The Economic Crisis

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Since this Blog is more or less about making money, I should make some comment on the current economic crisis, and how it can effect you. I’m by no means an expert on this, but from my own research from those who know better I have made a few conclusions. This is mainly advice on the UK market – but the “credit crunch” and the problems it is bringing are global.

Please use the comments on this post if you have advice.

1. If you hold investments, perhaps in shares and funds, you should remember these are long term investments. Don’t panic: for one, these funds are now buying shares at a lower price. The market always moves in cycles and there are not many fund managers who are making a profit in these times.

If you have your money in one of the collapsed banks I sympathise. I don’t know the US market, but in the UK your investments are guaranteed up to £35,000 per bank by the government. If you have more than this it’s advised you split them between a few institutions.

2. Your mortgage: House prices are in general falling. It depends when you bought yours and how much you paid as to how much it concerns you – prices were rising rapidly until relatively recently.. If you are looking to buy a home, perhaps it’s worth waiting longer as the downturn is expected to last a little longer. If you are looking to sell, be aware prices are unlikely to rise for at least 2 years or so according to the experts. And, of course, there are far fewer buyers who can arrange mortgages!

In the long term, house prices are always a reflection of supply vs demand, and land is a finite resource.

3. Spending power: Since this blog covers Internet Marketing, which mainly concerns selling, it’s worth noting that peoples spending power has taken a blow. This could mean a reduced income for you as people cut back, even if your primary income stream is from running advertising. However, it also means there are a lot of people out there who are looking to start earning a second income of their own… And who knows, now be the time to launch that new Surviving The Credit Crunch book :D

So what can we read from this?

A. Don’t Panic. Things will get better, one day, but it makes sense to ensure your savings are in the safest place. Basically this downturn won’t last. Those who claim this is the end of capitalism as we know it and the death of big banking are jumping the gun.

B. Look for opportunities! Even in a market thats in a downturn, opportunities exist. One mans crisis is anothers chance to capitalise. For example, share prices are lower so those willing to take a risk can source some real bargains, and certain credit and finance related products are in demand.








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    Comments

    3 Responses to “The Economic Crisis”

    1. Stefan Töpfer
      November 4th, 2008 @ 1:34 pm

      Great article….

    2. Webtoolkeeper
      November 13th, 2008 @ 2:38 pm

      The current economy crises has affected a lot in my online earnings… both adsense and affiliate sales have dropped by 5 to 14% since August…

    3. Caleb
      December 4th, 2008 @ 1:01 am

      Seems to me that now would be the perfect time to buy some shares…they have nowhere else to go but up ;)

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