That's a question we ask ourselves many times a day.
- Open our mouths at work or keep a lid on it.
- Run to catch that train or bus or slow down and go more carefully.
- Eat that greasy burger and fries or opt for a salad and smoothie.
- Invest in that highflier stock or put your money in the "G" fund.
The Wall Street Journal presents risk management as both quantifiable and qualitative.
For example, a MicroMort (1 MM, and sounds like micro fart) is "equal to one-in-a million chance of death."
An average American has a 1.3MMs chance of a "sudden, violent end" on any given day.
However, climb to the base camp at Mount Everest (at 29K feet), that's over 12,000 MM, base jump at only 430 MMs per jump, parachute 7 MM, and go on a roller coaster at only .0015 MM.
So there you have it--statistics tell the risk story!
But not so fast, our risk calculations also take into account our qualitative values. For example, we tend to lower the risk in our minds of postpartum depression (10-15% or higher) because we value having a baby.
Similarly, we tend to think driving (1 MM per 240 miles) is safer than flying (1 MM per 7,500 miles) because we believe we are in control of the automobile, as opposed to a passenger jet flown by a couple of pilots.
The result, "Scariness of an activity isn't necessarily proportionate to its risk."
That means that you can easily make a mistake and underestimate risk, because of your personality or cultural and social biases.
Rock climb at your own risk...BUT do you really understand what that risk even is or are you driven to do something overly dangerous and maybe stupid. ;-)
(Source Photo: Andy Blumenthal)
