For those of you who don't know or don't care to look it up, Pascal's Wager basically says that we as humans bet with our lives on whether or not God exists. And therefore a rational person should live their life as if God does exists because the consequences of being wrong (hell through eternity) far outweighs the costs of living a righteous life for X number of years where we give up pleasurable sins, etc. (aka our cost) Pascal basically implies the consequences are more important than the probability of error.
So how can we in the Personal Finance community benefit from this philosophical thought? It's simple. It basically tells us to "cash out our chips" when we already won the game. In other words we should be mindful of the end-game and to not take additional risks that may jeopardize it.
For many of us the game is early retirement or FI. And having read many of your blogs, many of you have already won or are close to winning it. Before I get accused of telling everyone to move their assets to Treasury bills and/or hide your cash under the mattress, I'm not. However, what I took away from this (and I hope you do too) is that we need to recognize how much of our success was tied to the bull run we've had over the last 6 years and that we should be mindful not to "press our luck". We all looked really smart because of all the stock we've purchased that allowed us to get here and write about our ever increasing net worth. However, are we prepared to see our portfolios (which is probably very stock heavy) decline by over 50% again? For those of you who are still very young, you will probably relish the opportunity to buy more of your favorite companies' shares at a discount, however, many of our older readers with family and children may not have that luxury of time.
While this thought is probably no different than mainstream media's advice to be more conservative with our stock/bond mix and to be diversified as we get older, I took this as a reminder to not be greedier and to risk more than I have to when I'm so close to winning the game. I promised myself today, I won't chase extra yield in an effort to make more or to get to the FI end goal faster. I also promise myself to put greater emphasis on my health and relationship with loved ones. After all, we spent so much effort saving and getting to where we are now, why take extra risks to gain more than we need? It's time to take a break and smell the roses. :-)