Hidden Risks Overlooked in Your Financial Plan

Several years prior to Sir Ernest Henry Shackleton’s renowned expedition toward the South Pole, as chronicled in his book Endurance, Robert Falcon Scott embarked on a similar ambitious endeavor with his Terra Nova expedition.

In an effort to guarantee the survival of his team throughout the grueling 1,800-mile round trip to the South Pole and back, Scott crafted an extraordinarily detailed strategy, leaving no aspect to chance. He precisely determined the precise quantities of provisions required for each member of the group and prepositioned these supplies at strategic points along their planned path. To facilitate movement across the harsh terrain, he incorporated a trio of transportation methods: sled dogs, Manchurian ponies, and cutting-edge motorized sledges that represented the pinnacle of 1910 technology. Additionally, he established the ‘One Ton Depot,’ a critical cache intended to serve as a vital supply lifeline for the team during their homeward leg.

The expedition launched on November 1, 1911, and Scott’s group finally attained the South Pole on January 17, 1912. This achievement came merely one month after the Norwegian explorer Roald Amundsen and his companions had become the first to plant their flag there. Despite arriving in second place, Scott’s determined crew resolved to outpace the Norwegians in returning to their base camp, eager to broadcast their success to the wider world via radio.

As they initiated their return trek in early January, initial conditions appeared promising. At certain stages, they were even surpassing their timeline by several days. However, upon reaching their initial supply depot, disaster unfolded unexpectedly.

When the team arrived at the depot, they discovered that a substantial portion of their paraffin oil—their primary fuel for cooking—had vanished from the storage tins. As Scott documented in his journal, later featured in The Worst Journey in the World:

Each tin featured a small cork bung, which proved to be a significant flaw; paraffin has a tendency to seep out in the most frustrating ways, resulting in considerable waste, particularly when the sledges traversed uneven terrain and were jostled or, as often occurred, overturned.

The defective seals on the containers allowed the paraffin to leak away, depriving Scott and his men of sufficient fuel to complete their journey back. Undeterred, they rationed their remaining supplies stringently and pressed forward. Yet, as the weather turned increasingly hostile and fatigue set in deeply, their progress halted tragically. They all succumbed in late March 1912, a mere 11 miles shy of the One Ton Depot.

The Terra Nova expedition led by Scott stands as a stark illustration of how even the most comprehensive and thoughtful plans can unravel in the face of unanticipated hazards. From time to time, I reflect on historical accounts like this one. I ponder questions such as: What potential threats am I failing to consider? Which perils might be escaping my notice? What so-called unknown unknowns in my own life—those elusive uncertainties—could I identify and address proactively?

Naturally, it’s impossible to anticipate every conceivable contingency. Consider a cautious restaurant proprietor who maintains a six-month reserve of operating capital, only for a pandemic like COVID-19 to emerge and force closure for an entire year. Such events defy accurate forecasting and pose existential challenges to survival.

That said, regularly evaluating and preparing for unpredictable risks remains a worthwhile discipline. For instance, my wife and I recently relocated to a larger apartment, affording us far more room than our previous residences. After more than a decade confined to compact 500- to 600-square-foot units, transitioning to a spacious 1,250-square-foot two-bedroom unit feels almost surreal in its expansiveness.

With this newfound space—and the impending arrival of our first child—I’ve found myself contemplating various forms of risk more intently than ever. Consequently, I’ve begun assembling an array of survival equipment. Among my recent acquisitions are several water purification systems, prepared for scenarios where municipal water supplies might fail. I also possess a tourniquet and Israeli bandages, essential for managing severe injuries. Even storm-resistant matches have made their way into my collection, ensuring the ability to generate fire regardless of weather extremes.

I recognize that this level of preparation borders on excessive. I’m fully aware that the vast majority—likely 95%—of these items will gather dust unused. In retrospect, years from now, much of it may appear as an unnecessary extravagance. However, that remaining 5% holds the potential to preserve life in a crisis. This perspective stems from a prior real-world experience that reinforced its wisdom.

Back in 2019, while residing solo in Manhattan, I proactively gathered some emergency supplies. One item was a chemical spill response kit, acquired in anticipation of possible attacks on New York City. I shared this purchase with Michael Batnick, who deemed it amusing enough to mention publicly on social media.

Remarkably, within a year, as the COVID-19 pandemic gripped the city, health authorities like the CDC initially downplayed the need for masks. This guidance didn’t sit right with me intuitively. Desiring proper protection but unable to source a quality mask from nearby retailers, I recalled my preparedness stash.

Delving into my supplies, I discovered, to my surprise, an N95 mask tucked within the chemical spill kit—something I hadn’t even remembered including.

I began using it diligently from March 2020 onward and remained COVID-free throughout that tumultuous year. It’s conceivable that this single item averted serious illness or worse for me. Had I not made that seemingly overcautious choice in 2019, the course of events might have altered dramatically, potentially preventing this very article from reaching you.

I acknowledge the statistical improbability of such a specific outcome, yet unpredictability defines these situations. For context, a close friend of mine in New York—same age, in excellent health—contracted COVID-19 in 2020, requiring hospitalization. He struggled profoundly with breathing at points and genuinely feared for his survival.

The core takeaway from my chemical spill kit episode is that the modest expense of these preparedness measures is negligible when weighed against their potential worth. Reflect on it: What price would you assign to emergency rations when starvation looms? Or to potable water amid widespread contamination?

The value in those moments approaches infinity—it’s a matter of life and death. Therefore, allocating a tiny sliver of your net worth—less than 0.5%—to mitigate these possibilities makes compelling sense today.

I’m not advocating for transforming into a full-scale doomsday prepper with an underground fortress, but assembling fundamental emergency provisions can prove transformative during genuine crises.

This principle extends well beyond physical survival equipment; it permeates every facet of one’s financial existence. What latent risks are you unwittingly exposing yourself to? Where might vulnerabilities lurk within your strategy? In what ways could your economic stability crumble unexpectedly?

As 2025 draws to a close, this juncture offers an ideal opportunity to review your financial position comprehensively and scrutinize the monetary decisions of recent years. These evaluations can be organized into several pivotal categories:

Career

• Income Fragility: Do you depend excessively on a solitary client, platform, or revenue stream? Should that source evaporate—due to client departure, platform policy shifts, or market changes—what contingency measures are in place?
• Skill Obsolescence: In what ways could advancements like artificial intelligence disrupt your field, and what proactive steps can you take to adapt?
• New Projects: Might now be the moment to explore fresh ventures, or would it be wiser to intensify efforts in your established pursuits?

Finances

• Concentration: Are your assets overly focused in your home nation, a single sector, or dealings with one entity?
• Emergency Fund/Liquidity: How many months of expenses could you sustain amid a recession or prolonged market downturn? Which readily accessible liquid holdings do you maintain for urgent needs?
• Insurance/Estate Planning: If you support a family, have you secured appropriate insurance policies and formalized estate arrangements?

In the hustle of daily existence, it’s all too simple to sideline these inquiries. Still, contemplating them now positions you advantageously for 2026 and the years ahead.

While the future remains unknowable, one truth endures: Planning proves straightforward during prosperous times. The true test lies in fortifying against adversity.

Wishing you successful investing, and thank you for taking the time to engage with this content.