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Risking what you can't afford to lose?Tags - risks,poker goals  Technorati tags - risks,poker goals The lower the risk, the lower the possible outcome. The old saying that you should only bet what you can afford to lose is wrong. Unless what you can afford to lose is something big, maybe 100% of your fortune? Okay, that’s usually too much but I hope you get the idea. The thing is that usually the amount you can afford to lose is too little to do you any good even if you manage to doubble or even tripple it. You play on stockmarkets with 100 bucks, you win 100 bucks extra. Did it really make you and richer? I doubt that. You need to risk with stakes that matter to you. As this makes you worry about it and this makes you a better decision maker. So a meaningful stake is a stake that makes you worry, even if just a little. And remember, the less you risk, the less you can earn. Now lets imagine you have achieved a nice outcome. When you have achived something great, on stock markets, in business, don’t hope things to grow a lot more, learn to quit the game. Learn to quit the game earlier than others might do it. While you are risking your chance to make a lot more, you are also risking to lose all what you have gained. Risks are neccessary but you need to end your investments, ventures at peaks. To be on the safer side. Not safe side, but safer side. I know it’s difficult, we all want more, always, but that’s not the way to go. Stop at right times. It’s all about setting your limits and quitting according to them. It’s all about management of your investments, money, ventures. Imagine a poker player who wins 5000 bucks, whether with 8 hours in cash tables or in a tournament. He’s been doing good. And now he wants to do even better. But you need to keep in mind, lucky strikes never last. And most likely the poker player will not go home with 6000 bucks, neither 5000 but rather 4000 or less. Yes, he still won, but by accepting less he could have taken home more. Know your limits, your goals. And once you reach them, get out of the game. That’s part of good money management. And these limits and goals should be set for both possibilities – for gains and losses. Yes, sometimes they say persistance is good. But...when the plane is starting to fall, it probably will, so take your parashute and jump! Don’t hope you’ll make it otherwise. Hope is often for fools. Now what? Digg it | Add to My Yahoo | Add to Google Reader | Add to Del.ICIO Comments (0) / Link to this topic - http://www.businessadvicepro.com/business-thinking/ Risking-what-you-cant-afford-to-lose--12.html |
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