We’ve all heard the old saying, “Never assume anything because it makes an ass out of u and me.”  But assumptions are made every day and every assumption distorts reality.

For example, we live in a fairly large home, have a 75,000-gallon pool and drive SUVs and pickup trucks.  The assumption could be made that we live extravagantly and are not mindful of our natural resources.  Interestingly enough, considering that 11 people live in our home, we average less square footage per person than two people living in a small 1500 square foot apartment.[i]  Our pool is heated by solar hot water and has a next to nothing carbon footprint.  And we drive, on average as a household, less than half of what most American households drive annually.[ii]  On top of that, we consume less electricity per household than the average household in our community, even though our home is over double the average square footage of homes in our community.

None of the above is reported here to paint a green, energy conscious family picture of ourselves.

Rather, it is reported for the purpose of illustrating that all assumptions are precarious at best and can be harmful to your long- term sustainability.

Contemplate, for a moment, that all investment projections are assumed projections not real values, or that most rate of returns are assumed averages not actual returns, and it won’t take long to find out who is the “ass” in these assumptions.

So, here’s how you can protect yourself from being destroyed by assumptions.  Don’t listen to them.  Don’t entrust your future to them. And don’t be fooled into thinking you can beat the odds because as Warren Buffet states, “The sales capabilities of people trying to sell you high-cost, low-yield investments grow as your wealth grows.”  It only takes one negative, or zero return to wipe out anything you have that is greater than one.  We all learned this in third grade, any number times zero is zero. But people like to assume that it can’t or won’t happen to them.

One of the best ways to guard yourself from this zero factor is to save your money where you have guarantees rather than assumed values.  Working with guarantees allows you to grow your wealth without assuming anything.  And that gets rid of the ass instead of making one.

Oh, and one last thing. SUVs and pickup trucks have a far greater track record of safety compared to other vehicles on the road today.  That is why we drive them.  Having a 77-78%[iii] less risk of being injured in an automobile accident is nothing to scowl at.  Participating whole life insurance, with all its guarantees, drops your risk by over 50% compared to the next closest investment risk category,[iv] and that means if you don’t own participating whole life you are losing money.  And that is an unassuming fact.




[iv] Data Compiled from actual contracts, investment portfolios, real estate documents and the IRS website, 2015