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drawing of multiplying by zero

❝You never know how long you've got. You could step into the road tomorrow and - WHAM - you get hit by a cement truck!❞ -Calvin in "Calvin and Hobbes"

Imagine going to a casino to play some blackjack. You convert your money into casino chips and start playing.

With blackjack, you get to choose how much you want to bet on a particular hand. The amount you win is related to how much you bet. Bet a little - win a little. Bet a lot - win a lot.

The opposite is also true, though. The amount you can lose is related to how much you bet. If you bet a little - you only lose a little. If you bet a lot - you lose a lot.

Even if you lose, you can always keep playing...unless you run out of chips. Once you run out of chips, you're out of the game. You can risk a lot of money to try to win a lot of money, but if you risk all of it, you run the risk of eliminating yourself from the game.

There's a lot to learn from this analogy about our financial lives, but there are some life lessons, too!


Risk is, essentially, the chance that something we don't want to happen will happen. In investing, risk is the chance that you'll lose money. In life, risk is the chance that you'll get injured.

Risk isn't just one thing, though. There are two sides of risk. The first is the chance that something bad will happen. Statisticians call this the probability of it happening.

If I'm far enough away from a ledge, I have a small chance of falling off the ledge.

drawing of low risk probability

On the other hand, if I'm right on the edge, it's a high risk that I'll fall off the edge.

drawing of high risk probability

The chance of risk showing up says nothing about the consequences if it does show up.

I might have a high likelihood of falling off the ledge, but if the ledge is only a foot off the ground, the consequences are low.

drawing of low risk consequences

If the ledge is the top of a skyscraper, the consequences are very high.

drawing of high risk consequences


If the consequences are high enough, it's like multiplying by zero.

Let's have a quick math lesson (skip to the next session if you hate math!).

Multiplication is, essentially multiple additions.

Take two times zero.

drawing of two times zero

This says that you add zero two times.

drawing of two times zero

There are two zeros being added, and since there are no numbers besides zero, the answer is zero.

drawing of two times zero

The same is true if we multiply by a larger number, like five. Five times zero is adding zero to itself five times. The answer is still zero.

drawing of five times zero

It's the same story with a million. Adding zero to itself a million times will still give you zero.

It doesn't matter how big the number is. Multiplying by zero will always give you zero.

The Death Attitude Profile assesses your attitudes toward death and dying. It's based on the belief that people's attitudes toward death play an important role in their overall psychological well-being and quality of life. It measures five different dimensions of death attitudes: fear of death, death avoidance, neutral acceptance, approach acceptance, and escape acceptance.


What's all this math stuff have to do with risk? Well, it doesn't matter how much money you have. If you engage in a multiply-by-zero event, you're out of money.

Our intent should be to avoid multiplying by zero. In the language of risk, we want to avoid devastating consequences.

For example, you might invest a little bit of money in, say, your friend's start-up.

drawing of investing a little bit of money

If the start-up doesn't pan out, then you're still okay because you didn't invest too much money.

drawing of minor consequences

If, on the other hand, you invest everything you have...

drawing of investing life savings

You're broke if the risk shows up. This is true no matter how likely it is. If the worst-case scenario is a multiply-by-zero event, you're out of the game.

drawing of going broke


This goes beyond just our money. It's true of life, too.

Say you want to partake in a potentially dangerous experience. It could be anything, like skydiving, cliff jumping, running a marathon, engaging with someone experiencing road rage, trying to pass someone on a busy two-lane highway, or even skiing on a closed part of a mountain.

drawing of dangerous activity

You have to consider the consequences of what happens if the risk shows up.

If the worst that can happen is that you get a few scrapes and cuts or even a broken bone, then you're probably okay.

drawing of low consequences

But if the worst-case scenario is death, then you're out of the game. You don't get to experience any more life.

drawing of death and being out of the game

Avoid multiplying by zero. This isn't to say that you should take risks. Risk and reward are related. It's also not to say that you should be scared of everything.

This is just a reminder to stay in the game, keep playing, and keep enjoying life.

You get one life; live intentionally.


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Adams, Scott: How to Fail at Almost Everything and Still Win Big Ariely, Dan & Jeff Kreisler: Dollars and Sense Burkeman, Oliver: The Antidote Housel, Morgan: The Three Sides of Risk

Manson, Mark: Everything is Fucked Manson, Mark: The Subtle Art of Not Giving a Fuck

Zweig, Jason: Your Money and Your Brain

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About the Author

Derek Hagen, CFA, CFP, FBS, CFT-I, CIPM is a speaker, writer, and coach specializing in financial psychology, meaning and valued living, resilience, and mindfulness.


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