Your overall plan-investments, objectives, spending, legacy, insurance, etc -it all has to fit together in a way that doesn't have any chance of failure. That perspective should change how we think on risk over the lifecycle.

There is no edge, even though you are using the same strategy as earlier. On the other hand, if you take your entire bankroll into the casino everyday for 1,000 consecutive days, you will eventually go bankrupt. This example is analogous to portfolio diversification. Fifty people will walk out having lost everything, but you know what your expected profit will be on the day. You can make money by dividing your bankroll up between 1,000 people and sending them all to the casino at once. Say you're a gambler, and you believe you have a strategy that gives you a slight edge over the house, but also has a 5% chance of bankruptcy. They can't just work most of the time, because we don't get an average outcome. We will only live once, which means our strategies need to work for our specific lifetime. I'd like to think Drake was, too.Д¬onsidered that way, YOLO gives us pretty good advice about longevity risk. In other words, you can only control the present, so do what you can, while you can, to make the future better. Horace was telling us to take advantage of today, because the future is uncertain. Seize the day, and put very little trust in the future.

But the second, usually forgotten, part of the carpe diem phrase changes the meaning: carpe diem, quam minimum credula postero. YOLO and carpe diem are usually assumed to imply some sort of overly self-indulgent and short-term view of behavior. He's famous for popularizing the acronym YOLO, which means 'you only live once.' YOLO is a modern version of carpe diem. I'll point to a Canadian philosopher that goes by the name of Drake in answering this question. One of the questions Mike Ryan asked me as part of the investment and portfolio strategy panel was, to paraphrase, 'Why does longevity risk matter?' My answer, which I've expanded on a bit due to time limitations at the forum, is below: We had our first of two United States-based CIO forums, titled 'Risk: From Chance to Choice,' last week in Los Angeles, CA.

Carpe diem quam minimum credula postero