Financial stability and risks

Over the past several months, I’ve realized how important financial security is for individuals and organizations.

When you have financial security, you have more room to breathe and take risks. Things aren’t as urgent. Your survival as an individual and a organization aren’t on the line.

For companies, this translates into a willingness to be more experimental and exploratory with their initiatives. It deprioritizes near term financial gains and optimizes for learning that could yield more in the future.

For individuals, the same dynamics apply. If you have financial security, this means that you have more capacity to invest in the future. These investments can be in the form of education or exploring your interests. Again, taking some level of risk now, for a bigger gain in the future.

Without financial stability, individuals and organizations have a zero sum mindset. Short term gains are urgent and needed to survive. A ticking clock when you don’t have enough money is very stressful. This creates the conditions for our worst parts to surface. Survival is a stress test for your values.

This can create a negative feedback loop. Where short term behavior for financial security means we don’t have a way to dig ourselves out of a financial hole.

When you’re prospering, it’s easy to take more risks to reap more rewards. When you’re suffering, it can feel nearly impossible to escape the cycle.

In the context of our world today, if you aren’t in the suffering cycle, then it means that there’s room to invest and support others.