I find myself reassured by the strangest things
I am part way through a book called Ordinary People, Extraordinary Wealth by Ric Edelman, and I came to a section related to investing in the stock market that said:
…throughout history, we have experienced many crises. Yet the world goes on. But what if it doesn’t? What if the next crisis is “the big one” — the one that truly destroys us?
Then you might as well invest in stocks.
And I think he’s right. If the entire economy really collapses, it won’t matter whether you have money stuffed under the mattress or whether it’s invested in the stock market, because money will be the least of our worries.
Do you ever get like that? Reassured by taking things to extremes? I guess that somehow makes reality more palatable. Plus it puts things into perspective for me.
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December 31st, 2008 at 5:59 am
It’s true though, I think Ben Stein said something similar somewhere a few weeks ago. If things really get “that” bad, then things like 2% vs. 8% return won’t matter. Allocation and diversification won’t matter.
It’s scary, but it puts the financial part of it into perspective.
December 31st, 2008 at 1:15 pm
Sweet Lawd, I couldn’t agree more. When people start clamoring about peak oil and blah blah blah (yeah, I do it too. So?!), I gently remind them that we have been on this spinning blue ball for awhile, most of which was spent without cars, TV, XBox 360s or tons of wealth. So, might as well keep plugging away as best we know and chill out about the impending doom. (And really, there’s ALWAYS talk of impending doom–every decade, every century. We’re obsessed with our own demise.)
December 31st, 2008 at 1:44 pm
Whenever taking a big risk, my husband and I discuss in detail the worse case scenario. When we moved to Texas from Virginia, for instance, we discussed very seriously what we would do in the event of not finding a job or home within the first few weeks of moving. The ultimate conclusion is always that we will have eachother, our family, and friends, so even homelessness and joblessness were challenges we were willing to undertake. Looking at the worse case scenario can be very comforting!
December 31st, 2008 at 9:53 pm
Glad I’m not the only one :)