Acceptable Risks
In a perfect world, I’d be flying to Maine today to spend a week with my family at a lakeside cabin. You know, the type of vacation you really look forward to in the fifth month of an ongoing pandemic! However, we decided that all of the factors involved – being at the airport, getting on an airplane, and then sharing a house – weren’t worth the risk, no matter how badly we wanted to go.
Pandemic or not, our life decisions come down to which risks we’re willing to accept.
We ask ourselves questions like...
Should we just move our investments into cash for a while? You know, until the economy/markets/COVID settle down?
Or...
Since we can work remotely now, should we move somewhere else?
Questions like these – and the emotions that stir them up – are perfectly normal. To answer them well, we should start by recognizing the emotions that cause them and then introduce some reason to the discussion before making any decisions. For instance…
While moving our investments to cash would relieve some of our current concerns about the economy/markets/COVID, what’s the long-term impact? And what if remaining invested is the right decision for our long-term financial well-being?
Or…
Are we willing to give up the community of friends we’ve built – a community that’s easy to take for granted when it’s not as accessible as normal right now – to start over somewhere new? Or do we really just want a change of scenery after hanging out in our backyard for five months straight? And maybe right now isn’t the best time to make a move.
Combining reason and emotion to choose our acceptable risks leads to better decisions — decisions that minimize regret from acting on emotion alone.
With our Maine trip off the table, we’ve ultimately decided to drive up to Michigan for a few days. We settled on staying at a place we’ve stayed at before which gives us an additional sense of comfort. And while risks certainly remain, they are risks we were willing to take in order to change up our environment and get in some socially distanced beach time.
Risk is an ever-present part of our lives whether we choose to recognize it or not. Either way, it helps to remember that we do get to decide which risks we’re willing to take. And using both reason and our emotions in our decision making process tends to serve us well.
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