I hesitate to call anything that I do by such a lofty term as philosophy, but that seems to fit as well as anything else. Anyone who has any degree of introspection has, at one time or another, thought about how they approach life in general – the basis for their big life decisions. I call my approach the Risk to Reward Ratio method. I suppose others may invoke more-established terms like opportunity cost, but I’m not an economist and I would rather not muddy the waters too much (unless it’s to the strains of Mannish Boy, but I digress).
So, what is the Risk to Reward Ratio, and how does one use it? Simply put, every major decision in life (and most lesser ones) involves a usually-instinctive weighing of the pros and cons. I.e., "If I do X, I’ll lose out on Y."
I recently had to decide the mid-range path of my family’s lives. Would we stay in Arizona, where a company was offering me 10 grand more to do the same job I have done the past 2 years? This job, while dull as an old spoon, is not too difficult and I’m told I do well at it. Personally, I feel that I’ve been thrashing aimlessly the past two years, glad to have avoided detection as a complete fraud out of his depth. The other, non-Arizona, option was to take a job offer to move back to Texas. This other job is building on the job I did the last two years in the army, and I’m sure I’ll do well at it as well.
The pros and cons started to pile up. First, the plusses for each side:
|More money||More job satisfaction|
|We bought a house last year||No travel ever|
| ||Family in town, so free babysitters (i.e., we get to go out like grownups)|
| ||Cheaper housing costs|
And the negatives of each one:
|Travel at least 25% of the time||Less money|
|Feeling lost at work||Family in town, so more meddling possible|
|Being a part-time husband and father|| |
|Boring work and dull coworkers|| |
This turned out to be much easier than I thought. However, in any risk-reward consideration, there are some risks that are larger than others. The house is a big risk: conventional wisdom says you’ll lose money if you sell a house less than 3 years after buying it. Fortunately, the market is wonky right now, and our realtor thinks we’ll be able to break even and maybe even get a nice dinner out of the sale.
Anyone want to buy a house in Southeastern Arizona?