On January 26, 2017, the Bulletin of the Atomic Scientists declared that it is now two and a half minutes to midnight. We hadn’t heard much about the Doomsday Clock in recent years, so I had forgotten all about it. A client reminded me when he sent a link to the January 30, 2017 article published by The New Yorker Magazine about how the super-rich are preparing for doomsday.
This year marks the 70th anniversary of the Clock. The 1/26/2017 press release for the Doomsday Clock reminds us that the Clock is, “a universally recognized indicator for the world’s vulnerability to catastrophe from nuclear weapons, climate change, and new technologies emerging in other domains.” It uses midnight to represent the apocalypse, and the countdown to zero to represent the threat. This is the closest the clock has been to midnight since 1953, when it was 2 minutes to midnight due to the arms race between the US and the Soviet Union.
I am not a doom and gloom person and I often comment that you have to be an optimist to work in finance. If we were constantly pessimistic and living in fear of the next market shock, we would never make any money. What piqued my interest in the article was actually more about the super-rich using some of their money to hedge against the unlikely possibility of the end of the world.
How each of us allocates our money towards various expenses is interesting. As I mentioned in an earlier blog, we practice judgement free planning. I personally have yet to see a budget that allocates funds to preparing for the end of life as we know it, or as the article defines survivalism: “the practice of preparing for a crackup of civilization”. Of course, I never thought to ask why you own that motorcycle, now that I learned it is a great escape vehicle.
The idea that some people prepare for doomsday by buying $3 million condos inside bunkers in Kansas or a ranch in New Zealand sparked an engaging conversation among our own team. We suppose that if you have more money than you need for daily activities of living, then allocating a portion of those funds to hedge against adverse outcomes is a possibility. However, we often find hedges to be expensive versus their ultimate payout.
The most thought provoking quote for me was, “Fear of disaster is healthy if it spurs action to prevent it. But élite survivalism is not a step toward prevention; it is an act of withdrawal.” The author does an excellent job of summarizing at the end of the article, so if you don’t read the entire article, skip to the end. My takeaway: continue to be philanthropic, optimistic, and resilient.
Cathie Straub, CPA, CFP®
Director, APCM Wealth Management for Individuals
Bulletin of the Atomic Scientists, Web. 25 Jan. 2017. <http://thebulletin.org/>
Osnas, E. (2017, January). Doomsday Prep for the Super-Rich. The New Yorker. Retrieved from http://www.newyorker.com/magazine/2017/01/30/doomsday-prep-for-the-super-rich