More About Risk


Risk is the normal condition. Risk is everywhere. Risk arises when anything changes.

You may have noticed that change is common and accelerating. Risk is too.

Risk and why it’s there.

There are ways to look at risk. The classic is the amount of the loss and the probability of an adverse event happening. others involve other dimensions. Time is one. the stock market might be down when you need the money.

Many risks exist because the person has not considered all the circumstances:

  1. If you want to test your car at high speeds be sure you know the speed rating for the tires. Especially true for motorcycle drivers.
  2. Understand the stock market. It is an auction market and some days everyone wants what is for sale and other days not so many care. Prices changes with the bidders actions. You have no idea why other people act the way they do, so you cannot know future prices.
  3. Understand how medications work. Not everyone can take any given medicine.
  4. Understand how your body works. As you age things change. You should adapt. Bench presses at 75 might not do as much good as a quiet walk.
  5. Have a hint about how the economy works. That will affect your potential income, your tax rates, interest rates, and the direction of change.
  6. Understand people. They are not as unpredictable as you think.
  7. Notice changes. Technology tends to change towards what people want more of. Longer battery life, lower prices, more features.

Risks are affordable or they are not 

If they are affordable, the approach is to minimize the potential loss by care and accept what happens. Everyone leaves an umbrella in a restaurant sooner or later. Driving a car while impaired, or with bad brakes, is avoidable. Being out of shape has risks.

Don’t buy excuses, invest in a solution.

If they are unaffordable, you minimize the likelihood of an event and insure the loss. Your house might burn down, but it is even less likely if you don’t store gasoline in the basement. Insure losses you cannot afford. House insurance with a larger deductible reduces premium. Be sure to insure to value. You might not do very well if you have a partial loss and have underinsured. Check with a professional.

The best insurance situation is high cost / low probability. Low cost high probability events, when insured, have high premiums because of the insurer’s overhead.

If the risk is unaffordable you must eliminate the risk or pay someone else to absorb any losses.

New risks are arising 

That’s normal. Change happens, people adapt, and new procedures and opportunities come along. Adaptation is on you.

What’s the reward?

Risk is not always a bad thing. Some risk is about changes that need you to change. Some of them will be positive. Even very positive. There was a time when changing from dial – analog phones to push button – digital phones was an unwelcome change for some.  Colour TV. Talking movies. Smart phones. Netflix.

When you see the idea of risk that improves things, you will take more interest in paying attention to it.

The takeaway

If you notice risk and change you will become a more dynamic person.

If you notice and act, you will have a more predictable future.


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

Planning Influences Your Future


People like the future to be reasonably predictable. Get a job with a big company, one that is likely to go on forever, get group benefits, get a pension, get holidays. As long as the salary is big enough, that’s a good deal. Key elements of the future are there.

People who have worked at Sears, or GM, or any of a dozen others, found the predictable to be almost predictable, but with some potential deficits.

Planning helps

If you can identify the future you want and you have the resources ot get it, it is just a question of organizing what you have to get what you want. For some others they will have to create the resources. The self-employed for example. Being a doctor, or a business owner does not come with group benefits and a pension plan. These people must create their own resources and then allocate them. Not so easy.

Planning is the process of attaching resources to hoped for outcomes. It does not guarantee the outcome but it does other things:

  1. It clarifies the goals
  2. It creates a time dimension
  3. It assesses the importance of each goal and assigns priorities.
  4. It assesses the resources available to attach to the goals and in what order.
  5. If there are not enough resources, it permits a coherent study of ways to change that.
  6. The study may involve reorganizing debt, minimizing taxes, upgrading skills, or changing lifestyle.
  7. Identify the cost of lifestyle and treat it as a key factor in all your planning.
  8. It identifies others who are affected by the actions or the outcome.
  9. It permits methods and products, like insurance and investment funds, to be understood in context of what you are trying to do.
  10. It identifies risk.

Risk is the part most people ignore

There is a thought that applies “Risk is what’s left over when you think you’ve thought of everything.” Carl Richards

The sobering thought there is you cannot think of everything.

How do you deal with that?

Most people just ignore it and assume they cand eal with what happens. Theya re likely right, but should they have thought about dealing with it with a plan and some resources. That’s what Emergency Measures Organizations are supposed to do. Have a plan for something that could be harmful and preposition resources to deal with it.

Identify possible problems

  • Get laid off
  • Lose your job
  • Get sick or injured
  • A child gets sick and needs care.
  • An unforeseen expense. Maybe the roof is leaking.
  • Someone in your extended family needs help
  • The list is nearly endless and it is different depending on circumstances.

The key observation is unforeseen and unforeseeable are not the same thing. Spend a little time and think about what you would do. What you do early matters most and if you have not thought about it, the response could be seriously wrong.

You can see the need for some easily organized tools. Insurance is one, an emergency fund another. Everyone know sabout those and you’d be surprised how few people do anything about it.

You won’t think of everything and you won’t be able to solve everything perfectly in advance. You can get a better answer than if you don’t think about it all.

The takeaway

The future will not be an endless repetition of the present.

You will be forced to deal with changes

You will accommodate change better if you have thought about the possibility ahead of time.

Planning is a process and it is never finished

Stay alert for new changes.


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

How Evolved Knowledge Works


When we begin to know about some subject, maybe financial planning, or engineering, or even current events, we soon realize there are things we don’t know. Our first impressions of what is right tend not to survive.

As we learn the basics and begin to add details we start to see a deeper reality. Eventually we achieve our idea of what is right.

But then reality happens

Things change. The problem is we are not especially good at changing our approach when we already “know” the answer.

Knowing something that has changed is a serious problem. If the change is substantial, you would be better knowing nothing. At least then you could be right by accident.

You can get a lesson in how it works by watching politicians who get involved before the context is known. There are many examples where a decision appeared to solve a certain problem but it didn’t work. Did they change? Not much. They may have added resources, repeated the action,  and ignored secondary effects.

You cannot afford to do that.

Your defence

I doubt we will see politicians change because of hubris and the effect mistakes have on their careers.

You though, can adopt a better approach.

Be open to the idea of change. Everything changes over time. Even change changes. At one time you could estimate how change will happen. Not so easy now. Some changes in earlier decades would have been different given the internet and smartphones. The Tiananmen Square demonstration was  coordinated with fax machines. Today the news travels quickly and people change attitudes to problems just as fast.

Recognize old experience may be more harmful than helpful. A carpenter who has not been involved for the past 30 years would be surprised by modern technique. Not that they could not catch on, but it would not be intuitive for a while. If you hold too tight to obsolete experience , you miss things and can hardly expect sound answers.

Address better ways to keep track. Modern technology makes recording and analyzing information much easier. You should use it. You will find relationships with a spreadsheet you cannot see with a paper and pencil. Finding a way into the depth is what creativity is about.

Join people with similar interests. A book club is a model, and you could as easily have a current events group, or an investment group.

In summary, never stop learning. Look for mistakes. One criteria for ability is not that the person makes no mistakes, but that they discover them and repair them sooner. Daniel Kahneman spoke of the approach, “ I don’t like being wrong, but I like having been wrong.” You learn from mistakes. You learn little by being right. Being right sets you up for even bigger mistakes once things change and you don’t adjust.

When things change and you don’t, you’ll have some explaining to do.

The takeaway. 

If you know everything today, and learn nothing else, you will be be near useless in just a few years.

Keeping up is the important part of knowing.


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

Inflation Is Likely Or Not?


Inflation at modest levels is certain. At least for a while.

There are several things happening

  1. Supply chains are not delivering “Just-In-Time” inventories. That leads to other product lines going down and anyone who depends on those will be without too. The supply chain is far more than a one-step program.
  2. Employers are having trouble finding employees to fill their job openings. There are complex reasons for that. Some involve government programs. Others involve an aging workforce who are having trouble getting enthusiastic about getting a job. Others still, because employers did not survive the shutdowns.
  3. Some unions are using the peculiar circumstances to demonstrate their powers. Dock workers in California and teachers everywhere see an opportunity.
  4. Governments are busy proving they are incompetent to govern even though they are very adept at playing politics. People prefer they govern well. If they did they would get re-elected without trouble. But that is not part of their skill set.
  5. People look around and see ambiguity about their future. Ambiguity forces them to wait and see. Banks are having trouble lending. Why? Not because people can’t afford the interest, but because they can’t see their ability to repay the principal. Predictability matters.

Could it become hyperinflation?

Hyperinflation conditions are quite specific. Many people think they arise from printing money. If you go and look, you will find the inflation starts for other reasons. The printing of money comes secondarily and as a response to minimize the problem.

It is important to notice how the International Monetary Fund defines hyperinflation. Sustained inflation at more then 50% a month. That is higher than we can even imagine. If something cost a dollar on January 1 it would cost $129.75 on December 31. and $16,320 a year after that.

The famous hyper-inflation examples we have seen include:

  1. Germany in 1923
  2. Greece in 1944
  3.  Hungary 1946
  4. Yugoslavia  1994
  5. Zimbabwe 2008 and apparently, again now

Brazil and Chile experienced serious inflation but not quite hyperinflation. More recently still we have Venezuela.

What can we learn from all those?

For the true hyperinflation, the economy was destroyed by war. Zimbabwe was a collection of things all of which destroyed their economy. They enjoyed an annual inflation rate of 79,600,000,000% in November 2008. I suppose the less significant digits wouldn’t matter to change the meaning. They got it under control for a while but inflation had reappeared at high levels again by 2019 and 2020. (737%)

Inept government, destructive programs, international trade problems, land reform, and the inability of banks to lend are each part of the cause in Zimbabwe. The economic destruction came before the printing of money.

The serious but less than hyperinflation results followed the same pattern. First damage to and near destruction of the economy, fewer goods, and higher prices for what exists. Governments meddling with the problem. Banks failing and being unable to perform their banking duties.

Black markets are the only markets that function.

Can it happen here?

Sure. Anything is possible, but probable?  Not so sure.

The key will be the extent to which the economy is harmed. Some of it may be intentional, but I would hope there are enough sane politicians to deal with that. On the other hand there is no reason to believe that competence will appear. Any programs will involve printed money and uneven outcomes from the effort.

Think this through. If inflation is 50% a month, most businesses will not be able to survive. The product that replaces what they sold at an old price costs more than that to replace. That’s not sustainable. In service industries it is the same. If minimum wage goes up 50% a month, how can you plan? Maybe it will be 80% next month. In Brazil, workers were paid each day and spent all their money before day’s end. Why? Because it was worth less the next day Holding money or anything denominated in money was the road to bankruptcy. Not because you had less money, but because the money you had was valueless. In hyperinflation or even high inflationary times, it is not the goods or wages that are not worth the money, it is the money that is not worth the money.

Worst of all there is no way to get ahead of it once it starts to roll. Wages will not keep up and goods will change in price every day. Maybe every hour. At the height of Zimbabwe’s inflation, 79 billion percent a month, is more than 3% per hour. I suppose people would run to the cash register at the grocery store.

The takeaway

Serious inflation is not impossible, but it is unlikely. Large economies are resilient. they could harm some of it, but not likely all of it quickly

Be alert. Floating rate loans will be a problem. Fixed rate may look pretty good. Paying 3% when inflation is 8% works in your favour.

Equity investments look like they should do okay. Many won’t. Your home for example. You must have someone available to sell too. Even if you sell it, you have to live somewhere and the prices for rent and houses will be rising quickly.

Precious metals might do well. Governments confiscated gold the last time. Silver did well.

The stock market will be unpredictable. Who will have money and want to invest it that way.

Bonds and term deposits will be in for serious trouble.

Think ahead. Have an emergency plan that implement early. You should not panic, but when you must panic, panic first.


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

Never Ask A Barber If You Need A Haircut


That’s ancient advice.

In modern times, it is harder. Lots of people want you to do things that benefit them and might even benefit you.

The key is to understand the motivation of the person giving you advice. Barbers don’t cost much, but should you believe politicians, media anchors, spokespeople for government agencies, or even spokespeople for any entity? The potential benefit to you is not clear and the cost could be very high.

What is truth about?

Truth is not so easy as you think. Truth is a very nuanced thing. How we think affects what we believe to be true. Edward De Bono has postulated that what we decide is more conditioned by how we think than it is by what we think about. Since no two of us have exactly the same set of thinking conditions, we must each have our own truth.

I think we could agree that things that are objectively true have a high degree of common factors with other people interested in the same thing. Small details on the periphery might not matter in the broad scheme of things. Those are what people argue about and mis the hge area of commonality.

How can you decide if something is true?

Deciding about truth.

  1. Assess the credibility of the one telling you this particular truth. Do they have the skills, judgement, and experience to have examined the evidence and reach a cogent solution. As Richard Feynman has said, “A scientist talking about non-science things is just as dumb as the rest of us.” If the speaker has no deep credentialization or experience, treat their expression as opinion rather than fact.
  2. Is it about details or interpretation? Look for the commonality part.
  3. If the subject is complex, decide if you could understand the truth. Oftentimes you will be unable. For example, it would take a remarkable presenter to have me understand quantum physics. Can you tell when truth appears when it involves complicated subjects.
  4. Don’t rely on your experience. At one time you could tinker with your car’s engine in your driveway. The parts were easy to get to and it was not harmful to do things like adjust the sparkplug gap or clean a carburetor. On my car today, I have been told if it isn’t liquid, don’t touch it. Probably good advice.
  5. Is there evidence you can verify? If not why not? If there is no evidence there can be little credibility. Your assumption should be they are not providing it because there is none or because it contradicts what they are telling you.
  6. Check the motivation of the presenter. People with a clear win if you agree with them require more evidence than someone who does not.

Evaluating evidence.

  1. Unnamed expert opinion is valueless. It is hearsay and inadmissible. Most of what you hear from politicians is material their staff collected from what they could find in journals, magazines or  by talking to others. Sometimes a scientist but not always. Keep in mind even the scientist will present their opinion of the science, not the exact science. Usually it is presented to fit the listener’s ability to understand it. When a politician talks about experts, they are talking about third hand interpreted hearsay.
  2. Is the presenter too sure, given the situation. Too sure is intended to inspire confidence but a careful listener notices that most of the time when they hear that certainty, the key information is not available at all. Not to anybody, even experienced experts. Fog of war. It doesn’t keep people from acting though. Certainty sells better. No one would mind if they made better decisions as they learned more.
  3. Is there a preferred story?  If there is, is what you are hearing just embellishment of that.
  4. Are some things denied without evidence that matters. That something is not proven in a particular circumstance means little. the circumstances of the test may have been more important than the product. If it is safe, why not use it in other circumstances. Nothing to lose.
  5. Is there compelling evidence that contradicts the story? Ask yourself if there should be.
  6. As always, to whom the good. Follow the money.
  7. The covid pandemic has  excellent material to help you learn to be a skeptical thinker.

The takeaway

At one time it was said you should believe half of what you see and none of what you hear. Given photoshop and similar technology the new rule is believe nothing until you see evidence and reasoning.

It is like high school. Demand that the presenters show their work..

Look for people who contradict. Even if you are on their side, hold them to the same standards.

Look for other news sources that have no reason to support the people who you can see easily. Some European. Sky News Australia doesn’t report much on the Australian madness, but has a different viewpoint on the US. No one reports on Canada.

Look for meaning.

Learning to be a skeptic is good fun. Try it.


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

Does “Woke’ Capitalism Make Sense?


I have been noticing an increasing trend towards ESG investing. (Environmental, Social, Governance) Is that likely to be better for businesses, their investors, the market as a whole, or even the customers? We know it is a win for the ones who want to rule us.

The idea is not so new

Can business leaders expect to win? It depends on how you define win. If their goal is to solidify political support for their business they will do better than the ones who do not subscribe. Using political influence to support business used to be called mercantilism. It didn’t work very well because it extracted costs from the customers that they should not and need not pay. It was a form of protection racket that supported corrupt governments.

Even Adam Smith in the late 1700s opposed the idea. We see his reputation as supporting free markets and capitalism, but he had no love for the shopkeepers of the day. Though Smith was not pro-business, he was pro-markets and there is a big difference. Governments and businesses can tamper with markets. Free-markets don’t match their ambitions.

Wokeism is anti-market.

Normally, markets are open to all and the rules are known. Wokeism is about political power and it is about choosing sides and preferred players. Shut out the rest. How difficult will it be for competitors to existing politically connected businesses to arise? As my friend Max Ma would say, “That’s not a problem; that’s impossible.” Governments like to influence markets because that’s where the money is. They tend not to reach some point where they have enough. There is always another project that needs even more money, and there are always a few businesses wiling to buy protection.

You can spot them by the virtue signalling. Major League Baseball, the NBA, Coca-Cola, most big banks, Amazon and especially Amazon Web Services, the Alphabet companies, Facebook, Twitter, Hollywood, and the list goes on.

Milton Friedman on the idea

Like Adam Smith, Friedman thought free-markets were optimal. Sure they needed some control to prevent the worst aspects of corporate greed, but they provide tremendous benefits.  The problem comes when the government regulators becomes a player –  influencing the markets through manipulation of the corporations.. That’s where we are now.

From the 1970’s, Friedman saw the problem. “The two greatest enemies of free enterprise in the United States … have been, on the one hand, my fellow intellectuals and, on the other hand, the business corporations of this country.”  Milton Friedman. Which Way Capitalism? Reason, May 1977, page 21.

Think bailouts, think subsidies, think custom regulation. The government in the past 20 years has worked at great expense to the taxpayers to buy the big businesses, the media and the entertainment industry. How does the benefit anyone other than the government officials and for a little while the businesses?

It will of course implode as there is no benefit for the added costs.

What to do.

It is probably too late to fix the government side of it. The catastrophe is both near certain and necessary for future reform to be possible.

There are two ways to think.

  1. For the people it is a conundrum. I don’t see much hope there. Maybe precious metals bought with borrowed money. Maybe Bitcoin or others. Maybe real estate. Work you can do that can earn a living, although there may not be many who can pay you.
  2. For the businesses. Government loans, grants, and guarantees. When the money gets lost, at least it looks like theirs. Really just other taxpayer’s money, but they were going to lose it anyway, so no new harm.

The big question.

It is no longer a question of being paranoid, the question is, “Are you paranoid enough?”


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

Using Numbers Again


One of the ways to lie with statistics, is to compare where the rate is small. I noticed an example yesterday. The numbers are these and apparently from the CDC. The headline is “The unvaccinated are 11 times more likely to have a serious case of Covid-19 than are the vaccinated

There are two messages there.

  1. Vaccinations work very well thank you.
  2. The unvaccinated are taking needless risks

How context matters

The headline does not provide any useful information unless you know the rate of serious cases among the vaccinated. It turns out that is 1.2 per 100,000. A very good result for vaccines.

The unvaccinated therefore are 11 times greater at 13.2 times per 100,000. While 11 times greater is meaningful, it is not meaningful by itself. Why? Because 13.2 times per 100,000 is one in 7,576, or 0.013%. Even that is not very helpful. Look at the other way. If 1 in 7,576 is the the group harmed then 7,575 in 7,576 is not. That is 99.987%. have no problem as opposed to 99.99988% among the vaccinated,

Unvaccinated are okay in 99.987% cases while the vaccinated are at 99.99988%, is not a very compelling headline.

Caveat

The statistics above claimed they come from the CDC, but realistically they should be investigated further. Skeptical is a good position to hold regarding any statistic. Sometimes you can see through the numbers.

What could have happened to make the ones here reasonable?

Only three things I can see:

  1. Older people are most at risk and would skew the statistic if at risk. We can estimate that most all old people are vaccinated and vaccinations protect them. Unvaccinated older people could be the problem demographic.
  2. Many of the unvaccinated have already had the disease, have natural antibodies, and strong immune response.
  3. Other unvaccinated persons have stimulated their immune system with Vitamin D, Vitamin C, Zinc, and exercise.

If anyone cared, they could assess the reasons and know more. If you dig deep enough you can usually discover not only the what happened, but also the why it happened.

The takeaway

Comparing statistics where the rate of occurrence is tiny must be examined in detail.

When statistics are presented with no context you can still come to some conclusions that supply insight.

The raw statistics would be nice to have but I can’t find them. The CDC is a inscrutable.

Never use statistical evidence to make medical decisions. There is risk using data covering large populations with varying conditions to assess how risk applies to you. Try to fit your situation to data relating to others like yourself not the population taken as a whole.

Learn to undo the carefully painted statistical picture. Looking from the other side usually provides insight. It is a good habit to have.


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

Study Numbers Before You Rely on Them


Many people think average is a number that matters. Mistake unless you know about the population of observations. Then does that population match your situation. If it might, the average might have meaning.

The intuitive idea

Average contains many bits of information and so the average must be useful. But no! It doesn’t have the depth people believe it does.

How no depth works

  1. Let’s take the municipality of Medina Washington. Zipcode 98039. There are a few more than 3,000 people who live there. If you live in a town of 3,000 people would you expect the average net worth or income of people in Medina would be like yours? It is possible, but not likely. Medina is an outlier. It is home to Bill Gates, Jeff Bezos ex-wife Mackenzie Scott, a founder of Costco, some retired professional athletes, and many corporate executives. Their average may not be relevant to what should be true on average in your town. When Jeff Bezos lived there, Bill Gates was the second wealthiest person in the zipcode.
  2. Okay, maybe too variable. How about the average height of all the people who work for the Los Angeles Lakers. I hear the aha. You got the idea that it would be very tall because it would include a crop of folks who are 6’10.” Good thinking but wrong. You would need to know how many people work for the Lakers. There are about 15 basketball players and they would all be far right outliers on the distribution. There are at least 160 employees in total. From the director of marketing, to the PA announcer, to the season ticket processor. The other 145 are what we think of as normal. If we guess that the mix of males and females is normal in the 145, we could guess their average height at 5’9″” if the 15 players averaged 6’7″ then there will be 150 extra inches arising from the players. so the overall average is likely about 5’10”.  The number of people in the population matters too. The tall folks only influence it if there are not many in the total sample.
    Okay that makes sense. The quantity of the population and the quality of the factor you are measuring matter.
  3. Let’s try this one. You are looking at buying a cellphone plan. You do some research and find one that on a scale of 1 to 10, the average satisfaction level is 7. Pretty good right? Maybe. When you look deeper you find there 100 people who have commented and of those 67 rated it 10 and the other 33 rated it 1. The problem now is the distribution is not a bell curve. It is u-shaped. Either you love it or you hate it. You don’t know which side you will fall on. Don’t assume a “normal distribution” – Bell curve.
  4. Another variation of the cellphone plan idea is this. What is the average number of left arms Canadians have. Not quite 2, is it. Most have one, a few have zero. There is not one person who has the average number of left arms. When there is no example of the average, you should step back and think. U-shaped distributions are a near guess.
  5. You cannot average averages. Suppose you have a moped that has trouble with hills. You want to drive two miles. One mile uphill, one mile downhill. You want to average 30 miles an hour over the whole journey. You can drive 15 miles per hour uphill. How fast must you drive downhill? I know you would like to say 45 mph, but you know it’s wrong. The answer is you cannot do it at all. Here’s why. Two miles averaging 30 mph takes four minutes. One mile uphill at 15 mph takes four minutes. You reach the top of the hill at the same time you must be at the bottom of the hill. No speed will let you be in two places at once. Don’t average averages.

A normal distribution has an average and a median – the middle value, that  are equal. There will be as many observations on each side of the number. The third number is standard deviation. Basically how flat is the curve. If all the observations are close to the average, the standard deviation is small and the curve will be a pointy bell curve. A high standard deviation means the curve is flatter.

If you know all three  and the size of the population, you can get an intuitive idea of what the average means.

The takeaway. 

Be careful with averages. Some people using them to mislead you.

Understand the shape of the distribution.

Understand the size of the population.

Not all small sections of the total population are like the whole thing. That’s what statistics is about. How many random samples would you need to make you believe the sample represents the whole? If you understand the nature of the population, the shape of the distribution, and you can pick randomly, the sample size will be smaller than you think.

When things turn out not as they seem, you can be very wrong.


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

The Dog That Didn’t Bark


Experience can mislead us.

We seldom consider all of the things in a given situation that could have but did not happen.

Suppose, given a certain set of circumstances, that three things could happen. A a very good result, with probability 5%, B a moderately bad result, with probability 35%, and C an okay result, with probability 60%

If the circumstances arose a thousand times we would expect to discover something around A – 50 times, B – 350 times, and C – 600 times. Easy enough.

Not everything that happens should have happened. Sometimes the probability of some outcome other than the one you saw, is vastly higher than you think. The dog that didn’t bark. Does it affect your next decision?

Experience is about what happened.

The general case is not always an easy thing to know. People are sometimes exposed to situations that they never see again. They don’t get a sense of the problem and its possibilities.

Suppose you had been exposed to the experience possibility above and your were presented with outcome A. just one chance in 20 that would happen, but it did for you and it forms part of your experience set. If you stop there, would your advice about dealing with the circumstances be helpful for others? Maybe not. It might not be helpful for you if the circumstances ever arise again.

 

Experience is useful

Useful expereince includes what did not happen, at least to you.

You want experience in context of all the possibilities. If you don’t know all the possibilities and the outcome matters to you, you should acquire other people’s experience. If someone deals with the subject matter all the time, they will have a much clearer understanding of the possibilities, and they will know about nuance that affects the results.

An income tax specialist might know clearly about the 5-35-60 mix, and will know hot to avoid B, and have a chance at A. That would be useful. Better yet, they might know a way to modify the circumstances so there is a better expectation of success. That’s what tax planning is about – modifying the circumstances within the rules.

For example, many years ago we imported devices to manage energy use in a building. Essentially a smart thermostat. If we imported thema s building materials, the duty rate was 13%. If we imported them as semiconductor control devices, it was 5%. You can’t figure that out as you drive to work

You cannot know everything

You also can’t know when what you used to know changed. Specialists keep up to date. Life is easier if you buy experience when the event is uncommon. That’s what lawyers do. How many times have you incorporated a business. Few. You don’t get good at doing things once.

The takeaway

On average, when outcomes matter, other people’s experience is the cheapest experience.

Know when adverse outcomes are possible. Be aware that, in the past,  you might have seen only the improbable outcome. Experienced people will know that, you will not.

Experienced people have details to support their methods. Like the right wording in a trust, or a will. Details minimize catastrophic outcomes.

Remember Jim Ling’s Law – “I was right twelve times and only wrong once.” Lucky streaks last but not forever.

Older people don’t fully trust experience. They have seen variability.

{Pay attention to what happens around you and study what has happened before in similar situations. History teaches. It doesn’t repeat exactly but as Mark Twain has said, “it rhymes.”

It’s like other skills. Practice does not make perfect. perfect practice makes perfect. Experience is not the key to success. Well studied and observed experience is.

The most dangerous belief – “This time is different.”

Be more humble.


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

Things Can Happen To You Or You Can Happen To Things


There is a thought in managing high-performance people. Losers let things happen  Winners make things happen.

In the beginning many people think they can’t do as well, but on examination they find they are missing some of the tools they need. Sales is one  field where the tool set is quite large. It is easy to find one or two that work and rely on them alone. While you can do okay that way, you cannot be a high performer.

There are too many others competing with a limited tool set. That kind of advice is a commodity and so not very valuable.

It’s like a plumber.

No plumber comes to your home with a pipe wrench, a couple of pieces of pipe, and a fitting or two. The plumber comes with a truck full of things. Specialized tools, common materials, rarely used material, and the ability to use any of them.

The first step is to assess the problem. Once assured of what’s happening and with a plan of attack, back to the truck and get the right tool and the right material. Then fix it.

With few tools, the problem or opportunity is never adequately assessed. Why not? Because  the solution must fit the available tools and material. That is limiting and if the customer has talked to anyone else more skilled, they will notice. Beware old advice, “If the only tool you have is a hammer, you tend to see every problem as a nail.” Abraham Maslow,

If you only have a hammer, at least be sure you have several kinds of nails.

The other part of success.

A lot of success is attitude. A sales person who recognizes that every day when they start the day they are unemployed. They must find work, over and over. That’s hard for many. But ultimately it’s a process. A number’s game. Learn some introductory techniques and try them until they are natural. Some are dead simple. I knew someone who had a 30-second interview for life insurance. It didn’t work every time, but it worked often enough.

  1. Do you have a will? Assume yes for this purpose.
  2. What does it say? Usually all to spouse.
  3. What’s everything? List of things
  4. Do you think they might like some money?

Be very quiet.

You manager may tell you about activity and that is important. You learn by doing it wrong so lot’s of mistakes help. What managers mean to say is activity is not valuable until you convert it to action. That’s where the tools, the techniques, and the raw materials come in.

Until you have the whole package things will be difficult.

The good news is activity => action is easier if you have more tools. One of them is other people who know how already.

The takeaway

Use any resource you can access

Make mistakes and learn from them The military does after action reports on every engagement. You should too. If you don’t write it down it might as well have never happened.

It’s a question of being acted upon or of acting. Thought for the day.

It had long since come to my attention that people of accomplishment rarely sat back and let things happen to them. They went out and happened to things.” – Elinor Smith

It’s mostl;y attitude to the challenge you face.

Get busy “happening to things.”


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

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