Before the article, here\u2019s what\u2019s happening this week on The Best Interest Podcast<\/strong>:<\/em><\/p>\n My daughter, Maeve, is about to turn 8 months old. She\u2019s chunky, smiley, and effortlessly sits like Buddha while playing with her toys. No crawling or walking yet. She did<\/em> recently learn to wave (\u2026flail her arm<\/em>) to say hi to people. It\u2019s pretty cute. <\/p>\n And I\u2019m sorry\u2026we\u2019re trying hard not<\/strong> to plaster pictures of Maeve all over the Internet, so you\u2019ll have to take my word on it. <\/em><\/p>\n<\/blockquote>\n But parenting isn\u2019t a cake walk. Kelly and I have put a lot of time and resources into providing for Maeve as best we can. Sleep comes and goes. There\u2019s only so much time in the day. It\u2019s not easy. But it\u2019s certainly worthwhile. It\u2019s both \u201cvery hard\u201d <\/em>and also \u201csimply the best\u201d<\/em> at the same time. <\/p>\n Maeve\u2019s grandparents have been an amazing help, watching her a few days a week while we work. Maeve has met many of our friends and their kids \u2013 she\u2019s social. She goes to the library, the local pool, and she\u2019s taken two<\/em> plane trips. She has a support system. She is worldly. <\/p>\n The point is: Maeve is living a good life. We\u2019re happy about that. <\/p>\n We were sitting in the kitchen the other day as Buddha Maeve played on her mat. I\u2019d recently been reading about the disproportionate impact that early years (0-2 years old, maybe 0-3 ) have on a human\u2019s life. And a sad thought crossed my mind.<\/p>\n I\u2019m sure there are some babies in greater Rochester (let alone the rest of the world) who are exactly<\/em> as old as Maeve, but aren\u2019t getting nearly the same support from their parents and families. It\u2019s not that I think Kelly and I are supreme parents. Instead, it\u2019s that I know other parents might not have the time, resources, support, emotional capacity, etc. to provide for their kids. <\/p>\n Put frankly: we all know that some parents aren\u2019t fit to be parents, and that sucks. <\/p>\n Here\u2019s the important takeaway, though. Maeve\u2019s situation has nothing<\/strong> to do with Maeve\u2018s great decision-making. Agreed? She\u2019s 8 months old. She\u2019s still working on getting food from her hand into her mouth. She is not the captain of her own ship. Instead, Maeve\u2019s life is entirely a function of luck in terms of which house, which family, which country, which time period, etc. she was born into. <\/p>\n This is Warren Buffett\u2019s so-called ovarian lottery<\/strong>. Buffett explains it well: <\/p>\n I have been extraordinarily lucky. <\/p>\n I use this example and I will take a minute or two because I think it is worth thinking about a little bit. <\/p>\n Let\u2019s just assume it was 24 hours before you were born and a genie came to you and he said, \u201cHerb, you look very promising and I have a big problem. I got to design the world in which you are going to live in. I have decided it is too tough; you design it\u2026\u201d <\/em><\/p>\n You say, \u201cI can design anything? There must be a catch?\u201d <\/em><\/p>\n The genie says there is a catch. <\/p>\n You don\u2019t know if you are going to be born black or white, rich or poor, male or female, infirm or able-bodied, bright or retarded. All you know is you are going to take one ball out of a barrel with 5.8 billion. You are going to participate in the ovarian lottery<\/strong>. <\/p>\n And that is going to be the most important thing in your life, because that is going to control whether you are born here or in Afghanistan or whether you are born with an IQ of 130 or an IQ of 70. It is going to determine a whole lot. <\/p>\n What type of world are you going to design?<\/p>\n Warren Buffett<\/cite><\/p><\/blockquote>\n Here\u2019s a longer clip of Charlie and Warren<\/a> discussing the Ovarian lottery (in the context of, of all things, capital gains taxes<\/a>). I highly recommend it. <\/p>\n The philosophical argument is that we should ask the genie to design a world where we are not overly punished for \u201closing\u201d such a lottery, nor overly rewarding for \u201cwinning\u201d the lottery. Because we don\u2019t know in advance whether we\u2019ll win or lose! Instead, we\u2019d design a world where other factors down the line (ideally, factors within<\/em> our control) play a greater role in our life\u2019s \u201cwins\u201d and \u201closses.\u201d<\/p>\n The ovarian lottery is the ultimate admission that some things are within our control and other things are out of our control. Going further, it\u2019s the admission that some of the most impactful variables in our lives, the ones that define us to our very core, are out of our control. That\u2019s a scary admission. It hurts the ego to think, \u201cSome of my personal success is just\u2026luck?\u201d<\/em><\/p>\n It\u2019s a sad thought that, while Maeve has done well (at least so far) in the ovarian lottery, some of her little Buddha peers have gotten burned by it. And, for better or worse, there are lifelong consequences to that. <\/p>\n I bring this idea up because of its natural parallel to the financial planning world, where we make decisions based on the best available information today. But we make those decisions knowing full well that many of the future variables will be out of our control, and the best laid plans today will, in hindsight, not have been correct. <\/p>\n You can\u2019t control the stock market and the returns it provides you. You don\u2019t decide when a recession hits. You don\u2019t know how interest rates and inflation will change. You might work your career expecting Social Security to be there in full, only to watch policymakers shift the rules. Tax laws, personal health, family issues, inheritances\u2026it\u2019s all out of your control. <\/p>\n Yet, we build a financial plan on a foundation of assumptions for all of these factors. That plan, and those assumptions, will invariably need revisions at some point. Sometimes, those \u201cout of my control\u201d variables will hurt us. <\/p>\n It doesn\u2019t mean we were \u201cwrong,\u201d per se, but instead means we weren\u2019t able to control everything as much as we wish we could have.\u00a0We control what we can, and add margin for the rest. <\/p>\n Both parenting and financial planning require us to do our best with what we can control\u2014while acknowledging the immense role of luck. We can\u2019t choose our starting point, and we can\u2019t predict every twist and turn, but we can still make thoughtful decisions that give us the best possible chance at success.<\/p>\n Now\u2026where did all the binkies go?!<\/p>\n Thank you for reading! If you enjoyed this article, join 8500+ subscribers<\/strong><\/a> who read my 2-minute weekly email, where I send you links to the smartest financial content I find online every week. You can read past newsletters<\/strong><\/a> before signing up.<\/p>\n On that note \u2013 our podcast is, actually, by far outpacing this written blog. Tune in and check it out.<\/a> <\/strong><\/p>\n -Jesse<\/p>\n
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