Hedging personal risk: What Wall Street gets wrong and doctors get right about disasters
Risk at Goldman Sachs
Before I became an ER doctor, I worked at Goldman Sachs, where I sat across from a Managing Director I'll call Rob.
Rob was an expert in managing risk in both his professional and personal life. Professionally, Rob helped run a hedge fund with billions of dollars in assets under management. He had spent his career honing his ability to identify and manage downside risk in multiple asset classes. For every trade, Rob could think of a dozen scenarios of how it could go wrong, and a dozen more of how it could go horribly, terribly wrong – and he knew how to hedge our trades to manage those risks.
In his personal life, too, Rob was an expert risk manager. He lived comfortably but not ostentatiously with his wife and school-aged kids in New Jersey, in one of the most expensive ZIP codes in the country. He carried a comprehensive homeowner's insurance plan on his house, and a comprehensive auto insurance plan on his BMW.
Rob took care of his health, and identified risks there too. He exercised and ate well to reduce his risk of heart disease. He got a colonoscopy to reduce his risk of cancer. And he took a statin pill every day to lower his cholesterol. Of course, Rob also carried a premium health insurance plan to ensure access to the best healthcare available.
When I left Goldman to become an ER doctor, I made a mental note that if I were lucky enough to find success like Rob, I'd be as smart as Rob about protecting it.
Risk in the ER
During my medical training, I learned that one of the core tenets of emergency medicine is to think about the most dangerous diagnosis first. That is, if you meet a patient with a cough, worry about it being tuberculosis (or worse) before thinking about the possibility of a common cold.
Working in the ER, I met Annie, an expert in not only emergency medicine, but also wilderness medicine, an actual subspecialty that studies survival off-the-grid. Annie lived and breathed the "worst first" mentality.
In addition to being an exceptional doctor to her patients, Annie used her emergency medicine knowledge and access to privileged equipment and medications as a tool to protect herself and her family.
Like Rob thought about currency devaluation or market volatility, Annie thought about downside risks to her greatest asset: her health and that of her family. Hurricane. Flood. Pandemic. Bioterrorism. All unlikely, all potentially devastating, and all addressable with a small amount of planning.
Annie basically set up a mini-ER in her house to care for herself and loved ones if regular medical care wasn't available. And, she did it at low cost, because she had the knowledge to assemble exactly the resources needed.
Health insurance that pays in health
Like Rob, Annie was an expert in managing downside risk. But, instead of buying insurance to protect herself dollar-for-dollar, Annie bought the tools needed to survive in unforeseen circumstances.
Despite his knowledge of how to hedge nearly every asset, Rob was shortsighted in the way he structured the payoff of his insurance policies.
Rob's insurance policy paid off in dollars. Annie's "insurance policy" paid off in actual health.
To stay healthy in a disaster, you need to "insure yourself," rather than just insuring your health.
Duration Health
I followed Annie's lead and put together a preparation plan of my own, and have since developed a passion for helping others do the same.
I founded Duration Health to bring this same level of comprehensive medical preparedness to my patients, and to provide free and open access to core medical knowledge required in a disaster.
Duration Health provides customized kits of emergency medications to have on hand when regular care is unavailable. We're on a mission to legitimize and democratize access to emergency medical care.
Visit durationhealth.com to learn more and get your Med Kit. "Insure yourself" today.
