Mass Mutual Life Insurance Company uses a great advertising slogan: “You can’t predict. You can Prepare.” Like many other ads, this one contains wisdom but needs elaboration to be meaningful.
The problem with predictions is that they rely mostly on the view in the rear view mirror. Charlie Keating spoke at my 1958 Cincinnati McNicholas High School commencement about morals and ethics. Who would have suspected he’d destroy the entire savings and loan industry and end up in jail for cheating investors? Two weeks before the Wright brothers made their first flight Wilbur predicted that man would not fly for another 50 years. In the early 1900’s the executive in charge of the U.S. Patent Office predicted that man had already invented everything of importance and that the patent office should be closed.
The problem of predicting when it comes to money and the economy is even more complex – if not impossible.
First, we are human; by our very nature we appear predictable yet nature allows and demands that we act in unpredictable ways. For example. we incessantly and compulsively study the “markets” and we act on our insights. The reality is, however, that if 100 of us all study the same information in the same way we are still likely to come to entirely different conclusions and take entirely different actions. If that were not the case, we would all have the same results – good or bad – Warren Buffett or Charles Keating. In addition, our studies are limited to the information available to the public. Recall the impact of thievery and greed on the may individuals who hooked their financial security to MCI, ENRON, Qwest, Global Crossing, and on and on.
The second issue is the unpredictability of non-economic events on economies and money. We shouldn’t need any reminders about this, but just in case, think back on the economic effects of 9/11/2001 and Katrina. On a personal level, think about the individuals and families that you know that have had their personal economies turned upside down by illness or drugs or any of the thousands of life changing events that people experience every day.
There are others; technology advances, religious terrorists, eco-terrorists, tsunamis, global warming (regardless of the cause), political upheavals and regime changes, genocide - an endless list.
Recognizing that you can’t predict, how, then, can you prepare? That’s the core message of Money for Life. In the 1950’s, preparation meant building a bomb shelter and stocking it so you could survive a nuclear attack. Economic preparation today means building a financial bomb shelter and stocking it with money that you can control when a recession or depression hits, or when you become disabled, or when your business partner runs off to the Bahamas with your secretary and all of the cash, or your child becomes addicted to drugs and you have to spend thousands on detox and rehab…another endless list.
You owe it to yourself and your family to learn the secrets –> www.TheMoneyForLifeBook.com
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