Now that the worst of the recession is behind us, what are we taking away from this experience that will benefit us in the future? Hopefully we have all learned lessons that will serve us well as we strive to re-stabilize, rebuild or continue to strengthen our financial lives and security.
Following are a three specifics of the very expensive education we have all been given.
1.
Greed is stupid.
Sure, we live in a capitalistic world where financial profits and growth are logical outcomes of well managed and operated businesses.
But, unbridled avarice is all around bad.
It breeds a sense of superiority in people who become wealthy on the work, sacrifice and loss of others.
This sense of superiority in turn instills the same type of entitlement philosophy in people that we see in 4th and 5th generation welfare recipients.
Executives of major companies come to actually believe that they "deserve" millions and millions of dollars a year in compensation and bonuses, even while their shareholders are having their equities eroded and futures threatened.
This is simply wrong.
These executives deserve only to share in the profitability of the businesses they operate, not to build obscene personal wealth while their business in being bailed out by tax-payer dollars.
Our choice is to continue to feed this monster or to take our business and investments to the companies with more responsible leadership.
I already have and I hope you will too.
2.
Greed is not limited to the rich and powerful.
Consider the state of the real estate market.
Think of the financial devastation caused by the actions of people who were 100% convinced that it didn't matter how much a home cost, it would be worth more in a year than it is now.
They overpaid for properties, overleveraged their equities and overcame logical risk tolerance levels, all actions that had been promised to make them rich and all of which in the real world forced millions into bankruptcy, foreclosure and financial ruin.
These were "average" folks, but greed worked its poison into them just as effectively as it did the big ticket moguls.
3.
Security is more important that wealth.
Forget rich! It is a concept grossly misunderstood by most of us.
When we think carefully about our financial situations, we really don't want to be rich, we want to be secure! True security is in knowing that you will never need for anything.
And that takes far less than many people realize.
Security comes only to those who understand it.
Your first objective should be to recognize and understand that your security is not in your mutual fund or your bank account.
It comes instead for the majority of those who enjoy it in stable jobs, the payoff of their homes and consumer debt and the buildup of sufficient secure retirement assets to meet their every need.
If we learned only one this from this recession, let it be this: We are individually responsible to insure our personal financial security and cannot leave it in the hands of people who have proven over time to take it for themselves.
Look around and ask yourselves in your banker, insurance agent, investment councilor and other professionals are really working for you or for themselves.
If they are working for you, they should have helped you make decisions such that you have survived this recession quite well.
If you have taken a bath, it's time to get some new providers.
Here's hoping you take the time to find them.
Good luck.
Following are a three specifics of the very expensive education we have all been given.
1.
Greed is stupid.
Sure, we live in a capitalistic world where financial profits and growth are logical outcomes of well managed and operated businesses.
But, unbridled avarice is all around bad.
It breeds a sense of superiority in people who become wealthy on the work, sacrifice and loss of others.
This sense of superiority in turn instills the same type of entitlement philosophy in people that we see in 4th and 5th generation welfare recipients.
Executives of major companies come to actually believe that they "deserve" millions and millions of dollars a year in compensation and bonuses, even while their shareholders are having their equities eroded and futures threatened.
This is simply wrong.
These executives deserve only to share in the profitability of the businesses they operate, not to build obscene personal wealth while their business in being bailed out by tax-payer dollars.
Our choice is to continue to feed this monster or to take our business and investments to the companies with more responsible leadership.
I already have and I hope you will too.
2.
Greed is not limited to the rich and powerful.
Consider the state of the real estate market.
Think of the financial devastation caused by the actions of people who were 100% convinced that it didn't matter how much a home cost, it would be worth more in a year than it is now.
They overpaid for properties, overleveraged their equities and overcame logical risk tolerance levels, all actions that had been promised to make them rich and all of which in the real world forced millions into bankruptcy, foreclosure and financial ruin.
These were "average" folks, but greed worked its poison into them just as effectively as it did the big ticket moguls.
3.
Security is more important that wealth.
Forget rich! It is a concept grossly misunderstood by most of us.
When we think carefully about our financial situations, we really don't want to be rich, we want to be secure! True security is in knowing that you will never need for anything.
And that takes far less than many people realize.
Security comes only to those who understand it.
Your first objective should be to recognize and understand that your security is not in your mutual fund or your bank account.
It comes instead for the majority of those who enjoy it in stable jobs, the payoff of their homes and consumer debt and the buildup of sufficient secure retirement assets to meet their every need.
If we learned only one this from this recession, let it be this: We are individually responsible to insure our personal financial security and cannot leave it in the hands of people who have proven over time to take it for themselves.
Look around and ask yourselves in your banker, insurance agent, investment councilor and other professionals are really working for you or for themselves.
If they are working for you, they should have helped you make decisions such that you have survived this recession quite well.
If you have taken a bath, it's time to get some new providers.
Here's hoping you take the time to find them.
Good luck.
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