Double Wrapping Your Finances

Sometimes 2x as much is half as effective

Back when F’er was a kid, the internet was just starting to become a thing and was mostly limited to the wealthier people. And even when dial-up internet was starting to get into houses, no one really knew what to do with it. Google wasn’t a thing. Yahoo search engine gave more misses than hits on the results. I remember when AskJeeves was a big thing.

In short, if you wanted to find information, you had to rely on hearsay from friends…mostly those with older siblings.

This lead to many crazy stories and theories that were spread verbally across the country. And even if they were disproven by practice over and over, they wouldn’t die because there was no source of truth.

Hilariously, the most incorrect ones were about drugs or sex…if anyone ever tried smoking banana skin shavings, then you know.

“You can’t get pregnant in a hot tub”

“Mountain due makes sperm immobile”

“Wearing extra condoms adds more protection”

Nowadays, you can just easily check out some sources:

But back in the day ‘double-wrapping for double protection’ was common advice being thrown around. It was gospel. People swore up and down it was the only way.

So you can imagine the surprise to many people when they had 2 rubbers break or both fall off. (But as we see far too often, you can’t prove a negative, aka “well good thing I had 2 because it would have been even worse if I was only wearing 1”.)

Now you may be thinking…what in the hell does this have to do with Financial advice?!?!?

Far too often in finance, people will have multiple layers of ‘protection’ thinking they are being extra safe, not realizing that they are actually making themselves less protected than if they only had a single form and used it correctly.

This post is brought to you by a recent litigation at work that F’er got dragged into and had to explain to a court of lawyers, judges, and common folk how doubling and tripling up protection was actually having a negative impact to the customer…and sadly no, I didn’t use the double-wrapped condom analogy. Our legal area strongly discouraged their expert witness from doing that as it would be deemed unprofessional.

But it got me thinking about all the areas where people end up taking on massive risk due to their efforts to be de-risk being done in a myopic way.

We will go through a bunch of these examples and why the extra ‘protection’ is adding more risk, starting with a generalized example of the court case.

You may find a few areas where you are botching up your risk-management…or some parallels to things you are doing that could be improved.