Packy McCormick wrote a nice piece on Risk. I have been writing about risk in various forms since I started blogging back in 2010.
Risk is a four-letter word and is to be avoided for many people. You see it in decision-making all the time. For example, force people to choose between two separate things, or give them optionality on the decision. They will always choose optionality because they don’t want to be locked into the consequences of a choice.
My friend Andy Swan had a good tweet a number of years ago about making decisions. Choose the one with the highest alpha, the other one will usually be there if you fail.
I don’t think our educational system in America teaches much and doesn’t teach how to assess, quantify, and assume risk-taking. Neither do we learn much at home.
Packy talks about how the liberals have instilled government control and oversight over many business activities which have leeched down into our society causing us to take less risk. All the rules and regulations designed to “keep you safe” have caused stagnation in society and stopped your standard of living from rising.
I think it goes deeper than that.
When I was growing up, everyone didn’t get a trophy when they engaged in a kid’s sporting activity. You had to deal with losing or not being picked, or something like that. This forced you to try and get better. It built in resiliency.
Even when you were good and kids didn’t know you, you didn’t get picked first. Friends pick friends. Surprise. That forced you to go out and prove it. You had to prove your worth. Merit. Imagine that.
With the rise of social media, the risk is increased. Now, everything is online forever, in real-time. Make a mistake, it’s searchable. Fail, searchable. It used to just be on family movies.
Packy says to let your kids roam free and I agree! We tried to do that with our kids. I was a free-range kid. Sure, I ran into some bad things. But, I survived and I learned to trust my gut instinct.
Keep kids off social media and don’t put their “stuff” on social media. Have a family movie night instead. Interestingly, my kids had a strict no social media policy for our grandson and I think that is a good thing. I hope they keep him off social media and don’t let him participate until he’s ready.
The sentence “failure is not an option” is a great movie line but it’s a terrible way to run a society. Failure is an option because it means you are trying. When you are young, the stakes are small. When you get older, the stakes get larger.
If I hadn’t built up resiliency after repeated failures, I would have never believed in myself. I would have never taken the risk to be a trader and I would never have survived the transition to investor. I was chatting with a friend of mine about this yesterday.
We need to tell our stories of when we took risks and failed. We need to relay what we learned. We also need to tell the stories of when we took risks and succeeded and what failure helped us learn so we could succeed. No one is an overnight success.
Go out and try. Go out and fail. When you do, laugh at yourself. Try again. I am going to do that right now as try and learn to hit a golf ball straight.
One of the direst consequences of helicopter parenting has been the near total elimination of unsupervised (by adults) and unstructured play time between children. I can't take complete credit for what I am sharing as I read it some of it somewhere else. But, as Ecclesiastes teaches, there really isn't anything new under the sun.
When children or young teens play without an adult around, they learn things like compromise, creativity, risk and reward, negotiation skills, common sense and wisdom and even courage. They learn discernment. Having an adult around when kids play eliminates that learning, as the adult will mediate any dispute, will tend to set "rules" and so on.
When I would ride my bike the 1/2 mile or so to the park in my neighborhood and meet up with a bunch of other boys we would collectively decide what we were going to do. Ride our bikes to the 5 and dime, play football, baseball, kick the can or, as we got older, go ogle the girls hanging out at the neighborhood pool. This required negotiation skills. And compromise. Just as we would craft the rules of whatever game we were playing to fit the moment and situation and number of boys available to play. Again, compromise. Creativity. Negotiation.
Another example is wisdom and discernment. If you are joined in play time with a new kid, and in the course of the day you find him to be a bully, or a crybaby or selfish, or whatever, you would say to yourself, I am going to avoid that kid in the future. I learn to judge character.
Last example. Adults infringe on a child's ability to test his limits. To try things that, were an adult around, they would forbid because someone might get hurt. How many times (this question is for men) growing up were you out by yourself or with other boys and do something that scared the shit out of you? But it was fun!!! For me, plenty. But those experiences taught me the principle of risk and reward, or that all of life come with trade offs. There are some things that are REALLY FUN, but REALLY RISKY. Do I want to take the risk? Is the reward outweigh the risk?
The result of this unhappy turn in our society is a bunch folks under say, 40, who don't have any of these life skills. The don't know how to compromise. See the college brats who shout down speakers with whom they disagree, or worse, attack them physically.
Or other idiots who say things like "speech I don't like is violence". That person has probably never thrown down in a dispute on the playground. In other words, someone who would say something so stupid, almost certainly has never participated in a fight. Having an adult around prevents those sort of things. So, a disagreement over politics seems violent to them as they have not had to encounter any resistance while growing up because they were protected from all problems by a parent or another adult.
Finally, kids playing without structure or parents around forms character and develops courage. Many, many times while out on my bike I would encounter something that caused me to intervene to help someone, to protect someone and so on.
Thanks for your blog.
100%!
I have found that the biggest determinant of success is perseverance -- keep going!
"Without failure you will not succeed."