Key takeaways
- Rational optimism is far different that the stereotypical optimism.
- Successful people have a reasonable tolerance of risk.
- Become a rational optimist to be successful in your endeavors.
Back in 2010, there was a popular book called The Rational Optimist by Matt Ridley. I really like this book because most people, before reading it, said, “Oh, you’re an optimist,” or “You’re a pessimist.” I always kind of took issue with those statements because they imply you’re either all one way or the other.
In his book, Matt Ridley did a great job of going through this mindset of being all one way or the other and saying, “No, there’s a type of optimistic outlook called rational optimism and it really makes a huge difference in the world.”
The segue from this, which is really important, is about taking risks. If you’re a young person today and grew up seeing 9/11 happen, then saw our troops shipping out to Afghanistan and Iraq, and then witnessed your parents suffering through the Great Recession, you’ve lived through several horrible events.
One thing we know about human beings—and I’ve got an 18-month-old grandson right now who demonstrates this—is that 95 percent of their learning comes from imitation and repetition. You’re no different. You listened to and watched your parents, grandparents, and the world around you to develop your perception of life.
Numerous studies have found that the younger generation has a very low tolerance for risk due to seeing these catastrophic events unfold and watching how others dealt with it. The point is that Matt Ridley says, “Be a rational optimist.” He’s encouraging people to get back to tolerating a medium level of risk. In other words, instead of being intolerant of almost any level of risk, get to where you can allow for some reasonable risk.
There are three things I advise you to consider:
Education. We know that when we have knowledge about a thing, it’s much easier to identify the true risks involved. We may find that investing in the stock market, or various other opportunities, isn’t as risky as we first thought it was, based on our Great Recession experience.
Knowledge can also change the perception that the world is such a horrible place because of what happened on 9/11 and the sensational news stories constantly reporting on every single terrorist act throughout the world.
It did look bad for a while. But if you begin to look at things more closely and educate yourself, you’ll probably say something like, “You know, it isn’t really that bad. It’s not actually at the level I thought it was.”
Learn to fail quickly. What I mean by that is that you must personally learn to fail quickly. It goes against what’s drummed into you in school: don’t fail, don’t fail. But the real world is messy. The real world’s difficult. Out there in the world, you’re lucky if you get an F every day.
You’ve got to fail quickly so you can learn from your mistakes and, eventually, you’ll succeed. It’s a really tough one, but it’s important.
Stay hungry. This means stretching yourself and putting yourself “out there” all the time. It means getting excited about everything new that’s happening in your life. That’s risky—putting yourself out there. You can fail. You can look foolish. Putting yourself out there can result in embarrassment.
But you’ve got to do it. When you put yourself out there, you make a statement. It’s like declaring that you represent this or you represent that—whatever it happens to be.
If you want to be successful in whatever it is you want to do, these three things are critical: educate yourself, take those risks, stay hungry. Until next time, enjoy.
Gary
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