Had I watched this video at any point before I was 27, it would have completely altered the course of my life. Today, we are talking about preventative insurance by way of consultant. So, let’s define what insurance is. Insurance is something that protects against possible damaging effects of something, and that is, per Cambridge dictionary, of course, that is a general definition. When most of us hear the word insurance, we think of home, auto, and health insurance. But conventional means of insurance are reactionary. They take effect after the bad thing has happened. So, with home insurance, this is after damage has occurred to our home. With auto insurance, this is after a wreck has taken place. With health insurance, this is after we are sick or after we are hurt. And so, with this reactionary insurance, we can’t undo the bad thing that has happened. we also incur the transactional cost of trying to resolve the matter. There may also be legal proceedings. Of course, our time is used throughout the entire process, and we are likely to be insufficiently compensated for our loss.
But the reason why I introduce first, reactionary insurance. The traditional way we think of insurance is to contrast it with preventative insurance and not just limit ourselves to thinking about the traditional categories of home, auto, and health, but to open up insurance to our entire life’s activities and our entire life experience. So, when I talk about preventative insurance, I’m asking you, what about general life activities? And what I’m telling you is, this can apply to anything of significant consequence. So, on the board with me, I have some examples. Whether or not to go to college, deciding which college to go to, entering into a business partnership, the relationships we’re involved with, the line of work we choose, buying a car, entering into business deals, buying a home, the various activities that we’re involved in, anything of significant consequence. We want to prevent bad things from happening. And if bad things do happen, we want to limit the degree to which they happen. And to do so, we can hire a consultant.
And so when I say consultant, this isn’t a coach, this isn’t a mentor, this isn’t a counselor. This is just a consultant. There’s no subscription. There’s no ongoing interaction beyond what you want. It is just, you are renting 1 hour of time from somebody that can help you with your specific situation. Now, with the advancement in artificial intelligence, AI very well may be able to help you with your specific situation. But what’s important to note is that AI’s answers are largely only as good as the prompt you enter. Also, you are going to get sanitized information, just like there is a very large gap between the information, you read in an article you find on Google and the information that you hear when talking to someone on the street. there is going to be a very big gap with AI’s information and that which you would get from talking to a consultant. I also have on here book. This can refer to books, YouTube videos, articles, et cetera. Of course, those can be very helpful, but they take time to extract that information and that knowledge. And also, it’s not particular to our circumstance.
So when we hire a consultant, we have someone who can talk to us directly and apply their information and knowledge directly to our specific circumstance. So what would you want to look for in a consultant? Well, experience in this situation is paramount, and it doesn’t need to be lofty experience. And when I say lofty experience, what I’m really referring to is we don’t need to see credentials. You don’t have to be a c level executive. You don’t have to be anything out of the ordinary. It can just be an employee who makes $20 an hour who can make all of the difference. It’s not the credentials, it’s not necessarily anything else other than that person has information that can help you. and then I also have expertise. So you want to make sure that in whatever you need help with, that person in some way has expertise that you can leverage. And I also have someone on the outside with nothing to gain. It may be a friend or family member, but usually not. It really depends on the situation. If it is a friend or family member, just make sure that they can help you. In certain, circumstances, they will actually work against you. Even though their intentions may be to help, because they have bias, their bias can lead to bad answers.
and so how can a consultant help you? Well, they can tell you what you don’t know. We know there is always something that we don’t know, and a consultant can immediately shore up that gap. A consultant can also be objective and non-attached. So when you have someone who is just an independent third party and doesn’t know you, they really don’t have any bias, and they don’t have any reason to tell you something that you want to hear. So that’s going to be really helpful in getting the real information that you need. And I have on here. A premium is worth it. So even if you have to pay someone $500, if it can save you years of disappointment or years of lingering effects, or hundreds of thousands of dollars, or just a few thousand dollars, it can immediately pay off. and it can also not only protect you against the downside, but you do stand to possibly gain. So you may actually experience a benefit above just protecting you against a bad thing from happening. You also have someone in your corner. So even if you have this detached third party who is completely independent, you’ve never met them before, they’re going to want to see you succeed because you have hired them. Just because you have this transactional relationship, they want their experience to pay off for you. when I’m saying that, I’m thinking of the example of, I had, my friend help me with, buying a car because he had had experience in buying multiple cars and negotiated really good deals. And I brought in. So he wasn’t detached, but he also, in this circumstance, his relationship to me had no bearing. He was in my corner and he wanted me to succeed.
So there are so many benefits to hiring a consultant. One is they are relatively low cost. Another is they can provide you assurance, so confidence in knowing that you are making the right decision, or at least, a decision that is more informed. they also provide a layer of insulation against a bad thing happening. there is what is called layer one and layer two thinking. With. I think it’s layer one, we are reactionary, and with layer two, we are waiting, and we are more logical because we are not reacting emotionally. And with the consultant, you have insulation. Not only do you have a third party, but you have expanded time so that you can better think about what your decision will be or make a better decision. it’s transactional in nature. So this doesn’t need to be an ongoing thing. It is just a one-time transaction. you can easily hire someone to be a consultant and have their ten years of experience distilled down into 1 hour specific to your situation. I can’t overstate how valuable that is. You will save time. As I mentioned before, there can be an asymmetry because you know your downside. Let’s say you pay someone $400 an hour. That is all you can lose, but your upside is all you stand to gain. So you’re not only protecting your downside, you have possible upside. It just depends on what you’re consulting on. But the point is that there is an asymmetry also. It’s at, ah, your option. You don’t have to follow their advice. You don’t have to think that they are right, but you do have a second opinion that is extremely valuable. You can even hire a second consultant so that, you can now even have a more informed decision that can provide you with an additional layer of insurance. It will also help you make an educated decision. And just one detail can make all of the difference. Let’s say you talk to someone for 60 minutes, and for 59 minutes, they only tell you what you already know. But in that last minute, they have that one detail that makes all of the difference. And this one detail can totally cover this cost of the hourly consultation. And again, this is specific to your situation, which is so, so valuable.
So last I have, there’s a home inspection. That’s an example. I have to say that this is one way in which I would use a consultant. And I’m thinking of my dad. My dad has literally built a home and knowing that even if I would get a home inspector, but I would still have my dad as a consultant to look over the work. And that is what I have next is consulting on the consultant. So maybe you already have an, advisor, maybe you have a mentor or a coach. You can have someone look at how they are advising you and tell you whether they are correct or whether they are directing you in the right way. Also, you can get someone with industry knowledge. And so when I’m saying this, I’m thinking of, when my aunt bought windows to have installed in her house, and then they brought the wrong windows and they couldn’t install them. And this was a tremendous expense and it had gone wrong. But had she talked to, reading reviews would have helped. But also, even if she had just talked to an employee of a competitor, just talking to that one person, she could have gained inside industry knowledge. So you have to remember, there is a lot of value just sitting right in front of you. that you may not realize. You could also get help with what car to buy. Let’s say you’re buying a car and you don’t know which car is the best one for your situation. Just think of how many YouTube channels have people that are breaking down these very detailed reviews of all of these different cars. These people could easily help you, find the exact right car for you. and then someone can also just point out red flags. Let’s say you’re dealing with someone and you want to vet them. And so you talk to a consultant and you tell them, here’s what I’m dealing with. Here’s how this person has acted. Here are the decisions they’ve made. Here’s what they’ve told me. Do you detect any red flags here? This can help with all types of relationship.
Going back to one thing I said, here, look for people who have experience, it doesn’t have to be in the way that you think. Just look at, imagine a Reddit forum. If you have a subreddit and you look at someone who is active in that subreddit, and they are dispensing a lot of good information, and you can tell they are knowledgeable, you could message that person or ask for consulting from that person, and that could make all of the difference. So again, it’s not always the people that are, holding themselves out as experts or consultants. Sometimes it’s just the person who has the information that you need. So of course, it’s always going to depend on your circumstance, what you are looking for, consulting for. But the point is that with a consultant, there is so much to gain, both in terms of limiting your downside and then possible exposure to upside. And the last thing I’ll leave you with is this. Just think about a time in your life where you made a bad decision and that went wrong, and then it had lingering effects or significant effects, and it was a bad experience. It may have been preventable. There are some times where you can think back and you can think, if I did have someone who I consulted with just for 1 hour, it could have prevented this whole thing. And that’s really the point here.