5 Things I Learned from the Government Shutdown

Dear Readers, 

I was musing on the recent government activities (or lack thereof) and thought I would share a few things that popped into my head regarding current events. It's important to learn from your mistakes, but you can often learn just as much from watching someone else mess up...So here's some takeaways we can all put into practice, thanks to the people in Washington D.C. 

1) Be Dependable, Pay Your Debts:

Obviously, defaulting on our debts as a nation would be catastrophic. But the general awareness of this fact leads me to think it won't happen. From a personal standpoint, keeping your debt level manageable is so vital that they created a credit bureau just to help creditors keep track of it. We love our toys so much that in the past we bought first and figured out how to pay for them second. I'm not sure this is the case as much these days (see #3, below), but it's still a good idea to take a look at your debt and try very hard to eliminate it or keep it low. I like to make sure I have enough in savings to cover anything I'm charging in full, should the need arise. Credit is a tool to be used appropriately to better your life. It's not a green light for a free-for-all spending spree. Likewise, if you borrowed money from a friend or relative, make it a priority to clear that debt. This is not a big conglomerate we're talking about, this is someone you're going to see this coming weekend. Friends are more important than money, and that is usually understood by both sides, so there's wiggle room and patience involved. Your buddy doesn't want to remind you to pay-up, don't give him (or any bill collector, if possible) the need to.

2) Plan Ahead for a Rainy Day: 

Mr. Cuban is right, "Cash is king." Think about how much better you'd feel with a substantial cash savings in the bank. Would you stress over challenges your company had to face? Economic slowdowns? Client issues? Problems must be dealt with head-on, but when the unthinkable comes along and hits everyone, the folks with a cushion to land on will be less concerned about the bumps in the road.

3) This Isn't a Trend:

Enough people have already figured out #1, above, but it seems like the financial analysts are still holding onto the old ways...Gone are the days of spending like crazy. This is a new economy, and people aren't "holding onto their money" or refusing to spend. They are just being smarter. They are buying more of what they need and less of what they don't. They are reading The Millionaire Next Door and other guides to financial prowess. They are not putting as much faith in the possibility of a liquidity event, and starting to settle in for the long haul. Perhaps the powers that be should pay attention - this may no longer be a consumer driven economy. Quality still matters.

4) It Will Get Better: 

Buffet has faith in the strength of the U.S. economy and I have to agree. This bizarre melting pot we all call home is still the best bet for creative thought and progress. I laugh when I see the crazy, short-term swings in the market. If you want to ride the tide of emotion and play the short game, you’re playing with fire. And the fire will only get hotter as rapid upheaval becomes more and more standard. 

5) Watch Out:

Without trying to sound unpatriotic or alarmist, my thoughts on the current congress are that they do not always have our best interest at heart and need major reform in order to be relevant. The classic, bad parenting principles of Do as I say, Not as I do used to work out OK for them, but with the explosion of information-sharing the web has provided, it's clear that people won't stand for it much longer. The only way to protect yourself is to take the power back. Become informed. Watch your leaders. Learn more, develop alternate income streams and stay prepared. We joke about Zombie outbreaks, and maybe even stock up to hedge against natural disasters and pandemics, but there's a bigger threat right here at home; the slow but steady disintegration of collaborative leadership. If we're going to make it through this, we're going to have to re-learn how to work together. 

That's my two cents...whether you came to the same conclusions or got other valuable life lessons from what you're witnessing, I wish you the best of luck in navigating this ever-changing world. Just don't let the events slip by without taking the opportunity to review your financial position, life-plan, goals and progress. Maybe talk it over with your kids, family members or friends. You never know what you might learn. There's a lesson in everything. Talk to you soon, 

Professor Betterment