Is Risk the True Path to Reward?

Yes, it is. Risk by definition means - The potential effect of an event, determined by combining the likelihood of the event occurring with the effect should it occur (whether positive or negative). When you take a risk, you must be optimistic and hope for gain but also prepare for potential losses. Because taking a risk is like diving into the unknown. You don’t know what will happen next or the situation you will face: it can be bright or dull. But if you never try, you will never know what awaits you.

Of course, you should take risks, but do not expect only gain or loss. Expect both. A much better way to express this is to say, “nothing sacrificed, nothing gained.” There are trade-offs to every path you choose in life. By investing time in one activity, pursuit, or venture over another, you are choosing to take on a certain level of risk.

Entrepreneurship: A Risk and Reward Example

I think this question is posed in a way that speaks to entrepreneurship. Let me use this example to illustrate the concept. If you choose to become an entrepreneur, there is a higher risk of failure, in terms of going broke and losing your job, compared to taking a job at a major corporation, which has lower potential for advancement but higher job security. By choosing to invest time in starting a business, you are increasing the risk that you will have no money and/or miss out on starting to move up the career ladder. On the flip side, you are decreasing the risk of feeling disengaged with your career and decreasing the risk of working for interests that do not align with your own. You are also increasing the chance of becoming a billionaire if it is important to you and/or increasing the chance of being able to dictate how you live your life on a daily basis.

It could turn out that all your entrepreneurial efforts go unrewarded and you...

Indeed, risk is a measure of what you have to lose, not what you have to gain. When you have nothing to lose, there is no risk. Conversely, when everything you have is riding on the venture, you face massive risk. It is true that the most rewarding ventures often require taking on lots of risk, but taking on lots of risk does not assure success. People with a higher tolerance for risk are better equipped to deal with the uncertainty and the chance of losing their investment. They fail more often, but they are also more likely than those who play it safe to reap a large reward.