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Tag: risk assessment

During the Second World War, some tiny Pacific islands were suddenly strategically important, and inundated with Japanese or American service personnel and material. In the years following the war, islanders started dressing up like servicemen and doing parade ground drill with wooden rifles, carving headphones out of wood and sitting in control towers wearing them, lighting signal fires on the runways, and in short doing everything they could to bring the influx of material goods (“cargo”) back. You can read all about these “cargo cults” here.

Because they did not understand the underlying structures behind the sudden appearance of all this wealth, they simply copied the external behaviours that seemed to attract it. They mistook form for substance, and sure enough, the cargo planes did not come back.

Financial security: multiple income streams

A friend of mine recently went from being employed to being effectively a freelancer. We were discussing how having lots of separate income streams was actually much more secure than having just one, when she came up with the analogy for the way people can mistake the trappings of security (a big house, a smart car, a good job) with security itself. It’s a kind of cargo cult. And ironically, many of those trappings make us less secure. A mortgage (literally translated as “death grip”) is the very opposite of security. Your home is secured on the mortgage so the bank will lend you the money to buy it: the security is the bank’s not the borrower’s. And the bank will take your house if you fail to keep up the payments. This has happened to several friends of mine, in the UK and the USA, in the last recession. It is horrible.

Whenever a friend of mine gets laid off, my first reaction is to congratulate them. I have discovered that this can come across as me being an asshole, so I have learned to choke back the impulse to shake them by the hand, and offer condolences instead. But inside, my actual feeling is “you’re free!” Because while a job is no doubt one perfectly good way to spend much of your waking hours, and can pay well, and even at times be worth doing for its own sake, the one thing it absolutely cannot provide is security. No company, government, or any other employer lasts forever. Countries rise and fall, companies come and go, and if you rely on a single income stream, then your financial security has a single point of failure. It doesn’t matter if you have an iron-clad lifetime employment contract: if the company goes bust they stop paying you. There’s a saying in the military: “two is one, and one is none.” It refers to redundancy in any situation; you cannot rely on anything for which there is no backup in place.

The primary solution to this is to have more than one source of income. In my own case, my income derives from teaching in my school's various branches, royalties from my books, and seminars taught outside my school. I think three is a safe minimum. Any one of those streams could fail tomorrow, and we would still be able to pay the mortgage. Just. But none of them can fail instantly, because none of them rest on a single person or entity. My readers can fire me one at a time. But I have several thousand of these wonderful people. My branches and other groups can stop hiring me for seminars; but they are unlikely to do that all at once (more likely that some catastrophe would prevent me from being able to teach).

For most employed people though, running a side-business of any kind is problematic; if it’s within their field, there may be conflicts of interest, and if their job doesn’t give them much time to spare, then there may just not be time. Some friends of mine just do not want to run a business. Fair enough. So the approach then is to siphon off at least 50% of the income into income-generating assets. This theory is beautifully presented by one of my favourite bloggers, Mr Money Moustache. In brief; learn to live off 50% of your income (easy enough if you earn more than about 40k/year, something I have never done!), invest the rest in index funds, reinvest all the income from the funds, and keep doing that until the passive income from the assets reaches the point that it meets your current expenditure. Bingo, you’re secure. Or as Mr Money Moustache would put it, retired.


Well, up to a point. Because the problem with money as a marker for security is that it is highly unreliable. When my family moved to Peru in 1986, my parents bought a new car, a Nissan Sunny, for 150,000 Inti. Three years later, a beer in a nightclub cost half a million. That’s an extreme example of inflation, but we all remember the recent bank crashes, pension fund fraud, and a host of other things that can strip you of all your savings in a heartbeat. War, for instance. The Soviets invaded Finland in living memory. The property I own here would become immediately worthless if that happened again, because I would grab my kids and run, leaving everything behind. Afghanistan in the 1970s was generally a safe nice place to be. Khaled Hosseini’s The Kite Runner has a lovely description of it. Some Europeans and Americans even retired there. Oops. Likewise Lebanon. Before the civil war, Beirut rivalled Monaco as a place for Europeans to footle off for a nice safe vacation. Less so since it tore itself apart. I don’t think it’s likely that Russia will invade Finland, nor that Europe will plunge into yet another maelstrom. But I’d be a fool to rest my sense of security on it.

What is safety?

So what is safety? Mostly, an illusion. You can lose everything, including your life, during your next heartbeat. Life is dangerous: everybody who tries it dies eventually. So step one in non-cargo-cult security is to make friends with risk. Everything is risky; if something feels completely safe, you’re wrong. Then learn to evaluate the real risk, as opposed to the perceived risk. Which is more dangerous: driving a car or eating candy?

Driving your car is very, very dangerous. About 36,000 Americans were killed in car crashes in 2012 (source). Eating too much sugar is much more dangerous. In 2010, according to the American Diabetes Association, 69,000 died from diabetes, with a further 234,000 whose death certificates credit diabetes as a contributing factor (source). In 2010, there were 25.8 million diabetic Americans. Only 1.25 million of those had type 1 (which is not caused by lifestyle). Type 2 diabetes is caused almost entirely by abuse of sugar. There are other factors, but in short, you can’t get Type 2 diabetes from a diet with no fast carbs. Here is a documentary that is worth a look.

I digress somewhat; my point is that human beings are very bad at assessing risk, and treat as safe things that are dangerous (eg sugar) and treat as dangerous things that are safe (letting your kids walk home from school). One very good book on this topic is Against the Gods, the Remarkable Story of Riskby Peter L. Bernstein. Read it!

So what's the answer?

So the question then is what is real security? I refer you back to this post. Love is vastly more reliable than money. I know for a sure and certain fact that no matter what happens to me or my wife, my kids will neither starve nor be homeless, because somebody among my family or friends would take them in. That may seem obvious to you, but at root, this is what security means: the freedom from watching your children starve. Those friends of mine who lost their homes? They had a couple of shitty hard years, absolutely. But their children didn’t spend a single night in the open or a single day hungry. Because they had friends, sources of income other than the jobs they lost, family to take them in until they got their feet under them again, and so on.

So here are my recommendations for actual security:

  1. Spend time connecting with the people you care about. If the shit hits the fan, they’ll be there for you.
  2. Diversify your income. Have more than one stream.
  3. Build up income-generating assets. An assets is something that generate income; your home is not an asset, unless you rent it out.
  4. And most importantly: understand and be ok with the fact that it could all collapse in an instant, life is inherently unsafe. If you feel completely safe, you’re wrong.
  5. Get some perspective. What, really, are the chances of you starving to death?

I anticipate that this post will ruffle some feathers, because people don't like to be told that their sense of security is based on illusion, or that they are not managing their money very intelligently (I have friends who have earned 150k or more per year for the last 10 years and still owe money to the bank. That is baffling to me). I'm sorry if I've hurt your feelings. But comforting illusions cause more trouble than they are worth, and it's always better to see what's really there.


Swordsmanship practice is inherently dangerous. The study of risk has been developed to the nth degree over the last five hundred years or so. For an excellent overview, see Against the Gods, the remarkable story of risk, by Peter Bernstein. (Thanks to my friend Lenard Voelker for sending me a copy!). The assessment of risk may be described as assigning probabilities to events that have not yet occurred. If they have happened before, then we can see how many times over a given period, and use that data to evaluate the likelihood of it happening again. For example, if it has snowed at Christmas 20 times in the last 100 years, you can state with some confidence that there is about a 1 in 5 chance of it happening again this year. But many of the events we fear have no measurable risk- either because they have not happened (yet), or we have an insufficient pool of data to draw meaningful probabilities from. So they are uncertain, but have no definite probability. This distinction was drawn by Milton Keynes (and explained by Niall Ferguson on p 343 of his book The Ascent of Money).

The risk we all fear is a training accident leading to serious injury or death. In the wider world of swordsmanship practice, all of the serious accidents (which I define as requiring hospitalisation) have occurred in either competitive freeplay, or outside the bounds of a formal school (such as on the re-enactment field). So while we know that there is a possibility of such accidents occurring in the salle, they have no definable risk as the incidence is so low. They are instead uncertain. Given the thousands of hours spent in swordsmanship training worldwide every year, and how few accidents occur, it is reasonable to assign a low probability of serious injury or death. Assuming that we do not relax our safety standards in response to this, then we can assure prospective scholars of the art that “this is dangerous, but pretty safe”.

Cars are also pretty safe these days. Airbags, crumple zones, safety glass, seat belts, all reduce the likelihood of serious injury or death in the case of a collision. But they do nothing to prevent collisions in the first place, and encourage a false sense of security. Cocooned in hi-tech armour, we ride invulnerable to our deaths. I think a shiny steel spike sticking out of the steering wheel to impale the driver at the merest fender-bender would do wonders to improve road safety.
When a risky activity becomes safer, human beings tend to consume that risk. Safer cars are driven faster. Better healthcare encourages unhealthy lifestyles. The Munich taxi experiment described here is an excellent example. Given better brakes, drivers went faster. So protective equipment in swordsmanship offers the comforting illusion of safety. Given good protective equipment we take more risks. Yes, armour works. But tell that to the French knights at Agincourt.
So, a balanced approach to swordsmanship training requires at least some time spent face to face with the naked possibility of your own death. A sharp sword, aimed at your unprotected face, in careful pair drills with a trusted, highly trained partner under competent supervision. There is nothing like a sharp steel point inches from your eyes to cut through the illusory safety of a fencing mask.
My favourite quote on this comes from Viggiani’s Lo Schermo (1575) (as translated by Jherek Swanger: note he does not translate “spada da marra”, which is a kind of blunt steel practice sword):

ROD:… but now it is time that we begin to practice, before the hour grows later: take up your sword, Conte.
CON: How so, my sword? Isn’t it better to take one meant for practice?
ROD: Not now, because with those practice weapons it is not possible to acquire valor or prowess of the heart, nor ever to learn a perfect schermo. CON: I believe the former, but the latter I doubt. What is the reason, Rodomonte, that it is not possible to learn (so you say) a perfect schermo with that sort of weapon? Can’t you deliver the same blows with that, as with one which is edged?
ROD: I would not say now that you cannot do all those ways of striking, of warding, and of guards, with those weapons, and equally with these, but you will do them imperfectly with those, and most perfectly with these edged ones, because if (for example) you ward a thrust put to you by the enemy, beating aside his sword with a mandritto, so that that thrust did not face your breast, while playing with spada da marra, it will suffice you to beat it only a little, indeed, for you to learn the schermo; but if they were spade da filo, you would drive that mandritto with all of your strength in order to push well aside the enemy’s thrust. Behold that this would be a perfect blow, done with wisdom, and with promptness, unleashed with more length, and thrown with more force, that it would have been with those other arms. How will you fare, Conte, if you take perfect arms in your hand, and not stand with all your spirit, and with all your intent judgment?
[53R] CON: Yes, but it is a great danger to train with arms that puncture; if I were to make the slightest mistake, I could do enormous harm. Nonetheless we will indeed do as is more pleasing to you, because you will be on guard not to harm me, and I will be certain to parry, and I will pay constant attention to your point in order to know which blow may come forth from your hand, which is necessary in a good warrior.

This says it all!
You can download the whole book here:  and Jherek’s translation here.

In case it is not obvious from the small sample here, Rodomonte/Viggiani's student the Conte is clearly an accomplished swordsman already, there is no suggestion of equipping beginners with sharps. As Manciolino (an ardent proponent of using blunt steel swords, as am I) put it in Book Six of his Opera Nova (as translated by Tom Leoni, and available from here)

Manciolino begins book six of his Opera Nova thus:

“I now wish to show how wrong those are who insist that good swordsmanship can never proceed from practice with blunted weapons, but only from training with sharp swords. …

It is far preferable to learn to strike with bated blades then with sharp ones; and it would not be fair to arm untrained students with sharp swords or with other weapons that can inflict injury for the purpose of training new students to defend themselves.”

(with thanks to Ilkka Hartikainen for digging out and typing up the reference.)

Quite: “untrained students” find blunt steel sufficiently threatening that there is no need to make the swords sharp, and indeed it would be grossly irresponsible to do so. Highly trained and experienced students tend over time to take the blunt steel less and less seriously, and need to be reminded that swords are weapons. Likewise, the more armour you wear, the less vulnerable you are, and the less vulnerable you feel, which tends in most people to actually increase the risk of injury as this safety margin, and a bit more, is consumed.

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