Recently I started a new job and had to ask myself this question to determine which retirement plan to chose. If I was to expand this question beyond investment related risks I would say that I like to think of myself as a calculated risk taker. But how true is that?
I use a VPN on my cell phone and computer, I filter water when I go backpacking, haven’t gambled in nearly a decade and read product reviews before making major purchases. On the flip side, I regularly train in a contact sport, I drive a car, eat fermented foods which have not been refrigerated for months, and I love eating at potlucks. One of the people I respect most in this world is very particular about where he eats. I have never seen him eat at a potluck, but … he did used to jump out of planes for a living.
Life is made up of millions of small choices. It’s hard to know which ones will really cost you. Humans appear to be hard wired to overvalue anecdotal evidence and are prone to outcome bias.
One of the salient pieces of advice my dad tried to convey to me ‘be careful who you hang around with.’ I have come to realize that other people’s risk profiles can strengthen or compromise your own. While I may feel comfortable having a friend watch my drink while I use the bathroom at a bar, their level of caution and awareness may result in me getting roofied. My brother will not eat off anyone’s plate nor share their beverage, with the sole exception of his wife. This may be one of the reasons he has successfully avoided getting herpes.
Most of us have avoided opening questionable emails from friends who have gotten hacked, but technology is advancing disproportionately to our ability to critically assess it. How many people do you know that have used the Face App which modifies one’s photos to show an aged version of them? I was almost tempted to do it myself, until I saw a post from one of my IT friends.
Many great things are achieved by taking risks. I do not want to discourage anyone from taking intentional, calculated risks. Instead I propose really sussing out your risk profile and comparing it to the people you spend the most time with.