Monday, 1 March 2021

Living in uncertain times




We live in uncertain times, but maybe the world has always been like this? Maybe things are just as uncertain today as they've always been? Maybe uncertainty is a constant, not a variable? Fact is, we simply don't know what's going to happen tomorrow. Uncertainty is constantly un-certain. But practically, what does this mean?





Maybe it means that, in reality, we all sit with questions and anxieties that is linked to uncertainty, yet uncertainty will never disappear - it's always there. Questions such as: should I change jobs, am I living in the right country, where should I send my kids to school, and will I have enough money are all just some of the common questions linked to uncertainty.

In truth, I believe no one knows the answers to these questions because it is simply uncertain.


Uncertainty is the same for everyone.

Although I believe the level of uncertainty we face hardly moves up or down, essentially making it a constant in our lives, I am intrigued by the question of whether someone like Bill Gates faces a different level of uncertainty than me? Does he fundamentally sit with lower levels of uncertainty because of his wealth? I don't think so.

At the end of the day, no one knows what's going to happen tomorrow, no matter their wealth. Money does not buy you more certainty in the bigger scheme of things.





Sure, Bill Gates worries about vastly different things than me, but remember, we are not talking about worry, which is simply an emotion. I am talking about the real levels of uncertainty in our lives. Bottom-line, no-one knows what's coming. Life is uncertain for everyone.


Perceived uncertainty fluctuates

Of course, how we perceive uncertainty fluctuates as we live our lives. We may feel less uncertain in a car than in a plane or with our money in property than in the stock market. I think perceived uncertainty is our greatest enemy because it fools us to think things are sometimes much better than what they really are and other times much worse.





We either live in a state of euphoria or anxiety. Perceived uncertainty dictates our emotions and isn't based on the facts. We either stress too much or too little.


Perceived uncertainty doesn't care who you are

It doesn't matter if you are stinking rich or dirt poor - your perception of uncertainty can be sky high or rock bottom. In fact, one could argue that the beggar on the side of the road feels much less exposed to uncertainty because, in his mind, he knows exactly what's going to happen tomorrow: he will be back here, begging. He has nothing to lose and quite a predictable life. This leads me to plot the possible perception of uncertainty between myself and Bill Gates like this:





On any given day, either Bill or I might have a higher sense of perceived uncertainty. We often hear Hollywood stars struggle with anxiety, and I believe some of this proves that uncertainty can feel overwhelming to you no matter who you are.


Don't let the news fool you.

It's easy to let the news "get to you", but I believe we should resist this. The news is hardly ever the full version of the truth, and secondly, whatever the news, it does not impact your amount of uncertainty, which is a constant - like gravity. Simply put, the news does not actually impact the real amount of uncertainty you face - it just makes you aware of (certain) parts of it by putting a spotlight on it. No matter how good or bad the news, your level of uncertainty stays unchanged. 


Make bold decisions to significantly reduce your risk.

Given that uncertainty is always there and always the same, no matter who you are, I believe we should stop trying to manage uncertainty and rather focus our energies elsewhere - on dealing with risk. 

To really reduce your risk and make us much more capable of dealing with uncertainty requires what I'd like to think of as bold "power moves". These moves are really, really difficult to make, but if you can, you take a quantum leap in the direction of reducing your risk. One such power move is living within your means and not incurring debt - especially consumer debt. By have no debt, you instantly boost your range of options and significantly drop your risk.

Another such power move is working for yourself. If you work for someone else, building up such a significant investment portfolio that you are, in effect, able to sustain yourself. Doing this, which takes significant sacrifice - whether to start your own business or put a large amount of your salary away into investments - will significantly reduce your risk. 

Other power moves include daily exercise, continuous personal development, maximising mobility through the acquisition of second passports or even as extreme as deciding not to have children or, in case you have them, limiting how many you have to maximise your ability to invest in each child's development. 

The bottom line, you don't make a dent in your risk by making small incremental moves but rather bold, principled decisions that require significant sacrifice. 



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