Control or Resilience

We are big fans of Seth Godin at Beacon. As a marketing genius, his focus is centered in that industry, but many of his writings are much more broadly applicable.

Not long ago a friend and client asked us to review an indexed life insurance product that his buddy, we’ll call him Bob, was near zealous over. Bob was so enamored with the promises of the insurance policy that he was even considering changing careers to sell it. A change of some kind was forced on him because he had just been laid off at 50 from a high-level executive position with a major pharmaceutical firm.

Catching him at a low point in confidence, Bob proved to be low hanging fruit for a life insurance salesman who skillfully fed his insecurities with carefully selected trends, quotes, and books filled with dire prognostications. Bob’s view of a hostile future was settling in and he wanted to do all he could to prepare and protect himself and his family from a worst case scenario that was almost certain.

Seth’s Tuesday blog speaks eloquently to Bob’s dilemma:

“It’s tempting to invest time, money and emotion into gaining control over the future. Security guards, written policies, reinforced concrete—there are countless ways we can enforce our control over nature, random events and fellow humans.

The problem is that while the first round of control pays huge dividends (keeping rabbits out the yard is a good way to make your garden grow), over time more control creates brittleness. The Maginot Line didn’t hold up very well, and the hundred-year floodwalls don’t work in the face of a thousand-year flood.

The alternative is to invest in resilience, to build systems that can handle (or even thrive) when the unforeseen happens.
In one case, you can say, “when the roads are smooth, when you read the instructions, when conditions are ideal, this is the very best solution.”

In the other case, you can say, ‘if people don’t read the rider, if the unexpected happens, if there’s a surprise attack, we won’t be perfect, but it’ll work better than any other alternative, which is a pretty good plan.'”

Bob has become enamored with the idea of control, and as Seth points point, he will feel comfortable with his controls for a time. But gradually control creates “brittleness.” In the vernacular of Bob’s insurance policy, his ‘control’ comes at the cost of gradually declining lifestyle and liquidity due to inflation and the opportunity cost of higher fees. Control becomes more ‘brittle’ as flexibility to deal with life’s problems declines, problems that he cannot now predict. The fine print in his life policy warns about these possibilities, but its too dark in foxholes to read fine print.

Resilience is so much the better long term choice than control. Real life happens outside fort walls, among the ideals, not the acceptables. Sure there are risks and threats, but guess what, you can have a richer life today and still be better-prepared for thousand-year events than are your bunkered friends will ever have.

Seth Godin publishes a pithy blog every day, we believe you will find most of them applicable and well worth your time.

Author Sam Bass Jr.

Sam founded Beacon Wealthcare in 1998. He has thirty five years' experience investing money for his clients. In 2006 he changed the focus of his firm from asset/return to a client/goal-centered and adopted state-of-the-art planning and management systems to deliver the best fully integrated planning service available. Sam holds a BA in English Literature from Hampden-Sydney College, 1975 and an MBA from Wake Forest University, 1981. He concentrated in International Finance, and did research for an International Finance textbook which included a summer at the London School of Economics. He is married to Sharon, a talented pleinAir oil painter, They enjoy being with their three children, their spouses, and five beautiful grandchildren as often as they can. Sam loves Jesus, sailing, cycling, and writing.

More posts by Sam Bass Jr.

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