CHAPTER TWO
Rule #1: Know Your Risks
“Risk comes from not knowing what you’re doing.” ~ Warren Buffett
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et’s talk risks. You take risks into account more often than you proba- bly give yourself credit for. Do you wear a seat belt? If you do, you are helping mitigate the risk of a fatal car crash. Do you eat fresh fruits and vegetables? With those wise dietary choices you are helping address the risk of heart disease and other ill- nesses. Do you check the weather report before you leave the house? That is also a good idea. You’re trying to eliminate the risk of getting drenched on your way to lunch. Those risks are relatively easy to address because it doesn’t take much to avoid them (I can buckle up in less than four seconds). Savings risk is different. It takes time to understand, and it takes commitment to change the way you’re saving. Your Three Biggest Risks A book is sometimes an impersonal medium. When I meet with a client, I get to look at them across the table, get to know their family, or understand their financial situation. So you might be thinking, “How can he know MY biggest risks?”
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