One of the many common threads I found in my study of self-made millionaires is the habit of taking calculated risks. Risk is often associated with some financial investment. But taking financial risk is only one type of risk. There is another very important risk that self-made millionaires take more often than financial risk. It is decision risk. Decision risk involves making decisions that often have consequences which affect your business or investment. Decision risk is overshadowed by financial risk because it is a less glamorous cousin in the risk family. But this risk is actually what makes or breaks self-made millionaires. And these millionaires very much understand that decision risk is far more important than financial risk. One bad decision could set them back.
Interestingly, however, despite the import of decision risk, self-made millionaires make decisions very quickly, once they’ve weighed all of the options. They don’t sit and ponder. They subscribe to something I’ve come to call the “50% Rule”. With any decision, there will be variables you cannot possibly control. These variables could positively or negatively impact your business or investment. Millionaires take the view that 50% of the time, no matter how much a decision is evaluated, they will be right or wrong about a decision. When they are right, the pay off is significant. If they wait on a decision, it doesn’t change the fact that 50% of the time they will be wrong. Armed with that knowledge, self-made millionaires act quickly and decide. Their confidence in their decision-making and their ability to recover from a bad decision, drives them to act quickly. Self-made millionaires understand there are things they can control and can’t control. Quick decision-making is something they can control.