Hold Up Four Fingers
We just finished the third quarter, and like so many football players in the college and pro ranks, it's time for us to raise our hand and show four fingers - commemorating the beginning of the last quarter of the game (or in our case, the year).
The Dow lost 12% of its value in the third quarter of this year. We haven't seen a downdraft of that magnitude since Q1 2009. Metals (of which I own - silver and gold) got pounded. Those relying on fixed income assets (and thus the interest rate) watched interest rates continue to trickle down into astoundingly low levels....along with their interest payments. The U6 unemployment number - which tracks not only those looking for full time employment but also those who are underemployed - came in north of 16% for both July and August.
On the treadmill last night, I read a report written by Robert Wiedemer for the Financial Intelligence Report entitled, "Are You Prepared for Retirement?" In it, Wiedemer cites a Employee Benefit Research Institute study showing 56% of the workforce has less than $25,000 in total savings (excluding home equity or defined benefit pension plans). He then adds that relying on home equity and pension plans at retirement may be equally problematic.
In short, the global economy is hurting. Most of us are ill-prepared for a financial disaster, like losing a job or health care benefits, and certainly not prepared for a larger disruption in society.
Take a deep breath. This is not a time to panic. This is a time to prepare.
The stock market is falling. It's in the process of creating a great buying opportunity.
I don't have money in savings. It's a good time to cut back and save, while everyone else is, so you need not feel self-conscious about spending money you don't have.
I don't have a job. So you now have more flexibility in your next career choice and hometown than you may have had in years.
I'm worried about what (insert political party you don't like here) will do if they win the next election. We always say that, and yet neither party seems willing or able to make any major changes, save one or two, when in power.
I have a mortgage to pay. Refinance that thing already. We just closed on our refi this evening - 10 year fixed mortgage at 3.37%. This is a fantastic time to lower your payments and get your home paid off that much faster.
I know what you're thinking - it's easy for me to sit here and say all these things because I have a job, I have health care, I have some savings. Friends, I work in corporate America just like you do, and my workplace is slated for employee cuts like a lot of other businesses. There's no guarantee I'll be in my current position a few months from now. So when I say these things to you, I say it to reinforce the message in my own mind as well.
This is time to get lean, to dig in, to chart a new course. Living a prepared lifestyle doesn't mean we sit in our house, cleaning guns and eating MREs all day long. It means being prepared for uncertainty in every aspect of your life...and then living your life.
Hold up four fingers. It's our time to rally ourselves and our families.
I have a very interesting project in the works - one that I've wanted to do for a year now. I hope to launch it on Sunday, provided I can find the materials I need to do it. It should be really interesting to say the least. Stay tuned.
No scheduled update for Saturday; will be back on Sunday.