|
Over the last month
we've seen some relative growth in the U.S. market, but there is
danger in getting too comfortable. While it may not be fun to think
about or easy to accept, it's wise to realize that as far as the
economy is concerned, it's wintertime. It's a tough, cold and long
season -- but it will be a lot easier if you know what to expect and
can be prepared.
This is the advice Tony Robbins, who has worked as a personal adviser
to some of the world's top financial leaders, offers in a video
message he recorded last week encouraging viewers to be smart about
the financial decisions they make in the coming months and years.
"People get so seduced into wanting to make money when things are
going well, that they think they're going to go well forever ... so we
make stupid mistakes." says Robbins. "It's important to realize this
is a season change. This is winter."
The key? Anticipation. You have to know the road ahead. Robbins likens
it to playing a video game against a young kid. As any parent knows,
the kid will win every time! Why?
"They win for one reason. Not because they're faster; not because
they're stronger; not because they're quicker. It's because they've
played this game before. They have the power to anticipate instead of
react."
Statistics and logic suggest the economy will get worse before it gets
better, warns Robbins, citing several reasons:
7 Financial Red Flags to Consider:
Psychology. The economy is driven by consumer spending, and a big
factor is the psychological mood the nation. For example, on top of
the fact that we just went through two of the biggest bubble bursts in
history, right now the baby boom generation is entering the life stage
when people start saving. This is contributing to a huge halt in
spending and borrowing money.
Unemployment. The lower the economic
bracket, the higher the unemployment rate gets -- up to 33 percent in
low-income families. Across the board unemployment is at record
levels, and people are hanging on to their money.
Consumer Confidence. According to a
University of Michigan report, consumer sentiment is as low as it's
been since October 2008; the last time it was any lower was right
after 9/11. While the recent boost in spending may have helped
temporarily, it's not a long-term fix.
Demand for Credit. Despite government
stimulus the demand for credit is shrinking. Counter-intuitively, even
with unemployment up people aren't applying for loans. As a society
we're paying back more than we're borrowing.
Real Estate. Interest rates right now are
the lowest they've been in a century, yet no one's buying houses.
Banks are selling more homes than home builders.
Banks. If they can't make money through
loans, banks will find themselves in a tough spot. Currently
businesses are borrowing less, too, choosing instead to focus on
boosting efficiency and productivity.
The Fed. The Federal Reserve has lowered
interest rates by buying trillions of dollars' worth of
mortgage-backed securities. But despite historically low rates, people
are borrowing less.
"This is a season called winter and it doesn't last forever. Winter's
followed by spring. There will be another great set of opportunities,"
says Robbins. "It'll probably take longer than we want, but if you're
smart and don't let things stop you, you can see where these
opportunities are."
So what can you do?
4 Steps You Can Take to Weather the Economic
Storm
Anticipate. Instead of blind optimism,
accept the season we're in. Understand the overall trend so you know
how to react: If you try to plant seeds in winter, nothing will grow.
Decide to find a way to take advantage of the reality of the
situation.
Educate yourself. Educate yourself about
personal finance. There are many tools available to help you make
smart decisions, to protect your assets and your family.
Look to Role Models. Learn from people
who have been through similar situations before and achieved success
in tough markets. One such person is Sir John Templeton, an investment
pioneer whose foresight made him billions.
Cultivate an Attitude of Gratitude -- Not Fear.
Find a way to add more value than anyone else is adding. If you can
give more than you expect to receive, it'll put your own life into
perspective and make it more meaningful. Wealth is not just about
money -- it's psychological, spiritual, emotional and physical.
"This opportunity for us in winter to get closer to our family and
friends. It's a chance to change the quality of our lives for the
better," Robbins says. "And if you're smart, it's a chance to do well
financially as well
|
