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Tom Riach
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Tom Riach   My Press Releases

Wealth 21 : Risk Management

Published on 6/15/2014
For additional information  Click Here

RISK MANAGEMENT


Risk Management” is the 21st in my 'Wealth' series of original copyrighted WakeUp2Wealth Press Releases written by Tom Riach (that's me above) from my home in the sunny south of Portugal.

Wake Up 2 Wealth

Wake Up 2 Wealth's Daily View Of The World!


RISK MANAGEMENT


'Risk Management' is an impressive term, sounds high powered doesn't it? But it needn't be. You see all of us just going about our business or in our daily lives must learn how to manage risk. Whether it be simply crossing the road, deciding on every-day purchases or perhaps taking part in a sporting activity, risk is involved.


POWER POINT - “There's risk of some kind involved in everything we do in life, whether we like it or not!”


So with 'Risk Management' all that we're really considering is to make sure that we know what the risk is in any given situation and to evaluate if we are prepared to afford it (the risk). The risk of crossing the road for instance, where there is no pedestrian crossing but several lanes of heavy traffic, is high risk. We could be hit by a vehicle and lose our life. The risk of buying the latest technology gadget is less. It might not function as we wish or could overstretch our budget leaving us short of cash for a period, but it won't kill us. So there you have two extremes. But whatever the situation there is a simple test we can always apply to help us evaluate risk. It's a simple question. It's probably my favourite question and I apply it all the time. The question is, “Why take the risk?”


POWER POINT - “One of the most powerful tools at your disposal in 'Risk Management' or in just running you life is the simple question – Why Take The Risk?”


Take my word for it. I'm not the kind of guy to mess about. Check me out by CLICKING ON the photo below.

Risk Management

That's me on the right, on stage at Vilamoura Casino presenting awards in my capacity as consultant to a major leisure and tourism company.


You can Contact me and arrange a FREE chat with me NOW! - Go to Contacts section at the bottom of this article.


RISK MANAGEMENT


You see, when we predetermine the extent of the loss we are prepared to incur in any situation – be it the loss of our life or of a few hundred dollars – then we can limit our risk to just that amount. Hence the term 'Limited Risk'. ie we limit our risk to the predetermined amount (in these examples, our life or a few hundred dollars). So from that we can decide what our 'Risk Exposure' will be. Risk Exposure refers to how much we are prepared to lose in order to expose ourselves to the potential gain. And this is obviously the next relevant question. What is the potential gain? Evaluating the risk against the potential gain is called the Risk/Reward Ratio. Idealy you want the risk to be low and the potential reward to be high.


POWER POINT - “Evaluating the risk against the potential gain is called the Risk/Reward Ratio. Idealy the risk should be low and the potential reward high.”


The ideal may not always be achieveable but the principal holds good so, in practice, we should always ensure that we are looking at a healthy potential reward in relation to a lowish risk. That is clearly not the case in the crossing-the-road example cited, that's maximum risk for no purpose; but it could well be the case when investing in

the new technology purchase, lots of potential benefits with downside risk limited to a few hundred dollars. Getting the balance right is the trick!


In many situations, if the risk is negligible then the liklihood is that the reward will be low also. And if the reward is very high then the risk is likely to be great. This is all true. But what successful 5%ers, that small proportion of the populace who over-achieve, have learned to do is to sway the odds in their favour. They have learned to consistantly lower the risk while increaseing the potential gain from their commercial or other activities. They have done this in an infinite variety of ways, using ploys and tactics learned through practice and experience but all their practices contain two vital elements. Can you guess what they are? Yes, that's right, our two old friends 'Simple' and 'Repeat' . 5%ers risk management strategies are always remarkably simple and are carried out repetitively!


POWER POINT - “Simple strategies carried out repetitively and well add up to great achievements.”


Entrepreneurs of course take risks, that is one characteristic that makes them entrepreneurs. But the smart and successful ones manage their risk. What seems a risky situation to others will have been carefully assessed by the 5%er. They take only limited risk, never exposing to potential loss anything more than they predetermine that they are prepared to lose. They evaluate risk/reward carefully. They always ask, “Why take the risk?” So too should you.


I live and 'work' in the sunny south of Portugal. Need I say more?

Risk Management

My Office In The Algarve


Email : Click Here



Tel. : (00 351) 914 021 159



Website : Wake Up 2 Wealth

RISK MANAGEMENT

is an original copyrighted Tom Riach press release, short and to the point. I hope you enjoyed reading about ”Risk Management” and found it informative/entertaining. To learn more or to get in touch with me or to join my contacts group, please visit me on my website at WAKE UP 2 WEALTH.

See you there! Regards, Tom.


© Copyright Joseph T.Riach 1998-2014. All rights reserved.


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