I'll confess, that now, as we are easily in the midst of a down economy (some would say we're coming out of it), it is easy to become somewhat down. For me, this has not been a simple matter of just putting my head down and becoming more of a hard worker. Instead, this has made me realize a few things. Perhaps you have had these observations as well, in which case this will be somewhat of a confirmation of your ideas.
First, this economy hurts more than just the people who have lost their jobs. In many ways, this down economy hurts the people who still have jobs in several ways. First, in families that are usually dual income homes, there may be a sole bread winner now. This adds to the stress for that individual where there is fear that there could be a job loss.
Second, in all situations, there are people who are still working at some companies where there have been layoffs etc. As a result, there is just as much work but fewer people to do it. In fact, due to hiring freezes etc, there are situations where there is simply not enough mobility within the company. People cannot be promoted, hired, and sometimes (for fear of not being able to replace the resource) fired. So, here we are with resources not being allocated correctly.
Third, there is simply less opportunity for investors. Very little is happening in terms of the velocity of money. Whereas a dollar went from your paycheck, then was spent and passed through something like 8-12 hands before it was sunk back into a bank account, now we're still seeing a serious decrease in economic activity as unemployment nears 9% nationally and those who are still working are saving.
All of this has me somewhat nervous. But given my timeframes, I am still investing in my 401k for retirement in nice diverse mutual funds. I look at what I expect to be slow, and perhaps even anemic returns over the next 12-36 months and I still feel ok about investing. I know that at some point, I will get paid off for being patience. I can see the wisdom of this especially given that I play poker...another place where you're paid to wait.
But even more than that, I am focusing on good places to spend my money. I am looking for bargains now for things that I need. I know that the inflation is going to come back; even gasoline has jumped a dime per gallon in the past week. So if you have projects that you're interested in taking on, I would start shopping for prices now. I don't expect to see much in the way of higher bank account interest rates as an incentive to save. And I do expect to see real destruction in terms of purchasing power.
But most of all, I have hope. I feel that I will learn from this some key lessons about self reliance and what I really need versus what I want. I think that most people like to say that they don't live an extravagant life or have many luxuries, but I think that this economy, and these times have shown that nearly all of us have something that is a luxury. Perhaps this will teach me to be even more grateful for what I have. Maybe as a country and a society we'll become more grateful as well. Here's hoping....
First, this economy hurts more than just the people who have lost their jobs. In many ways, this down economy hurts the people who still have jobs in several ways. First, in families that are usually dual income homes, there may be a sole bread winner now. This adds to the stress for that individual where there is fear that there could be a job loss.
Second, in all situations, there are people who are still working at some companies where there have been layoffs etc. As a result, there is just as much work but fewer people to do it. In fact, due to hiring freezes etc, there are situations where there is simply not enough mobility within the company. People cannot be promoted, hired, and sometimes (for fear of not being able to replace the resource) fired. So, here we are with resources not being allocated correctly.
Third, there is simply less opportunity for investors. Very little is happening in terms of the velocity of money. Whereas a dollar went from your paycheck, then was spent and passed through something like 8-12 hands before it was sunk back into a bank account, now we're still seeing a serious decrease in economic activity as unemployment nears 9% nationally and those who are still working are saving.
All of this has me somewhat nervous. But given my timeframes, I am still investing in my 401k for retirement in nice diverse mutual funds. I look at what I expect to be slow, and perhaps even anemic returns over the next 12-36 months and I still feel ok about investing. I know that at some point, I will get paid off for being patience. I can see the wisdom of this especially given that I play poker...another place where you're paid to wait.
But even more than that, I am focusing on good places to spend my money. I am looking for bargains now for things that I need. I know that the inflation is going to come back; even gasoline has jumped a dime per gallon in the past week. So if you have projects that you're interested in taking on, I would start shopping for prices now. I don't expect to see much in the way of higher bank account interest rates as an incentive to save. And I do expect to see real destruction in terms of purchasing power.
But most of all, I have hope. I feel that I will learn from this some key lessons about self reliance and what I really need versus what I want. I think that most people like to say that they don't live an extravagant life or have many luxuries, but I think that this economy, and these times have shown that nearly all of us have something that is a luxury. Perhaps this will teach me to be even more grateful for what I have. Maybe as a country and a society we'll become more grateful as well. Here's hoping....
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