It’s odd, but I’m never afraid of the things I can’t influence. But I do fret over actions I take that might affect either my personal or financial safety.
Which is why I’m going to compare the current financial storm to a tornado.
We get tornadoes down here in North Central Texas, though they’ve been a bit rarer in the last few years, even as 90 degree temperatures have started to linger almost until October. (Don’t tell me global warming’s not affecting weather!) But a few years ago, you could almost count on having two or three tornado-spawning storms come through the Fort Worth-Dallas area each spring. A prediction by the local TV weatherman would have me checking online radar and here it would come—a four-hundred-mile-long band of storms, running usually north to south and coming at us from the southwest, with lots of angry red or purple on the computer screen. Back on the TV, the weathermen would start zeroing in on “hooks” on the radar. Then we’d hear about spotters reporting wall clouds, those dangling wedges of darkness that can drop and start twisting into the long black snake of a descending tornado.
I’ve had a tornado go within two hundred yards of my home. (And at the time, it was a mobile home, which made it that much more interesting. ) I’ve also, in my current home, more than once seen television path predictions that stated that a tornado on the ground was headed my way.
When it came to that point, I and my dogs would head to my main hallway closet: center of the house, protected on one side by two walls and the solid bulk of the water heater, on the other by twenty feet and three walls between us and any flying debris, the most dangerous part of a tornado. (A powerful tornado can drive 2 x 4s through three inches of solid concrete.) I’d check to make sure my portable radio and flashlight had fresh batteries, I’d fill up two gallon jugs with water, I’d check that my flashlight was at hand, and that I had a heavy blanket to pull over my head, then I’d sit down on the floor, dogs at my feet and read. ( I always take a book into the “tornado” closet with me, since these storms can last hours.) The house would shake, the windows would rattle, the wind would scream overhead and then….it would be over. Out of the closet and on with our lives.
Am I particularly courageous? Hardly. But I do know that fear and tears and screams will not turn a tornado. My job is to take what precautions I can, then ride it out.
The same holds true with the current financial crisis. We ordinary citizens can’t do much to influence the course of events…yes, I have called both my state senators to express my POV—but we can do something to help ourselves survive financially, should this thing roll over us.
First, don't panic. Take what both Washington and the press say with a grain of salt. The headline today was that the 700+ drop in the Dow Jones Industrial Average yesterday was “the largest in history.” In terms of points, true. But as a percent of the DJIA, no, not even close. (Update: I just checked and the DJIA has gone up more than 300 points.) And the DJIA itself only measures 30 stocks, a reasonable bell weather of the stock market’s health decades ago, but less important with the ever-increasing number of stocks and indices available now.
Second, realize that despite appearances, there are some smart, sensible people working very hard to solve this thing.
I’m not going to get political here except to say that the “failures” of those in our government to come to an agreement aren’t really failures until the people involved give up, and they’re far from that point. As long as a deal is still in the works, I think the credit markets will watch and wait, fluctuating a bit, but not crash-diving.
Third, if you’ve taken sensible precautions, your chances of riding this out without serious harm are reasonably good. If you live a bit below your means, if you have low debt, if you’ve accumulated a three to four month emergency fund in an FDIC account, enough to pay your bills and daily expenses for awhile, you’ve got the equivalent of the zone of protection that surrounds my hall closet.
No guarantees, or course, but then, nothing in life is guaranteed. I can die in a car crash tomorrow, but if I’ buy a reasonably safe car, use my seat belts and drive defensively, I’ve done what I can to better my odds. That’s all any of us can do, and for the vast majority of us, it will be enough.
So hunker down. Fear is one of the greatest enemies of sensible action.Try to ignore the screaming—not the screaming of the wind, but the screaming of the press and the pundits. Keep an eye on any investments you may have, but make decisions based on facts, not speculation.
Do what you can to keep yourself and your family financially safe. But don't lose sleep over factors over which you have no control.
Update: I just checked, and the DJIA is up over 400+. Hang on....the roller coaster ride is going to last awhile!
Which is why I’m going to compare the current financial storm to a tornado.
We get tornadoes down here in North Central Texas, though they’ve been a bit rarer in the last few years, even as 90 degree temperatures have started to linger almost until October. (Don’t tell me global warming’s not affecting weather!) But a few years ago, you could almost count on having two or three tornado-spawning storms come through the Fort Worth-Dallas area each spring. A prediction by the local TV weatherman would have me checking online radar and here it would come—a four-hundred-mile-long band of storms, running usually north to south and coming at us from the southwest, with lots of angry red or purple on the computer screen. Back on the TV, the weathermen would start zeroing in on “hooks” on the radar. Then we’d hear about spotters reporting wall clouds, those dangling wedges of darkness that can drop and start twisting into the long black snake of a descending tornado.
I’ve had a tornado go within two hundred yards of my home. (And at the time, it was a mobile home, which made it that much more interesting. ) I’ve also, in my current home, more than once seen television path predictions that stated that a tornado on the ground was headed my way.
When it came to that point, I and my dogs would head to my main hallway closet: center of the house, protected on one side by two walls and the solid bulk of the water heater, on the other by twenty feet and three walls between us and any flying debris, the most dangerous part of a tornado. (A powerful tornado can drive 2 x 4s through three inches of solid concrete.) I’d check to make sure my portable radio and flashlight had fresh batteries, I’d fill up two gallon jugs with water, I’d check that my flashlight was at hand, and that I had a heavy blanket to pull over my head, then I’d sit down on the floor, dogs at my feet and read. ( I always take a book into the “tornado” closet with me, since these storms can last hours.) The house would shake, the windows would rattle, the wind would scream overhead and then….it would be over. Out of the closet and on with our lives.
Am I particularly courageous? Hardly. But I do know that fear and tears and screams will not turn a tornado. My job is to take what precautions I can, then ride it out.
The same holds true with the current financial crisis. We ordinary citizens can’t do much to influence the course of events…yes, I have called both my state senators to express my POV—but we can do something to help ourselves survive financially, should this thing roll over us.
First, don't panic. Take what both Washington and the press say with a grain of salt. The headline today was that the 700+ drop in the Dow Jones Industrial Average yesterday was “the largest in history.” In terms of points, true. But as a percent of the DJIA, no, not even close. (Update: I just checked and the DJIA has gone up more than 300 points.) And the DJIA itself only measures 30 stocks, a reasonable bell weather of the stock market’s health decades ago, but less important with the ever-increasing number of stocks and indices available now.
Second, realize that despite appearances, there are some smart, sensible people working very hard to solve this thing.
I’m not going to get political here except to say that the “failures” of those in our government to come to an agreement aren’t really failures until the people involved give up, and they’re far from that point. As long as a deal is still in the works, I think the credit markets will watch and wait, fluctuating a bit, but not crash-diving.
Third, if you’ve taken sensible precautions, your chances of riding this out without serious harm are reasonably good. If you live a bit below your means, if you have low debt, if you’ve accumulated a three to four month emergency fund in an FDIC account, enough to pay your bills and daily expenses for awhile, you’ve got the equivalent of the zone of protection that surrounds my hall closet.
No guarantees, or course, but then, nothing in life is guaranteed. I can die in a car crash tomorrow, but if I’ buy a reasonably safe car, use my seat belts and drive defensively, I’ve done what I can to better my odds. That’s all any of us can do, and for the vast majority of us, it will be enough.
So hunker down. Fear is one of the greatest enemies of sensible action.Try to ignore the screaming—not the screaming of the wind, but the screaming of the press and the pundits. Keep an eye on any investments you may have, but make decisions based on facts, not speculation.
Do what you can to keep yourself and your family financially safe. But don't lose sleep over factors over which you have no control.
Update: I just checked, and the DJIA is up over 400+. Hang on....the roller coaster ride is going to last awhile!
It is one heck of a roller coaster ride indeed. Kind of a noxious one that can make you sick on the ups and downs. I've tried turning off the tv, but find myself wanting to know the daily bank news and bailout info. How are you coping with the stress?
ReplyDeleteHaving four months living expenses in cash in a insured account is a help...so is a new box of graham crackers every few days.
ReplyDeletePlus, I'm 57 years old...I've seen--and survived--a crisis or two.
(Now, if Quartermain, my faithful old van, will just continue his march towards 250,000 miles... without major hiccups...we are currently at 248,126.)
Do what you can. Cut what expenses you can and bank the savings. If you have one of those subprime mortgages, keep the payments current, even if you have to eat rice and beans, because once you miss a payment, penalties and fees start to kick in. Pay the minimum on your credit cards, but make those payments on time. Pay for other things with cash...and if you don't have the cash, don't make purchases. Hopefully, we'll get a resolution of this thing soon...if not, be prepared for a scaled down Christmas.
As I said, do what you can...then do your best not to worry about what you can't change or influence. That kind of worry will only lose you sleep.
By the way....I hate roller coasters. Not fear, motion sickness.
C. Sykes