Didn’t see that one coming, did you?
We’ve been so focused on a deadly pandemic and unceasing political drama that we missed the onset of…winter.
You remember winter, don’t you? Normally in Louisiana, it’s that brief period between the Sugar Bowl and the Super Bowl. At least, that’s the way I remember it.
Until this winter when we got the arctic blast that ruined Valentine’s Day. Winter Storm Uri (when did we start naming cold fronts?) has left millions without power and/or water. It’s made anybody with a four-wheel drive vehicle everybody’s best friend.
By the time you read this, the great thaw should have occurred, and Uri will melt away in our memories.
But let’s not overlook the important lessons, both literal and metaphorical, we can learn from an event like Uri:
Storms happen. It’s a long time between winters. Long enough to forget. But storms happen—and not just when it’s cold. In 2020, five named tropical storms or hurricanes hit Louisiana! You may remember the two “hundred-year floods” we experienced within months of each other. I’m not recommending we lock ourselves in a shelter as a wise strategy for dealing with storms. But we also can’t afford to ignore their reality.
Every storm is unique. Storms have many different causes and they come at different seasons. They don’t look alike, cause the same problems, or behave quite like the one before. The one thing they have in common is their capacity to come suddenly and destroy with cruel ferocity.
You can’t prevent storms. Ignoring the reality of storms is the Ostrich approach. Everything is fine until it isn’t. When you ignore the fact of storms, you pay a much higher price than you otherwise would have incurred had you simply made some preparations.
You can prepare for storms. This is how I can tell the difference between those who are wise and those who are naive: Wise people take the initiative to prepare for life’s inevitable but unpredictable dangers.
Financially speaking, when you are already stretched to make ends meet, it is so tempting to tell yourself, “I’m just going to chance it that life’s storms won’t come my way anytime soon.” You tell yourself you don’t have the time or money to have a will drafted. Or that you’d be better off to fully fund your 401(k), rather than put money aside in an emergency fund. Or that you’re going to buy the least amount of insurance necessary, rather than analyze what your family might really need.
The financially naive think such approaches will save them money. That has not been my experience in 30 years as a financial planner.
When clients takes the time to prepare for the worst by drafting estate documents, putting aside six months of income and buying enough insurance to really protect themselves in the event of a life disaster, they don’t end up with less, but with more.
I won’t try to demonstrate all the math there. I’ll simply say this:
Life favors the prepared. Not those who are scared, hiding, and cowering—that’s no way to live. Rather it favors the ones who plan for the unpredictable, but eventual storms of life. Not only are they ready for any disaster, they’re also better prepared for positive opportunities that come their way.
At the very least, wise preparation means planning, buying insurance, saving, and making legal arrangements. None of these actions will “make you money.” But they’ll go a long way to being sure you keep what you make.
And when the next storm approaches, all that will feel mighty good.
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