Michael on April 27th, 2009
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You might already know that I’m a pretty big Red Sox fan.  This weekend’s series with the NY Yankees was filled with a lot of unexpected events including a 2 run bottom of the ninth comeback, a 16-11 game (during which the Red Sox once trailed 6-0) and in my mind the craziest: Jacoby Ellsbury’s dramatic straight steal of home.

Depending on who you listen to, the last time a Red Sox player stole home was either 10 or 15 years ago. Regardless, it’s an incredibly rare event, especially when you consider how many games the Red Sox play every year.  And while it’s truly special to see it, if you watch enough baseball, you will, sooner or later, see it.

You: What’s this got to do with personal finance?


Expect the Unexpected

Emergency Funds are for Emergencies

To all those people who never feel the need to create an emergency fund because they’re super-confident in their job security: get an emergency fund. Even if you’re never laid off, you could still get very sick or have an expensive accident.  At that point, you’ll need an emergency fund and won’t have time to create one.

Investing Means Risk – Especially When it Feels Risk-Free

To all those who feel they can stomach the potential incredible short-term volatility of the stock market and therefore invest very aggressively even if they’re nearing or in retirement:  Open a newspaper.  Stuff happens.  Was any of it truly expected? Heck no and certainly not the actual combination of events that led to the most recent market meltdown.  Was something crazy going to happen sooner or later to spook the market? Of course.  Invest for your age and true risk tolerance.

Never Risk a Lot for a Little

To all those who don’t have renter’s insurance because the odds of something going wrong are so low and because they don’t own too much anyway: Just go buy the policy.  Since the odds are low, the cost of coverage is cheap and I can practically guarantee that, although you might not have much, losing all of it would be financially devastating.

Of course, there’s a good chance that you won’t need to tap your emergency fund, experience another tremendous market correction, or survive an apartment fire in the next few months, years, decades, or, perhaps, ever.

It was also quite possible I’d never see a straight steal of home – especially from a few hundred feet away.

Expect the unexpected. Sooner or later, it happens.  I was glad to be there for Ellsbury’s accomplishment, but I’m not looking forward to any of the other events I mentioned above. But I’m prepared. Are you?

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9 Comments to “Expect the Unexpected: The Jacoby Elllsbury Edition”

  1. Jan says:

    Absolutely beautifully written.

  2. Michael says:

    Thanks, Jan!

  3. Ted says:

    Dead on accurate advice, Mike!

  4. Michael says:

    @Ted: Funny how sports analogies tend to speak more poignantly to many folks (myself included)!

  5. Bret says:

    Being an Angels fan, I’m not so fond of the Red Sox, except when they beat up the Yankees.

    However, I did watch that game on TV and Jacoby’s steal of home made the whole game exciting. I love that kind of baseball and you guys got a great player with Ellsbury.

    The advice of preparing for the unexpected was dead on. I know a lot of people who have gotten laid off lately. Also, accidents and medical costs are way out of hand. It’s best to be prepared.

  6. Was at the Phillies game last night when Jason Werth stole home. He stole 2nd, 3rd, and then Home. It was spectacular. It’s good see some guys willing to take risks.

  7. Michael says:

    @Bert: Thanks for the kind words. You’re dead-on with regard to unexpected medical costs in particular.

    @Jeff: I can’t believe I first heard about this here – that’s amazing (I just watched the replay on-line). Smart risks are a lot less risky than risks as a whole.

  8. Paul says:

    I never thought I could “afford” to put money away for an emergency fund. You know, rasing kids, living paycheck to paycheck. Those sorts of things. Now I’m socking money away so I’ll have at least six months worth of living expenses readily available and I’m “paying myself” by investing over 24% of my gross. Thanks for your advice.

  9. Michael says:

    @Paul: Absolutely awesome. Thank you for sharing your story. Keep up the good work – you’re clearly on your way!

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