I like this book a lot as it really aspires me to be a more decisive person and take on more risk. The way the book is written makes me feel very refreshed after reading it. I decided to buy this book from Amazon.com after reading a copy from the library.
One of the most important principles in wealth building : you must go where the market is. She defies the old maxim that real estate is about location,location,location. Instead the author talk that its about education,education, education. How can you know if a location is right unless you’ve learned about the area, the economy, proposed future development, and population trends? You can’t. Education enables you to take smart risks that look crazy to people who don’t have the same information. You’ve got to educate yourself, learn the telltale signs of a boom in the making, and then act quickly with a system in mind.
Kendra’s Risk/Reward Equation :
(Smart Risk + Reward Assessment + Research and Planning) * Persistent, consistent action = Positive Results
Smart risk means the risk you’re looking at fits your goals and reflects a modicum of sense. You might not know if the risk is worthwhile until you start digging and analyzing the data, but you know if it fits your objectives, your skill set, and your resources.
Reward Assessment means you have calculated whether or not the potential reward involved makes the risk worthwhile. This is often a matter of opinion and depends greatly on your goals and situation.
Research and planning means that once you decide the risk and reward are worthwhile, you educate yourself and create a strategy.
Persistent, consistent action means that once you jump into your risk, you don’t stop working until you realize the reward and you always act according to your plan. You’ve also got to stick to your plan.
I think it’s wise to get into the habit of taking risks in your personal life so you learn how it feels to be uncertain, to not be good at something, and to fall on your face and get back up. Try public speaking, singing in front of an audience, running for local office, or taking a martial arts class Do something that makes you a bit afraid. The fear of risk comes from the fear of uncertainty, of not being in control of all events. But if you can twist that fear around, you can turn uncertainty into a source of energy and power. And that’s when you’ll get off the treadmill and make real change happen in your life.
Uncertainty and risk are sources of power if you choose to see them that way. As with the rest of life, it’s all in how you look at it. If you choose to view uncertainty as fearful, it will be. On the other hand, if you choose to view it as an opportunity, a period of time when the outcome is not guaranteed and you have the ability to influence events with your hard work, creativity, and smarts, then you’ll find risk to be absolutely electrifying. That’s the attitude you have to develop, a reflex that sees a potentially risky situation and instead, of first looking at how it could blow up in your face, first saying to yourself, “Where’s the great opportunity here?” Because more often than not, there is an opportunity. As a matter of fact, taking informed, wise risks becomes habit forming.
Risks can be governed by three core principles that I called the Three Ates. The Three Ates are three things you must do tomake a risk worthwhile. There are 3 Ates :
1. Calculate “calculated risk”
2. Initate – Once you’re informed and prepared and have decided the risk is a good one, act first and act fast. Force the action. Take control by being decisive and being a catalyst for other people. Be consistent in your actions and never, ever quit.
3. Mitigate -Before you dive into the risky sistuation, look for ways that you can benefit even if it doesn’t pay off, because not all calcuated risks pay off.
The book even quoted Brian Tracy’s words “The more you seek security, the less of it you have. But the more you seek opportunity, the more likely it is that you will achieve the security that you desire.”
Myth 1 : Risk is bad.
Truth : Risk is essential
Kendra’s Rule of Risk 1
Those who will not risk end up producing wealth for others rather than themselves.
Taking wise, calculated risks gives you control. In fact, not taking risks is bad. Of course,Reckless, poorly planned or self destructive risks can be catastrophic.
Myth 2 : Risk takesrs cant afford to make mistakes.isk is bad.
Truth : Making mistakes is the way risk takers learn.
Mistakes are the source of greatest inspiration. If you are not making mistakes, you are not taking enough risks. Think about it : if you ‘re not making any mistakes, then you’re firmly in your comfort zone, where you know your skill set is sufficient, you can predict what’s to come with reasonable accuracy and you have little apprehension. You’re in a rut. That’s not security. That’s stagnation.
Myth 3 : Risk takers are fearless.
Truth : Risk takers feel fear but don’t let it control them.
Fear is natural, and there’s not a risk taker out there who doesn’t feel fear at one time or another. Some feel fear all the time. Fear prevents you from taking stupid risks or from letting your emotions overrule your common sense and make you do things you not only know are dangerous but that you are ill prepared for. Only fools feel no fear.
Myth 4 : Risk takers are overnight successes.
Truth : Becoming a smart, brave risk taker can take years of learning.It doesn’t matter how great a risk you take, you can’t fight the fact that success takes time. Even those who are supremely talented and jump into professional sports or music years before their peers take time to blossom. Behind every so-called overnight success lies a long back story.
Myth 5 : Risk takers are born, not made.
Truth : You can train yourself to embrace risk.
Your ability and willingness to risk depends on who you are as a complete person, not just on your aggressiveness, your emotions, your threshold for danger, or anything else. There are 3 things you should do consistently to elevate your risk threshold :
1. Find new explanation for failure
Wise risk takers accept their own errors but know they are temporary and can be corrected, recognize external factors for what they are, and are always determined to try again.
2. Start taking small risks.
Dip your toe in the water and do small things that take you out of your comfort one. That’s one thing no one tells you about a successful risk – it’s an incredible high! Once you get used to small risks, take larger ones, then larger ones.
3. Hang out with risk takers.
If you make friends of people who are always pushing the boundaries and trying new things, you;ll learn the language of risk takers. You’ll be inspired. You’ll see they’re not very different from you, they just have a different outlook on life.
Myth 6 : Risk leads to financial ruin
Truth : Wealth requires risk.
Taking a calculated risk is often the best way to create wealth for yourself. Risk always suggest the possibility of loss. If it didn’t, it would be called certainty.
Myth 7 : Risk is for the young.
Truth : Risk knows no age ceiling.
I think the older you are, the more risks you should be taking. First, as you get older, it’s natural to want to slow down, to get into a comfortable rut and to stop taking risks. The minute you do so, you stop growing. You quit dreaming. And you wait to die. Instead, I think older Americans should be on the lookout for risks – starting home based businesses, travelling to new places, getting involved in the arts or politics, stepping out of long yeras of comfortable, familiar behaviour into things that are a little scary. As we age, we own it ourselves to consciously explore ways to continue risking, growing and challenging ourselves.
The second reason that the author believe that older people should take more risks is obvious : they have more experience. Older people have hard-earned judgement, perspective, and experience that younger people can’t come close to matching. Those qualities can be tremendous assets in a business deal, an investment, or an entrepreneurial project.
Myth 8 : Risks are always obvious.
Truth : Some risks will only be seen by the educated.Most often, the risks you’ll come across will be subtle, quiet chances to revector the course of your life : meeting someone who wants to talk about starting a new business with you, reading an audition notice for a local summer stock theater, passing runners in training for their first marathon. How do you start recognizing these quiet, under-the-radar risks? You’ve got to know yourself, know what makes you comfortable and what scares the daylights out of you.
When you encounter a person, an audition notice, a business opportunity or a sporting event, you got to be able to ask yourself these questions :
1. Is this situation outside my comfort zone?
2. If it is, why?
3. Is it something I want to explore?
4. If so, what do I need to do ?
Start asking yourself those questions constantly, whenever your mind runs across a situation or opportunity that’s unfamiliar. Slowly, you’ll train yourself to see the risks that others ignore because they’re too busy looking for the bright lights and loud music.
Myth 9 : You have to be first in line for your risk to pay off.
Truth : If you’re in the right place at the right time, it doesn’t matter.One of the biggest advantages of taking more time to prepare is to let somebody else make big blunders, discover the swampland under the construction site, the pending fraud charges against the would be partner.
Myth 10 : You’ll get to it someday.
Truth : If you don’t do it when the chance appears, you won’t do it.
Breaking out of a rut and stepping out of your comfort zone takes energy, planning and goal setting. It’s not easy. Unless you take specific action to being tackling the risk that you’ve been dreaming about, you will not do it. Instead of talking about your risk or trying to jump into it with both feet before you’re ready, you can take a step at a time, a day at a time. It’s not glamourous, and it’s not climbing mountain or ballooning across the world, but it is progress. You’re moving farther from your comfortable rut every day. And that can only make your life better.
Without risk, there would be no reward. Barring miracles, good things don’t just fall out of the sky in your life, do they? If you want to build a multimillion-dollar retirement nest egg that will let you move to Maui at fifty, then you’ve got to accept greater risk in your financial portfolio than somebody looking to retire at seventy and live modestly. You’ve got to buy stock in more volatile companies, time the market and maybe even buy high-rate junk bonds that offer a big potential payoff but zero security. The greater your risk, the greater your reward. The flip side, is that you’ve also got a greater chance of disaster.
One thing you’ll learn as you venture into more risky situations is that no matter how much you anticipate and plan, there are factors in any risk you cannot control. You can plan from now until doomsday, but real life seldom cooperates with plans.
One of the most important lessons I’ve learned in my years as a risk diver is never get complacent. Never assume everything is in the bag until the contrats are signed and the check clears. If you get complacent, you;ll get sloppy. It’s always safe to assume things can and will go wrong until they prove otherwise. Thinking on your feet is a matter of practice. As you involve yourself in more risks and step outside your comfort zone more often, you’ll develop the ability to find fast, creative ways to solve problems.