Betting is the wagering of an item or money on an event with an unpredictable outcome with the sole motive of winning a certain percentage of the value risked. Betting is a matter of taking risks on uncertain outcomes of events with the hope of earning more. The whole process entails three elements which are; the amount to be waged, the risk for waging and the price to be won. Betting is a major international commercial activity with a worth of over $400 billion as of 2019. There is a wide variety of events that people place their bets on, ranging from casinos to sports.
Why you should assess your risk profile
Many are the people who have ended up bankrupt with their assets taken to cover the amounts lost in a betting competition. It is therefore paramount for you to assess your risk profile before you start betting. A risk profile is the assessment of the ability of an individual to take risks. You can assess your risk profile by reviewing your assets and liabilities. You will be in a favourable position to bet if your assets are more than the liabilities.
Nevertheless, your eagerness to take the risk involved in betting may be greater than your ability to cater to the same. For instance, a person with more liabilities than assets may decide to risk it all and bet on the few assets he has with the hope of winning a huge lump sum amount. In this case, the development process of his risk portfolio will be altered as the eagerness and ability to take the risk greatly differs.
How to start
In assessing your risk portfolio, start with a risk profile questionnaire. The risk profile questionnaire will grade your response to multiple incisive questions to come up with a risk profile. This risk profile will outline the possible risks you face as an individual or an organization. It is therefore in your best interest to be vigil when it comes to risk management before you start betting. Failure to do so can result in a negative outcome leading to loss of assets and an increase in liabilities.