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MAKING CENTS OUT OF THE NEWS
Blog #33
(August 27th, 2009)
WHAT A DIFFERENCE A DEFINITION MAKES!
By Tom McAllister, CFP®
Financial news from both from Wall Street and Washington, D.C. is more upbeat these days. At the same time, the effects of the long and very deep recession continue to make themselves felt in the form of layoffs, downsizing, mortgage delinquencies, bank failures, business closings, and bankruptcies. Nearly everyone has a friend, relative, or neighbor whose job everyone thought was secure but which turned out to be otherwise. In my weekly rounds of social and volunteer activities, I sense fear at every turn.
Not to make light of anyone’s troubles, I’d like to nevertheless suggest that fear and worry do not serve us well. Mark Twain’s statement “I have had a long life, full of many fears and worries, nearly all of which did not happen..” leads me to muse about the huge difference between fear and concern. Fear is enervating, which means it deprives us of force and strength. Concern is motivating, which means it impels us to action. Concern is better because it is proactive, whereas fear is reactive. A friend taught me many years ago: “Do something. Even if you are wrong, you will feel better! You can usually quickly correct your mistakes.”
When it comes to the current financial crisis, let’s assume that the personal financial situation for most, if not all, my blog readers and clients, (and, I dare say, for the majority of Americans), remains relatively stable. Job or retirement income continues to come in, perhaps in somewhat smaller amounts, and debts are at least manageable. To you I say ”If you are being flexible in your spending habits, I suspect you’re going to be just fine.” What I try to convey is that fear will prove neither necessary nor useful. Concern, on the other hand, may well be appropriate.
About what should we be concerned? We must take note of the danger of runaway inflation, for one. Since, as we learned, concern impels us to action, we must look to protect ourselves and our future well-being against erosion of our purchasing power. The threat $9 billion of deficit spending poses to the financial stability of our country over the coming decade is a valid cause for concern. I continue to be concerned, as well, about the impact of the U.S. negative balance of payments. But I refuse to be fearful about these things because I do not have the direct ability to change them. I can express my concern by writing or calling my Congressman and Senators. I can vote to replace them in future elections. I can urge others, including my readers, to do the same.
The Serenity Prayer asks for three things: the serenity to accept the things we cannot change, the courage to change the things we can, and the wisdom to know the difference. When it comes to the economy and our personal financial situations, I advise serenity in place of fear in the face of things we cannot change; I advise the kind of courage and concern that motivate us to change what we can.
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