Saturday, April 1, 2017

It is not panicking but embracing uncertainty that lays the foundation of our future wealth and prosperity


Humans are in many ways like herd animals and they feel safe in numbers when they follow fashionable concepts. This is even true when those concepts are wrong and may lead us humans over the cliff. We humans are conservative and fear change. Change of climate. Isn’t it ironic that forecasters of a warming climate warn of forest fires, storms and failed harvests; while those who predict an oncoming ice age, warn of droughts, forest fires, storms and failed harvests.

Sea level and climates have been changing since the dawn of this earth. So those who live on the coastal plain are always living with the dangers of changing sea level. It is this fear of change that makes mankind so easy to manipulate by those who feel they can tell us how we should live.  It is not only fear of climate change; it is fear of terrorism despite the fact that cars kill many more people every year than terrorists have over many decades. It is fear for our health that makes us panic and obey rules imposed by those who claim to know how we should live. It is fear for another big stock market crash like the one in 2008 that keeps us up at night. Fear for losses in the stock market although we all should know by now that we don’t lose with a stock market portfolio as long as we hold on during down turns rather than sell (often at the bottom).  It is the time spend being invested that ultimately determines our ever-increasing net worth.

Right now, the U.S. seems to be ground zero in a battle between those who want to tell mankind to how to live and those who want less government intervention. Yet, it doesn’t truly matter in the end, because all governments and associated bureaucracy have one thing in common:  the desire for power to govern others.  The more mankind counts on leadership from above, the more likely we will lose both our wealth by increased taxation (direct or indirect) and we will give up our privacy and freedom. Ultimately, we will turn into a blubbering mass of fear clinging to the manipulations of politicians and ‘private sector’ leaders who will love to take care of us from cradle to grave.  When you see how easily Goldman Sachs leaders become secretary of state or of treasury, maybe you realize that many of these leaders are only looking out for number one – themselves.   Wall Street is to make profits from YOUR savings NOT to build up assets that make you a financial adult (i.e. when you are independent of your boss and your job – formerly known as ‘retirement’).   We should take care of our own lives; be accountable to ourselves. Even if society could take care of you from cradle to grave – this is your life to live and the buck stops with you!

Who would look after your money better you or your broker or your financial advisor?  Will it be safer to invest your savings in a publicly traded company run by corporate rats and robotic senior managers rather than investing in yourself and in your own business? Not all business owners are millionaires but most millionaires are business owners.  So why then would you think that stock market investing is the best you can do with your savings?  Are you doubting your own competence that much?

We humans are so fearful and we follow our ‘leaders’ so anxiously because everyone does so and we don’t want to standout from the crowd. Yet we all claim to be ‘contrarian’ investors. In my experience, we lay the foundation of prosperity and success when we dare to go out on a limb. Typically, you only get going when you don’t feel comfy but on edge. Only when we’re ‘on edge’ do we dare to try things that may make us avoid real dangers and learn from new endeavors – many opportunities we didn’t knew existed just one or two years before.

Things happen in life. Maybe you lost your job. You think OMG how am I going to pay for my daily living? Well, the first thing that you will learn is that ‘bad things’ do happen even to you. If you haven’t build a bit of a cash reserves for ‘bad times’, you will make that mistake never again. You may find out that you got a decent severance pay and that you qualify for EI. Many people realize things aren’t that bad after all and ‘gosh I am so happy to be out of that terrible work environment’. Don’t run out in a panic signing up to the first new job that comes along. This is a fantastic opportunity to review your life: what you do love about it and what you hate? Relax, take a vacation to distance yourself from your situation. Have coffee with friends and past colleagues. This is when you may learn about the people in your life that you can really count on and you may be surprised who they are. You may realize how good or bad your reputation in your profession really is and work on improving it. Or you learn about new things you like much better than your previous job. You could start your own business – being your own boss. Our lifespan is ever increasing and chances are that you may have several completely different careers between which you can switch back-and-forth or are which you can do concurrently.  Example: be a plumber during the day and an angel investor at night. Most of us will be living easily past 80 years old and it may not be impossible for some of us to live far into our second century!  So the future is truly limitless and even if something goes wrong you probably have plenty of time to turn things completely around.  No life is often not easy but life’s challenges may give you perseverance and adaptability; you may realize what an awesome person you are and how many things you are capable of doing on your own.  This is probably also the attitude you need to remain active during your financial adult hood.  The longer you keep on doing challenging things the longer you may be able to stay active even well past your 80s. After all, if you are not active you may as well be dead!  This is how you build a truly fulfilling life.

The most dangerous thing in your life is ‘falling a-sleep at the wheel’; ending up trapped in a rut. That so-called ‘bad thing in your life’ is usually an opportunity – a new beginning. So embrace life; embrace change. Don’t fear life and don’t cling to leaders who only want to manipulate you for their own, often power hungry, purposes.  Don’t let them be in charge of your life, instead ‘choose yourself’.

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