I know a guy who was looking to park some of his cash in a safe, conservative place and asked his broker for advice. It being 2007, his broker directed him into a new vehicle called auction rate bonds. The broker explained that the returns were both safe (bonds) and liquid (they were traded regularly and could be considered almost as liquid as cash). The guy trusted the broker, put the money in and walked away.
Two months later the guy opened his second statement (he had ignored the first, since he expected very little return given the conservative nature of the investment) and noticed a return of something over 13%. Shocked, he quickly opened the previous month's statement showing a return over 11%. The guy immediately called his broker and told him to pull all of his money out of the bonds. "Why" asked the broker? The guy told him that 11 – 13% returns were by definition not conservative and so the place they were sitting could not be a safe, conservative investment. It took a number of weeks, but the broker got the guy's money out and a month later the market for action rate securities tanked and people lost their shirts.
I know another guy who was hiring a manager for his organization. It was a low unemployment period and after a longer than expected process, he and his organization decided to look closely at a particular young lady. She was flown to town and interviewed. In preparing for the interview, the guy noticed that at the end of her resume, the candidate had included the information that she had been a swimsuit model. The guy didn't know what to do with that and decided to ignore it (you're skeptical aren't you).
The interview happened, the lady was hired that day and 2 days latter she called to say that unfortunately her husband was moving to another city and she could not take the job.
A few weeks later, the guy got an email from the lady thanking him and offering him a preview read of the first chapter of her new book she was writing. He read it and was surprised to see that it was about a young lady similar to the candidate who was apparently having sexual adventures with powerful men. The guy responded to the lady with a thanks . . . 'interesting chapter . . .good luck'. A couple of days later, the lady sent an email inviting the guy to look her up next time he was in her town because he seemed to be a guy who would enjoy an adventure. The guy went to his boss and asked that the lady's email be blocked and explained why. When the boss exclaimed confusion around what the problem was, the guy further explained that, "The swimsuit model doesn't call . . . period. Ever. That is not a part of any real life dream or option. Anyone operating otherwise is a fool."
These two gentlemen had determined certain risks were not consistent with a responsible management of their business and personal lives. And if you just scratch the surface a bit on these stories, you'll see that our current economic situation and the lives of some of our most famous celebrities are in the crapper because some people think that they are an exception.
I share these stories to encourage you to accept the realities of our life, the arithmetic as it were. Because to not accept them is to invite disaster into your life, your company and into the life of your loved ones.