If you were blind but were given the opportunity to have your vision restored through a risky and complicated surgery, would you take that risk?
Mike May was blinded by a freak accident at age 3, but that never slowed him down. He went on to set world records in downhill skiing, join the CIA, and become a successful inventor, entrepreneur and family man.
In 1999, at the age of 45, he became a top candidate for a new procedure that could restore his vision. The procedure would involve cornea transplants and a pioneering stem cell procedure by San Francisco ophthalmologist Daniel Goodman.
Dr. Goodman knew that they had a good chance of restoring his vision, but with that came risk. It was imperative for May to understand them very clearly.
I love how author Robert Kurson in this heart-pumping biography, Crashing Through, has Goodman breaking it down:
- The chances of success are just 50-50. Only a 50% chance the new cornea would stay clear and not reject during the first year
- The stem cells and the cornea could reject at any time in May’s life. Even if the transplant worked, May could lose his vision with no warning. He could never presume that his sight would be permanent.
- The extent of sight restoration is unknown. Cases of vision restoration after a lifetime of blindness were so rare that it was impossible to estimate how well May would see.
- A failed surgery could cost May his light perception. Trauma to the eye during surgery could snuff out the slight be valuable light perception May used daily.
- The potential side effects of cyclosporine are serious – and include cancer. To prevent his body from rejecting the stem cells and cornea, May would need to ingest cyclosporine, a highly potent immunosuppressant. The potential side effects included: liver failure, kidney failure, tremors, vomiting, hair loss, decreased ability to fight infections and cancer.
As much as we try to have our cake and eat it too, there are always trade-offs in life and risks with every decision we make. I loved the breakdown of the risks for this vision restoration procedure and thought I’d write my own as a financial planner.
There are risks with implementing a retirement plan and it is imperative for clients to understand them clearly.
- You could lose upwards of 50% of your investable net worth. While the long-term trajectory of markets is up and to the right, it doesn’t mean we don’t go through hell on the way there. The Great Depression of 1929 and the Great Financial Crisis of 2008 are examples of what can happen when you have your money on the stock market. That’s not to say future events won’t be even worse (or better), but plan on experiencing a severe drop in the markets during your retirement.
- You’ll have to take a 10% pay cut multiple times. Dynamic withdrawal strategies, like the one I believe in, allow for retirement income to be increased when times are good, but conversely mandate a decrease in retirement income when times are tough. There’s going to be some rough patches, so plan on having some wiggle room in your monthly budget.
- There will always be a reason to not move forward with the strategy. Global events hitting the headlines are a guaranteed constant in our day and age. If you’re waiting until the “dust has settled,” you’re going to be waiting for forever. If you want to find a way out from putting a strategy to work, there will always be one.
- You’ll most likely “lose” money the moment that you invest it. Murphy’s Law is in full effect especially when you’re investing a large sum or are just starting to track your investment performance. These paper losses will be a sting and make you question whether you did the right thing.
- You’ll have to pass on “sure things” and “big opportunities.” One of the hardest things in life is to say, “No.” And you’ll be saying “No” a lot when you stick with a strategy. You’ll have to put up with other friends and neighbors making a killing in XYZ stock or whatever is the rage. This will fill you with FOMO and tear at your emotional sanity.
- You’ll always hate a piece of your portfolio. Diversification gets touted as the panacea for all investors. While I fully subscribe to the philosophy, what it really means is that parts of your portfolio will perform really poorly and you question why you hold that part at all.
These are the risks you sign up for in order to reap the rewards of solid investing.