There are two ways to be an almost sure loser in life. One is to take goofy risks; that is, risks that are out of proportion to the rewards being sought. And the other is to take no risks at all.
Lucky people characteristically avoid both extremes. They cultivate the technique of taking risks in carefully measured spoonfuls.
Some people find this an especially hard technique to come to grips with. In some cases they can appreciate its truth in an abstract way but find themselves incapable of putting it to practical use in their daily lives. Difficulties over this profoundly important Third Technique are among the most prominent causes of bad an mediocre luck. Study it with care.
Of the two unprofitable extremes – goofy risks or no risks – by far the most commonly seen in our society is the latter. Large number of people in America and Western Europe shun risks as assiduously as they shun hornets. They value safety and security above everything. As a result, they miss some of life’s best fun. And they tend to stay poor.
Consider the career plodder, a typical product of our place and time: joins a company right after high school or college; fears risk; never sticks her neck out; makes as few decisions as possible; innovates nothing. Comes to work promptly at opening time each morning does precisely the work that is required, and goes home promptly at five. Thirty five years later, collects a gold pen-and-pencil set and retires, never to be seen or heard from again.
What’s it all for? Security. That is all the plodder has earned. A salary that bought modestly comfortable living conditions and a pension that assures a retirement free of want. Those are nice things to have, but where is the joy and color? Where are the great victories, the triumphs? They are missing.
Our education and social conditioning tend to push us into the plodder’s way of life. We are taught that risk is foolish. The Puritan Ethic frowns on gambling and speculation. It urges us to make our way through life by keeping our noses to the grindstone: a bird in the hand and all that.
There is an old fable about a race between a tortoise and a hare. School kids all over the world get this fable laid on them because it is supposed to teach a great truth about the proper way to design one’s life. The prudent tortoise carefully conserves his capital – his energy – and wins. The crazy hare bets his entire capital in a single wild speculative spree, bankrupts himself early, and loses. The moral thus derived is that it is best to choose the plodder’s way. That way may be boring but it is the way to win. So says the ancient teaching.
But is it true? Not in real life, it isn’t. The straight-line plodder, shunning risks, also avoids the possibility of lucky breaks. On the whole, plodders are unlucky.
Or perhaps it would be more accurate to say many of them are luck neutral. Neither good nor bad luck strikes them to any notable degree. Their lives hardly change. Nothing happens.
You may be reading this book partly because you feel you have been leading such a life. You don’t necessarily have any grandiose dreams of becoming a movie star or making a six-figure killing on the stock market. You just want something to happen. You want interesting events. You want change.
But not even change will happen unless you take some kind of risk. Remember our definition of luck: events that influence your life but are not of your making. To secure the best chance that such events will happen to you, you have to invite them to happen; in other words, stick your neck out. You cannot control the kind of luck that will come your way. It may be good luck or bad. If it is bad, there are steps you can take to get out of its way. We will study those steps later in the book. For now, the pint to understand is that if you want luck to come around and change your life, you must initially be willing to accept either good or bad luck. That is another way of saying you must take a risk.
Yet our culture keeps telling us not to take risks. It is a peculiar fact of life in America, and to a lesser extent in Western Europe, that some of the most solemn antirisk preaching comes from men and women whose early lives were in fact wildly risky. That odd phenomenon reinforces the basic Work Ethic philosophy of the culture and adds to the social pressures that turn too many people into risk-shunning plodders.
What happens is this: A man or woman (most often a man until recent times) indulges in some glorious speculation early in life. His luck is good. The speculation pays off. He becomes rich and famous. Young men and women look to him for advice. “How do we make it, sir?” all the new young climbers ask. And what does the revered sage reply? Does he tell the truth: that he made it by being lucky? Of course not. He says, instead, that he did it by being smart, dedicated, patient, tenacious, and all those Work Ethic things. He tries to make people believe that he is really just a pious plodder who happened to plod further than other people.
And strangely, most people believe him. Maybe that is because he gives them what seem like sound reasons for avoiding risk. A risk-free life seems safe and comfortable, and this is what most people choose when they see no good reason to choose otherwise.
John D. Rockefeller the elder was an early example of this phenomenon. In fact he was so good an example that he was very nearly a caricature of it.
Old John D. made his enormous pile by taking some wild gambles in the oil business. He began adult life a half-starved young clerk in a Cleveland mercantile business. He recognized instantly that he was always going to be a half-starved clerk is safety was the guiding principle of his life. To lift himself above the lower or lower middle income strata, he realized he would have to take risks. And that is what he did. By saving and borrowing he put little wads of capital together and plunged into various commodity speculations and other ventures. He had some bad luck but also some good. One excellent piece of luck (the result of Rockefeller’s fast-flow orientation) was his meeting with a man named Samuel Andrews, an expert in the chancy new business of refining oil.
Rockefeller by now was a practiced and dedicated risk taker, and the idea of a new gamble was a powerful attraction. He and Andrews set up an oil refinery in Cleveland, against a chorus of jeers from more sober business men who were sure it was a harebrained gamble. That Cleveland refinery was the nucleus of Standard Oil.
He was a risk taker of the first magnitude. No plodder, this Rockefeller was a man who stuck his neck out and invited luck to come and change his life.
But after had he had made his first few hundred millions, and after he had become a nationally known source of Great Wisdom on how to succeed in life, did he ever mention luck? Did he counsel people to take risks? No. He told them to be plodders.
He became famous for singling out small, ragged boys – caddies on golf course, newsboys on street corners – and delivering homilies on hard work, thrift, and patience. “Work hard, spend wisely, invest safely, and let time do the rest,” he would solemnly instruct, as the wide-eyed kid gaped up at him. And then Rockefeller would reach into his pocket, pull out a dime, and pluck it into the youngster’s small, grimy palm. “Save a dime every day,” the tycoon would declare, “and you’ll be a rich man!”
This was perfect nonsense, of course. Assuming the kid had seventy more years to live, his total invested capital after a lifetime of following Rockefeller’s advice would be $2,555. If the kid was lucky, compounding interest at fluctuating rates might triple or quadruple that amount – to $10,000, let’s say. Rich? Rockefeller himself earned that much in a single day.
In any case, the whole dime-giving charade was a hoked-up public relations scheme. It was invented by Ivy Ledbetter Lee, Rockefeller’s public relations counselor. The object of the game was to change old John D.’s image as a fast-bucket operator and thereby ameliorate a storm of public criticism over certain Standard Oil business practices. Lee saw to it that the much-abused, often hated tycoon was always supplied with a pocketful of dimes. The old gentleman’s valet was instructed, in fact, to consider the dimes as important as any item of clothing. The aged tycoon was no more to be allowed out of the house without his dimes than without his trousers. He was to seek out small boys in any place where news reporters were present, hand out dimes, and mumble about Work Ethic stuff. He was to hide, with the utmost care, the real truth about his stunning success: that he was a risk taker who got lucky.
And people swallowed it. Including, perhaps, some of those small boys who received dimes and advice. They would now be elderly men. Those who took the advice have plodded their way through life and can now boast small savings accounts, maybe. Few are rich. Few have climbed peaks of fun or triumph. Was it good advice?
We have noted before that it diminishes us to admit that our greatest achievements resulted largely or even partly from good luck. It is much more ego warming to say,”I made it because I was smart” – or because I had patience, fortitude , and all that. Undoubtedly this fear of diminishment was one reason why old John D. Rockefeller avoided talking about risk and luck.
But the more important reason – at least from the viewpoint of Ivy Lee, the public relations choreographer – was that there is something very un-Puritan about gambling. At the time that Rockefeller was assailing small boys with his dimes and advice – the early decades of this century – Standard Oil was embroiled in shrill arguments about corporate morality. The company was the target of muckrakers who accused it of illegal price-fixing, monopoly in restraint of trade, bribery of public officials, and other unsavory practices. Many of the charges were without foundation in fact, and many others, while plausible, were based on fairly flimsy evidence.
But the public believed many of the accusations because it wanted to. It wanted to because it hated Standard Oil, and it hated Standard Oil at least in part because the huge company’s founder and figurehead, John D., had grown rich by luck. He had gambled and won. And in America, that can be a mistake.
Many people, especially of the plodder breed, hate a successful gambler. They hate him largely because they hate themselves for not having had the guts to take their own risks. He stands there rich, happy and having a world of fun; a living advertisement for what they might have been. Seeking acceptable reasons to dislike him, they cultivate the notion that gambling is, in some way, impure.
That was one of the thigs that made Standard Oil so easy a target for muckrakers. Its founder and chief was a gambling man, obviously a fellow of low character and not to be trusted. Ivy Lee, perceiving this, invented the dime-giving game as one way of proving that old John D. wasn’t a gambler. Why, no! He was just an ordinary nose-to-the-grindstone type like your next-door neighbor!
Thus, antirisk mentality keeps its dominance. Even the very biggest risk takers and the very luckiest gamblers are determined to show they are nothing of the kind.
For a more modern example, consider Thomas John Watson, the man who founded mighty IBM. This tall, lean, ascetic, somewhat dour fellow made himself into perhaps the world’s leading evangelist of the work Ethic. He didn’t look, act, or speak as though he had ever taken a risk in his life. Luck? The word never entered his conversation. He wouldn’t allow anything so untidy as luck to play a part in projects he was associated with.
“Plan your work and work your plan,” he told the crisp young men and women who came to work for him and emulated him. That was the route to success. Luck had nothing to do with it.
Watson’s most famous slogan was “Think.” Signs bearing that single word, in dozens of languages, hang in offices and factories all over the world. The slogan once was longer and even more stern. In the company archives, photographs of long-ago sales meetings show banners urging the assembled strivers to “Work and Think.” Watson personally leaned towards a three-item slogan. Once when I, a young Business Week reporter , interviewed him and asked him the usual question about the roots of success, he wagged a bony finger at me and intoned solemnly, “Work, Think, and Plan”.
It also helped, in his view, to have a starchy white shirt and well-shined shoes. I recall doing a lot of wriggling during that interview, trying to place my scuffed loafers where he couldn’t see them.
Work, think, and plan. A man who could invent a slogan like that would have to be a dedicated champion of the Work Ethic. As far as I know, no more dedicated champion ever strode the earth than Thomas John Watson.
And yet Watson had risen to his high station by being a gambler. This man who claimed you could plan your way through life, this man who never mentioned luck, had in fact taken some wild risks in his younger days. His luck had held; he had won. But like John D. Rockefeller before him, he carefully ignored the workings of luck when young reporters came around to sample his wisdom.
His first encounter with luck was discouraging. He sold sewing machines door-to-door, raised some cash, and opened a food store in Buffalo, New York. Mainly because a bigger, better-funded rival store chanced to opened nearby at the same time, Watson’s venture failed quickly. It must have occurred to him that no amount of Working, Thinking, or Planning could have prevented this dismal outcome. At an early age – he was in his early twenties – he had been given an introduction to the mysteries of luck.
Next, he went to work as a salesman for the National Cash Register Company. After a chancy start, he worked his way into a secure job. Lifetime safety could have been his if he had wanted it, but he didn’t. He chose, instead, to stick his neck out – far out.
It was a mad gamble. Three small office-machine manufacturers had merged into a clumsily glued-together outfit called the Computing Tabulating Recording company. It had lost money from the start. Two presidents had tried to nurse it to health without success. Its aggregate bonded debt totaled three times its assets. Most of the major stockholders and directors wanted to bail out with a few cents on their dollars, but they couldn’t find anybody dumb enough to buy their shares. Desperate, they hunted for a new president, somebody who knew something about office machines. The new man would have to be a gambler.
The gambler they found – a tertiary link in somebody’s acquaintanceship network – was Tom Watson. He was the about forty years old. He was looking for a change in luck and was willing to take an enormous risk for that purpose. Like Rockefeller in the previous century, he had come to understand that you cannot get rich on a salary. If he wanted to make a meaningful change in his life, he would have to embark on a gamble.
So he went to work for the half-dead company CTR. He agreed that his salary should be only partly in cash. The other part was to be in the company’s nearly worthless shares.
He had put himself at the mercy of luck. Of course he could work, think, and plan all day long, but the company’s fate was only to a limited degree under his control. Luck was in the driver’s seat, as it is with any weak company. CTR could have been killed by any of a thousand possible events not of Watson’s making: economic changes, the appearance of a powerful competitor, and so on. By good luck, no such event happened. CTR survived, then prospered, and finally changed its name to IBM.
Back in 1914, when this risk taker first came to CTR, you could buy one hundred of the company’s common shares for less than $3,000. By the time of Watson’s death in 1956, stock dividends and splits had multiplied that round lot to 4,987 shares, and they were worth about $2,275,000.
And this was a man who never talked about luck.
J. Paul Getty knew. The old gentleman wrote thirty four articles for Playboy , telling the readers how to make it financially in a hostile world where half one’s friends and relatives were going broke. Listen to old Uncle Paul, Getty would say. You want to get ahead, young fellow? Then do as I have done. And he would list all the Work Ethic virtues that he believed had contributed to his stunning wealth. Have faith in yourself, he preached. Persevere. Practice thrift. Think clean thoughts. Quit smoking. (Getty was proud of that.) Study hard. Laugh at life’s storms. You know: all that.
Playboy printed this stuff partly because of Getty’s famous name and partly because he owned a piece of the company. A third reason – the man deserves his due – was that he wrote with considerable grace and verve. At one time in his youth he had wanted to be a writer. He was probably the world’s most literate oil tycoon.
But all that stuff about getting rich by hard work, thrift ,and fortitude was nonsense, and deep down in his heart, Jean Paul Getty knew it. “It was really luck, wasn’t it?” I challenged him one day in a mischievous mood. He replied in mock alarm, “You’ve found me out!” Then he said, soberly, “Well, maybe. Luck. But who ever admits it was luck? How can you make a sermon out of luck?”
You cannot make a sermon out of luck. But if you want to know how Getty really founded his monumental fortune the fact is that he and his heirs owe everything to luck in its purest, blindest, wildest form.
Getty made it by striking oil. His very first test well – mark that: his very first – was a 720-barrel-a-day gusher.
Virtue had nothing to do with it. Getty was not even looking for oil very seriously at the time. He had no plan to make oil his life’s work. He was just larking around. In college, after toying with the idea of a literary career, he had become attracted instead to the diplomatic service. This new career plan pleased his father, Minneapolis lawyer who had made some killings in Oklahoma oil. Young Jean Paul thereupon got himself sent to Oxford for polishing. He came back to America with a faint British accent and started looking into the diplomatic job market. But he was distracted by the fun being had in Oklahoma. He decided to delay the start of his government career and taste some of that fun for himself. With a modest stake from his father, he went into business – just for a year or so, he thought – as an oil wildcatter.
He spudded his first test well near the tiny Oklahoma town of Stone Bluff. The reasons of hoping there might be a flow of oil beneath that remote spot were not better than the reasons indicating a million other spots. But, early in February 1916, that out-of-the-way hole in the ground began spewing wealth into the startled young man’s bank account.
That was the beginning of it all. He and his father founded the Getty Oil Company in May 1916, and young Jean Paul went on to become one of the richest men in the history of the world.
Why him?
Thrift? Courage? Diligence?
We know better. It was luck.
It is essential to take risks. Examine the title of any lucky man or woman, and you are all bur certain to find that he or she was willing, at some point, to take a risk. Without that willingness, hardly anything interesting is likely to happen to you.
For a simple and commonplace example, consider state lotteries. As everybody knows, and as the lotteries’ ads keep reminding us, you cannot win a prize unless you place a bet.
It isn’t much money. A dollar or two will get you into the game in any state that runs a lottery. Yet even that small degree of risk seems to be too much for many people. Failing to get into the game, they are doomed to sit on the sidelines, watching jealously as more and more willing risk takers collect those stunning prizes.
One lucky risker was Lula Aaron, a New York grandmother. It was her habit for many years to buy a few lottery tickets after finishing her Saturday grocery shopping. She would stop in at a liquor store near her favorite supermarket and risk a dollar or five dollars or something in between, depending on how she felt.
Some of her friends and neighbors felt this was a silly practice. The odds against winning were big, they pointed out. Buying those lottery tickets was like pouring money down the drain.
The fifty-four-year old grandmother responded with a risk taker’s credo. “I used to tell them I placed those bets because I enjoyed it,” she explained to a lottery official. “Even if I never won, I got my dollar’s worth of fun out of it every week. The fun was knowing I’d bought myself a chance to win.” Or put it another way, the act of taking this minor Saturday risk put her in position to win.
The people who criticized her were locked out of that position by their own choice. She had a chance to win, but they were bound to be losers.
Eventually she did win: $10 million, or twenty-one annual payments of $476,000. All taxable, of course, but who cared? Mrs. Aaron, the Saturday risker, was rich.
Undoubtedly many of those who criticized her were jealous. “Some people have all the luck!” they may have complained. But if they reflected on the episode, it should have occurred to them that their failure to win was their own fault.
Not everybody is interested in lotteries, of course. But the need to take risks extends into all areas of life. Falling in love, for instance. If you want to experience the joys of such a relationship, you must be willing to take the possible hurts, too. You must be willing to make an emotional commitment that has the capacity to wound you. But it is exactly like playing a lottery. If you don’t bet, you are not in position to win.
Dr. John Kenneth Woodham, a New Jersey psychologist, observes that the unwillingness to take risks is a characteristics of those unlucky people we call “born losers”. He says, “Not all losers have this risk-aversion thing, but I do see it often in the really beaten-down kind of person, the kind life has kicked in the teeth over and over again.”
He tells of a patient whom he last saw about a year ago. He calls her Louise but says that is not her real name. “The minute she walked into my office, I could guess what her problem was or, at least, part of it: She was scared to make a move. She walked and sat in a head-down kind of way, avoided eye contact, even avoided talking about herself for the first couple of sessions I mean she talked but not about what counted. She talked around things. She was afraid to take risks even with a therapist. She stayed closed up inside herself and stayed safe.”
Louise’s story came out slowly. “One dominant theme in her life,” Dr. Woodham recalls, “was an intense love-hate-rivalry kind of relationship with a former college roommate. Louise was in her middle thirties when I was seeing her, but this painful thing with the roommate seemed to be as strong as it had ever been when they were younger. All through her years, Louise kept comparing herself with this roommate – and in these comparisons, Louise always finished last. The roommate lived the kind of life Louise wanted: you know, glamorous, colorful, varied, and interesting. She had all the good successes, the great jobs, the grand passions with men. Louise envied her, hated her, then hated herself for being envious.”
Louise’s life was gray and dull by comparison. She had lived with her mother in a suburban town. Years ago her roommate had suggested that they share an apartment in Boston, but Louise had found that too risky a proposition. Louise had a boring but secure job with an insurance company near her suburban home. She did not want to leave that corporate womb and look for a new job in Boston. What if nobody wanted to hire her? How would she pay the rent on that apartment? She would have to borrow. But the, suppose it took her a year or more to find a job with a big enough salary. What would she do then? How would she even get out of debt?
She was so acutely worried about losing that she was unable to place a bet. Later, when the roommate was about to start a small business of her own and invited Louise to join her, Louise was again unwilling to take the risk.
The same problem stifled her relationship with men. Since it is never possible to be 100% sure about another person we have just met, every new relationship requires us to take a chance – sometimes a big one, sometimes a small one. Louise was never willing to place even a small bet. Dr. Woodham is not perfectly certain about this, but he suspects men found her unnecessarily suspicious, tense and unresponsive – not the kind of woman with whom the average man would want to spend his Saturday nights.
Louise’s roommate didn’t win all her bets anymore than Lula Aaron, the lottery player, won all hers. But the roommate did place herself in position to win, and that positioning paid off. She ended up as the owner of a successful business, modestly wealthy, free to travel at will, married to a man she loved. Louise ended trapped in a life of loneliness and boredom.
One of Louise’s difficulties evidently was that she lacked skill in assessing the risk-reward ratio in her life’s important situations. Either that, or she didn’t understand the need to make such an assessment. All risks looked equally daunting to her.
That is a recipe for poor positioning in the world of luck. It is essential to study risk-reward ratios. When a given risk is small and a potential reward large, you might as well take the risk and so position yourself to become a winner.
A risk may be “small” either in terms of its size or in terms of he odds against you. A simple example of a small-sized risk is a bet in a state lottery. You plunk down a dollar. The odds against you are huge. In all likelihood you are going to lose that dollar. But since it is so small an amount, and since the potential six-or seven-figure prize is so big, you can justify taking the risk. As Lula Aaron noted, you can justify it on the basis of fun alone.
For an example of a risk that is “small” in terms of odds, consider the act of putting your money in a savings bank. The looked-for reward is the interest you expect the bank to pay you, and the risk is that the bank will fail with your money trapped inside it. If it fails the Federal Deposit Insurance Corporation is supposed to reimburse you. It may do so, but only after a long delay and with no interest. If a lot of banks fail all at once in some world economic collapse, then there will be a “run” on FDIC, and it too, will fail. In such a catastrophe, you probably will lose every dime of your deposit.
But the risk of that unhappy outcome is very small. This situation is exactly the opposite of the lottery bet. The reward you are seeking – the bank interest – is small. But the odds against you are also small. Thus even though we may be talking about a big amount of money – your life savings – you can still consider the risk to be “small” and so can justify it.
Not all situation are so clear-cut, of course. Indeed, few situations are. Life is a muddle of fogbound choices. One trait of the consistently lucky is that they are able to assess risk-reward ratios even amid this confusion and ambiguity.
Somebody like Louise, lacking this skill, may well come to see all risks as pretty much alike. If a possible course of action involves any degree of risk, then it is to be avoided.
A risk avoider like Louise will therefore shun gambles in which the risk is really quite small. For example, there was Louise’s refusal to leave a secure job and go job hunting in Boston. In this case the potential reward was big, a grand package of assorted goodies: a better job, more money, more excitement, new kinds of fun in the city environment, and so on. Risk was involved and that risk frightened Louise off.
But what was the risk? It was really not so big. The worst likely outcome was that she would be jobless for a few months. She would then have had to use up savings and perhaps borrow for living expense. Not a calamity, just an inconvenience. She would not disappear off the face of the earth. There are no debtors’ prisons in America. She would not be allowed to starve while down on her luck. Moreover, there were fairly good odds that this down period, if it happened at all, would last only a few weeks. As an able young woman with good job skills to offer, she was not likely to wait long before an employer took her off the market.
It was a gamble worth taking. It might have led to a big win.
And then there are people who make the opposite mistake: taking big risk for small gains. They are very much more colorful people than the Louise type, and as a result we hear more about them. The dull gray life of a Louise isn’t newsworthy and its only contribution to fiction is to inspire lot of boring novels and short stories in which nothing happens. But let some world risk taker walk between skyscrapers on a tight wire and that’s news. It can be gripping fiction, too. Some of the world’s best plays, novels, and movies are based on mad risks at Monte Carlo; on Wall Street; in war, poker and love.
But in real life, those exiting and colorful people are not nearly as common as the risk avoiders. There are at least ten men and women of the Louise type for every reckless gambler.
The reckless ones are also far less well understood, which may help explain why we find them fascinating. You don’t have to be a shrink to guess at the motives of a risk avoider. The risk-shunning syndrome stems from excessive fear of getting hurt, often as the result of being burned in the past or seeing a loved on burned. It’s usually that simple. But what make somebody into a compulsive gambler, betting the rent money on long shots? What strange fire rages in a woman who climbs dangerous mountains simply for the reward of standing at the top?
Nobody knows. There are a lot of psychoanalysts and others who say they know, but they don’t. All that can be said for sure is that some people crave risk the way others crave alcohol or drugs. These risk cravers usually lose just as Louise did, only more spectacularly.
Such a man was Joe Kennedy, Jr., older brother of President John F. Kennedy. Joe was a compulsive risker. He was always involved in harebrained stunts – for instance, swimming across an icy, turbulent river that could easily have drowned him, just for the reward of saying he had done it. He lost of bundle speculating in the stock market, risking big amounts on ventures with appallingly long odds. His luck was almost certain to run out sooner or later, and it did. At the age of 29, during the Second World War, he volunteered to fly a near-suicidal bombing mission against a German rocket installation. He told a friend that the chances of success were only fifty-fifty. He never returned from the mission.
What draws people to such fearsome risks? Psychoanalysts speculate about a “death wish”, but the existence of so weird a motivation has not ben convincingly demonstrated. It probably doesn’t exist except in a very few, vey peculiar individuals. It certainly isn’t a common trait among humans. Nor is the minor death wish that analysts ascribe to compulsive gamblers – the supposed wish to lose. In Freudian theory, a gambler may want to lose because he wants to be punished for some real or imagined sin or failing, usually a fantasized, sex-oriented sin supposedly committed in childhood.
Well, maybe it’s so. I hope I may be forgiven for doubting it. In all my years of studying luck, in all my travels up and down Wall Street and around the casinos, I have never met a gambler of either sex who wanted to lose. Never. I very much doubt that there is such a person.
On the contrary, all gamblers want to win – including the pathological risk cravers who are always betting too heavily against odds and losing. All of them want to win. The more compulsive ones – the daily long-odds bettors and chronic losers – are know to go crazy with delight when they do happen to win. They dance and sign, hug strangers, and walk into bars and buy drinks for the house. That isn’t the behavior of somebody who secretly wanted to lose.
what really seems to drive such a risk cravers is not a desire to lose but just the opposite: a desperate yearning for the experience of a big win. It must be a big win: a twenty-to-one shot at the track, a stock market gamble that pays off in six figures. Modest successes aren’t enough for the risk craver. He is like a heroin addict who started by injecting small amounts of the drug, got hooked, built up a tolerance, and now cannot get a kick except from large amounts.
Studies at John Hopkins University bear out this conclusion. At the university’s Compulsive Gambling Counseling Center, staff members say they have never noticed any widespread “wish to lose” among their patients. Nor have they identified any special personality type as particularly prone to this problem. But according to project administrator Sandra Leavey, there are “Common threads” in the lives of many of the patients.
Two of these common threads are worth looking at. First, the risk accepted as a positive experience. The youngsters went to the racetrack with Dad or heard a favorite aunt talk about the fun to be had in Las Vegas. And second, the risk craver had a big win early in his or her gambling or speculating career.
Thus, perhaps, an exaggerated urge to gamble becomes established. First the future overrisker learns from an admired aunt that gambling is a good activity to be involved in. This is the opposite of the Puritan disapproval and bird-in-the-hand preachments most of us get as kids, and it sets the stage by allowing the neophyte risker to enjoy a jackpot without having feelings of guilt or uncertainty. Then, when a big win happens the young risker gets a million-volt jolt of pure gambler’s pleasure and is hooked for life.
Anybody who is so thoroughly hooked for overrisking is probably not going to be changed by reading a book or listening to a lecture. Compulsive gamblers and speculators know their behavior is self-destructive without needing to be told so. All they need to so is look at their ow bank accounts to observe that they aren’t lucky. As a general rule, somebody so hooked needs the special help provided by organizations such as Gamblers Anonymous. The members of GA, thoroughly and personally familiar with the risk craver’s problems, are best equipped to help each other.
But statistically, if you feel good luck has been avoiding you, it is far more likely that you lean in the direction of too little risk taking rather than too much. What you must do is learn the technique of risk spooning.
From now on, seek out risks. Start small. The very least degree of risk you should expose yourself to is the degree associated with a typical state lottery, in which tiny amounts are bet against long odds in the hope of monumental rewards. If your state runs a lottery, bet a couple of bucks once in a while. Or place a bet when you visit a neighboring state.
If there’s an office or neighborhood Super bowl pool, get into it. Play bingo at the local church once in a while. Risk a few quarters in a slot machine if you get the chance. Buy raffle tickets. The idea is to get used to the idea of taking risks and and to become comfortable with the thought of yourself as a prudent risker.
Take a few risks in your personal life. Get out of the habit – Louise’s habit, and a very common one – of automatically shying away from every risk. Instead, assess the risk and determine if it is really as big as you supposed. If it is, and if the hoped-for reward is small, then all right, don’t take the risk. But if it is minor and the potential reward is big, grit your teeth and place your bet.
This kind of risk assessment can become important in all kinds of situations. Potentially grand love affairs, friendships, and business relationships usually start with the need to take a chance on another person. New career opportunities almost always involve taking a chance. If you insist on waiting for risk-free situations, you are probably doomed to wait, like Louise. And wait. And wait.
Once you get used to risk, think about increasing the dosage. Don’t keep all your money in a bank. Take a flier in the stock market. Invest in a friend’s promising new business. You don’t have to gamble with your entire net wealth; that would create an unacceptably high risk-reward ratio, the kind that has such a fatal attraction for GA members. But you must conquer your fear of risk.
No matter how you define success, risk is a necessary ingredient of every successful life. Risk puts you in position to win.