Consider this scenario: you’re flying over the Pacific Ocean on the way to Hawaii. You’re reading Robinson Crusoe in peace when suddenly the plane starts to plummet! BOOM! You crash land onto an island. It is covered in bamboo and various caverns. You are the only survivor. After looking through everyone’s luggage, you find a screwdriver and some dental floss.
What do you do to get off the island?
Do you have an answer? I’ll bet you do.
Now consider this different scenario: you just got fired. You have a wife and two kids with $200 in your savings account. The next day, you wake up with a burning pain in your side. Your appendix burst, and you need to be taken to the emergency room. You make it through the surgery, and luckily you are still on your old employers insurance. The hospital sends you the bill for $1,000. What would you do?
This one is tough to answer. But why?
The first scenario might happen to one in a billion people. If that. The second scenario happens to people every day in one form or another.
The first scenario is easier to answer because we likely think about it more often.
If you followed TV viewership numbers, you’d probably think that shark attacks or zombie invasions are the biggest threats to humanity. After all, these are the TV programs that receive the most viewers. In reality, more people are killed by vending machines than sharks. And zombie attacks? Don’t make me laugh.
What makes these so popular?
People Love Drama
1,000 Ways to Die, Naked and Afraid, and Alone all catch people’s eye because these are insane scenarios. If you asked 100 people on the street what their biggest fears are, you’d probably get these results:
- 35: buried alive
- 28: burned alive
- 15: dying in plane crash
- 12: shark attack
- 6: snakes/spiders
- 3: zombie attacks
- 1: spontaneous combustion
All of these are scary, yes. But they are unlikely to affect you. All of these combined affect 350 people per year. That means that there’s a 0.000005% chance that any one of these will happen to you. Not likely.
Compare that to the chances of being homeless. It’s estimated that 150 million people in the world don’t have a home. That’s 2% of the population. That’s a real possibility.
There used to be a show on National Geographic called Doomsday Preppers.
It was centered around ordinary folks with deathly fears that the world would end. These people would spare no expense getting their bomb shelter ready for Armageddon. Food, water, electricity, weapons–you name it, they got it.
And that’s all well and good. Who am I to judge their expenses?
The problem comes when they ignore the risks with higher probabilities. How many doomsday preppers could afford an emergency medical bill? How many could afford to replace their car’s transmission?
Nearly 70% of Americans don’t have $1,000 in their savings account. My bet is that most of the doomsday preppers fall into that category as well.
When people focus on the big spectacular dangers, they ignore the ones right in front of them. For the best chance at a great future, forget about the unlikely–if not impossible–scenarios. Prepare yourself for the highest probability risks.
Eliminate Money Risk
The risk of being broke is far more likely than many of people’s biggest fears. 13 people died skydiving last year–750,000 declared bankruptcy. The bad thing about money problems is that they rarely ever go away (unless you reach financial independence).
The good news about money problems: 90% of people can solve their money problems themselves.
This starts with a few hard choices. Live below your means and start saving your money. Starting an emergency fund is not just a luxury; it’s a necessity. If you don’t have $1,000 in the bank, you don’t need a vacation. Do everything you can to get that comma in your account.
And once it’s there, leave it there. Just because you have it, doesn’t mean you can spend it.
If you do nothing else, that $1,000 will give you more freedom than you can imagine. And saving $1,000 isn’t the end. It’s just the first step of many that grant you more and more freedom as you climb.
People spend their whole lives learning how to survive in the jungle with only a pocket knife, but they don’t consider their money. Don’t let the grandiose keep you from seeing the real dangers.
Not having money is one of the greatest risks to a modern human being. Instead of learning how to start a fire by rubbing sticks together, learn about your finances. Fore warning: it won’t be the most exciting thing you’ve ever done.
But there’s a big chance it will save your life one day.