See also
To have any chance of lasting value, this blogpost need a _scope_ and must not become /indiscriminate/. In this personal finance blog, I won’t say too much about livelihood risks. Now let us shift our focus to ffree derailers.
This bpost is at least “w1r10”.
— intro .. Insurance and emigration companies put out subtle marketing messages portraying their “products” as the main protections in a person’s life, but that’s 喧宾夺主
- 1) health and 2) cash flow are the twin primary livelihood risks in our lives.
- Family stability (and harmony) .. is the third risk factor, a distant third in some traditional families, perhaps decades ago.
- PIP, (kids’) grades … are two big derailers in some lives.
In contrast, some of the adversities listed below are outlier (black swan or missteps?) events i.e. highly unlikely. They are nevertheless worth knowing. If you don’t pay attention, they are more likely to hit you.
— ffree derailers .. All of these adversities demand financial resources and can drain my reserve. In some of them, a single misjudgment/misstep on my part could threaten to weaken or break a pillar beneath my lifelong foundation..
- [v = too vague.. Can be more specific]
- [3 := Pr(hit in my lifetime) ≈ 10^-3 =0.001 (three leading zeros). This numerical estimate depends critically on the qualifying criteria. Many criteria below are vague 🙁 and does not deserve this numerical estimate]
- [0 := Pr(hit in my lifetime) >> 10%]
- [$ or $$ = level of livelihood/financial impact. Within a given item like injury, there are many levels of financial impact. Here we try to give a (highly imprecise) estimate of the upper limit. No $$$ please]
- [F = the later we hit the derailer, the Fwd Hazard Rate improves i.e. less impact ]
- — half ranked by severity, and logically grouped .. Heaviest derailers sinking down (No precise composite sort key please.)
- [5 $] natural disaster hitting my properties esp. BGC [criteria: $100k cost]
- [5 $$v]Misstep: juvenile delinquency… before age 18 [criteria: criminal record]
- [3 $$] Misstep: criminal offense …… often due to 一念之差 (misstep) [eg trespass, Genn’s fraud?] [aa]
- ..[F] The later it hits in my career, the less financial impact it would have on my remaining career 🙂
- ..[4 $$] Misstep: Immigration offense -> GC implication? I think you won’t get a chance to explain or appeal. Luckily I can always work in Singapore. This can only happen when you are in U.S. before receiving GC. Staying in SG, you reduce Pr(hit).
- [3F $] minor misstep: personal trading breaches contributing to job instability .. In the grand scheme of things, this disaster is much smaller than criminal offense or immigration offense
- [1F $$] minor swan:/oversized/ loss …. (100k) on property investments. I have already hit 10k losses.
- —- accidents + illness, where medBx is crucial
- [3 $] misstep: driving mistake injuring SomeoneElse….. need liability insurance [criteria: financial liability. A much lower (severity) criteria than above]
- [2 $$] misstep or swan: injury (partly) due to driving mistake ….. [criteria: hospitalization within my family, in my lifetime]
- .. Can I minimize driving? I guess I need heavy practice to improve, before I reduce driving !
- [3v] minor swan: kids’ injury …….. before age 18 [criteria? how serious? Let’s be vague]
- [1] misstep/swan: bike accidents …. or personal accidents. [criteria? hospitalization within my family, in my lifetime] Handicap is rare but more likely at an older age.
- [3 $$v] swan: major medical …….. what if a family member needs a lot of acute medical help but not hospitalized and not due to aging? Very vague:( [criteria: 200k out of pocket]
- [0 v] swan: minor medical ……. kids’ health, wife’s health, my health.. [criteria? out-of-pocket 20->40-50k cumulative cost for a given condition, in my lifetime] These minor health issues are multiple times more likely than accidents of equivalent severity.
- ^^^^^
- [0 $] issue like sis’s where father had to put in all his savings for rescue
- [2 $] Misstep: drug addiction …….. [criteria? need professional including medical intervention by age 30 ]. More widespread than juvenile delinquency or minor medical!
- [F $$$] disastrous Misstep: divorce …. high probability + huge impact. The later it hits in my life, the less financial impact.
- [0F] salary instability …………. remains the #1 derailer, even though (paradoxically) ffree is defined for zero dependency on salary. [Criteria: drop by half and half again before 70.]
- age discrimination, churn/evolution
- PIP? Usually doesn’t lead to salary instability if you are in-demand.
[aa] For the minor offenses, hopefully I get a chance to defend myself in front of employers, but sometimes the background check could immediately get you disqualified without a chance to explain. Sounds scary, but Pr(hit) is below 10^-5.
The big list demonstrates that the most likely missteps/swans are less severe whereas the most severe missteps/swans are rare.
There are other /uninsurable/ disasters to derail my ffree “dream”. How much more money would you need for those? 10M? Forget it! Below are some of my practical “defenses”. “Resilience” is my favorite word here rather than “protection” which sounds more lazy, passive and more reliant on external protection.
There is some overlap with random list@protections and other lists, but the below list is focused on resilience against disasters, and more about cashflow.
- #1 resilience strategy — career longevity=Bedrock@ %%fledgling ffree
- Better keep learning and keep applying your skills. If you retire for a while then forced by a disaster to /unretire/ (i.e. come out of retirement and rejoin the workforce), you will hit an uphill worse than the uphill facing those loyal employees
- resilience strategy — invest in the “Singapore_hedge” to hedge the risks of rejection_by_US_job_market
- resilience strategy — buy time, slow down and blunt the impact of the disaster. Some situations would improve gradually as my family adjusts to the situation
- resilience strategy — bx? continue to spend some time on review
- resilience strategy — diversify “productive” investments generating regular income + increase contingency reserve
- resilience strategy — identify retirement destinations with reliable, low-cost health care such as MYS