We need to personally prepare for the unknowns and the unknowable unknowns. The problem isn’t that unknowable and difficult things will happen to us; that is inevitable. It is the exact timing of those things that is difficult to predict, and past experience proves that even those people most in contact with the facts of a historical situation usually fail to predict the critical moment. Because we can not know when the tipping points and the breaking points will occur it is best to prepare for them right now.
The problem for us is how to prepare for them … right now. That is, what to think about now. What preparations to make right away. What actions to mentally prepare for now so we will be emotionally prepared when unexpected things do happen.
There are things that we can do now that will help us to cope with the unknown unknowns and the unknowable timing of those events. One of the most important is to mentally prepare yourself to be flexible in the face of uncertainty. Many people, perhaps most, don’t prepare for difficult times because they don’t think ahead and they expect things to continue as they are for the indefinite future. With the advent of modern computers, the internet, and lots of other innovations it becomes increasingly difficult to know what will happen next year. What new products will become available, what new wars will create an ongoing catastrophe for some people, perhaps us.
On top of the potentially good disruptive things that are going to happen, there are difficult and even horrible things that will probably happen to some of us. Those people who are prepared and flexible will do better and perhaps even prosper, but those who are unprepared and rigid in their beliefs will be the ones who will suffer the most.
Thinking about those unknowable and unpredictable things will bring us to the concepts of slack and antifragile. Applying those ideas to our preparations will help us to survive and perhaps to prosper. Slack means to have enough of various categories of things that you don’t run out of them at a critical moment.
An obvious example was reported on a couple of months ago in the national media. Almost half of Americans can’t come up with $400 in an emergency and are forced to turn to various types of loan sharks that charge a lot to loan money. It takes some time to get access to that money and it puts the borrower into more difficulties than they had before the emergency. The obvious answer to that problem is to have instant access to some money in an emergency. Simply having paid your credit cards promptly and having some form of income and tangible assets will get you a few thousand dollars quickly. Most people can’t do that because they have purchased something at the limit of their existing credit, such as a new car or educational debt, but when they need money quickly they may find that their interest rate on their whole debt is increased. Thus a $400 short-term loan may soon have cost them thousands of dollars more to cover their new interest rate.
A second important concept is Nassim Taleb’s method called antifragility. What that means is to preplan and pre-allocate your resources so that no matter what happens you can prosper, or at least not suffer as much as your competitors. Using the antifragile concept makes it possible to instantly change the focus of your resources to something more appropriate to the evolving situation. For example owning a pickup truck instead of a car gives you the flexibility to haul stuff, and having a panel truck permits safer hauling than with an open pickup.
To be intentionally flexible routinely permits you to cultivate flexible mind habits and to have some slack in your resources so you can shift your allocations quickly.
We need slack in our available resources that we can instantly apply when we see actionable realities for using our flexible assets.