Increase Your Risk Appetite and Earn More Money in 2012

The word ‘risk’ is a dreaded one. Whenever this word is alluded to, quite often it’s hardly in the affirmative. You are therefore likely to have overheard such phrases as ‘I don’t want to risk’ or ‘let’s play it safe’ in many business conversations. As much as the word draws mounds of fear, many money coaches say that it is a prerequisite to financial success. A quick snapshot of today’s world business leaders, say the likes of Richard Branson or even quite closer home  Patrick Bitature, will tell you that these individuals were probably the biggest risk takers of their time. However when asked, they say that all they did was to take ‘calculated risks’.  Many folks are therefore left to wonder whether this newly baptized word is as a result of pompous grammar or simply a safer way to risk. 

Quite vividly this dreaded word draws its meaning from the uncertainty posed by future occurrences which can either be fruitful or even quite ugly. This likelihood has led to individuals adopting any of the three widely known risk attitudes mainly depending on their perception of the probable outcomes. These attitudes are; risk averse, risk seeking and risk tolerant. Risk averse individuals are said to be pessimistic as well as cautious and will mainly focus on the potential minimum returns. A risk seeker on the other hand is said to be optimistic and will focus on the potential maximum returns. A risk tolerant individual is however said to be indifferent of a good or bad return. Well, Kenyans have been said to risk seekers and Ugandans risk neutral/tolerant. Where do you fall as an individual? Remember individual risk attitudes are bound to be different from the general perceived attitude.  Determining the attitude you subscribe to will be quite vital in your quest to make more money as well as success in other aspects of life.

In a world where living is a risk in itself, there can never be such thing as a decision that is risk free. The big question is, how do you keep the ugly outcomes at bay and you maximize on the fruitful? The first ingredient will be your ability to do enough homework on the subject in question implying that before you venture, consider doing adequate market research. When carrying out a market research however, it’s prudent to focus on a field based research due to its ability to pin point the targeted customer and product area. Other means of market research such the internet may appear cheaper than a field based research but are likely to lack focus. Once the market research data is availed, consider computing worst case and best case scenarios. For instance a worst case scenario computed using poor demand and high costs while the best case scenario computed using high sales and minimum running costs. 

In my view, the subject of risk is quite akin to driving. Folks that don’t know how to drive, when asked, will say that it’s the riskiest thing ever. Probably they have never figured out how two speeding cars travelling in different directions can avoid a collision on a narrow road stretch. Such folks when given a two – week driving lesson emerge the best drivers on our roads. Well, a two – week lesson is rather superfluous, some taxi drivers in town amazingly learnt how to drive ‘on the job’ or may be let’s call it ‘one lesson a day’. Risk and all its components are no different. In addition, despite the ability to reduce possible uncertainties (through market research), one special ingredient is of the essence. That’s none other than developing ‘clear instincts’ or what some could brand the ‘sixth sense’. You probably could wonder whether folks downtown at Kikuubo did all the research and lots of analysis... Some of them followed their gut feelings and are successful to date!   

Finally, you will need to learn to accept the consequences of your decisions and develop counter strategies fast enough to stay ahead of the competition. This coupled with the suggestions above should increase your risk appetite with a probability of reaping big in future.