Thursday, 5 March 2015

Great catastrophes that will never happen

In which way can we increase our chances of success? How can we overcome exaggerated fears and take well-calculated steps? Thinking must take place before action if such action is to be productive. Planning must take place before implementation if success is to be attained. Self-confidence needs to be built before it can be applied. Skills must be acquired before they can be employed.
 
The most powerful tool


Reason is the most powerful tool for dismantling falsehoods. If we grow convinced that we stand a good chance of accomplishing our goals, we will become less worried and more adventurous. Logic is our cardinal ally for contesting overblown concerns. The best way to face fear is to demonstrate its irrationality.

The intensity of a potential catastrophe is independent of the likelihood of its occurrence. Salesmen promote insurance policies by painting vivid pictures of misfortune, but their sales presentations seldom mention the actual statistical probability of such misfortune taking place.

The perception of risk is also heavily influenced by cultural stereotypes. Saving rates differ from country to country according to how citizens see their future; the willingness to change jobs and move to a distant city is higher in the US than in Europe; the proportion of the population that invests in the stock market also varies from country to country.
 

Asses risks objectively

Potential dangers need to be quantified in order to be properly assessed. If emotions take control, they will exaggerate the negative consequences of risk. On many occasions, the material damages that people actually suffer are minor compared to the accompanying psychological discomfort.

Many things we fear arise from stories written by marketeers. Why do California residents protect themselves more often against earthquakes than against divorce? Because salesmen market earthquake insurance very effectively, while at the same time, few couples are aware that a pre-nuptial agreement can protect them against a devastating divorce.

The trap of exaggeration


If you are considering a challenging professional move, forget about irrational fears and ask yourself the right questions: if your new job proves to be a disappointment, what is the actual likelihood of your becoming unemployed? Even if you lost your new position, how long would it reasonably take you to regain employment?

We worry about risks that have been exaggerated by marketeers trying to promote their products or services. Those who sell pension plans frequently paint grim pictures of retired people living in poverty and rightly so. There is no reason why salesmen should refrain from offering their insurance policies, but it is up to us to appraise risks according to their true gravity.

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Text: http://johnvespasian.blogspot.com

Image by RA_photography under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us