Risk Mitigation - When Life Goes Sideways
It occurred to me this morning when the electricity went out at 1 am, that we may not have been good Scouts. We are in a new (to us) house, well off the highway halfway up a mountain with not many people around. We were able to get in through 15" of snow, but now there is significantly more on the ground and with the storm continuing to rage on, the likelihood of the mountain roads being drivable are slim.
The truth is, we haven't been good Scouts (hello - where is the camping coffee??) and we are going to need to do better. The flip side of that is that there are two of us here to think about ways we can make the best of the situation. We have our fireplace to keep at least part of the house warm, and with a little intermittent electricity I was able to make coffee (thank goodness), get some water into carafes for drinking and dig out the backup "stove" we use when backpacking. We have our camping water filter so we can melt snow and know we have clean drinking water. We have ramen so we won't go hungry. Had we planned ahead, there are a few small things we could have done to be more prepared for such an event and not felt the scramble of being behind the curve.
My investment background forces me think from a risk perspective, but I am an optimist by nature. I believe in the power of positivity, good karma and a Higher Power who wants the very best for me, though I recognize that helping myself never hurts!
Our attitude and perspectives shape how we view events. Understanding how you make decisions in non-stressful situations can help you help yourself when life goes a little sideways.
As part of our Financial Life Planning process, conversations around risk mitigation include a lot of What If questions. It's not just a financial question around how much money do I need to retire or when can I retire. It's a life safety, quality & comfort of daily life and overall peace of mind questions that sometimes with just a little bit of planning, we can keep a bad situation from wreaking havoc on us emotionally and financially. Many times just having the knowledge that there are resources and where to find them will help you to get through it.
Write down the things that could take you off course.
What's the worst case scenario if those things happened?
Can you find ways to mitigate it happening?
If it happened, what could lessen the impact?
If you are an entrepreneur and own your business, ask yourself the same questions from a business perspective.
What are the small things that make you more comfortable? Me - you wouldn't catch me without chapstick, hand lotion and a water bottle. If you do, please stop me and ask if I'm ok - because I'm probably not. Is it the umbrella or blanket in the car? Pair of flip flops that if the "cute" shoes start hurting half way through the day you can switch into?
Now go do something that makes you happy! There is no reason to borrow worry from the future.