It sure does look like the financial world is falling apart. Major financial institutions are going bankrupt, smaller banks are in danger of closing, government bailouts are taking place, and the words "recession" and "depression" on everyone's lips.
The immediate threat seems to be a serious tightening of credit, which would affect consumer spending. This in turn would hurt the US economy. At the same time, the problems in the US are affecting economies around the world.
So what's the good news? This financial crisis has been a long time in coming as regulations were eliminated or not enforced, and greed took over. Those out for the big bucks made risky investments, and the more they got away with, the more risk they took. Then it all started to collapse as securities backed by subprime mortgages went bad.
Here's the good news: I see the current situation as a major correction as the greed and corruption come to the surface, which will allow the system can start healing itself. The dysfunction goes very deep, so it could be a lengthy healing, but it will heal. And the system that emerges will be stronger--until greed and corruption take over once again. But that will be years in the future.
Should you be afraid? No. And you can minimize your fear if take steps to protect yourself.
* Do everything you can to reduce your debt and cut down on spending.
* Downsize if you have to in order to feel more secure.
* If you can't stop spending or you keep living on the edge, find out why you hold on to these habits.
* Think through all of your purchases and ask, "Do I really need this?"
* Keep making plans for a positive future and developing strategies for income building.
We are in the down side of a cycle, that WILL turn around in time. The people at the top don't want the whole system to collapse and will do what they can to save it. It's going to take a while, because the problem is global. This is a good time to find your place of peace in the midst of the chaos.
In the meantime, this is an opportunity for you to clean up your money mess and prepare for prosperity.
The above helpful post was by Joan Sotkin, money wizard at Prosperity Place. The first month of the six-month Build Your Money Muscles for Financial Strength & Security program has an audio, Overcoming Financial Fear, that can help you get yourself out of fear and into positive action.
**image of Hong Kong courtesy of Edwin Stemp as stored at www.sxc.hu