Risk. It is part of life. Everything we do entails some level of risk, whether we like it or not. Unfortunately, some in our midst believe it’s possible to erase all risk by implementing policies designed to control human behavior. But reality refuses to cooperate. There are no shoe covers for life, covers that protect against all harm.
The shoe cover analogy works perfectly to describe what so many people are trying to achieve. Take a pair of state-of-the-art men’s shoe covers from GC Tech. They protect a man’s dress shoes against snow, rain, road salt, and every other form of environmental exposure. A man’s shoes stay clean and dry when protected by GC Tech products.
Life doesn’t work that way. There is nothing we can envelop ourselves in capable of preventing exposure to disease, injury, financial loss, heartache, and so forth. And truth be told, even the best pair of shoe covers can fail. So even they are not risk-free.
Life Can Never Be Perfect
The folly of attempting to erase risk doesn’t make sense. And yet, we keep doing it. Perhaps it is rooted in the mistaken belief that we can create a perfect world for ourselves if we just work hard enough and do the right things. Maybe we have allowed ourselves to be bamboozled by fairy tales and dreams we want so desperately to come true.
It matters not how healthy your lifestyle is, death will eventually find you. Sound financial practices, while very wise, do not guarantee you’ll never have money problems. Getting a college degree does not equal a promise of a good job for the rest of your life.
The fact is that life can never be perfect. Running ourselves ragged in an attempt to make it so is a fool’s errand. It only serves to discourage and defeat. In only serves to make us more miserable. And truth be told, we tend to be more miserable the harder we work to attain perfection.
Risk Aversion Is the Key
So, if there are no shoe covers for life, how do we handle risk? The key is a term very familiar to investors: risk aversion. In the financial world, risk aversion is a personal measurement of how much risk you are willing to take with your investments.
Some investors are willing to lose significant amounts of money in return for the possibility of making equally large profits. Other people are much more conservative. They do not take huge risks because they don’t like the idea of losing so much. Their investments are a lot safer.
We can apply the same principle to nearly every area of life. For example, what is your risk aversion in terms of your health? If you are like the conservative investor, you might go to great lengths to prevent getting so much as the common cold. You might stick to a strictly healthy diet and exercise seven days a week.
On the other hand, you might be like the aggressive investor willing to take risks. You are willing to do things like bungee jumping and skydiving. For you, the potential risk to your health is worth it in exchange for the ability to do the things you love to do.
The Middle Ground
For all of us, there has to be a middle ground between risk aversion and acceptable risk. There are no shoe covers for life. Ditto for strategies or methodologies that completely erase all risk. If you are attempting to live a 100% risk-free life, you are pursuing a life you will never obtain.