Playing The Odds at Every Turn – Part II

In the last issue, I walked you through a spirited conversation we had with a friend over dinner about health, and my statistical findings on the leading causes of death from The World Health Organization’s website www.who.int.  

This was all sparked by our friend’s comment, “All your exercise and attention to healthy eating is great, but there’s no guarantee you won’t still drop dead of a heart attack.  My father and grandfather both died of a heart attack before they were 62.”

What we discovered through our research was that 71% of all deaths world-wide (and 88% in high income countries like the United States) are related to non-communicable diseases (NCDs), i.e. not an epidemic and not an accident.

And, that among the four leading NCDs, the startling commonality is that they are not random, and not genetic.  They’re primarily brought on by lifestyle choices and the physical effects these choices have on our body:

  • Eating: what do we eat, when do we eat, and how much do we eat?
  • Drinking: how much alcohol do we consume? How much water do we consume?
  • Smoking
  • Exercise: how often, and what type
  • Stress
  • Sleep: how much do you get, and what’s the quality of your sleep?

In health, it’s 100% true that you could get hit by a bus and die.  It’s also true that genetics plays a role in your longevity.

However, as The World Health Organization statistics suggest, your lifestyle choices have a much greater impact on your health, vitality, and ultimately, your longevity. 

If you have a sincere desire to be healthy and live a long life, why would you not play the odds? 

Study how to eat better, drink much more water and less alcohol, stop smoking cigarettes, exercise rigorously on a daily basis, etc.

Those like our friend who choose to focus on the role that genetics or accidents play in our long-term health, etc. prefer believing it’s out of their control because it absolves them of any responsibility or role in the outcome.  After all, “there’s no guarantee.”

What they’re really saying is they prefer not to make the proper choices and, instead, just do whatever feels good in the moment without any regard to the long-term ramifications.

It’s easier to say it’s out of our control, it’s random, or it’s predetermined. 

However, that’s a rejection of the reality that we all have the freedom to make the choice to play the odds at every turn and reap the rewards the statistics demonstrate.

I know I run the risk of that coming across as mean spirited when pointing this out.  Or, that I’m not sympathetic.  Nothing could be further from the truth.  My mother died of a brain tumor which later spread to her lungs at the age of 57. 

She strictly ate three square meals a day, never smoked a cigarette in her life, and she consumed one cocktail a year on Christmas Eve.  She played the odds and still passed away at a very young age. 

My Revelation: The Analogy to Financial Health

At this point, you’re probably wondering what this has to do with financial health?

In short…everything!

When you read or listen to the majority of individuals (and, by extension, the financial media) talk about those who have achieved financial success, what do you hear?

  • Right Place, Right Time, Luck: Those who have done well had the luck of good timing, choosing to work for many years for company X vs. Y, the business they created benefitted from outside events, etc. and they earned a large income,
  • Trust fund kid, i.e. they inherited it (despite Forbes annual statistics of the remotely small minority to have sustained wealth coming from inheritance),
  • Magic Investment: they somehow obtained information, probably unethically or unfairly, that lead to a great investing outcome,
  • Education: they went to X school and thus had connections that nobody else had.

Do you see the commonality in all of this? 

It all adds up to the belief that financial independence and success is all random, luck, and good fortune, and you have very little influence over the financial outcomes in your life.

As potentially mean spirited as this may sound, just as it is with the health examples I gave, it’s easy and convenient to believe that financial independence and success is all random, luck, and good fortune.

Believing that absolves them of the responsibility of focusing on the long-term and making the necessary choices you have made which have generated your financial independence! 

It’s easier to just block all of that out and focus on what brings instant, short term pleasure today, i.e. a new car I can’t afford, a 60-inch flat screen television, eating out five nights a week and running up the balance on my credit cards, or investing in a new “can’t miss hitting a home run” venture I heard about with money borrowed from my home equity line of credit.

Stark Contrast

The reality that I have witnessed amongst our Relaxing Retirement members over the last 32 years is that almost none inherited anything.  The majority did not earn extraordinarily large incomes during their working years.  And, very, very few went to Harvard or Yale!

The reason they have achieved total financial independence has nothing to do with any of the traditional dogma most folks conveniently buy into, or that Hollywood loves to portray and demonize.

They made decisions long ago that they stuck with over their lifetime to spend much less than they made, i.e. live within their means, and save and intelligently invest the difference.

They took 100% responsibility for the outcome they’ve experienced.  They didn’t look for a mystical guarantee, or a magic pill (investment). 

In short, they played the odds slow and steady.

And, this is what it all boils down to.  There are no guarantees and no magic pills, so you may alert anyone and everyone you know to call off the search.

There are, however, successful formulas built on highly probable odds in both health and finance that are in plain view for all of us to see. 

I’ve often said that if I fail, it’s certainly not going to be because I wasn’t prepared or I wasn’t willing to accept 100% responsibility for whatever outcome I realized.

In health, and in finance, we should all welcome our wonderful freedom to exercise control and choose our actions.  And, happily do whatever is necessary to play the odds at every turn.

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Playing The Odds at Every Turn – Part I

Last summer, I had a “spirited” conversation with friends over dinner about health which led to some research on my part, and a revelation about the remarkable similarities to “financial health.”

The debate with our friends essentially boiled down to the leading causes of death and the role that luck and genetics play vs. the choices we make.

It all started when our friend said, “All your exercise and attention to healthy eating is great, but there’s no guarantee you won’t still drop dead of a heart attack.  My father and grandfather both died of a heart attack before they were 62.”

I’m sure you’ve heard some version of this comment before.  Ultimately, it’s the same as, “you can do everything right and still get hit by a bus!”  Or, “I know a guy who was healthy who collapsed and died while running.”

All of that may very well be true, but it certainly doesn’t change the facts about the overwhelming leading causes of death, and what those are predominantly attributable to.   

Let’s look at some updated statistics I pulled from The World Health Organization website www.who.int about the leading causes of death (the italicizing and bolding is mine for emphasis).

World Health Organization

Non-communicable diseases (NCD) were responsible for 71% of all deaths globally in 2016, up from 68% in 2012 and 60% in 2000.

What’s even more telling is that NCDs account for 88% of deaths in upper and middle-income countries like the United States.  That’s remarkable!

Of the top 10 causes of death in upper and middle-income countries, only two are not NCDs: lower respiratory infections and road injuries which are numbers 6 and 8. 

The 4 main Non-Communicable Diseases (NCDs) are cardiovascular diseases, cancers, chronic lung diseases, and diabetes.

Chronic obstructive pulmonary disease claimed 3.0 million lives in 2016, while lung cancer (along with trachea and bronchus cancers) caused 1.7 million deaths. Diabetes killed 1.6 million people in 2016, up from less than 1 million in 2000.

Deaths due to dementias more than doubled between 2000 and 2016, making it the 5th leading cause of global deaths in 2016 compared to 14th in 2000.

  1. Cardiovascular Diseases (CVDs)

CVDs are the number one cause of death globally: More people die annually from CVDs than from any other cause.

An estimated 17.7 million people died from CVDs in 2015, representing 31% of all global deaths. Of these deaths, an estimated 7.4 million were due to coronary heart disease and 6.7 million were due to stroke.

Most cardiovascular diseases can be prevented by addressing behavioral risk factors such as tobacco use, unhealthy diet and obesity, physical inactivity and harmful use of alcohol using population-wide strategies.

  1. Cancer

Cancer is the second leading cause of death globally, with 8.8 million cancer related deaths in 2015.  Nearly one in six deaths is due to cancer.

Around one third of cancer deaths are due to the 5 leading behavioral and dietary risks: high body mass index, low fruit and vegetable intake, lack of physical activity, tobacco use, alcohol use.

Tobacco use is the most important risk factor for cancer causing around 22% of global cancer deaths.

  1. Chronic Obstructive Pulmonary Disease (COPD)

It is estimated that 3 million deaths were caused by COPD in 2016, which is equal to 5% of all deaths globally that year, and 90% of those deaths occurred in low and middle-income countries.

The primary cause of COPD is exposure to tobacco smoke (through tobacco use or second-hand smoke).

Many cases of COPD are preventable by avoidance or early cessation of smoking.

  1. Diabetes

The number of people with diabetes has risen from 108 million in 1980 to 422 million in 2014!

In 2015, an estimated 1.6 million deaths were directly caused by diabetes.

Type 2 diabetes comprises 90% of people with diabetes around the world and is largely the result of excess body weight and physical inactivity.

Healthy diet, regular physical activity, maintaining a normal body weight and avoiding tobacco use can prevent or delay the onset of type 2 diabetes.

What’s the Commonality?

As you read through all of this, do you notice any commonalities?

First, more than two thirds of all deaths (and 88% of deaths in upper income countries like the U.S.) are related to non-communicable diseases (NCDs), i.e. not an epidemic and not an accident.

Among the four leading NCDs, the startling commonality is that they are not random, and not genetic.  They’re primarily brought on by lifestyle choices and the physical effects these choices have on our body:

  • Eating: what do we eat, when do we eat, and how much do we eat?
  • Drinking: how much alcohol do we consume? How much water do we consume?
  • Smoking
  • Exercise: how often, and what type
  • Stress
  • Sleep: how much do you get, and what’s the quality of your sleep?

There’s No Guarantee

Armed with these statistics from the WHO, let’s now go back to my dinner conversation with our friend and her comment: “All your exercise and attention to healthy eating is great, but there’s no guarantee you won’t still drop dead of a heart attack.  My father and grandfather both died of a heart attack before they were 62.”

I again sympathize with the loss of her father and grandfather because I lost my mother to cancer at age 57, but the fact that they both died of a heart attack before age 62 doesn’t necessarily suggest that it was genetic.  What are the chances that their lifestyle choices, and the negative long-term effects they had on their bodies, were similar?

More important, however, was our friend’s choice of the word “guarantee.”  It’s a very, very important word and one that led to my “revelation” about financial health.

Everyone desires certainty in their lives.  Most would prefer guarantees with everything (health, finances, etc.)

Unfortunately for the majority who seek it, life is not a straight line.  There are virtually no guaranteed results in anything.

Given this, to achieve whatever it is that you want, use your freedom to choose. 

Research and Play the Odds at Every Turn!

In health, it’s 100% true that you could get hit by a bus and die.  It’s also true that genetics plays a role in your longevity.

However, as The World Health Organization statistics suggest, the tremendous news is your lifestyle choices have a far, far greater impact on your health, vitality, and ultimately, your longevity. 

If you have a sincere desire to be healthy and live a long life, why would you not study how to eat better, drink much more water and less alcohol, stop smoking cigarettes, and exercise rigorously on a daily basis.

Those like our friend who choose to focus on the role that genetics or accidents play in our long-term health, etc. prefer believing it’s out of their control because it absolves them of any responsibility or role in the outcome.  After all, “there’s no guarantee.”

What they’re really saying is they prefer not to make the proper choices and just do whatever feels good in the moment without any regard to the long-term ramifications.

It’s easier to say it’s out of our control, it’s random, or it’s predetermined. 

However, that’s a rejection of the reality that we all have the freedom to make the choice to play the odds at every turn and reap the rewards the statistics demonstrate.

Stay tuned for the next issue as I reveal my revelation, i.e. the amazing analogy to financial health!

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Your Racetrack

Have you ever driven a car at high speeds around a racetrack?

I haven’t, but I have a friend who has done so many times, and there’s a great lesson he shared with me that is incredibly useful for all of us in many other aspects of life including investing.

As he shared, your margin for error when driving around a racetrack decreases as your speed increases, so you must have a very definitive plan if something goes wrong.  A critical strategy, as you will learn in a moment, is to always keep your eyes on your target, i.e. where you want to go.

That seems simple enough.

Inevitably, however, weather conditions and fuel spills create “tests” for all drivers.  You’re humming along feeling confident on a straightaway when all of a sudden, as you head into a turn, you hit a fuel spill and your car spins out of control toward the wall. 

What follows is what all inexperienced drivers do: they panic, their focus changes, and their eyes get locked in on the wall they’re trying to avoid. 

When my friend experienced this for the first time, his instructor, who was seated next to him, simultaneously grabbed and turned my friend’s head while yelling “focus on where you want to go!

Amazingly, when my friend snapped his head back and adjusted his focus in the direction of the path of the track, the car responded and he steered back into control and avoided any contact with the wall!

The lesson for my friend: when in danger, don’t stare at the wall you’re trying to avoid.  Instead, remain focused on the track, i.e. where you want to go.

Guarded Confidence

So, why am I sharing this story with you?

Well, the path to investment success, your long term financial health, and a fulfilling life is littered with “fuel spills,” each of which has the potential to grab your attention, influence your mindset, change your focus, interrupt your long ingrained successful habits, and, thus tarnish the outcomes you have worked so hard for and deserve. 

If you have your eyes and ears open on any given day, you know how much more challenging this has become with 24/7 “news” on dozens of media outlets and devices. 

The days of watching Walter Kronkite, often sited as “the most trusted man in America,” on the 6:00 p.m. news for your daily dose of information are over. 

It seems as if everything today is “Breaking News,” and each dose carries with it the “potential” to interrupt your long ingrained successful habits, and throw you off your carefully chartered course. 

Essentially, you have two choices.  You can do what my coach, Dan Sullivan of Strategic Coach, has done.  He made a conscious decision to eliminate television and hasn’t watched anything for 27 months.  Instead, he’s a voracious reader.

His first observation: “it’s amazing how the number of crises in the world has dropped significantly over those 27 months!” 

As we all know, the news media must manufacture and embellish events in order to repeatedly get our attention, so there are varying degrees of crisis.  However, each is reported as new and “different this time.”

Short of eliminating television completely, your second choice is to vigilantly guard your confidence against all forces competing for your attention including all forms of media, and friends, family, and co-workers who may very well have conflicting mindsets and biases. 

In many ways, my job as your Retirement Coach is very similar to the race car driving instructor.  You won’t find me physically grabbing your head and turning it, but every time there is a “crisis” of some degree reported, I want to be there to help you instantly gain perspective, keep your focus on where you want to go, and what I believe is the strategic path with the highest probability to get there. 

Just like the positive outcome my friend experienced when he adjusted his focus away from the wall he was about to crash into and back to where he wanted to go, condition yourself to remain focused on the long-term outcome you want and watch all the good that comes as a result.

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