Shocking Vulnerability Revealed

We were all captivated by the underwater, volcanic explosion in Tonga over the weekend. Before getting to the post, the video was a spectacular reminder of how powerful the forces of nature are.

Fallout that might not immediately come to mind is that an underwater cable providing communications, phone, cell signal and internet, was severed potentially isolating the island for an extended period. In 2019, Tonga decided to deploy a satellite system as a back up of sorts but that has not happened yet due to prohibitive costs. Even then though, it may not have been effective as the ash that is still in the air is interfering with satellite phones.

How many people fantasize about selling everything and moving to a place like Tonga or maybe, a little more practically New Zealand? We've been to NZ twice and while I wouldn't say we a serious notion to move there, it's fun to ponder. Whereas maybe we got caught up in a fun moment, some people actually do this. Picture taken near Milford Sound in 2012.

I suppose if you're really living in the jungle, totally self-sufficient for food, then the lack of communications might be less of a problem than trying to recreate some portion of your previous life in an exotic and interesting location. 

In everyday life in Tonga or other places, I have no idea whether the threat of natural disaster-induced isolation or other form of disruption lives on people's front burner or not but it is potentially serious given Tonga could be isolated for weeks, even longer. 

In 2007 we went to Molokai. It's the smallest of the islands you can visit. Things could have changed since then of course but there was a shocking lack of stores to find food. I remember one store in the main town of Kaunakaki that sold some Kirkland brand food and one or two other stores. There was one restaurant at a resort near where we stayed and there was a pizza joint and a Subway in Kaunakaki too. Choices were very limited and although we had access to food, it was not too difficult to envision some sort of hiccup causing problems. I don't know how or if the island was worse off than the rest of us during empty shelf event in the earliest days of the pandemic. 

The pictures we have do don't justice to how stunning it is there but the potential challenges that you might not think of are substantial and I don't think I even understand half of them. The process to solving this would probably mean having a backup to everything. Solar is an easy solution even if it isn't cheap to install. Being self-reliant for food is easy to know you need to do it but then you have learn how and be successful. When the ash cloud in Tonga clears, will satellite TV and phone, maybe internet which is what our ISP is, work normally again? What if there is a serious disruption in gasoline or diesel supply. You can keep some gas on hand and maybe add stabilizer to slowdown the process of it going bad. What about medications? What will a doctor give as an emergency supply and how long before things like insulin expire? I consider myself very lucky that I have no idea about that. 

My desire to explore this line of thought is not about believing bad things will happen, that's just not how I think but inconvenient things happen and the idea of beefing up self reliance is something I enjoy learning about and I believe it is directly related to financial plans and retirement. 

How vulnerable are you to a serious means testing cut to Social Security? If it happens it will come down to affect those who are merely comfortable or well off, not just the truly wealthy. How vulnerable are you to needing a full 4% from your portfolio no matter what in order for your retirement plan to work? Are you in the sandwich generation meaning you might have to financially support parents or children...or any other relative for that matter? How vulnerable are you to healthcare costs continuing to go up at the same rate they've been going up for the last 15 years? 

Here's one, if you envision consequences of climate change being as dire as some believe, how vulnerable are you to having to move because where you live might be underwater one day? Not only would you have to move, you wouldn't get any money from selling. What if you're not worried in the least about this but it happens anyway? 

No one can plan for every possible adverse outcome. But we know some of the basics that we can't really interrupt for very long; food, medicine and utilities. We know with our finances, that we have to be able to pay for certain things uninterrupted. There are simple ways to mitigate these things such that regardless of what causes supplies to be reduced, we can be a little bit ahead of our regular need. That applies to money too. A client is starting their RMD this year and they asked if they have enough set aside because the actual cash balance was low. They have a Treasury note maturing on January 31st that will cover two years worth of RMDs. The market may or may not do crazy things but they are nicely insulated from potential volatility. This is useful financial management and I believe also useful real life management too.