The Key to Better Finances and a Bolder Life
Risk! It is not just a board game I avoid at family gatherings. Risk is the possibility that something will go wrong. Or, as the brilliant Carl Richards says, “Risk is what’s left over after you think you’ve thought of everything.”
The word itself used to make me run for the hills! I was risk-averse, to say the least, in my financial life and beyond.
But, eventually, despite my best effort to avoid it, risk found me. And it became clear that risk was always going to be around, like glitter after a craft day. So, I decided, if I can’t have no risk, then I better get to know risk.
Here’s what I did — I made it my pet!
Just like a scruffy, flea infested stray that wandered in and wouldn’t leave, no matter how much I tried to shoo it away, I brought risk into my house and tried to tame it!
So, let me introduce you to my imaginary dog Risk, who has come to live with me, fur-ever. 🙂 I’ll explain the basics of managing risk, and some of the unexpected benefits of embracing it.
See if, by the end, you can’t find it in your heart to make friends with your own pet Risk! It will definitely improve your finances and might just lead to a bolder life.
Ready or Not, Here Comes Risk
When Risk first arrived, I wasn’t ready for it. I had been desperately trying to keep it at bay, trying to follow the safe recipe: go to college, get a respectable job, marry a hometown boy.
Of course, I had seen Risk around. Like a bull in a china shop, he thoughtlessly knocked about on a whim. Sometimes digging up a garden (sprinkler repair cost), darting through traffic in pursuit of a squirrel (car crash – ouch), or snatching a sandwich off an unattended plate (there goes lunch).
Risk and I would eventually collide! At the age of 34, I suddenly found myself without a career, money, a spouse, or a family. But that’s a long story for another day.
Let’s just say, I found myself, dazed and confused, eye to eye with the metaphorical mangy mutt I’d been trying to avoid.
Risk was like, “You left the door open – so I live here now?!” Making himself right at home, as he leapt onto the couch with muddy feet to mark his territory.
As stupid as I felt for thinking that I would be the one person who would be untouched by Risk’s antics, I couldn’t be mad at him! He was just so blissfully ignorant of his destructive nature. It was apparent, Risk was not vengeful, he was just indifferent to the world around him.
Getting a Handle on Risk
Like trying to get a handle on a feral dog running roughshod through your house, getting your financial life in order can feel overwhelming and impossible.
I started with a very small step, tracking my money! And I used an app for it, so it wasn’t that hard. All I did was look at what was coming in and what was going out.
Then, I found Vicki Robin and Your Money Or Your Life. This book drives home how we are all trading our time for money. And often, we’re spending a lot more of our time and money, just to make money. Like buying clothes, commuting, happy hours to decompress from work.
Once it was framed in that way, I was able to really prioritize what I wanted to spend on, and it made budgeting much easier!
Most importantly, I started building an emergency fund.
Once I finally felt like I had a few months’ cushion in place, knew exactly where my money was going – I felt like I had made huge strides in managing Risk. It was like I had given the shaggy dog a bath and taught it to pee outside.
Empowered by the small successes, next step was to look at debt. I worked to get rid of any “bad” debt and whipped my credit score into shape.
Last, I looked at insurance: health, car, home, life – maybe pet insurance? I wanted to make sure I was doing what I could to cover the big whammies that could totally ruin me financially.
With a little bit of effort, Risk got more and more manageable all the time!
To recap, the basics of getting your pet Risk under control!
- Prioritize and track your money
- Build an emergency fund
- Address debt and credit score
- Make sure you’re appropriately insured
Risk As Motivator
Once I really got to know Risk, I found it was always trying to drag me out of the house!
And like when your dog sniffs strangers crotches or knocks lollipops out of a child’s hand, lots of awkwardness can ensue when you take Risk out for a walk.
Risk can actually be a motivator—it reminds you that life is short and uncertain, so why wait to do the things that matter? Whether it’s investing in the stock market or finally taking that pottery class, risk can push you to take action.
It can help you appreciate what you have, keep you from procrastinating, and encourage you to embrace those “what ifs” with excitement rather than fear.
For instance, I could never bear the thought of losing a single penny of my hard-earned money until Risk showed me that I would never achieve my financial goals that way. I needed to learn about investing – and then I had to actually do it!
Sure, it was scary, and there was a lot to learn. I made mistakes along the way. But eventually I found an investing style that works for me. Risk taught me not to keep all my socks in my one basket, or rather, to diversify my portfolio.
Risk helped me professionally, as well. Having my finances in order, I discovered I could afford to take some chances at work. I could speak up, take on learning new skills, strive for a promotion – which I ultimately got!
After all, sometimes Risk ends up leading to good things; more often than not, actually.
So, to reiterate, once you start to know and understand Risk, you can start to:
- Invest in your future
- Invest in your self
- Diversify your assets (financial and otherwise)
Risk Will Bite You
Of course, Risk will eventually do damage—no matter my level of forethought or preparation. Some things are negligible, like destroying a pair of shoes. Or Risk can really bite you in the ass!
Time and money fix a lot of the things. But some things Risk destroys are irreparable, and cause lifelong pain. Permanent loss of health, severe financial set-back, or unthinkable things worse.
I always try to remember, it isn’t personal, and it isn’t within my control. Its just the nature of Risk.
Risk’s Cousin — Luck
But, since getting to know Risk, his cousin Luck has started to come around. Poor Risk, having such a handsome, charming cousin. It must be like being Jesus’ younger brother.
“He’s a carpenter, I’m a plumber — you do the math.” (One of my all-time favorite jokes :))
Luck came and brought me a new love interest, got me a better job, and made my bank account grow. When Luck’s around, I feel on top of the world!
But alas, Luck is not loyal – he comes and goes.
Risk however, my trusty friend, is always there. Like in the beloved children’s story Little Prince, I tamed him, and he tamed me. He is mine, fleas and all.
True Risk
Risk is lurking around, whether you choose to recognize it or not. At some point, it is going to destroy something you love. But you don’t have to be an easy target!
The only true risk is ignoring risk.
Some basic risk mitigation can be done. Financial risk mitigation, especially, will go a long way in making your life smoother! And once you have a solid financial base, you can let risk provide motivation, inspiration and perhaps open the door to unexpectedly lucky things to come into your life.
Therefore, instead of ignoring risk and hoping it will leave you alone, like I did for a while, try embracing it. It will find its way into your house eventually, anyway — as it did mine!
Do your best to not let risk run wild, but understand its nature. Its a beast with a mind of its own. While not malicious, it will misbehave from time to time, unpredictably.
So, what does your pet Risk look like, can you give it a name? Is it a Fluffy, Rocky, or perhaps a Petunia? Are you ready to accept that you have a forever pet, for better and for worse?
If not, what can you do today to start getting to know your Risk? After all, it is the key to a better and bolder life!
Live a Life You Love
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