Morning Folks!!
If you have paid attention to what I have been saying about the economy you also know I believe that 2011 will be the toughest year so far. It takes years for the current situation to trickle down. That is what is coming and a lot of desperation may be weaved within it.
I already hear you saying, “There he goes again”. Well think of me as a weatherman. If I told you that a torrential rainstorm was coming tomorrow, you just may opt not to wear those $500 shoes you just bought. That is all I am doing. Alerting you to the economic weather and how it affects us.
Truly you don’t have to be a rocket scientist to understand that cash flow is the 2000lb gorilla in the room. I don’t care who you are or how much you make, if the cash stops flowing, you may collapse and choke before you know what hit ya.
So if you look at history the spigots started softening in 2007. When we hit New York TRAFFIC in Fall 2008 the crash was just happening. But that crash takes YEARS to trickle down to us. Years.
So the average person has bills that exceed their income. However many had savings and assets and were able to fill in the gap relatively comfortably until NOW!
Enter 2011. That is when the “Suffocation” truly begins. For some in happened in 2008. They were over extended, had little cash reserves, were all in….and then…….BUST. Caught flat footed in an economic storm they never saw coming. THEY SHOULD HAVE SEEN IT COMING!! Those folks are gone and you won't be hearing from them for a very long time. You don't know who they are because they don't make a huge announcement that they lost everything.
Even if you don’t see it coming you have to always progress with a certain degree of caution. Not every day is a sunny day. Not every deal works.
So what I see is almost everyone getting weaker month, by month, by month. That depends how much cash reserves you have. How much assets you have. Most importantly, which assets are liquid. Which assets are not depreciating. Which assets are really liabilities.
Then of course are those liabilities. The anchor that can sink the biggest no matter how big you are. The bigger you are, the harder you fall. That comes from the liabilities and they can fold a business like a house of cards faster than you can imagine.
So here we are on the eve of 2011. If you have read what I have said over the years you will know that this is when it is time to START being concerned. They may have saved the institutions, but they sure as hell have not done a thing for you and me other than to hand us the bill.
That BURDEN is coming. The unrest in Europe will soon spread to America. If you think you can be all business and not pay attention to politics and current events, that may have worked most of our lives, I don’t see that working anymore.
So 2011 we march into. Most will continue to get weaker. Have less money. Do less things. Take less risk. But you never have to settle to be part of the “Most”. You can be smarter. You can pay attention. You can be aware. You can use the weakness to gain strength. But you can’t do any of this if you don’t understand where we are economically, historically, politically.
My gift has always been being able to see around the corner. See further and understand some very simple things that have HUGE impacts that most people miss and if I were to articulate it few would agree. But it keeps proving itself to be accurate. Very accurate for many years. I see what I see and I interpret it. That allows me to walk in between those storm clouds when I want and get rain when I want. To navigate and miss the worst part. Like having a radar system while others just look at the sky. That would be an edge that if used correctly would pay dividends in one way or another.
Nobody is immune to cash flow problems. Soon it could turn into an epidemic. All I know for sure is that you have to work 3x has hard now and you still won’t be back to 2007 for a number of years.
Those that have experienced these downturns before do have an edge. If you saw it coming in 2007 you have an edge. If you have prepared, you have an edge. If you have your bills in check, you have an edge. These times are about “Edges”. Those with the edge……WIN!
I hope this post, gives you an edge.
Have a GREAT Day!
Rick Schwartz
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