How to get Through This Mess
Written by Paul on September 30, 2008.
I suspect that most people have been watching the “Financial Crisis” that has been circling throughout the media. The truth is there are some major problems in the financial markets and they have the potential to effect other markets. The hype in all this is that this will be as bad as the Great Depression. I just don’t see that happening. It will be more like a normal recession. Something we haven’t had in a while but the government decided to get involved in the 90’s and cause one. We can place blame all over the place but the real question we should be asking ourselves is, “how do I survive economic downturns?”
The key to surviving any economic situation, short of the complete disolution of society, is to get your personal finances in order. First, get out of debt. This may take some time and it means not only living within our means but bellow our means. I don’t worry about my wife or I loosing our jobs because we could make it (if we had to) on one salary. We could make it because our only debt is our house. We have so few real expenses that I could live off very very little. Think about if you had no car payments, credit card payments or any other type of payments except for you housing. How easy would life be? If I had to I could cut off my cable and internet, take my cell phone plan down to nothing, and wear clothes around the house during the winter (ok the last one may be taking it a little too far). The point is we can cut our expenses to such a small amount that in the worst situations a job at McDonald’s could get us through. This is where I dream everyone could be.
The second key is to save up three to six months of expenses so that if you do lose a job you have a bunch of time to find another one or atleast find a stream of income to keep you afloat. Once you have those two key elements you really do not worry about what is going on with the economy.
As far as money in the stock market goes, if you are atleast five years from retirement, you will be fine leaving it in. In fact I am buying right now because the price of mutual funds have gone down. This means when it goes back up I have gotten it all on sale. And you know I like a bargain.
If you need help, there are people out there that specialize in helping people with their personal finances. The most practical that I have seen is my good friend Joseph Sangl. Joe has helped thousands of people over the last two years and has one of the easiest to understand systems for getting out of debt and staying that way. You can get all the info you need at Joe’s Website or you can purchse Joe’s Book on Amazon.com.
