Many of us pretend to understand risk and think we are fully prepared for it. Wrong. Most of us are hoping that since our parents did not face risk, we will not face risk.

Let us look at some of the risk which we pretend will not happen to us, because so far it has not happened to us (OMG what a complicated statement, and how foolish!).

1. I know 3 people who lost their lives in the July 2004 deluge in Mumbai: perfectly normal guys who would have LAUGHED on 22nd of July if I had told them that they could DROWN in the middle of MUMBAI. Of course there were many, many others whom I did not know who died or lost substantially in that deluge. Obviously none of them was even REMOTELY prepared for it. Neither are we.

2. Building crash in Andheri: A few days ago a building (30 years old) came down like a pack of cards…awesome that nobody lost their lives. In the midst of Mumbai, a fully occupied building just fell down because the contractor who was carrying on the repairs was not skilled enough to do it. Maybe even he did not know that he was not qualified.

We will pretend ‘it has not happened to me EVER’ till it actually happens?

3. Husband and Wife working in the same industry (even worse same company): Can you imagine what happens when a H and W work in the same company earn fabulously, but commit every rupee to real estate purchase (one own house, one to be let out on rent, one in another city….).

When the industry slows down, the annual increases do not happen, the kid wants a change in school – from ordinary to INTERNATIONAL, …..what do you do?

Learn the advantages of being prepared for …….the ‘black swan’ . None of the risks that I have mentioned here is a BLACK SWAN.

A black swan is when the threat which stuns you when it hits you….YOU CANNOT BE PREPARED….nobody knew that a Tsunami was till it hit….


Related Articles:

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

  1. Dear Subra,

    Thanks for creating awareness, and fear! πŸ™‚

    But one cannot live life in fear. So you have ended your comment with a comma, and did not complete the sentence.

    How does one be prepared? And while preparing, how does one ensure that life is not foregone in fear? We should not overprepare for every contingency, such that we spend 70 years dealing with risk and then what happens, WE DIE ANYWAY!

    So please share your thoughts on how we can prepare?


  2. Rajaram,

    Atleast we should prepare an emergency fund that bares all our expenses for one year. Apart from this, we should live happily..No need to think all sad things as we are going to die and we have one life only..This is my view..

  3. Online Marketing | Pandu

    As they say, one cannot “see” one’s own pre-mature death!

    That makes it difficult for people to accept it. (Same goes true for selling term life insurance also!) A general layman thinks that an accident can happen to “others” only, not to “themselves”!)

  4. Thanks sir. Even if i am not prepared for all kind of risks (except term and health policies), this type of articles always remind push me learn about financial planning.

  5. Other than a will, an emergency fund and regular prayers, how??

    Ok the husband and wife in the same company is a no-brainer, agree.

    Seriously puzzled.

  6. “Best Way to Prepare for emergencies are to take LIC Moneyback and Jeevan Anand policy”. should i cry or should i laugh?

  7. The best way to prepare for emergencies will be to have some sufficient amount in liquid instruments (savings account, liquid funds or FDs).

  8. neither Pravin. You should thank me for my zero edit policy and for bringing humour to your life. Insurance salesmen will not lose any opp to sell. Can bet my life on Vivek being a LiC agent. Any takers? LOL

  9. 1) Pure Term Insurance
    2) Personal Accidental Insurance
    3) Health Insurance (preferably with critical illness rider)
    4) Emergency funds equivalent of 4-6 months of expenditure
    5) To try and live on 80% of take home salary

    Does this cover foreseeable risk, Subra sir ?

  10. Differentiating between the vital, essential and desirable items and living based upon that will help reducing unnecessary expenses and will leave more funds for emergency needs.

  11. As subra rightly said…either our friend vivek is an LIC Person or very very New to our site.If later is the case ,Vivek kindly read Subras detail POST on Life Insurance…Lot of enlightment and Learnings Guranteed

  12. i think, vivek missed to put (!) at the end and subra sir wrote that between the lines or my english is poor! no regrets, my mother tongue is not english! i am gujju!

  13. Praveen, If you think the world ends on Dec 21,2012 better take LIC’s Bima Bachat policy it is a Single/One Time Payment Money-Back-Policy no need to worry about future payments.

  14. “If you think the world ends on Dec 21,2012 better take LIC’s Bima Bachat policy it is a Single/One Time Payment Money-Back-Policy no need to worry about future payments.” – this guy is just too good πŸ™‚

  15. I think somebody should bell the cat.

    Vivek, if world itself is ending in Dec 2012, what’s the use of any policy? (let alone LIC).

    but subra, you made my day with this post. Good humor in comments.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>