What is the Difference Between Risk and Chance?

In everyday life, when we’re not careful, our instincts can lead us to make the same mistakes time and time again. Sometimes there’s nothing wrong with the equipment or the tools, but we just cannot seem to utilize them effectively. It’s a common phenomenon and it can really frustrate us. That’s why it’s good to remember the exact definition of the words that you’re using, especially if you want to keep your cool when things aren’t going well.

What is the difference between risk and chance? Simply put, risk is the possibility that you’ll experience a negative outcome, and chance is the lack of control that you have over a situation. So, if you have a 1 in 5 chance of having a car accident, that’s considered risk, but if you’re using proven tactics and strategies, then it’s not really a risk at all. Being able to quantify risk in this manner can help you make better decisions and stay level-headed in the face of uncertainty.

At the most basic level, you might consider financial risk to be the risk of loss or damage. If you put yourself in a risky situation by choosing to play the stock market or invest in real estate, then you might expect to lose money in the process. This is called pure risk and it simply refers to the possibility of negative results. If you are going to take a risk, it’s usually best to take safe risks, but even then, you’ll probably lose money in the long run. This is why it’s often a good idea not to rush into anything. Instead, take your time to see what opportunities present themselves and make the right decision for you.

Risk Versus Responsiveness

Let’s say that you’re driving down the road and you see a dog walker with his dog. The two of you make eye contact and the dog walker waves to you. This is a totally ordinary and innocuous interaction, right? Well, according to a study done by the Cambridge Center for Behavioral Sciences, it’s actually quite a risky situation. To quote the study, “The more that drivers saw pedestrians as a risk to their own safety, the more likely they were to cross the road to avoid them.” In other words, the more that you perceive risk, the more likely you are to take measures to reduce it. This is why, in some cases, the best policy may be simply to stay away. On the other hand, suppose that the dog walker and his dog weren’t carrying any toys or treats for the small dogs, so you feel that you’ll have a better chance of getting some if you engage with them. In this case, it might be a good idea to wave back even though you’re driving down the street. After all, who knows? The dog walker might just have need of a driver. Who knows?

The point is that the perception of risk can change based on our existing circumstances. If we’re faced with a risky situation, but we don’t feel that we have enough information to assess the risk, then it can make us feel anxious. On the other hand, if we have all the information and feel comfortable in our assessment, it can make us feel confident and even daring. 

Risk Versus Certainty

Let’s say that you’re driving down the same road and you see the same dog walker with his dog. This time, though, as you’re approaching him, you notice that his dog is sick and likely to throw up any moment. In this case, the situation has obviously changed and the risk level has increased. It doesn’t matter that the dog walker isn’t carrying any toys or treats for the small dogs, because now you’re exposed to a real and present threat. This is why it’s usually not a good idea to make assumptions about other people. We don’t know what kind of circumstances they might be facing, so we can’t predict how they might react in a given situation. The only way to find out is to ask them directly.

While it’s impossible to eliminate all risks in life, it’s possible to reduce them as much as possible. If we do our research, take our time, and apply intelligent thinking, we can make better decisions about what risks to take and how to take them. For example, if we’re aware that heavy traffic makes us more likely to get in an accident, but we still need to go to work, then we have to weigh the risk of getting in an accident against the risk of not going to work. In the end, it’s all about how much you want to risk versus how much you want to achieve. That’s the beauty of it.