The chilling truth about financial risk

Back when Yours Fatherly was a tweenager, my best friend John and I sneaked up to the loft of my parent’s barn and jumped out the hay door. 

It was winter and there was a bunch of snow on the ground. And, since we didn’t own a snow plow, my parents would convince a friend of theirs come by and plow the snow out of the driveway. Usually what Mr. Plow did is he would push the snow up against the barn doors to get it out of the way and make it easier to get in and out of the driveway. But.. we had a pretty long driveway and all that snow made a huge snow bank, and do you know what this looks like to a couple of bored teenagers? It looks like a helluvalotta fun, that’s what.  

Now, we didn’t live on a farm. The barn was an actual barn though, but it was a very very old barn (probably from when the village was first founded and there werent’ too many houses in the area). The stairs up to the loft were pretty shaky and the hand rail wasn’t something you’d actually want to lean on. Assuming you didn’t slip on the ice-covered wooden steps leading up to the loft, or fall through one of the holes in the loft, or lose your balance while swinging the hay door open, you could jump out the loft door and into the snow bank… which is exactly what we did.

When we hit the snow bank, we went in feet-first and I think came up to our waist. 

We didn’t try it a second time. 

Looking back on it, we probably should have broken a leg or something but we didn’t. We had some trouble getting out of the snow bank (we didn’t think about that beforehand), but we did walk away without so much as a scratch. 

But… we could have not walked away at all. 

The fact of the matter is, even though we thought it was fun at the time… it was incredibly risky. It was an objectively bad decision in spite of the fact that we survived.

We never thought about whether the snowbank was full of gravel (we had a gravel driveway) or if Mr. Plow had accidentally scooped up a tree limb with a pointy end and maybe that pointy end somehow got stuck straight up in the snow waiting to impale one of us on the way down. Or… if the snowbank had turned into solid ice the night before (we never checked it before jumping). Or if the snow bank had a hollow spot in the middle and we’d fall straight through and seriously injure ourselves or die. 

We never thought about any of that. All we saw was upside. All we saw was fun. 

And that’s why it was a bad decision. It would still have been risky if we checked the snow bank before jumping in, but we could have at least assessed the risk and maybe we still would have done it anyway. It would have been just as fun, but a lot safer.

But, we didn’t assess the risk. We got lucky. 

But… some people aren’t as lucky. And… really that’s kind of the point. Here’s what I mean: A few years back in 2016, a young boy in Greenwich, New York died while doing something somewhat similar. He was digging a tunnel through a snowbank (I guess trying to make a snow fort cuz, let’s be honest, snow forts are cool as hell). But… the snow bank was unstable and the top caved in on him and he suffocated. He was 13 years old… and maybe you think a 13 year-old is at a severe disadvantage because it’s just a kid, but the reality is, a New York sized snowbank can kill an adult just as easily.

Why did this kid die while my friend and I walked away “scott-free”?

We got lucky. That’s it.

Maybe you take unchecked risks in life and everything turns out OK. So, you look back on it and you don’t see the actual risk because nothing bad happened. You got lucky. Whether you recognize it as luck or not doesn’t matter. You. Got. Lucky.

And eventually, my friend, your luck runs out. Do you care? I have no Earthly idea. But, if you do not, then this message ain’t for you. If you do, then keep reading.

A lot of what happens to you in life comes down to how good you are at assessing risks and then… taking risks that make sense while also avoiding risks that don’t make sense.

It’s like playing a round of Russian Roulette. You pull the trigger, click. Nothing bad happens. It doesn’t mean it was a good decision in retrospect. Eventually, you’ll pull the trigger and… bang. It wasn’t that that last pull was a bad decision and the rest of them were good. All the previous pulls were bad decisions too, but you just didn’t realize it until it was too late. On the other hand, what is the risk of playing a round of golf? A sore shoulder?

If you are taking unreasonable or stupid risks and your number is up, you’ll jump into that snowbank (or climb into that snow fort) and you won’t walk away. 

A lot of investors are about to learn this lesson the hard way. Now, don’t misunderstand me. I’m not saying don’t ever take risks. I’m saying, pay attention to your risk capacity — how much risk you can objectively afford to take. If you’re fully insured, by all means. Take risks. But, if you’re not fully insured, why are you taking risks with money you can’t afford to lose?

Anywho, if you want to protect yourself and your family before jumping into the snow bank of life, then hop on my email list and let’s boogy.

David Lewis, AKA The Rogue Agent, has been a life insurance agent since 2004, and has worked with some of the oldest and most respected mutual life insurance companies in the U.S. during that time. To learn more about him and his business, go here.