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Musings Report 2021-25 6-19-21 The Sky Isn't Falling, But It's Definitely Different
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The Sky Isn't Falling, But It's Definitely Different
An old friend recently suggested that I take a wee bit too much satisfaction in puncturing expectations that all will be well because it's been going well for a long time.
As my friend put it, "it's normal for people to believe a season of good fortune should be interpreted as entitlement to a lifetime of good fortune."
I readily confess to this bit of pride, which is of course a human predisposition / failing, and to my own predisposition to reckoning my good fortune should continue by reason of continuity (i.e., why should my fortune turn?) and entitlement (i.e., I've earned / deserve this good fortune).
Setting aside our dispositions to pride and entitlement, I think it is important to prepare for changing fortunes and the possibility of multiple misfortunes.
Setting aside our emotions, which strategy has the higher likelihood of success: trusting in our entitlement / luck or having a plan?
Analyst Samo Burja captured a key insight into planning:
"The main bottleneck here is planning, defined as considering your actions in advance and improving the entire sequence, rather than just thinking one step at a time."
My analogy is the difference between falling off a ladder and having prepared a strategy should one fall off the ladder.
I fell off two roofs in my construction years, a fall off a one-story flat roof that I escaped with only bruises, and slip/freefall off a rain-slicked three-story metal roof that very nearly cost me my life.
I also had two ladders slide out from under me, one I scrambled and clung on to beams and such on the way down, breaking my fall, the other one could have been crippling or deadly, as I was knocked unconscious--a few inches to one side and my head would have struck a sharp steel post anchor or the concrete foundation block, and that would have been the end of me.
I mention this for two reasons: one is my experience as a builder is that misfortune is the norm, and things going smoothly is uncommon. The other is that in all these accidents, I hadn't fully prepared a response if the ladder slipped or I lost my footing.
Now modestly wiser (after only 51 years of physical labor), I examine the various options whenever I set up a ladder or climb on a roof and prepare a multi-level response: if this happens, I'll try to do this, and if that happens, I'll try to do this other action. If all else fails, I'll try to do this third action.
As you know from driving, bicycle, skiing, skateboarding, climbing, etc., accidents, our first reaction is the critical point of failure. Since we only have a few seconds to respond, we only have time for one response.
If it's not the appropriate response, there's no second chance.
Depending on luck is one approach, but my luck hasn't been all that good so I prefer having thought out a few potential responses (Plans A, B and C) should misfortune strike.
Of course we might fail to respond as planned, as instinct and chaos are a volatile mix, but having thought through a reaction at least improves the odds of acting appropriately to save whatever can be saved. (For example, is the gutter strong enough to hold me should the ladder slip and I grab the gutter?)
Having been self-employed for most of life, and regularly been in positions where being thoughtless can lead to severe injury, I tend to view misfortune and chaos as the norm. I don't think of misfortune as "the sky is falling," i.e., as something that should elicit an overwhelming emotional response; I think "the sky is different and if we need to do X to save something valuable like someone's health/sanity/capital, then let's do X."
Even when we've planned a response to misfortune, it's difficult to act on it. For example, if we hold some investment and we've told ourselves that we'll sell it if it falls below X, when it crashes below X then a dozen rationalizations not to sell it appear like magic: it will probably bounce back up tomorrow, it's a long-term investment, and so on.
In other words, it's the human condition to presume good fortune is our permanent entitlement, and to take pride in being better prepared than others, and to have great difficulty in acting on our planned responses. (Hence the saying, "if you want to make God laugh, share your plans.")
In the previous Musings I promised to share five possible responses to general misfortune, of the kind that recurs throughout human history: economies falter, nations go bankrupt, governments fall, plagues re-emerge more virulent than before, cities burn to the ground, supplies of essentials are disrupted, the weather repeatedly ruins crops, and so on. (Fun stuff!)
In the context of noting that the sky isn't falling but it's definitely different, here are five possible preparedness responses:
1. Create a realistic budget to get by on 50% of your current income. Lots of things can happen other than actual reductions in income: costs can rise, effectively reducing the purchasing power of your income by half, for example. This exercise helps identify what's actually essential and what's nice to have.
If expenses can't be cut, perhaps some larger changes should be considered. Being able to get by on half your current income reduces the odds of bad things happening.
2. Build social capital by being useful, kind and generous with responsible, stable, caring people whom you like and value, to predispose them to helping you should misfortune strike.
3. Take as close to 100% control as possible of one's career, income, finances and health. Yes, there will always be luck, fate and destiny in play, but having others decide one's fate is an avoidable misfortune.
4. Pay off all debt, become debt-free. It's more difficult for bad things to happen if one is debt-free. Misfortunes multiply when supposedly fixed debts get called by the lender, etc.
5. Invest in tangible assets. History offers many examples of intangible assets vanishing into thin air. Come what may in the abstract world of intangible assets, you'll still have your house, trees, gardens, tools, etc.
As Cicero noted, "The individual who has a garden and a library has everything."
Here's a lagniappe suggestion:
6. Assuming the financial system remains intact, insurance might come in handy, and umbrella policies that protect against a variety of misfortunes are relatively inexpensive. It's a good idea to review home and health insurance, and make sure the replacement cost of your home is covered, and health emergencies are covered (in the U.S., these emergencies are a common cause of financial ruin/bankruptcy.)
Preparing to fall and fail puts things in perspective: The Sky Isn't Falling, But It's Definitely Different, and it's just plain old common sense to have a well-considered back-up plan for wild weather.
Highlights of the Blog
Videos:
It Always Ends The Same Way (34:33)
Posts:
USA 2021: Capitalism for the Powerless, Crony-Socialism for the Powerful 6/18/21
Is Inflation "Transitory"? Here's Your Simple Test 6/16/21
Seven Things Nobody Talks About that Will Eventually Matter--A Lot 6/14/21
Best Thing That Happened To Me This Week
Three-kale salad (plus lettuce and carrots), one kale from a cousin's garden, two from our garden, and cherry tomatoes from our profusion of volunteer tomato plants.
From Left Field
Delta Force: Notes on Our Newest Covid Variant of Concern
The Most Effective Weight Loss Method I See Almost No One Using-- clickbait headline but a worthy point being made....
What tree rings reveal about America's megadrought: How we know the American west is experiencing a once-in-a-millennium drought
My Son Was Diagnosed With Dyspraxia––It's Not Uncommon, But It Is Misunderstood
Help needed: 41 servants and counting -- how many energy servants do we need, and how many energy servants do we need to provide for our energy servants?
We Are About to Run Out of Some Stuff--yup....
The Mining of Minerals and the Limits to Growth -- a massive study that completely destroys the fantasy that we'll all have more energy than ever before thanks to windmills and lithium-ion batteries...
Bill Gates's Philanthropic Giving Is a Racket -- yup, and so are all the other philanthro-capitalist trusts....
Forget Going Back to the Office--People Are Just Quitting Instead (WSJ.com)
Young Chinese take a stand against pressures of modern life — by lying down
The Tiger Mom and the Hornet's Nest: For two decades, Amy Chua and Jed Rubenfeld were Yale Law power brokers. A new generation wants to see them exiled.
Why There Are No Space-Faring Civilizations -- and on top of the gravity problem, sending humans is a waste...
"I do not want to frighten you by telling you about the temptations life will bring. Anyone who is healthy in spirit will overcome them. But there is something I want you to realize. It does not matter so much what you do. What matters is whether your soul is harmed by what you do. If your soul is harmed, something irreparable happens, the extent of which you won't realize until it will be too late." Albert Schweitzer (via GFB)
Thanks for reading--
charles |
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