Monday, 20th December 2010

How to combat a financial crisis

Written by George Traganidas Topics: Personal Finance, Wealth Building

A lot of people are confused on what to do in this difficult economic climate. People are losing their jobs, governments are raising taxes, goods are becoming more expensive, currencies are devalued, etc. This is not a nice picture and many people are feeling helpless in this doom and gloom.

Maybe this is not the best way to think, but you have to consider how all this affects you. Maybe the general economy is bad, maybe companies are not doing so well, but the real question is how are you doing? What does all this mean for you? What can you do to avoid the chaos and (to take it a step further) profit from all this? Do not think that this is totally selfish, it partially is. But looking after yourself, you can survive and then you can provide for the people that matter to you. You can provide to them in the form of money, but even better you can provide to them in the form of knowledge.

There are a lot of factors that you can not control in the economy. There are things that you can not affect and can not do anything about. But also, there are many things that you can do and affect and they can have a great impact on your life. Therefore, you need to focus on the things that you control and influence and act on them.

The best thing to do in this crisis is to educate yourself. Learn about what is going on. Learn why things are happening. Learn why governments and companies fail. Learn how people profit in these times. All this knowledge will help you to understand and also will point out the errors that have been done and hopefully you can avoid them. As a wise man once said, “All I want to know is where I am going to die so I will never go there”.

The second thing to do is to invest in yourself. Learn a new skill. Learn something that will make you more competitive than the rest of the guys in your field. You might have a job now or you might not, it does not matter because by learning a new skill you make yourself more valuable. And no one can take this value away from you.

Another thing to do is to track all your finances very carefully. Make a detailed account of how much money you earn each month (If you do not earn any, that is fine). Then calculate your expenses. See where your money is going every month. Examine your expenses in detail. Do you really need to spend money in all these items? Maybe you can do some trade offs in these difficult periods to help you go by.

The fact that everything around you is going from bad to worse should not affect you. You should take a hard look at yourself and take steps to improve your individual situation. Stop waiting from someone else to solve your problems. A lot of the steps you might take now might not pay dividend for a few years. Do not worry about it, just go ahead and act and then in a few years time you will be so glad that you acted.

Follow the practical way,
George Traganidas

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