Last time, I spoke about the responsibilities of management: what to do, how to do it, to what extent, and when to do it. The true principles always simplify complex problems. Today, understand that a good teacher makes complex issues easily understandable. If you don't understand something in class, it doesn't mean anything. From today onwards, don't just listen; learn. As I speak today, contemplate and study.

If you're making a plan for 2019, you must ask: What will you do, how will you do it, and why do it? What will I do? What are the key parameters? Most importantly, it is risk management. If you're involved in property management or investment, and you don't understand, then learn.

If you don't know what risk is, that's the biggest risk in risk management. Don't be muddle-headed. As Christians, we must be clear-headed.

Risk Management is Particularly Important

Investment involves risk, and doing business involves risk. Risk is crucial. Someone invested two hundred thousand, and I asked him what he would do if he lost it. His reaction was, It won't happen. Why wouldn't it? Any investment could result in a loss. A clear-headed person understands the risks and rewards of an investment, and decides whether to take the risk for the reward. Business ventures have risks and rewards—this is vital.

When buying a house, even when prices in Beijing are falling and everyone is rushing to buy, do you think it through? Risks must be managed. What is risk management? It is understanding the extent of the risk and how to handle it.

For example, when you're driving on the road, the risk is an accident. How do you manage the risk of driving? You need to know when it's dangerous and when it's not. If someone has a sudden lapse while driving, they can't drive. However, if someone is alert but deliberately violates traffic rules and has an accident, they're asking for it. When entering a main road from a side road, you need to be careful, look carefully, and then step on the gas.

Some time ago, I drove to another city. Being unfamiliar with the city, I carefully observed the road signs. Being inattentive on the road could easily lead to an accident. I visited these cities recently and didn't get a single ticket, while my friend got six in just a few days of driving. Your mind must be active. You must think, know the dangers, and manage them.

If we manage risks well, accidents are rare. We must learn risk management. If you understand risk, it's hard to be deceived. Wanting to take advantage makes you susceptible to scams. There are people who specifically target the elderly, called Happy Old Age, swindling their money because the elderly only think about returns, not risks.

If someone tells you, Give me ten thousand now, and you'll get twenty-four thousand by the end of the year, it sounds good. But wouldn't you think? That return rate is better than Buffett's; it must be a scam. Everything has risks, and there's no such thing as something for nothing.

Need to Understand Risks

Understanding risk is crucial. Some people don't understand risk and pass it off to others. How can you shift the risk to someone else? How do you save costs for a company? You must manage risks. There's no such thing as zero risk. If you work in a company, you must always be aware of risk management.

For example, the network might crash. Computers operate 99% of the time, meaning they're unusable for three days a year. If you want to increase it to 99.9%, meaning it's unusable for half a day a year, how do you operate? Buy another computer—that's the cost of addressing the risk. If you want to increase it to 99.99%, meaning only half an hour of downtime per year, the cost is even higher. It depends on the company's needs. For Taobao, 99% is unacceptable; they can't tolerate downtime on Double Eleven.

Risk has a cost. To transfer risk, you pay a price. The extent to which you reduce risk determines how much you pay. Why buy insurance? When I crash, someone pays for the repairs. Some say companies should insure their computers, so the insurance company compensates in case of an accident. If a company has a thousand computers and each insurance policy costs two thousand, that's two million in insurance fees, which could buy another thousand computers. It's interesting: better to buy more computers or insure the existing ones? You need to ponder.

Risk Management Means Understanding Things Clearly

Risk management encourages everyone to understand things clearly, using the understanding to its fullest extent. Whether driving on the road, understanding the risks of driving, investing, understanding the risks of investment, or doing business, understanding the risks of doing business, then conducting an in-depth assessment of the risk, you'll know whether to proceed. So, management is deciding what to do, how to do it, and to what extent—that's all management.

Fear Arises from Lack of Understanding

Deciding what to do is based on risk assessment. Risk management is also the management of fear. Fear arises from a lack of understanding. A person is afraid because of ignorance. Knowing dispels fear. So, I encourage the brothers and sisters to start learning practically, and through practice, you'll understand and won't shift hypothetical problems to costly solutions involving money. Fear and risk are two important things to manage. But fear arises when we lack understanding, and risk becomes a risk when we don't understand it. Managing risk well reduces costs and significantly increases returns. This is a crucial concept.

Conclusion

Understand the essence of things. When we do things, we know whether we should do them, and what the risks are after doing them. Don't act impulsively. Learn to recognize God in your understanding, recognize risk in your understanding, recognize the essence, and then decide what to do, how to do it, and to what extent. This is an overview of risk management. May God bless everyone!