The Economy Is Doomed! Now What?


It seems as if everyone is worried about the economy going into a double-dip recession these days. Worry in and of itself can be very destructive, both to your mental state and to the economy overall. Besides pulling out your hair, causing acid reflux and other health problems, worry can actually become self-fulfilling prophecy and cause the very thing you are most afraid of.

A number of years ago when I read Dale Carnegie's book How to Stop Worrying and Start Living, one method he suggested was just to accept the worst case scenario and then move on with life from there.

So accept it: THE ECONOMY IS DOOMED! it's going to be 10 years of economic nightmare!

Now what?

For each individual the plan may be different, but let me make some suggestions.

Pay down debt. Clear off the balances off of your Visa (V) and Mastercard (MC). It is rarely good to pay high interest rates on money, and when everything recovers you are going to be happy if you are balance free.

Get some education. Is there a degree that you have always wanted, some night classes that you are putting off? Now is the time to fill your mind, learn new skills and expand your horizons. Being more educated can help you in both good times and bad, and it is rarely a wasted opportunity. Be sure to consider the starting pay of your chosen profession as there are some degrees that have a very poor return on investment. (That is why you can do double majors.) Maybe you can even do it online at someplace like Strayer (STRA) or Apollo (APOL).

Reconnect with old friends. There is probably a whole list of people who you have been too busy to call, have not written or kept in contact with. Call up old friends just to say hi. Go through your old rolodex or Google (GOOG) those you haven't heard from in a while, or get on Facebook and search the social network. It's always great to hear from an old friend, and you might provide just the lift they need to get through a tough time.

Take a cooking class. Rather than go out to eat with all your friends, cut back by cooking at home. Better yet, make it a social event, put an ethnic spin on it and see who can create the best-tasting, most cost-effective meal at home. Most of the world survives on much less than America's food budget and their food does not taste bad. The average Indian survives on about $1,000 U.S. dollars per year; they eat a lot of rice and vegetables, but use an impressive array of spices and multiple vegetable curries to appeal to the palette. With an economy that may be bad for years, having multiple easy, cheap, tasty and healthy home-cooked meals ideas ready to go could really help the grocery budget and be fun.

Balance your stock portfolio. Are you diversified properly? Are you set for both good times and bad? Do you have bellwether stocks like General Electric (GE) and Proctor & Gamble (PG)? Is there some energy like Exxon Mobil (XOM) or Chevron (CVX) and technology like Microsoft (MSFT) and HP (HPQ)? From dividends to growth, make sure you are diversified.

Make a plan for good times. As much as preparation for bad times can be good, the hurricane does not hit every year. Make a plan on how to capitalize on events if they go better than expected. Write out your goals, review budgets and make plans for the future going out one, five and ten years or more.

I don't think all of American's problems are going to be solved by eating rice curry, although it is a great meal. If everyone in America would just quit worrying about bad times, tighten the belt while working for and investing in the future, the economy could turn itself around very quickly. Some people may decide to pursue a new hobby, begin volunteering or even start a new business, but once you have accepted the worse and start taking part in a plan for the future, things seem so much better!

America is a strong, vibrant, flexible and creative country that has overcome much worse in the past. Americans are honest, hard-working, flexible, resourceful and out-of-the box thinkers. We are competitive, independent and responsible for many of the great innovations of the past several hundred years. From harnessing electricity and inventing the light bulb to creating the assemble line and landing on the moon, it is Americans that have led the world. From the personal computer and iPads to the latest drug research, Americans need to stand up and take credit -- and then get back to work.

Paying down your credit card debt, educating yourself for the future or reconnecting with old friends over dinner are things you are unlikely to regret. And before you know it, you may be just too busy to worry about the economy because you are involved with the next big thing.

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Last updated: February 10, 2012: 11:04 AM

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