Wall Street and It's Effect on Main Street

This past week has been an incredible few days for the financial markets. On Monday, I saved my copy of the Wall Street Journal with the headline: "Crisis on Wall Street as Lehman Totters, Merrill is Sold, AIG Seeks to Raise Cash."

Monday I had to travel to Atlanta for work and in the morning right before I got to the airport, I heard over the radio that the Dow had plummeted 350 points already. They kept saying that the worst thing we can do is panic and we should NOT call our stock broker and sell. Knowing my wife would wake up to the news of the market crashing, I texted her this: "The market is crashing today. Kind of wished we had pulled out a while back, but it's alright. Our plan is long-term." I was not particularly concerned for two main reasons: 1) the market always has its ups and downs and we have highly diversified mutual funds less prone to dramatic fluctuations, and 2) we are continually preparing for anything that might happen.

I then called her and talked to her about how fortunate we are to be prepared for an emergency. I have life insurance (although with AIG, which I guess means I know have government insurance ;), I had just applied for disability insurance, both of us have university degrees in high-demand fields, we have enough savings to last us nearly a year and we have enough food storage to last us nearly 3 months. Although we certainly aren't prepared for every possible problem, we felt good knowing that we are prepared to handle a lot of things if the economy turned south.

That brings me to my point. If Main Street (meaning ordinary folks like you and me) learns anything from the messes on Wall Street this past week, I hope that it is the importance of being prepared. We can never take the good times for granted. And it is naive to think the good times will never end. Bad things can happen and we should take every measure possible to ensure that our homes and families will remain in tact, no matter what happens. We need to have a college education or proficiency in a trade or skill (such as an automotive technician, a computer programmer or a welder), we need to have life insurance and disability insurance policies, we ought to save at least 10% of our income and put it away in safe, low-risk, liquid investments such as a savings account, we ought to never go into debt for anything except maybe a home, education or bare necessities, we ought to be stockpiling food in case of a rainy day, we ought to forgo the nice car for the used cheapo and overall we must protect the hard-earned assets we have, no matter how few or of little worth they may be.

Now in saying this, I don't want to sound gloom and doom. I hear the commentators of gloom and doom all the time and they make me nauseous. Listening to them all the time doesn't help anything, it only leads to discouragement. We need to put things in proper perspective and remember to always have faith, faith in the future, faith in ourselves, and faith in our Father in Heaven who is ultimately in control. It is only by faith we can solve the current problems we are in and build for ourselves a better world.