How to survive difficult times-Part 1

While waiting for our fight to Manila on our trip to the Summer capital ast November 2008, CNN reported that the three major U.S auto makers namely Ford, GM and Chrysler has asked the U.S congress for $ 25 Billion dollars to bail them out. According to CNN, if the U.S auto industry fails, this will translate in roughly 2.9 Million job losses; truly these are the signs of difficult times.

The other day, Citigroup announced another set of job cuts bringing the total job cuts to more than 50,000. More signs of difficult times to come.

On a more personal level, I talked with my mom last night and she revealed that some of my relatives are worried about difficult times. They talked about how the global financial crisis has affected their investment portfolios. They are all asking the question on what action should they take. The future seems to look for grim. Difficult times have gripped even the closest of my family members.

It seems that there is no end to the deluge of bad news. Most of the world’s greatest economy are in difficult times as they took a real bad beating because of the global financial crises. It still amazes me how our country managed to survive amidst this financial chaos and difficult times we are facing.

The question in everyone’s mind is can we survive the difficult times that we are facing.  What should be our response? Should we start stacking up food and dig underground bunkers? Well that might response might be an over reaction. But here are some prudent things that you can do to survive these difficult times.

1.) Stop worrying – Whether you believe in the Bible or not you will probably agree with me that Jesus gave the best advice to those who are anxious about what will happen tomorrow. In Mathew 6:25 to 27 Jesus said “For this reason I say to you, do not be worried about your life, as to what you will eat or what you will drink; nor for your body, as to what you will put on . . . And who of you by being worried can add a single hour to his life?” (NASB) Rightly so ! Worrying about tomorrow or the difficult times does not add anything to your life. Instead, worrying will bring you wrinkles an upset stomach, insomia, ulcers and headaches.

We are still far from the difficult times in 1929. Many economists and experts are quite confident that the present crisis is not comparable to the difficult times in 1929. According to them, the world economy has the proper mechanisms in place in case difficult times like these happens. Now that it has, let’s just relax, cross our fingers and hope that these preventive mechanism will do what they are suppose to do. Besides, the great depression in 1929 ended after more than 4 years. If the generation of that time survived the Great Depression, there should be no reason that we shouldn’t survive the difficult times we are facing right now.

Above all, I believe the best reason why we should not worry about tomorrow is because “ . . . God so clothes the grass of the field, which is alive today and tomorrow is thrown into the furnace, will He not much more clothe you? You of little faith!” (Mathew 6:30 NASB) (I wonder if they have furnace filters during those times ?)

2.) Focus on the things that you can do something about – You can’t control how the market reacts in these difficult times. You can’t do anything about what the economic managers of the countries are doing and you can’t do anything if banks, companies and other financial institutions are bankrupt or asking for a bail out.

The best thing that you can do is to focus instead on the things that you can do something about. You could cutback or put on hold your company’s expansion programs. You can minimize expenses and implement cost cutting and austerity measures. Whatever you do focus on things wherein you can do something about. Do not mind the things that you cannot do anything about. Forget the worrying about difficult times.

3.) View the current crisis as an opportunity – A Chinese proverbs goes “A crisis is an opportunity riding the dangerous wind” Rightly so ! Difficult times spells opportunity. Warren Bufffett, the world’s greatest investor waits for opportunities in difficult times like these.

Before I studied Buffett extensively my mentality is the same as that of an ordinary person. I panicked when the crowd panicked and I became euphoric when the crowd became optimistic about the market. Studying Buffett has changed my perspective when it comes to stock market investments. I have now started to view difficult times as an opportunity. I had been snapping in on some good bargain in the stock market despite difficult times.

A couple of months ago, I shared this to a friend and she wanted to get into the stock market as well to take advantage of the buying opportunities. When she submitted her application for a trade account to the bank personnel she was asked why she wants to get into the stock market right now considering that the market is down and that we are in such difficult times.

This is the typical “Glass half empty” response for people who have not learned to view difficult times as an opportunity. Now is the best time to buy. Don’t wait for the markets to normalize. As Buffett used to say “If You wait for the robins, spring will be over.”

In the meantime you might want some more insights check out some materials on how to survive difficult times.

Click here to read the second installment of the post “How to survive difficult times – Part 2.”

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7 Responses to How to survive difficult times-Part 1

  1. Perikoyz says:

    Very good tips Mr. Diaz… Pinoy are very good survivor in times of crisis, but i hope our government will prioritize programs that will support our poor Filipinos coz currently they’ve just talk about controversy that’s not helping our people.

  2. johnray says:

    my friend when’s the next installment…hehehehe..i like your article…hope the next one would do the same..

  3. zigfred says:

    johnray: Hang in there, the next installment is coming soon !!! hehehehe :-)

  4. Iris says:

    Bail out (I call this hand out instead) for the automakers? What a joke! It passed and still our economy hasn’t improved. Well, the hand out for the financial companies also hasn’t affected the economy positively. In fact, it only drained the American tax payers into more and more debt. Comparing our tough economic times into the Great Depression of the late 20s and 30s is incorrect. The politicians just somehow tries to scare people into thinking we are heading into the same economic difficulties, but that’s far from the truth. Sure, our economy is bad, stocks have depreciated in prices and thousands of people have been laid off. However, the economy in the 80s was worse, but yet, we’ve recovered because of Reagan’s adminstration. Also, we have to note that our market was hyperinflated before the housing bubble. All our issues can be attributed to too much government intervention with our housing market, which started during the Clinton administration. Because of government regulations, banks were loaning money to practically anyone without down payment and people were buying houses that are way beyond their means, but able to make huge profit by turning around and selling it at a higher price (inflated market). However, when the true price of the housing market finally caught up (stabilized), many realized that they bought their houses at an inflated price and unable to sell; hence, which lead to increased in foreclosures. People simply abandoned their properties to escape their debt.

    I support free market. Everytime the government comes to regulate, it all goes down the drain. Hey, Unlce Sam can’t even manage our social security properly and our tax revenues, which is a good indication that they should not be medling into the business market.

    Oh, yes, many blamed Bush for the housing bubble, but Congress and the House members are made up of mostly Democrats and it was this party that pushed for lower standards of mortgage loaning.

  5. zigfred says:

    Iris: As Reagan once said “The best government is less government” hehehehe :-)

    I presume you are a Republican. Well If I am were an American citizen I’d be one too. heheheheh :-) I also support free market, but on the other hand I also support strong market regulation just like the Chinese economy.

  6. Mel says:

    True enough, there are opportunities in crisis. it is best to keep one’s mind clear and to stay positive in difficult times. Sulking and worrying is a waste of time.

  7. zigfred says:

    Mel: Yep ! Better to do something positive or at least get something positive from our current situation than to sulk about it.

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