March 25, 2012

Planning For ALL Possible Future Risks

Recently FMF was talking about  The Safest Retirement.   This prompted some people to comment on possibilities like wars, natural disasters, the government taking all your stuff, hyperinflation or whatever other possible disaster might derail all your future plans.    Those things could happen but they probably won't.   Of course I can't guarantee you that they won't happen. 

I also can't guarantee you that Ninjas from New Zealand won't conquer us and enslave the citizens of USA in the year 2025.   Likewise you can't give me 100% certainty that a zombie apocalypse tied with robots overthrowing the government won't happen in August of 2037.  BUT if either of those things DO happen then you'll still be better off with $3m in the bank than $100k.  Maybe our future NewZealander ninja zombie robot overlords will take bribes in the form of obsolete US currency.    They might consider it an amusing novelty to wallpaper their homes in $100 US dollar bills.   It could happen.   You never know what the future could hold.  Hey., even weirder things could happen,  we could EVEN end up with a flat tax!

Wars, hyperinflation, and widespread catastrophic natural disaster are possibilities but they are not probable.  It wouldn't hurt to take some sort of precaution against such disasters like storing some (10%?) of your wealth outside the USA or having emergency food stash in your home.   Past that I wouldn't worry too much about such things.    If you attempt to plan for the worst possible scenario then you'll never possibly prepare adequately.    99.99% of the time that stuff doesn't happen, so planning for it is almost always a waste of time and resources.

Of course nothing is 100% guaranteed.  You can't plan for everything.  But this shouldn't keep people from making reasonable plans for the future.   What we should all do is take reasonable precautions to plan for likely events.

Likely events are inflation, personal illness or disability, future periods of unemployment, and possibly some form of natural disaster.   Reasonable precautions for these events can usually be covered by having some form of insurance. 


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