October 17, 2008 at 6:17 am
Since I'm almost 27 and haven't touched the stock market in 5 years, the maket fall hasn't hurt me in a retirement savings way. Most of my investments are in the form of gold and silver coins as well as a brick of silver I use to prop up a sheet of plywood in the house. My wife and I have aggressively paid down debt in the past couple of years as well.
Fortunately, Canada's banking system is the most sound in the world right now so I'm not worried about the bank I use going insolvent. The branches in my city are on strike, but that's another matter. My company's fortunes are somewhat tied to the mining industry so if that takes a huge hit, then it could be trouble. No one around here is too worried about it though. The nice thing is that even if the metals stay low, as long as the currencies of the countries our clients are in keep getting hammered vs the US$ it's still alright. I'm not too worried but I'm keeping an eye on it and sympathetic to those who are taking hits right now.
October 17, 2008 at 6:24 am
will the finacial crisis affect me? Yes it will.
How much will it affect me? i don't know, depends if i keep my job.
should we panic and stress about it? well what is that going to acheive. not alot imho! Theres not too much that I can about it, at least on my own.
even though the world economy is stuttering on the brink of reccession, alot of it has been brought on by the media coverage including forums and websites - that are basically frightening people, they stop spending, companies go down the pan, This time less poeple have money to spend, more companies go out of business and the spiral continues but the papers and tv still get the viewers cos people are scared and want to know the latest.
I don't like this poll on friday - not exactly setup my weekend for relaxing and enjoying myself - which i still feel i'm entitled to do. I'm still working hard proably too hard and long may it continue, wait for the media to start talking about the green shoots of recoevery and you actually see some positive outlook on the ecomony.
Lets not doom monger and encourage people through this tough time. it will benefit us all in the long run.
Gethyn Elliswww.gethynellis.com
October 17, 2008 at 6:33 am
I'm afraid my crystal ball is dim on this one. I'd like to think that we'll pull out of this given a few years. I think the most important thing is to keep our cool in hard times like this.
I mention this because of a recent study that I ran across which surveyed the voting tendencies of people in hard times. The general mindset is "throw the bums out". I understand, but the results are very random. In most cases, the economy gets better, and whomever is in power at the time gets credit. In the 30's, some societies threw out conservatives and replaced them with liberals. In others, liberals were thrown out and replaced with conservatives. Eventually, the economies got better, and the winners were the politicians in place at the time. Sadly, in Germany the winners were a group called the Nazis. The economy of Germany got better, so the Nazi's became firmly ensconced and the rest is history.
The article is a little long - if you're busy just skip down to the last few paragraphs
http://www.wilsoncenter.org/index.cfm?fuseaction=wq.essay&essay_id=478918
___________________________________________________
“Politicians are like diapers. They both need changing regularly and for the same reason.”
October 17, 2008 at 6:41 am
I'm looking at this from the "already retired" side of the job market, as I took early retirement in 1998 and have done consulting work in various areas since then.
The overall business response of cutting back non-essential expenses means that the small income from consulting has evaporated.
My IRA shrank by 20% in a couple of weeks but that's better than many people because my financial advisor is 1) conservative and 2) aware of our life situation (many of my wife's ancestors lived to 90+, so the money needs to last longer than average).
My first response was to drop the monthly withdrawal from the IRA by 20%. As our only debt is the house (another 11 years on a 15 year fixed rate loan), we'll cut back where it's the least painful.
We purchase appliances and other big ticket items during the "no interest for X months" sales events - and discipline ourselves to make monthly payments that ensure the item will be paid for a month or two before X.
My wife is driving a 14 year old car; I replaced my 18 year old truck last year when my wife refused to ride in it anymore. Our cell phones are ancient but reliable; TracFone serves our current cell phone needs for about $8 per phone per month (neither of us is addicted to the cell phone 😉
We have money to cover the anticipated increases in heating costs this winter, but we'll probably shut off several rooms to reduce heating costs, except when we have overnight guests.
If you don't have a fixation on "everything must be new", there are alternate sources of goods:
Freecycle (www.freecycle.org) is a place to pass along no longer needed items and possibly find something you need - better passed along than in a landfill. A LaserJet III probably won't be your first choice for a business proposal or resume, but it's OK for a draft copy of anything or printing a program listing. It's a great deal if it's free and toner cartridges are still plentiful and cheap.
Craig's List (www.craigslist.org) has free, for sale, and wanted sections. You can find lawn and garden, furniture, computers, entertainment gear, kids' stuff and lots more. That 18 year old truck was sold via Craig's list and I had cash-in-hand in 24 hours from the time the ad was posted - there's no charge to post or sell on Craig's List.
If you do your homework, Ebay can be a good source as well. Just be sure you know what the average price is for the item you're interested in (you can get a listing of recent sales prices of similar items) and remember that if it seems to be too good to be true - it usually is.
John
October 17, 2008 at 6:55 am
"In the US in the last couple weeks we've seen a recession potentially turn into a depression."
No. We aren't *in* a recession, much less a depression. The cowards of wall street paniced, lost their shirts (as always) and the markets adjusted. What was that 900 point *gain* a few days ago? 🙂
Should we ignore matters? No. Should we panic? No. We've been in a lot worse position twice within my lifetime. Life goes on, make sure you keep Finance 101 firmly in mind.
Keep a reserve. Don't spend more than you make. And don't panic. The banks will recover. They always do.
Finally, do try to avoid adding to the panic by using scare words inaccurately. We hate it when users do it to us, we shouldn't do it in areas outside our expertise.
October 17, 2008 at 6:55 am
Being a programmer in the food sector is working well right now. People seem to be buying more of our products in these hard times...maybe going out to eat less and having nicer meals at home. This sector has lower highs, but higher lows.
The fundamental problem that caused the economy to get where it is today has not been attacked. Our financial habits at every level have finally reached a global macro economic scale. I think more financial education has to be provided. Teaching people how to spend and invest wisely would help provent this in the future.
October 17, 2008 at 7:06 am
The view from Canada:
The economy is still relatively stable compared to the US. The housing market has stagnated a little bit, but there are still new housing starts. The uneployment rate is low - about 6%. The new government is a minority - which means that no party can go and force any laws through all by themselves. The last round of government reduced taxes by 2%. Gas is currently about $1/Litre, but it was close to $2 in the summer. My job is currently in the agricultural/retail sector - so as long as farmers buy chemicals to put on their crops, I am going to have a job.
It looks pretty good up here in the north so far. However, our biggest trading partner is the US. And if you guys don't get it all under control, you will be bringing us down the black hole with you.
Mia
I have come to the conclusion that the top man has one principle responsibility: to provide an atmosphere in which creative mavericks can do useful work.
-- David M. Ogilvy
October 17, 2008 at 7:28 am
imho from the U.K ... we are talking ourselves, or being talked into a recession.. the new the increased coverage the word on the web becomes self fulfilling prophecy to a large extent...
America has a recession therefore so must we seems to be a recurring theme.. food prices, fuel prices the cost of the war on terror all rise ..
And yet it does feel as if we’re being manipulated into a recession due to the reporting we all hear
October 17, 2008 at 7:31 am
Firstly - the crisis has definitely affected my family. We were in the process of relocating to Southern Cal from Oregon. I've had a job on a data warehouse team here for 3 months while my family has been waiting in Oregon for the house to sell...never happened...on top of which, although we literally have excellent credit, the lender decided I hadn't been employed at this particular job long enough (even though I have 15+ years in the same career). So, today, I'm going back to Oregon.
The good thing - and I would strongly encourage this - is that over the years, I have tried NOT to over specialize in any aspect of database work, with the exception of vendor, i.e., Microsoft. I have worked as a DBA, Business Intelligence consultant, Data Warehouse manager, Business Objects report writer, etc., and have been fortunate enough to find jobs in those areas. With this crisis, I was forced to scramble for a new job in Oregon again. With a diverse background, and help from God, I have no doubt(!), I was able to find a new job at the same salary within a week. Best of all, it is within 15 minutes from my home in the country!
Secondly - regarding the car...:P I strongly agree with Tim and the others. We let our son 'lease' our car at $50 a month, just hoping to instill some sense of responsibility. I had JUST paid it off after 6 years of payments. It was brand new when I bought it. Within a few weeks, it had dents on the hood from sitting on it, and after 2 short months, he totalled it. Since insurance is so high for teenage boys, my wife convinced me to change the insurance to only cover him if he damaged someone ELSE's car, so I kissed all THAT money goodbye... Next car, he paid for and, surprisingly enough, he still has it 3 years later! Amazing what paying for stuff out of your own pocket does...
Vince
October 17, 2008 at 7:40 am
I agree on the car thing -- the only way I will buy my sons a car is if it helps me by allowing them to get to ballgames, etc by themselves. Even then, I would probably make them sign a note and pay me interest (which I would put in their college fund).
As for the economy, I believe it is going to get much worse before it gets better. We have just had the financial meltdown and have not had the secondary tremors hit yet. With everyone pulling back, this is going to affect Industrials heavily (no one having the FCF to buy items if they can be put off). We've already seen this with consumer spending on cars declining -- this will continue with businesses not upgrading their systems, not buying that new piece of equipment, etc. This is going to put people out of work which is going to worsen the financial problem.
I feel confident in my skills, but it still really scares me. I think that the financial meltdown is the tip of the iceberg. I just hope that our ship is not named Titanic.
Regards,
Joe
October 17, 2008 at 7:51 am
Thinking about how bad it could get... is this where we're heading?
http://www.thepigs.org.uk/index.php5?page=13
A pub in Edgefield is trading home grown produce for beer!!
October 17, 2008 at 7:59 am
Interesting comments and I hope it's 2-3 years as well for things to recover.
As an FYI, we aren't buying a car for my son, but we did agree to match what he earned. So he's paying 1/2 of the price, and that has limited his budget. He works and has to pay expenses on the car and all his entertainment, so it's not a free ride. We could have him earn all the money, but living where we do, it's an expense on our side in time and money that we're looking to reduce by having him drive. May not be the best solution, but we believe in giving him support.
With the loss of value in both stocks and real estate, some big companies are feeling a crunch. It is a macroeconomic issue that we won't see for awhile since it's builders and automotive industries that are struggling along with the financial sector. That will start to affect other industries in the next year.
I don't want to ruin your weekend, but I wasn't sure how people viewed things. There's a good mix of people here that aren't too concerned, which is good. I think we'll come out of it, but it will take some belt tightening. And hopefully we stay employed.
October 17, 2008 at 8:05 am
I'm 21 and have been working as a developer for 2.5 years, but that's not long enough for me to have any money to lose, so the market has no real direct effect on me.
I've got a good job at a small development shop and am unlikely to be let go for anything short of the company going under (my boss is a longtime friend, and he likes that i can do my job without supervision). I actually work full time on an ongoing project for a company providing Asset Retrieval services (they call you to send your cable box back after cancelling service, for example) and the business is growing.
If anything, an economy in trouble means opportunities for someone in my position; i can start buying stocks at ridiculously low prices; i can even think seriously about getting a house with the way that market is doing.
October 17, 2008 at 8:14 am
For my family, we are much better off now then we were 4 years ago when I had to give up my consulting company to take a full time job with benefits. My spouse was layed off from his job and we have 2 small children. He stayed home with the kids and remodeled the house for a few years, but now he has found new employment with a flexible schedule. There are jobs out there, especially for those who are willing to work hard and retrain.
There were rough times. We cut out all extraneous spending. Since we did the work on the house on our own, we increased the value of our home, cut heating costs, and basically hunkered down. We barely had to touch our 6-month reserve because if we did not have the money, we didn't buy it. We shopped for deals, especially regarding food, used second-hand stores for clothing and various other supplies, and used our 2 acre backyard and the various parks in our area for our children's education and entertainment. It really is do-able; you just have to have discipline.
Also, it helps that we do not spoil our children like many other people we know and are related to! We probably will provide a vehicle for our children when they are at the driving age (one for both of them, as they are very close in age), but more than likely we'll plan that in a few years ahead-they will get our old car and we will purchase something for ourselves at that time. They will contribute to insurance and gas, of course.
October 17, 2008 at 8:18 am
It's not a particularly comfortable time to be without a steady income (consulting), but things aren't as bad down here (South Africa) as in some other parts of the world.
We've had a credit-control law in place for a couple of years now that makes it completely illegal for financial institutions to lend money to people who can't afford to pay it back. Also, our exchange control laws mean that local companies couldn't invest too much overseas, and hence didn't get too badly burnt. I think this is the first good thing I've ever had to say about the exchange control laws.
That said, the exchange rate to the dollar, pound and euro are plummeting, and that upcoming trip to Seattle is looking more and more expensive by the minute. 🙁
Gail Shaw
Microsoft Certified Master: SQL Server, MVP, M.Sc (Comp Sci)
SQL In The Wild: Discussions on DB performance with occasional diversions into recoverability
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