You can be too careful

chicken costumeWe all develop a money blueprint during our early years.

As part of this, we pick up partial truths about money and other things from well-meaning people around us in childhood.

So Granny may have told us that we can’t be too careful and we take that as if it were a literal truth that applies in all situations.

But it turns out that you can be too careful.

Financial independence is like a game of football; if you just focus on defence, you are unlikely to win. You need to be able to combine attack with defence.  So the people that do well at this game are those that know when to aim high and take risks…as well as when to play it safe. Aiming for financial independence means setting yourself goals that will seem outrageously ambitious to most people.

Sadly most people are never going to get to financial independence because they’ve been told that saving, say, 10% of their income is what they should aim for. 10% sounds so reasonable doesn’t it? It sounds like an achievable goal that even a consumer sucker could work towards. And a goal that sensible middle class people should be able to hit without too much difficulty.

People like things that are conventional, non-scary and seem reasonable. There is great comfort in the middle of the herd.

Unfortunately, saving 10% may sound sensible but its terrible advice. It’s handed out by people who are selling us things (the media) and by financial advisers who are happy with the prospect of us working for them until we are 65+.

One way to make better decisions is to look at real numbers where possible. The FI-o-meter tells us that if we save 10% of our income then we will never accumulate 25x our spending. Saving 20%, it will take a 21 year old to work until they are 68.

But at a saving rate of 60%, financial independence can be achieved in just 14 years. So a 21 year old leaving college would be free and financially independent by the age of 35.

Another problem with the 10% saving advice is that it encourages complacency.  10% is an easy target for someone in the middle class of a developed economy to hit. It’s so easy that very little change is required.

The advantage of an outrageously ambitious target is that it forces us to examine every area of our life for areas of improvement. It’s only by the aggregation of marginal gains that financial independence is possible. Complacency is one of the greatest threats to the pursuit of FI.

So you can be too complacent about the amount that you save.  But you can also be too careful with your savings.

Firstly, by over-valuing safety you may end up sat on surplus cash in a bank account with its value being slowly eroded over time by inflation and tax. This is OK for an emergency cash reserve of say 6 months spending but beyond that we want to put our money to work for us.

Secondly, by worrying too much about existing savings we may not think enough about how to save more. We have a natural tendency to protect what we have. That’s fine but if you only focus on protecting what you have, you may end up focussing on fear and scarcity.

Given that we humans sometimes struggle to hold conflicting thoughts in our minds, focusing only on protecting what we have can cause us to overlook opportunities to make more. For many people, asking: “What should I do with my savings?” is the wrong question and the better question is: “How can I spend less and earn more to increase my saving every month?

There is a point at which caution becomes paranoia. Some people refuse to save into pensions (and so lose the tax advantages) because they fear the Government will never let them take the money out.

There are lots of other ways in which it is possible to be too careful financially.

Most people buy too much insurance.  I prefer to save the money and self-insure where possible.

People over-pay for structured financial products with expensive guarantees. They cling to the illusion of safety of bonds or peer to peer lending or other fixed income products when they’d be better off accepting the volatility and higher returns of equities.

The most striking example that you can be too careful is the people that have enough to quit but carry on working in jobs that are crushing their soul. One reader said it took them 8 years after reaching financial independence to get up the courage to quit. In my book, that’s too careful!

The idea that you can be too careful applies not just in finance but in lots of other areas of life.

In sport, you can definitely be too careful. If you are a racing driver and you never spin off, then you’re not trying hard enough. You can’t find the limits of a car unless you experiment.

We may fear “failure” or being humiliated. Which for the most part is ridiculous. We need to remind ourselves that there is no failure, there is only learning and growing. The biggest risk in fitness (and in money) is that not that you fail, its that you don’t push yourself enough to achieve what you are capable of.

Our physiology is designed by evolution to improve most when we exercise with intensity…when we dip into the red zone. If you want to build muscle, you don’t have to spend a lot of time in the gym but when you do go, you have to exercise with intensity, to push yourself to your (current) limits.

What then happens is that your body says to itself something like:

Ah! I’m being asked to do a task that I can’t currently do…that sucks…so I’m going to need to change….hmmm…lets add some muscle and burn some fat to release the energy I need.

If you want to improve at running, even long distance running, its best to incorporate sprints and hill climbs into your training to provide the short, sharp shocks that your body needs to tell it to rewire itself for greater performance.

You can also be too careful in the area of relationships. If you are young and single and you never strike out with the opposite sex then, like the racing driver example above, maybe your sights are set too low?

You can also be too careful by not showing vulnerability in relationships.  One of the elements of developing relationships is honesty and openness rather than putting on a show. But this entails vulnerability. One way to avoid ever being hurt is to avoid any vulnerability, but by doing that you place a limit on the quality of your relationships and hence your happiness.

One of the things I’ve come to realise is that we can’t overcome fear once and never feel it again. Fear is just an emotion and emotions will always come and go…popping into our heads and then moving on. So success is not about eliminating fear, its about taking action in spite of fear.

Successful people still feel fear but they don’t allow fear to paralyse them. If you think of fear as something you feel at the limits of your comfort zone, then fear can be a clue that you are going in the right direction. Adam Gilbert has a great phrase for this: make discomfort your compass.

We can learn to distinguish between situations that actually involve real physical danger and those that just feel uncomfortable. We evolved fear to avoid real physical danger but, in the modern world, almost every situation is physically safe. Realising this frees us to get on with difficult but rewarding stuff.

Earlier this year, I cycled up Mont Ventoux and then all the way up from Provence to the English Channel. Before I did this, I wasn’t sure if this was possible for me…so there was only one way to find out.  Turns out it was possible.

With all this in mind, I’ve decided that The Escape Artist needs another physical challenge.

Running a marathon is something I’ve wanted to do for years. But I’ve always found reasons to put it off. Firstly time; I was busy at work and we’re told that running a marathon takes lots of training time (although I’m not sure whether this need be true). Secondly, I was worried about the risk of injury. Truth be told, I still am.

But this may be my chimp brain being overly cautious. Our minds are programmed to err on the side of caution to ensure that we survive….not that we thrive. Like I say, you can be too careful.

So I’m going to run a marathon…just not in a chicken suit.

You can follow The Escape Artist on Twitter here


  1. Great post. I really like the running analogy of having to do sprints and hill climbs, even if you’re a long-distance runner.

    I find it utterly sad that so many people are in poverty in their retirement, just because they were ‘too cautious’ and followed the old ‘save 10%’ rule. I guess generations ago, saving 10% might have been enough if your life expectancy was a lot lower… but let’s face it, our life expectancy is going to be 80, 90, even 100 pretty soon. That piffling 10% will get you nowhere.

    But the question is, how do we instil strong savings habits (of 20%+) and the associated earning more and spending less habits in the culture of today? We hear so much rot around us, it’s all noise trying to get us to part with our money… how do we teach our kids to mute all the crap out?

    We’re planning that now for our 2yr old son… how best to teach him about handling money, hard work, savings, investments, and spending wisely. Thankfully I’ve got a few years before he can understand all this.


    1. Thanks…I bet 2y/o mini TV will absorb most of that good stuff automatically…that’s the advantage of how the Money Blueprint works…it should work well for the children of the financially savvy…hopefully some of this stuff will also filter through to the others as well…

      1. Thanks, I really hope so. Unfortunately for me, it never really happened. My mum was a saver and would only buy in cash. She ensured the mortgage was paid off early. My Dad saved a bit for specifics, but was and is still more of a spender, and not particularly great with money… so it was down to learning about P2P finance and value investing in my 20s that put me on the ‘right track’ so to speak.

        I just hope our 2y/o will somehow pick up all the right messages by osmosis, if not by directly learning from us.


  2. Thanks for another great post. I think I might have been a bit guilty of being too carefully by sitting on a bit of £ cash of recent from fear of Nigerian Naira devaluation which eventually did happen. But it is not productive keeping £ cash either. Unfortunately, I have been unable to find a broker willing to accept funds by non residents even though I have a UK bank account. If you do know of one, please let me know. I tried SVS but after sending them all my docs, they declined to open the account.

  3. A great post. I was quite cautious with money but have learnt to change and take a few risks now and again. The same now applies to other areas of my life. A bit of fear is good for you as it makes you think about what you are going to do, the self-preservation aspect of life. It can also encourage you to fight.

    The 10% savings is part of the keep the population working scenario. What would the government do if everyone was capable of FI? It would completely change the tax policies to get everyone back into work. It wants/needs the population to work, Its part of social control.
    Fear of failure is always pushed hard in society – another form of control, it is something that has troubled me throughout my life, I fear failure! I have to fight those thoughts.

    My last big sports challenge was walking the Yorkshire 3 peaks, 26 miles over 3 peaks. I was told years ago by someone that I would never be able to do it as I wasn’t capable. Well, I succeeded in doing this last year and I felt so great at achieving it. I trained and trained to be ready. I was knackered and my feet hurt and I struggled as did others to walk the final few miles to the finish but I persevered and the sense of achievement was great! The mark of my ‘fight’ instinct was the push to run over the finish line.
    It goes to show that if you put your mind to something, you can find a way! It is the same with savings, FIRE or any other aspect of life.

    1. Thanks for the comment…esp the 3 peaks example. Maybe you are like me…there is nothing I find more motivating than being told that I wont be able to do something! Did you get to tell them you’d done it afterwards and see their reaction?!

  4. Survivor · · Reply

    Yup, another good post Dude, I agree with it all. I just wanted to add that maybe until recently a lot of people in this country believed they would get a decent enough pension if they had worked hard all their lives & that would always guarantee that they would have a painless, worry-free old age – that had to have had an effect on their savings habits, even if only at a subconscious level.

    One good way to fight the fear is to not avoid thinking about it, let alone doing anything about it – like most people do – but to educate yourself as much as possible on the issue in question. That gives you the confidence that you now know what you’re doing & you can start trying baby steps with whatever challenge is bothering you, like maybe investing.

    Like most things in life, I think the whole fear deterrent is a matter of balance, as you say, don’t be put off too easily, but at the other extreme, don’t jump in blind either …..with the vulnerability for example, you can show too much of your hand/too soon. Last time I did that, I lost my home in a divorce when she realised I wouldn’t fight to the death [figuratively in court that is] for it – so we split it 50:50 …..she got the inside, I got the outside. 🙂

    1. Thanks!…I agree there are limits to vulnerability….and I think you might enjoy this…

  5. Survivor · · Reply

    @ TEA,

    Ohhh, too cruel buddy …….this is my new favourite song since then though:

    – if you put it on full bore & wait for the chorus line to hit, (best fully appreciated after a good bottle of wine, maybe a really tasty 15% Malbec) you’ll get why I figured that any price which still left me alive was worth it to be free. I’d win your marathon if I saw her behind me Dude – there’s a handy tip for you if you have something comparably terrifying.

    …….& yup, maybe, just maybe, I’m not yet totally sanguine about that experience 🙂

    1. I like it….and glad you got to keep your sense of humour in the settlement Survivor! 😉

  6. Congrats on the decision to run a marathon. Not nearly as taxing as a marathon but a couple of years ago I trained to do a half century (50 miles) on my bike. I accomplished that then my son wanted to do it so I did it again a year later with him. It was great.

    Good luck!

    1. Thanks Steve….but not sure I’ve earned the congrats yet? Will award myself these after I’ve completed it!

  7. I think you’re being a bit harsh in saying that a 10% savings rate is terrible advice. It may be cautious, but it is quite achievable. And I wish someone had given me that advice at the start of my career, because I’d be a multi-millionaire in my fifties if I had followed it! Perhaps saving 60% of your income is a fine ambition for a young thruster in today’s affluent age, but what about a couple who want to maximise their chances of having a family? Waiting to 35 while you accumulate your pile is going to lessen your chances of that happening. And there are plenty of people who will argue that if you’re saving 60% of your income between the ages of 21 and 35, it’s going to feel like you’re 65 by the time you get there!
    Anyway, great thought-provoking post, and good luck with the marathon.

    1. Thanks Jim…if saving 10% would have made you a multi-millionaire in your 50s, then maybe you were better paid than I was! But I agree with you that saving 10% is (easily) achievable and is better than nothing.

      And as for your theoretical couple who want to maximise their chances of having a family…what should they do? Stay home of an evening and have sex would be my advice. Its free. 😉

  8. London Rob · · Reply

    Hi EA,
    A great post again. I think at least they are telling people to save, but it ought to be more a minimum of 10%, but ultimately you need to save as much as physically possible until you are FI – but very much easier said than done – and a bigger challenge if its two people, if one doesnt follow the path.
    I have a lot of friends who are really not saving enough for retirement, only one of them is actually saving that I know of, but at a really low level (5 – 10%). For me, I put in 10% sacrifice, whatever the company matches (6%), then I pump the rest into a personal pension, my ISA, my other half’s ISA and with anything left over pay the mortgage or add to cash holdings.

    I have to say I did laugh out loud at the last reply:
    And as for your theoretical couple who want to maximise their chances of having a family…what should they do? Stay home of an evening and have sex would be my advice. Its free

    Superb 🙂

  9. Ah good luck for the Marathon training TEA!

    I am half way through writing a similarly themed post actually, on the running side of things (a lot of which is inspired by some of your earlier posts in fact). Without revealing too much here I totally agree on the whole *pushing your limits* thing when doing physical tasks, and the other side of things is getting out of your comfort zone when it comes to more mentally based challenges (anything from learning a new skill or speaking in public)

    I will publish my challenge later on today and let you know when it’s live 🙂

    I have only done one marathon but will give you the obligatory advice as if I’m some sort of expert anyway:
    1. Do as many long runs (20 miles+) as time and without incurring injury allows because the difference between 20 and 26 is exponentially hard. I think I only did one run of 21 miles then tapered back down as it was too close to race day and once I got to 22 I didn’t know what hit me! Having said that, I think if you can cycle up mount ventoux and have a very decent diet from what I’ve read on here, you are in a much fitter state than I was in 2011 so you will probably be fine anyway 🙂
    2. You do have to be careful of injuries. Again it depends on the starting state of fitness but I ramped up the mileage too quickly and got lot’s of issues with ITB band. Again YMMV, you could be fine.
    3. Related to the above I think a lot of people over train and many training programs you find on the internet are just ridiculous. I would often just to 2 runs per week, one long one at the weekend and one very short one to keep my legs from stiffening up. Some training programs literally have you doing things every single day, that is the sure fire way to get an injury if you ask me, you are not giving your body time to rebuild the muscle etc…!!! Again by the sounds of what you said in the post you won’t have this issue, and I agree training should be more intense but less of it.

    Cheers and good luck once again!

    1. Thanks I will look out for your post later today TFS

  10. […] mentions: I’m fine, but could be better, You can be too careful, Why I don’t love 5-star hotels, and 1500days’s household junk mail […]

  11. Thanks for another very interesting post. We suspect that we are guilty of at least two instances you detail in terms of being possibly over cautious. Like the person who took 8 years to retire after reaching financial independence, we probably will wait at least 1-2 years beyond reaching FI before we pull the plug on our full-time jobs. We’re trying not to let ourselves be too cautious though, so your post is a nice reminder.

    The other area of possible caution involves surplus cash savings, though we’re trying to tell ourselves it’s an investment strategy (and not just being too cautious). We have most of our investments in mutual funds/index funds, but we are not that keen on bonds (only about 5-10% of our investments, at just a few years before we want to retire). We are thinking about keeping another 5-10% in cash (in an online savings account earning .95% interest) and keeping it there so that we can quickly invest more in stocks should we see sudden drops in the market.

    We wonder if other readers invest similarly, or if this is also a case of being over-cautious…

  12. […] You may be too cautious – The Escape Artist […]

  13. meglinson · · Reply

    Your marathon challenge reminded of a conversation and essentially a paradox.

    A friend of mine recently said he needed a challenge and was going to sign up for L’Etape (A stage of the Tour De France for amateurs). Having done marathons and long distance cycling like L’Etape myself, I can tell you that they are relatively straight forward challanges if you do the training….not easy (I don’t to to p*ss on anyone achievemnets!)

    So I said that if he really wanted a challenge then do half the recommended training…that’s a challenge. But he’ll be too cautious he’ll do all the necessary training to guarantee a finish.

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