What If?
One life change either from the microcosm of our own life or a moment in the global world can affect our financial lives in drastic ways. I do not know what is going to happen to you or our financial world in the coming days or months. I do know that there is value in contemplating what changes are possible and if you are prepared for shifts in your world. So, my question this month is “What IF?”
What IF??
The stock market has been variable since the beginning of the year, the Fed has signaled rising interest rates.
The world is an unpredictable place. Our lives are full and the only thing we can count on is change. Despite this, all of us get complacent. We act as if things will never change, especially in our financial world. Life is easier that way. For Now.
So we leave our financial life on autopilot. In that way, we do not have to think about it. How we have handled our investments, cash flow and financial decision-making remain in place as we did last year and the year before that. One major shift in our lives or the greater economy at large and we are financially flustered. Just when we need stability most, we are thrown off balance.
What if there was going to be a global trade war or any type of war?
Would you stock up on: Food? Cash? Gold?
Would you move to a smaller apartment?
Sell something now to garner cash?
What if you knew you were going to lose your job?
Would you save more money?
Reduce Your Debt?
Refuse to take on another monthly commitment or debt?
Buy a good used car instead of new? Or pass on a vehicle all together?
What if the stock market was going to go down more?
Would you reallocate your investments?
Buy Treasury Bonds?
Keep some money in cash to buy stocks low?
Pay down your mortgage instead of investing more?
What if Interest rates were going up?
On this point, the Federal Reserve has indicated they will move to increase rates, how much is the question.
Pay off your variable rate home equity line?
Focus on keeping your credit cards at a zero balance?
Lock in your mortgage rate?
I don’t know if you are going to lose your job, or what the stock market will do for the rest of the year. I do know that most people do not get heads up by their employer before being laid off. I do know that before the 2007-2008 stock market crash, few major investment managers were calling for a decline. I do know that trying to read ahead to our future is virtually impossible.
I do know we can create our own solid financial footing so that downslides don’t affect us so long. Because we know for sure is change is inevitable, we can get ready. Being prepared for change is critical to sanity and stability during times of crisis.
Today perhaps some reflection on what will make whatever life has in store for you this year a bit less tumultuous. Then, take action.
Perspective is often what is needed in times of turbulence. We cannot control world events or the economy. Control what you can today. There is something you can do now that will improve your life later no matter what is in store for your world and our world. Preparation is what we need now so that we have the finances to ride out our future. Then, no matter what happens, rather than be react without thought, we will have time and cash to stand firm. Once we gain some perspective, we can take thoughtful action.
Take care of yourself!
The Serenity Prayer
Higher Power, Grant me the serenity
to accept the things I cannot change;
Courage to change the things I can;
and Wisdom to know the difference.