The Lucky Boy and the Hurricane

I believe it was Rod Stewart who sang “Some Guys Have All the Luck.”

This is an apt description of my friend Dave. Best I can tell, the only bad luck he’s had in the last 20 years was ending up with me as a roommate in college.

Dave has somewhat of a penchant for stumbling into good fortune. The fact that he was able to attract a wife and successfully procreate twice is one of the great miracles of the 21st century.

Anytime he wants to attend a sold-out sporting event, tickets to that event just magically appear in his hands from some unexpected source.

One time at a Niagra Falls casino, he made a one dollar bet that won him $1000. (Canadian dollars, but still).

While trying to sell his house several years ago, he was frustrated about not getting any offers, so he pulled the house off the market, then suddenly decided to put it right back on the market two weeks later, this time at a higher price (because that’s the logical thing to do when you’re not getting any offers at your current price—make it more expensive)? But lo and behold, it had only been back on the market for a few days when some lady came along and inexplicably bought it at the higher price.

Maybe he’s lucky or maybe he’s a genius. But you’d have a tough time selling me on the latter.

So about a week ago, when we learned that his family trip to Disney World was going to coincide with a Category 5 hurricane hitting Florida, I thought, “Aha, finally some bad luck for this guy!”

Alas, I was wrong.

They assessed their options and decided to roll the dice and proceed with their trip. By the time they arrived at Disney, the hurricane had slowed down, meaning they’d at least be able to enjoy a day or two before the weather got bad. And then the hurricane came to nearly a complete standstill over the Bahamas, and suddenly their entire trip was unscathed.

Meanwhile, every other person who had scheduled a Disney trip for this week decided to cancel, so Dave and his family basically had the entire park to themselves. Rides that would normally require a 2-3 hour wait only took 10-15 minutes.

The world’s luckiest man pulls it off again.

Now, in fairness, their decision to forge ahead with the trip was actually strategic. They knew that regardless of the weather, Disney World was unlikely to shut down. In fact, Floridians often evacuate to Disney because the parks and the resorts are so well-equipped with generators that they’re rarely without power. And they were partially banking on the notion that a lot of other people would cancel their trips and crowds would be slim.

It was a calculated risk that panned out.

Financial planning has similar opportunities. Sometimes it makes sense to take a calculated risk with some significant potential upside. Sometimes we just want a plan that gets us from point A to point B with the highest odds of success and the lowest risk possible. Sometimes we just don’t want any risk at all.

There’s also such a thing as stupid, unnecessary risk.

This kind of risk also gets illustrated during hurricanes. These are the people who hear their local weatherman say, “You should evacuate.” And they don’t. Then the governor says, “No really, please evacuate!” And they don’t. Then the next thing they know, a Coast Guard chopper is rescuing them from the roof of their house.

There are similar risks in the financial world that should be avoided by virtually everyone. But they don’t get news coverage like an impending hurricane, so sometimes you don’t even recognize when you have significant exposure to those risks. Inflation that you’re not equipped to address, potential tax rate changes in the future that will cripple your retirement income, too much exposure to one particular asset class…

Risks like these (and dozens of others) could leave you on the roof of your retirement house waiting for the chopper.

If you want help assessing your exposure before the storm comes, schedule a visit now.