Summary OF The book " You Are What You Risk" - By Michele Wucker

Key Concepts in this book:

1. Risk has a variety of meanings for different people.
2. Risk is everywhere, yet it can be defined in a variety of ways.
3. Your risk fingerprint is an integral part of who you are.
4. Different demographics have varying risk perceptions.
5. People's tolerance for danger varies greatly depending on their backgrounds and personalities.
6. Your risk awareness is increased when you have a sense of purpose and involvement.
7. Every decision you make entails taking a risk.

Who can take the most benefit of this book:

• People searching for new ways to make decisions.
• Economists looking to better understand risk.
• Thrill-seekers and scaredy-ctas wondering why they are how they are.

 What am I getting out of it? Rethink how you feel about taking risks.

Take a moment to look around you. Risk is omnipresent, believe it or not, and it determines everything you do. However, you shouldn't be alarmed by this. If that's the case, you're thinking about risk incorrectly!

Risk doesn’t only mean danger; it also represents opportunity. That's right: danger can be harmful, but it can also be beneficial. The outcome is solely determined by the circumstances – and your attitude toward risk.

You'll learn a better approach to thinking about the hazards you confront at work and in your daily life in these blinks. Petrified skydivers, rash war reporters, and game-changing financiers are among the stories you'll hear. However, none of these tales should govern how you handle risk. You have a one-of-a-kind relationship with danger.

• You'll learn how being a coward makes you take a higher risk.
• How your risk tolerance changes when you listen to music.
• And why guys shouldn't bet after applying hand cream in this summary.

1. Risk has a variety of meanings for different people.

To you, what does risk imply? And how does it influence your behaviour?

Consider three pals who have the opportunity to skydive. The first, a daredevil, immediately accepts. The second is less certain. So she does some research and realises that being struck by lightning is more likely than dying from a jump. So, she joins in as well.

What about the third companion? He's scared to death. But he's more afraid of his two pals accusing him of being a coward. As a result, he reluctantly agrees.

They all go skydiving in the end. They've all taken various kinds of risks, though.

The main point here is that everyone's relationship with risk is different and complicated.

In our case, the first skydiving buddy has a low-risk sensitivity by nature. She simply does not believe skydiving is risky, thus participation is simple. Friend Two is perceptive enough to investigate the threat. The data, on the other hand, gives her confidence.

Which of your friends has the most risk tolerance? The scaredy-cat is actually Number Three. He is acutely aware of the dangers of skydiving, yet decides to go ahead and do it anyhow. Simply put, he is the most daring.

When it comes to taking risks, people sometimes make surprising and even illogical decisions. The author often remembers her grandmother, who meticulously prepared for the winter by preserving summer vegetables and, for some reason, vast amounts of butter. Despite her extreme food aversion, she refused to see a doctor when she became ill. Why take such a low risk with food and such a high risk with health?

It all comes down to how terrible we are at seeing rhinos – grey rhinos, to be precise.

A grey rhino is a massive, visible menace that can be seen from a mile away. Consider the financial system's unstable status on a worldwide scale, for example. Or there's the environmental disaster. We all have our own grey rhinos, such as doomed relationships or escalating health issues.

When it comes to grey rhinos, we're surprisingly lousy at recognising when they're charging right at us.

Everyone would benefit from a greater understanding of hazards, especially the large, grey, raging ones they don't want to face. We should all strive for our own Goldilocks-style sweet spot, where we take chances that aren't too big or too tiny.

But this isn't to mean that everyone is Goldilocks. Some folks are Mama Bears, and they prefer their porridge to be colder. Some people are Papa Bears who prefer it hotter. At the end of the day, people's attitudes about risk are simply a function of who they are.

2. Risk is everywhere, yet it can be defined in a variety of ways.

Mariéme Jamme, an entrepreneur, doesn't use the word "risk" too much. She knows how it feels to be up against the odds, having been through a horrific childhood in Senegal and France, where she was trafficked. She also understands the importance of both hard effort and luck in reaching success.

Mariéme defines taking a risk as having a goal in mind and working as hard as she can to achieve it. Risk is no longer her favoured term; instead, she prefers the word hope, which has more positive overtones.

After all, the term "risk" did not always exist. It dates from the seventh century or before. So, what did people think about risk like before? Perhaps they simply called it "life."

The main point here is that risk is everywhere, but it may be defined in a variety of ways.

The current Western idea of risk appears to have originated in the military and naval industries before being adopted by the corporate world. The chance of anything happening and the heaviness, or importance, of that event, according to French mathematician Blaise Pascal in the seventeenth century.

For generations, risk has been at the heart of the global economy. Personal accident insurance has been around since the 1840s. Furthermore, capitalism is predicated on risk. Investors put their money on the line in the hopes of gaining more money, while also supporting new company projects.

Finance has a very specific notion of risk that the rest of the world does not. Risk is precisely quantifiable to a financier. Risks can be assigned particular numbers so you know just how much they're worth. This contrasts with things that are simply uncertain or unquantifiable.

But how precise can we really estimate risk? It's an issue when we rely on numbers that are essentially assumptions, as the financial world discovered in 2008.

Furthermore, risks aren't always negative. Negative risks are the only ones that are genuinely dangerous. There are also positive risks, which are more commonly referred to as opportunities. The core concept of risk is value-neutral, meaning it is neither good nor harmful.

Oh, and there's one more thing to consider: hazards are relative. They are influenced not only by people's personalities – their willingness to take risks – but also by the situations they find themselves in.

When refugees depart a dangerous place, how much of a risk are they taking? Staying would almost certainly put them in more danger than running, therefore they're opting for the safer alternative; the negative risk is bigger if they stay.

When refugees depart a dangerous place, how much of a risk are they taking? Staying would almost certainly put them in more danger than running, therefore they're opting for the safer alternative; the negative risk is bigger if they stay.

3. Your risk fingerprint is an integral part of who you are.

Annie Edson Taylor, a 63-year-old widow, had one goal in 1901: to ride in a barrel over Niagara Falls. She wasn't looking for thrills; she just wanted money, and the barrel stunt was a dangerous way to make rich quick.

But why did she seem so at ease with danger? There were other factors at play. Her husband and father had both died abruptly, teaching her the value of life. She'd been wealthy before and lost everything, so she wasn't afraid of the penalties of failure. And, as a result of the recent stock market crisis, she was left with few options.

To put it another way, riding a barrel over North America's greatest waterfall made perfect sense to her own risk fingerprint.

The main takeaway is that your risk fingerprint is an integral aspect of your identity.

As writer Frank Smyth observed, a risk fingerprint isn't as stable as a real fingerprint, and it varies with time.

Smyth was a courageous war reporter in his teens. From Colombia to Rwanda to Sudan, he covered a wide range of conflict zones. However, during a trip to Iraq in 1991, he was suspected of spying and spent 18 days in Abu Ghraib prison. What made matters worse was that he was a freelancer, therefore no media outlet was on his side.

Smyth was fortunate enough to escape Abu Ghraib, and the experience taught him that some dangers were simply not worth taking. He stepped away from combat zones and started an organisation to train other war reporters after his own risk fingerprint had irrevocably changed.

Experience no longer determines all parts of a risk fingerprint. Some of them are inherited. According to one study, the human genome has 124 genetic markers that influence how we think about risk. However, each of these markers accounts for only 0.02 per cent of the available variations in risk tolerance - a negligible fraction when compared to other variables.

Environmental influences, in fact, can have just as much of an impact as genes. After consuming hot food or listening to loud, fast music, for example, people are more prone to take risks.

Risk fingerprints are weird, complex, and dynamic. However, they play a significant role in people's lives. They can make you quit a perilous profession, jump out of a plane due to peer pressure, or even ride a barrel down Niagara Falls.

Annie Edson Taylor, by the way, made it over Niagara Falls in the end. On her sixty-fourth birthday, she did it. But she didn't make a fortune - it turns out that taking chances isn't always the best option.

4. Different demographics have varying risk perceptions.

What kind of risk-taker do you consider yourself to be? Even though everyone is different, broad classifications can be useful. Risk profiles are used by financial advisors to assess how much of a client's investment should be allocated to safer bonds vs risky stocks.

The Risk Type Compass, created by the Psychological Consultancy in the United Kingdom, assigns persons to one of eight points on a compass. Each of these points is labelled with adjectives like "Wary" or "Prudent," with the words "Adventurous" and "Carefree" appearing on the opposing side. People who fall somewhere in the middle have a variable risk appetite.

Specific vocations, loosely speaking, tend to fall into certain groupings — air traffic controllers, for example, are "Deliberate," whereas performers are "Intense" or "Excitable." However, the profession is not the sole factor. Cultural background, age, gender, and even physical attractiveness are all factors.

The main takeaway is that various demographics have varying risk attitudes.

Tall, strong, and beautiful people, according to one study, are more likely to take higher risks. Also, certain cultural stereotypes concerning danger aren't wholly false. Germany, for example, has a risk-averse culture, which is one of the reasons the country excels at detail-oriented jobs like engineering.

It is also important to consider your age. The massive uncertainty produced by the 2008 financial crisis has left younger millennials with an odd relationship with risk. Millennials are sometimes chastised for their financial planning; unlike previous generations, they place a greater emphasis on rainy-day money and debt repayment rather than pensions.

Is that, however, such a negative thing? Given the true uncertainty they've faced – and their typically astronomical levels of student debt – the risks millennials are taking may be appropriate for their circumstances.

What about the issue of gender? Women, on the other hand, appear to manage risks slightly better than men, according to growing research. Of course, the stereotype tells you otherwise, and that stereotype is so detrimental that it has an effect on women's prospects in both jobs and life. When women take risks, for example, they are subjected to more scorn than males.

Stereotyping affects both men and women. Two groups of men played dice in one experiment. One group used power drills, while the other rubbed perfumed hand lotion on their hands. The hand lotion group took more risks because their manhood was threatened.

Overall, there are so many variables at play when it comes to risk attitudes that people are constantly unpredictable.

5. People's tolerance for danger varies greatly depending on their backgrounds and personalities.

New York City hospitals were particularly hard struck during the first wave of the 2020 coronavirus pandemic. Emergency-room nurses were directly in the danger zone because personal protective equipment was in short supply.

What were the nurses' reactions? It turns out in a variety of ways. Some people accepted the hazards and made the best of their situation. Some parents placed their children with friends. Others separated themselves from their family or planned extensive decontamination plans after they returned home. Some people retired, while others stepped out of retirement to help.

When confronted with the same threat, you might not anticipate a single group of people — New York nurses – to have such disparate levels of risk tolerance. They did, however. This is because personality and life experience are just as important as demography.

The main point here is that people's thresholds of acceptable risk vary greatly depending on their backgrounds and personalities.

There is a significant distinction between objective risk, which is calculated by financial analysts, and subjective risk, which is what we personally sense. Assume you're an Australian travelling to Malaysia. You sense that something is wrong with the plane, and the oxygen masks are lowered. You have no idea what's going on because the worried-looking staff members don't speak English; consequently, you assume the worst.

You're scared to death. Fortunately, the pilot performs a calm emergency landing, and everything turns out alright. But, after that, how would you feel about boarding a plane again? It would be entirely reasonable to consider a subjective risk to be significantly bigger than the real risk.

Of course, objectively quantifying risk is also beneficial. David Spiegelhalter, a risk scientist, quantifies hazards in micromorts, which are units that objectively compare the chance of mortality. For example, consuming 1.4 cigarettes, living with a smoker for two months, and driving 230 miles all pose a risk of 1 micromort. Hang gliding carries an 8 micromorts risk. The average cost of giving birth is $170.

Having a good grasp of objective risk allows us to calibrate our decisions and increase our risk literacy. However, that is only half of the struggle. There's also the issue of how to make a wise judgement based on the danger that has been identified.

During the Covid issue, for example, Americans exaggerated the risk of death — on average, they thought obtaining Covid would kill them 22% of the time, whereas it was just 3% of the time. Did all of these folks, however, wear masks, maintain social distance, and avoid crowds? Even if many overstated the danger, they nevertheless reacted ineffectively. So, what can we do to improve our risk-taking abilities?

6. Your risk awareness is increased when you have a sense of purpose and involvement.

In South Korea, October 2017 was a peculiar month. The city of Seoul was directly in the line of fire as US President Donald Trump and North Korean leader Kim Jong-un engaged in a high-stakes verbal battle. South Koreans, on the other hand, were thinking about President Park Geun-Hye, who had recently been dismissed from office due to corruption.

The past president was particularly unpopular due to the long-term consequences of a ferry catastrophe that occurred several years prior. But why was this topic enthralling the general populace when the possibility of nuclear war with their neighbours loomed?

Simply put, South Koreans were dissatisfied with their lack of involvement in the US-North Korean conflict. Yes, it was a significant risk, but it was one they couldn't control.

The main point here is that having a sense of purpose and involvement increases your risk awareness.

When people feel involved, their attitudes change - whether it's about the risk of nuclear war or the chance of defaulting on a loan. Historically, people from low-income communities have had a hard time getting business loans because lenders see them as too risky. However, several organisations have recently attempted to resist the trend. For example, the Boston Impact Initiative Fund gives not only financing but also a sense of purpose.

Deborah Frieze, the fund's founder, is fortunate – and her risk-taking has always been rewarded. However, she realised that impoverished individuals who take chances encounter scepticism or rejection, so she founded a non-profit that does things differently. The lower the interest rates on loans, the earlier entrepreneurs start their businesses. On the other hand, more established enterprises pay a higher rate. Similarly, the fund provides additional protections to those who need them the most, rather than those who can afford to pay the most.

Frieze's strategy works because it identifies an important aspect of business that is often overlooked: everyone is reliant on one another. Her organisation, as well as those that borrow from and lend to it, are true allies. And the risk is distributed among them in such a way that the system as a whole is strengthened.

It's not only that everyone feels like they're a part of the process; it's also that they're acting with intention. That is something that the modern financial system frequently lacks. Since the 1980s, financial deregulation has contributed to a system that is acutely aware of dangers to shareholder value — a concept popularised by economist Milton Friedman – yet unconcerned about risks to stakeholder value.

However, as more people are realising, risks take on a different meaning when you consider what's at stake for everyone involved.

7. Every decision you make entails taking a risk.

At the age of 22, Coss Marte was a millionaire. But he'd made his fortune dealing narcotics, and by the age of 23, he was on his way to a seven-year prison sentence. The prison doctor informed him that he only had about five years to live due to his obesity.

As a result, he got in shape. After that, he assisted his fellow inmates in doing the same. He opened a gym after he was released from prison. When the epidemic struck, he quickly shifted to online training sessions, greatly expanding his reach.

That might be viewed as a motivational narrative about how to change one's life. You may also see it as an illustration of how danger influences every aspect of a person's life.

The main point here is that every decision you make is a risk decision.

Marte's choice to drop a significant amount of weight was an essential step in reducing his chances of dying in prison. And later on, building up his business was all about risk: as an ex-convict, he struggled to find work and decided to cut his losses and work for himself. The COVID-19 lockout basically compelled him to make the risky decision of switching to online. Marte's risk tale is straightforward: every time he's confronted a risk, he's taken a wise, good decision.

Another threat that every young person on the planet faces is the global climate problem. This is a major risk, which is why so many kids are taking such severe measures to mitigate it. Haven Coleman, a teen activist, has put a lot of pressure on American lawmakers and pushed Congress to find meaningful solutions.

Is staying at home and playing video games, as most 12-year-olds do, truly safer? When Coleman's entire future is on the line, it's hard to say no. From a risk standpoint, her activism is the obvious decision.

As we've heard, every one of us has a unique risk fingerprint that is shaped by a variety of factors including our experiences, heredity, and physical appearance. The circumstances in which we find ourselves have an impact on the risks we choose to take. But, no matter who we are, we can all strive to become more risk literate. We can make better decisions about how to cope with risks if we have a better understanding of the - positive or negative.

That might look like defying Congress while still in high school at times. At other times, it will resemble returning to work as a nurse amid a pandemic. It may even appear as if you're riding a barrel over Niagara Falls. Although let's face it, that's unlikely.

The essential takeaway from this summary is that everyone has their own risk fingerprint, which is determined by a variety of factors ranging from our DNA and appearance to our experiences and the situations we find ourselves in. What appears harmful to one individual may not appear to be a significant risk to another. Recognizing the essential, defining role that risk decisions play in our daily lives can assist us all in making better risk decisions.

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