Certain businesses and media outlets often instil in us, the public, a state of panic and fear in an attempt to control our perception of the risk associated with daily life to further their own agendas. For example, how many times have you been offered expensive insurance from your car rental company who cites all possible known risks under the sun, when you know full well that there are hundreds of cheaper alternatives out there?
There are numerous ways in which companies steer their marketing and advertising to give customers a sense of fear with the objective of selling them more expensive items. In this post I will highlight a few of the risks which businesses tell us we are in danger of. Hopefully after bringing these to light, you will be able to avoid falling into their trap of spending more money when you don’t necessarily need to. The key objective here is for you not to simply accept the common perception of how risky things are, but instead to do a bit of research yourself to challenge these views and to add clarity to any purchasing decision that you make.
The following points are some of the perceptions that we the public have been led to believe:
- Small, fuel-efficient cars are more dangerous so to be safe on the road you need an SUV.
- Riding bicycles to and from work is incredibly dangerous and could lead to crippling or fatal injuries.
- DIY with heavy tools can cause one to chop off a finger or puncture an eyeball.
- Selecting more cost-effective health insurance puts you at a far greater risk of not being covered for the more important conditions and illnesses that can arise.
- Holding 75% of your savings within investments puts them at great risk considering the general volatility within investments these days.
Taking the above into consideration, you get the general idea of why our society has an obsession with safety and danger. Pick up any newspaper or watch the news and it doesn’t take a genius to figure out that these mediums help perpetuate the fear used to sell insurance or related physical goods. Even if a story is a simple, humble piece of news, you can guarantee these guys will add some element of fear to make it stand out.
From a company's perspective, the average person can generally be categorised in one of two ways. If you live more along the lines of ignoring this fear you are considered a radical-risk taker supposedly, whilst everyone else is much more sensible. I'm sure that many of these so called "radical-risk takers" have simply figured out that life is generally safe enough in westernised countries that they can ignore the safety-obsessive nature of modern society.
Don’t take it from me though, let's look at some stats to see if what I'm suggesting is actually credible. Going back to my example from above of small cars being unsafe, if we instead look at the positives they are known for being more fuel-efficient, easier to park and requiring far lower amounts of materials to do exactly the same job as a big car. The common belief as far as their safety is concerned, however, is “If you crash into a big car, the big car wins. Period.”.
To begin putting things into perspective though, I was interested in the results from the 2014 Annual Road Safety Report (conducted by the International Traffic Safety Data and Analysis Group). It shows that between 2012 and 2013, Australian road fatalities actually dropped by 10%. Over a wider spread period, the change from 2000 to 2012 shows that road fatalities decreased by an even greater margin of 28.5% across Australia. This isn't surprising though considering a number of factors that would have come into play during this time including improvements to roads and associated infrastructure, as well as the safety engineering in cars themselves.
If you then look at the road fatalities per 100,000 population and per billion vehicle KM’s travelled within Australia, you'll see that in 1970 it was 49.3 while in 2012 it was just 5.6. Bearing this in mind, it’s also worth looking into the fatality rates by vehicle type:
|Total Occupant Fatality Rate per 100,000 registered vehicles by type and size|
The measurement does slightly differ because the graph represents fatalities per 100,000 vehicles instead of per mile. However, we can still derive a clear picture from these figures. A subcompact car is roughly 16.85 / 12.34 = 37% more dangerous compared to a full size SUV, where as midsize cars are safer than SUV’s of any type, large or small.
Therefore if a SUV owner drove an average of 7,000 miles (11,265 KM) per year then they will have a 7,000 / 100,000,000 chance of killing themselves in any given year. This basically implies they have a 99.993% chance of surviving per year.
If an individual were to drive for an average of 60 years within their base life expectancy would be 99.58% (or 0.99993 to the power of 60). To make this information more relatable, driving causes an expected 0.42% reduction in a person’s life expectancy, or reduces their driving life by 4 months over a 60 year period.
Taking into account that a subcompact car is 37% more dangerous, based on the figures above this would mean another 1.5 months should be deducted from the individual's expected life.
Therefore, this leads to the question of whether it really is worth driving a fuel guzzling SUV compared to a fuel-efficient subcompact car for an extra 1.5 months of life over a 60-year driving lifespan?
Or you can look at it another way: driving 7,000 miles (11,265 KM) every year for 60 years adds up to a total of 420,000 miles (675,924 KM). Let's say for arguments sake that the big SUV averages 14MPG (16.81L / 100KM), it would have to consume 30,000 gallons (113,400 litres) of fuel for that period, which at todays price would cost $131,544. A subcompact car, on the other hand, consuming an average of 30MPG (7.84L / 100KM) will only burn about half of that amount of fuel, meaning the associated cost is only $65,772.
Maintaining a smaller car over your driving lifespan is considerably cheaper too, but I wont delve into maintenance or insurance costs because it would be to difficult to compare since cars vary so much. Yet, based on fuel alone, how long would you have to work to save an additional $65,772 after taxes and after paying for all of your expenses? Probably a minimum of 1 year if you earn good money, otherwise its more like 2-4 years for the average salary earner.
To put it bluntly, the ‘safer’ SUV driver is having to work an additional 2-4 years so that they can potentially extend their life by a statistical interpretation of just 1.5 months. Makes me rethink the whole concept of an SUV's safety rethink.
It was certainly a long-winded way of explaining things, but hopefully helps us understand some of the other points mentioned initially. Going back to that list, riding a bike actually extends our lifespan due to increasing our health by between 20-70 times more than the associated dangers deduct from it. Plus, I doubt I need to explain how the money saving aspects of using your own energy compared to a gas guzzling vehicle (not to mention the regular maintenance requirements and associated taxes).
As far as investing money goes, doing so can help grow it faster than it would otherwise if simply kept in a savings account which doesn’t keep up with inflation.
And lastly, carpentry and DIY activities provide an immediate return on investment for an acceptably small amount of risk. Doing the work yourself saves money on handy men and the work could greatly improve the value of your house compared to the cost of the drill or saw you'd need to buy.
At the end of the day, these are just a couple of examples where the statistical data available to us all actually challenges the common perceptions in society of what's safe and low risk versus what's not. What I'm encouraging you to do, is to avoid simply accepting them the next time you're faced with a purchasing decision where risk/safety are major factors. Before you spend a cent, I recommend you run a quick Google search and find the relevant body or association who produces and maintains statistics on whichever area of the economy your purchasing decision is related to.
The other important thing is to make sure that you're getting figures from a source that isn't biased in anyway by the company who is trying to sell you the product/service. That way you can draw your own independent conclusions about whether paying more to avoid the perceived risk is worth it or not.