Oct 23rd, 2008
Even in a Downturn, Not Everyone Does Horribly
Yes, the economy is a fiasco. Yes, the stock market has been in bear market mode. And yes, the job market is tight. People are uptight and I hear tons about financial distress everywhere. I’d be lying to you if I said that my portfolio was looking great.
Yet things are not horrible, at least not for me. I still have no credit card debt; I still have a nicely established emergency fund; my paychecks are coming in on time; my blog is earning a little money; my spending is managed pretty well. In fact, I’m going to earn more money in 2008 than I ever have.
The point is that even in a downturn, not everyone does horribly. If you have planned and executed well, you’re more likely to do well. Yes, it’s possible that your employer will unexpectedly collapse (anyone remember when Lehman Brothers was a secure place to work?), but it’s also possible you’ll have many other opportunities lined up or multiple streams of income–a subject that we really need to talk about here but haven’t–going on.
Yes, luck has something to do with it, no question, but to some extent you make your own luck. While there’s no question some of the economic slowdown has affected my finances–I can see that whenever I log into my Vanguard, Firstrade, or Sharebuilder accounts–due to my having taken care of my debts, achieved pretty secure employment, and having multiple streams of income (including this blog), in some ways, 2008 will be my best financial year ever.
Great points. If you position yourself to do well by making good decisions when times are great, you’ll be in much better shape to weather the inevitable storms.