More on Risk Management

"First, remember that risk — the probability of an outcome significantly different from the expected — can produce both surprisingly good as well as surprisingly bad results. Be as ready to seize the wondrously good as you are to shield yourself and others from the horrendously bad.

"Second, in dealing with exposures to loss, put risk control before risk financing. It is always better to prevent losses, to minimize losses, or to make losses more predictable than it is to pay for potentially large and unforeseen losses. Good risk control makes more efficient use of a company's or a country's resources than does any kind of risk financing.

"Third, in managing risk in either gains or losses, be as self-sufficient as you can. Here, the "you" can be an individual, a household, an organization, public entity, a country, or even a continent. The more you are self-sufficient, the less you have to pay someone else to safeguard you from, or to indemnify you for, unexpected losses. Likewise, when unforeseen opportunities for gain arise, being self-sufficient enables you to keep more of the gains for yourself or for those you serve."

from I Will Write No More Forever. Thanks to Jim for the link.