My grandmother was born six months after the onset of the Great Depression’s Black Tuesday, marked by the stock market crash October 29, 1929. As I was growing up she shared the many day-to-day survival stories of my great grandparents and other immediate family members.
An oft-repeated statement from those days was, “They would have to nickel-and-dime to survive.”
The saying is as true then as it is today, with the spiraling subprime meltdown financial crisis that has taken this country and the global markets crossing the economy into negative territory.
Since August 24, the business headlines have been dominated by the rare move of the Federal Reserve agreeing to lift requirements on how much Citigroup Inc. and Bank of America Corp. can lend to its broker affiliates as part of the banks’ decision to borrow from the Fed’s discount window.
Observers of the meltdown have cast blame widely. Fingers are pointed to mortgage brokers, appraisers, regulators, lenders, Wall Street, agents and ultimately the borrowers assuming loans they could not meet.
Subprime borrowers gambled on purchasing a piece of the American Dream through home ownership to build wealth, just as the middle class did after World War II.
When the borrower signed on the dotted line of the loan documents, in their minds they were placing a much more tangible bet with greater odds than going to Viva Las Vegas wishing and hoping to hit a winning jackpot.
The subprime foreclosure storm has since drowned out the dreams of first-time homebuyers, causing personal financial woes, anguish and doubts about where to go from here.
The financial trouble facing these subprime borrowers and the negative psychological effects will touch all aspects of their lives. It will result in less consumer spending, which ultimately weakens the economy and results in job layoffs.
The emotional part of losing a home and becoming a renter again will affect many deeply. Some will be bitter about the experience, while others will be grateful to have lower expenses and an opportunity to nickel-and-dime their way out of debt.
Let’s assume that you fall into the category of a subprime borrower and are headed into this financial crisis. How you deal with it will determine your ultimate success. Let’s begin with analyzing where and how you plan for tomorrow.
Your self-respect and self-esteem may have taken a hit. First and foremost, take the tailor-made jacket of subprime borrower off and throw it in the trash.
Secondly, make your self-esteem officially off-limits to potential detractors – no trespassing is allowed!
In life, we are either driven by promise or pain, the promise of an abundant future or the immediate need to change a painful situation. Your immediate goals often relieve you of an undesirable situation; your long-term vision propels you towards great possibilities. State what you envision for yourself, from the immediate to the long-term..
Then assess where you are today using the SWOT Method: Strength, Weakness, Opportunities, Talents – in Mental, Social, Emotional and Physical terms.
A goal is a desire with a date on it. So, get ready, set goals and run with high expectations. Plan how you will put your SWOT inventory to acquire your new vision. What additional knowledge do you have to master to get there?
Now, make a commitment to assign completion dates to all of your goals, from the immediate to the long-term. Your commitment list is the first step toward refueling your dreams. You have made a commitment to yourself. Now you’re more prepared to weather the storm of a possible coming of another Great Depression.