Financial Planning Lessons We Can Learn from Chernobyl
HBO’s Chernobyl is a five-part mini-series that dramatizes the story about the nuclear disaster that took place in 1986 in northern Ukraine. It just wrapped up a few weeks ago. It was one of the best shows I’ve ever seen on TV. My wife, Lauren, and I were hooked from the start. Spoiler Alert! for those interested in seeing the show but haven’t or are unaware of the events of Chernobyl.
Consequently, the explosion likely killed dozens of people. However, the death toll would continue to add up over the years due to long-term health complications caused by radiation sickness. After watching the series and learning more about the disaster, you have to wonder what could have been done differently to prevent the explosion from happening in the first place. You don’t have to be a nuclear engineer to take away lessons from the disaster, and there are also some financial planning lessons that we can take away.
Financial Planning Lessons
Set realistic expectations
In the show (and in real life), there’s an engineer named Anatoly Dyatlov, deputy chief engineer at Chernobyl nuclear plant. The day of the explosion, he was overseeing a reactor test. His team was ill-equipped to carry out the test. Regardless, Dyatlov insisted they move forward, expecting an inexperienced team to run tests they weren’t prepared to do. He’s portrayed in the show as a bully with dangerously high expectations that his underlings failed to live up to.
So what kind of financial planning lessons can we learn here? While setting unrealistic expectations in your financial plan might not lead to a nuclear reactor exploding, they can mean falling short of reaching your goals. You’ll need to make some assumptions about things like your anticipated rate of return on your investments, or how high inflation will be. While we can’t be exact in our predictions, we can make reasonable assumptions in-line with reality. That company stock in your 401(k) might have doubled or tripled in the last decade, but it’s best not to extrapolate that into the future.
Don’t double down on a bad idea
Later in the series, the events that led to the explosion are replayed. Once there were signs the test of the reactor had gone awry, engineer Aleksandr Akimov recommends to Dyatlov to shut down the poisoned reactor. Stubborn Dyatlov insisted on continuing. Minutes later, the reactor would explode.
Things won’t always go according to your plans. Financial planning is a process of creating a plan and continually revising it as new information makes itself available. When we make mistakes, we need to take a step back, determine the cause of the error, and how we can avoid making the same mistakes in the future.
Don’t lie to yourself – be honest and upfront
In the hours following the explosion, Anatoly Dyatlov and Viktor Bryukhanov were in denial about how bad things were. They portray in the show to be in disbelief that an explosion could ever take place. Even as they witnessed men falling to radiation burns and sickness, they couldn’t come to terms with what had just happened. Their denial led to them failing to take corrective action immediately, causing more harm than was necessary.
Our denial can be detrimental to our future financial success. There are things that we know we should be doing today to better prepare for our future. Sometimes we might be apprehensive about doing financial planning because we’re afraid we might find ourselves ill-prepared, so we do nothing, and hope things will take care of themselves. It’s much better to confront that apprehension than to live in denial, praying for a good outcome.
Financial planning can be tricky. That’s why we’re here – to provide you clarity, confidence, and control in your financial life. Our financial planners will discuss with you how to develop a financial plan to not just get you to retirement, but through retirement as well. If you’re interested in meeting with one of our financial planning teams give us a call at 913-393-1000 or fill out the form below and we will be in contact to schedule a time with you.
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The views expressed represent the opinion of Barber Financial Group an SEC Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Barber Financial Group does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.