When was the last time you worried about being bitten by a shark? If you’re a frequent swimmer or surfer at one of Cape Town’s iconic beaches, it might cross your mind. Here’s a fun statistic to put things in perspective: sharks bite around 70 people globally each year, while more everyday risks often catch us off guard – whether it’s a near miss in Cape Town’s rush-hour traffic or underestimating financial risks.
It’s a surprising comparison, and it tells us something important about how we perceive risk – especially in our financial lives. Often, we’re so focused on the dramatic “sharks” in our financial waters that we miss the real dangers much closer to home.
Let’s look at some common financial fears and explore whether we might be focusing on the wrong threats.
“I’m scared of losing money in the market.”
Many Capetonians see the financial markets as shark-infested waters. Headlines about market crashes can amplify these fears. But here’s the real risk many don’t consider: not investing at all.
Think about it. While market volatility can seem unsettling, inflation quietly erodes your savings every day. It’s like worrying about sharks while a rising tide of inflation is steadily washing away your financial safety.
“I want to keep my money somewhere safe.”
This is another case of misplaced fear. Many people feel their money is safest in cash or other “risk-free” investments. But is playing it too safe actually risky?
Imagine yourself anchored in Table Bay harbour. Staying put might seem the safest option, but if a storm approaches (we’ll call it inflation), you might actually be safer riding out the waves in deeper waters. Similarly, a well-diversified investment portfolio might feel choppy at times, but it often offers better long-term protection for your wealth.
“I’ll invest when the time is right.”
This may be the most dangerous misconception of all. Waiting for the perfect moment to invest is like waiting for the ocean to be completely calm before learning to surf – that moment rarely comes, and meanwhile, you’re missing valuable time to build wealth.
The real risk isn’t in timing the market – it’s in the time spent “not” investing. Every day you wait is a day your money isn’t working for you, a day you aren’t moving closer to financial independence.
“I need to keep working because it’s too risky to retire.”
Let’s talk about lifestyle risk. Many people stay in jobs they’ve outgrown, fearing they haven’t saved enough to retire. But what’s the bigger risk: carefully planning a transition to retirement, or spending extra years doing work that no longer fulfills you?
So, what’s the solution?
Start by reframing how you think about risk. Instead of focusing on short-term market movements (the sharks), consider these questions:
- What’s the risk of not having enough money to live comfortably in retirement?
- What’s the risk of missing out on life experiences because of financial fears?
- What’s the risk of staying in an unfulfilling job too long due to lack of planning?
Just as staying out of the ocean isn’t the answer to avoiding sharks, avoiding all financial risk isn’t the way to build a secure future. The key is knowing which risks are worth taking and which are genuinely dangerous.
Reflect on your financial fears. Are you focusing on “sharks” while ignoring risks closer to shore? Are your safety measures actually increasing your long-term risk?
True financial wisdom isn’t about avoiding risk altogether – it’s about understanding which risks are worth taking for the life you want. Sometimes, the biggest risk of all is playing it too safe.
Ready to tackle your financial fears and focus on the right risks? Let’s talk about aligning your risk management with your goals.
After all, the water’s fine – once you know what you’re really looking out for.
