By Rob Schulz
I didn’t realize, until reading David Wallace-Wells' recent article We Had The Vaccine The Whole Time that Moderna’s COVID-19 vaccine was designed in just two days right after the genetic sequence of the virus was made public: Jan. 11 of this year. It was shipped for Phase I clinical trials only a month later and before the first American death had even been reported.
The long, careful scientific process of insuring a vaccine is safe for humans has been drastically shortened in order to save lives during this pandemic, but may still be too long to save us from this winter’s massive spike in cases and deaths. I’m not a scientist so it’s hard for me to draw any concrete conclusions, but I do know a thing or two about risk.
Taking risk can significantly increase the probability of a successful outcome.
Many times, people come to me to find out their risk of outliving their money so I calculate a probability based upon a whole bunch of assumptions. Some of these assumptions are known better than others and only a small handful are within our control. The one assumption we can control that gives many people the greatest amount of trouble is the amount of investment risk to take.
Time and again, I’ll run these calculations for a very risk-averse person who hates taking any chances and the probability of them outliving their money approaches 100 percent. Why? Because they are playing it safe, holding all of their investments in cash, and therefore almost guaranteeing an erosion of their purchasing power and wealth over time to inflation. Then I’ll meet with another couple who are much more comfortable with risk regarding their money. They are investing broadly in the stock market, which is by nature uncertain and volatile. When I run their probability of outliving their money, it’s just the opposite at nearly 0 percent.
How is that? One person almost guarantees retirement failure by playing it safe while another increases their chance of success by taking risk. I believe the more complicated our world becomes, the less intuitive it becomes to navigate important decisions. Those decisions made around the safety of vaccinations and investments definitely fall into the complicated category.
Rob Schulz is a local Certified Financial Planner and author of “Thoughts on Things Financial: Your Guide to a Chaotic Money World.” He can be reached at firstname.lastname@example.org. You can buy his book by clicking here: https://www.schulzwealth.com/book/
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