Don’t live in a dreamworld!
Earlier this week I was talking to the nicest person I have ever met about bringing up children in a really positive atmosphere, to give them the best chance of success.
I agreed that children need a positive atmosphere, but they also should also be taught that life gets tough, things go wrong, and fairness is fairy-tale.
Because she’s so nice, she disagreed with me. She believes in loving, nurturing and giving a trophy to every kid in the race!
Realising that I had no chance of convincing her, I quickly moved on, but there is an important point here.
No matter what you’re age, there will be a point when you face fear, failure and bad fortune.
To help cope with such times, here’s a simple technique that I have developed from Tim Ferriss’ fear setting strategy.
I use it and I think you (and all of your children) should too!
My fear, failure and risk setting practice
My education in business and finance has allowed me to merge Tim’s stoic Fear Setting practice with Risk Analysis.
In business you learn to manage risk. Combine this with a stoic approach to fear and failure and you get a real superpower that allows you to prepare and take necessary action in certain situations (obviously you can’t prepare for all eventualities).
This is my stoic, fear and risk matrix…
- Draw 5 columns on a page (or spreadsheet).
- Write down the following titles at the top of each column:
- Loss prevention
- Loss reduction
- Issue – Define the issue/risk
- Impact – On a scale of 1 to 10, write down the impact each issue would have if it came true.
- Likelihood – On a scale of 1 to 10, score the likelihood of each issue occurring.
- Loss prevention – Write down strategies to prevent the issue from occurring.
- Loss reduction – Write down strategies to reduce the loss (emotional, physical, mental, monetary, etc.) if the issue occurred.
Once you have completed this, review it on a periodic basis.
Tim goes a little further in his practice by adding two more pages that include:
- Analysing the benefits of success (partial success).
- Analysing the cost of inaction.
These additional steps are much more decision focussed, like questioning whether you should take a trip abroad.
My practice tends to look at “macro” risks and fears such as the death of loved ones, a nuclear war or going to jail.
I find that once I have stoically mapped these fears, thought about them, and reduced their impact and likelihood, I feel content that I am [reasonably] in control of my mental, emotional and physical responses.
It’s not that tough times become less tough, they’re just quicker to bounce back from.
Examples of fear, failure and risk setting
Just some examples from my stoic fear and risk matrix include…
My house subsides, burns down or is destroyed
Impact – 6
Likelihood – 3
Loss Prevention – Get subsistence reports and make sure my foundations are strong. Install fire alarms. Install safety equipment.
Loss Reduction – Insurance cover. Manage investments (pool risk). Don’t own expensive things. Be mentally and physically prepared (have a good philosophy and perspective).
My skills become redundant
Impact – 8
Likelihood – 2
Loss Prevention – Always continue to develop. Do things that I enjoy and embrace learning. Continue to create value.
Loss Reduction – Have savings to retrain. Be mentally and physically prepared (have a good philosophy and perspective).
I become paralysed, sick or disabled
Impact – 7
Likelihood – 5
How analysing your fears, failures and risks will help you in life
Stoic philosophy and fear setting not only helps your prepare for the bad times it also allows you to seek opportunities in them, Antifragile style.
By periodically following this practice, you will find it easier to operate in the disorderly world we live in!
I hope that helps!
If you have any further suggestions or examples of when you’ve used fear setting, please get in touch!