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Expert Answers to Biz Questions

Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.

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When to Play it Safe vs. When to Take a Chance

There are times when you want to throw caution to the wind and take a chance. In fact, risk-taking is an essential part of living, since there are plenty of times when it’s better to take a chance and fail, rather than not take a chance and live a life that’s too safe and confining. On the other hand, there are situations when you should be as careful as possible before you make a decision with life-changing impacts. We’ll take a look at times when it makes sense to be risky, and times when it does not.

Risks Worth Taking

One of the best things you can do for yourself is buy an experience rather than an item. Think trips to local concerts, or a night in an escape room. If an artist you’ve always wanted to see comes through town, it’s probably worth dropping some money on tickets. They don’t have to be in the front row for you to enjoy yourself. There’s an cliche about how, on their deathbed, no one says, “I wish I had worked more.” If you’re not sure about a decision, think about how often this opportunity comes along. A dinner party at your friend’s house is probably OK to skip sometimes, especially if you’ve had a long week and just want to relax at home with your dog and some wine (but don’t give the dog wine, please). But if it’s a dinner party say farewell for a friend who is moving to Australia? That’s another matter. You don’t have to stay all night, but you’ll likely regret it if you don’t give your friend a proper sendoff.

If the risk is something like taking a new job, think about how you would feel if you didn’t say yes. There’s an old trick that involves asking a friend to decide for you, then seeing how you feel based on the decision you make. If you feel relieved when your friend says no, that could be a signal. If you feel sad and irritated, that may mean taking the chance is the best way to go.

It’s also a good idea to talk to experts in your field  about the new opportunity, regardless of what kind of work you do. If someone with twenty years of experience thinks it’s a good bet, then that tells you something.

Proceed with Caution

Of course, there are some risks that are much more likely to blow up in your face. If you want to make sure your family is taken care of, you need a better plan than “I’m just never going to die.” Start looking for life insurance immediately. Don’t put it off until later, because not deciding is still making a choice, albeit not a very sound one. Don’t choose inaction.

Winning the lottery is a fun dream, but not a great financial plan. If you’re struggling to make ends meet financially, try to look at where you can cut costs. If you need cable, do you really need all those channels? Everybody has to eat, but do you have to eat out with your coworkers five days a week?

In some cases, loans are an option, but make sure to find a reputable lender in your area. Try to only borrow for things that are a good investment, like a loan to buy a house. There are good reasons why housing loans are so common. However, do you really need to take out a loan to help finance your wedding? You don’t want to be paying for a wedding for ten years, especially if that debt hanging over your head keeps you from truly enjoying your marriage.

When it comes to financial risks, be wary of family members and friends who ask for money. It’s natural to want to help out if there’s a medical emergency or other disaster, but be wary of the sibling who always comes to you asking for rent money. It doesn’t matter if they promise to pay you back. Plenty of people loan family members money and never see it again. Only loan someone money if you can take the financial hit from never being repaid, because the odds aren’t exactly in your favor.



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