Risk, by definition, means “the hazard or chance of loss and the degree of probability of such loss”. Loss has many uses and is described with words such as: detriment, disadvantage, or deprivation from failure to keep, have, or get; the state of being deprived of or of being without something that one has had; the accidental or inadvertent losing of something dropped, misplaced, stolen, etc.; a losing by defeat; failure to win; failure to make good use of something such as time waste; failure to preserve or maintain; destruction or ruin; a thing or a number of related things that are lost or destroyed to some extent; death, or the fact of being dead.  In finance, we talk about risk as it relates to chance, yet always the underlying issue is the fear of loss. And, as the dictionary words demonstrate, also includes an association to death. This means that when making financial decisions, it is critical to understand and to manage your risk of loss in a way that keeps you in control of the outcome.

How could you possibly control the outcome of all your financial decisions? Start by being strategic with your actions by following a written plan for everything from spending to investing. Then work with your financial professional to understand what risks are associated with your plans and to implement loss protection strategies using insurance, investment exit strategies, and interest rate protection plans so you are effectively controlling the degree of loss you are exposed to. In essence, you are not gambling with your money and exposing yourself to catastrophic results if you experienced some sort of financial loss by having a written plan to minimize the various types of financial risk you are exposed to.