I adhere to my own advice, I don’t read or listen to financial news unless something so big occurred that it’s impossible to avoid.
In my lifetime I never expected the U.S. to have its credit rating downgraded. In case you didn’t hear, that’s exactly what happened Friday night.
What does this downgrade mean for members of Generation Y. Honestly, a lot of the same with one major difference.
Let’s start with the same:
- The easiest and best returning investment you’ll ever earn is by cutting your own spending. Even if the market continues to go down, you can still earn great returns by cutting personal spending. There’s always opportunity.
- Somehow and in some way the amount you pay in taxes will rise soon. We just don’t know how (income taxes, capital gains, state income, etc…). As with before the downgrade, look to invest tax-efficiently.
- Inflation will rise. However, we’ve known this for a while. This is what happens when you spend money to get out of debt and you have the ability to print more of it.
- You must invest in yourself. You must acquire skills that are valuable to the market place.
What Has Changed?
Fear. A lot more people are scared that it’s 2008 all over again. Most of our country just entered lockdown mode. And as long we’re in lock down mode, nobody will do anything but fixate on the threat.
Instead of doing meaningful work, they worry that they’re job will be lost or gossip to coworkers. Instead of starting a side business to diversify their income, something they can control, they’ll watch the news about things they can’t control.
When everyone is fixated on a threat, there’s more opportunity for those who are not.
Opportunity to learn a new skill, while everyone else worries about their job.
Opportunity to start a business, while everyone else watches the news. (If you’re interested in building a profitable online business in one year by doing one thing every day, I highly recommend The Empire Builder Kit (affiliate link).
Opportunity to earn a guaranteed 20% return, by cutting your personal spending.
Let everyone else worry. Now is the perfect time to get ahead.
{ 7 comments… read them below or add one }
Great advice RJ! Worrying does not accomplish ANYTHING! Also, when you live within your means, there is a lot less to worry about when the economy is struggling.
Thanks Natalie.
Good post. Many people are going to enter reactionary mode, which doesn’t work. We have to be proactive, and taking steps to start your own business and make more money is a great proactive step.
Thanks Shawn.
And it’s not just starting your own business. It’s more about controlling what you can control.
So the one major difference is that this downturn caused more fear? Seems to me fear has been the main control mechanism of those in control of our lives for at least a decade now, if not longer.
What I think this current downturn (because it hasn’t let up) translates to for gen y should be the recognition of America’s new standing in the world, no longer “#1″. This shift did not happen Friday but was a slow train coming. And while this stop will provide some the opportunity to get off, there’s still a few stops to go to get to where we’re headed.
Like you said it’d be wise to pick your departure in advance, or at the very least know where you’ll be when we get to the destination.
It’s not that ther’s been an absence of fear but a sudden spike.
I have seen more fear in people in the last few days, then before the downgrade. Just look at the crazy behavior of the markets.
I hope the US Govt is able to cut down on its debt and spending and the S&P does not dowsgrade US further as it has kept US on a negative outlook for the next 2 years after which it will review