Wealth building is an interesting mix of risk. On one hand we need to take risks to make things happen in life (or we would never leave the house in the morning). On the other hand, the risks should be prudent and within tolerances to allow us to move towards our goal as safely and efficiently as possible.
Here are some “R” words for you to ponder in relation to your wealth building and preservation plans:
- Resilient
- Robust
- Redundant
- Responsibility
- Resolute
- Relentless
- Rational
- Reasonable
- Record-keeping
The list could probably be much longer. I’m sure you get my point though.
The world is full of risks. If done properly, wealth building (with proper preservation techniques) allows the prepared to bounce back more quickly or effectively than those who are much less prepared. Risks come in all shapes and sizes that could be on an individual basis (some within our control) all the way up to global events (far outside of our control).
Individual risks:
- Loss of income
- Loss of investments
- Loss of health
- Damage or loss on assets (homes, cars)
- Loss of a loved one who we have some dependency on
Non-individual risks:
- Cyber attacks
- Natural disasters
- Wars
- Stock market crashes
- Viruses and epidemics
The reality is, the world is constantly changing. Nothing ever stays the same. Most major risks are unpredictable in nature. As the saying goes, “History does not repeat itself exactly. But it does rhyme.”
How robust is your wealth? Are you prepared for the unpredictable? Are you assuming or over-confident that what has recently occurred in your life (say in the last 2 to 5 years) will automatically continue or better yet, continue to improve without major interruption? Are you prepared for a sudden change of course? Have you thought through what could happen if odd things occurred such as;
- A cyber-attack occurred at your financial institution which shut down the website for a period of days.
- You couldn’t use a credit card at the grocery store because of a temporary loss of electricity.
- Your income suddenly changed but you’re the debts you took on never disappeared.
- You or your significant other had a health emergency.
That’s why we preach the principles of wealth success which allows us to live our life today while keeping in mind that tomorrow may be dramatically different.