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My Parents’ Neighbors’ House Caught Fire: A Financial Cautionary Tale

My parents’ neighbors’ house caught fire last week. My mom smelled smoke as she worked in the kitchen. My dad looked out the window and saw flames coming out the window.

Not good.

These neighbors are older (75 or 80) and not in great health. The fire had clearly been burning for a few minutes already.

My dad ran across the street while calling 911.

Editor’s note: this fact is under review. My dad claims he “flew across the road in his superhero cape.”

As he arrived, the matriarch neighbor got to the front door from the inside. But then she stopped. She couldn’t take the step down onto the porch without assistance. Her husband stood behind her. Smoke poured out over her head.

Fearing flashover (see below – specifically what happens in just 60 seconds between 2:00 and 3:00), my parents stood ~15 feet outside and beckoned her to take that step. But she was gripped by fear and confusion.

Time dilation is well-documented during an adrenaline rush. My mom said it felt like forever as they pleaded with the neighbor to leave the burning house. Plead. Refuse. Plead. Refuse. Plead. Refuse.

Finally, enough adrenaline (and heat, I’d bet) pushed the neighbor to take that step down onto the porch, and a few more steps towards the handicap ramp. From there, my parents darted up and grabbed her, helping her out into the lawn. The patriarch then stumbled out of the smoky doorway under his own power.

The neighbors suffered some burns. But they were alive.

After a few more agonizing minutes (or hours?!) the sirens came from the distance. Firefighters, police, and ambulances all rolled in. First-aid was administered and the fire was quickly quenched. The first response time was 8 minutes—not bad for rural America.

Quick aside: shout-out to volunteer firefighters.

Most of you think of fire departments as well-funded, full-time institutions.

But many rural areas have volunteer-only fire departments. The volunteers carry radio scanners as they go about their daily lives. And when a call comes, they drop what they’re doing and respond. About 30 different people responded to this fire, some coming from as far as 20 miles away. That’s dedication.

This is a true story about a real fire.

But my financial mind can’t help but see powerful money lessons.

Lesson #1: Money in the Closet

First, an applicable lesson.

There’s a reason my dad got to the front door before the neighbors did.

They delayed leaving so they could retrieve cash stored in the back of the house. I’m not a fire safety expert. But according to actual experts, one of the top fire safety rules is:

If a fire occurs in your home, GET OUT, STAY OUT and CALL FOR HELP. Never go back inside for anything or anyone.

An unburned person without money can recover. A lump of charcoal with $1000 cannot.

But there’s more to this lesson, like peeling back an onion.

Because some of you are thinking, “I have $100K in my 401(k) and $10K in a bank. I don’t care if $500 burns up in a fire!”

You’re in a good spot. But I’d bet these neighbors have no 401(k), no bank account, and only the $500. You and I cannot comprehend their desire to save that cash.

A fireproof safe costs money. These neighbors don’t have money. To make matters worse, I doubt they have homeowners’ insurance (which typically covers small cash losses). Their distrust of institutions (like banks) plays an obvious role as well.

These aren’t separate issues, but interrelated ones.

The positives in life create compound magic—good parents, good childhood, good schools, good university, good career, good spouse, good friends, good life.

And the negatives in life create compound tragedy. Ignorance, poverty, broken homes. These issues are interwoven and deep-seated. How can they possibly be fixed? I’m not sure. It’s a sad state of affairs.

Lesson #2: Smoke Detectors

Smoke detectors are a life-saving risk management tool.

Again, I’m not a fire expert. But the rest of the top four fire safety rules are:

Install smoke alarms on every level of your home, inside bedrooms and outside sleeping areas. 

Test smoke alarms every month. If they’re not working, change the batteries.

Talk with all family members about a fire escape plan and practice the plan twice a year.

The essence of risk management is that it almost always appears unnecessary. It’s a nuisance.

Why should I have smoke detectors? They’re annoying as hell when I accidentally burn toast and they cost me $5 in batteries every year…

My parents’ neighbors did not have smoke detectors. If this fire had started at night or in an unoccupied room, they’d likely be dead. (Remember that scary flashover video above?)

Risk and risk management are essential parts of investing and money management, too. In fact, I’ve written about “investing fire alarms” before on The Best Interest.

Emergency funds are risk management. An emergency fund feels wasteful (cash that loses ground to inflation) until suddenly you need it. In that moment, the waste magically transforms into your most vital money.

Diversification is risk management too. It’s not fun during a bull market. Why am I worried about risk when every stock is going up? But the value of risk management comes into focus during bear markets, just like these past 6 months.

Building risk management into your life will benefit you in the future. It’s too late to fix the past. You either had risk management that helped you these past 6 months, or you didn’t.

Lumps of charcoal, in other words, can’t buy smoke detectors. Plan for the downsides now, before it’s too late.

Lesson #3: Health

The Best Interest is about money. But I see money as a means, not an end. The true end is to live a happy, healthy, fruitful life. Money is a tool that helps along the way.

So I find something sad, scary, and cautionary about those neighbors’ inability to leave their own home.

Old age comes for us all. Physical deterioration is unavoidable. But I pray my body will always permit me to escape a burning building. And I hope these salads and 8-mile runs actually work as intended.

You only get one mind and one body. And it’s got to last a lifetime. But if you don’t take care of that mind and that body, they’ll be a wreck 40 years later.

Warren Buffett

Take care of your mind and your body.

Spray, Spray, Spray…

Time to quench this article.

Big shoutout to my parents for helping save two people’s lives. Shoutout to firefighters and emergency responders too.

And one more time, here are the four rules of fire safety. Review them for yourself and especially with your children:

  • Install smoke alarms on every level of your home, inside bedrooms and outside sleeping areas. 
  • Test smoke alarms every month. If they’re not working, change the batteries.
  • Talk with all family members about a fire escape plan and practice the plan twice a year.
  • If a fire occurs in your home, GET OUT, STAY OUT and CALL FOR HELP. Never go back inside for anything or anyone.

Stay safe, my friends.

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2 thoughts on “My Parents’ Neighbors’ House Caught Fire: A Financial Cautionary Tale”

  1. And one other thing: make sure you have insurance and it covers the *current* cost to rebuild your home. I’m always amazed at the retired people with paid-off homes who are too cheap to pay for homeowner’s insurance. That’s way more risk than I’m comfortable with.

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