Life’s Risk & Reward: The 5:1 Rule

Not every dream happens the way we think it will. In fact, it’s almost certain that you will have small failures or setbacks along the way. Taking at least some risk is necessary for our career. There’s no return without paying the price.

As a baby, you will stumble and fall too many times in order for you to learn to walk. The same goes for life, business, and in pursuing our dreams.

Companies cannot promise their people lifetime employment. Especially now the world is fast changing. We are in the age of NFTs, Bitcoin, VR, and the soon-to-be (World Wide) Web 3.0.  The speed of change in our workplaces has made it necessary for us to learn new skills and be proactive about “leveling up” our game.

Here’s a more visual representation: Consider all the devices you have at home (ie. our phones, appliances, laptops, etc.) What happens if we don’t update the software, or replace them say after 2-5 years?

My point is if we just do our jobs and just wait for great things to happen, we’re already taking a risk. Why? Because what if all of a sudden, you lose your job? Not having the skills to excel, advance, move up — or even change — our careers is fairly a BIG risk already so might as well risk on something that will give you maximum returns in the long run.

 

THE GOLDEN RULE:

If the reward is bigger than the risks, then always take the risk!

Risk leaving your comfort zone in exchange for making your dreams come true! Risk believing in your business. Risk moving to a new city to experience a new way of living- surrounded by new people, immersed in new cultures, and exposed to new ideas and possibilities. Risk in relationships. You will go through a lot of toxic relationships before you figure out exactly what you’re looking for in a partner. Once in a while, you will get disappointed but one day, you will find that special someone that will make the entire search worth it. Risk going through the bad dates in order to find the exceptional – your ONE TRUE LOVE.

Take big risks especially while you are young because even if you messed up, you still have enough time to cover all the losses and start all over again. If you don’t play the risk game while you’re young, you’re going to play the blame game while you’re old.

Another way to bring asymmetric risk and reward into your life is to use the 5-to-1 rule. The strategy here is relatively straightforward. The 5-to-1 rule means that for every risk, you have the potential to make five gains. What this ratio does is it allows you to have a hit rate of 20%. You can be wrong 4 out of 5 times, but as long as you are right that fifth time, you will break even.

Asymmetrical risk is the concept of taking a risk that will produce a return that far surpasses the risk taken. This is a really important concept that can change your quality of life greatly.

As for me, it was indeed a big risk to move to Abu Dhabi. At first, it was very exciting. I finally got my one big break! I did it. But as days go by, I feel empty. I left my heart to pursue my dreams. Being away from my partner (& loved ones), and giving up my comfortable lifestyle is like trying to swallow a rock and pushing it inside your throat. It was painful and difficult. But I have to risk it in order for me to establish myself and my career. Most of the time, I’d cry and doubt if I made the right decision…

It may not be clear for now, but I know and believe that things will always work out for the best and it will be worth it!

Asymmetrical risk opportunities will take a lot of time to achieve/ manifest, so you should be sure that it is something you are passionate about. Sometimes to attain the reward in an asymmetrical risk situation, you will have to risk your well-being or make a drastic change in your way of life.

 

 

I remember one of my mentors told me when I asked him what is his one advice for me to become successful. His exact words are:

“Be so good that no one would ever dare to replace you!”

But let’s face it. The sad truth is that there will always be someone who is better than you – and that’s okay. You just need to keep growing. The fun part is that people who are better and smarter than you make up your game. Smart people make you smarter. They make you better. They spark interest and introduce you to new concepts, ideas, culture, etc.

Being the best isn’t really the goal for me anymore. Yeah, I want to be great at what I do, but I won’t even be great if I’m paralyzed at the thought of not being the best. For me, the goal is to be happy – to be surrounded with love and be of service to people and provide value to society.

Long gone are the days of spending 10 years at one job just to play safe.

Is the job you have now going to be the same — or even be there at all — in five years?

Look at the way your life is doing right now and imagine doing what you’re doing for the next 10 years. What does your life look like if it progresses in a linear fashion? Are you happy? Are you fulfilled? If you are very content with the results, then great! Keep doing what you’re doing. But what if you realize the future sucks?

A BRUTAL CHANGE NEEDS TO HAPPEN! That is why you need to do something to start living life on your own terms. You may temporarily end up working longer hours but you will have the satisfaction that you’re building for yourself. If you don’t build your own dreams, someone else will hire you to build theirs.

Change is necessary for growth, survival, and for long-term happiness. Risk investing in yourself. Some will be shit. Some will be so-so but two of them will be life-changing. It will always be scary especially when we venture out in the unknown, but the more you expose yourself out there, the more you do, the more you learn, the more you overcome your fear, the stronger you become.

 

 

That’s it for this month’s post! Thank you for reading! Until next time.

Stay humble and always believe in yourself!

 

 

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Mabuhay!

Khim here. 20ish wood fairy and part-time mermaid. I’m writing just for fun but aiming to inspire countless beautiful souls.

I am lover of life and a dreamer. I dream and I make it happen.x

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