Five Worst Mistakes You Can Make in a Recession Economy
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Do you want to be like the most part of the population who fears that the doomsday will come soon or do you want to think forward and achieve your dreams? Read what the biggest mistakes are that you can make in a recession economy.
Being Afraid
Anyone is familiar with this face? That’s what we’ve all been seeing on Wall Street recently. Don’t be afraid. Instead of being afraid, be courageous. Courage pays over the long term. Don’t allow the economy collapse to stop you from achieving your goals. The important part: Do not let it stop you from achieving your financial dreams. Fear is the biggest obstacle to taking action. Don’t let it prevail.
Thinking Money Suddenly Disappeared
Where did all the money go anyway? Did they got stolen? Did anyone robbed us? Not quite. Money doesn’t go away, it just gets transfered from one entity to another. Your money are still here and you should know that. Don’t allow anyone to lie to you about this issue. And the biggest liar is, of course…(hint:it begins with ‘n’)
Watching the Freaking News!
I am very serious about this! STOP DOING THAT! When was the last time you heard some good news report from your news station? Seriously… Stop watching the news. The only thing you are going to get from them is more FEAR in your bones. This is the primary weapon of news stations around the world. The more fear they ignite in you, the bigger is the probability you’re going to come over and over and over again. That’s what they want, you watching and consuming then endlessly.
Listening to the Experts
All of them say different things. They all give different predictions. Will a prediction become true when an expert says so? No. Nobody can predicts the future. If you look backwards you’ll see that most of the predictions given by so-called ‘experts’ didn’t come true AT ALL. Think about it. Stop listening to them.
Seeing Yourself as a Victim and Complaining All the Time
The government, those bas**rds!!! They got all us to the place we are now! Does this kind of thinking helps? No. So, stop complaining. Instead, look on this as an OPPORTUNITY. Yes, you heard me right. Here’s one secret: When there’s a huge difficulty going on there’s also a huge opportunity emerging. Did you know that recession times are often the easiest to become a millionaire? The stocks go to very low price. From history we know that eventually those stocks will go up and by up I mean WAY up in the following years. Warren Buffet, the richest man in the world, knows this. That’s why he recently bought General Motors.
Implement one of the things I told you and you’ll become better. Implement all of them and you’ll become WAY better. God bless us all.
43 Comments
Hey…excellent article.
Thanks for the information. This looks like a good site, I’ll be sure to come back.
Your articles always give me some insight, Dave. Thank you for the great job you done.
I agree 100%. We should not complain but take ACTION.
Great article!!! Finally someone that makes sense and isn’t a stupid journalist. I especially hate when money is supposedly ‘wiped from the economy’ or ‘destroyed’. It’s still there! Money doesn’t vanish. And of course, the news is always negative, making it seem like the world is about to end. Things have probably hit rock bottom now and shares are very cheap, so it’s the perfect time to invest. This will also get the stock market moving again. Every time some hope comes along, it seems to be countered the next day with the value of everything plummeting.
Anyway, that was my monologue and again, great article. Unfortunately I can’t invest because I’m in school and have next to no money with no job and no time because exams are coming up. Damn.
Thank you for the comments Someguy I also agree that news is always negative and for a reason that is what keeps people attention. If news were positive I doubt anyone of us would watch TV. I know lots of sites and news stations that went bankrupt because their purpose was to produce positive news!
I agree with your points Dave.
I agree that watching TV is kind of addictive and we all need to STOP that addiction. For all of you who struggle to quit watching TV: DON’T GIVE UP!
Astounding information.
Thanks Dave about the useful article.
I am already making the first mistake
Thanks.
I recognize me already making some of these mistakes as Mike. Thanks for the reminder though…
I saw this referenced on http://www.SubliminalMessages.Com and I gotta tell you that I disagree with some of your points. For example, you say that the missing money didn’t really disappear, but instead, got transferred from one party to another. Not really true. In actuality, it really did disappear. It evaporates. When Google stock goes from 725 to 350, it didn’t transfer. No one “got” it. It just evaporated. Like steam. Poof. Gone.
Just stumbled here, and I have to point out something that bugged me – the title refers to things you shouldn’t do, so the first two points are essentially “stop being afraid” and “stop thinking money suddenly disappeared”, but then the other three all work out as double negatives, because of the titles of each segment – it implies that “stop watching the freaking news” is one of the five worst mistakes you can make, and so on.
Just had to say.
Actually, money does disappear. Putting money into banks creates a multiplier effect of the money supply. When people take money out of the banking system (and put it under the mattress or whatever) the money supply lessens. Take an economics class.
Jayarr soon this will be fixed. Thanks for pointing out.
Recession Sam my point wasn’t to take the case to such analysis but to proove one obvious point. You see, most people think that we will soon RUN AWAY FROM MONEY. The truth is, money will ALWAYS be here as long as we live in a system and society like capitalism.
Thank you for the remark I will try and fix this so it fits in the article.
Regards,
Dave
Excellent article. Listening to the so-called experts can rob us of our peace of mind. And you’re right, all their predictions never hit the mark.
Hey can you check out some of my articles and pictures their URL’s are:
http://www.picable.com/Art/Photography/Dangerous-Hummer.299339
http://www.picable.com/Art/Digital-Art/Bert-the-Soldier.299829
http://www.notecook.com/Bread/Mays-Date-Loaf.299855
http://www.socyberty.com/History/The-Battle-of-Fort-Sumter.299859
http://www.socyberty.com/History/Hippies-in-the-1960s.300467
http://www.authspot.com/Poetry/The-Maths-Teacher.300475
Intelligent article and liked your use of the graphics.
Thank you for this article. A lot of people are listening to the TVs and going nuts from hearing everything. I don’t agree that we should completely stop listening to the news because it’s important to stay aware of current events, but I think we should stop believing every little thing we hear.
I cannot agree more with the “Stop Watching the news”. The more alarming, the more they enjoy it.
They rarely inform but alarm. This goes for Foxnews, CNN, USA Today.
Over following the news is a good way to raise the stress in your life.
“Stop watching the freaking news!”
Absolutely correct.
One more suggestion: Don’t open and read any mail that shows your huge stock losses. It is very depressing.
yeah right that is good suggestion
Are you kidding? While some of the points in this article are cogent, like the one telling you not to be fearful, the whole article is essentially a piece of propoganda, and a poorly written on at that.
“Money does not disappear”, but the value of assets, including stocks and currency, goes up and down. I have less assets today than I did a year ago, whether it is the value of the dollar in my pocket or the stock in my portfolio.
“Don’t listen to the experts”, expert advice is used in every facet of our lives, from the plumber who advises us that our pipes are leaking and need to be fixed to the doctor who tells us we are sick. None of these experts are right 100% of the time. In fact, no one is right 100% of the time whether they are an expert in some area or just your average person trying to get by. Information is a tool. Learn how to obtain it, question it and use it.
“Stop watching the news”, because being ignorant of a situation means it will automatically get better? Knowing that the current financial crisis is international and not just limited to the U.S. is valuable information. Again, information is a tool.
“Stop seeing yourself as a victim and stop complaining”, because the current financial crisis just happened, it’s no one’s fault? The government deregulated the financial industry so there was less oversight. The financial institutions made bad decisions resulting in the complete loss of value in their companies. Company executives are still walking away from this mess with millions in their pockets. Sure, they may have lost their stock options (boo hoo), but they still get majorly compensated for running their companies into the ground.
There are victims in this situation. While I don’t think you should be the kind of victim that just sits around and whines, I do think that if you’ve lost a major portion of your retirement savings due to this situation, you should be writing your congressmen and letting them know you expect them to act as quickly and effectively as possible to help keep the economy as healty as possible, and you expect those who committed fraud (like the AIG executives), to be held accountable and to get more than a slap on the hand for their actions.
The economy runs in cycles, naturally expanding and contracting. The timing of the current financial crisis fairly well matches the normal historic economic cycles, but the severity has been increased by the stupidity and greed of those who made bad decisions. This includes the government in failing to provide the proper oversight to our country’s financial structure, company executives who invested in low-quality investements, such as sub-prime mortgages, and who issued the record number of sub-prime mortgages in the first place, and to those individuals who bought the B.S. that an adjustable rate mortgage and a 0-5% down payment on a house that was beyond their means was a good idea just because some bank or mortgage company would give them the mortgage on those terms. Things are always better 5 years down the road, aren’t they? Well, it’s now 5 year’s down many peoples roads and they are essentially screwed.
And for those of you who don’t believe in “big” government, how much government intervention do you think it’s taken and is going to take to just try to keep this situation from getting so bad we have another depression? How many billions of dollars need to pumped into the economy via bailouts to keep us going and where is that money coming from?
I agree, don’t panic, but don’t sit back as if there is nothing you can do about what has happened and will happen. Keep informed and keep involved at the legislative level.
You are mistaken – Obama does not begin with ‘n’.
Stop watching the news,are you serious? I guess you must have read the local newspaper or you would not have had the information to write this article.
I agree.
Absolutely correct about the news – the media is that which is used to control us (as religion was in centuries gone by!). Entertaining and while you had your tongue occasionally in your cheek, I somehow get the feeling that some of your readers didn’t quite get that!
I agree with pretty much everything, but the last bit. It’s kinda half right. IF you buy low stocks, it does have a chance of shooting back up when this is over. Likewise, it has the chance of failing completely and going out of business, wherein you lose all that money you invested. During a recession, invest wisely, look for things that have a good chance of coming back up.
Stop complaining, are you kidding? As a matter of fact, the one single thing you should be doing is questioning and complaining about social and economic decisions that are happening around you. If its one thing we’re learning it’s that we’re all connected. It’s not until people are held accountable for the decisions they make in the long term, will real positive social and economic change happen.
I fixed the mistakes some of you pointed. I pretty mush agree to some people points like R.J. Evans and Marcus.
I also understand some of you might felt little offended by some of the recommendations like: STOP WATCHING THE TV. The average American watches 5 hours TV so…I guess many will act defensive when they will read this (as I can see, it is already happening in the comments and in SU reviews).
For those of you that liked the article, I’m glad you did.
Simple truths
For those of you taking this advice and not watching the news, it may be helpful (in case you accidentally see some news) to realize the news is actually optimistic – besides being liars.
They surmise “the bottom” of the market may be here every time there’s a tick upward. They are also quick to give out advice that is absolutely useless to the fully 80% of the population. (Any sentence you hear where they start out with “If you make $100K annually…” is addressing less than 20% of American citizens.)
Not to be the (latest) bearer of bad news, but you should indeed be worried. The entire basis for the U.S. free market economy has been usurped with selective socialism. If Americans had any sense of what that means, they’d be in the streets with pitchforks.
If you believe in the sovereign status of nations, you should be worried. When the U.S. uses tax dollars to cover the bad bets of the rich and pay off foreign banks, you should be worried. When making adjustments to the U.S. economy requires a global meeting of bankers, you should be worried. When dollars have no intrinsic value and hundreds of billions of them are thrust into the economy, you should be worried.
If you want to know how all this might affects you… get a certified appraisal on your home. Don’t get your buddy to do it, and don’t rely on real estate agents trying to get a listing. Just get a certified appraiser and tell him or her that you have to move out of state and need to know what your house is worth today.
I just did this, and thanks to two foreclosures in the neighborhood (one two doors down) my house is worth $7K less than I paid for it eight years ago. I thought I had factored in the current problems and I was still $25K too high in my guess-timate.
Over the eight years I’ve owned this house, I’ve never even been late on a payment – let alone behind. But look at that for a minute and you start to see the real screwing we’re getting…
Consider this: I borrowed $184K to buy this house. Over eight years I’ve paid $110K in payments. Now if I were to default today, the bank would “short sale” the place for $140K (just like they did the one two doors down). So let’s see $110K + $140K = $250K (even though they only loaned me $184K.)
Next, they would 1099 me for the $40K they “lost” in the short sale. That means I somehow have $40K in nonexistent income to pay taxes on while they get a $40K tax credit. SO now that’s $110K + $140K + $40K = $290K for the bank. So now you see why they really need the hundreds of billions in tax dollars, right?
This is a scam, and if Americans knew anything about how “money” really works they would see this in a heartbeat. So if you want to stay happy and ignore the facts, that’s fine, but don’t try to sell it to others that have legitimate reasons to be deeply concerned about their own well being and the state of their country.
Mike Levelchek, great post man. I may have been little extremistic in my “don’t watch the news” view. Maybe the key would be to limit your watching to the news…you don’t want to be exposed every possible day…you hear all the time the same things.
Maybe visiting CNN and browsing for 5 minutes would be better solution to stay up to date and keep your sanity.
Probably the suggestions err a little on the side of being too general, but in effect you’re right. Far too much fear-mongering going on. Meanwhile, the canny people sell quickly while the stocks are still worth a few dollars, and then buy back again when the stocks have dropped further, thus making themselves more money.
Money doesn’t actually vanish from the system, but value does. The problem is that a lot of the value wasn’t value in the first place; it was just numbers on paper. I can use the equity in my house to buy another house, but the equity isn’t actually real…
Part of thee problem is the banks have become greedy and are funding all sorts of loans that would never have been considered a couple of decades ago. And now they’re paying for it, and squealing. Unfortunately the governments are listening to the squealing and backing them up – with more unreal money. Fools’ gold all round.
Welcome to “new” world . We also thing that money put on safe banks , like “Bank of Nova Scotia” afiliate , in Argentina .
Tha bank just gone and lets us bankrupt , as many banks on argentina crisis on the 2001 . There was no money. The goverment take the bank and give us a bond to lucky been paid on 10 years.
In argentina case , the banks borrow money to goverment that never paid back, on your case your money was given to buy houses , that will never paid back.
Dave, I really LOVED this article, all the pictures, and the positive atmosphere that it projects! We really shouldn’t panic about the financial crisis.
Excellent article.
nr and Mike Levelcheck are correct. Dave Cool is not. Bankers have our country–and the world–by the balls. We the people need to take back our responsibility for governing ourselves. Get the lobbyists out of Washington. Let’s forget the party line for now; we can get back to that (if that’s your thing) when we’ve reestablished our access to our elected officials, and superseded that of enriched and empowered interests.
I’ve thoroughly enjoyed reading this article.
It is informative and encouraging.
nice work…