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All risks, whether good or bad, share one thing in common – both require investment. That investment usually includes time and money.
Good Risk vs. Bad Danger
- Measurable/Measurable – Good Risk is a risk that can be measured and calculated by doing Due Diligence (Homework). If the costs of potential outcomes are not measurable/quantifiable, then you are taking a Bad Risk.
- Identify Uncertainty – If you can identify all possible outcomes, whether good or bad, and can plan for all possible outcomes, then you are taking a good risk. When the Uncertainty is unknown or unknown, that is a Bad Risk.
- Probability of Success – If there is a high probability of success, then you are taking a Good Risk. If the probability of success is low or unknown, then you are taking a Bad Risk.
- Readability – A risk that may be adequately funded, under extreme circumstances, is a Good risk. If under extreme circumstances you run out of money, that is a Bad Risk.
- Probability of Failure – If there is a low probability of failure, then you are taking a Good Risk. If there is a high probability of failure, you are taking a Bad Risk.
- Understandable – If you can understand the type of risk you are taking, that is a good risk. If you cannot understand the nature of that risk, then you are taking a bad Risk.
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