Monday, October 06, 2008

What To Do Now

The current financial crisis is the reason you want to make as many mistakes as possible when you are young, and can learn from them so that you're prepared to deal with anything -- and especially the challenges of change. That is the virtue of having made fortunes, even if one has lost them also. The worst thing, is to have been successful all one's life in everything, so that when blue-chip investments go to ZERO, one can recover from them, or any other death-defying experience.

That's why I like the experience of John McCain for president, because he faced death every day for several years; one develops a resignation, realization and resilience of knowing one can come back from the edge of death -- rather than never experiencing that severity of challenge -- to know that one can recover and transcend that experience. When one risks their fear, all they can lose is their fear. That's very different from merely the challenge of academic tests, or learning to say what others want to hear, so they don't have to deal with reality.

That is the beauty and willingness to move somewhere else and start life all over again, because that is what it also means to be reborn into the new. Those who live their lives for a false sense of security, and the promises of security, eventually have to face the realization, that they are only promises and fantasies of reality.

Originally, retirement planning and provisions were about preventing extreme hardship at a very vulnerable stage of one's life. In recent times, people were convinced that they required at least $10 million so that they could take as many trips around the world each year and own as many houses in different parts of the world as their "entitlement" for having worked and gone to school in life.

And that scenario seemed to play out as long as real estate "always" went up -- but they don't tell you that for extended periods of time, real estate doesn't always go up, and in fact, most of the time, drifts down, and sometimes becomes illiquid, with brief, speculative runups that the promoters convince us are the rule.

But then the money runs out -- and many are left holding the bag -- looking for that next guy to buy at higher prices, endlessly. That is the current financial crisis -- that probably takes a while to work through.

The faster market that recovers, is the stock market, because it is never illiquid. One can always buy and sell at the current market price -- but there is always a market. That is the advantage of the stock market over every other market -- you can always sell, or buy; no waiting for customers. No muss, no fuss. It is easier to take gains, as well as losses.

As that market recovers, the real estate market will have more people who can afford to buy -- and that money is not being drained off into real estate speculation, and other alternative, tangible "investments," that people think are also “real” and therefore can never go down, much less disappear. But they all do.

Life is change -- and the greatest value in life, is the ability to adapt to those changes, rather than developing a mentality that seeks the security of no change, even if it is merely an illusion and delusion that if you vote for the right demagogue, nothing can ever go wrong again in life -- and that one can live peacefully forever after, with no sacrifices -- nothing but one’s own wishful-thinking.


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