Never Multiply by Zero, Savings on Medical Care, Systems vs Goals Plus Community Wins

Never Multiply by Zero

I listened to the ‘Modern Wisdom’ podcast episode with Ryan Holiday last week and one concept ( link to that segment ) has been on my mind ever since:

“Never multiply by zero.”

It was essentially a conversation about avoiding risks with potentially ruinous consequences, couched under the mathematical concept of ‘any sufficiently large number multiplied by zero still equals zero.’

This can apply to life, business and money and I think it’s an essential risk mitigation strategy for life.

No matter how great your life is, no matter how successful you are, no matter how smart you are with your normal risk strategy, multiplying by zero (taking a ruinous risk) can still get you to zero.

Some examples they used in the podcast were (they are closely paraphrased quotes from their examples in the episode):

1. Financial Ruin/Leverage: In financial dealings, using too much leverage when trading and going bankrupt are bad ideas because they effectively multiply your efforts by zero, thus ending the game.
2. Health/Safety: You could diligently look after your health by eating a grass-fed diet and avoiding things like seed oils, etc. However, if you decide not to wear your seat belt in the car one day, the outcome could result in a "sure zero".
3. Life Goals/Teen Pregnancy: A teenager might work hard on their education, make it to university, and be about to start a new adventure, but then they have unprotected sex and get somebody pregnant. While this is "Not quite zero," it represents a "big change" that disrupts the planned trajectory.

I was brainstorming other ‘multiply by zero’ type events and came up with a few additional ones. I’d be curious to get your reply to this message if you can think of other ones:

• Drunk driving
• Personally guaranteeing a business (I’m thinking about people who open a restaurant (probably a 90% chance of failure) and personally guarantee it with their own assets
• Buying a portfolio of rental properties with little money down and/or adjustable rate mortgages with balloon payments just hoping for the best down the road and having little margin for error.

Savings on Medical Care

I’ve been meaning to revisit some of the best tips from past FI Weekly newsletters, so when Keenan wrote in, it provided the perfect excuse to highlight some ways to save on medical care.

Here’s Keenan’s email:

“I wanted to share two discount pharmacies that I've learned of that have saved people I know hundreds or thousands of dollars:

• GoodRX
• Cost Plus Drugs (Mark Cuban’s company)

For instance, I have a family member whose Anthem Blue Cross medical insurance wouldn't cover Mesalamine and the quotes were between $600-900 for a 30 day supply. It's only $32.40 at Cost Plus Drugs (Brad note: I’m seeing this down at $26.70 now). A truly astounding difference.

Hopefully this may help others out!”

Here are two other medical savings tips I highlighted in prior newsletters:

• MDSave.com for hundreds of different procedures, scans and tests at a fraction of what you’d pay your local hospital or imaging center through insurance
• Ulta Lab Tests for a la carte blood testing at extremely reasonable rates and easy scheduling

Systems vs. Goals

“If there is ever a gap between your goal and your system; if there’s ever a gap between your desired outcome and your daily habits, your daily habits will always win. It doesn’t matter how good your intentions were. It doesn’t matter what you hoped to achieve. It’s what your habits are carrying you toward.

And the great irony of all of this is we all so badly want better results in life, we all so badly want to make more money or to reduce stress or to find love or to be more productive but the results are actually not the thing that needs to change.

It’s the system that precedes the results. It’s the habits that precede the outcome. Fix the inputs and the outputs will fix themselves.”

James Clear, author of Atomic Habits

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