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.
- 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