A Change in the Economy: A Threat or an Opportunity?

by Paula Pant on · 15 comments

Both my dad and my good friend Kara (not her real name) saw huge changes in their bank accounts in the past few years.

Their home prices sank. Their investments were cut in half.  Their businesses teetered on the verge of collapse. And it’s during this time of tremendous change – these tough times – that their emotional strength was tested.

But their reactions are wildly opposite.

Kara never wanted to learn about money in the first place. Even during the so-called “good times,” when home prices were skyrocketing and the markets were on a bull run, she thought it was greedy – and sad – to devote her energy to thinking about money.

At the same time, she knew she was supposed to start saving for retirement. So she opened a 401(k) and put her retirement contributions into mutual funds, which someone told her was a ‘safe bet.’

But she never paused to learn about the market. She doesn’t know how large of a fee her fund managers pay themselves out of her nest egg. She never learned to ask herself what level of risk she would prefer. She never set financial goals.

Then the market chopped itself in half.

Kara now sees investing as too risky, too fraught with downside and loss. She knows that her retirement savings have been cut in half and she mulls over the hours she spent earning that money.

“Do you know how long it takes me to earn $1,000?” she tells me. “And it just disappears – poof! – just like that, in a day! I didn’t even get to spend it on anything fun!”

Kara focuses on loss. She views the downside as ‘permanent,’ not as a temporary dip in the roller coaster of life.

She’s only 28 years old but she’s already sworn to avoid ‘risk’.

“What happens if I’m about to retire and we go through this recession again?” she tells me. “I’ll be screwed! I just want to put my money somewhere safe.”

My 70-year-old dad took the opposite reaction.

He sees the change as temporary. For the moment, his chips are down. For the moment, his retirement portfolio is smaller and his home is worth less. But it’s only for the moment. Just wait until tomorrow.

“But Dad, you’re 70,” I tell him, and he replies, “which means I still have 20 or 30 more years to go!”

He views economic change as a time when wealth is transferred from one group to another – and he wonders, “How can I position myself on the winning end?”

But he’s only able to do that because he invested the time – decades ago – to learning how stocks, business and real estate work. He set goals. He won some and he lost some. He learned to take it all in stride.

A few weeks ago – actually, on my mom’s 70th birthday – we were all sitting at dinner when he said to me: “Homes are on sale right now. I want to buy a rental property but I don’t want to do any of the repairs and maintenance. I’m going to pay a property manager to do it, unless you want the job?”

And I thought: “Here’s a man who knows how to leverage opportunities – and how to make the most of people’s time and talent.”

Our response to tough times is a window into how we view the world: as a place of scarcity or a place of abundance.

The more your personal finances change – as your debts are repaid, your income increases, or your nation’s economy undergoes a massive shift – the more opportunities you’ll be blessed with. “Change” equals another chance.

It’s exhilarating to recognize your personal wealth for what it is – a roller coaster – and to choose to enjoy the ride.

by Paula Pant

Thanks to wise money managing, Paula Pant has traveled to 27 countries, purchased a 99-year-old Victorian home near central Atlanta’s most beautiful park, and has never — ever — had a penny in debt. Her blog, Afford Anything, is based on one radical idea: money should never hinder your dreams.
Paula Pant
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{ 15 comments… read them below or add one }

David Stevens October 16, 2011 at 6:53 pm

Hi Paula,
There are always opportunities in Life…….just need to keep your eyes open.
be good to yourself
David Stevens´s Last Fabulous Post ..15 “When’s” can make it rightMy Profile


Jimmy October 17, 2011 at 12:18 am

We are always in times when opportunities are mixed with difficulties. The mindset of people looking at this status quote is the most important thing. Kara sees difficulties. Your dad saw opportunities. It’s a no brainer to see who will be rewarded handsomely in the end.

There is a deeper message for us all to see the need to find out the right information for ourselves regarding finance. Thanks for this contrasting tale that teaches a very important lesson.

Lance and Paula, let me take this opportunity to get your views on personal development for students. I have a debate on at my site, hope to hear your views.

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Rochelle October 17, 2011 at 4:53 am

I think all changes are opportunities. There’s so many opportunities in life. You just have to take the risk. I enjoyed reading this post. 🙂 Look forward to more. Rochelle


Nikea October 17, 2011 at 6:55 am

For me changes are opportunities.. If you see one, grab it! Things don’t happen the second time around..


Lynn October 17, 2011 at 9:34 am

Like your father, I’m hopeful that things will turn around. It’s scary, but I try not to dwell on it.
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rob white October 17, 2011 at 10:02 am

Great example, Paula. Most folks are thinking ‘big recession’ right now … and they get to measure their lives according to this thought (lack, lack, lack). We are the ultimate CAUSE of the abundance of money … or the lack of money that we experience in our reality right now. It’s not the recession – it’s US! IF IT IS TO BE POVERTY, IT IS UP TO THEE! Constant association with foolish ideas makes a person foolish … and thinking in terms of lack is a foolish idea. There is certainly a lot more going on around the domain of money than most folks are willing to take responsibility for. This bad new is good news … awareness creates space for us to do something about it.
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Anna October 17, 2011 at 2:12 pm

The life itself is constant up and down. We have to get use to accept both out failure and successes. But it so hoard sometimes. Therefore, keep your ambitiousness all the time and even if you are not at the top, you will feel the same way as you are:)


Justin | Mazzastick October 17, 2011 at 6:51 pm

There is always some degree of risk when money is involved. In a free market money flows from place to place and person to person. Its all about timing. Some people were lucky enough to sell their homes and get top dollar before the bubble burst.
Justin | Mazzastick´s Last Fabulous Post ..Freaky Haunts of Monkton Maryland Part 2My Profile


Jen October 18, 2011 at 2:16 pm

Your dad is a wise man:) My father, at 85, has a bit of the same philosophy. Combined with the wisdom in age, he has the desire to continue to make changes to minimize expenses….growing a garden, recycling and reusing items, making gifts with his talent of wood crafting. Our generation surely could learn from the older people of the depression who saw life’s ups and downs firsthand.

Great post!
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Melody | Deliberate Receiving October 18, 2011 at 3:00 pm

I’m absolutely convinced that this “recession” is not only an economic adjustment (did we really think that spending borrowed money wasn’t going to bite is the hiney at some point?), but also a tremendous time of opportunity for those who choose to see it. Even those who have been laid off are often discovering that it was the kick in the butt that they needed in order to get out of a situation that they hadn’t been happy in for a long time. Now, they’ve been forced to make a change they were too afraid to make. And many are finding their passions and perusing them, something they never would’ve done without the crisis. It’s jus a great time to be alive. A time of tremendous change, opportunity and good things a-comin’!

Melody | Deliberate Receiving´s Last Fabulous Post ..When Love Is Painful – How To Use the LOA To Get Over A CrushMy Profile


Erica October 18, 2011 at 10:55 pm

I have to say too that there’s always some degree of risk when money is involved. In the free market money flows from place to place and individual to individual. Its all about timing. Some individuals were lucky enough to sell their houses and acquire a lot of money prior to the bubble burst.


Alex Aguilar October 19, 2011 at 4:01 am

Keep in mind that Kara’s 28 while your dad is 70. Your father has a lifetime of experience to draw from. His generation has lived through several wars, recessions and boom-bust cycles. I’m not saying what’s happening right now with the economy isn’t bad – but I think older people aren’t as fazed by it as the rest of us – they’ve pretty much seen it all before.

The most remarkable thing about your story is that a 28 year old had the foresight to open a 401(k) and invest in mutual funds!


Paula @ Afford Anything October 26, 2011 at 4:21 pm

“is that a 28 year old had the foresight to open a 401(k) ” — You’re seeing the positive! I like that!
Paula @ Afford Anything´s Last Fabulous Post ..How Can You Afford to Travel the World?My Profile


Abby October 20, 2011 at 8:28 am

a change in the economy a threat or an opportunity? well i think it depends, its an opportunity for people who are smart enough to utilize it, and its a threat to the governments that run the people.


Noel October 22, 2011 at 12:22 am

Wow Paula, you brought out a great message: “Change” equals another chance. And it’s just a difference of 1 word. Love it!


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