The 5 best things you can do for yourself in this crappy economy/market

I was pissed at my parents for several years that I never achieved 6 feet tall. It sure wasn’t my fault, yet it consumed an inordinate amount of brain space. My lack of verticality was all consuming. I worried about how it affected my life. I was convinced that it eliminated my chance to be a pro point guard or pro quarterback. Although I could still ride any ride that I wanted to at Kings Island, I wasn’t going to accept my 5’9″ stature.

One day when speaking to my pops when I was a senior in high school, I said, “I know that I could be a D1 (NCAA Division 1) point guard if I were taller.” He looked at me like I was a bird that just flew into our large dining room window. “What in the world are you talking about? Something that you can’t control is all of the sudden defining you? That’s weak. You cannot waste a millimeter of brain space on things that you can’t control. Just work harder at the things that you can control. Besides, your jump shot is keeping you from D1.”

Ouch. But true.

The economy and the stock market are absolutely terrible right now. But you can’t do a damn thing about it. Should you understand what’s going on? Yes. Should it affect the way you live you life? Nope. In fact, you should be proactive in the way you deal with this problem. And I don’t mean sell all of your investments. Here are the 5 most important things that you should do right now:

  1. Refinance (if you can): 30 year fixed rate mortgages are on the verge of dropping below 4%. That is absolutely insane. If you are a homeowner, and have the ability to refinance, then you need to do it right now. You should consider refinancing even if you have to “take cash to the table”. Which of course means pay off a chuck of your mortgage in order to qualify for the new one. You would be eliminating debt, and that’s a good thing. However, do not use your emergency fund to do this.
  2. Increase your 401(k) contribution: No, don’t call the looney wagon. I’m serious. Increase your retirement contributions. The more the market falls, the cheaper you are buying things that WILL go back up. Want to be a market maven? Then buy low, and sell high. Don’t freak out and sell your investments (if you are far from retirement), buy more of them.
  3. Learn about economic indicators: Be a bit of a nerd. If you understand the housing market, the Gross Domestic Product (GDP), and the job creation rate, then you will get a good handle on what is on the horizon. The less you care about the market, and the more you inform yourself about the economy, the better. The market had a great year up until July (or so). The economy has been abysmal since 2008. It was only a matter of time before they matched each other. And the economy sure as hell wasn’t going to be the one doing the matching.
  4. Don’t buy a house that you can’t afford: This goes for current homeowners that might be considering “upgrading”, or for renters considering taking their first plunge into the world of home-ownership. By now, you know my thoughts on renters making that plunge based on peer pressure. Not only are you hurting yourself if you get into a situation that truly doesn’t serve you, but you are eventually hurting the economy. Remember, affording the mortgage payment isn’t enough. You MUST also be able to put down at least 10% as a down payment.
  5. Have a career backup plan: I know that this seems pessimistic, but it’s not. One of the most talented media personalities that I know just got laid off due to budgetary concerns. If he can get laid off, you can too. Take a second and ask yourself “what would I do if I lost my job today?” No, drinking isn’t the correct answer (although it’s honest). Who would you call to get your career back on track? Would you finally pursue your dream job? I hope that you would. I did. And I love it.

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