Risk averse versus risk/reward

Actually this is a title about a few concepts.

Risk and reward is an important one. Some people see risks. Some people see risks and weigh against the rewards. Understanding the chance of a risk falling through or a reward brought to fruitition is a fine art. Science finds predicition in this area is about as good as it is in mental health research. Some people manage it be it at the trading desks of an exotic derivatives portfolio or when buying a lottery ticket.

And some people are risk averse. An extreme is someone who rarely takes risks, with their hearts or their minds, and small risks are considered big ones. Risk aversion looses out on the big rewards. It's sort of like a pension portfolio compared to the futures market where fortunes can be lost or made in a day.

Those who seek big rewards need to be ready to take big risks. They also need to be aware of the results of failure, often as great as the rewards. They need to be able to handle them too.

Understanding and applying the risk-reward equation isn't easy. In life, in my belief, it is better than the risk averse way. Risk averse is safe but offers little reward but lack of failure. Some people may want a life free from failure but others are willing to risk for the hope of a greater reward.

This is about happiness and the pursuit of happiness as much as anything else.