Risk: Life's Critical Ingredient.

November 9, 2015

Each turn, game and outcome holds lessons for their young minds. Cause and effect. Forethought. Strategy. Tactics. Deferral of immediate gratification in lieu of a greater goal. A ring-side look a the world-driving, history-impacting relationship between risk and reward.
Whether your path is that of the arctic explorer or eighth grade teacher, risk acclimation is part and parcel of our lives.
Your morning meal. Your drive to work. Your relationships. Career choices. Professional licenses. Family planning. Geographic decisions. Schools. Social lives. Hobbies and habits. Friends and foes. Each entails endless interplay between risk and reward. From which your decisions will ultimately determine your life's direction and experience.
So, why will some six-year olds flip off the high dive, while others refuse to jump at all?
The neurotransmitter dopamine plays the primary role in one's risk-orientation. Fewer auto receptors in the facet of the brain associated with reward (and addiction) brings a freer flow of dopamine. Which makes any risky behavior more satisfying. Causing one to take bigger risks.
Dopamine enhances your propensity to explore, discover, and challenge one's self. It can lead to greater accomplishment, and greater loss.
It was dopamine that brought our ancestors to depart from the Rift Valley in East Africa 200,000 years ago. So beginning a trans global quest for greener pastures. One that has never been satiated.
Dopamine catalyzed Louis and Clark's westward expedition. Put a man on the moon. Helped men ascend to The White House. Climb Everest. And enabled you to confidently approach your spouse for the very first time.
More dopamine leads to less risk aversion. Plain and simple. Devoid of this natural neurotransmitter, we would still be drafting sketches on cave walls somewhere in East Africa. Anxious about the outside world.
And so there is no greater, more complex and less understood a relationship than that which exists between risk and reward.
Speculators have made and squandered fortunes on a hunch. Would-be entrepreneurs have condemned themselves to poverty, risking everything on one unappreciated idea. Political, business and athletic careers have been shattered as one strove to attain the elusive philosopher's stone.
Mythology, history and literature are replete with this theme.
Gatsby risked everything trying to win Daisy's heart.
Icarus flew too high and fell to earth.
Napoleon, risking everything at the Battle of Waterloo, was soundly defeated and exiled.
Everything worth attaining comes with risk. Our loves. Careers. Faiths. Families. Friends. Every foray and adventure upon which we endeavor will be accompanied by risk and reward. Without one, there is no other.
Recall what our 26th president, Teddy Roosevelt, said of risk.
"Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows neither victory nor defeat."
Risk too little, you run the risk of achieving nothing. Risk everything, however, and you risk having nothing. Within that opaque and volatile equation lay the penultimate secret to satisfaction and achievement.
Wish I had the dopamine to figure it out.

Securities offered through Dempsey Lord Smith LLC – Dempsey Lord Smith LLC, Rome, GA Member FINRA / SIPC / MSRB.

Advisory Services offered through Dempsey Lord Smith, LLC, an SEC Registered Investment Advisor. Clearing through and accounts held at Charles Schwab & Co., Inc.

Dempsey Lord Smith, LLC nor Hyde Park Wealth Advisors LLC provides tax or legal advice and you should consult your accountant and/or attorney if considering an investment of this type. Hyde Park Wealth Advisors LLC is not controlled by or a subsidiary of Dempsey Lord Smith LLC. Investing in Alternative Investments come with a variety of risks that could result in a complete loss of principal investment.

Alternative Investments offered as private placement securities are offered only to qualified accredited investors via confidential private placement memorandum. Income and returns are not guaranteed and there are no assurances investments will meet their stated objectives.

© 2024 Hyde Park Wealth Advisors. All Rights Reserved