This is Why We Are Comfortable in Taking “Big Risks”

Lately, I’ve been reviewing Risk registers for large and long-cycle projects. It’s quite the chore to understand and fathom how teams come up with the possible risks and how they’re weighted. And then I realized, why not utilize these same Risk Management principles in our lives. Many of the adventures and goals we choose to pursue are basically long-cycle projects. Not only the big picture stuff, but we all have a knack for some slight risk everyday, like (horse race) betting.

Day at the races. Let's win some money! #Saratoga #EmpireState #horseplay

A post shared by Bernadette Joy Cruz Maulion (@bernadettejoycm) on

Bernadette in Saratoga

Stage 1: Leaving and moving to a new state


(Image via Flickr Ben Stephenson)

As an example, we definitely used some Risk Management tools when deciding to move to North Carolina. How? By first identifying our risk with these three basic steps:  (1) Determining our objectives (2) Reviewing internal and external factors, underlying assumptions and constraints, and other uncertain events that, if triggered, will adversely impact our objectives and (3) Developing our risk by, If event, Then impact. Finally, implement our risk response strategies.

In our Moving to NC example:

Objectives – Break away from unwanted stress in our lives, build independence and wealth faster, and to generally be happy.

Factors – Unknown job market, making new friends, relationship strain with a different stress, lesser and unknown support system


  • If we cannot find a job, then we will deplete our savings and take longer to build wealth.
  • If we can’t find new people to connect with, then we would rely on old friends and constant travel back to NY.
  • If any of these factors places a strain in our marriage, then we would be far less happy.

With the risks evaluated, we decided whether to (1) accept, (2) reduce, (3) transfer, or (4) avoid. A risk response strategy should address each and then re-evaluate them again to determine the final risk tolerance.  And this is where people show a generally low risk tolerance level for certain things. In my opinion, they either don’t have enough contingency funds or they have a poor risk response strategy. So to be comfortable in proceeding with the decision to move, I had to be comfortable with our strategy or have the funds to cover our asses.

For each of the example risks above, I reduced my risk of not finding a job in NC by obtaining a professional certification, applying for jobs I was over-qualified for, and even applying for jobs that would pay much less than I would normally expect. Bernadette is also now continuing her education to expand our opportunities. Furthermore, to mitigate the risk of making new connections as adults, we put ourselves out there by trying new things as soon as we arrived in town. See our 8 Easy Tips to Meet People.

Stage 5: Acceptance

Ultimately, before we decided to leave NY we accepted the risk of the strain in our marriage if everything falls through and none of this works out. That was probably the biggest risk for me and scary for most newlywed couples. Fortunately, growing with Bernadette as a couple, has increased my risk tolerance for these strains. There was a greater impact for taking this risk, moving to a new place, and chasing our dreams instead of staying put in our previous status quo where we weren’t either happy or unhappy to begin with.

Now, after about 18 months of this life project in Charlotte, none of our initial risks have been triggered and we couldn’t have been happier. We are still monitoring, controlling, and assessing new risks daily. But the biggest difference is that our risk tolerance is EVEN HIGHER where we can mitigate and accept risk beyond our prior comfort zones to experience and achieve our end objective to live an effing good life. And recently, that includes buying another house in town and investing in a startup technology company. I never would have dreamed of these opportunities if I played it safe all along.

Are you stuck in the status quo and afraid to take some risks? Or let us know if you have some advice on taking even larger risks. That would get us closer to selecting and starting our own business one day.

ps. For the technical geeks out there who want to quantify your risks:

For each of the identified risks, you should assess the probability and impact from Very Low to Very High and from Minimal to Critical, respectively. Ideally, we could convert each of the risks to dollar amounts where the

Expected Monetary Value (EMV) = P x I, where

P –  probability that the risk will occur

I – the cost impact if the risk occurs

Plan for Reality risks have a very high probability of occurrence with significant, severe or critical impact and should assume these risks WILL occur and plan accordingly.

Tail Events are risks with extremely low probability of occurrence and critically high impacts! Instead of setting aside your contingency funds, you should consider establishing recovery plans that should be taken if the risk triggers.


One thought on “This is Why We Are Comfortable in Taking “Big Risks”

  1. Pingback: Now is the Time to Get Aggressive. I have no other choice. | the effing life

What do you think?

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s