How To Take More Risk In Life & Business [And Win]

How To Take More Risk In Life & Business [And Win]

If someone told you 'Invest $500 today, and there is a 60% chance you'll make 10X in a few months,' would this be a risk you'd take?

The chances are more than in your favor and it's a good risk to reward.

Your answer to this question will dictate your appetite for risk.

Personally, I've never been much of a risk-taker my whole life.

Before getting into business, I was much timider than I am now.

Back when I had school to worry about, I just stayed in line and didn't do anything more than what was asked of me.

I didn't get a job till I was 18.

I didn't do many extracurricular activities until around 17 or 18 years old too.

I could never relate to those who say 'I've been an entrepreneur my whole life - because I wasn't.

I never had much money to throw around.

This sort of mentality was prominent among my family members.

They had the mindset that wealth and riches don't come to people like them.

Yet, I've never seen any of them step out of the norm to change that.

So when it was my turn to start learning more about the inner workings of money, I naturally adopted a scarce mentality towards it.

I remember starting my?first e-commerce store and giving up after losing ￡11 in ad spend?since it didn't yield any results.

I was scared of buying a domain because I felt like the costs were too high to incur.

FYI: A?domain can cost less than ￡1?

Looking back, there was no chance of success with this outwards mentality towards spending money.

No matter if you like him or absolutely hate him,?Donald Trump is a great person to reference?for this.

Between the years?1985-1994, Trump lost over $1.17 billion yet managed to become a billionaire again later on, in record time.

How is this possible?

When you're in a position like Donald Trump, your appetite for risk is already much higher than the average person.

Having had this sort of wealth previously, it was an easy decision to risk big to win big once again.

So how can we also start to build this sort of appetite for risk?

How can we learn to take more risks in our lives and businesses?

Here are some of the lessons I've learnt about taking risks and how they can help you too.

Inevitable

Pretty straightforward lesson, but one that we must all understand nonetheless.

Taking risks is inevitable in almost every aspect of our lives.

When you start going to school as a child, you're betting on that school being a good fit for you.

When you start to make friends, you're betting on those friends being real friends.

When you leave to go to university, you're risking leaving the comfort of your parent's home.

When you find a job, you're risking your future on that job and what it provides.

When you get married, you're betting on the fact that this will be your true love forever.

Almost every part of our lives can be related to risk.

The most important lesson to learn is that taking risks is an inevitable part of human existence.

No matter what you find yourself doing, you're most likely taking some sort of risk.

In order to be successful, risks will happen somewhere eventually.

Learning forex, I delayed the inevitable for more than a month.

Every time I wanted to trade with real capital, I told myself there is more to learn.

The best way to learn, however, is by applying what you know.

You're always going to have to put something up in order to get something in return.

Most of our fear or risk is?rooted in our beliefs about success and wealth.

If you don't believe you can be successful, everything you do will be a gamble.

This is where the only team player you have is hope.

Don't let hope be your only strategy.

This was one of?my biggest mistakes in the first year of entrepreneurship.

Spend vs Invest

In a previous?article on investing or saving, I explained the distinct difference between spending and investing.

Although the difference seems to be clear cut, many people don't know how to differentiate the two.

They would label spending in the mall, the same as 'spending' in the financial markets.

To restate, spending is 'giving (money) to pay for goods, services, or so as to benefit someone or something'

On the other hand, investing is 'put (money) into financial schemes, shares, property, or a commercial venture with the expectation of achieving a profit.'

You see, when you 'spend' money, you're essentially throwing it all away.

However, when you 'invest' money, you're putting it into something with the?expectation?to make a future profit.

When I started to look at taking risks as 'investing' rather than plainly losing money, I started to see how it was different.

Investing is still a form of risk-taking - however, it's a more calculated risk.

When I was building?Condensr, I had no experience in coding, or even building functional wireframes.

I spent over $2000 building a wireframe, which is just a way to show the workflow of the app once it's officially built.

This sort of investment would have never previously been made if I didn't learn this difference.

Spending $2000 on the wireframe was a calculated investment I made which had some risk I had to endure in order to move forward with the problem.

When we invest, it's important to do your 'due diligence.'

This is sort of like a research stage where you learn more about the investment the possibility of it paying off.

With?Condensr, this was the research I had done and presented in a?pitch deck.

After you do your due diligence, you can make a better-informed decision on the sort of risk you need to take.

Treat it like a game

In the book 'Principles,' Ray Dalio explains how you should view your life as a game where conquering obstacles is the objective.

Once the individual accepts the game's rules, they can eventually become used to the pain that comes with continuous dissatisfaction

I used to be a massive?GTA 5 player.

GTA 5 was a way for me to live out my dreams virtually through money, houses, cars, and yachts.

In GTA, you'll find yourself dying a lot of times, failing missions, and so on.

However, at the end of it all, you still had all the nice cars, all the houses, and all the wealth.

All you had to do was respawn and give it another go.

Adopting this sort of outlook to life, where giving up is never an option but rather an ongoing cycle will make it a lot easier to overcome any hurdle that you face.

In GTA, I often find myself with a few million dollars. I would take the risk of buying something luxurious because I know that this money will eventually come back.

However, when faced with a decision like this in real life, it will oftentimes be a lot harder because we don't face the same level of certainty in our abilities.

Start to embrace risk-taking as if it were a game.

When the risk does not go in your favour, understand and accept that this was only part of the game's mechanics and move on.

Not long ago, I invested in some?courses?regarding?social media marketing.

Although I understood the business, I felt like I was missing something that these courses can offer me.

I took the risk and invested in them knowing that there is no guarantee that they'll pay dividends.

My assessment was right. They didn't.

Not because of the courses themselves, but because I decided to cut my losses early and move on to the next one.

I accepted this loss, knowing it is something that I must go through to move to the next level of the game.

Start small

Taking risks doesn't always mean putting everything you have on the line.

Taking risks can mean putting up minimal amounts and compounding them from there.

In the?forex or stock markets, they teach you not to invest more than you can lose.

With this idea, it is recommended that you only invest 2-3% of your account size in one trade.

This principle can also apply in life and business too.

Don't invest everything you have up front.

You can always start with small investments where the outcome does not matter.

With these small risks and investments, you're able to build up an appetite for risk.

You'll notice how when you lose, it's never as bad as you thought it would be.

You'll notice that it's okay when risks do not go your way and that is it normal when this happens.

In fact, going back to the?forex example, many great traders lose more than they win.

The reason they still manage to earn big is that they learn to cut their losses short whilst letting the winners keep going.

When you take a risk, start small and learn to cut your losses quickly.

However, you must also learn to predict a positive outcome from a (what seems to be) negative situation.

This means that not every negative situation will stay negative - it can turn around with some time and effort.

Be generous

I mentioned that the?courses?I had bought were all useless and did not bring about any results in regards to the marketing agency.

hat I failed to state, however, is the courses?had a mindset training module?involved too.

I'm a massive advocate for the power of our brains and mindsets.

I believe that once our brains are trained, we can't be stopped.

This is why Donald Trump managed to become a billionaire once again - his mindset trumped everything. (pun sort of intended)

In these courses, there was a specific lesson that stood out to me.

That lesson was the art of giving.

Giving doesn't always mean giving money.

This could be giving your time, energy, love, guidance, and support too.

Before you can take, you must learn to give.

In order to get over your fear of risk-taking, you must first learn how abundant the world truly is.

Try this the next time you go out with a family member or friend:

Invite the other person to a coffee, or a meal where you pay for it.

Once you do this, you can realise that losing money is not bad at all.

You'll start to realise how normal this all is.

When you're in a situation to give, you will be unstoppable.

Give to others, and experience the abundance that life has to offer.

From there, risk will be but nothing more than a small piece of the puzzle to a larger outcome.

Have you learnt something new from this article?

Let me know below and share any insights on what you'd like to learn about next.

Till next time,

Mohamad