The New Normal?

According to an article I recently read in Time, it said that America had seen from 1952 to 2000, an unprecedented time of prosperity. This is most likely due to new and inventive ways of extending credit and the expanded use of credit. They stated that in all of History there were only 2 other such times, one during the Roman Empire. Great…we all know what happened there! Anyway, it went onto say that the idea of entitlement and obtaining things easily is the thing of the past, we are getting moved back 70 years where you have to save before you can buy and buying a house will require a substantial nest egg/down payment. I don’t believe our culture will get to that point but I believe things are beginning to shift in a more conservative manner. I for one have only known the culture that we are in, easy credit and getting what we want and when we want it, with barely a blink at the debt that we are accumulating, me included. About 18-24 months ago, I took a hard look at the Financial Statement, it was all well and good but I saw our liabilities were out of control due to investments. That is when my goal setting shifted from Net Worth, that can be artificially inflated on paper and that is not necessarily reality. Good thing I started the process of deleveraging myself and backing away from investment opportunities that were coming my way, I had said, okay I need to get my liabilities down prior to adding any more assets to my balance sheet. I may very well could have sunk our ship, luckily I didn’t. That doesn’t mean we are out of the woods but with the deleveraging focus that we have now gotten we continue to make progress. That also doesn’t mean I will never invest again, but I will be very cautious as to what I do and how I do it.

So the turmoil that we are finding ourselves in is what we have to look forward to? Do you agree with that?


~ by debt2dreams on February 8, 2009.

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