When to Gamble, When to Fold: How to Take Calculated Risks

A deck of cards on a white table, with a 5 of diamonds peeking out next to a green plant.

Is there anything scarier than the unknown?

Whether it’s something big, like quitting your 9-to-5 or asking for a raise, not knowing what could happen after the jump can be unnerving.

Even smaller risks -- ones that you’ve thought through, making mental calculations -- can be unnerving. You’re betting on the outcome being favorable even though there isn’t an absolute guarantee. If there was, it wouldn’t be a risk.

But the outcome can be so worth it. A new job, a new opportunity, a newfound passion.

We make small calculated risks every day: speaking up during meetings, skipping work events, and shifting focus to new goals are all calculated risks even when they seem benign. But the big stuff — trading careers, taking a promotion, switching majors — can throw us into a tailspin when we don’t know what’s on the other side. That’s normal.

Oftentimes, though, the risk is worth it. Even if it’s not a smashing success, the process teaches us something and we learn how to be better in the future. So how do we take smarter calculated risks? When it’s time to gamble, how much do you risk? Or do you fold, and give up on taking the risk, knowing it’s ultimately the best decision?

First, weigh your options

Calculating a risk is like building a web. There isn’t just one linear process to taking that jump. Every decision you make could affect something else, which could affect something else, and lead to something totally unpredictable.

That’s why calculated risks are smarter than random leaps -- by doing a few mental projections and calculations, you can begin to see what the future would really look like if you made a change.

Weighing the options can sometimes be as easy as making a pros and cons list. And it’s a good, simple place to start no matter what you’re weighing!

When I was in school, I found that making any big decision, like whether to apply for an internship or seek a leadership role in a club, was agonizing until a close friend told me to start making simple lists.

“It’s just stream of consciousness writing,” she told me. Writing my feelings about something first really helped me to figure out what it is that I wanted and why. When you know your “why”, it becomes a lot easier to prioritize the right steps to take.

After that, you can start spinning the web of “if”s. Sometimes it’s even best to write that visually as an actual web or mind map, so you can visualize any potential obstacles and consequences while also thinking through how to make your risk a little less risky.

Ask yourself questions that help you visualize the future more clearly:

  • What would happen next right after ____?
  • What questions would I need to answer?
  • Is there anyone else who would be affected by this change? How? Is that okay?

For example, if you’re debating on whether to ask for a raise, consider how much you ask for. Is it better to shoot high? (Always, yes.) But how high should you ask for? What if the answer is no? Are you prepared to continue bargaining? Do you have stats to back up your request? If you can work through all of those questions, taking the risk will be easier.

Timing is everything 

One of the first things you should ask yourself when taking a risk is whether the timing is workable. This is with everything from asking for that raise to studying for a big test. It can be the deciding factor on whether you should play your hand or fold, because sometimes it’s not about whether it’s a good gamble, but whether it’s the right time.

Ask yourself:

  • What’s the ideal time to take this risk? 
  • Are you in the safest place possible to do it? 
  • How much do you have to gamble? (This could be credibility, money, time, etc.)
  • Could you recover if this doesn’t go well? If the answer is no, rework the timing and don’t do anything until the conditions are right.

In asking for a raise, maybe it’s better to wait a month right after you plan to complete a big project when you will have extra credibility to spend. If you’re thinking about dropping a class, you’ll need to factor in whether or not that decision will cost you money, put a bad grade on your transcript, etc. Sometimes it’s worth hanging in there a while because the benefits of staying put outweigh the benefits of moving on.

Timing is important because it can lessen the risk and shift the gamble in your favor. They say there’s no time like the present, but when it comes to gambling, there’s more to consider.

Welcome flexibility into your life

When you don’t know what the outcome of a situation will be, be prepared to pivot. PIVOT! Maybe not as abrasively as Ross and that couch, but you get the idea. The unknown is an unknown for a reason; if you knew all the possibilities, it wouldn’t be a gamble.

It’s okay to change your plans to fit the situation as it evolves, or even to change your mind completely. Something is bound to go wrong, and being prepared for that (even if you don’t know what it will be) will help you to make smart choices as you move along. Don’t get frazzled by the unexpected. Take a deep breath and make one decision at a time.

Even in the most amazing success stories, nothing goes perfectly according to plan and people have to pivot. Changing your plans does not make you a failure -- it makes you smart.

Upping your research throughout the process can lessen the blow. You’ll be able to make a change at a moment’s notice when you’re prepared for possible outcomes and informed on your options. Even if you don’t see the obstacle or change coming, just knowing that you’re open to flexibility will make it all a little bit easier.

Welcome the challenge for what it is. The pivot is part of the process.

Be realistic in your expectations

Not every risk, no matter how much you assess it or plan, will pay off. Some risks really are just too big or the timing is off. That’s okay.

So while it’s good to think big and be hopeful, don’t expect every big decision you make to change your life. Setting your expectations too high will only set you up to feel like a failure, even if things go as well as they possibly could.

Through your calculations, ask whether your thought process is realistic, whether the goal is realistic, and know that it’s rarely ever a “yes” or “no” question. Knowing whether something is realistic is often times a sliding scale, and you won’t always have a clear answer.

However, you have enough experience and knowledge in certain areas of your life to make practical guesses about outcomes.

Starting a side business might not be realistic unless you can cut back on some other job duties. The keyword? Unless. That’s where the calculation comes in.

  • What’s the risk? 
  • What’s the benefit of cutting back on some other aspects of your life? 
  • How long can you handle reduced work duties if your side project doesn’t immediately take off? 
  • How long do you think it will take your side project to earn enough income to balance your reduced work duties? 
  • Will your boss let you reduce your work duties? What if they don’t?
  • Are there other areas of your life where you can cut back, like social commitments? Will that extra time pay off if invested in your side project?
  • Who else will be affected by these changes? 
  • Will their reactions affect your ability to be successful?

One calculated risk is actually many layers of decisions, because of all the considerations you have to make about your own reality. Life is not simple, and one choice here will affect your life somewhere else.

Remember that no matter how you do it and when you do it, risks are the foundation of success. That’s just reality. Not every risk needs to be huge, but if you want to grow, you’ll have to take a leap someday. Just make sure you’re ready for a safe landing when you do.

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