Monday, March 2, 2009

I'm Not Panicking...Yet

If I was the type to panic (but I'm not--the whole world could be collapsing and I would be observing and then giving orders), now might be the time to begin. My "line in the sand" for grave concern, at least in my mind, was when the Dow falls into the 6,000 range which it did today for the first time in twelve years. What the news didn't say is that the Dow fell to 6,000 in 1997 but it fell from a high of 8,000 not the 14,000 it fell from beginning in late 2007. This is huge. Here's some of my thoughts on this crisis:
  • It does no good to panic. Panic makes you behave irrationally.
  • If you cannot change the situation then you need to roll with the punches. Sticking your head in the sand and being oblivious is just as bad as stressing and panicking over something that you cannot change.
  • I am going to continue to tithe. This is something I have always done and of any money I have, I will continue to do this, to me it is the right thing to do.
  • Having backpacked for extended periods of time and traveled all over the world with what I could carry in one bag, I know that what I really need to survive is actually very little. People who think they can't live without a huge home, two SUVs, shopping on credit, an X Box, or whatever other material possessions they have, really do have it worse off because they don't have the mental flexibility to accept and go with change.
  • I'm not using credit. Ever again. I am old enough to see how credit creates an illusion that is totally out of sync with reality. I have made enough mistakes with credit that I never want to go back there.
  • I will continue to volunteer and donate to good causes.
  • Constricting your use of money seems to constrict the flow of money to you as well. So I continue to spend (in a reasonable manner) and give.
  • Over the past maybe year and a half, we have gone from eating out once a day to a couple of times a month. And I really don't miss it.
  • I still buy things we need. I bought a new backpack last weekend (of course it was on the clearance rack) but I determine ahead of time if it is something I need or just something to buy out of boredom or because we "deserve" it. You know if you need to treat yourself or you are shopping because you are bored, sad, or depressed, that it probably isn't something you NEED.
  • I will continue to buy food to rotate into my emergency food supply. Having a year's supply of food on hand is sometimes better than money in the bank.
  • We are doing a thorough cleaning/reorganizing of the house as soon as the weather gets warmer. The reason for this is because we have lots of stuff and we don't need two, three, or ten of one item. Minimalism is good. Then we will have a huge garage sale.
  • Our ultimate goal is to sell our oversized house that we hardly use (more than half basically goes unused unless we have guests) and buy a small (I'm thinking 800 square foot or so) house as a "homebase" and then live in random places around the globe for most of the year (at least the cold part of the year).
  • Business is still good fortunately, however whereas before I would basically pick and choose the work I wanted to do, now I will take anything and everything as a hedge against the possible future of little to no work.
  • Skill development is still at the top of my list. Learning skills, improving skills, and devising ways to market these skills seem more useful to me than a large investment portfolio right now.

I am no economist but this is my take on the current financial situation. I'm guessing things will get worse but how much worse remains to be seen. The best way that I can think to prepare myself for this possibility is to be debt free, have some (but not excessive) savings because who is to say how much (or little) value our money will hold, have a wide range of marketable skills, look for interesting ways to keep the income flowing, continue to participate in our market economy, and move forward with my life instead of hiding in a bunker from things that may or may not happen.

1 comment:

  1. Pretty much you describe part of my life in your post.

    you almost left no room for comments since you covered all aspects.

    Great post