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Why Risk Taking Works (Usually!)

While there are some people who embrace risk-taking, for many of us, the very idea is an uncomfortable one.  Yet, studies show that people who take risks are happier and more satisfied with their lives.  That being said, how can someone who is naturally cautious become more comfortable with risk-taking?

Brave author Margie Warrell has the answer.  She suggests that if we knew the odds were stacked in our favor when it comes to risk-taking, we'd be more comfortable taking chances.  In her article, Take A Risk: The Odds Are Better Than You Think, Warrell identifies 4 critical thinking mistakes people make when it comes to risk-taking.  They can be summarized as follows:

  1. We Overestimate the Probability of Something Going Wrong.

    Rather than consider all of the benefits that might occur as a result of taking a risk, we're more inclined to focus on the potential disadvantages.  Because those disadvantages loom large in our mind, we often misjudge the likelihood of them occurring.

  2. We Engage in Catastrophizing.

    Catastrophizing refers to our tendency to imagine the worst possible scenario.  For instance, a person might feel fearful at the thought of becoming an entrepreneur, because their business could fail, they could then lose all of their money, subsequently they'd lose their house, their wife, their social stature, etc.  As you can see, while technically this could happen, we tend to exaggerate the negative consequences of risk-taking.

  3. We Underestimate Ourselves.

    As Warrell explains, sometimes we let our misgivings that we “have what it takes to succeed,” prevent us from taking risks.  It's unfortunate because many talented people allow their doubts about their abilities to hold them back.

  4. We Minimize or Deny the Cost of Maintaining the Status Quo.

    When we're risk-adverse, we tend to tell ourselves that “things aren't so bad,” or the unhappiness of the status quo is superior to the unhappiness associated with trying something new and failing.  Yet that isn't usually the case. Unfortunately, issues that we try to sweep under the rug tend to grow in magnitude, becoming worse the longer we ignore them.