Recession recovery already?

Recently there has been a lot of talk in financial circles suggesting that perhaps we have seen the worst of the economic crisis and that there are signs of recovery. The US stock market has responded to this talk and has moved upward but “are we being overly optimistic?”

When people think about recovery they often think about returning to the situation that existed before the crisis. I would like to state that it is not possible to return to those days. We seem to have very short memories when we go through these episodes and have forgotten what caused the problem. The markets in the US went up based upon results that were generated by Financial Companies. However, it is now clear that such profits never existed in the first place so therefore we cannot return to that situation. Instead we should seek to return to the basics of investing where we buy assets for their true underlying value and invest for the long term.

The concept of investing to become independently wealthy needs to be thrown into the trash. Investing is all about putting aside for the retirement years and for supplementing one’s income. I like to quote Proverbs 13:11 wealth gotten by vanity shall be diminished but he that gathereth by labour shall increase. The writer cautions us that when we seek to acquire wealth through either dishonest means or get rich quick schemes that such money tends to disappear quickly. We have seen this with persons who win the lottery one year and the next year they are broke.

We also saw it at work with the unregulated financial organizations where persons who were financially secure put major sums of money into them with the hope of more riches but now they are left with nothing but regrets. It would seem that when we do not work for what we earn then we do not appreciate the value of the money and we tend to spend it foolishly. Instead we are exalted to learn the value of hard work, to gather little by little and to increase over time.

Instead of trying to return to a situation that is unsustainable let us instead commit ourselves to the principles of hard work where we are paid a fair wage for a fair day’s work. In the long term we will be much better off by being content with what we have rather than trying to buy a ticket to our dreams.

Feedback Question: How long do you think the current economic recession will last?