TIP

TIP: The margin of safety is often sufficient when it can absorb double the worst-case scenario. So the baseline for a margin of safety is one that could withstand twice the amount of problems that would cause a crisis, or maintain twice the amount of resources needed to rebuild after a crisis.

— from Takeoff Into Chaos · Clear Thinking: The Art and Science of Making Better Decisions by Shane Parrish

In the book

The grown-up response is not blind optimism but intelligent humility about risk. Keep a margin of safety wide enough to absorb roughly twice the worst case you can imagine; in any environment where a single rare event can sink you, the first rule is to limit the downside, not to chase the upside. We reliably underestimate both how possible and how severe the high-impact events are — and the data backs the caution, since the odds of catastrophe climb sharply once a system has drifted into its danger zone. — Takeoff Into Chaos

There are some things that are never worth risking, no matter how large the potential gain; the whole art is to distinguish the daring that serves your destination from the gambling that betrays it. So you calculate — you honestly weigh the probability and the size of what you could lose — and you keep a margin of safety wide enough to absorb roughly twice your worst case. Where the cost of failing is low and recoverable, take the leap freely. — The Flight Plan (Purpose/Wisdom/Risk)

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