The Distillery: We're the Victorians of the Future

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We're the Victorians of the Future

Once, while working from my home, I realized I hadn’t gotten up in a long while. I got up, stretched, and made my way to the kitchen for a refill of my water jug.

I noticed the light in hall bath was left on. Shaking my head, I opened the door to flip the switch and a wall of bubbles smacked me in the face.

I stood in disbelief as the wall slowly tumbled forward, encroaching on my wood floors. I snapped into action, grabbed some beach towels, and began deflating bubbles and mopping in quick succession.

My daughters had filled the toilet with soap, and I can only assume, flushed with mad abandon. I didn’t know that could happen if you put soap in the toilet. I certainly never thought to make a rule banning toilet-soap experiments.

Yes, ladies and gentlemen, it was a black swan event in my very own home. I use that term all the time when my kids do something jaw-droppingly random, but its normal use is in finance, and it’s meant to describe truly wild market events.

A black swan event is...

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Planning for the (Potential) Impact

I remember this silly episode of The Simpsons I saw a long time ago. A hurricane comes and blows down the neighbor’s house. Because he was very religious, he didn’t carry insurance. He saw it as a form of gambling and therefore, sinful. He then goes insane, checks into an asylum, and recovers all in the span of 20 cartoon minutes.

I’ve been known to say insurance is a racket, especially when it comes to health insurance, but I don’t agree that it’s a form a gambling. Their paths diverge at intention.

Gambling is all speculative risk, meaning you took on the risk voluntarily hoping for some form of gain, but accepting the potential for loss. Most insurance products exist to cover a pure risk, like a fire in your home.

You’re not meant to profit from these policies, only cover losses, and you’re not usually in control of the circumstances surrounding pure-risk events, insurance fraud aside. Life, health, property, and casualty policies all fall in this category.

Financial planners should be...

What's Reasonable Anyway?

One of our clients has a tag line in their email signature that’s been there for years. It reads something like “Safety Third, google it”. I extend my apologies to this person as I confess that, until a few weeks ago, I failed to google it.

Our newest advisor, Chuck, asked about it and thus reminded me to look into it. I’m glad I did. For one thing, I really enjoy Mike Rowe’s voice. And he offers a different perspective on risk and safety in this video interview, which ends hilariously with a mock blooper of Mike directing stock trades.

His general point is that mindless compliance with safety standards may inadvertently create a culture of complacency, ultimately allowing us to outsource common sense and personal responsibility.

Case in point: a safety officer that made him wear a harness on a low-level platform (because it was going to be televised) when the...

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