The American economy is a very sound and powerful one – thanks to bright individuals we have made it through great depressions and great recessions. Lessons learned from the Great Depression of the 1930s are well known by Ben Bernanke and Paul Volcker of the Obama administration, which helped to prevent another great collapse of the American economy that led to the Great Depression.
In summary, before the Great Depression of the 1930s, the easy access of credit for corporations and over leveraging by banks was allowed in support of a strong economy and big business for America. Eventually, this easy access to credit and bank leveraging caused a catastrophic quake in the American economy. As this market collapsed, the money supply was severely decreased due to a now credit crisis and the lack of spending as fearful domestic and foreign investors began to withdraw their savings and investments out of American banks. Eventually banking institutions, large and small, did not have enough cash in their vaults to satisfy every withdrawal request as people wanted to pull their life savings from the banks. As a result, it is estimated between 9000-10000 banks failed during the Great Depression. Because there wasn’t a deposit insurance company (FDIC) around – if the bank was to fail then you lost all of your money.
In 2007, (the credit era as I like to call it) the same economic behaviors that were in place pre-1930s were set to lead our economy back to the Great Depression again. But this time around, we knew how to somewhat prevent such a disaster from repeating. Notwithstanding deficits being alarmingly high – as well as unemployment – optimism remains high for a strong economic recovery. Hopefully, as regulators debate on Capitol Hill about whose to blame for this economic downturn, the Obama administration will set the bar to prevent a 3rd recession from occuring in our lifetime.
Don’t let the economy, or even your employer, dictate your ability to create or have wealth for you or your family.
Don’t rely solely on your 401K for your retirement.
Do educate yourself as much as possible when it concerns your health, your wealth, and your career.
Plan for an early retirement – you dnt have to wait until 67.
My second thought…
The internet has allowed for many entrepreneurs to come to the surface and offer better solutions to problems, or satisfy a demand, moreso than a corporation could. Armed with a better balance sheet, more tax credits, and a thirst for innovation allows for first time and experienced entrepreneurs to come to the scene and also reap huge profits in the face of an economic downturn.
If you do not want to try your hand at entrepreneurship, then think innovatorship. Where your innovative ideas create royalties for you as you let someone else take the relms of marketing, manufacturing, and selling your ideas and pay you a percentage of all sales. Think how rich the inventor of the Snuggie has become…or how history will be made for African Americans through the upcoming and redesigned release of 500thousand.com this February.
This is America – success can be achieved by those who work for it and for those who work smarter and think harder. Think outside the box. What problem can you solve? What demand can you meet? Can you do something better than someone else?
No success happens overnight…at least not usually…so give yourself some time and get out there and make a name for yourself.