Last week’s article generated several worthwhile conversations, one with a fellow advisor about another misunderstood financial topic. He told me his client base had lost all appetite for risk, forcing him to spend his time selling products with predictable outcomes. Knowing the products of which he spoke I jokingly responded, “You mean that predictably pay no return?” His quick response was, “Exactly!” He then said something that I have pondered all week. He said “Flat is the new up.”
During election years we have politicians who attempt to gain favor by promising to remove risk from life. Their, “A chicken in every pot” language promises that if they are elected everyone will have food, housing, healthcare, and free education. They promise to deliver these benefits regardless of efforts on the receiver’s part. They also promise to bring peace to the world without fighting wars and an end to terror without the loss of American lives. It is a slogan as old as humankind.
“Remove risk from life?” I ask. Would you also remove computers, cars, cellphones, airplanes, electricity and everything else that began when some ambitious individual decided to take a risk? Would we also send the pilgrims back to their “flat” lives in Europe? Would we turn back the great advances in the arts, science and even religion, that only came when those who wanted a better life took some risk?
I go to great lengths to make flying my airplane as safe as possible, but there is no denying the inherent risks in defying gravity. But along with the risks, I have experienced beauties that Solomon himself would have given all his wealth to see. I have gone places and visited people that have brought benefits to my business and clients, and great memories for myself and my family. “A life without risk,” you say? I would loathe a life spent in fear that I might scrape a knee on my way to experiencing something new and wonderful.
Are some risks too great? Of course they are. Just as I have experienced the joys of flight, my family has also spent several extra nights in airports waiting out a storm that posed too much risk. We must stay informed and exercise sound judgment, but to eliminate risk from life would be to eliminate all the wonderful blessings as well.
Do not flee risk, nor listen to those who say they can remove it from your life, or from your investing, for such is not possible. Look at where you are in life, and the great experiences you have enjoyed, and remember what got you here. It did not come from burying your talents for fear you would lose them, as the story goes, but from waking up and taking daily educated risks, risks that brought the blessings you enjoy today.
“Risk,” an often misunderstood word, is a necessary ingredient to enjoying life. I hope I never reach the age where I believe that “flat” in any area of life, is good enough. I want to always be truly looking “up.”
Hi, I'm Dan. I'm a CFP® Professional.
Securities and advisory services offered through Commonwealth Financial Network®.
Member www.finra.org / www.sipc.org , a Registered Investment Advisor. Wyson Financial, 1173 S. 250 W. Suite 505, St. George, UT 84770.
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