Not a subscriber? Click here to learn
more.
|
| Home | About Us | Resources | Archive | Free Reports | Market Window |
|
Editor's note: In yesterday's edition of our holiday series, Steve shared seven secrets of a successful businessman. But hard times fall on even the smartest and wealthiest... So today, Steve shows us how to "reboot" when the worst happens...
Time to Hit the Reset Button on LifeBy
Saturday, November 26, 2011
"We're going to have to write a big check to get out of our house," a friend told me.
He's moving far away from here.
"We close on our house this month," he told me. "I'm trying not to see it as a big loss, though. I figure we're just trading out... I figure the house we're buying where we're moving is probably at the same kind of discount."
My friend and his family have to recalibrate their lives...
Back during the real estate bubble, they were living high, hardly working. They'd borrowed heavily and put it into real estate, which gave them a large and ever-increasing net worth... until the bubble ended. I'm not sure how much of that net worth has disappeared – but there's a chance most of it is gone.
The regular vacations and extravagant lifestyle are things of the past, for now. He is back to work – hard at work – in a new town, with a new life. With his willingness to change and his work ethic, my friend will be a success at whatever he chooses.
He is one of the few smart ones out there now... He is moving on. He has changed careers. He's moved far from our bubble area. And he's recalibrated back to a more normal standard of living.
Surprisingly, many intelligent folks haven't acted as smartly as my friend.
You see, where I live on Florida's east coast, real estate and tourism were the top businesses in the bubble. When the bubble ended, they both collapsed. Yet the guys who were successful in the bubble haven't moved on. They're still sitting on their real estate or their tourism-related business, hoping for a return to old times.
While the tourists have returned and real estate prices are the lowest I've seen in a long time, the brutal reality is, we won't see the same levels of spending and real estate prices for possibly a decade or more – longer than that crowd can wait.
So what can you do?
Taking a huge loss on your home doesn't sound like fun. Finding a job far away in a non-bubble industry is a tough decision to make as well. But my friend is doing the right thing, and he has the right attitude.
In short, instead of sitting around hoping the good ol' days return while his investments fall in value, he bit the bullet. He's making a new life with a more normal standard of living.
In a decade, he'll have the money to buy all the real estate around here he wants. Meanwhile, the guys who sat around moping and hoping won't have the money or the optimism in a decade to buy.
If you're in a position like my friend was – in a bubble town, in a bubble industry – don't forget, you have a choice. You can stay and hope the bubble days return. Or you can leave and try to create a better life.
I realize 99 people out of 100 will stay and hope. But it might be time to do something bold... something like my friend did. He can always come back, and it will be just like he left it. But now that he left, he's succeeding... And I'm not sure when he'll return.
Good investing,
Steve
Further Reading:
Faced with a depressed market, Steve's friend Grant decided to change his lifestyle... dramatically. He sold most of his physical possessions, downsized his home, moved his family... and is now enjoying life more than ever before.
"You can choose your life," Grant said. "A lot of people don't realize that." Read more here: You Can Escape This Market.
Market NotesCHART OF THE WEEK: PLATINUM'S EXTREME "CHEAPER THAN GOLD" LEVEL Over the past few days, we've noted "bargain" levels for gold and silver... the world's most widely traded precious metals.
Today, we're looking at another precious metal... and note that this one is the biggest bargain of them all. We're looking at platinum.
Platinum is a "double duty" metal. It's a rare and valuable commodity. It's used in jewelry... it's been used as money... and it's a major component of catalytic converters for cars. The market for platinum is much smaller than the market for gold... so its price is volatile. But many precious metal experts recommend keeping a small portion of your wealth in platinum for diversification... and to get exposure to platinum's explosive upside potential. Right now, getting that exposure is extremely cheap...
Because platinum is rarer than gold, it typically trades at twice the gold price. For example, gold traded at $600 per ounce in 2006. Platinum traded at $1,200 an ounce. This was a "normal" ratio. But just recently, platinum has become cheaper than gold. Several players in this small market have had to "puke up" positions due to the European debt crisis. This makes platinum's recent "cheaper than gold" level of $1,500-$1,550 per ounce an interesting bargain...
 |
Stat of the week
20%
Quarterly sales increase reported last week by farm equipment giant Deere & Co. Robust grain prices are swelling farm incomes. Jim Rogers was right!
In The Daily Crux
Recent Articles
|
