Lifestyle

Avoid The Risky Zones

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Hey everyone! I have a short post today. We had a very busy weekend at the RB40 household. I worked on our taxes and RB40Jr had 2 Ultimate (Frisbee) games. The taxes weren’t too stressful because I’m filing an extension. However, there were more taxes to deal with for Portland. We had to pay the Art tax, the Portland business tax (blog), the Trimet tax (public transportation), the Homeless tax, the Rental tax, and the State income tax. I swear, Portlanders never met a tax they didn’t like. I finished them and paid online. That made life a bit simpler. Now, I’m good for 6 months. Anyway, I’ve been following the Jack Teixeira case in the news and I want to share my thought about it.

Jack is in HUGE trouble. He was a young IT specialist with the Massachusetts National Guard. Over the last few months, he acquired and shared hundreds of government secrets on Discord with his online buddies. He told them not to tell anyone. Yeah, like that’d work. Of course, someone shared the documents on other platforms and it caused a sensation in the news. The investigation quickly led to Jack. Now, he’s in jail and will probably go to prison for a long time. It seems he didn’t perform a risk-reward analysis before becoming an inadvertent traitor.

Risk Reward Matrix

Here is a simple risk-reward matrix that everyone should know about.

It’s pretty simple. We make all sorts of decisions every day. Every decision has risks and benefits. Most of them fall into the Safe Zone. Sunday, I drove RB40Jr to play Ultimate. It cost 3 hours of my time and a bit of gas. He got good exercise and a lesson on how to play on a team. Ultimate is a no-contact sport so the risk of injury is minimal. This is the kind of low-cost, low-benefit decision we make all the time. However, we need to think about it a lot harder if the risk is high.

Jack went to the No-Go Zone and he’s paying the price for it. It was stupid to share secret documents to impress his online buddies. He achieved his objective and got some street cred for a few months. However, this is a meager reward for the risk he took. Once you share secret documents online, it is highly likely to spread. As expected, his online buddies turned on him as soon as the FBI showed up.

He should have thought about the consequences before breaking his security clearance.

Avoid the No-Go Zone

That’s a lesson for RB40Jr. We talked about it and he agreed this is high-risk, low-reward. It isn’t worth it. I try to live in the Safe Zone and the Win Zone. That’s where life is good. Once in a long while, I venture out into Danger Zone, if the reward is high enough to justify the risk. I retired from my engineering career when I was 38. It was risky, but it was worth it. But I avoid the No-Go Zone like a plague. Why take on so much risk if the reward is inconsequential?

What about you? Do you thrive in the Risky Zones?

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Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!

Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.

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