What The Great Recession Has Changed
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Here’s the big lesson: nothing has changed.
The main misconception of what’s been termed (at least for now) the Great Recession is that the rules of personal finance have suddenly and inexplicably been changed.
This recession, though, isn’t an aberration in personal or macro financial laws, it’s the culmination of those rules. A contraction proves that the system works and smart money moves are still smart. Maybe even smarter.
We may have forgotten these lessons. We may have dismissed them. But they’re still relevant.
The rules of finance have not changed.
It’s not what the mainstream and even elements of the financial media want you to believe. The whole world has turned upside down, they scream. What’s down is up. What’s right is wrong. What’s left is right. Only they can help you navigate through this mess.
The mess, in fact, is not a mess. The recession is the result of negligence and needless risk. When people borrow too much, credit turns bad. When people stop innovating, production suffers. There’s absolutely nothing strange about that.
The rules of wealth creation are still the same.
Creating wealth is still possible. It’s not what you’ll see on the television news, though. This hasn’t changed: when you create value, you create wealth.
Rules of spending are the same.
Spending money and using credit intelligently have not changed either. Spending less than you make is a high probability method of surviving bad economies.
The rules of employment have not changed.
After 25 years of low unemployment, we’ve been lulled into the belief that holding a job is a sure ticket to financial security. It isn’t. A job will not guarantee you security. People who are more versatile in their approach to employment and who have residual streams of income stand to survive this downturn–and others–than those who think they’re guaranteed a job forever.
In the future, this recession will not likely change much. The drum beat of technological and economical advancement will go on.
What do you think?
Has this economy been changed? Has your personal financial outlook changed?
Related posts:
- Five Ways That Recessions Are Personal Financial Spinach
- How Your Thoughts Affect Debt
- We Failed… Great!
- Three Assets You Must Protect During A Recession
- Recession Over… Or Just Beginning?
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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.
