My nephew is going to college to study actuarial science — the art of calculating risk — and I wish I could deploy him to give me some odds on some personal decisions instead of just having him calculate insurance rates or credit worthiness.
Lately I have been weighing the merits of several decisions that involve a host of unknowns. Should I buy that $500 generator or take the chance that the power won’t go out again and risk flooding my basement without a sump pump? Is it worth it to go through the discomfort of a colonoscopy on the chance that they will find something but risk the possibility that in the process they will tear my colon or do one of the other nasty possibilities the doctor listed in his pre-op exam? Will a business loan propel me into an exciting new venture or just rack up debt? Should I buy a $250 CUJO firewall or hope hackers don’t bother me? There is no way to have a definitive answer for any of these questions, and yet I must choose one of the options.
As you face risk questions in your own life or organization, consider not only the pros and cons of each choice, but also the implications from procrastinating or just letting fate decide. It’s also helpful to have a self-awareness of your overall tolerance for risk — if you know you are adverse, you can consciously push yourself a bit past the comfort zone, but if you tend to fly on the aggressive side, perhaps a bit of caution is warranted if you are feeling some doubt. I’m afraid that until someone starts a personal actuary service you’re on your own to determine whether to roll the dice or not.