We all take risks on a daily basis. Cross the street against oncoming traffic, wear red instead of blue. We all differ in our appetite, from those who are adrenaline junkies, to those who are extremely cautious, to those unwilling to take any degree of minor risk in their life.
Taking risks is a thought process of the immediate environment, the degree of how safe one wants to feel, which is a result of evolutionary conditioning, that’s healthy or beneficial to us. How successful one is, depends on how much risk they’re willing to take.
Those who are overconfident, cocky, will minimize the potential threats which may be posed by risk, while those who lack self-esteem might quiver from even the slightest fright.
One person’s idea of fun such as skydiving is another person source of pure terror. Some are just too cautious, hiding under the bed sheets the entire day, which is also a risky position to take. On a daily basis, we’re forced to make these calculated decisions.
To Calculate Risk Taking
Those who are on the polar ends of risk taking are in peril. The super brave adventurer and the bookworm nerd afraid of their own shadow.
Both have to reform their habits, attitudes, and comfort levels which aren’t great for their mental and physical health, affecting their behavior at home or work. One appears paralyzed while the other reckless.
It also depends on the type of risk, such as our health, finances, ethical, or recreational dares that people will take.
There appears to be a blanket consistency in everything most decide. There are the risk averse and the risk embracing. Those who takes risks in one setting, will do so in the same degree in another.
Willingness Of Risk Taking
Risk taking comes down to several variables. Those who are adolescent, perhaps not knowing any better, will take more risks than those who are older. Males will generally take more risks than females.
One’s personality also plays a part. What individuals determine differently is how risky situations are perceived and appraised. Essentially their propensity to taking the particular risk is individually different, this usually based on experience.
Situational, along with social and cultural factors plays a part in a person’s degree of risk taking. What it grounds down to is their particular perception of the situation, past results, and what they have to lose.
Various Types Of Risk
Those cautious and pessimistic types afraid to take a risk are terrified of failure. So they never change, remain boring as they favor tradition and convention. They’re wary of any change, stay routine, as anything new or innovative is scary.
Those who are prudent, will value predictability and continuity to anything that’s new and different. They’re extremely careful, conservative, and conventional in their outlook.
The average risk taker is known to be deliberate. They’re usually even tempered, assure of themselves and well prepared. Their risk taking is calculated more by thinking rather than impulse. They’re systematic and sensible, while not being influenced by the radical.
What Type Of Risk Taker Are You
Some are more the spontaneous types, who are also average in their risk taking, but on occasion they react emotionally. They can get excited, and become impulsive to the ups and downs of high hopes along with disappointment.
The composed individual won’t be swayed from their task at hand. They’re positive, resilient and dependable. They are not thought of as being reckless, as they’ll focus on their priorities.
The free thinking carefree type does is value their independence and autonomy. They function well in fast moving situations and are stabilized by their sense of precise direction. They enjoy creating new ground while challenging the status-quo.
Then there are the ultimate radical risk takers, who has an extremely high risk tolerance, the adventurers. They’re constantly upbeat, positive, daring, and cool.
They can be seen as impulsive, rarely organized, always looking for a new thrill which can cost them money or a limb. They act as if the laws of fate favors them, and will boldly go where most dare not.
The Measurement Of Risk
When it comes to measuring the motivation of taking a risk, it initially comes down to measuring ones previous experience of the risk, along with their attitude regarding it, this when it comes to the various situations they’re faced with.
This is usually predicted by the individuals behavior when it comes to a range of different risk taking situations. The theory being that past experiences will predict their future actions.
The more of whatever action they did in the past, and the more that they found it exciting, successful, or pleasurable, the more that they’re likely to repeat the same act in the future.
It Is What It Is
Another measurement comes down to a personality variable that’s related to taking that risk. This can be a need for achievement or some other type of specialist variable. The most popular being sensation seeking.
An investor who’s conservative, is one who prefers lower guaranteed returns with all the outcomes known, rather than potentially higher returns but greater unknown risks.
A risk averse investor will avoid any type of risk at all costs. They’ll stay away from high risk, high return investments, while preferring investments which are guaranteed and provides a sure return. So they’ll invest in government bonds and index funds.
A person’s propensity to taking risk is determined by their perception of the situation, what they feel comfortable with, which suits their personality.
What risk and safety experts claim, is that there are a lot of attempts to minimize ones risk taking tolerance, but what most will often fail to take into account is their personality.