The U.S. economy has now been growing for over ten years, the longest period of economic expansion in our history, but nothing lasts forever. Lately clients have been asking me about how to prepare for the upcoming recession. They’re unsettled by the political environment, threats of climate change and growing tensions with other countries. The future feels uncertain. And many remember the Great Recession of 2008 and 2009 all too well.
I understand these fears. I have them too. But now, as always, it’s important to stay disciplined. That means staying the course, focusing on what you can control and investing for the long haul. The truth is no one knows what the future holds. Recessions, corrections and bubbles have occurred for centuries, and we can expect them to keep happening. But as is often said, emotion rarely has anything to do with logic.
Why is it that we still have these moments where we want to move money to a safe place in case the market crashes? Why do we worry about how much money we have in our emergency fund?
I recently attended a seminar with the father of Financial Life Planning George Kinder, which helped me gain some perspective on this. He mentioned that our fear, anxiety and distress is there to wake us up. The struggle you feel when deciding whether to quit your job, when you try to figure out if you have enough money to retire or when you attempt to get on the same page financially with your spouse is an alarm. It’s asking you to “find out who you really are in relation to your money.” To alleviate your fear and anxiety, you must resolve your inner conflicts around money and use your resources in a way that builds the life you actually want. Today, I want to discuss how you do that.