In 1940, chaos was raging in Europe.
Hitler’s war machine was in full effect. Denmark and Norway had been invaded by Germany. An offensive was launched by the Germans to topple France and scoop up the Netherlands. Mussolini-led Italy had sieged the Mediterranean and were gobbling up countries like a fat boy gobbling up Chick-Fil-A nuggets…
Meanwhile, in sleepy suburban America – the scene was bucolic. Peacetime was in full effect. People had heard about and read about the war going on in Europe…but it was their problem. They’d solve it and everything would be kosher.
President Roosevelt thought otherwise.
The same year, President Roosevelt saw that the military was in need of a serious tune up. He issued a “military preparedness campaign”. Two of his most controversial acts from this campaign? Doubling the size of the U.S. Navy and issuing the first peacetime war draft, requiring the registration of all men between the ages of 21 and 35. People were wondering why Roosevelt was wasting all these funds, when war wouldn’t happen. But Roosevelt wouldn’t take that chance.
If anything happened, the U.S. was ready.
It didn’t take long for something to happen.
In December of 1941, the Japanese bombed Pearl Harbor. The U.S. was now dragged into the war. This was a true black swan event.
After several bloody battles later and millions of lives lost, the Americans squeezed the German offense at the Battle of the Bulge and ended the their campaign. Several months later, the Americans dropped a nuclear bomb on Hiroshima – forcing the Japanese to surrender.
All of this was possible because FDR decided to prepare for war even when there were no visible signs of it anywhere (in America at least).
Life follows a rhythm. Think of seasons, financial recessions and surpluses, and the moon as some examples. Likewise, in our personal lives, we will experience periods of drought and periods of plenty. There will also be times in our life where an unexpected event (usually a negative event) just seemingly happens. These are called “black swan events”.
It’s an event that is extremely hard to predict (from the observer’s) point of view, but is rationalized as hindsight. It’s one of those “I should have seen it coming! How did I overlook this?” type of moments.
In this article, I’m going to be going over some ways you can mitigate or lessen the effects of a black swan event in your life. Think of it is an “black swan insurance policy”.
The old age rule
All of this will follow the old age convention:
Prevention is better than cure.
You don’t wait until something happens to act. You prepare beforehand so that something doesn’t happen and if it does, you can easily fix it.
Here’s the thing: for every effect, there is/was a specific cause. Your goal? Keep your eye on all or as many of the causes as you can. Neglect is the one of the biggest deterrents of success. You would think that this little, wee thing would have never mattered. That’s how black swan events happen.
Reacting is a sucker’s bargain. It decreases your locus of control and prevents you from acting from a grounded, masculine position. This is what most of the world does. That’s why the world is in a shitty state.
Creating antifragile, anti-black swan strategies will help you become proactive.
Black Swan Strategy # 1: Anticipate the downside
Nothing in life is free. There’s a price to pay for everything. The question is: do you want to pay that price?
The key to this is anticipating the downside of every action you’re about to take. For example: let’s say you want to buy a car. You go to the dealership, drive the car around the block, and sign up for an auto loan. Problem is – this car eats up a good amount of your monthly budget. It’s a great car, it’s a nice car…but you have to pay for it (at least in the short term).
Not a big problem, until you get laid off from your job. So not only do you not have a car payment but now you have no job. Things like these are black swan events that come out of left field.
Going further: Do you have enough cushion in your life to absorb the downside? A cushion in this case would be an emergency fund or a “side hustle”. In some cases, the downside isn’t that severe or the upside is so great it makes up for it. Just keep in mind that there’s two sides to everything, no matter how small.
Maxim: There’s two sides to every coin.
Black Swan Strategy # 2: Milk the upside
This is everyone’s favorite part. This is the fat paycheck from a high level job. This is the great part of being single. This is the conquering feeling of waking up early. This is the knowledge accumulation from reading tons of books.
These are all benefits. And you have to milk these benefits.
Here’s another example: living at home with mom and dad. For most people this absolutely sucks. I know it did for me…but there’s an advantage here.
The average cost of living in the U.S. is absolutely ridiculous. Couple that low and stagnant wages and we’ve got a serious imbroglio.
If you live at home with your parents for a while, you can drastically reduce your living expenses. If you’re not dumb mule, you can even save a good chunk of change for whatever purpose you choose.
This can make up for whatever lose of freedom you may lose.
Going further: How can you squeeze this advantage as much as possible? How can you absolutely cover all the bases? Instead of using as an excuse to lay around, how can you use this time to become more of the man you want to be? Here’s some suggestions:
- Use it to build your focus and productivity
- Manage time
- Become more self-disciplined
- Create something of lasting value
All of these are meant to give you barriers to around yourself to prevent or mitigate the impact of black swan events.
Maxim: Do the best you can, with what you have, where you are.
Black Swan Strategy # 3: Reduce the Size
In Antifragile, Nassim Taleb states that the larger something becomes, the greater chance it has of becoming susceptible to errors.
Large animals, such as elephants, boa constrictors, mammoths, and other animals of size tend to become rapidly extinct. Aside from squeeze when resources are tight, there are mechanical considerations. Large animals are more fragile to shocks than small ones – again, stone and pebbles…If you throw a cat or mouse from an elevation of several times their height, they will typically manage to survive. Elephants by comparison, break limbs very easily. Nassim Taleb, Antifragile: Things That Gain From Disorder
“The bigger they are, the harder they fall” isn’t a cute cliche. It’s a reality. In any undertaking you do, you’ll want to reduce the scope to as small as possible while being as efficient as possible.
I used to work for a company that expanded too aggressively over a very short period of time. In an even shorter period of time, they had to close down several of the locations and lay off many people. With growth comes a greater loss of control. It’s a lot harder to finance, manage, and supply 30 locations than 3.
Going further: This has a practical application in the realm of material possessions. Bigger houses, more cars, more stuff in general… severely limits your mobility. With a big house comes a big mortgage. With a big car comes a big car payment. It is a serious drain on your finances, which makes you less agile. The things you own end up owning you.
This is why I encourage anyone to be as minimalist as possible. Don’t accumulate things, accumulate experiences. I’m pretty sure you have a ton of stuff just sitting around the house that you don’t use.
Get rid of it.
Maxim: Do as much as possible, with less
Black Swan Strategy # 4: Self-Reliance
Self-reliance isn’t being “self-sufficient”. It’s about taking care of what you need to take care of with no or little help from anyone else. If you rely on someone to come to your aid, you’ll die before it ever happens. Most people are in self-preservation mode.
I found this out quite young when I realized that most people don’t keep their word, especially women (sorry gals). David Deida even agrees:
For a man, or for anyone speaking in the masculine style, to say something that is not true is lying. But, for the feminine, truth is a thin concept compared to the thickness of her flow of feelings. The “truth” of the feminine is whatever she is really feeling, in this present moment. – David Deida, The Way of the Superior Man
In this case, truth is “keeping your word”. If someone says they’re going to call you this afternoon, but they don’t do it…they’re not telling the truth. Most of the time they didn’t call you because they didn’t feel like it.
An example of this is a woman giving you her number. You text her, things seem to go right. You sent up a date. She says she’ll meet you at so and so at such and such time. Cool. You show up at the venue. Outcome? She flakes you. You may or may not receive a text saying: “Sorry, couldn’t make it. Maybe tmrw?” She didn’t go out with you because she didn’t feel like it.
If you’re trying to rely on people in a world where most people feel instead of think, I’m sorry bro – you’re not going to make it.
Going further: You can’t rely on a woman or any other external stimulus to give you a grounded emotional state. Only you can do that. One of the only ways you can shield yourself from the inevitable buffeting of life is to create an environment of feel-good inner emotions that you can call upon at times. An inner citadel. Getting hobbies, advancing in your career, meditation, even friends to an extent – these are all things you can do to support your emotional ecosystem when life has you pinned up against the wall.
Maxim: No one can save you but yourself.
It’s pretty clear that there’s a number of things that you can do to help create a positive environment that can mitigate or defeat black swan events. Becoming someone who can actually thrive during times of chaos (antifragile) isn’t easy – but it is doable. Antifragility comes from creating a solid “defense network” and following that up with a mindset that allows you to grow and thrive even when the inevitable crisis hits.
Fix things you’ve been neglecting, keep an eye out for things that could pose a potential problem, and stock munitions. That’s black swan insurance in a nutshell.
I want to hear from you: which one of these strategies did you resonate with and why? Let me know in the comments below!