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YARNLADY's avatar

Why is it wise - or foolish - to plan for things that might never happen?

Asked by YARNLADY (42051points) May 29th, 2009

Are insurance, savings accounts, retirement plans important or not at all? Why or why not?

Observing members: 0 Composing members: 0

40 Answers

tinyfaery's avatar

ooh ooh, I inspired this

Jeruba's avatar

To avoid the fate of the Grasshopper.

MacBean's avatar

Definitely important. Because SHIT HAPPENS. It’s much better to have a bit of a safety net than to have to scramble in a crisis.

rhector63's avatar

well think about it, you never really know whats going to happen. sure you can try and estimate when somethings going to happen, but you never really know
so in my opion, you should, but don’t dedicate your life to it. like don’t go out there and preach that the worlds gonna end and that you should well prepare (i don’t wanna get religious)

skfinkel's avatar

No spaghetti feeds to pay the mortgage or for hospital treatment. And who wants to take a chance on not having any health care? Just one night in a hospital is astronomical.

and, here’s a little related thought: you have fire insurance even though fires are very rare. Long term disability insurance will be needed by one in three people.

chyna's avatar

skfinkel is right. I am now a firm believer in planning. I had short term disability because it was cheap, 75 cents a pay check, never thinking I would need it. I’m basically a very healthy person. I had a surgery that forced me out of work for 6 weeks. My insurance paid my entire paycheck or I would have been behind in my bills.

Lupin's avatar

Just a quick peek inside my car trunk will tell you my answer. I’m ready for anything.

Jeruba's avatar

@Lupin, do you have a baseball bat in there? an inflatable pillow? a mortar and pestle?

And how well prepared are you for dictionary emergencies?

Kayak8's avatar

Actually, in a recent Oprah magazine there was an article about the traditional US manufacturing approach of “just in case” vs. the, presumably more efficient, Japanese approach of “just in time.” The author of the article encouraged folks to look at all the aspects of their life to see if they take a just in case approach (hoard things for a rainy day) or just in time (don’t take more than you need) approach. This has been a very interesting mental exercise for me as I have realiszed, for me, I need some things to be just in case (insurance, savings, etc.) and others can be just in time (don’t need 5 cans of beans on the shelf unless it is winter and we might get snowed in).

Your question is kind of a different way to look at personal risk assessment and to determine, for yourself, where you are happy taking risks (just in time prep) vs where you are more happy being risk averse (just in case prep).

Lupin's avatar

@Jeruba I must admit I never considered a dictionary emergency while in the US. When in a foreign country I always have one handy.
I have water, oil, gasoline, chains, tire inflator, tools, clothes, food, small cooler, flares, spare tire, trioxane, first aid kit and a fire extinguisher. Most of it all fits under the back deck behind the rear seat.
I also keep a Kidde Dry chem under my seat next to a Spax SP16. I hope I never need any of it.
Seven years of ambulance service have convinced me that it is better to be prepared.

Lupin's avatar

I just checked in my trunk. I forgot about the tarps, flashlight, umbrellas, reflector and 1/4 mile of 14 gauge electric fence wire.
.

Facade's avatar

nevermind. I read the question incorrectly

chyna's avatar

@Lupin That is some huge trunk!

Jeruba's avatar

@Lupin, when we form a caravan and migrate to a new frontier, I want to ride with you. I’ll bring the dictionaries. Do you think twenty will be enough?

YARNLADY's avatar

@Facade I’m talking about the act of planning and saving, not making people wise or foolish.

hungryhungryhortence's avatar

So anyway… your question, yeah. mods anywhere in sight? looks like not

Yes, I think it’s a very good investment, gamble, idea, whatever people want to call it to plan ahead. It only takes one good hospital stay or month out of work to put most people months behind on bills, mortgages in jeopardy and credit rating to the tank. In the past two years, I’ve seen so many people lose everything because hey had no security net.

Lupin's avatar

It all packs nicely, honest. I’ll admit I do have a large trunk.
I like to be prepared . If I never use the stuff, I figure I am ahead. In my wallet, excluding the credit cards, licenses and cash, I keep: a razor blade, P-38, nichrome wires, 4 retroreflecting Limb Light twist ties, a few plastic zip ties, bandaids, butterflies, foil, and a couple of benadryls. This stuff costs very little and takes up virtually no space. But I have it just in case. I sleep easier knowing it’s there. Like my 401k.

I keep a second wallet for air travel so I don’t get arrested.
@Jeruba I’ve got Japanese and Spanish covered. You can take care of the rest.

tinyfaery's avatar

Time for my answer…

Nothing, and I mean nothing is assured. At this point in American life it’s fairly obvious that you can do everything “right” and still get screwed. A lifetimes worth of saving can be lost in a moment. The people at Enron thought they were playing it safe and planning for the future. How about all the people who have lost 75% of their lives’ savings in our current recession?

I save money. My wife has STRS and I contribute to my own 401k (which I am going to change to a savings account), but trust me when I say, the money I earn is being spent on the present. I like good food and nice clothes. I like concerts and I like to go on road trips. We are currently saving (dnt dun dun…) for a trip to Europe in 2010. I am spending my money now and leaving the future in the future. If I’m going to get there then I get there. I’ll deal with it then.

I even have an earthquake kit, but it has more stuff for my cats than it does for us.

chyna's avatar

@tinyfaery “Live for today, but still plan for the future.” I really like that idea. I will mull that over and see how to fit it into my scheme.

YARNLADY's avatar

@tinyfaery Thanks for the in depth, thoughtful answer. My MIL spent her working life saving and planning for the future, and is fairly well off now. Her cousin bought everything she wanted and even made fun of her frugal ways, during trips to Morocco, and such, and ended up in a group home with other elderly women who had zero savings and have to exist on Social Security.

chyna's avatar

@YARNLADY But she had fun during her life on her trips. Not saying your MIL didn’t have fun.

Lupin's avatar

You know there’s a lot of middle ground between “smoke ‘em if you got ‘em.” and save everything for your later years. I believe all things in moderation. Ideally you run out of cash the day you die.
I’m still going to keep my “junk in the trunk.” :-)

tinyfaery's avatar

Fun while your young just sounds better to me. And like I said, ANYTHING can happen. I might end up in one of those homes. I’ll deal then. Or maybe my mind will be gone and I won’t care anyway. Besides, I plan to develop a heroin habit when I’m done living.

YARNLADY's avatar

@chyna Cousin did, indeed, have fun, but I heard her say at one visit that for the one week of memories, she could have gone to Coney Island, and now have the money to have a private room for the rest of her life, instead of sharing with a stranger.

augustlan's avatar

I’m with @Lupin on this one. Moderation is key. Yes, enjoy your life – especially while you’re young – but remember that you won’t always be young, and plan for that eventuality.

Darwin's avatar

It would be foolish to plan for things that realistically never will happen. For example, as delightful as Douglas Adams’ writing is, one really shouldn’t assume that the Earth could be demolished any time now to make way for a new hyperspace bypass and make plans in case of that eventuality (although it is never entirely a bad idea to have an extra towel or two around).

On the other hand, one would be wise to assume that you will have unexpected expenses that will need to be covered by savings. The roof does wear out, tires and whole cars do need to be replaced, and we all get old.

But one would be wisest to assume that while these expenses may happen, economies are not fail safe, so you should really hedge your bets by stashing your savings in different types of places. So never bet all your pension on the stock of one large company, no matter how solid it seems. Buy bonds to balance out your stock holdings. Have a savings account in addition to your investments, and so on (but really, don’t bury your cash in mason jars in the back yard).

And while you are at it, don’t forget to have a pleasant life. Of course, don’t spend all your money in one place, make sure to save for the rainy day that will come, and make sure your bills are paid, but also make sure you have decent food, nice clothes, a comfortable place to live, all the medicines you are supposed to take, and a bit of fun.

Jeruba's avatar

@Lupin, I meant English dictionaries, but you’re right, we’ll need more. I have a good big German one, a decent Greek, a small Latin, a very hefty Sanksrit, and a huge dictionary of Canadian English that is as big as the big Webster’s. And a seven-language dictionary and a handful of specialized ones. I was thinking of leaving the Sanksrit, though, so I can bring the OED. Ok?

augustlan's avatar

@Jeruba No fair! Flaunting your dictionary collection in front of a confirmed dictionary lover. Now, I’m jealous. :/

Jeruba's avatar

Been accumulating them for decades, @augustlan, by hook or by crook. When the company I worked for folded, I grabbed the OED! One year the only thing I wanted for Christmas was the big Webster’s, and my dear husband gave it to me. Another year it was the American Heritage III. Sometimes I have to look at a lot of dictionaries before I find the one that agrees with me.

augustlan's avatar

@Jeruba I also asked for (and received) the big Webster’s as a gift. It’s one of my favorite possessions, and it always backs me up in Scrabble ;-). My children love it almost as much as I do.

DarkScribe's avatar

Is it wise or foolish to carry a spare tyre? (Tire for the Americans.)

Lupin's avatar

It is wise if you know how to change it. I believe everyone should practice once in their own driveway. Sure you can call AAA but it will take 2 hours for them to come. If you do it yourself you can be on the road in 20 minutes and you’d get some exercise to boot.
Unless you are elderly or female. Call AAA first and then just stand there until some do-gooder male drives up and does it for you. I’ve changed so many I can qualify as a NASCAR crew member.

chyna's avatar

@Lupin I’m female! I can change a tire.

Darwin's avatar

I’m female, also, and I can change a tire, too,

That is, I can as long as some lazy-ass mechanic didn’t tighten the lug nuts down too hard with the compressed air gun.

Lupin's avatar

@chyna @Darwin
I have no doubt you can do it. I think everyone should know how and should practice at least once. I didn’t mean to be sexist or anything. Honest. Maybe it’s that old suppressed hint of chivalry coming through.
I will stop and offer help if the person appears to need assistance. Sometimes it is nice just to have someone else to just be there in case something goes wrong. Cars fall off jacks, Lugs are too tight, traffic is scary.
I work on the Conservation of Grief principle. The goal is to reduce the total net grief in the world. Changing a tire might be difficult or cause an inexperienced person a lot of grief. If I have the time, and it will only cause me a little grief, I do it. The net total grief is reduced if I do it or at least offer. If the person stopped is a big guy who can do it just as fast or as easily as I, then the net conservation of grief is a wash so I will let him do it.
OK now this will really highlight my geekitude. I actually figure the COG ratio to be anything greater than 3 to one. For example, if it takes me one minute out of my way to save a hitchhiker 3 minutes, I will do it. If I can change the tire in 1/3 the time of the other person, I will. You need to have a ratio greater than 1 or else you would spend your life only helping others, unless you are Mother Theresa. Selfishness is 1 over the COG ratio. Multiply by 100 and you get an idea of what the person gives back to society. The worst, selfish, SOB in the world would be a 0. Mother Theresa is 100.
This is not an exact science but it sure is close. It carries through for much of life.

tinyfaery's avatar

@Lupin As liberated as I am, I am very willing to let a nice stranger help me out. I hate manual labor, but I do know how to change a tire. If I absolutely have to do it, I will. But I’d accept help from both @Lupin, @chyna and @Darwin. No need for chivalry, just a helping hand to a fellow human. :)

Lupin's avatar

@tinyfaery And I’d be honored to do it. We’d both would have a brighter day.

YARNLADY's avatar

I can and have changed a tire (in my own driveway), but I have seen drivers nearly kill themselves trying to get off the highway to help me, a little old white haired lady, so I’ll just stay in my car and call AAA if it happens again.

Lupin's avatar

I was one of those guys! I was the one who pushed my phone through your slightly opened window. Sorry I looked so messy and my appearance put you on edge. I was working at my friend’s farm. I’m glad to hear you made it home all right. ;-)

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