There’s a clever distinction in finance between being “risk averse” and “risk aware.” Someone might be opposed (aka averse) to taking any risk (“I bury my money in the backyard”), or comfortable with certain risks they understand they are taking (aka aware, “I bury my hard drive with my Bitcoin info on it in my backyard,” or ”I only invest in local real estate”).
While that captures the essence of the “willingness and ability” to take risk, it leaves out a key component: a professional opinion. Personally, I prefer a “coulda, shoulda, woulda” approach for this reason.
Let’s use an example of eating a strange and exotic food.
There are the risks you could take (relating to your ability to take risk, i.e. so long as you’re not allergic to similar foods, you technically could just try it).
There are the risks you would take (relating to your willingness to taste the strange food).
And finally, there are the risks you should take (where we insert the language “please consult a professional.” In the case of food, we add an expert confirming that it’s safe, including “I once saw Andrew Zimmern try this”).
Risk-aware and risk-averse unfortunately leave out the availability of professional help. A self-assessment combined with a professional opinion that understands more of the nuance about what you’re getting yourself into can go a long, long way.