The Opportunity of the Economy
The media is full of stories about the global economic crisis. The point of most stories seems to be that the economy is going down in every country, and there’s nothing anyone can do to succeed. The truth of the matter is that when the economy is down and everybody’s running scared, it’s the easiest time to make a lot of money quickly.
How is this possible? Well, one simple way is to do the opposite of what everyone else is doing. Warren Buffett is buying stocks like crazy, and the market is down 40%. It’s true that the market may go down a lot more, but he doesn’t care because he doesn’t use his wealth to buy anything besides investments.
Another good example is the housing market. Living in Los Angeles, prices have more than doubled in the last five years. But now the market has come way down, it’s easy to buy a house for less than most people thought possible. You can buy a condo that was selling for several hundred thousand dollars just a few years ago for $100,000-$150,000 now. And as the market goes down it will become easier and easier to buy a house.
Another major benefit of this economy is interest rates. The Fed has pushed rates down to multi-decade lows. So that means anyone with good credit can buy a house at discount prices, and pay for it at a low interest rate over the next 10, 20 or 30 years. The financially savvy ones will pay it off in 10 years or less, or they will use the money that would have gone to paying off their house for wise investments.
The cliché says, each cloud has a silver lining. If you look, you can find the silver lining in any economy as well.
is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
