There comes a time in ones life when taking risk becomes inevitable. We generally tend to be risk averse as risk is associated with danger and not taking risk is perceived to be a sign of security.

The problem with risk is the possible downsides that comes with taking the risk which lead to a terrible outcome but we forget that risk does come with its own rewards or the upsides.

Not taking risks in a way becomes risky as we are limiting ourselves from the potential gains which could drastically improve our life, sort of like iatrogenic where an easy fix to a problem leads to a bigger problem.

Photo by Loic Leray on Unsplash

The problem with Iatrogenics is that by denying ourselves of exposure to stress, risk or volatility in a cozy environment can actually backfire and lead to a suboptimal life full of worries, fears and mediocrity, which can stand in the way to achieve self actualization which is the top most need in the Maslow’s hierarchy of needs.

The way ahead would be to avoid Iatrogenic and learn to manage risk so that it ends up benefiting us instead of us being fragile.

Seneca’s barbell strategy is one of the interesting strategies that can be considered for managing risk in an antifragile manner. The idea is mainly about how one can clip the downside from a situation and maximize the upside with infinite rewards. This is done by taking very low risk most of the time and rarely getting involved with something very risky with a very high reward. This way, risk of ruin which could have terrible consequences is prevented and yet, one is exposed to a possibility of high reward.

In financial terms, this would mean to have lets say 90% investments in low risk portfolios likes cash, fixed deposits and allocating the rest 10% in very high risk, high reward investments. This way, one would limit the losses and yet be exposed to a possibility of very high reward.

In terms of profession , it would be similar to having a stable day job and yet occasionally spending time on personal aspirations which could help in advancing one’s profession in a different direction thus clipping the downside and being exposed to maximum gain.

In terms of mastering a skill, this could mean practicing deep work with uninterrupted chunks of time and then not doing anything after that. This is important because rewards or returns are usually non linear and one can reap crazy rewards by dedicating a huge chunk of time and effort in a controlled manner. But of course, doing this every day, neglecting work life balance would not be sustainable and perhaps one should do the same when it comes to leisure as well.

In terms of trying something new, like lets say solo travel or an adventure sport, it would be good to have a backup like a stash of money or some trusted contact within arms reach which clips the down side and yet take bold and risky actions which could potentially provide an experience that could help one grow as a person.

In the end, the greatest pioneers were once risk takers and we owe our civilization and technology to them. So the more we take calculated risk, the more we prosper.

There comes a time in ones life when taking risk becomes inevitable. We generally tend to be risk averse as risk is associated with danger and not taking risk is perceived to be a sign of security.

The problem with risk is the possible downsides that comes with taking the risk which lead to a terrible outcome but we forget that risk does come with its own rewards or the upsides.

Not taking risks in a way becomes risky as we are limiting ourselves from the potential gains which could drastically improve our life, sort of like iatrogenic where an easy fix to a problem leads to a bigger problem.

Photo by Loic Leray on Unsplash

The problem with Iatrogenics is that by denying ourselves of exposure to stress, risk or volatility in a cozy environment can actually backfire and lead to a suboptimal life full of worries, fears and mediocrity, which can stand in the way to achieve self actualization which is the top most need in the Maslow’s hierarchy of needs.

The way ahead would be to avoid Iatrogenic and learn to manage risk so that it ends up benefiting us instead of us being fragile.

Seneca’s barbell strategy is one of the interesting strategies that can be considered for managing risk in an antifragile manner. The idea is mainly about how one can clip the downside from a situation and maximize the upside with infinite rewards. This is done by taking very low risk most of the time and rarely getting involved with something very risky with a very high reward. This way, risk of ruin which could have terrible consequences is prevented and yet, one is exposed to a possibility of high reward.

In financial terms, this would mean to have lets say 90% investments in low risk portfolios likes cash, fixed deposits and allocating the rest 10% in very high risk, high reward investments. This way, one would limit the losses and yet be exposed to a possibility of very high reward.

In terms of profession , it would be similar to having a stable day job and yet occasionally spending time on personal aspirations which could help in advancing one’s profession in a different direction thus clipping the downside and being exposed to maximum gain.

In terms of mastering a skill, this could mean practicing deep work with uninterrupted chunks of time and then not doing anything after that. This is important because rewards or returns are usually non linear and one can reap crazy rewards by dedicating a huge chunk of time and effort in a controlled manner. But of course, doing this every day, neglecting work life balance would not be sustainable and perhaps one should do the same when it comes to leisure as well.

In terms of trying something new, like lets say solo travel or an adventure sport, it would be good to have a backup like a stash of money or some trusted contact within arms reach which clips the down side and yet take bold and risky actions which could potentially provide an experience that could help one grow as a person.

In the end, the greatest pioneers were once risk takers and we owe our civilization and technology to them. So the more we take calculated risk, the more we prosper.