Tag: risk

The Fear of Risk

“So when are you going back to work?”

If I had a dollar for every time someone has asked me that question I could live on the money for quite a while. Even my daughter seems puzzled over my decision. Part of that is my fault; in order to blend in I’ve kept quiet about my finances so she doesn’t realize that, at the moment, I am doing okay.

I believe that my friends and family are so concerned because they believe that I am taking a major risk. They believe that I can’t afford to support myself on my royalties and investment income.

They believe that I will have a problem locating a job that paid me as much as I earned at the job I quit.

Eric West wrote a thoughtful piece on the subject of fear entitled You Fear Letting Go Because Humans Suck at Assessing Risk. If you’ve not read it, I highly suggest that you click on the link. Eric used minimalism to achieve his dream of downsizing into an RV so that he could travel full-time with his family. He has an awesome story if you are not familiar with it.

While Eric is focused upon our obsession with material things in his post, the fear of risk is prevalent throughout our society.

We fear needing an item (even if we never use it), so we refuse to throw it away.

We fear new places, so we refuse to relocate.

We even fear failure. This is why so many of us refuse to walk away from our public jobs to pursue freedom.

How to Defeat Fear

One of the best ways to defeat fear is to ask yourself what is the worst that can happen?

That simple question allows you to analyze your fear, to plan ahead for an unpleasant possibility. Bob Knight discussed this process in-depth in his book The Power of Negative Thinking. I believe that his book should be required reading for anyone contemplating a bold decision.

I have taken the advice from his book and applied it to my life several times over the years. I even applied his advice to think through worst-case scenarios as I made the decision to walk away from that job.

What is the worst that can happen in my case?

The absolute worst that can happen is that I will have to get another job.

The funny thing about that worst-case scenario is that any job I take in this area will pay me a higher wage than I received as a manager. Most of the entry-level positions in this area actually start out their workers at a higher price-point than I was earning when I quit. In fact, I received a job offer for a cashier position just yesterday. The pay was $1.00 more an hour than I was earning in my previous job.

That is my worst-case scenario.

What is the worst that could happen if you decided to pursue your dreams? Please share your scenarios in the comments below.

Two Hours Closer to Freedom

Today was the day for my latest stock purchase. My transfers had arrived at my brokerage and I had a day off to savor the experience of growing a tiny bit closer to freedom. I targeted Blueknight Energy Partners (BKEP), a tiny company in the Energy Sector that I’d been eyeing for months. I’d researched them, noting several things I liked about the company as I waited for them to officially slice their dividend. I’ve learned my lesson about buying stock prior to a dividend cut so I held my hand and waited.

Sure enough, the stock price tanked when the cut was announced. I watched it, waiting for it to hit bottom so that I could calculate the new dividend yield based on the lower price. When I was satisfied with both the price and the yield I began purchasing shares in the company.

This month I managed to buy 54 more shares. At the new dividend rate I will receive 32 cents a share per year which works out to $17.28 in annual dividend income thanks to today’s purchase.

I’m over two hour’s wage closer to my goal.

In total I now own 138 shares of Blueknight. I’ve spent $388.04 on the investment, which includes my brokerage fees. This investment will provide $44.16 a year in dividends.

For the moment I’ve decided that I absolutely adore companies that decide to slash their dividends in order to pare down debt or to expand their businesses. Investors hate companies like this so they flee in droves, allowing cheapskates like myself to sweep in and purchase shares at bargain basement prices.

I have finally found my niche.

What risks are you taking in order to achieve your goals? Please share your stories in the comments below.