Risk Is Never as Simple as It Seems

Risk Is Never as Simple as It Seems

Posted August 18, 2020 by Ben Carlson

“The financial models many banks used gave them a false sense of security leading up to the Great Financial Crisis. Garbage-in, garbage out is the same for financial models as it is for your sink.”

A number of years ago I was packing up my bags on a Sunday morning to fly out to an investment conference when my wife told me we had a plumbing situation. Water was coming up out of the drain in the shower. And the kitchen sink was backed up. That’s not good.

She was scheduling a plumber to come to the house as I walked out the door to hop on my flight. As my flight touched down I called to see what the verdict was. The news was weirder than I expected. So what’s the damage? I asked.

Well it’s not great she told me. When the plumber put his snake video device into the pipe that runs from the kitchen sink to our master bathroom he discovered it was full of eggshells.

What?! There’s something living in the pipe?!

No, Ben — eggshells from your morning breakfast.

Oh.

You see I’m a creature of habit. Every morning for breakfast I have scrambled eggs. And when I first started making eggs I would discard the shells into the garbage disposal. I probably did this hundreds of times.

The problem was the grade of the pipe was off just a smidge so those eggs weren’t finding their way out of the house but instead sat on the bottom of the pipe and built up over the course of a couple of years.

Whoops.

After flushing the pipe with many blasts of water to clear things up the plumber gave us some advice: Never put any food down your garbage disposal. Garbage disposals are what keeps me employed.

He said the garbage disposal gives people a false sense of security that they can just put anything down their sink and it will magically disappear. Much to my surprise, garbage disposals are not as trustworthy as I thought.

Lesson learned.

https://awealthofcommonsense.com/2020/08/risk-is-never-as-simple-as-it-seems/

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