Saving Nine - Risk Management Part 2
So, if you went through the exercise in Part 1, you have a mad, bad, and dangerous to know list of terrible things, in rough order of importance. Now you have to figure out what to do about them.
The Mitigation Mindset
There's a certain mindset you need to get into to plan risk mitigation effectively. When faced with scary possibilities, most people retreat into one of several unhelpful mindsets:
- Avoidance: "this will never actually happen to me." Hopefully you've gotten past this just through the process of listing and prioritizing your risks. If at this point, you find yourself thinking it can't happen, you need to remind yourself that you listed this risk for a reason.
- Pessimism -- "there's nothing I can do about this." There are risks you can't really do much about, but a lot of things you can do. Worried about an earthquake? Well, you're not going to stop one, but you can prepare for disruptions to basic services (or move or get a ham radio or...). If there's really nothing you can do about a risk, really truly, then scratch it off your list and move on.
- Polyanna-ism -- "I'll just do 'x', it'll work great!" Yes, optimism is good for you. But being unrealistically optimistic about dealing with a risk is very dangerous. You have to be objective and realistic when you evaluate your strategies... save the optimism for when you have them in place.
- Magical thinking -- "I do believe in fairies... I do, I do, I do." I'll say it again, positive thinking makes you less likely to succeed. Magical thinking gets you no place, it's magical action that counts. And it counts double if you couple it with practical action.
Classic project management lists various responses for positive and negative risks, some of which overlap with the Black Swan mitigation options. For example, you can do nothing (accept the risk as is), you can try to make things better (mitigate a negative and enhance a positive), you can affect the occurrence (avoid a negative to keep it from happening or exploit a positive to make sure it happens). You can also offload the risk onto someone else, which sounds nasty but could include buying insurance to deal with a negative risk or out-sourcing help to take advantage of a positive one -- I think of these as just variants of mitigation.
We're focusing on negative risks here, which means the options are Accept, Avoid, or Mitigate. Mitigate is similar to Strengthen. And you can also Benefit or Gain as per the Black Swan mitigation options:
- Avoid: Dodge the situation so that it doesn't affect you.
- Strengthen: Reduce the impact by being more robust.
- Benefit: Turn the Black Swan into a positive by taking advantage of some upside.
- Gain: Find a way to be antifragile and actually benefit.
|Options to the right are better...|
These responses aren't necessarily mutually exclusive. For example, take the risk of your house catching fire. I used to live in a wildfire area, so the risk was a priority for us (when you find yourself on the roof checking if the falling ash is still hot, it kind of clarifies its importance). This is one risk that you don't want to just accept. And it's not likely you can benefit from the risk (unless you plan to set fire to your house for the insurance money, in which case, don't talk to me). But there's still a lot you can do.
First, you want to avoid the chance of a fire. Depending on where you live this could include:
- Having your fireplace regularly cleaned (FYI, modern day chimney sweeps do not sing and dance, so don't ask them)
- Clean your drier vent
- Clear all brush from around your house
- Replace your cedar shingle roof with a less flammable one (and tell the homeowners association to fuck off if they complain -- the law is on your side)
- Get a lighting rod / house surge protector (in the shape of a red rooster or other magical charm)
- Create an altar and pray to St Agatha
- Plant houseleek or hang mistletoe
- On holidays associated with fire (Summer Solstice, 4th of July in the US, Yule) perform a symbolic burning away from your home in order to propitiate the fire elementals
- Get smoke detectors and inspect them / change the batteries annually
- Get a fire safe and put things like birth certificates in it
- If you don't have a renters policy, get one right now (best $20 a month you'll ever spend)
- Make sure your homeowners insurance includes enough coverage (and maybe take a video of your stuff once a year or so and keep it off site)
- Get fire extinguishers and put them in logical places (ask if your local fire department has a program to provide free or reduced cost ones)
- Have an evacuation plan and practice with everyone in the household
- Enchant to protect all who live in the house (which you are anyway, right?)
|Candle magic -- not recommended for fire mitigation spells|
The suggestions above are pretty straightforward. And a lot of risks are like this. You'll come up with ideas, pick the most logical and relevant ones for your situation, and then figure out how to execute them. Easy.
More likely you will decide to either avoid losing your job or mitigate the risk of losing it. And what you can do here depends on the reason for losing it in the first place. If your entire industry is going through an upheaval, you may not be able to do much to affect change. If your company is going under, again, that might be a ship too big for you to turn. If, on the other hand, you are dealing with toxic politics or restructuring, there's a lot you can do to hang in there until the chaos dies down.
I once managed to keep a job for many months longer than I otherwise would have by lobbying to move my desk to a different location. I used the excuse that the lighting was causing headaches. This wasn't an outright lie, but the actual reason was that I needed to get away from several toxic office neighbors (who were also huge headaches). Once I got permission from HR, I actually came in on a weekend and moved four years worth of stuff to the new location, alone, without telling anyone. I left a note and a "forget me" enchantment in the old location. This was not a permanent solution obviously. But it kept me just under the radar for long enough to make progress on my other plans.
|Yeah, that'd be grrreat|
- Have a system for networking in place. I recommend LinkedIn. Note, LinkedIn is not a social network for old people... it's not a social network at all. It's a professional networking tool for career management and you should treat it that way. And yes, I've gotten referrals, interviews, and even jobs through LinkedIn (people always ask this). It's critical in my industry. It's also an excellent visualization tool for sending magical calls for help through your network.
Protip: If you don't want everyone at your current job to know you're hunting for work, go into the privacy settings and turn off the option that announces changes to your profile. Otherwise all that resume polishing will get announced via email to everyone in your network and if you don't think it will get back to your boss, you're wrong.
- Figure out your minimal sustainable budget. What will unemployment pay you? What bills can you postpone or cut right now? What other sources of income can you leverage? What services can you eliminate? I do a full budget review at least once a year, whether or not my job's at risk, all the way down to calling and asking for reduced rates "just because." Sweetness is the word here, both magical and mundane.
Protip: If unemployment really is looming, the magic words are "I won't be able to pay this bill anymore... is there anything you can do?" I've had companies let me out of binding contracts, allow me to skip payments, offer reduced service options for less, etc.
- When the time comes to get unemployment, ask what options they have for training or retraining or certifications. I took a coveted certification class under a special program where the federal government paid most of the tuition. For a couple hundred dollars (instead of over a thousand) I got a professional cert that made me more qualified for jobs in my field.
Protip: Look at the jobs you want but aren't qualified for and identify the gaps. Fill them by any means necessary (I've downloaded free trials of software and used them to create sample portfolio items, just so I could legitimately put it on my resume).
- Create a master resume with every bit of experience and everything you ever did. Enchant the hell out of it. Then cull the irrelevant bits to create customized resumes for individual positions in very little time.
Protip: Odds are you resume is going to get vetted by a computer before any actual person gets to see it. Words matter. Search through job listings and plug the latest buzzwords into your master copy. When customizing, parrot the language in the job listing as much as possible. Think pattern matching algorithms.
- Start the infamous "side hustle" to bring in more money
- Try to pick up consulting gigs in your area for friends and colleagues (without jeopardizing your day job of course)
- Set up sustainable systems in your household that benefit directly from extra time (gardening immediately comes to mind, as does frugal cooking)
The Money Question
Notice that nowhere on this list of mitigations does "have more money" appear. There's a reason for this. If you're like most people, what you're going to discover is that money shows up again and again as a risk mitigation strategy. Loosing your job? Money! Chronic health issue? Money! Car accident? Money! If this is your situation, then stop and rethink. Because money isn't the mitigation. Money is the risk. You may as well put "I don't have enough money" at the top of your risk list and draw giant stars by it.
But be careful, because in our society no one has enough money. If you truly need a few months salary in savings to feel secure in your job, then yes, you need money. But money doesn't magically mitigate all risks and can, in fact, be a lazy mitigation strategy. Certainly, mitigating the affects of a house fire by saying "I'll just throw money at the problem" is a terrible idea (as compared to say, saving life and property or not having a fire in the first place).
Besides, the economy of the Western world is currently completely geared toward parting the 99% from their money in every possible way. It's literally getting impossible to afford a middle class life and most methods for wealth building have been turned into scams by the corporatocracy (home ownership, mutual funds, higher education). Any mitigation you can come up with that avoids money as a primary driver is likely going to be more stable and sustainable. Yes, fire insurance is still a good idea and does cost money. You're not going to get away from money completely without completely stepping outside the bounds of society (which few people can actually do). But don't let it be the lazy out for everything.
In fact, if you really did put "I don't have enough money" on your list, go erase it and write this instead "I need more money than I have." Now that's got some room for leverage! You can work on the money side of the equation (and I have no qualms with that) as well as the need side. And if it applies to you, put "Debt" down as well... because it is a risk, and a major one.
In fact, needing more money right now is actually an issue, because needing money isn't something that might happen to you, it's already happening. And that's an important distinction, because for your most pressing risks, you need to get your mitigations in place now, before they happen and not wait. Also, because when it comes to issues, before you go charging in and slinging magic around, you need to get to the root of the problem and figure out where your leverage points are.
This process is what I'll be touching on next.