How Risk-Tolerant Are You?

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In Ruth Rendell’s novel, Kissing the Gunner’s Daughter, an off-duty policeman had just taken his teenage son’s authentic-looking toy revolver from him, and the cop put it in his own pocket. The policeman went to the bank to make a deposit whereupon a man and a boy rob the bank. The man shoots and kills the security guard and runs out, leaving the boy with what the cop assumes is a toy gun. The cop decides to take the risk of pulling out his son's toy revolver. He points it at the kid and orders, “Drop the gun!” The kid’s gun is no toy and he shoots the cop dead.

Turning to the real world, we're all faced with risky decisions. For each of these 13 situations, ask yourself if you'd take the risk. Your answers will help you clarify your risk tolerance: how much risk you’re willing to take regarding your work and personal life.

As you're deciding, consider what, in your case, would be the opportunity cost of making the risky choice. For example, someone who is relatively satisfied in their career would have more to lose in pursuing their dream career than would someone who hates his or her career.

Work

You’ve always wanted a career in the performing or visual arts and been praised by teachers, friends, and family: for example, “You really should try to be a professional singer!” But you’re now 25 and gotten only $50 or $100 gigs: total annual income $2,000. Total annual expenses for lessons, costumes, and travel: $3,000. Do you press on?

You see good burrito shops quite crowded. Contemplating opening your own, you work in one to learn the trade. Now, you think you have a good sense of what to do although you worry about raising enough money, hiring well, quality control, insurance, and complying with state and local government regulations. The other alternative you’re considering is a low-risk one: a job in accounting. Which do you choose?

You see a cool job opening but meet only two-thirds of the requirements and sense that your chance of landing the job, even if you create a great application and prepare well for the interviews, is only 5 or 10 percent. Do you apply?

You’d love to work for Apple but there’s no appropriate job opening. So, on LinkedIn, you find the names of a few Apple employees whose job title suggests they’d have the power to hire you. You know that cold contact only occasionally results in a job offer. Do you take the risk of contacting them?

Your boss doesn’t like an idea that you think is great. Do you take the risk of bringing it up to someone else, perhaps your boss’s boss or at a staff meeting, or do you let it go?

You hate a component of your company’s training program but you saw someone else complain about it and soon was demoted. Do you complain?

Relationships

You have your romantic eye on someone who is more attractive, has a better personality, and a better job than yours. Do you ask the person out for coffee?

You’ve been married for a few years and seen the relationship decline from B+ to C. You like being in a couple and think there’s a significant chance you won’t find anyone better. Do you leave the marriage?

You’ve grown disgusted with your adult child: meanness, laziness, lousy friends, drug abuse. And that’s despite your diligent efforts to be a good parent. Now, your child has just dropped out of college and after a desultory job search says, “I can’t find a job. I want to come and live back home.” The chances of that ultimately benefiting your child, let alone you, are small. Do you say yes?

Health

You’re 20 pounds overweight and your doctor said, “You should lose it.” But you know that the vast majority of dieters, despite the months-long sacrifice, gain back the weight. Do you commit to losing the weight and keeping it off?

You’ve become dependent on your psychotherapist but you’re revisiting the same issues again and again and your life isn’t much better. Alas, you’re pretty sure that if you discontinue, you’ll be worse and, you don’t want to offend the therapist who has tried so hard to help you. Do you quit?

Career Essential Reads

The Problem With Purpose

Getting Write Down to It: Passion and Purpose in Writing

Money

Your friend is a mortgage broker who tells you that you can get a 10 percent annual return by lending on a piece of real estate that has plenty of equity in it. But you heard about a similar situation in which the appraisal was phony and so, in fact, there was no equity in the property and the owner ran away without paying the mortgage holders. You ask your friend, “If the loan is so secure, why doesn’t a bank make the loan?" Your friend replies that the owner said that the banks wanted to charge 12 percent. Do you make the loan?

Recreation

You have long planned a trip to Europe and finally saved up enough to afford low-season prices: mid-November. Even though you’re vaccinated, you’re nervous about going, both because of COVID and because you’d hate if you got the snowy, cold weather that often but not always occurs at that time of year. Do you go?

The takeaway

People vary on all sorts of factors. Risk tolerance is perhaps an under-considered one. Have your answers to these questions clarified anything about your risk tolerance? As a result, is there anything you want to do differently?

I read this aloud on YouTube.