Call it a correction. Call it right-sizing. Call it anything you want. Whatever you call it, good or bad, means absolutely nothing to me. I don’t care if the ‘stock market always comes back’ (yeah, in ten years or so) I’ve just seen too many people lose their life savings in the stock market to ever trust it myself. I’m more of a slow and steady investor type. I may not make a lot of money over my lifetime, but I certainly have no problem sleeping at night when the stock market takes a tumble.
And tumble it does. Yesterday the stock market went down around 823 points, a drop in investment values of about 3.15% Today, it looks like it’s going to be another negative stock market day. All due to rising interest rates and technology. When hasn’t a decline been faulted to technology stock? Such as the dot-com disaster of 2001? Some may consider this time a buying opportunity. Me? Rising interest rates mean this is the perfect time to be in cash and out of debt. This is no time to be taking out a loan and this is no time to be having revolving credit. Your borrowing rates are going up. If you can, seek out zero-interest credit cards and hold off on your borrowing needs (especially if your loans are tied to the Prime Rate)
Both DH and myself have been bombarded lately with credit offers. Heck, we’ve even gotten calls from local bank managers telling us we’ve been pre-approved for just about any borrowing vehicle there is. Read the fine print, people! Everything is tied to The Prime Rate, which is going up, up, up. Remember the lessons we all learned from 2008. If bad things can happen to us then, now is the perfect time to be extra careful. Sure, we’re all making money now and have trusted jobs and plentiful employment. Yeah? So? If anything, NOW is the time to be super careful and extra vigilant.
Stay strong and don’t borrow a dime. Buy less than what you can afford. Protect your cash and remind yourself: the good times do not last forever! If you’ve gotten the urge to go ‘bigger and better’, such as a bigger car, a larger home, a longer vacation, more creature comforts, better appliances, a more powerful computer or larger flat TV screen: don’t do it, don’t do it, don’t do it! Hold firm to your core values. Understand that our economy can change on a dime.
Here’s a perfect example that happened to DH and I just recently. DH wrapped up a very intense and difficult technology installment last month. The boss on hand wanted to thank Nick for his outstanding work (he got the project done under time and under budget) and told him he was sending him a bonus check. We estimated the check would be at least $1,000. I had some expenditures coming up that that $1,000 would have wiped out handsomely for us. So, DH and I made some adjustments and waited for the bonus check to cover our costs.
The keyword here is ‘waited‘. And waited we did. We waited. And we waited. And then after some embarrassing phone calls and needless confirmations, we waited some more. The end of this story is an easy one. DH never got the bonus check. There was no bonus check. It was just a figment of the boss man’s imagination. We don’t know what the reason was but the bottom line is DH didn’t get the bonus check. DH said his gut feeling told him that the company, in the long run, realized they just couldn’t afford it.
So, now, DH and I were ‘stuck’ with higher bills because we (stupidly) anticipated a larger cash influx. Wrong. Experience has taught us NOT to spend until the money was actually in our hands AND cleared the bank. Thankfully, we had cash to cover the extra bills and again we mentally resounded lessons learned.
Maybe the economy is doing better. And then again maybe, it’s just not.
DH and I were wiped out twice because of the stock market. Once in 1987 and again in 2001. Three times for us will never be the charm. While everyone else is bragging to us how much money they are making in the stock market, DH and I are keeping our lips tight and just slowly chugging along. We’re only making 4.21% on our money right now and that’s fine with us. It’s a helleva lot better than the .01% we were earning a few short years ago. The admin is blaming the recent stock market demise on rising interest rates. That means, to us, those rising rates might just be stopping for a while. If so, what will that do to the stock market then?
Most financial pundits agree right now that cash is very much the king.
And I wholeheartedly, agree.
Live well and prosper, my friend. Live well and prosper.