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Lie: You Can Arrive At Financial Freedom Using A Rear View Mirror

April 5th, 2009

They say that history doesn’t repeat itself; but it does rhyme.

Financial wizards like to parade out statistics from the past and make predictions based on their analysis of this rear-view mirror information.

So far, I’ve heard our current economic trouble compared to:

  • The tech bubble burst of 1999-2000
  • The bear market of the 1970s
  • The Great Depression

… And just about every other economic downturn, from the South Sea bubble to the collapse of tulip bulb prices in Holland, in between.

By cherry-picking bits and pieces of data from those eras, they believe they can convince you that since they understand the patterns of the past, they can see the future. But, that logic is faulty.

While this data may “rhyme” with current conditions, it does not repeat exactly. Take the current conditions: Americans have far more options of saving money, investing money, and creating money than the people in the Depression did. A person today could create a business in seconds for pennies, just by connecting to the internet.

How will this play out?

Read more…

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