Our strategies for risk management are tested at every moment

There are always unforeseen risks in any decision we make. The decision to commute outside during a global pandemic is one example. We also take risks when we sit down to eat at a new restaurant, when we invest in assets, and when we put our faith in our friends and family to always be there for us.

People create systems for risk management once they are given full autonomy over their lives, around the same time when they are able to move out of their homes and make a name for themselves.

We can (and should) consciously create these systems to make decisions faster and with less effort. Trusting our instincts is important yet, not having clear guidelines to follow can lead to unnecessary mistakes in life. Creating simple rules such as not going outside after 10:00PM to save money or not swimming in open waters due to a lack of training can help to mitigate risk.

Every decision has known and unknown risks

Risks don’t only relate to your health or wealth, they can also relate to your reputation. The risk we take when accepting a job we’re not qualified for so, that we can advance in our career is a common example. We also take a risk whenever we post something on social media, whether we are aware of this risk or not is another matter.

Perhaps the most vital aspect of risk management is considering when to not take any risks. There will always be unknown risks in every decision we make.

I tend to only make a decision after taking into account at least three potential risks. If you make a decision and think that there aren’t any risks involved, you haven’t thought about it enough. Consider the decision one more time. What are the risks involved?

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