Between the mayhem in the markets, the economic uncertainty in the world and a number of tragedies I have witnessed lately, I have been thinking a lot about my future. Despite working for years to mitigate many of these risks, there are still some things we have no control over. I have chosen to avoid every risk I can and to accept the unavoidable risks as a part of life. Some people I know expose themselves to risk constantly and they are paying a heavy price. There is a big difference between accepting problems and inviting them. Here are some of the things I have learned.
Income & Employment
This morning, my coworker lost her job. I found out last night, because I work in IT. So, I had to come in early to deactivate her key card, collect her computer equipment and change her network password. We talked a little before she left and I could tell she was upset about the situation. I told her not to take it personal, but that wasn’t much consolation. There is very little loyalty between employees and employers. And, there is very little job security. It’s nothing personal. That’s just the way it is now.
Never count on your income. Millions of jobs were lost in this recession and many of them will never return. Sure, new jobs will be created, but they will likely be filled by people with a different skill set. And, because the government is broke, those jobs may be the next to disappear. Clinging to your income is futile, because the job market is changing. Put some money away and be prepared for this change. Stay flexible and keep your liabilities to a minimum.
The job market may change more in a decade then it has in a century.
Partners & Relationships
This afternoon, I spoke with my neighbor, who had recently gotten divorced. He was cleaning out the garage of his house that had just been foreclosed. He told me a sad tale of how he had lost everything, because his spiteful wife had accused him of abuse and forced him to move out. Then, she took everything of value and purposely let the house go into foreclosure. Normally, I remain neutral in someone else’s personal dispute, but she went as far as to euthanize his dog. And, having known them both for many years, I’m just glad he is finally free of this relationship.
Divorce is a primary destroyer of wealth in western countries. Teenage pregnancy is a poverty trap that can last for generations. Abusive, addicted or spendthrift spouses can wreak havoc on a family. Dishonest financial advisors or business partners can devastate your finances. Even lending money to friends and family is a potential disaster. Choose your relationships carefully and avoid giving up control of your finances, at all costs.
Count on yourself and you will seldom be disappointed.
Health & Lifestyle
Last weekend, one of our employees succumbed to cancer, after fighting for eight years. She lost her life on Mother’s Day and left behind a husband and 12-year old daughter. She was a warm and thoughtful person, a talented Engineer and a woman of faith. I’m not looking forward to her funeral, because I have nothing to say that could possibly bring comfort to her family. Sometimes, bad things just happen to good people.
Although it’s impossible to completely avoid health problems, there are many things we can do to tilt the odds in our favor. Everyone knows we should eat right, exercise and maintain a healthy body weight. But, it’s easier said than done. The next thing we know, we are eating a donut for breakfast, skipping a workout, stressing at work and carrying around an extra 20 pounds. We aren’t planning to become the next cancer, stroke or heart attack victim; we’re just too busy to make health a priority.
Treat your health as the most valuable thing you own, because it is.
Insurance & Savings
A couple of years ago, a friend of mine broke his back, while riding a quad in the desert. Unbelievably, he flipped the quad back over, rode it back into camp and then drove himself to the hospital. He missed some work, rang up some medical bills and wound up having to sell his house. They moved out of state to a place they don’t really like, but at least they can afford. He regained his health and has a new career, but he doesn’t seem nearly as happy as he was, nor does his family.
I miss my friend and some of the fun things we used to do together, with our families. And, I can’t help thinking that an emergency fund or some disability insurance may have changed his fate. If you live on the edge financially, it only takes a small push to send you over a cliff. Why expose yourself to a large problem that can be avoided with a small amount of money?
Save, invest, insure and prosper.
The Bottom Line
The bottom line is that there will always be risks in life. And, the people who manage those risks are the ones will become successful. Those who ignore the risks are the ones who will become a statistic.
“There is no security on this earth. Only opportunity.”
Douglas MacArthur – American General
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