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Risk is What's Left Over Thumbnail

Risk is What's Left Over

General Behavioral Finance

We are really good at managing risk by looking backward and preparing ourselves to handle a situation we’ve already seen. But we’re not very good at managing risk by looking forward and preparing ourselves for something we can’t even imagine.

The problem is, “something we can’t even imagine” is precisely what we need to be prepared for. Because risk is what’s left over after you think you’ve thought of everything. 

It’s not the car you see coming that will kill you… it’s the one you don’t. 

Bummer, right?

Let me be clear: This doesn’t mean you should cover yourself in bubble wrap and lock yourself in your house. 

The point is simply to foster general resilience. You know—like an emergency fund. 

And guess what, emergencies will happen. When they do, general resilience provides a margin of safety. 

That’s what will protect you from the thing you never saw coming… not trying to predict the future and certainly not bubble wrap.