Benjamin Todd

This led Nobel laureate Daniel Kahneman to say, Nothing in life is as important as you think it is, while you are thinking about it.

Often, when you think through the worst realistic scenario, you'll realize it's not so bad and is something you could overcome in the long term.

The risks to pay most attention to are those that could permanently reduce your happiness or career capital, such as burning out, getting depressed, or ruining your reputation.

You might also have dependents who rely on you.

Second, is there anything you could do to make sure that the serious risks don't happen?

Many people think of entrepreneur college dropouts like Bill Gates as people who took bold risks to succeed.

But Gates worked on tech sales for about a year part-time as a student at Harvard, and then negotiated a year of leave from study to start Microsoft.

If it had failed, Gates could have gone back to study computer science at Harvard.

In reality, he took hardly any risk at all.

Usually, with a bit of thought, it's possible to avoid the worst risks of your plan.

Third, make a plan for what you do if the worst-case scenario does happen.

Think about what you'll do to cope and make it less bad, as well as having a fallback Plan Z job as above.

If it helps, remember you'll probably still have food, friends, a soft bed, and a room at the perfect temperature.

Better conditions than most people have faced in all of history.

Fourth, if at this point the risks are still unacceptable, then you may need to change your Plan A. For instance, you might need to spend more time building your financial runway.

Going through these exercises makes risk less scary and makes you more likely to cope if the worst does happen.

Set a review point.

Your plan should change as you learn more, but it's very easy to get stuck on the path you're already on.

Not changing course when a better option exists is one of the most common decision-making mistakes identified by psychologists and can be caused by the sunk cost fallacy or status quo bias.

To help avoid this mistake, you need to set a review point.