I met a few friends for lunch recently and I was struct by the randomness of events that each one of us was going through…

• Friend  1 developed kidney stones suddenly and spent a couple of painful hours in Emergency….just came back from a visit.
• Friend 2 developed twitching on one side of the jaw and that was diagnosed to be a neurological condition….
• Friend 3 experienced an unexpected job loss…we are trying to help out with job leads…
• Last year and a half, I have experienced unexpected hospitalization, unexpected job loss and an unexpected crisis of confidence….so, I am not that behind 🙂

Some friends expressed the inability to forecast how the next 5-10 years will look like and how it was creating a lot of stress in their respective lives. Ironically, a similar pattern is what forced me to discover Financial Independence 🙂

That led me to think about Uncertainty about the future and its effect on Happiness today. I came to the sudden realization that the dramatic popularity of FIRE (Financial Independence and Early Retirement) over the last few years is directly proportional to the level of Uncertainty in the society as a whole. Let me think aloud on this a bit. Read on if you are interested!

What is Uncertainty?

There are many definitions of what Uncertainty is.

• According to Merriam Webster dictionary, Uncertainty is defined as the quality or state of being uncertain.
• According to probability theory, any event can have many possible outcomes. If the result of many of these outcomes cannot be predicted ahead of time OR worse yet, the outcomes itself cannot be predicted, then there is supposed to be Uncertainty.
• I remember reading on a bumper sticker that the oldest emotion of man is fear and the strongest of the fears is the fear of unknown. Not sure who said it, but it seems right to me. When there are unknowns in our life, there is Uncertainty.

Uncertainties in life

Let us take me as an example. There are four main uncertainties that I can think of in my life.

• Income uncertainty
  • I am in a profession where assuming income certainty does not exist. I got half a day notice to pack my bags and leave in my previous job.
  • Planning for the long term like buying a house, paying for college, saving for retirement, etc requires sustained income for atleast 15-20 years.
• Health uncertainty
  • All the years spent slogging, both student years and work years, have taken their toll on my body. Another decade of stress and the certainty of failing health is guaranteed!
• Family Relationships Uncertainty
  • Uncertainty of aged parents’ health on both mine and my wife’s side
  • Uncertainty of a vagabond life (moving to different rental houses) on kids and wife
• Social Network Uncertainty
  • Social network includes family and friends whom I can count on in case of an emergency. The pressures of the HCOL area economy has driven a couple of close people out of town and out of state….some due to job loss and some due to high cost of living issues.

Priority of Uncertainties

Uncertainties about the future can eat away at the happiness. Not knowing all the outcomes and if the outcomes are known, not knowing the results can cause stress and anxiety. If I were to rank the uncertainties in the order of severity to me, here is what I came up with:

• Severity High
  • Income Uncertainty
  • Health Uncertainty
• Severity Medium
  • Family relationships Uncertainty
• Severity Low
  • Social Network Uncertainty

Importance of Income Certainty

Achieving Income Certainty has an impact on all the other uncertainties. Take the example of a Government employee who has the most certain income situation I can think of. The size of the income is less important than the certainty of it is. With income certainty, I see the following advantages:

• Improved health
  • When sustained income is assured, then long term decisions like housing, etc can be taken with less stress and anxiety.
  • Health uncertainty is reduced
• More time to work on getting healthy
  • I have found that more uncertainty leads to working longer and harder to try and make the outcomes more certain…whether it be work OR relationships or something else.
  • More working leads to missing out on gym time, eating unhealthy food, etc
  • Income certainty to me would mean more time work on improving my health.
  • Health uncertainty is reduced
• More time to spend with family and friends
  • When working longer and harder to overcome income uncertainty, time with family and friends is usually a casualty. When sustained income is assured, spending time with family and friends is is much easier.
  • I once went to a baseball game on a Thursday afternoon as part of a team outing from work and I found the train station overflowing with families. There was no standing room even in the station! I then realized that I had not gone to a baseball game in years and the station was packed on Thursday…a full blown working day!!
  • One person I met on that station many years ago was a post office worker. I saw a lot of happiness and joy in that man and he was the one who taught me the difference between the size of an income (small in his case) and the certainty of that income (high in his case).
  • Family relationships uncertainty and Social network uncertainty is reduced.

Conclusion

In the last two decades of my life, the uncertainty that has grown the most around me in Income Uncertainty. I used to hear about this topic rarely in social events…now it has reached me and my inner most circle of friends and families. I have seen family and friends go through it…and I have seen what devastation it can cause in life…divorces, bankruptcies, three kids and 2 adults in a 2 bedroom apartment, depression, etc etc

With so much income uncertainty, is it any surprise at the wave of populist movements sweeping across the entire developed world? With this background, is it any surprise that FIRE has taken hold in our society and across the world.

Life is meant to be enjoyed. Life with complete certainty is most probably boring. Uncertainties in life are supposed to be indicate exciting new possibilities….new places to visit, new people to meet, new adventures to experience. But, is all of this possible without Income Certainty? Does it take a certain kind of personality to live with Uncertainties but no income certainty?

I am so glad that I discovered FIRE and thanks to the education and support of the FIRE community, I am on my way towards income certainty 🙂