How to take intelligent risks

Recently, I covered my hallway in wallpaper I bought online (via Wallpaper Weekly). Everyone I showed the wallpaper to said the it would be too busy a pattern. But I loved it. So I bought it anyway.

There are a lot of problems with my hallway now — most notably, I used Elmer’s glue instead of wallpaper paste and I’m going to have to pull down the wallpaper and start over. But every time I walk through my hall, I think about how important it is to take risks with my house — because that’s what makes it mine. Which, of course, is very similar to a life. You can live someone eles’s tried-and-true template for a life, or you can make your life your own.

So many of the questions we grapple with in our life are about this very type of risk taking. We know what we want to try, and we’re not sure if we should try it. Moving across country. Writing a novel. Starting a business. Painting a room.

I’m starting to think, though, that we should evaluate risk in terms of process. Do we like what we are doing during the time we’re taking the risk? Because if you enjoy the process, the weight of the outcome is not so heavy.

I liked the solitary process of wallpapering. I liked making copies of family photos and gluing them to the wall. I like seeing how it all turns out — what works in my house and what doesn’t.

So I ask myself, what is the cost if the risk does not work out? But when I consider process as well as outcome, then the scales often seem to tip in favor of the risk. Here’s are five things I keep in mind when assessing risk:

1. Long-term regrets are usually about not taking more risks.
If you ask people at the end of their lives what their biggest regret is, it’s common for the regret to center around not taking more risks. The same is true of younger people. Ran Kivets is a psychologist at Columbia University who studies winter break. He says that in the short-term college kids regret not having studied enough, but in the long-term, college kids regret not having had more fun. So it’s no surprise that of the most popular posts on my blog is about regrets over getting straight A’s. (Hat tip: Joshua Althouse Cohen)

2. Being wrong costs very little.
In general, people don’t care if you’re wrong; it’s your life and you get to make mistakes. Also, in general, people don’t care if you’re right because they are too interested in themselves. And okay, it’s true that if you invest a lot of money being wrong costs a lot, butut there are very few risks we consider that require a huge outlay of money and a 100% risk on that money. Instead, risk-taking generally requires a relatively small percentage of the money you can earn. Fortunately, the way we get the most happiness from spending money is by spending on experiences. And what better experience than taking a risk and finding out what it will be like.

3. People bounce back faster than they expect.
Most of us are much more resilient than we realize. Daniel Gilbert, professor of psychology at Harvard, explains that we each have a set-point for how happy we are going to be, and we mostly just stick there. Winning a lot of money doesn’t make us much happier, and losing the ability to walk doesn’t make us much sadder. So it’s fair to conclude that most of us overestimate the impact risk-taking will have on our lives.

4. Don’t make the risk bigger than it needs to be.
For example a lot of people think they need to quit their job to try starting a new company (you don’t) or someone who thinks they need to completely dump one career to try a new career (you don’t.) The best risk takers are in fields like entrepreneurship, hedge fund management, and excavation. The thing these people all have in common — those who are successful in their field — is that they are constantly working to mitigate risk before they take the risk. Sometimes just looking at how someone else has approached your challenge can show you a less risky approach to taking the risk.

5. Most risks turn out fine.
In our minds, that is. Gilbert shows that we are able to reframe a poor decision in order to think it was a good decision. Having kids is his favorite example to use. Having kids makes us less happy, but we invest so much time and money into raising kids, that we’re able to convince ourselves it made us happy, and we don’t have regrets. And successful people who make big career mistakes are able to reframe the mistakes so they don’t matter. Also, inherently positive thinkers don’t usually have regrets over the long-term. (Wondering if you are one of these people? Take the test (middle of the page)

You might have noticed in the wall paper picture that there are a lot of lumps. That’s because I was so excited to get started the day the wallpaper arrived but it was 9pm and I didn’t have any wallpaper paste. So I googled and it looked like I could use Elmer’s glue. So I did. Five bottles. And it would have worked, but I didn’t know you put the glue on the paper and not the wall. So I have to tear down the paper and start over. But I don’t care. I like the paper and I had fun learning how to do it.