Appetite and Tolerance

Last night’s conversation revolved around risks and rewards/success. Everyone has a different appetite for success. Some take a look at the motivations for their ambition. Others would see this as varying definitions of success, the framing of which shapes every person’s decision. It colors the lens by which we see the world and how we choose to spend our days. 

On the other hand, risk tolerance levels are also relative for every person. What may be risky to one is perfectly safe for another. It may be due to personality, upbringing, experiences and exposure. For the more pragmatic, it’s not about tolerance but a more straightforward and data driven risk-return trade-off. You go with an option  that gives you optimal return relative to the cost of making the decision. 

Seems straightforward but when you combine both appetite for success and risk tolerance, you get all sorts of permutations. I think it will always be a trial and error exercise to find an acceptable mix and this may shift over time depending on context and circumstance. But what is clear to me is that in setting both, you have to define and clarify your personal limits. Setting boundaries will allow us to freely explore the combinations that work best for us. 

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