Recently, I posed this question to some of my prior guests, “How would you advise a young person to reduce risk in their life?” The answers rolled in from 40 guests! I grouped the responses into five categories: Building valuable relationships, managing finances, personal growth, risk management, and having awareness. There are tremendous pearls of wisdom!
“Don’t be afraid to ask for help.”
“At each stage in your life, find mentors and friends you trust and who you feel are invested in you – listen to their advice.”
“Get married, listen to your wife, stay married.”
“Alongside your time and money, the most important asset allocation decision you will make is with the trust you invest in a select few people: your spouse and family, your friends, those you work with, and those you entrust to take care of whatever or whomever you cannot personally care for. (You’ll note your choice of fund managers and CEOs of stocks you buy only fits into that last category).”
“Start investing early to create wealth and always live within your means.”
“Pass CFA exams and be a CFA charterholder.”
“Invest in what you truly understand.”
“Study money! If you want more of it, you must talk about it and think about it daily, which means, read books; all and any book with the word money in the title.”
“Hold when your investments drop a little; hold even when they go up as much as you wish. There’s more on the horizon for you, always.”
“The worst income source you will ever have as an adult is a traditional job.”
“Find ways to put multiple irons in the fire, aka develop skills that are valuable among several industries, and develop relationships with colleagues in a variety of industries and professions. This is much like the diversification of assets in an investment portfolio. However, the flip side is reducing risk generally results in lower overall returns since the investments are not overweight in any single industry (or portfolio holding). So, one must be content with not experiencing exceptional returns in exchange for reducing risk in life and career choices.”
“Get away from the mistake, learn from it and try to avoid it in the future.”
“Be honest about your mistakes and losses so you can learn from them.”
“Live with no regrets. The memory of not chasing your dream at all is worse than the pain of going for it and failing.”
“Curiosity is a superpower; use it to be open to what you don’t know and never be closed to what you learn.”
“If there is a mismatch between your long-term goals and your everyday actions, there are professionals out there who can help you.”
Anonymous prior guest
“Invest in yourself; your mind and hands are the engines of your wealth.”
“Look beyond the current scenario.”
“Give without expectation and receive without resistance.”
“Let time do the work for you, do not entertain the daily emotional rollercoaster; instead, stay true to your long-term strategy.”
“Be bold and live your dream, for life is short.”
“Be curious and get out of your comfort zone.”
Devyani Vaishampaya
“Study well, then select the best opportunity, then manage properly and get perfect results.”
“Always have a plan.”
“Test everything for yourself. Don’t believe everything you read. The path to greater results and a deeper and more meaningful life is the path less traveled.”
“Don’t rush. Pause, think, what’s the worst thing that could happen? What is the impact on my future life?”
“Embrace risk, but do it with caution; learn from your mistakes.”
“The best way to reduce risk in life is to take many small chances and make as many mistakes as possible early on because nothing builds resilience more than past failures.”
“Risk is something you can’t eliminate, but you can manage it with knowledge.”
“Life is full of risk, so is a business, and being a finance professional, we should always try to take on calculated risk.”
“You can’t eliminate risks in life, but you can manage them. Start by understanding them.”
“Certainty is uncertainty; keep calm, don’t panic, and stay diversified.”
“Don’t assume that “risky” means taking the less-traveled path; sometimes, the riskiest thing to do is to play it safe and assume that you have control. Control is an illusion. Plan for the worst-case and figure out how to get comfortable with that – everything else is gravy.”
“As we know, there is no return without risk, so be abundantly vigilant to identify and analyze each risk unemotionally...separate your beliefs from facts. Good luck!”
“The best way that I can think of to reduce risk is to spend time beforehand getting to understand whatever it is you want to invest in, and by all means like I stress in my book, ‘Your Time Is Now’ – seek the advice of PROVEN experts!”
“Think twice before you decide on major issues, if feasible; sleep a night in between.”
“Train and increase awareness of your biases and correct for these in the face of transverse risks.”
“To deal with life’s risk, identify the risk, determine the specific characteristic of when this risk is occurring and implement your rescue plan without hesitation.”
“The best way to deal with risk in life is to contemplate what can go wrong before you act.”
“Always remember there are two sides to every coin, i.e., weigh the pros and cons.”
“Risk management is as much art as science – when done properly, it’s as much to do with scenario planning as with formulae. Risk is when some or all the things that you haven’t thought of actually happen. Basic risk management involves thinking of as many different outcomes as possible and mitigating their effects. Advanced risk management involves mitigating effects of all the things that you haven’t thought of and couldn’t possibly think of.”
Those are the golden nuggets my guests shared, which can help you build valuable relationships, manage finances, personal growth, risk management, and have awareness. To conclude this post, I want to share a quote to live by from Eleanor Roosevelt:
“Learn from the mistakes of others. You can’t live long enough to make them all yourself.”