When we talk about the chances of
something bad happening, people tend to fall into three general groups.
- The Numbers Don’t Matter No matter the odds, this group dismisses the
statistics.
People insist they can trust their gut.
I suspect this group buys lottery tickets every week.
- The Odds Look Great This
group focuses on the good news.
If there’s only a 10 percent chance that something bad will happen, they stick their worry in a closet.
They prefer instead to focus on things other than the small chance a bad thing might happen.
People in this group will buy plane tickets even after a plane crash because they realize it’s still safer than driving a car.
- We’re Doomed No
matter how low the risk, this group can’t help but focus on it.
They plan and plot and worry about how to avoid the 10 percent chance that something bad will happen.
People in this group worried a lot about dying from Ebola, even though odds for most of them were greater that they would die from the flu.
I want to focus on this last group.
To be sure, today’s world can be a
scary one.
In some ways, I’m surprised we don’t
all walk around thinking, “We’re doomed!”
After all, during the last 15 years,
we’ve lived through what seems like countless terrorist attacks and financial
crises that seem unending.
It feels like the chances of
something really bad happening at any time are huge.
But
what if they’re not?
What if our worry about the 1 or the
5 or the 10 percent chance of something bad happening blinds us to the rest of
life?
The Centers for Disease Control and
Prevention statistics show that it caused 611,105 deaths.
Just think about that for a minute.
Clearly, the potential risk of dying
from heart disease was greater than the risk of dying from salmonella.
But if you read the news stories about the E. coli outbreak at Chipotle recently, it
became really easy to fear for our food safety and to ignore our weekly cheeseburger habit.
We
do something similar with our money fears
Over the last few years, I’ve lost
track of how many people have told me about their plans to avoid any fallout
from the next financial catastrophe. “Great,” I tell them, “but how do you know
what will happen next time?”
They all begin answering my question
in roughly the same way.
“Well, the last time …” Do you know
how small the probability is that the next financial crisis will look exactly
like the last one?
They’re focused on the teeny, tiny
possibility that what happened last time will predict what happens the next
time.
Whether we’re talking about our
money, our health or our safety, we’ve got to get past that fear of the thing
that has a tiny chance of happening.
This fear blinds us to making the
most of the remaining 90, 95 or 99 percent. Once we’ve done everything we
reasonably can do to be safe, once we’ve accounted for everything within our
control, we need to learn to let go of the rest.
One of my favorite examples of
misguided worriers are the investors who insist on trying to build a portfolio
that will survive any market situation.
That’s just not possible.
But we can build a portfolio that handles
most of what the market might do within the context of our short- or long-term
goals.
And that needs to be enough.
In life, the chance of something bad
happening will never be zero.
But I think Calvin Coolidge got it
right when he said, “If you see 10 troubles coming down the road, you can be
sure that nine will run into the ditch before they reach you.”
Let’s see what happens if we save
our worry for that tenth trouble and let the rest run into the ditch.
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