The Impact of the Unreality of the Highly Improbable ramped up over last weekend as events unfolded on Bloomberg through late on Sunday night, September 14.

Sleeping little, awake at 1am on Monday, seeing financial headlines three hours later, there was Merrill Lynch (merrily no more) - gone, Lehman bankrupt, and American International Group hanging by a thread. In a matter of hours, the market value equivalent of the Gross Domestic Product of several small countries vaporised.

In the morning commute, surreally, life in beautiful Bermuda, just as fine as ever - no clouds on the horizon, no worries, no awareness. It would take another three days before the future ramifications to us and our economy generated any comments.

Persistent as a storm surge, a sea change in our way of life is rolling ashore increasing in weight with every metre; will it be permanent? Starting with a six-sigma event last August, global market volatility has been ongoing. Investment professionals collectively had an anxious sense for some years that this time it was going to be different, hence the success of 'The Black Swan" by Nassim Taleb.

Starting in 2003, my co-columnist Roger and I have written often about preparing for contingencies - see archives listed below. We have both been roundly dismissed with comments; "You people with your doom and gloom, Bermuda just sails straight on through these crazy global events." Roger takes far more flak than I for writing about common sense. Secretly I think that he relishes it, but he also wins the popular vote, hands down! It matters not that we two sceptics (or downright cynics) have had credible first-hand living experiences of economic and social recession. What lessons did we learn and what do we know?

• Lesson One: The world does not revolve around Bermuda; in fact, we, as a country, are almost as easily replaceable, as say any other employee.

• Lesson Two: Everything we buy does not go up in value forever.

• Lesson Three: A job is not a Bermuda birthright.

• Lesson Three: We may have to work harder for the same income

• Lesson Four: We may not be able to afford everything we want.

• Lesson Five: We can survive collectively if we work together.

• Lesson Six: We believe in fiscal prudence as a sign of careful maturity in individuals and companies. Fiscal prudence must be a fiduciary standard of excellence in governments (those individuals) responsible for the social welfare of the country and its people.

Intelligent humans invented the Internet from which comes the message: no one, no individual, no company, no country is immune from major economic shifts. Material change used to take days, months, years, even centuries. Now, it can happen in a matter of hours. We may be about to experience life lessons of serious proportions, or in yet another streak of random luck, our economic situation remains moderate. No matter, we must heed this warning. Volatility in markets or in life, still means estimating probabilities of occurrences - planning for the what-ifs and your values-at-risk - is far better than sticking your head under your arm, swan-style.

With uncertainty in the economy and in life, no matter the origin, control of your financial plan is comforting. There is still time to get your finances in order - if you start now Where should you start? By figuring out where you are and playing the what-if game.

And certainly, not like this: Absolutely true conversation overheard on cell phone user in store. "Well, I told her that I am fed up with these hours. I have to make eight o'clock every morning. I told her that a job is from nine to five, none of this eight to six stuff. Who does she think she is! (Muffled response from phone end - probably, so what did you do)" I gave her my notice yesterday; I am tired of all this and am finishing up today. Then, I am getting on a plane and going on a nice long vacation."

Do not walk off your job. Always find a replacement first. You face an immediate loss of benefits, some of which you may never be able to replace: pension gaps, health insurance, life insurance, dental and eye coverage, restricted stock, bonuses. In an economy where good jobs may become harder to find, if your employer asks you to work longer hours to keep the business going, smile and say, yes, no problem. You think you have trouble balancing your own finances, just try managing a small business!

Review your sources of income. Salary, rent, interest on deposits, dividends, pension payments.

Expenses; park the spend, spend, spend mentality on the shelf. What are your expenses, can you eat less, consume less, shop from your closet, and save the difference?

Debt: Are your credit card, mortgage, vehicle payments within your budget?

Diversification. Have you spread out your investments so that you have no significant concentration in any one area beside the Bermuda obsession with real estate: currency, stocks, bonds, hedge funds. Work with a financial representative that you trust. One who returns your phone calls and provides objective information about your investment risks when you feel uncertain about the markets - that is their job.

The What-If Scenario? We are going to make some specific assumptions about the what-ifs in life. Assemble all your monthly financial data in the following way, using two columns.

• Add up all your current income (including rent if you get it), then decrease the total by 25 percent in the first column and 50 percent in the second column.

• Figure out your total expenses including debt payments (do not forget one-twelfth of annual stuff like land tax, house insurance). Then subtract that number from the reduced revenue in each column

• What does the end result look like? Is the bottom line positive or negative?

If you are struggling for any surplus with a 25 percent reduction in income, then plan now to find an additional source of revenue and reduce expenses. Work with these scenarios until you feel confident you can weather the storm.

Collective Community Support. And when you do have to shop, do not forget to patronize local retail stores. Remember, their profits, payroll taxes, and job positions are dependent on your purchase filters to maintain our collective lifestyle. We, and Government, are collectively poorer when a business fails. If the country revenue pot at the end of the rainbow is significantly depleted and our outside revenue sources decrease, we will all pay, one way or another.

For now, sit tight, focus on your family's financial security; stay on track with your job. Capital markets and business cycles are ever changing. You can feel secure knowing that you have planned for contingencies in your life. The rest is up to them!

Sources of additional articles at Royal Gazette archives:

• A Bermudian Couple's Financial Odyssey: July 8, 19, August 2 and 9, 2003.

• Job on the Line: October 3, 2003.

• Planning for Redundancy: March 12, 2005.

• Time to Plan for the Future: April 10, 2005.

• Inherent dangers to be found in concentrating your risk: September 8, 2007.

Martha Harris Myron CPA -NH1929, CFP® -67184 (US licenses) TEP - Society of Trust and Estate Practitioners. She is a Senior Wealth Manager at Argus Financial Ltd., specialising in comprehensive financial solutions and investment advisory services for individual private clients and their families, business owners, endowments and trusts. DirectLine: 294 5709 Confidential email can be directed to mmyron@argusfinancial.bm The article expresses the opinion of the author alone. Under no circumstances is the content of this article to be taken as specific individual investment advice, nor as a recommendation to buy/ sell any investment product. The Editor of The Royal Gazette has final right of approval over headlines, content, and length/brevity of article.