How Much Have The Present Economic Crisis Affected People Globally?
At this present slump economy which had affected the working class globally, what will be the shared phrases do you hear from family members, friends, neighbours and newspaper.
“Honey, I lost my job” next “Our Company had laid-off a few hundred workers” next “We are financially strapped, how we are going to pay our daily bills” next “XXX Company is laying off hundreds of workers to reduce cost”.
The International Labour Organisation expected about 20 million people going to lose their jobs with current of this fearful economic crisis.
Everybody have to put on their austerity belt to offset daily expenditures and cutting cost over unnecessary expenses.
Battling a deepening recession, some parents already extent back or abandon day care sets, keeping their children at home under the care of their grandparents.
Many people have to upend their work life balance because petrol and food prices have become prohibitive and the average day care costs outpace rent and mortgage payments already for those drawing salaries. already after a sharp decline in petrol prices.
It’s not low wage earners feel the pinch but also hit those people who thought they were safe from this troubling economy for a while.
Governments around the world must find solution to unemployment, and the rate is jumping to a higher figure dramatically.
People need to work, they cannot be left without work, and gone are the days where you can make choices of the types of occupation according to your interest, and it’s a grab in any case job is obtainable situation for the sake of living hood.
FINANCIAL CRISIS LESSONS
What is truly on everybody’s mind now?
Most people might be worried about the dreadful financial crisis, work, money situation or your wealth.
Is it all that you should do? “NO” let us focus on the current economic crisis and start learning from the impact and brave ourselves to confront the worst and to better our survival tactics.
First informal, here is a new perspective for those whom are worried about their money.
“Wealth is not how much money you have. Wealth is what you’re left with when you lose all your money” quoted by Roger Hamilton.
Now what are you left with, when all your money goes?
You may have forgotten about your personal wealth that you have accumulated over the years, those skills that you learn, knowledge absorbed from society, the network of associates and finally the character that had matured over difficult periods.
Stop, stop, stop, all the worries, instead focus on building and expanding a quality business network with your knowledge and skills. For those, working class people, look for more part time jobs obtainable around your community.
One must also stop caring about reputation, but to focus and improve our character, because you have zero influences on your reputation.
It is what people think of you, and that you have total influences on your own character and your mindset.
GOOD AND BAD INVESTOR THOUGHTS
Most Financial Management courses, educate its student about the positive correlation between risk and return at the beginner stage.
The higher the risk of an investment with higher return of profit and that is vice versa of course.
Institutional and private investors who critically acquired high yielding sub-chief financial structured instruments overlooked this basic rule.
Most of the re-packaging and re-selling of sub-chief mortgage risks will not eliminate the ultimate credit default risk that is based on credit standing of the end borrower and not the emitting edges.
But however numerous financial institutions and private investors keep purchasing these high yielding sub-chief instruments or debentures and should we follow them blindly?
Well, the answer is to put forward questions to the financial promoters were;
Why does this instrument offer such a high provide, when promoted as low risk investment?
What will be the risk?
We need to have the transparency of this risk before already having any thoughts of investing into this so call safe investments.
Over confidence is one of the most shared traps, people might fall into and must be aware of all the knowledge gaps and perceptual blind spots.
This sort of situation is dangerous as we do not know what we are supposed to know from the financial promoters.
As a matter of facts, most financial institutions did really know what risks they were taking in their books and the same with for the high provide craving investors having risks in their portfolio.
Pay attention to what you really do not know about any business situation before investment done as the quote by Aldous Huxley is right; “Facts do not cease to exist just because they are ignored”.
It amplifies the effects of risk ignorance’s by Groupthink 2006, a few economists and policy makers warned that the US real estate market would get into thorough trouble as soon as US interest rates start to rise again.
This warning was ignored, as these critics were often ridiculed, silenced and forced to to pay attention to the prevailing mindset of the principal uncritical majority.
Although clear warning signs of an imminent US real estate crisis were voiced for more than two years, most investors failed to take notice or just ignoring the facts.
So finally, what causes the financial crisis?
It is chiefly herd thinking coupled with over confidence, ignorance, egoism and greed with short term focus on exciting growth, personal gains, remuneration and neglect of sustainable long term growth and profitability.
The greedy mind of many investors with its thoughts; “I want to have more and more profits now” as such thinking is value exploitation at its worst. It is the antithesis of value creation as of a responsible investor or business thinker.
As show by statics of the world population, which have reached to 6.8 billion people living on this earth to the latest and calculate to increase to 9.0 billion by the year 2050.
Conclusion of today’s economic crisis is human error, not by any natural disaster; it is the human’s ignorance, greed, egoism which Lord Buddha defines as poison encased into the human’s mind.
As quoted by Albert Einstein “We cannot solve our problems with the same thinking we used when we produced them”.
As times are getting tougher with the economy and recession stances, will our fellow humans eradicate bad thoughts, wake up, it is time for a new creative renaissance.
The slogan will be; “Revive our economy to reduce sufferings and agony of the recession”