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Extinction Level Event (ELE) in Financial Freedom

If you watch enough films such as “Armageddon” or “Deep Impact” that talk about meteorites hitting the earth and wiping out the human race, you will find the term ELE or extinction level event familiar.

It refers to disasters of such epic proportions that an entire species e.g. the dinosaurs, can be wiped out quickly.

Why am I talking about ELE with respect to financial freedom?

Known Unknown ELEs

The world is unpredictable–you know that already. Personal financial planners bombard you with risks and threats to your life from illness, premature accidents, death or permanent disability and try to tell you that insurance (and the higher margin investment linked) plans are the way to mitigate those risks.

Those are the known-unknowns, i.e. risks you can foresee and take some actions such as insurance or to adopt a prudent and healthy lifestyle. These are scary but not too bad if you can anticipate the possibility of those happening and take (some) precautions.

But if an ELE type of event happened to you in our journey towards financial freedom, would you be able to cope? How would it shake your assumptions, your foundations and your views about life itself?

Prelude to my own ELEs

I have described in earlier posts about what triggered by fierce drive towards financial freedom. It was the realisation that no-one was indispensable to the organisation. This struck in 2003 when two of my colleagues in cost centres were asked to go in a GLC that was making 300-400m in profits. They were let go as part of the process to hit $500m in profits under corporate cost-cutting and austerity measures. Their individual performance was not the issue; their position in a cost centre was the issue.

This was for me the epitome of capitalism. Shareholders did not care about you as an individual, they only cared for you as a factor of production to generate returns on investment. If you are not the part contributing to increasing the bottomline, then perhaps you are not needed.

Flashforward: A Possible Personal ELE

Since then, my drive towards financial freedom has led me to living within my means; saving and investing my investible capital and growing while protecting my means. I have concentrated on my career and in managing my money while having a family.

In a perfect world, all things go well. In this imperfect world, my career is all right but my family life is not going well. The gulf between my spouse and I is increasing and it is in jeopardy because of inter-personal relationships.

I now live in a world of flashforwards where there is a very real possibility of separation. To complicate the issue, my daughter is growing up in this environment and any decision by the adults will have a lasting impact on her even as it has on my spouse who comes from a divorced family.

It is within this context that I reflect on my own personal ELE. My assumptions, illusions and dreams of achieving financial freedom come to naught if the family is broken and relationships are damaged beyond redemption.

The positive aspect of this largely negative development in my current life is that it has made me really question the “WHY” of financial freedom. I realise that in life, it is indeed difficult to have your cake and to eat it too.

Facing up to One’s ELE

I now realise that financial freedom is important only if you can live your life according to your values and principles. There are just too many things that can go wrong for one to plan for every single contingency and event that can develop in our lives.

I realise even more that happiness is the attitude that one needs to cultivate despite one’s circumstances. It is easy to be happy when things are going well. It is hard to be happy when they are not.

I am still committed to this path towards financial freedom as the values of living within my means, saving and investing as well as growing my means fit within what is important to me.

But I am tempered and humbled to also understand that I cannot control many things, only the small actions I take each day to bring myself closer to financial freedom, and to bring myself away from the abyss that is my relationship at home.

I am thankful that despite the tough conditions at the home front, I can still function well and to still be the father to my daughter. I just hope to be able to do what I can each day to mitigate the fallout on her and to be there for her in ways that I may be limited to if my spouse and I indeed do separate.

Be well and prosper.