As I watched the news this morning and heard the special on the emergence of 'tent cities' that are booming across the country in areas like Sacramento and Reno, I had to say to myself..."GOSH! This is not going away!" I admit, I've been somewhat in denial about this for awhile. Regardless of my lack of interest in topics of finance and economics, I think there was a part of me that was hoping that the economic problems would just slowly fade away, like a bad dream. The news this morning woke me up. This is real and this is bad.
The eternal optimist in me, however, believes that with great challenges come great opportunities. And, yes, this does not discount the severity of the situation, but part of me really thinks that there are some positives in all of this...and that everything happens for a reason. So, that said, here is my logic around hopeful improvements in the world, as a result of these "tough economic times."
Improved Lifestyle: Our lifestyles have gotten infinitely more complex as a result of the infinite number of options we have. From the diversity of ethnic food offerings to the number and diversity of technologies offered, we have had to continually make choices within every aspect of our lives.
- less $ to spend = greater demand for value = less frivolous purchases = less clutter
- less $ to spend = purchases that provide 'all-in-one' benefit = increased interest in products that simplify = simplified lifestyle
Improved Environment: For decades, we have spent money in ways that has impacted the environment. We have depleted rain forests, carved through the ozone layer, and built McMansions...all impacting our precious planet.:
- less $ to buy a home = increased interest in smaller homes = less square footage = less energy required for heating and cooling = smaller home carbon footprint
- less $ to spend on energy = increased interest in efficient homes and design = less energy waste and spending
- less $ to spend on purchases = increased importance placed on permanence vs. disposability = increased purchases of longer lasting products = decreased number of 'disposable products' in landfills
Improved Health: When the economy was booming, we were quick to indulge and spend on things that weren't always great for our health.:
- less $ for habits = less $ for cigarettes = lower cancer risks = improved health
- less $ for socializing = less $ for alcohol = lower alcohol consumption = less drinking and driving = lower death rate due to drunk driving
- less $ for junk food = less junk food consumption = healthier population
- less $ to go out to dinner = less time in restaurants = increase in cooking at home = healthier meal consumption
Improved Relationships: With wealth and 'keeping up with the Jones's' as a driver in our culture, we have lost sight in the importance of our relationships.:
- less $ for going out for entertainment = more time at home = more quality time with family = stronger family ties
- less $ for dining out = more eating at home = more family dinner time = deeper connections with loved ones
- less $ to spend on toys and gadgets = more focus on getting joy from things that don't cost a lot = increased investment in relationships
Smarter Spending: Whether it be Madoff's grand scheme or investments in the stock market, we have lost billions of dollars. There are 60 year olds who have lost 40 - 50% of their retirement savings due to risky investments. Instead of reallocating their portfolio to more safe investments that provide a 5 - 8% guaranteed return, they looked for an 18% potential return. For these folks, retirement isn't around the corner anymore.:
- less $ to spend = greater need for stability = less greed
- less available debt = lower ability to buy things we can't afford = improved financial stability
- less risk tolerance = less risky investments = smarter Investing
I think that there are probably a lot more that I could name, but these seem to pop out first. Can you think of any positive aspects to this economic situation?
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