Musings: Dealing with risk

In my years as a financial planner the main issue was always risk. Not "investment risk" but life risk. Things like, "It's too expensive to live here in the Bay Area, but how can I take the risk to move elsewhere? How will I find a job? How will I find new friends?" or, "We want to buy a bigger house but the monthly costs will be much higher; will the extra financial burden hurt our relationship?" or, "Since I want my kid to go to the best college possible, I figure I'll just borrow the money from my 401k plan, and just hope I can get a job as a Walmart greeter once I've 'retired' ".

As I used to tell my clients, life IS risk - the only way to avoid risk is to be dead.

So now we live in Mexico. Thanks to the American "news" media, Americans have unthinkingly absorbed the line that the entire country of Mexico is unsafe due to the presence of drug cartels. Oh really? Let's try to think this through a bit, shall we?

Mexico is a large country - it is as large as the U.K., France, Germany, Italy, and Spain combined - with 31 states plus the D.F. (their version of D.C.). As we all know, the murder rate is not uniform throughout all the states in the U.S., nor all the cities in the U.S. There are plenty of people who wouldn't consider going to Oakland or Detroit because of all the "news" stories about crime there, but I know people in both those cities who live peaceable, happy lives without being worried about their personal safety. I dare say that wherever you live, dear reader, you know of an area near you where you would feel less than secure.

So, if we then admit that it is NOT appropriate to reject an entire nation based on generalized statistics, how can we know whether a specific place in Mexico is risky? One key observation (if you're into reading statistical data) is that the high murder rates you hear about in Mexico are specific to one group of people: those involved with drug cartels. You are actually much less likely to be in danger as an extranjero (non-Mexican) in Mexico than you are to be hit by lightning, or win the California lottery, or be physically assaulted almost anywhere in the U.S. If the drug cartel executions weren't included in the murder rate, Mexico would be shown to be considerably safer than the U.S. So unless you plan to buy drugs or hang out with drug dealers while you're in Mexico, you're not on the radar screen of those who are looking to off people.

Let's look, then at the considerable regional differences in the murder rate. As the map on the link shows, even taking drug cartels into account, most of Mexico has a lower-than-average murder rate. The states with very high murder rates are the ones struggling with a strong presence of the drug cartels. So how is this different from many areas of the US where there is a strong gang/mafia/cartel presence? (and don't be so naive as to think that the U.S. doesn't have these problems). Even in the Mexican states that look the worst on this map, an entire state doesn't bear the risk evenly - there are specific areas where the cartels operate. Not much different from living in the greater Los Angeles area where there are certain cities or neighborhoods where non-residents would do well to avoid. That doesn't mean that all of L.A. is given over to murderous gangs, nor is all of California, or all of the U.S.

The town I live in is small, about the same size as Fort Bragg, California which is near our family compound in the States. There are drug problems in both towns (where are there not?) but our town in Mexico is quite a bit safer than Fort Bragg, even without a police force that one can rely on. When our teen-age granddaughter came to stay with us earlier this year, my daughter-in-law asked if it was safe to let her walk around by herself during the day. I couldn't understand where that question came from until she said that she doesn't let our granddaughters walk around alone in Fort Bragg by themselves (and our granddaughter echoed that by saying that she doesn't feel safe walking by herself in Fort Bragg during the day).

Here in our town there are so many people without cars that day or night there are lots of people - often entire families - walking from one place to another. Also, people (in large part) live their lives outside, in the company of other people. This is common throughout Mexico, whose culture is much more oriented toward family and community relationships than the American culture. Wherever you are, whatever you're doing, you're in plain view of numerous people of good will all the time. In our town we have an added protection - most of the people who live here are from families who have been here for generations, and everyone knows everyone else. Not much can be done in secret or anonymously around here - if you're in the Mexican part of town (it's a different thing where the gringos congregate).

SOOO...how much risk is there for Americans in Mexico, either as visitors or as residents? If you aren't looking for the adrenaline rush that comes from doing stupid things in dangerous places (say, trying to buy drugs in a bar in Tijuana) you're in less "danger" than if you were going to wander around Orlando after seeing Disneyland. You're in less danger than you would be as a tourist in New Orleans. You're in less danger than you are (statistically speaking) if you live in Houston. Oh, and by the way, La Paz, which is the capital and largest city in our state of Baja California Sur, is considered to be one of the safest cities in North America....by the U.S. State Department!

PLEASE try to remember that the "news" media doesn't exist to give its viewers/hearers objective information - not even NPR does that. All media have at their core the need to have enough readers/viewers/hearers to justify their existence, and the only way that they can get that is by focusing on the sensational. As beloved Pope Francis recently said, "a single tree falling makes a sound, but a whole forest growing doesn't". Here's a last link that might put this subject into perspective.

This is a photo of two things that are at the heart of Mexican society: the church (that's our neighborhood chapel in the photo) and having fun outside together, this time at a neighborhood street fair.