan was a success or seemed to be a failure, you will gain valuable insight by taking the time to assess the outcome.
What did you learn from the process? What might you do differently next time? What went well and what roadblocks did you encounter? How did you overcome them? Did you have the support in place that you needed?
Tips for Developing Positive Risk-Taking
Now that you understand the process of how to take risks intelligently, you can start now to develop the skills of successful risk-takers. Practice these skills each day so that you can easily apply the steps to taking risks for desirable outcomes in your daily life.
Expand Your Thinking
Start thinking about opportunities that could be created if you take risks that move you beyond the status quo. Instead of fixating on “what if” something goes wrong, imagine the “what ifs” if something goes very right.
Open your mind to greater possibilities and push past your comfort level. Be willing to dream big dreams and know that you deserve great things to happen to you.
You have the capacity and ability to think of new ideas and take action on them with the right information, support, and understanding of how to take calculated risks.
Change is naturally uncomfortable. We are creatures of habit and often prefer security over innovation or venturing into unknown territory.
However, we are meant to grow and change, and when we resist it, we feel stuck and dissatisfied over time. We tend to blame others for our situation or feel there is no way out or things are just meant to be this way.
There are flaws in this type of thinking, though. You are in control of the trajectory your life takes, and taking calculated risks can help you get to where you want to be.
It may also help to remember that most changes are not permanent. If you are not satisfied with the change you’ve made, take steps to change it again. The more you embrace change, the more capable you feel in creating the life you want.
Share the Risk With Others
When faced with risk, enlist the help and support of others on your team or within your personal or professional circle. You don’t have to go it alone.
There is great value in getting advice from entrepreneurs and others familiar with taking calculated risks.
You will also find comfort in knowing that people you trust are aware of what you are going through, what your goals are, and what you need to achieve success.
Mindfulness helps you to calmly assess situations and not overreact or become overwhelmed.
Practice mindfulness to get in touch with your feelings, gut reactions, and instincts. Listening to your inner voice is essential to fulfilling your purpose in life and making decisions that will lead you to personal and professional success.
Take smaller periods of silence and solitude throughout the day whenever you feel stressed or need to make a decision.
Learn to take action on the insights you receive while meditating to really hone your skills at taking risks.
Take a Moment to Pause
When your thoughts are racing and you can’t seem to make a decision, move away from the problem momentarily to clear your mind. You can even sleep on it to refresh your thought processes and get in touch with your inner self.
Taking a moment to pause will help you gain perspective, which will lead to a greater ability to take risks that are intelligent and lead to greater success.
Practice Incremental Risk Taking
Taking calculated risks takes practice, so start small to get used to the process and overcome the intimidation that can come with risky decisions.
When you are first starting out as a risk taker, begin with risks that have a lower potential for negative outcomes. For instance, if you want to start your own business, begin it as a side hustle first instead of quitting your job to pursue your dream.
Practice visualizing what you want to achieve. See yourself in the situation and the results that you want. Visualizing the outcomes you desire will help program your subconscious mind to gravitate toward your desired solutions.
Overcome Fear and Negative Thinking
The antidotes to fear and negative thinking are positive thinking and optimism. Practice affirmations every morning to set your mind, emotions, and actions on an optimistic track throughout the day.
An optimistic attitude increases your self-esteem and opens your mind to greater possibilities. Feed your mind with beneficial thoughts, words, music, books, podcasts, and visuals every day and as a habit.
These strategies will give you the mindset and confidence you need to take risks and overcome change.
Practice Smart Risk Taking to Excel in Life
You learn how to take intelligent risks without fear by taking a risk intelligently and then 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 the goals you set for yourself and lead you toward success.
To help you get started on becoming more successful and achieving your goals, download my free Personal Development Plan Template.
About Brian Tracy — Brian is recognized as the top sales training and personal success authority in the world today. He has authored more than 60 books and has produced more than 500 audio and video learning programs on sales, management, business success and personal development, including worldwide bestseller The Psychology of Achievement. Brian's goal is to help you achieve your personal and business goals faster and easier than you ever imagined. You can follow him on Twitter, Facebook, Pinterest, Linkedin and Youtube.