Risk and Reward

June 15, 2024

Arsh Gill, Low Entropy Volunteer Writer

With most things in life comes a combination of risk and reward. To determine what the risks and rewards are, one must understand what they could  gain or lose. In order to assess this, you want to identify your risk tolerance, which will look different for everyone. What one views as a high or low risk tolerance is going to be unique and tailored to their own situations. Hence, there usually isn’t a golden piece of advice that will produce a win-win situation. 

I assess risk and reward from a zoomed-out perspective. By this I mean it’s important to consider what aspects of your life matter the most to you in order to flourish and achieve goals. These areas can include your academic, career, social and financial aspects of life. Conducting an analysis of these variables assists me in determining how I want to proceed in choosing a particular decision. Personally, I truly believe that to reach my future goals, there are many small risks and sacrifices I have to make in order to be successful and live the life I desire. Reminding yourself of where you want to be in the future can be very beneficial to understanding the relationship between risk and reward. 

Personally, there are certain things I am willing to sacrifice and other areas where I know will not risk anything. For example, during a very stressful exam period, I am willing to risk skipping the gym, which will put me behind in my workout routine and potentially throw off my consistency. However, I will gain extra studying time. With that extra studying time, my grade is more likely to improve, which is a great reward for such a risk.

On the other hand, during the exam period, I am not willing to skip hanging out with friends and family because this is what makes me happy and motivated to continue studying. Therefore I take a conscious risk that will reduce my studying time and possibly lower my grade. However, there is a certain reward, as hanging out with friends and family reminds me of my passion for school and inspires me to continue fighting for my dream. This short period of spending quality time with the ones I love can actually be beneficial for my academic endeavors. 

Another example is related to investment,  such as investing money or time into a business or relationship. In these scenarios, I would ask myself if these opportunities are worth my energy, time, money and happiness. Asking yourself important questions is key to being aligned with who you are, because at the end of the day, everything simply becomes a lose-lose situation if you do not go after what you love in life. You can choose to invest energy into something with the hope of being rewarded in a greater, more positive change in your life, one that acts as a stepping stone to another level in your life. But it’s just as important to understand that you could potentially lose something, so you need to have a backup plan. 

Overall, understanding what you view as important and taking into consideration what your future goals are is what will help you determine the relationship between risk and reward in the different aspects of your life. Just because one thing worked for someone else does not mean it’ll work for you, nor does it have to. It’s easy to compare your situation to others, but that’s always a surface-level comparison. You may not truly know what somebody lost to get to where they are now. Following such a mindset and using thorough analysis is what helps me navigate complex situations and tough decisions with confidence and clarity to assess risk and reward relationships. 


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