Some Tips for Taking More Calculated Risks

You have to be willing to take risks to do great things, but your ability to accept risks in your life is predetermined genetically, and you can't take risks if you don't have the right genes.

The solution is to take advantage of the loopholes your brain provides, bypass your genes, and take better and smarter risks, giving you an advantage over those genetically gifted.

If this article asks you a question now, you won't remember it when you get to the end. Most friendly bets start with this bravado, but how often do these bets go unanswered?

How do you respond when you're at odds with a friend, and they ask you to bet your money? If you're one of the bold few with a huge ego, you'll probably agree immediately, but what about the rest? They may respectfully decline or accept their differences and politely move the conversation to another topic. You may dismiss it as a joke or ask a comic question: “Why does it always have to be about money?”

People are uncomfortable for one reason or another when betting on things they are not sure they will win. Still, despite this, millions of people participate in the lottery every day, and most research indicates that the less you can afford a ticket, the more likely you are to buy it.

The potential winnings are great and spark dreams of an unattainable life, but that doesn't change the fact that the bet you just missed with your friend was millions of times better than the lottery ticket.

If you look at the statistics of the most popular lotteries, you will not only see very low-profit potential, but they also cost you a lot of money.  You can calculate the real cash value of a lottery ticket, and then you will have difficulty finding a card worth its price.

Lottery tickets aren't the only stupid risk people take:

• They hang out with people who don't embody their values even though they would be like them.
• They discount financial risks with a better chance of success than those they stick to.
• They do things they think will keep them safe when it brings them more unseen dangers.

Humans today are bad at taking risks; as a result, their risk avoidance strategies bring them more risk, but it wasn't always like this.

Man was created to take risks

Not so long ago, the survival of the human race depended on risk, and when you look at it objectively, it still is. No one today can remember that, but there was a time when humans did not have the modern conveniences they have today, and they had not yet risked what they risked to create them thousands of years ago:

• You had to hunt an animal, and kill it if you were hungry for food before it kills you first.
• You had to move your family to a warmer place if it was too cold, and you had better choose the right direction.
• You had to find a plant or mineral that could cure you if you got sick, but it could be poisonous.

You're successful today and enjoying your life because your parents, grandparents, and everyone before them were excellent risk-takers.

In 1988, some ecologists studied the risk-taking habits of perch - small fish that live near the coast - by observing their feeding habits in different environments. Would they eat from a large thick patch of algae, their favourite food, if the food patch resembled the one where they were likely to meet their arch-rival, the kelp bass?

Adjacent to this patch was a sparse and less attractive patch, and though the safe patch needed more food to support the fry, the fish preferred to feed there and compete for the droppings.

In each subsequent test they conducted, the chicks preferred the safer option even though the food was of lower quality and there was not enough of it. As a result, the chicks lived in a safe but ultimately fragile state of existence. So, their survival depends mainly on what their environment provides.

However, humans were not like that. They risked their lives and created systems that allowed them to manipulate their environment. As a result, we currently enjoy what most of us would consider a life of luxury. Humans took a calculated risk for most of human history since their success depended on that. But today, things are a little different, and they are no longer encouraged to take risks on a large scale because they are no longer necessary for survival.

Look at the prevailing culture, and you'll see that the generally accepted belief is that a better life comes with staying safe and avoiding dangers.

Today's most famous risk-takers are rarely the ones who operate on complex and long-term risks. Instead, everyone prefers new adventures and thrill-seeking to prove this point. Ask any child: “Who knows the leader of the Indian independence movement, Gandhi, or the British adventurer, Bear Grylls?” They must know the former.

This does not mean that Bear Grylls does not provide a helpful service to the world, but it does indicate that the current view of risk is very different from what was used in the past. In this new perception of the stakes, the search for novelty is a genetic trait, and if you don't have it, you're in real trouble.

Genetics

Your ability and willingness to take risks are predetermined, and like any other genetic trait, you have no control over how it works. If your family comes from a long line of thrill-seekers, you will be too. Nonetheless, if they're not, science says you'll feel good. I'm older watching a movie about riding a bull then riding it yourself, but what exactly is this gene that determines how you act?

After decades of research, geneticists have identified it as the DDR4 gene, which is now referred to as the “regeneration gene.” This gene is located on chromosome 11. So, everyone has this gene, but there are different types of it depending on which one you have. You could be an employee paying a 30-year mortgage or a professional skydiver.

Taking risks and striving for innovation is a personality trait. You cannot change your personality traits without literally changing your genes, but despite this, people still believe that they can change themselves to become risk-takers by moving to a new environment, changing their old habits, and making new friends. However, the truth is, these things make no difference to their ability to accept risk.

Researchers at the University of Delaware studied the characteristics of identical twins separated at birth to learn how personality traits develop. The study ended up with many interesting results, but one was the most notable:

The children studied, despite the environment in which they were raised, were more likely to act like their biological parents than to adopt the characteristics of the parents they were raised in. Therefore the child, who was raised by cowardly and fearful parents, is still looking for new and exciting experiences in their life. They were born carrying the risk gene, although their parents and their surroundings discourage them from birth.

Also, the child who lacks the gene will still prefer reading adventure novels to real adventures despite being raised by parents who dive among sharks and hunt down predators.

So, what can you do if you don't have the correct version of the DRD4 gene? What if your genetic repertoire lacks this essential component?

There are three things you can do:

1. Don't blame your parents

You can blame your parents for not passing on the good genes you want, but it's not their fault either. At some point in your family history, your ancestors moved from needing to take risks to survive to finding other ways to do it, and as you'll soon see, that's not a bad thing.

2. Feel grateful

Being born without the essential gene for adventure isn't bad because you don't have to worry about becoming addicted one day. The DRD4 gene is closely related to the addiction gene and both control how you respond to dopamine, the neurotransmitter that controls your brain's reward system.

It also indicates that you will not pursue any unwanted profession when money is tight. The ability to predict the behaviour of risk-takers is amazing. A study of 18-year-old college students succeeded in predicting their behaviour at the age of 21. Also, other studies that balance the prisoners' past with the genetic makeup of those with risk-taking genes were very shocking. So, a genetic predisposition to risk does not mean that you will be able to take risks intelligently.

3. Take advantage of your weaknesses

There's still a backdoor you can exploit, a locked doorway you can open with the right tools if your genes don't make you a natural risk-taker. Therefore, opening this door will not only allow you to take risks but with the best risk as well, and the key to it lies in your mind, of course.

Beat your genes

Researchers Leslie Palich and Ray Bagby wanted to find out what makes entrepreneurs such successful risk-takers, which means what allows them to see opportunities and take advantage of them while others shy away or avoid them altogether.

The two researchers assumed that entrepreneurs are not genetically different from anyone else and they only see risks differently. To test their hypotheses, they surveyed decision-making and sent it to 550 successful entrepreneurs, and the results were clear.

After collecting the responses to the survey, highly successful entrepreneurs no longer consider themselves risk-takers than the general population. As the hypothesis said, entrepreneurs do not have advantages that make them innately more risk-takers than anyone else. Rather, most consider themselves people who avoid risks rather than seek them. Successful entrepreneurship often depends on an unexpected factor, which is learned ignorance.

Successful entrepreneurs are not more open to risk than anyone else. Rather, they can look at risks differently from others. The average person sees a high level of risk and tries to avoid it. Instead, entrepreneurs see an opportunity and capitalise on it so they succeed. Because they fail to see the dangers to which others are exposed, and when they do, they consider them less of a threat. But why was this discovery so exciting?

Because it confirms that entrepreneurship is not a hereditary personality trait that cannot be changed. Rather, it is a cognitive feature and an acquired behaviour that can be formed and changed with practice and perseverance.

You can't escape what you can't see. To take more risks, train yourself not to see them. If you used to see them previously, then learn the quality of acquired ignorance, and it is wise to learn this gradually. You can change how your brain perceives risks by trying small risks and accepting them as if you would accept anything else entirely.

Expose yourself to daily experimental risks that allow you to test hypotheses with little consequence for failure and more reward for success with small, repeated successes at first. You can build confidence and slowly change the balance of your experiments in your favour.

Your risk tolerance will increase more and more as you succeed, and this will eliminate the role of the amygdala, the part of your brain historically responsible for preventing you from doing something scary in the decision-making process. This is by slowly raising their risk tolerance and deactivating their function rather than energising and triggering the alarm.

You won't go back to seeing risk in situations where you used to see it before; if you were afraid of it, that would stay the same. What will change is that you won't notice it in the first place.

You are now above these natural risk-takers. They have the natural ability to take risks but may need better judgment. You can take risks and still retain your ability to make informed decisions. If you take more risks, you will be better off if you learn to take smart risks. Here is an example:

Imagine for a moment that you run a small business and you have some financial decisions to make to keep things running smoothly. In one case, you have to choose between a sure bet with lower payouts or a higher payout bet with the potential not to win. In the other case, you must choose between a certain loss or the chance of losing nothing.

Look at the options below. You have to decide which decisions are best for you.

In your first decision, you must choose between

1. Confirmed profit of $240.
2. 25% chance of winning $1,000 and 75% chance of not winning anything.

In the second decision, you must choose between

1. Confirmed loss of $750.
2. 75% chance of losing $1,000, 25% chance of not losing anything.

Which pair of resolutions do you prefer?

Most people choose a combination of the first and the fourth. You made the sure bet when it came to making money, but you accepted the risk when it came to losing it. People across the board tend to be risk-averse regarding the possibility of gaining something and risk-averse regarding the possibility of losing.

This is logical and intuitive, but you would have needed help in the above scenario.

If you choose the first and fourth options, you would choose a 25% chance of winning $240 and a 75% chance of losing $760. However, if you chose the second and third instead, you would choose a 25% chance of winning $250 and a 75% chance of losing $750. It seems a wrong choice, but it is objectively the best decision.

You would probably realise this if you considered both options, but the mind is not programmed this way. Instead, it prefers to deal with such problems linearly by solving the first problem first, then the second problem. Sometimes this succeeds, but it often leads to bad decisions.

By looking at simultaneous decisions as part of a single decision rather than as separate events, you can get a better idea of the real scenario that is taking place.

Life is a series of interconnected decisions, each one affecting the next. How good you are at taking intelligent risks depends on how good you are at anticipating the effect of each choice on the next. In the above example, that means re-learning mathematical relationships that you have long forgotten. Still, in everyday life, that means thinking about the consequences of your choices and thinking proactively rather than thinking about each decision individually.

Studies have found that people who take randomized knowledge tests are generally optimistic about their confidence in each answer they give but pessimistic about their overall performance. Most people say they are confident in their decision after each answer, but once the test is over, they are unsure of their answers.

This is another little way that you constantly misunderstand yourself armed with this knowledge, and you can use it to your advantage.

More fun ways to take a better risk

The body and mind are amazing. Although we still don't fully understand them, we've made amazing discoveries that may help you become a better risk-taker every day if you're willing to listen to wise scientific advice.

Here are some other tips that you can follow in your quest to take smarter risks:

1. Befriend smarter people

Just being in a group makes you more willing to take risks, and this may result from your feeling of shared responsibilities. You do not feel that you are acting alone, but the risk itself does not guarantee that you will make the best decision. So, make sure you surround yourself with people who inspire you to take risks in a smart way. You don't have to be smart, but the point here is to be your dumbest friend.

2. Deprive yourself of sleep

If you are instinctively inclined to risk losses more than gains, studies have shown that you can at least partly counteract that by staying up very late at night. Sleep deprivation depresses the part of the brain responsible for assessing potential losses.

3. Watch the artwork

New research suggests that just 40 minutes of looking at art can achieve the same effect as five hours of typical stress relief such as reading or relaxing. It helps you de-stress quickly before making a difficult decision.

4. Avoid MAOIs

If your doctor prescribes an MAO inhibitor, avoid making important decisions while using it. Severe deficiency of the neurotransmitter MAO-B is closely associated with poor decision-making.

5. Don't eat too much meat

Not so long ago, scientists found out that tryptophan, an amino acid found in meat, is responsible for the tired and relaxed feeling you feel after eating a big feast, and may even make you a temporary idiot.

Participants in a study at Queen's University Belfast tested their decision-making ability in a normal state and in a state of rapid tryptophan depletion, and found that they made objectively better decisions when they were in a tryptophan-deficient state.

In conclusion

Risk was once necessary for survival, but it is no longer so. As a result, some of us have lost that genetic quality that pushes us to test our limits.

If you don't want to accept your destiny and find it difficult to break out of your comfort zone into exciting new experiences, remember that there are several things you can do not just to take more risks, but to take smarter risks. So:

• Trick yourself into slowly raising your risk threshold.
• Don't make a decision in isolation from other decisions.
• Put yourself in situations that help you take smart risks, and avoid situations that force you to take risks in an unconsidered way.