Recently, I was introduced to the behavioral psychology and economic work of Daniel Kahneman, Winner of the Nobel Prize in Economics, and I am now officially obsessed.
Risk aversion and loss aversion (to me) go hand in hand and describe exactly the paralyzing fear we go through when embarking on an entrepreneurial journey. There are some of us that aren’t averse to risk and some of us that literally never step out for fear of loss.
A simple shift in perspective here is all that might be needed if the thought of working for yourself causes you to double over in anxiety.
Put weight on the gain, not on the loss.
In addition, when you are in a fearful place it’s good to lean on your advisors or people you trust as Kahneman suggests. They are thinking about your losses and gains with more neutrality.
To be fair to all aspects of your life, it seems to me this shift is always appropriate. Learning a new skill, ending a friendship, pushing a limit, falling in love… put the weight on the gain. Being averse to a loss is human nature, but Kahneman is saying this is an error in our decision making as we may find that a certain decision could hurt worse if we choose to protect a loss over achieving a gain.
Sometimes things are simple, but not easy!
My challenge to you for the new year is to shift your focus from what you might lose: my income, my time, my lifestyle, my heart – and focus on what you could gain: tripled income, free time, love, notoriety.
You can do it, sister – and you look amazing today, btw.
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