How to Eat an Elephant: Achieving Financial Success One Bite at a Time

Chapter 6

Risk and Living Insurance

Risk appears when we are unprepared.

—Frank Wiginton

Even with the best-laid plans, unexpected things can happen. Trying to anticipate some of those problems can go a long way toward ensuring your success. As you work toward your goals, you may already be aware of some of the problems you might encounter in trying to achieve them. Inevitably, there will be one or more surprises or problems that you may not have planned for. Some of these problems you can manage and deal with, while others are out of your hands.

What I'm really talking about is managing risk. In order to accomplish our goals and deal with the mishaps along the way, we need to do our best to manage the risks involved.

Managing the Risk

Managing risk can be done in four different ways:

• Avoiding the risk
• Reducing the risk
• Sharing the risk
• Retaining some of the risk

Avoiding the Risk: This is as it says: changing what you are doing so that you no longer face the risk. An example might be to take public transit to work rather than driving. This avoids the risk of you being in a car accident.

Reducing the Risk:

This involves taking actions to lessen the risk. If you do drive to work, you could reduce the risk of being in a car accident by slowing down or travelling outside of rush hour. It could even be something as drastic as moving closer to the office to shorten your drive.

One Frank Thought

Networking can be a great risk-reduction strategy by providing you with a wealth of resources ...