Last week I read a news story about a pharmaceutical company called Valeant. They had just announced the acquisition of an eye health company called Bausch and Lomb.
The cost of the deal: $8.7 billion dollars.
By anyone’s measure, the deal is a risk. When you plan to spend billions of dollars to buy a company, you’d better know what you’re doing.
But even though the costs are huge, the rewards are even greater. Through this deal, Valeant is expected to cut $800 million dollars in annual costs every year plus get all the revenue from the new business.
Risk More, Gain More
It’s unlikely that you or I will be involved in such a huge deal. Billion dollar buyouts aren’t a normal everyday occurrence.
But the sentiment behind this story, the risk that was taken, reveals a good lesson:
Some of the biggest gains in life come from our willingness to take risks.
Every day we make decisions about what risks we’ll accept. We might:
- Start our own business
- Go back to school
- Change careers
- Talk to an attractive stranger
- Move across the country
That last one is a risk I took recently. A few weeks ago, I packed everything I own into a truck and moved from Minneapolis, MN all the way down to Houston, TX. We moved because my wife was offered a job way too good to pass up.
It took three days to cross the country and start life over in a city I’d never even seen until I had arrived.
To some people, the move would be really scary – starting life up in a city you’ve never visited. I’ll admit that I’m curious to see how it will all turn out, but I’m not experiencing much fear.
That’s because I know the secret to risking more, but at the same time fearing less:
You make taking calculated risks a habit you do regularly.
The more risks you take, the less fear you have. It’s just like working out a muscle. You either use it or it turns to flab.
This Houston move was an easy risk to take because I’ve done it many times before.
The first major move I had was leaving my parent’s house to get my first apartment. That’s a huge scary step for someone who hasn’t lived away from their parents before.
Then I moved to Minneapolis which was a little easier for me to do, but I had other fears. I didn’t have a job or means of income waiting for me. I was taking a risk that I’d find something when I arrived.
The risk paid off in many ways. I found a job, made new friends and met the woman I’d eventually marry. It’s that same woman who found a job all the way down in Texas for my most recent move.
It’s interesting how one risk can lead to another.
The way to fear less, but take more risks is to build that risk-taking muscle. When you become accustomed to making risky choices, you don’t fear them as much.
All risks are like this. The more you do, the less fear you have doing them.
It’s the same thing when it comes to traveling. The first time I traveled abroad, I was nervous. I was heading to a foreign country and had no previous experiences of what it was like to go to a new country. I wasn’t sure if I’d have trouble finding my way around or if there would be a language barrier.
Basically I was taking a risk that everything would turn out ok.
The second time I went abroad, I was less afraid. I had a little experience behind me and I knew what it was like on the road.
Now I’ve reached a point where I don’t get nervous at all. In fact, I’m extremely calm before I go anywhere.
People who talk to me before I go somewhere don’t think I get excited for my travels. Of course, that’s far from the truth.
I just don’t have any nervous energy before I go. I’ve traveled so much that I don’t really have to think about what I’m doing anymore.
But that’s the end result for taking on this risk regularly. Eventually you stop fearing those risks and just do them. And the more risks you take, the more you’ll potentially gain.
Think back to the story about Valeant Pharmaceuticals. Over a three year period they spent billions to buy about 60 companies. Those purchases led up to the one for Bausch and Lomb at an eye-watering $8.7 billion.
Each buyout increased their gains even further. Bausch and Lomb is expected to have an even bigger impact. News of the buyout increased their stock by 13%. They know the huge potential there is in increasing the amount of risk you’re willing to take.
It’s a good lesson in what taking some calculated risks can get you.
photo credit: Trekking Rinjani
I fully agree that risk taking gets easier with practice. Moving for me no longer feels risky because I’ve done it so much. Also, I recently quit a bad-for-me job without anything lined up. I’ve been unemployed a lot in the past, all voluntarily, and so it doesn’t feel like a risk. An emergency fund didn’t hurt … nor does the fact that I’ve been out of work for 7 days and already have two interviews scheduled.
Confidence and a sense of humor in the face of risk makes the whole situation not only bearable, but also enjoyable.
I hope you enjoy Houston and get settled soon.
Confidence plays a huge part in it. The more you take risks like quitting your job, the easier it is the do the next time. Part of it is that the first time you do it, you’re going into the unknown. You don’t know what’s going to happen. The next time you do it, you have a better understanding. Experience can be a great way to reduce fear.
I’ve quit jobs without lining something up afterwards too. It’s definitely not as scary as it was the first time.
“People who talk to me before I go somewhere don’t think I get excited for my travels. Of course, that’s far from the truth.”
This part stood out the most to me. After you get used to risking, people begin to think you’re this brave beast who is unshaken by anything. The truth is that we have more exposure and practice so we are more willing to put on a brave face on the outside. What’s even better is when it’s not even just a face anymore but our hearts really are calmer than they used to be. That’s the beauty of risks, the potential for rewards and the hardening you endure.
I think it’s part of gaining experience. When you take that first risk such as traveling to somewhere exotic for the first time or starting up a business, you’re always uncertain if you’re doing the right thing. As you gain experience, you get a better understanding of what you’re doing. That’s definitely a good way to be more calm or brave.
Moving to an unfamiliar place is always a challenge and you never know what to expect, but if you believe it’s for the best, it will turn out to be that way. I once moved all the way from the Ukraine to the US and was a little nervous about it. Now I can’t even imagine living elsewhere. Love the country, the city I live in, my job, and got married to a wonderful man recently. Taking risks is opening a window to many life’s wonderful opportunities. It’s totally worth it!
That’s cool that you have a similar risk-taking story to mine. We both moved somewhere and were nervous, but ended up finding someone and getting married.
It’s true you never know what to expect. I’ve learned that when you take a risk, the worst-case scenario rarely happens. I think as long as you’re careful and understand the potential consequences, you’ll be ok. Plus, there are always learning opportunities if something goes wrong. Then I use what I’ve learned the next time I do something.
Fear is a gift. People act like having fear is a weakness when that is far from the truth. Having fear means you got common sense.It means you understand the situation.
I do take risk in my life because I know I wont it anywhere if I don’t take the risk.
If you no longer have fear of the situation, can you even consider it a risk anymore?
That’s a good question. Is it still a risk if you don’t have any fear of it? I think so. Just because I’m not afraid of something doesn’t mean that there might not be consequences. When I travel somewhere, I don’t feel any fear, but something bad could happen on the trip.
I agree with you that fear isn’t a weakness. No one doesn’t live without it. What matters is how affects you. It’s good to listen to your fear and take it into consideration, but it’s bad to let fear make decisions for you.
Great post. No risks means safety, but it also means no rewards.
If you want those rewards, you have to take some risks.
Great post! I am so thankful that my risks aren’t in the billion dollar category! I am from MN too and my boyfriend is from TX. We spend the summers in South Padre but he’s originally from Houston. Which out of all my travels is where I experienced the most culture shock…. Good luck and welcome to TX!
Wow, it’s a small world. It’s been great here so far and I haven’t had any culture shock so far. But then again, I’ve traveled a lot so nothing fazes me much anymore.
Nicely written, Steve. I have a terribly powerful addiction to the rush of risk. I have been cultivating it since high school and gently raising the stakes every so often. I have seen too many people, late in life regretting the lack of risk in their younger days. It terrifies me to be one of those people. Moving to H-Town, from anywhere, can indeed be construed as taking a risk;)
I’ve noticed that too. I’ve met a lot of older people that wished they had taken more chances. Usually that means chasing down a dream they had or traveling more or things like that. I don’t want to be one of those people who wish they had taken some risks and done more. For me, I’d rather take a risk and have it not turn out than never have tried at all.
Yes Sir, Steve. Go get it, or die tryin’! Great way to live AND die;)
It is very true that one risk leads to the next. I’ve moved 7 times in the last 13 years (5 states)…so I know what it is like to start over someplace. Our moves led us to adopting our son.
That’s a lot of times. You’re probably pretty good at setting yourself up in other states.
Yes, yes, Steve! Once you take one risk, it’s easier to take the next. When we moved to Houston, it was sight unseen. “Arrive before 3pm,” the apartment office told us. Being from Upstate NY, we had no idea what Rush Hour meant. After unloading our Ryder truck in 102 degree heat, we settled in nicely. Settled in a bit too much,really, but now we’re back on track with a new lease on life. The Holy Cow This is Fun lease on life. Your stories are an inspiration!
Cool, so your story is similar to mine. We arrived early in the morning so we’d get an early start to unpacking. Yet our apartment complex wasn’t ready and we had to wait for a while. We also unloaded in over 100 degree heat. It was intense.
I absolutely agree that the risk-taking mindset is built like a muscle. I too have the same feeling about moving – I’ve done it so many times that the fear has been removed from it. But there are areas in life where I do not take risks (not consciously).
So Steve – are there areas of your life in which you don’t take risks ?
– Razwana
Yeah, I don’t take risks in everything. Some areas I don’t care about as much as others so I don’t take risks on them as much in order to get more out of them. Some areas I’ve taken more risks in the past such as investing spare money, but I don’t do that as much now. Although I did just rent out a house so I’m kind of getting back into it.
You’re so right Steve. Our risk tolerance IS like a muscle; something we can train to get stronger. The more risk we take, the easier it becomes.
And vice versa . . . the less we take, the harder it becomes. But that path leads to stagnation.
Better to err on the side of a bit too much risk, I think.
Congrats on the move and good luck getting settled in. I hope it’s a smooth transition for you two.
Cheers!
Yeah, it’s better to err on the side of a bit too much risk. If you play things too safely, you won’t get much. It will lead to stagnation. Of course, some risks might not work. But even if they don’t, there’s always something to learn from them.
Good one Steve. Flexing those calculated risk taking muscles is definitely a good exercise in conquering your fears so that you can take more of them but fear less. I think that is why I was able to pick up and move to japan at 18 on my own and now move to France with my husaband and three kids with no job in place but only a hope to create our own income while here. People ask if I was scared and to that I say hell yeah but….as you said, when you do it more often, you fear it less or atleast you manage fear less because you know there is a reward at the end.
P.s
Congrats on your wifes new job and your new move. I personally love moving to new places. I am ready to move on to a new French town. We have been in our town now for 10 months but we decided to stay put one more year because the kids want to stay here with their friends. Understandable since we were in Marseille last year. Then Montreal the year before that and part of Maryland. And before that in San Francsico. I think they are done moving for atleast the next year. LOL.
Yeah, it was the same thing when I went to Morocco to teach. I didn’t move there permanently, but I was staying long enough to need an apartment. I didn’t know the country, the person I was rooming with or my co-workers. It was scarey, but I did it anyway and had a great experience.
You’ve definitely moved a lot so you probably don’t feel fear doing it anymore. It’s all about being comfortable with risk.
I really related to this story because though only in the U.S. thus far, I’ve traveled across the U.S. several times from the time I was 18 years old. I’ve driven from Florida to California twice by myself with my 2 older boys in tow and it was such an empowering experience. From these experiences I too do not experience the nervousness that often accompanies moving and traveling to new destinations. I love moving and traveling to new places and meeting new people and I believe that through these experiences I have become a lot more educated, less ignorant and more tolerant. I have met a man from Canada whom I plan to marry in October. I plan to move with my youngest son up to Saskatchewan and start a new life in a place I’ve never lived before and I couldn’t be more excited. Just have to get through the court proceedings in order to be able to take him and I’m outta California!
That’s a great story. I hope you get everything sorted out and have a great marriage.
I liked crossing the country too although I didn’t do it from Florida to California (that must have taken a while). Although I wish I would have been able to make more stops to see the sights. I was towing a car on a hitch the whole time so I couldn’t maneuver the truck very much.
You’re right that you can learn a lot from moving. I’ve already learned so much about Texas. There’s still a lot more I could be learning about too. I guess that’s part of the adventure.
Nothing great happens without risk. I really like your wise statement: “You make taking calculated risks a habit you do regularly.” They key is to take calculated and well thought out risks. Great post bro!
Thanks, Dan, I’m glad you like the post.
Great post Steve! And look at that, we’re fellow Texans! Strangely enough, we packed our car and headed to Texas so that I could start my PhD program. It’s a huge change but as you said, no risk = no reward.
Wishing you guys the best in the new roles!
Alright, another fellow Texan. A lot of people have been coming out since I’ve written this post. Good to know there is a sizeable Texas population reading this blog.
It’s funny that you mention a PhD program since my wife is working towards a PhD right now. It’s a small world.
Hi Steve!
I love what you say about fear being like a muscle. That is so true! The more you keep taking that leap of faith, and the more doors that open as a result, you more you go for it. The more you go for it, the more abundance floods into your life!
Sunshine and smiles,
Jess