Episode 87: Self Protection in an Uncertain World

Rob and Sherry talk about the emotional toll of living in an uncertain world and the protective steps you can take.

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Episode Transcript

Sherry Walling: So the thing that we have outlined to talk about today is how to be self-protective and proactive in a really uncertain world. And it’s Monday, October 10th. It’s the day after the second presidential debate. And wow, I think regardless of your political orientation, a lot of us in this country are feeling a lot of uncertainty and just a lot of angst perhaps over what the future may hold and over the kinds of conversations that seem to be so prominent in the world around us.

Rob Walling: Well, and it feels a little bit like a circus at this point. I think two or three times last night as we were watching them, we had a couple friends and we used the word “circus”. Of like, “Is this really happening?”

This is insane. It’s like I’m a little embarrassed, certainly for the rest of the world to be watching of this, kind of embarrassed how this is all going down. But also our kids were in the room, and we were like, “Hey, watch the debates.” Right? Presidential candidates, they’re gonna talking about issues. And if you did that 20 years ago, you would’ve gotten two people making little jabs at each other but for the most part actually discussing issues that are perhaps a little boring for kids but at least for the first 5 or 10 minutes they can sit and watch. And last night we actually scooted the kids out pretty quickly.

Sherry Walling: Yeah when my six year old asked what rape is, it was time to plan to have those conversations in a different way and not let the debate be the educator of those kinds of topics for our kids. So that was sort of a low moment in the way that the conversation happened in the debate, and realizing “Wow, it’s not appropriate for my elementary school-aged children to watch the presidential candidates having a conversation about their policies and their plans. Not safe at all.

Rob Walling: Right. And even right before that, we haven’t had TV, like local news and all just local channels in years. And we wanted to watch the debate last night so we downloaded, it was a Roku app that gave local news, and right as we turned it on they were talking about some heinous crime, some child being killed.

And our six year old was like, “What? Why does that happen? What happened?” He’s not exposed to this. Because we don’t do local news and we don’t do 6 o’clock news and that kind of stuff. But it was another thing of like, good grief. Suddenly he was all stressed out just by hearing things that day to day, if you are paying attention, and if you do watch TV and you watch the news, you’re just gonna be exposed to this stuff pretty heavily. I mean I actually think that hearing too much of it, period, is not good for any of us. I think as adults we have a little more of a filter and a sense of perhaps what we’re gonna take in, whereas for a child it may escalate them. But it was just striking how all this kind of negativity, and I guess uncertainty, as we were saying, surrounded us just within 20 minutes of turning on that TV channel.

Sherry Walling: Yeah and I think it has led me to have thoughtful reflection both in terms of how to talk with our kids about scary things. I mean, we’ve been doing this for a long time, this is part of being a parent. How you kind of introduce the world to your kids and how you have a conversation with a young child about a really bad thing happening to another child. And our son had lots of questions about, “Is that gonna happen to me? Will the bad guys come to our house and shoot me?”, was essentially his question. And those conversations are so important.

But I also feel like they’re important for us to think through as adults. And the emotional toll of living in a world that at some points feels like it’s going to hell in a handbasket, that takes quite a toll on even the most sort of resilient and self-contained of us.

Rob Walling: Yeah and I think one way, we’re gonna talk today about the emotional toll of living in an uncertain world, we’re gonna talk about some proactive steps you can take, kind of to think realistically, things are gonna be fine. Things are gonna be okay. But to plan in case they aren’t, is how I like to think about it.

Sherry Walling: Yeah. I feel like it’s sort of checking off as many boxes as you can around some of the scary contingencies so that if the very unlikely, very bad thing happens, you’ve at least protected yourself as much as possible. And that I think contributes to decreased anxiety. But we’ll get to that in a second.

So those of us who are aware of the political situation or the toll of the hurricane in Haiti and in North Carolina and the crime in our neighborhoods, there can feel like there’s a lot to be afraid of in the world. And whether that leads us to make isolating choices or it leads us to make different kinds of choices, I think for many of us exposed to a lot of information, there’s just a lot of anxiety about how much uncertainty and how scary the world can be.

Rob Walling: I think that can bring about a lot of stuff in you if you are exposed to that stuff. It can make you anxious or stressed out, just kind of all the time. Just a low level feeling of wow, things are bad or things are gonna get worse. I have some people I know that really are thinking all the time about kind of the US government is gonna totally tank because they have all the debt, the national debt issue, and the US government’s gonna default on their bonds, and like you said, the world’s gonna go to hell in a handbasket. And there is, just, every decision they make is informed by this thought of, “Boy, I’m gonna need this shotgun and these MREs and this gold that I have in order to survive.”

And that’s certainly not where I think people need to be. We can always think of the worst case scenarios and plan for all of them. I think being prepared for the worst case scenario is something you want to do, but I don’t think that letting the free-flowing anxiety of the possibility of that happening is a good way to live your life if you’re thinking about it all the time and it’s informing every decision you make.

Sherry Walling: And I think when you really see the world as a 90% scary, terrible place that can lead to a lot of cynicism and really lead you to opt out of any meaningful contribution that you might make. And I think it also, that sort of cynicism, or way of seeing the world, is very scary, can feel very depressing. It can lead to sadness and a sense of not being safe or happy or feeling like you’re living in a world where you can make meaningful contributions and have a meaningful life. So I think it’s really important to have a cap on some of this inundation of negative and scary information because it can really do a number in how not only you see the world, but how you see yourself in the world and your capacity to participate and create a meaningful life.

Rob Walling: Yeah, and if you watch us as a world or as a society or even as individuals that you know, people making decisions when they’re either stressed or in fear, decisions made in fear tend not to be the best decisions. And that is a way that both in Science Fiction books, they show governments manipulating people by putting fear in their hearts and making them scared of the other guys and then you can pass all this legislation. We’ve seen it happen in real life, arguably with the Patriot Act after 9/11. There was just all this legislation that was pushed through that folks, in retrospect, may not have been voted through. May not have been allowed. But if you have fear and power, then you can do a lot of things that you shouldn’t be able to. And if you live your life, out of fear all the time, concerned about everything, all the worst cases can happen to you or your kids or whatever. It’s not a great long-term viewpoint.

And also, when there’s a lot of fear you get really polarized. And you see this on Facebook or Twitter or whatever social media. It’s like, in our political system here in the states, people used to be a lot more towards the center. And now it’s just this fear that the other side’s gonna screw everything up. And the fear that kinda the media is spewing, the fear that the politicians are spewing at each other, it is just incredibly polarizing. And it means that just two parties that used to actually be quite similar, if you go back to the 80s and you listen to just speeches like Ronald Reagan made, who is a conservative, a Republican. Stuff that he did like giving amnesty to all the immigrants in the US, just several other of his policies today, would actually be considered to the left. Frankly, they would be considered Democratic policies. I mean that’s how far we’ve split. There just is so little moderation anymore.

Everyone has to get polarized because of all this fear that you’re gonna lost your constituents and fear the constituents are gonna lose their jobs. And I don’t know, it’s just not good stuff.

Sherry Walling: And I think at a more individual level that makes people more isolated, right? You’re afraid of asking real questions or having real conversations about your concerns about the candidate because it’s hard to have nonchalant conversations that don’t feel like it must be a dual to the death. And I think that does contribute to people’s sense of aloneness or of all of these really important topics that can’t be discussed with family members or with friends. That sense of isolation I think is just really bad for people and is kind of a cycle that perpetuates around and around when we talk about fear and fear breeds isolation and isolation breeds more fear and more polarization.

Rob Walling: And so we have a few ideas of kind of some action steps, some action items that you could take if you do feel like perhaps there’s a little bit too much of this in your life. Whether it’s the rhetoric or the polarization or the cynicism or whatever. And the first one I want to throw it is to just reduce your exposure to the news, to bad news, to sensational news. I think there’s a certain level of being informed and aware that yes, there was a hurricane and yes, some people were killed in some different countries. But not watching the local news coverage of it where everything has to be sensational and they just blow things out of proportion, at least in my opinion. And even checking the news every half hour to see what the new devastation is. I mean there’s just a certain point where I’m not sure this is healthy or helpful if you are the kind of person that is impacted by this kind of news.

Sherry Walling: It’s been really important for me to also just be thoughtful about the kind of media I’m taking in. So for a while I had lots of news flashing through my Facebook feed and my Twitter feed. And I undid all of that because there was just too many times when I’d be looking at some friend’s beautiful new baby and then I’d see some heinous crime reported in the news and it just was too jarring. So now I check the New York Times and I check it online maybe once a day or so. And then we get the local paper and I sort of skim it. And I know what’s going on locally and I know what’s going on in the world. So I feel like a responsible adult and a responsible citizen, but I’m really limiting the when and where that I take news in and I’m making sure that I’m in control of the spigot so to speak. So that it’s not sort of pouring out whenever I’m not in the mindset to hear potentially difficult news.

And I think that was so hard about what happened with our son, is that we’re just sort of setting up this Roku channel and we’re just all in the living room, and all of the sudden it’s like, story about dead kid getting shot. And then just, whoa. It just jarred the whole evening from legos and conversations about the pumpkin patch to the bad guys might come to our house. So really controlling media for your kids and for your own sanity, I think is really important.

Rob Walling: I think another thing to think about is, is to realize yeah, in reality, even if you reduce your exposure to this kind of news, there still are realities that there is a possibility bad stuff’s gonna happen always in all walks of life. And there is a book that I read recently. A lot of people will probably be familiar with it, it’s by Nassim Taleb, it’s called Antifragile. And the concept of this book is, he has studied Black Swan events, he’s studied risk and uncertainty. And the idea of Antifragile is that there certain systems that actually gain from bad things happening.

So an example of something that is fragile is a teacup. Because if you put stress on it, it breaks. An example of maybe investing in a fragile way is if you have 100% stocks. Because you stand a real chance of losing a good chunk of your money in a recession if the market goes down 40%. But there are systems that actually gain from disorder. There are a bunch of biological systems, there are actually forests that he talks about where the fire sweeping through, which you could say is like a disaster, it actually long-term helps the forest, right? Because it clears a bunch of stuff out and then new brush is able to grow.

And he also talks about how you make your portfolio, let’s say you’re investing, this is an example that keeps coming up, that you can make it antifragile but not just having much stocks in, the stocks are there to help things grow, but then buying things that actually when the market goes down, that those things retain value and those things could even increase in value. So it’s things like other currencies. Or it’s things like investing in gold. Or it’s things that just aren’t related to the stock market. And so if you want to kind of dive more into this, it’s really fascinating, it’s very kind of an academic look. He’s a professor I think at Harvard or MIT or Yale or something and he’s done 20 years of research, 30 years of research into this stuff. So it’s a pretty fascinating read and it dives deeper into this topic.

Sherry Walling: Yeah I think you reading that book was very timely given that you just sold Drip and we have a little stack of money to play with and trying to think about how to invest wisely, to maximize the gains that we can maximize. But also how to think, sort of self-protection. Like given the uncertainty of the world, we’re not gonna be super-neurotic and like bury a treasure chest out here in the lake. But thinking about how to balance maximizing profits with also being very self-protective. And that’s something that you’ve been reading a lot about and thinking a lot about and we’ve been talking about quite a bit and I think that’s been very proactive. To sort of say, we are not expecting a full meltdown of the financial world, and we don’t live in fear of that. But if something like that does happen what are a couple financial steps we can take to try to maximize our resilience?

Rob Walling: Yeah that’s the idea, is as you’re kind of building up a nest egg. So let’s just switch into talking about investing, it’s kind of the third point of being proactive. A lot of people put all the money stocks or they’ll split 60/40, 80/20 of the stocks and bonds depending on your age. And we saw that in the 2008 crisis, some people lost 40% of their portfolios or more. And that’s not being antifragile, and it really is a big deal. And something that Nassim Taleb talks about in his book, as well as, I talked to a couple friends of mine in the past few months who are people I respect, they’re both startup founders. And one guy sold his startup and he literally has physical gold held in a vault overseas, which at first I kinda laughed at. Because it feels like, I have a family member of mine who is very much into the ind of the doomsday, end of the world, stuff and is kind of a gold bug and reads all the gold folks talking about, “You gotta buy world because the end of the world’s coming.”

And that’s not at all what the startup founder’s doing. He just said, “If it all hits the fan. If it does, I did this one thing one time years ago, and hopefully I’ll never have to use it, never have to revisit it, I don’t think about it all the time. But if it hits the fan I have this out. I have this ability to do this.” And so, that’s the idea here. I think if you’re investing, it’s to think about investing maybe a little bit more diversified than just stocks and bonds. There are a lot of ways to do this, it depends on how much you have, but having a small amount in some precious metals or having even a small amount of cash that you were to keep on hand in case something goes wrong, is an interesting idea. It’s unlikely to happen in the US but if you look at when other countries have had issues, even recently I think in Greece, one day they just said, “Alright, no credit cards work. No bank cards work. And the maximum you can pull out of an ATM is $300 a day. Go about your business.”

And so there were literally people, it’s like, “Wait. So I’m gonna support my family, pay my mortgage, and do everything with this $300 a day?” And that didn’t go on forever but it went on for a few months. And so think about that situation. If you have fragility then you don’t have anything on hand and you’re just waiting in line like everybody else at the ATM. But if you’ve thought through it, then you maybe you have just a few months of living expenses in a form that you can more easily access than just being in a single bank or just being in a single country or just being in a single currency. It’s thinking a little broader and mixing things up.

And again, you don’t have to get crazy with it. You don’t need $50,000 in cash sitting in your house. But having even a small amount I just think is a prudent way to be antifragile and kind of proactively work against the uncertainties of the world.

Sherry Walling: Are there other resources that you think are helpful beyond the Antifragile book?

Rob Walling: Yeah there’s another book, it’s called “The Intelligent Asset Allocator”. And I just listened to it on Audible and I think it was quite good. And then there’s a podcast I just started listening to that I’m fascinated with and the name humorously enough is called “Money For the Rest of Us”, which is funny because obviously my other podcast is called “Startups For The Rest Of Us”. But I’ve become a fan of that guy’s because he thinks along these same lines of just having backstops and having enough diversification. And he invested in some peer-to-peer lending stuff, he has some hard money loans, which is real estate stuff, you don’t have to get too deep into that. But he diversifies himself way beyond the stock market but in a way that’s not super-risky and doesn’t feel like he’s doing crazy things like going out and speculating on commodities, nothing like that. They’re all pretty consistent ways to earn a return without necessarily being all in on something that can lose 40% of its value if we had another recession.

Sherry Walling: So moving beyond investing, because I know that you’re really into this and we love talking about it, but moving beyond investing, I think there’s this sense of having some locus of control, of wanting to make choices and have mastery over some areas of your life, such that you don’t feel you’re completely at the whim or whimsy of whatever the next president is gonna do or of whatever sort of shift’s happening in the world around. And I think, again, these proactive steps of investing in thoughtful ways can really just help the psychological aspect of feeling like, “Okay, I’ve thought about this and I’m exerting some of my own control and influence.

And I think that that is also, more globally, a really helpful strategy to handle an uncertain world, is really finding your place of influence, finding your tribe so to speak, finding the people that you belong to and they belong to you, and places where you do feel like you have meaningful authority and contribution. And I feel like that is the most important buffer against this sense of like, the world out there is going to do whatever it’s gonna do to me and I don’t have any way to shape what happens to me. So in a way, putting your head down and doing your work and continuing to decide to make meaning and push in to your calling and the things that you’re interested in and to develop influence and connections, that is the best response to sort of a cynical, disengaged, polarized world, is to say, “I’m just not going to do that. I’m going to continue to make life meaningful.”

Less existential, more practical strategies include really just planning for the worst. I mean, thinking about what natural disasters might come about in your area and making a plan for them. Talking with your kids about what happens if there’s a fire in your house, where should they leave? Where should they meet you? Which neighbors can they run to? Helping everyone think through the different strategies that you might need to use in an emergency so there isn’t this black hole of the unknown. But it says, if something really scary and bad happens, we’re gonna meet at this neighbor’s house. Or we’re gonna meet at the tree in the front yard. And let’s practice getting the screen out of the window in case you need to climb out of the window.

And these conversations can be scary and they can be intense for families. But they’re so important to have so that everybody has a little bit of empowerment and a plan in place should they need it.

Rob Walling: I think that’s the biggest thing, right? It’s like thinking through the contingencies and having enough of a plan that, both everyone around you knows what’s gonna happen, but it also helps you sleep a little better at night. And you don’t have to spend a ton of time doing any of this stuff, anything we’ve mentioned in this episode. I think another thing to think about in terms of preparation is to have your affairs in order, whatever that means. That typically means, like in the US, you probably want a living trust or a will. Something that doesn’t leave a big mess behind. Because you’re gonna die eventually so you’re gonna need this eventually. And as soon as we had kids I think we sat down and had a living trust. Probably could’ve used one before that but I think it’s less complicated at that point.

Once you have kids you have to start thinking about, “Boy my kids are young. Who’s gonna take our kids if something happens to us while we’re traveling?” You don’t really want to think about that but definitely sleep easier at night knowing that we have thought of that and that they’ll be okay. They’ll be taken care of, both financially and by folks we’ve talked to about this.

Sherry Walling: I think one of the things that is also super-important for folks who are in the startup world, especially for single founders, is to again, think about this worst case scenario plan of what happens if something happens to you. And a few years ago, Rob and I had this conversation and he went through and thought about all of the assets that he owned, and at that time, you owned a lot of different websites. This was sort of pre-Drip, HitTail era, and you had several different products that you owned and I would have no idea what to do with those. I wouldn’t really know how to sell them, although I would now because I’ve been through that, I know who to call, Thomas at FE International. But we put a plan in place and reached out to some friends who are in the startup space and would’ve been able to help me. And were something to happen to Rob, I sort of know who to call and to say, “Hey, I need to sell these sites. How do I do it? Can you help me figure this out?”

And then we had other sort of friends in place for things that were more technical that I would’ve needed help with because it’s not my area of expertise or familiarity.

Rob Walling: You know, and I think if you are in a situation where you have less liquid assets like a business, having someone who you can trade off with, because that’s essentially the commitment we both made is like, “Look, if you can die, I will help settle the business side of it.” You still need a will, you still need a trust, but in terms of just disposing of those assets and turning them into something liquid that your spouse can use, I will commit to doing that, and you commit to doing it for me as well. Less of an issue specifically for us these days because having sold HitTail and Drip and all that. But I think a lot of folks listening to this podcast should be thinking about that. What do you have that is either complicated enough or just illiquid enough that your spouse wouldn’t know necessarily how to deal with it if you were to suddenly disappear one day?

Sherry Walling: This is definitely a macabre episode.

Rob Walling: Yeah. Planning for the worst always is, you know? And an uncertain world like we’re talking about, is not necessarily a fun topic to talk about. And I think that’s why, I don’t think you should dwell on it, I don’t think you should think about it all the time, but I do think adding a few items to a Trello list and working through them kind of one time and having these things in place, I think it can impact your ability to weather storms and to deal with the uncertainty and anxiety and the fear that this society creates. If you have some of these in place and you know like, “Ah, we would bounce back from that.” We are now antifragile in these ways.

Sherry Walling: And it helps you sleep better at night.

Rob Walling: Lord knows we all need that. (singing)