Risk and Reward

Every investor, active or passive, has in mind a financial risk/reward relationship. They have to decide exactly what degree of risk they are willing to accept in exchange for higher rewards. Passive investors generally see single digit returns these days which is one reason why there is so much interest in the much higher returns of your own business.

So why doesn't everyone want to jump on higher returns? Passive investors (people who invest in someone else's business) only concern themselves with financial risk. Running your own business also creates another form of risk, personal risk. When you're in charge, not every effort is going to work the way you planned. You can be rejected (or more accurately, you will be rejected). You are subject to frustration and self-doubts. These are just some of the personal risks each Active Investor much face.

Is it worth it for just the financial rewards? That will depend on the circumstances. What is always true is that overcoming personal risk produces personal gains of enormous benefits. In countless biographical examples, people with great satisfaction from their lives have all overcome personal challenges. Active Investors assume a double risk and receive a double reward. Both their financial and personal net worth evolve.

So what can we do about Risk Management when the topic is Personal Risk as opposed to Financial? As I was writing this posting (talk about JIT) I meet with Jeff Weaver, a Texas serial entrepreneur who spends a great deal of his time coaching and mentoring others in addition to developing his own businesses. His strategy is to move out of judgment and move into curiosity.

We worry about that last phone call or meeting. Did we say the right thing? Were we weak, or were we offensively pushy? Are these the right people? Are we doing the right thing? Every one of these internal questions comes with an implicit self-critical negative answer. That's our humanity (Ego) at work. It's what Jeff means by judgment. What if that changed to personal curiosity? We can be equally curious about that last encounter. We can review it with a sense of wonder about what will happen next. Who will we meet as a result? What will they tell us now? What new opportunities have started to emerge?

When we learn to think this way instinctively, Personal Risk converts to Personal Adventure. That's a good thing.

(For those with an interest in how this works out on a theological level, try applying it to the Kingdom Parable in Matthew 18:23 -35. An attitude of curiosity encourages a spirit of forgiveness.)

Image Credit: thegoldguys.blogspot.com/