February 15, 2011

Set right expectations of reality

Most people do not like risk. The threat of getting sick is a risk. The threat of terrorist attacks is a risk. The threat of running out of money in retirement is a risk. Risk is inherent in life and can never be eliminated. Although there may be numerous evolving strains of viruses out there at any moment, it takes only one brisk strain to make people sick. It just takes one person out of billions to briskly carry out an effective terrorist attack. To make poor economic choices which briskly drain even the largest bank account is always a possibility.

Yet, enough people cling to the idea of someone absolving them of any risk. Politicians at all governmental levels frisk citizens of votes by catering to this false belief. They use the people's fear of risk and offer them a false sense of respite in their programs. Risk of not having adequate health insurance? Relax, vote for me and I'll eliminate that risk. Risk of getting caught in a terrorist attack? If you vote for me, its risk-free. Risk of not saving enough for retirement? Someone's got that risk covered. Risk of losing your house? Keep voting for me to stay risk-free. "Risk-free" is what people want to hear, but that road just leads to disappointment. Risk still exists, it can't be eliminated entirely.

We could never even afford to eliminate all the risk. All money in the world could never eliminate risk in any of these areas. Risk exists in just one person, one bug, or one bad decision. By its very own definition, we could never even afford "all money in the world", let alone the money needed to truly eliminate risk.

Let us set correct expectations about risk. Why not accept the reality of risk?

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