“What’s that noise?”
“Not sure, heard it over Dallas but then it went silent again.” Taylor and co-pilot Billy Short where headed to Flagstaff Arizona, 257 passengers on board and a plane full of fuel.
An inconvenient noise became an in-flight emergency.
“(Master Warning Chime) We have an in-flight emergency – need clearance to land – direct nearest airport,” Taylor radioed ahead to traffic controllers.
Short looked up at Taylor, and even with his experience, fear was creeping into his eyes. He didn’t want to tell him.
“We’ve lost both engines” Short said.
“Make your heading two eight nine,” the controller instructed, “Do you copy?”
“We have lost both engines. Not going to make the airport!” “Notify the flight attendants to prepare the passengers, we are going in.”
Saddlebags of sweat were clearly visible on Short’s uniform as he notified the flight attendant.
“Flight seven-seventy one, head two eight nine into Alburquerque International, do you copy?”
Taylor told flight control, “Our position is 70 miles east southeast of Alburquerque, prepare emergency vehicles.”
“Flight seven-seventy one, do you copy?” No response.
The lights came on, Taylor and Bill pushed out a sigh of relief, unbuckled their seat belts and stepped out of the flight simulator. Clearly stressed and uniforms sullied, they took a moment to reflect on what just happened.
Flight simulation must feel real to work which means simulating events and emotions we don’t particularly like. But it’s better to figure out our ability to withstand negative events before they become a reality.
Over the two decades, I have helped clients navigate some pretty stressful events. Two of my clients were pilots for Delta Airlines for 30 years. They had a retirement pension that would pay them for the rest of their lives. As long as Delta was solvent, they had no risk. We put them through the financial flight simulator and asked them how would they react if Delta filed bankruptcy? Nobody thought it would happen. But no matter how remote the possibility, the outcome was precise. It became clear in the simulation what had to be done. No debt and plenty of reserves. In 2005, Delta did file bankruptcy because of skyrocketing oil prices. It was a sad moment because they both lost their pensions. I remember seeing the letter they received in the mail informing them they had just received their last check. The financial catastrophe was outside of their control but because they imagined the impossible in advance, they were better prepared for the bitter reality.
Another client was a 40% owner of a company that was doing very well. On a Friday afternoon, they informed him that his services would no longer be needed and his income stopped immediately. He had a baby on the way, a mortgage and the company stopped paying dividends on the stock. The legality of the termination was questionable but who has the time to fight a battle for uncertain gain but certain costs. He did imagine this scenario and kept a significant cash reserve. He used the cash reserve to live for 3 years while he pursued a lawsuit against the company. It also allowed him to start a new company; he settled the case for a fair sum and he is doing better now than he was before.
We all have risks that could sink our ship. Dive into these risks. Make the simulation real and it will help you build strength in your financial life.