Risk versus Regret Minimization
Amar Pandit
A respected entrepreneur with 25+ years of Experience, Amar Pandit is the Founder of several companies that are making a Happy difference in the lives of people. He is currently the Founder of Happyness Factory, a world-class online investment & goal-based financial planning platform through which he aims to help every Indian family save and invest wisely. He is very passionate about spreading financial literacy and is the author of 4 bestselling books (+ 2 more to release in 2020), 8 Sketch Books, Board Game and 700 + columns.
February 24, 2023 | 2 Minute Read
Many times, we are unable to make a decision because we are not sure of the outcomes. We rely too heavily on the outcomes. We miss the point that we can never be sure of anything right from anything in our personal lives to everything in our professional lives. Because we live in a very uncertain world.
In their book “The Upside of Uncertainty”, Authors Nathan Furr and Susannah Harmon Furr share an interesting framework to make sense of this uncertainty and help us make decisions. They wrote:
“Most of us are taught to minimize risks, but that’s different from minimizing regrets.
Minimizing risks reduces negative surprises, but it also reduces the chances of new things happening.
Regret minimization on the other hand is about identifying the right risks to take, the ones that define who you are now or who you want to become.
When we were deciding whether to move to France, clarity arrived when Nathan’s grandmother said, “Parents teach their children to live their dreams by living their own dreams.””
We need to understand that there is risk in everything we do. Not just that there is risk in simply being alive. While it is wise to reduce many risks, the reality is that we will never be able to eliminate all of them. Many of the risks will still exist and we need to live our lives facing these risks. Life then is not just about minimizing risks but it’s also about minimizing regrets.
What about you? Are you working on minimizing any regrets or are you only focused on minimizing risks?
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