Joe’s Short Stack- Risk & Reward Edition

This week I drove halfway across the country to pick up my kids from grandma and grandpa’s house. Everyone wants to get in on the “one last time together before college” game, which means I’m playing the “overland bus service” game. Little Rock. Memphis. Nashville. Lousville. I now know the route by heart.

As a planner and a runner, I decided to leave a day early to break up the drive and scout out a good running trail in Nashville to run in the morning. I was scheduled for a tempo run of 5 miles (a tempo run is just above your race pace….in this case, I was supposed to run about 8:20 per mile). So, I jumped on Hotels.com and found a clean comfortable place for $65. Perfect.

In Nashville, at 4 AM my phone woke me up with a flash flood warning in the area. I pulled up the weather on my phone and saw that although there were thunderstorms rolling through, they were going to be gone by 6:30. Perfect. However, the flash flood warning was in effect until 8. No biggie. They often run these things long just to be safe.

Being Safe

I started thinking about what I would have told a client. “Don’t chance it. There’s no need for the risk. You’re in unfamiliar territory.”

I’ve always advocated:

– Plan. Do your homework.

– Have a safety net in place.

– Calculate your risk/reward before betting on anything.

Sure, sometimes you’re going to bet, but if you calculate first, you’ll make better bets. That’s why some of the best money managers in the world are also good poker players. They know that at some point you have to bet, but an educated bet beats a “gut feeling” any day.

The Risk/Reward

Suddenly I realized how silly it was what I was considering. I was going to run along a river….one of the ones that had flooded in 2010. I didn’t know anything about the area. I wasn’t training for the Olympics….only for a marathon with my sister in late October. Also, if I didn’t chance it, I would push it to the next day (which was scheduled to be an easy run) and instead slug it out in the Texas heat. While that didn’t thrill me, the workout would be harder, which might offset the fact that I’d pushed it off a day (I didn’t want to reward my subconscious mind for missing the run).

The point: How often do we take unnecessary risks without considering the risk/reward? There was almost no upside except that I would run a cool path that I’d never before run. Was that worth being out during a flash flood watch?

Don’t get attached to the glamorous “if everything goes perfectly” future. Imagine the downsides and protect against those first….and then bet on the future.

BUT ENOUGH OF THAT

Let’s talk about more exciting subjects, shall we? I was only home three days this week, so the stack is going to be short. Blogger buddies….if you wonder why I haven’t visited your site much lately, I promise I’ll be back in the community this coming week.

At the top of the stack is the latest in Pauline’s travel ideas for different countries at Reach Financial Independence. This time she tackles Italy in the piece Bang for Your Buck, Italy Edition, which is a place I’ve yet to explore. I’m sure it’s a lot like New Jersey.

I also loved Alexa’s announcement at Single Mom’s Income that she plans to quit her job and go independent soon. She’s made the right move: put that goal out in public so that you force yourself to achieve it. Even if things turn out differently than she’s written in Ditching the Day Job: Six Months To Go, Alexa is going to see some huge, positive changes in her life. Because I strongly believe that if you write it, the goal will come, I’m going to write here how much I love blueberry pie and maybe some will magically appear…..

As I fantasy football fan, I have to give a nod to DoneBy40 and his skillful melding of his league’s draft and how people make financial decisions in Fantasy Football Trades and Behavioral Economics. I love the fact that people are more disturbed by losing something than gaining, even if it runs counter to their best interest.

My “grandma” friend Kathleen at Frugal Portland reviews her recent AirBnB stays. I stayed at a cabin we’d rented via AirBnB two weeks ago and I absolutely loved the experience. Unfortunately, there were no “nekked” pictures lying around like Kathleen experienced in AirBnB: The Good, The Bad, and Lessons for Next Time.

Cheryl would kill me if I didn’t say that a post about Qdoba and great customer service wasn’t one of my favs, so Kim at Eyes on the Dollar gets free admission to this week’s Stack. I love stories where a manager is willing to believe a customer instead of turning an easy win into a clear customer service nightmare for the restaurant. Check out Customer Service is Alive and Well at Qdoba?!?

Edward Antrobus had a great piece while I was on vacation called You Might Be Wasting Your Money On Organics If….. Have you seen the numbers on organics and gluten free foods? It’s insane what a money pit this can be for the many people buying these products who really don’t need them…..

Shannon at The Heavy Purse writes a nice piece about your “stuff” and your goals. How does your spending align with what you truly want for yourself? Check out: How To Ensure Your Goals Align With What You Truly Want.

Finally, at TieTheMoneyKnot, the discussion rages again about a Prenup in the aptly named Asking for a Prenup (crazy title, huh?). Should his friend ask his fiance for one? I had to get one from Cheryl just to make sure that my board game collection wouldn’t be tragically split in half if something in our relationship went awry. I couldn’t have my ex taking Settlers of Catan in our breakup…..my precious……

Many Tanks

First, thank you to the people who’ve written about the podcast. Our last episode was especially inspirational. Chris dives a little into religion, but even if you’re not a religious person, I think you’ll find his planning unique and his comfort with uncomfortable situations refreshing.

Thank you (and congrats) to Holly at Club Thrifty. Thanks for her shout out to the podcast. Congrats for her recent Lifehacker and Kiplinger’s mentions. The Kiplinger article even includes a pic with Holly, Greg and the family. Check out Kiplinger and Lifehacker Japan.

Thanks to Laurie at The Frugal Farmer for mentioning our Freedom post in her epic: How to Pay Off Debt, It’s About More Than Budgeting. I love this piece, too (frankly, it should be a thank you AND a post in the stack…..)

Thank you to crazy man Len Penzo for the shout out to our $800 per hour job post in his Black Coffee: Don’t Worry, Inflation is Dead and the Economy is Fine.

Next week is going to be nuts! For the first time in about a month I’m going to be at the desk for nearly a week (Friday my daugther is off to the University of Arkansas!).

Photo credit: John Out and About