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Tom Riach
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Tom Riach   My Press Releases

Risk and Reward - Força Portugal!

Published on 7/11/2016
For additional information  Click Here

Joseph Tom Riach

"Risk and Reward - Força Portugal" is the 43rd in my "Wealth" series of original copyright press releases sent from my happy home in the sunny south of Portugal

Ponte da Piedade

RISK AND REWARD - FORÇA PORTUGAL!

Portugal is in especially happy mode today. 'We' have just last evening become European football champions for the first time - great excitement! No-one does celebration quite like the Latinos - fire-crackers, flares, car horns, doughnut screaching tyres, general hysteria - and just the odd sip or several (!) of our lovely local plonk. Hence the reason that I awoke this morning (afternoon actually :-) with a somewhat fuzzy head ... and a smug grin. But why the 'smug'?

Well the source of that was the knowledge that the success of 'our' team had not only sent all of Portugal crazy but had at the same time made me several hundred euros better off. Prior to the start of the tournament you see, I had come across a book-maker offering odds of 12/1 against Portugal winning. Now, given that Portugal is a nation of gifted footballing talent, is a regular 'final four' team in major championships and was on an impressive run of winning form, this seemed to me an incredibly generous price, an opportunity. So I seized the chance and placed 100 euros on Portugal to win.

But why take the risk? Simple, it was only limited riskYou see, when we predetermine the extent of the loss we are prepared to incur in any situation – in this case one hundred euros – then we can limit our risk to just that amount. Hence the term 'Limited Risk'. ie we limit our risk to the predetermined amount. And from that we can determine 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. Ideally 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. Ideally 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 was clearly the case in my 'Portugal to win' example cited, lots of potential gain with downside risk limited to one hundred euros. 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.

So what you must aim for, and I'm talking all business and profit related entrepreurial activities, is to :

1. Stay alert for high value opportunities (low risk/big gain)

2. Seize value when it presents itself

3. Limit risk to easily affordable levels


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. 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. The Portuguese football team did just that.

Their coaches evaluated their strengths, sized up their options and opted to abandon the customary flowing style expected of 'a Seleçao'. They played a restrained 'tight game' in order to minimise the risk of defeat and thereby with it increase the liklihood of victory. Their successful assessment of the competition was based on one critical question, they asked, “Why take the risk?” So too should you.

 

I am Tom Riach. I live and work in the sunny south of Portugal. Need I say more?

For many years I have run my WAKE UP LEISURE AND LEARNING BREAKS where I talk of success and of creating serious wealth. Or send for my MASTERING THE ART OF MAKING MONEY Amazon best-seller, it's packed with my secrets of success and exact details of how I earned a fortune as a Super Achiever.

RISK AND REWARD - FORÇA PORTUGAL is an original copyright Tom Riach press release, short and to the point. I hope you enjoyed reading about “Risk and Reward - Força Portugal” and found it informative/entertaining. To learn more or to get in touch with me please visit me on my website at WAKE UP 2 WEALTH.

See you there! Regards, Tom.

© Copyright Joseph T.Riach 1998-2016. All rights reserved.

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