Current Financial Crisis Is Just Temporary

Despite what the doomsayers and Chicken Littles of the world would have us believe, our current financial crisis (if we can even call it that) is just temporary. Yes, the vultures are circling, but there will be no carcass for them to consume. All of this is merely a bump in the road and we will come out of it just fine – as we always have. The U.S. has had (and will continue to have) its ups and downs and this is just one of the downs.

At the end of the day, America will emerge once again as the great nation it has been more than 230 years, and still as the world's only remaining super power. Before you start believing those who are predicting some kind of cataclysmic conclusion to these events, please consider this: Those people are almost always … well … wrong! Another Great Depression, you say? I'll believe it when I see it.

How soon we forget. Things were much worse during the late 1970's and early 1980's. We had gas shortages, interest rates that were through the roof, and much higher unemployment and inflation than we have now. Yes, the housing and financial markets are not looking good right now, but they will make a comeback in due time – just like things did in the 1980's. And when they did, we all became proud Americans again.

We have gotten so spoiled! If things are so bad now, why are people still buying big-screen TVs and subscribing to expensive cable, satellite, Internet, land line, and cell phone packages? Some just want to complain and bellyache just because they have to tighten their belts a little. Still, though, there are many others who have lost their jobs, their homes, or even both. No one can blame them for worrying and losing sleep over the current state of financial affairs.

But I'm not going to panic. I'm going to leave my 401(k) dollars in the same stock funds I've had them in. In fact, I'm even planning to increase my contributions to take advantage of the cheap stocks that are now available. I can handle a temporary downturn. It's just a paper loss for now and I have 20 years until retirement – plenty of time for those losses to be recouped. And I if don't live until retirement, none of it will matter anyway.

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Comments on this article:

» left by jennifer cuddy (63 days 21 hours ago.)

invest in gold Terry..invest in gold

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» left by Michelle Mackin ^(4,008)
Michelle Mackin (63 days 18 hours ago.)

Hey! I remember the eighty's and you are absolutely right Terry. We came through that period and we will come through this one in due time.

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» left by Robert Melaccio, Sr. ^(6,428)
Robert Melaccio, Sr. (63 days ago.)

Terry I'm making a presumption here and if incorrect I will accept correction. Yet I believe you are making in the levels of what Obama calls "The Middle Class" based on what you explain as your business expertise. That is $95,000 and up.  If I have it correct as a Software Engineer you evidently have and are doing ok, suffering somewhat, but can do and  there is nothing wrong with any of that. You are entitled to that. Yes and you as I see by your writing you support much of what these politicians do and certainly you are entitled to your opinion and frankly at that same point in my life I held a similar one, until. Yet, Terry as someone who knows hardship, as you defined earlier, one wonders what your opinion would be if suddenly you were out of work? Like tomorrow and could not find a replacement job? It would seem a real possibilty you might after a time fall perhaps into that personally responsible, non credit worthy category?   I wonder why you percieve if even even raising that limit to $500,000 is good and you are protected? If things sour go try and get your money my friend. They will dole it out, fact, they can and fact they will. Also, there isn't enough money available to cover every account, impossible a facade, fact. The doors would close. Yes, my money is insured, wow. Tell that to AIG. The simple fact is if you are part of Middle America I agree there will be a recovery and you will make money again on the backs of all Americans and isn't that what really matters? You see Terry who will maintain these homes that are rotting away? Who has credit to buy them all? Who can afford to rent them? Terry where are the jobs? Yes you have yours, for now but what if? Think about that and I know your answer will be never happen. Yes, like my neighbor he too was a never happen man but he is long gone but his home is still there yes rotting away.

 

I know I was a little direct but aprpeciate your feedback as to why?

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» left by Terry Mitchell ^(2,881)
Terry Mitchell (62 days 23 hours ago.)

Robert, thanks for your honesty and your comments. I will attempt to honestly address your concerns.

 

First of all, even though I am a software engineer, my salary is more than $20,000 below what you are guessing it is. I wish I did make that much. :-)

 

Also, I do know what hardship is like, both financially and healthwise. I grew up in a very poor family. Sometimes we barely had enough food to eat -- even at Thanksgiving and Christmas. Sometimes I was thankful to get a small bowl of beans for dinner. I had asthma real bad when I was a teenager and came close to dying several times. I had pneumonia multiple times when I was younger. I had a collapsed lung in two consecutive months when I was 20. I had to walk to the hospital both times because I did not have a car or anyone to give me a ride. The doctor said most people in that condition would have to be brought in on a stretcher. I had stage 3 cancer 13 years ago and again last year. It was a different kind of cancer each time. Both incidences required months of chemotherapy. But, thank God, I'm cancer-free now.

 

And yes I do know what it is like to to lose a job. That happened to me shortly after 9/11 and then again in 2005. The later time I was out of work for six months but I was unscathed financially. Why? Because I planned ahead and saved for a rainy day. In fact, I now have enough in taxable savings so I could survive being out of work for as long as 5 years if I had to. I wouldn't want that to happen, but I would be prepared for it.

 

Don't try to tell me it is impossible for a middle class person to thrive in this economy. For the last eight years, my taxable savings have increased at least 15% a year, and that's not even counting my 401(k) and Roth IRA contributions. I pay off my credit cards completely every month and I have absolutely no debt other than my mortgage. 

 

If I can do it, other people can do it too. It just takes discipline and the will power to not try to keep up with the Joneses, buy everything that tickles your fancy, or get your kids the best this and the best that. I bought a house that cost less than half of what I could afford. I did this because I wanted some wiggle room in case of a setback -- while many others choose to throw caution to the wind because they thought times would always be good. I never put anything on my credit cards that I can’t pay off at the end of the month. Therefore, I've never paid a penny in credit card interest. I don’t waste my money on expensive vacations that are here today and gone tomorrow. I save up to pay cash for a car, furniture, and other big-ticket items instead of going in debt to get them.
 
We must learn to take charge of our own lives in this country, familiarize ourselves with the concept of personal responsibility, and quit blaming the government for every bad thing that happens to us. What has happened to our pioneer spirit? Are we becoming a nation of whiners? When we lose our homes because we signed up for a mortgage we ultimately couldn't afford, we have no one to blame but ourselves.

 

We need to stop the crying and complaining that we were beguiled by a predatory lender. We are not children. We are adults and it’s high time we started acting like it. We need to lose the spoiled, got-to-have-it-now attitude and step up to the plate. We have to acknowledge the fact that financial security is no one’s birthright – it must be earned. The buck stops with each of us – not the government or anything or anyone else.

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» left by jennifer cuddy (62 days 20 hours ago.)

Terry, that would make a great blog by itself! Good answers.

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» left by Terry Mitchell ^(2,881)
Terry Mitchell (62 days 13 hours ago.)

Thanks, Jennifer. That's a great compliment -- especially coming from you!

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» left by Anonymous (62 days 18 hours ago.)

Terry I think all of what you said was said excellently and yes you are correct with many of your points. I knew you would respond and respect that. I also know you didn't have an easy road and certainly you are not that middle class that they say has a salary of 95k. I also feel you are correct it can be done by individuals and you are a living proof. Yet what I am addressing is the the entire situation caused by this fixation with credit and this bailout. Now I myself went from "Credit Worthy" to non simply because I care. We pay for a car that when we purchased was under retail and is now 50% of the loan value. We have a home that when we re-mortgaged to help our son buy a home, was $150,000 more then the mortgage and is now worth $80,000 less then what we owe. Our three credit cards went from a 7.9% to 31.9% in two leaps and the monthly payment from less then $100 to over $200.00 and our friendly bankers could care less. Of course we were lumped into that "personally responsible" category even though I am a shut in takingc are of tow handicapped moms on SS and no pension. It was lost somewhere when the bank folded. My wife earns less then 30k gross and this is what we make due on. No help anywhere. No savings, all gone. So my gripe is why am I bailing out those that cause this destruction? Why am I interested in credit when just today, when I wanted to upgrade my car, my bank, who I did business with for 30 plus years said sorry your beacon score isn't good. Now it was over 7230 just a few years ago and now the pits. Debt to income shot, etc. So where is the credit for people like us?  What good is the tax break? I have no health care and how can I afford it even with their so called tax credit? What have they done about usury? Yes check the bible, usury. So I, like many do not care to get lumped into that non credit worthy stereotype and to hear about how the crisi is just temporay. SDorry terry no not for us and sadly thank God you have your job now and yes it will get better for YOU.  Now I could go Chapter 7 and wash it all and in a year have more credit then I need. I could hand them back that home or car and still get another. There is always someone to lend. So my complaint is not with average people like you it is with these  so called leaders and their works. It just isn';t there for families Terry, period and sadly that is a fact. making 60 k and over and maybe hurting, but try it with 20 or 25k or even 40k less and you know what it was like. Best wishes and thanks, I agree it makes a great article.

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» left by Terry Mitchell ^(2,881)
Terry Mitchell (62 days 13 hours ago.)

Obviously, your situation is understandable and, of course, I wasn't referring to people like yourself when talking about those who throw caution to the wind. Unfortunately, people like that are more likely to get help from the government than people like you -- who are in a bad situation through no fault of your own. I agree with you that it's a sad state of affairs.

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