Where did all the $ go?

Well we’ve all just gone through one of the worst economic times we hope to ever go through, but they can’t really call it a recession so was it as bad as the Great Depression?

So then was it really that bad, and is it over yet?

While there have been many who have struggled,  I believe we haven’t seen absolute devastation that has caused us to sell everything to survive. After all we can’t live without our plasma TV’s even if we can’t afford the electricity to run it.

But do you ever ask yourself what happened to all that affluent wealth that existed before we were told we had to tighten our belts? What really stopped us spending so quickly and when will we return to those affluent days?

In those days the ability to borrow had a lot to do with the affluent behaviour and our drive to keep trading. It was easy to just go in and ask for a loan and so long as the valuation came within the acceptable lending levels and we had the income level to support it. While we could borrow we could earn money.

After all you need money to make money.

When the financial crisis first had its rippling effect through our economy the first belt to tighten was that of the banks as it was their debts that created the crisis in the first place. Now that they weren’t going to lend so easily, we all had to take stock of how we were going to trade without that lifeline there ready to pump fresh monies through our business veins.

Then there was the added impact of the increasing interest rates. As the majority of business owners have to borrow in some form in order to trade, the rising interest rates were like nails being hammered into the coffin.

Business world coming to an end
Think about all that money that once flowed around our economy, how easy it was to borrow it and at such cheap rates, it made the world turn. When that money stopped, you could almost hear the world screeching to a slow painful stop. Only the world doesn’t stop spinning it’s just we wake up the next morning with that feeling of what happens next because it doesn’t feel like it’s spinning in the same way it did the day before.

There’s no doubt the Global Financial Crisis has made us all take stock of how much we all have to rely on money to survive. Even more that we rely greatly on borrowing money to survive.

Your next financial strategy
Has this crisis made you rethink your financial strategy in that saving is a better option? What steps have you started to make so that this awful situation doesn’t affect you next time it happens. History shows us that it will happen again at some time in the future, we’ll just call it something different.

Have we all learnt enough from this crisis so that the impact will be minimal next time? Can we actually trade in business without the heavy reliance on borrowings, or at least put strategies in place in order for the borrowings to be repaid as quickly as possible to you can survive on your own working capital?

I think with all that has gone on it will still take some time for the flow of affluent money to come back into the market space. If only because we have all become a little wiser and more cautious perhaps, or just because it will take some time longer before the banks will forget the past and go back to lending more easily.

The money will come back, eventually. In the meantime, take stock of how best you think you can trade to survive the next bump in the road.

Michelle Gargar

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