Perceived And Real Risks
Risks in life come in two flavors, perceived and real, and as we enter the 2nd half of life we have to be more aware of the difference. This was extremely evident when I returned to the United States for the launch of Repurpose Your Career – A Practical Guide for the 2nd Half of Life 3rd Edition.
I was approached online and in-person and admonished for the risks I was taking for living in Mexico. Most of the risks people admonished me for taking were perceived and not real. However, our perceptions shape our own realities. Therefore, to these individuals, the risks that I was taking were real. (I will discuss the real risks of living in Mexico in a future podcast and yes, there are real risks but just not what you think they are.)
We are currently discussing the concept of risk in the ‘What’s Next Mastermind Group’ in the Career Pivot Community as a way to help us define what is a risk – and then once identified – how to mitigate it.
In this post, I want to touch on risk in general.
What are Risks?
The definition of risk from Dictionary.com is as follows:
- the hazard or chance of loss.
- the degree of probability of such loss.
- the amount that the insurance company may lose.
- a person or thing with reference to the hazard involved in insuring him, her, or it.
- the type of loss, as life, fire, marine disaster, or earthquake, against which an insurance policy is drawn.
verb (used with object)
Perceived Versus Real Risks
I have taken many risks in my career and life. Some of them appeared to be risky and in hindsight they were not. These often turned out to be very lucrative. On the other hand, other times I have taken risks that seemed quite benign or I did not think of it as a risk and I was dead wrong.
Why did I perceive some of these as risky decisions? I did not have all of the data, some of which were available and some were not.
I left IBM in January of 2000 to work for a tech startup that had just been acquired by Lucent, at the time the largest telecommunications equipment maker in the world and the most widely held stock on the New York Stock Exchange. IBM had screwed me on my pension and then reversed their decision.
I felt this was a risky move because I was leaving a company where I had worked for 22 years. My pension was still in place, but there was growing insecurity at IBM. I had just received a less than stellar performance rating because I was not doing my best at my job. What I did not do is research Lucent thoroughly to know that going from IBM to Lucent was a pretty lateral move. It felt risky because I did not do my research.
Was this a Real Risk?
What I did not see was the dot com bust and the implosion of Lucent coming. Lucent went through multiple divestitures of various technology divisions including the Lucent Micro-Electronics Division which was spun out as Agere Systems. Lucent hemorrhaged people and cash.
In hindsight, my Lucent and then later Agere Systems stock options were worth a little over $1k but I received over $100K in retention bonuses which allowed me to pay off the mortgage and finish funding my son’s college education.
I perceived this as risky but in hindsight, it was not a risky move at all. In many ways, I was just plain lucky.
I left in late 2003 after my near-fatal bicycle accident in 2002 which changed my perspective forever.
Reak Risk with Real Consequences
On July 11th of 2002, I went on a scheduled ride with my bicycle club. I had never been on the scheduled route that I knew was very windy with steep descents. I did not think twice about going on the ride but my wife decided not to join me. The route scared her.
I climbed to the top of a hill and started my descent. At the bottom of the hill was a blind right turn. What I did not know was the road was cambered in the wrong direction. It was a horrible road design and I could not hold the turn at 25+ miles per hour speed. I crossed the center line and hit a 1996 Toyota Corolla head-on. Our combined speeds exceeded 50 miles per hour. I will not go into the details but you can read more about in my post A Near-Fatal Bicycle Accident Was Actually a Mammoth Gift.
The point is I did not perceive I was taking a risk. I did not know there were accidents on that spot frequently – as I did not do my homework and did not listen to my wife. My perception was my reality.
I spent 5 days in the county trauma center but was walking on crutches in 3 days, back on a bicycle in 10 weeks and flying back to China to run a class in 4 months. Statistically, I only had a 10 percent chance of survival. Once again, I was just plain lucky.
The club has never held a scheduled ride on that route ever again at my request. That was my way to mitigate risk for the club and its members.
Types of Risks
In the next post, I will go much deeper into these types of risks; but we need to define them before we can determine the actual risk involved.
- Career Risks – One could say that when I left IBM I was taking a career risk. The startup could have failed and left me without a job.
- Financial Risks – Anyone who has lived through the last 2 recessions understands this.
- Health Risks – I am now convinced that living in the United States is taking a health risk. I will explain in the next post.
- Safety Risks – This is an area that is easily misperceived based on our mass media exposure. I grew up in the New York City area in the 1960s and 1970s when murder raids were double or triple to what they are today. It is much safer today than it was, however, many feel far less safe for themselves and family. Perception of safety versus reality is very distorted in today’s never-ending news cycle.
Here are some posts I would like you to read:
- Living in a “Career Disaster Area” at the Age of 65
- Investments in Your Health in the 2nd Half of Life
- The Looming Healthcare and Insurance Catastrophe for Baby Boomers
- The Stress of the Being an Economic Refugee Expat
Next Post on Risks
If we do not take risks then we will likely get left behind. However, for those of us in the 2nd half of life, we need to be careful in the types of risks we take.
In the next post, I will take you a little deeper into the types of risks you might take. And, then give you some exercises to determine the depth of the risk; and finally, a way to mitigate those risks.