The word risk commands different emotions from different people. The Heritage dictionary defines risk as:
• The possibility of suffering harm or loss; danger.
• A factor, thing, element, or course involving uncertain danger; a hazard.
Many of us associate risk immediately to the loss of money or danger to ourselves. By definition, risk is much more than just losing money or harming ourselves. Risk is on both sides over every action and event.
If we are unwilling to accept risk on investments, we risk not gaining on those investments. If we never risk injury, than we will be unable to eat, sleep or drink, since all these actions carry some sort of risk. If we never took any risk on relationships, then we would be risking being alone.
Whether we know it or not, we accept risk every day. The risks we take may be in attempting to limit risk itself. We all take risks and to some the possibility of gain trumps the possible loss, to others it is the opposite. A person willing to accept harm or loss for gain takes just as much risk as the person who is not.
From 1839-1843, 1873-1879 and 1929-1932 the United States suffered economic depressions. These American Depressions were the result of credit defaults, failed banks and deflation. Taking too much risk caused each depression. History tells us that too much credit risk eventually leads to a depression, but the unwillingness to accept risk again prolongs their effects. Time and time again we continue to repeat the errors of our forefathers.
Each depression occurred about in a span of a life expectancy (at the time) away from each other. From this correlation alone, it is fair to say, it only takes us to a generation to forget. Once we forget, our instincts take over and we repeat history all over again.
Risk is present throughout history. The risks we take are generally no different than the ones our forefathers took. History tells us that our instincts determine the risks we take since we continue to repeat the errors of the past. There is no life without risk. Even by never leaving our homes we take risks. The only way to avoid all risk is to not be born. To be a risk taker is absolutely “Normal”.