There are four basic drivers of human behavior; greed, fear, love and hope. These are the active responses to threats and opportunities.
How we plan for and respond to situations we are facing flows out of this.
For instance, given the current levels of debt being faced worldwide, it is not difficult to look ahead and see that there will be great turmoil as people, companies and nations realize and start to act on the basis that these debts will not, indeed cannot, be paid back. The financial system as we know it will collapse. There is no if in this, only when and how.
It is a situation that faces each of us, some time in the next 3-5 years. It could be sooner than that, and there is a small chance the current system could limp on longer than that. Myself, I’m expecting we make at least one more year, hoping for three, and would be rather surprised if we made five. We have choices in how we respond, and those choices have roots in one or more of the basic motivations.
Disbelief is perhaps the easiest response to fall into, as it is easy dismiss the situation as impossible or unlikely to occur. This sort of situation hasn’t occured within our lifetimes, not unless you are over 80. Why would it happen now?
Once the unavoidability of the situation is accepted, it is easy to react in fear, to see this situation as a threat. Fear leads to actions design to isolate yourself from the consequences of such a collapse. Greed drives people to ready themselves so they can pick over the remains, for their own personal gain, regardless of the cost to others. Hope, based on the certainty that things will improve in the future, leads to actions intended to bring that day closer. Love leads to actions that improve others situations, even if that is at cost to yourself. I encourage you to act out of a basis of hope now, so that you can act in love later.
So acting in hope, what can you do? Two main issues that will be faced are:
– money will be worth significantly less, and in some places, worthless;
– international trade will largely cease until the first issue is resolved.
The following presents my thoughts on how to proceed, in light of the above.
Realise your wealth. This has two potential meanings, and both of them apply. First of all, take time to assess and acknowledge the wealth you have. Seriously sit down and figure out what you own, what it is worth, and take away what you owe. And, remember that this is not for insurance; don’t estimate replacement cost, estimate what you could sale value. Secondly, take steps to make the wealth you have more real. Cash is more real than a number in a bank account. Gold is more real than cash. The value of real estate is only nominal until you sell it or obtain an income from it; consider what impact you would face if the nominal value dropped 40% (which is a recent estimate of the degree of overpricing in the Australian real estate market).
Take advantage of your current opportunities. Work hard. Do something additional of value. Take short term risks. Sell stuff you don’t need, that someone else wants. In short, act to build your capital, the wealth available to you when it’s needed.
Position yourself for a local, more need oriented world. Spend wisely. Buy equipment that will last. Buy stuff you need that is not made locally. Consider how valuable your current skills will be if people move towards necessities rather than luxuries, and how you can extend these or develop more need focussed skills. Consider what opportunities may arise in that situation that someone prepared could take advantage of, filling needs that otherwise would go unmet.
The best part of this is that it doens’t require the world to fall apart for these actions to be beneficial.
Above all, maintain the hope that you have. Work together with like minded people. Accepting that at some point, things will get worse; knowing that at a latter point, they will get better again. The more people who are ready, the more people who have resources to act positively when the time comes, the sooner something new will emerge.