Monday, May 18, 2020

The success and beauty in failure

Part of my occasional, ongoing series working with the book, The Collapse of Parenting, by Dr. Leonard Sax.

Aaron S. Robertson

A couple of stories to open this discussion up

In his 2016 book, The Collapse of Parenting, Leonard Sax, MD, Ph.D., devotes Chapter 5 to attempting to answer the question, "Why Are So Many Kids So Fragile?" There are two stories from that chapter that I find fitting to share here.

The first one is about a young man named Aaron (that's a cool name, by the way). Aaron has been a gamer since early childhood, and he's a whiz at the game Madden NFL Football. In high school, during a routine checkup, the nurse practitioner told Aaron and his dad, Steve, that Aaron was overweight. She recommended sports as an outlet to increase his physical activity. Steve, in turn, suggested to Aaron that he give football a try. Steve was a football player throughout his time in middle and high school, and he really enjoyed it. He had already been encouraging Aaron to give it a shot for quite a few years, but to no avail. But when some of Aaron's pals, who were fellow gamers, decided to try out for the JV team, Aaron finally caved in.

Here's what happened, in Steve's words, from the book:
“Aaron was pretty cocky when he went to the tryouts. He thought that being master of Madden NFL Football would give him an advantage. But the coach said he wanted to get a sense of who was in shape and who wasn’t. So he had them do some sprints. Then he made everyone run a mile, and every boy was timed. Aaron’s times in the sprints were terrible, and he took nearly 12 minutes to run a mile. One mile. The coach said, ‘Son, I have no idea whether you’re going to be able to play this game or not. You’re out of shape. I expect to see you back here tomorrow morning at 7 a.m. with the other kids who are out of shape. You’ll run another mile around the track, then we’ll go the weight room.”

“What happened? Did Aaron go back the next morning” I asked.

“Nope. He never went back. That was his first and last foray into any kind of after-school sport…” (Sax, 2016, pp. 94-95)
Julia was a high school junior when her story was told in the book. She was very competitive by nature. Dr. Sax surmises that perhaps she got some of that from her parents. Mom is an investment banker, dad a surgeon. Long story short, Julia attempted to take AP Physics her junior year, a course that is usually taken senior year. Accustomed to always being at the top of her class, or at least very close to the top, she scored a 74 on the first quiz. Her teacher suggested after this first quiz that it wasn't too late to consider dropping the course. This, unfortunately, sent Julia into a downward spiral emotionally and mentally.

After some hard convincing by her mom, Jennifer, Julia started getting help from a tutor. She scored a 79 on the second quiz, and this sent her into a total depression. She couldn't handle getting a C in the course. Jennifer took her to see the pediatrician, who placed her on a low dosage of an antidepressant. It helped for a short period of time, but her mood and feelings relapsed. Jennifer then decided to take her to a psychiatrist, who recommended adding another medication to the mix. She was alarmed when she read the potential side effects of this medication, which included weight gain and diabetes. That prompted Jennifer to reach out to Dr. Sax for a second opinion (Sax, 2016, pp. 95-98). 

Here's the scoop: You're going to experience failure numerous times in life.

You're going to encounter failure throughout your life. Many, many times. Countless times, in fact. In all sorts of contexts, places, situations, and sizes - in school; the workplace; relationships of all kinds; sports; business ventures; tests of all kinds; not getting into your top college choices; your finances; not getting that dream job, internship, or scholarship; and from simple mistakes to what may feel like the end of the world to you.

There are two main contributing factors that lead to, or accelerate, these failures:

1) Simply encountering circumstances beyond our control, and there will be plenty of these.

There were many other applicants that were better qualified. The economy is crashing, and now I'm out of a job. The other team showed up to play, while my team was nowhere to be found. A recession is causing my investments to nosedive. I just didn't foresee this as a possibility, and so it caught me completely off guard. A sports injury has railroaded my dreams of going pro. And, let's be honest - there are people out there who are just jerks by nature, and nothing you say or do will ever change or please them. They will put up barriers for you without any particular rhyme or reason.

2) Circumstances that are totally within our control.

Instead of studying for the big exam, I decided to spend all that time playing video games with my friends. I didn't ask for help when I needed it, and now I'm in a mess. I could have been a better listener for my friend. I let my teammates down by not putting in the practice time I needed to. I never saved anything (money), and now I'm out of work. Etc., etc.  

Here are the solutions to overcoming failure and powering ahead

First off, accept and embrace failure as a natural part of life that's not going away. Simply accepting this fact is actually quite liberating and empowering. The earlier you can embrace this truth, the better you'll be prepared mentally and emotionally for when these times do come along, and they surely will. You'll be more level-headed, even-keeled, and able to look at things more objectively and reasonably. 

See every situation, every failure, as an opportunity to learn. Every situation in life and career is a learning opportunity that will better prepare you for future success. Ask yourself, and really take the time and effort to reflect on, questions like: What can I take away from this experience? What in this situation did I have control over? In regard to those things that I did have control over, what could I have done better? What could I have taken more seriously? How can these newfound insights better prepare me for the future?

The current situation that we find ourselves in, the coronavirus COVID-19 pandemic, presents many such learning opportunities to us, if we simply take the time to listen to them. In a post that I just published last week, "Building your own personal economy," I discuss, and offer a number of solutions to, how this crisis has fully unmasked (pun intended) the true magnitude of Americans' lack of savings. We're living paycheck to paycheck, we can't fund an unexpected $500 car repair, and missing work for even a week or two with all the lock downs and business closures across the country has left us in dire straits. 

Yin and Yang
Realize that success and failure are intertwined, and that you cannot have one without the other. Look at success and failure as Yin and Yang. It's an axiomatic truth that they are interconnected, and that one cannot exist without the other. We can't have success without failure, because it's learning from those failures that leads to the successes. And we can't have failure without success, because we wouldn't have anything to compare failure to. And because we wouldn't have anything to compare failure to, we wouldn't have anything to strive for. We wouldn't know what success looks and feels like because it doesn't exist.       

One of the very first posts I wrote for this blog, way back in December 2018, is, "Success comes from not quitting." And in that post, I discuss the career highlights of several historical figures, mostly athletes. And the reason why they became legends - the reason why we know their names today - is because they simply kept going. Every day was a new day, a new opportunity to learn from yesterday's mistakes and defeats. A new day to notch another victory.

As I note in that post, pitcher Cy Young has the most wins in baseball, but guess what? He also racked up the most losses. Neither record is even close to ever being broken. The biggest loser in baseball is also its biggest winner. Babe Ruth was the home run king for decades before Hank Aaron came along and took the title. Decades after Aaron, as we know, Barry Bonds claimed it. But while Ruth was the home run leader for decades, he also held the record for most strikeouts. That record - the most strikeouts - was eventually claimed by another legendary slugger, Reggie Jackson. Michael Jordan and Bob Cousy were cut from their high school basketball teams. And Thomas Edison was said to have failed thousands of times on the light bulb before he finally got it right.

Adopt a Growth Mindset, and unleash the power of yet.

This next point ties in well with this notion about seeing every situation as a learning opportunity. I recently took an online course as a part of my ongoing professional development called "Teaching Online: Principles, Techniques and Strategies." The course covered, among other subjects, the Growth Mindset vs. Fixed Mindset philosophy. I was already aware of this approach prior to taking this course, but it was great to get a refresher on it, and it definitely fits the overall topic of this post. Check out this video that was in the course. It does a wonderful job of explaining the concept:

And check out this poster, which ties in really well with the video:

The power of yet

Adopting a growth mindset and understanding the power of yet is what frees up your mind to allow you to see every situation - every failure - as a learning opportunity.

Try looking at your failure from a different perspective - it may not be nearly as bad as you think.

Here's my take on Julia's situation - I'm actually a little jealous of her. I make it no secret that I was a slacker in high school. From where I stand, her carrying a C in AP Physics is far more than I ever accomplished in high school, and college credit is college credit. A grade of a C is passing the course, and that means college credit before even filling out the admissions application. Combined with her other AP coursework throughout high school, she's well on her way to a much faster (and far less expensive) start in college - as well as in career and life - than I ever was. Whereas Julia saw that C as being a major failure, I see it as simply standing for the word, "Credit." There you have it - a different perspective.

Have backup plans.

Around six months ago, in mid-November, I wrote this brief post about the importance of cultivating many options - essentially, having a few viable backup plans ready to go in case things don't work out as you had planned, or simply to enable you to explore new territory and opportunities, or to hedge your bets against risks.

Finally, work on building courage, humility, and gratitude - NOT self-esteem.

I'll close with this passage from the book that I found particularly insightful and relevant for this post. It's on the dangers of self-esteem. Now, that may sound somewhat strange to say - that we shouldn't have a high amount of self-esteem - I found it somewhat strange and paradoxical at first, as well. But I read this passage a couple of times and really reflected on it for some time, and it now makes perfect sense to me. All too often, we tend to confuse self-esteem, because it's a big word or phrase that's ingrained in our culture, with what we should really be aiming for - courage, humility, and gratitude. These characteristics are different from self-esteem, as we'll discover here. Here is that passage:
Charlene has very high self-esteem. I don’t think that’s such a good thing. Her high self-esteem at age 15 is setting her up for disappointment and resentment at age 25. I have witnessed this trajectory many times. Soaring self-esteem in childhood and adolescence, carefully nurtured by parents and teachers, predictably leads to a crash after college, typically about 3 to 5 years after graduation, when it slowly dawns on the young adult - the same adult who had been so talented as an adolescent - that she’s actually not as talented as she thought. She discovers that just because she was repeatedly told that she is amazing does not mean that she is, in reality, amazing.

Put bluntly, the culture of self-esteem leads to a culture of resentment. If I am so wonderful, but my talents are not recognized and I’m still nobody at age 25, working in a cubicle - or not working at all - then I may feel envious and resentful of those who are more successful than me. How come that other young writer got her novel published, and she was on the TODAY Show and I can’t even get an agent?

One parent recently said to me, 'Kids need self-esteem. I want my daughter to have the courage to apply for that big job, her dream job. And that requires self-esteem.'

Not quite, I answered. Taking appropriate risks requires courage, first and foremost. Again, many parents confuse self-esteem with courage, just as some parents tend to confuse humility with timidity and cowardice. To be courageous means that you recognize the risks and your own limitations, but you find the resolve to move forward anyhow. The young person with bloated self-esteem, unaware of her own deficiencies, is unlikely to do well in the job interview. But the young person who is genuinely interested in what the recruiter has to say is more likely to get the job.

The right kind of humility helps you to recognize your own shortcomings. To be better prepared. To understand the risks. And to take those risks courageously, when necessary.

The antidote to the culture of bloated self-esteem is the culture of humility. If I am in the culture of humility, then I rejoice at the success of others, and I am happy with my portion. The culture of humility leads to gratitude, appreciation, and contentment. The key to lasting happiness is contentment.

This conclusion is now grounded in some compelling research. Investigators have recently found that if an individual has a grateful attitude toward life, that individual is more likely to be satisfied with life, more contented, and happier. (Sax, 2016, pp. 162-163).

Sunday, May 10, 2020

Building your own personal economy

If the coronavirus pandemic can teach us anything from a financial standpoint, it's that we each need to focus on building our own personal economies. We can't trust, or rely on, other people, politicians, or broken-down systems to do that for us.

If you're one of my high school or college -aged readers, you have the greatest asset going for you right now. You have time on your side. Don't squander it. Harness its great power before it catches up to you and is gone forever. And if you're one of my older readers tuning in, it's better late than never, as the old saying goes. You can immediately commit to these principles and strategies today, and dramatically alter your course heading for the better.

Aaron S. Robertson


As time goes on during the lock downs and business closures throughout the country due to the coronavirus COVID-19 pandemic, we're seeing more and more of the devastating financial effects all of this is having on families and businesses. As I write this, well over 30 million Americans are now unemployed during the pandemic. Food insecurity is creeping in, and children are going hungry. Lines to drive-up food pantries are backed up for miles in some areas of the country. Protestors are demanding an end to the shutdowns, with many pleading that they simply need to return to work in order to support themselves and their families. Rents, mortgage payments, and other bills are going unpaid.

A problem exposed that transcends all politics and personal beliefs about the virus

For this discussion, try to set aside any political or ideological persuasion you may have. Whether or not you think the coronavirus is a hoax; whether or not you're in support of these lock downs/closures; whether or not you feel your Constitutional rights are being violated - none of that matters for purposes of this discussion. These issues will be tested and battled out in the court system in due time. In the meantime, there's one indisputable fact that we know for sure right now in this very moment, and that is the purpose of this discussion - we Americans are not saving enough, and, as we're seeing, we can't weather out a storm, be it in the form of a pandemic, a natural disaster, an individual job loss, or a widespread economic meltdown.

A case in point: Here in Wisconsin, the "Safer at Home" order went into effect on March 25. Granted, schools had already dismissed prior to that date. The school district in which I'm employed, for example, held its last in-person school day back on March 13. Now, the "Safer at Home" order was originally scheduled to go through April 24, but it ended up being extended through May 26. So, let's assume, worst-case scenario, barring any court intervention or the governor lifting it earlier, that the order will stay in place through May 26. In total, that makes for nine weeks between March 25 and May 26 - a hair over two months. As this page on the Wells Fargo Web site explains, we should ideally have 3-6 months worth of expenses tucked away in an emergency fund. That's the typical advice doled out by financial advisors and economists across the board. But families and business owners are really hurting right now, and we're not even at the full nine weeks yet. I'm writing this on May 10, and we still have 16 days to go until we reach May 26. And, in fact, families and businesses were already feeling the pain and pleading to get back to work less than one month into the order. Clearly, we're not saving enough. We're living paycheck to paycheck. But we're great at spending and racking up debt, as Warren Buffett recently pointed out in comments he made about Americans' use of credit cards.

We need to focus on building our own personal economies so that we have the resources to effectively navigate through the storms that undoubtedly come our way in life. And they come in all shapes and sizes - anything from an unexpected car repair to an accident or critical illness. Anything from widespread economic decline to - yes - a pandemic. Back to unexpected car repairs for a moment - this press release issued by in 2016 pointed out at the time that 63% of Americans could not afford to cover a $500 car repair or a $1,000 visit to the emergency room. Four years later, in 2020, those numbers haven't improved much. According to this article published by CNBC back in January, 41% of Americans can cover a $1,000 emergency with savings. That leaves some 59% who cannot. And when it comes to the current state of retirement savings, the picture doesn't look pretty, either. According to this recent Washington Post story profiling six retired baby boomers:
Half of American families in the 56-to-61 age bracket had less than $21,000 in retirement savings in 2016, according to a longitudinal study by the Economic Policy Institute that used the most recent available figures. A less formal survey last year found that little had changed. Forty percent of Americans over the age of 60 who are no longer working full-time rely solely on Social Security for their income - the median annual benefit is about $17,000.
Clearly, what we're seeing right now, is that it took this current crisis - the pandemic - to unmask (pun fully intended) the dire problem of Americans' lack of savings. Tens of millions of Americans not being able to fund an unexpected car repair or emergency room visit, with each individual incident scattered over a long period of time, isn't going to make the news or create large-scale economic disaster. The problem is there, but this type of occurrence isn't enough to expose the true nature of it. But bring tens of millions of Americans together, all at once, who have been out of work now for anywhere between one and six weeks or so, and the lid has been fully blown off. We can't hide it anymore. We're now clearly seeing the magnitude of Americans' lack of savings.

Roots of the problem

I'd imagine that our inability - or unwillingness - to save is largely due to our collective consumer culture. With credit so readily available, it's all too easy to want to live for today by splurging and borrowing against the future. Tying into this is the whole "Keeping up with the Joneses" mentality. It's a trap that's easy to get caught in when it seems like everyone else around you is doing it. But a couple other factors, I suspect, are also at play here.

In addition to the consumer culture/keeping up with the Joneses dynamic, I'm betting that another factor contributing to the problem is that we just don't want to imagine anything bad ever happening. We don't want to think about those things - an accident, serious illness, job loss, natural disaster, pandemic, economic collapse, death - the car needing to be repaired. And because we don't want to think about the potential for things to go wrong, we're naturally caught off guard and perhaps even shaken to our core when they do happen.
"Tens of millions of Americans not being able to fund an unexpected car repair or emergency room visit, with each individual incident scattered over a long period of time, isn't going to make the news or create large-scale economic disaster. The problem is there, but this type of occurrence isn't enough to expose the true nature of it. But bring tens of millions of Americans together, all at once, who have been out of work now for anywhere between one and six weeks or so, and the lid has been fully blown off. We can't hide it anymore. We're now clearly seeing the magnitude of Americans' lack of savings."
Finally, a third contributing cause that I see here at work is our dependency on "the system" stepping in and providing relief when things go awfully wrong. We've come to expect unemployment insurance and other programs that collectively comprise what we call the "social safety net" always being there for us and coming to our rescue. The problem here is that the social safety net is marred by bureaucracy, inefficiencies and backlogs, technical woes, budget cuts, and politics. When it comes to the unemployment system alone, today's front page section of the Milwaukee Journal Sentinel is replete with stories of working people still waiting after many weeks to receive their first unemployment payment. Furthermore, these programs were always meant to be a band-aid of sorts; a little bit of temporary help - a supplement in a jam. They were never designed to fully take the place of our own planning and saving. We can't rely on these programs like that.         

What should we do about it? What can we do?

Fortunately, there are a number of tools and strategies we can implement to help us prepare for these situations and significantly mitigate the effects on ourselves and our families. We, alone, must do these things for ourselves and our families. We can't rely on other people, on politicians, or on broken-down systems to do these things for us. It doesn't matter who's in office. It doesn't matter how strong the broader economy is. We have to do this important work ourselves and resist the temptation to take the words and promises of others at face value.

The best part about these tools and strategies? It doesn't matter what your income is. Your income is not tied to your ability to save, mitigate risks, and build wealth. We know plenty of people earning six-figures who are sinking in debt, and we know plenty of people earning far humbler numbers by comparison who have become millionaires by faithfully following the 10 things millionaires do not do. You can start today with many of these items with the proper mindset and a little discipline.

First, let's talk about that mindset - I don't know if I've transformed into a jaded, cynical, bitter old man in my 30s, or if I've simply become more of a reasonable realist. For me, determining where that line is can be difficult sometimes. But here's my philosophy and psychology in a nutshell, for whatever it's worth. It goes back to some points made earlier about people generally not wanting to think about bad things happening, only to be caught off guard when they do happen: If you can imagine it happening, it can happen. If it can happen, it's likely that it will happen. There's virtually nothing that surprises me anymore about the world - about how people react; about how we treat one another; about the motives of others; about bureaucracy; about chaos, destruction, disease, natural disaster, famine, mass death, economic collapse, situations beyond our control; etc. If it can happen, it's likely that it will happen. And that's why it's important to think in terms of possible worst case scenarios and hedge your bets accordingly in order to protect yourself and those you care about. That was the general gist of my post, "Cultivating many options," that I wrote back in mid-November. In that post, I argued the benefits of having a few backup plans always ready to go at a moment's notice.
"We have to do this important work ourselves and resist the temptation to take the words and promises of others at face value."
I love movies about Wall Street and the world of investing, and one of my favorite films of all time in this genre is The Big Short. Here's a clip from that movie:

Here are some particular lines from that above clip that do a great job of summarizing my overall mindset and approach to life:
Charlie: "Our investment strategy was simple. People hate to think about bad things happening, so they always underestimate their likelihood."

Narrator: "Their strategy was simple and brilliant. Jamie and Charlie found markets will sell options very cheaply on things they think will never happen. So when they were wrong, they were wrong small. But when they were right, they were right big."   
The envelope system - Back in early March, I wrote a post about how I just started utilizing the envelope system for budgeting and saving, a strategy that I picked up from a personal finance class I assist in at the high school I work at. Since starting the envelope system, I've managed to save over $2,200 as I write this. Now, granted, I concede that this number may be a little artificially propped up by Wisconsin's "Stay at Home" order - it's hard to spend money when there's nowhere really to go. Nonetheless, $2,200 is $2,200. I wouldn't have it without this system in place. At first, it took a lot of discipline and getting used to. Now, it's second nature, and it's working really well for me. I love it. I could kick myself in the rear for not starting it earlier.
"It doesn't matter what your income is. Your income is not tied to your ability to save, mitigate risks, and build wealth. We know plenty of people earning six-figures who are sinking in debt, and we know plenty of people earning far humbler numbers by comparison who have become millionaires..."
The snowball method and the avalanche method for tackling debt - The snowball method is taught to students in our personal finance class. It's highly effective yet very simple to implement. This finance article on CNBC discussing ways to tackle credit card debt does a great job of explaining the concept:
Popularized by “The Total Money Makeover” author Dave Ramsey, the snowball method prioritizes your smallest debts first, regardless of interest rate. To try it, start by listing out all of your debts, smallest to largest. Pay the minimum balance on each one, except the smallest. For that one, dedicate as much cash as possible each month until it is repaid. Then move on to the second-smallest debt.

The idea is that you’ll gain momentum by watching debts disappear - as you would watching a snowball grow bigger and bigger - and that will motivate you to continue.
That same CNBC article describes the avalanche method this way:
To employ the avalanche method, list your debts from highest to lowest by interest rate. Pay the minimum balance on each, but this time dedicate as much extra as you can each month to the one with the highest interest rate.

Mathematically speaking, tackling the highest interest rates first is the most efficient way to handle debt because it eliminates interest as quickly as possible. The debts that would be racking up the most in interest are dealt with first, so you can minimize interest paid.
Both the snowball method and the avalanche method are effective for tackling debt. However, it should be noted that, according to this research conducted by Harvard Business Review on paying down credit card debt, which the CNBC article cites, the snowball method appears to be the best way to go because it's easier to stay motivated. There's a psychological effect at play here. You're more likely to see the total number of your debts disappearing faster, even though your higher-interest debts may be getting paid off last, and it's seeing the total number of debts shrinking that will keep you energized throughout the process.

Using cash as a negotiation tool - Who doesn't like cash? Once you start accumulating some through saving, budgeting, and knocking some debts out, you can use cash to your advantage in many scenarios where you're able to negotiate, not just buying a car. Mark Cuban and Dave Ramsey explain the benefits of using cash to negotiate.   

Long-term care insurance - In December 2011, just days before my 29th birthday, I purchased a long-term care insurance policy. This Wikipedia article on long-term care insurance explains it well:
Long-term care insurance (LTC or LTCI) is an insurance product, sold in the United States, United Kingdom and Canada that helps pay for the costs associated with long-term care. Long-term care insurance covers care generally not covered by health insurance, Medicare, or Medicaid.

Individuals who require long-term care are generally not sick in the traditional sense but are unable to perform two of the six activities of daily living (ADLs) such as dressing, bathing, eating, toileting, continence, transferring (getting in and out of a bed or chair), and walking.

Age is not a determining factor in needing long-term care. About 70 percent of individuals over 65 will require at least some type of long-term care services during their lifetime. About 40% of those receiving long-term care today are between 18 and 64. Once a change of health occurs, long-term care insurance may not be available. Early onset (before 65) Alzheimer's and Parkinson's disease occur rarely.

Long-term care is an issue because people are living longer. As people age, many times they need help with everyday activities of daily living or require supervision due to severe cognitive impairment. That impacts women even more since they often live longer than men and, by default, become caregivers to others.
Now, most people in their 20s aren't thinking 40+ years down the road. But if you're one of them, you have a great advantage. Generally speaking, time and health are on your side, and the younger and healthier you are when you purchase one of these policies, the lower your premium amount. The odds that you're going to need this kind of assistance when you're older are high. And a policy like this can help mitigate those odds by protecting your assets down the road from being eaten up by healthcare costs, not to mention relieving loved ones from the burden of having to take care of you. Insurance agent and financial advisor friends of mine tell me that purchasing a long-term care policy when I did was one of the best moves I could ever make. Many people who purchase these types of policies don't start thinking about and buying them until they're in their 50s or older - to a significant cost disadvantage.

Finally, on this subject, if I pass away prior to having to tap into this policy, all the premiums I paid into it will be returned to my estate.

Disability insurance - I purchased an individual disability insurance policy (individual meaning that it's not tied to my employer-sponsored benefits - I own it as long as I continue paying the premiums on it, regardless of employment status or job changes) back in June 2017. If I become disabled and, hence, unable to work, this policy will provide a guaranteed monthly income for a set period of time. Additionally, at the age of 65, with the way my policy is structured, I can have my premiums returned to me. The amount of premium returned to me will depend on the amount of benefits I took from the policy. If I never have to tap into the policy, I'll have 100% of all the monthly premiums I ever paid into the policy given back to me at 65. I look at this as sort of a forced savings strategy. If I pass away prior to 65, I can have the premiums I paid up to that point go to a beneficiary.

This Wikipedia article on disability insurance sums it up well:
Disability Insurance, often called DI or disability income insurance, or income protection, is a form of insurance that insures the beneficiary's earned income against the risk that a disability creates a barrier for a worker to complete the core functions of their work. For example, the worker may suffer from an inability to maintain composure in the case of psychological disorders or an injury, illness or condition that causes physical impairment or incapacity to work. It encompasses paid sick leave, short-term disability benefits (STD), and long-term disability benefits (LTD). Statistics show that in the US a disabling accident occurs, on average, once every second. In fact, nearly 18.5% of Americans are currently living with a disability, and 1 out of every 4 persons in the US workforce will suffer a disabling injury before retirement.
Job loss insurance - Not long ago, I purchased a policy from SafetyNet, based in Madison, Wisconsin. Unfortunately, SafetyNet is no longer taking on any new customers, but you should be able to find somewhat similar coverage through another provider. These types of policies are becoming popular.

Anyway, at the time I had their coverage, SafetyNet provided an insurance policy that protected against job loss on two different fronts - job loss caused by an involuntary, no-fault-of-your-own layoff/shutdown/business closure that would prevent you from working for at least 30 days, and job loss caused by a covered illness or accident that would prevent you from working for at least 30 days. I believe there were three levels of coverage. You could pay $5 per month for a payout of x. That was the lowest premium/payout amount. The payout may have been $1,000. There was an amount in the middle. And I chose the highest amount of coverage. I paid $30 per month - one dollar a day - for a payout of $9,000. Well, that ended up being a good decision on my part. I ended up filing a claim in early 2018 when the business I was working for was experiencing financial difficulties and had to lay me off. It really came in handy, and I was able to collect regular unemployment insurance from the state of Wisconsin, as well.

Now, for these job loss type of policies, one thing to keep in mind is potential tax implications. With me taking a payout on the layoff/shutdown/business closure side of things, the payout counted as income, and I had to pay tax on that $9,000 when I filed my tax return for the year. Well worth it. I would have had to pay taxes on that $9,000 anyway if I had earned it working. By contrast, you do not have to pay tax on a payout from a covered illness/accident claim.

Finally, here are some additional tips, strategies, and resources from personal finance expert Dave Ramsey that I highly recommend:

30 Easy Ways to Save Up to $1,000

How to Save Money: 20 Simple Tips

How to Save Money Fast
8 Ways to Turn Saving Money Into a Game

These are just a few things you may want to consider employing as you seek to build up your own personal economy so that you can navigate the challenging times and curve balls that life, without a doubt, throws at us from time to time. I also have life insurance (both employer-sponsored and individual coverage) and some investments in my toolbox, but that may be better suited for a future post here. I'd also like to write a post in the future about employee benefits. Depending on what your employer all has to offer, there could be some really nice gems that can further help you in mitigating risks and planning for the future.

What are your thoughts, observations, and experiences? Do you have any financial tips and strategies not discussed here that have served you well during times of uncertainty and crisis? We'd love to hear from you! Please feel free to share in the comments section below.