When investing, many advisors suggest diversifying your portfolio. By buying a little bit of different things you spread your risk over a variety of different investments. If one goes bad, you still have a bunch that are thriving.
The old adage “Don’t put all your eggs in one basket,” can apply to our personal lives too. Clyde Coombs, a University of Michigan psychologist, developed a theory of risk based on this portfolio idea. By being cautious, disciplined, and controlled in most areas of our life, we can take high risks in another.
This occurs over and over in life. Remit Sethi, personal finance entrepreneur calls the concept his Tripod of Stability. He states, “This basically means that I try to keep the big things in my life ultra-stable–car, where I live, relationships-so I can afford to be ultra-aggressive about other things.
In willpower experiments, scientists have concluded that willpower is a finite resource that can become depleted like using a muscle and that willpower draws from one source for all tasks. When you are focused on working out and dieting, you may be more open to gambling, an affair, or stealing.
In order to create, grow, and improve we must push ourselves beyond our comfort zone. You will NOT get better if you don’t. And pushing beyond your comfort zone is risky. It can take willpower and energy. By definition it means you have to try to do something you haven’t done before.
And that means uncertainty, doubts and fears. We must balance that risk with the known, boring, routine. It’s why I like to have my daily morning routine of getting up, having a cup of coffee while I read the Scriptures. Then I workout doing Pilates, pushups, body weight squats, and kettle bell swings.
Every Saturday and Sunday I do the same things. It’s routine. It may be boring to some. But I love it. I know what I’m doing and what I’ve chosen to do provides me with energy and our productive activities. And by being boring I can take risks in other areas of my life.
But just because I take risks, doesn’t mean I’m stupid. Take steps to mitigate the risk. I have a house by the beach which could be susceptible to hurricanes, flooding, and the wind. But I’ve purchased wind and hail insurance, flood insurance, earthquake insurance, and have an extra umbrella policy. We also are prepared with water and an emergency kit.
Adam Grant in Originals wrote about taking risks:
“To become original, you have to try something new, which means accepting some measure of risk. But the most successful originals are not the daredevils who leap before they look. They are the ones who reluctantly tiptoe to the edge of a cliff, calculate the rate of descent, triple-check their parachutes, and set up a safety net at the bottom just in case.”
We have to take risks. But by being boring you open yourself up to taking smart risks.
Are you a routine person and does it allow you to take risks in an area of your life?