Risk Tolerance and Reality

Financial Advisers talk about Risk Tolerance -- the amount of uncertainty you're willing to cope with should your investments trend in the wrong direction. But Risk Tolerance applies to more than just Wall Street dynamics.

Consider where you stand with respect to:

• Career/Job Risk Tolerance -- The amount of uncertainty you're willing to cope with should your employer choose to restructure or eliminate your current position.
• Leadership Risk Tolerance -- The amount of uncertainty you're willing to cope with as the boss of those facing current, impending, or recently-experienced Job Risk.
• Interpersonal Risk Tolerance -- The amount of uncertainty you're willing to cope with should an important relationship of yours hit a rough patch.
• Self-Confidence Risk Tolerance -- The amount of uncertainty you're willing to cope with should these or other things at work or in life not go as planned.
• Self-Esteem Risk Tolerance -- The amount of uncertainty you're willing to cope with should your self-confidence dissipate and work/life continue to trend in the wrong direction.

The underlying question here differentiates between PLANNING for potential realities...and dealing with ACTUALITIES.

So what do we do when we find ourselves needing to cope with more risk than we would typically tolerate?

When financial advisers talk about money-matters, many (most?) suggest that we not 'change horses in the middle of the stream' but rather establish, and then stick with, an allocation strategy or plan that's properly aligned with our overall Risk Tolerance level. That, they say, will serve us BEST in the long-run.

Yet isn't it true that airplanes never actually fly in a straight line from here to there but, instead, must make a series of continuous, albeit minor, adjustments along the way to properly correct for the realities of what's going on in the skies around them?

Planning for Reality is important. But effectively handling Reality is more so. Is it not? (This reminds me of Maslow's Hierarchy of Needs -- self-actualization may be the ultimate goal, but if you aren't getting your basic needs met, it's sort of irrelevant.)

So how ARE you handling the REALITY of your work and personal lives these days --not just your financial reality,but your entire reality?

• If you're struggling some, what might you do to bolster yourself and your situation?
• If you're not, how might you help someone who is?