The economy is in the doldrums. We’re in a “lost decade.” The latest jobs report is terrible. The investment you have will never see the same returns again. You need to invest in gold to have your savings survive. No, wait, silver. No, wait, natural gas.
There’s always an economic bogeyman out there. There’s always some sort of “magic” fix that will keep you safe from the bogeyman.
It’s just like the monster in our closet when we were children. It preys on our fear of the unknown. It lies in wait until we’re unprepared. We surround ourselves with blankets and stuffed animals and pillows. And then…
Just like the bogeyman when we were children, the economic bogeyman of the moment isn’t real.
A person who works hard, spends significantly less than he or she earns, and invests the rest in both a diversity of investments – stocks, cash, real estate – along with investments in their life – education, skills, a home, a strong social network, debt freedom – have everything they need to protect themselves from virtually any economic bogeyman.
If you’re not protected in that state, then no one is protected and the situation is far beyond what you or anyone else is able to control. Worrying about that event is akin to worrying about an asteroid hitting the earth. It’s essentially a waste of your time.
The nice thing? The preparations you would make to protect yourself against the economic bogeyman are the same preparations you’d make to live a lasting and stable life.
Here’s the truth: the people telling you about the economic bogeyman and the magic solution to protecting yourself against it are salesmen. They’re drawing upon whatever negative news they can find to make you afraid and convince you to invest or spend your money in a different way.
As with any broken clock, they’re right every once in a while and when they are, they go into full self-promotion mode, writing books and appearing on every talk show that would have them. They’re talked about as if they are great prognosticators of the economy.
Then something else happens in the economy, something they didn’t predict, and they’re left behind in the dust. Think about the people who were making outrageous “Dow 36,000” predictions a decade and a half ago. Think about the people who predicted total economic collapse half a decade ago. These people vanish like dust in the wind.
The closet door opened and there was no economic bogeyman in there. Just a bunch of economic dirty laundry to clean up.
Never, ever invest based on fear. Instead, base your investments on hope. Invest and live as though you’re wanting to protect and insure a lifetime of good fortune for you and your family instead of giving into the latest economic bogeyman. If things completely fall apart, you’ll still have the things most important to you. If you spend your time running from the bogeyman, you’ll do little but help a salesman line his pockets with a nice commission.