The Global Financial Crisis of 2008 was a rude awakening for me to the ways of the world. At the time, I had been working for about five years and it had been a time of growth and progress, for me personally, the media industry and India’s economy. Good times are seldom fertile grounds for introspection.
2008’s Global Financial Crisis and the Recession that followed it got me thinking about work, my personal life and money. Here are some of the life lessons I learnt from it all.
1. EVERYTHING IS CONNECTED
The Global Financial Crisis was triggered by the bursting of the housing bubble in the United States. It impacted banks and insurance companies based mostly in New York but the tremors were felt in every country that did business with the US – which is, practically everyone. I saw people lose their jobs in a media organisation that had nothing to do with any of it.
The economic slowdown that followed in India (though thankfully, India avoided a full-fledged recession) saw job cuts running into the millions and a great deal of unemployment and diminished growth. This taught me that globalisation isn’t just a buzzword for investment summits but it’s real and, like everything else, it has its negatives as well as positives.
2. DON’T LET JARGON SCARE YOU
It’s important to be aware of the big stories in the business and financial worlds. The stuff you don’t know could still upend your life. It’s best to know what’s going on. Don’t let the acronyms and numbers scare you away. Try and understand the story and the direction in which it is headed. The direction matters more than the numbers and jargon.
3. FOLLOW THE MONEY
Figuring out the direction in which the money flows can tell you a lot about the lay of the land - the real motivations behind what people do, where their loyalties lie and as a consequence, how seriously you should take them.
For instance, don’t take a financial influencer too seriously if they just uploaded an interview with the CEO of a big business a few weeks ago, and then start recommending the company’s stock as the greatest thing since the steam engine. Whether they received payment in cash, kind or views is immaterial. You need to remind yourself that it is sponsored content even if doesn’t say so. And that you need to treat it as such. This is as true for TV shows promoting cryptocurrency as it was and is for the rating agencies who gave AAA ratings to junk bonds because they are paid by the banks selling the junk.
4. POLITICS AFFECTS EVERYTHING
So, you think that just because one political party fighting an election against another or which Bills they table in Parliament doesn’t interest you, it won’t affect you? Let me put it plainly. Are you interested in how much money you are able to spend or save from what you make at your job? Or who you can marry? Or what your kids are taught in school? Or whether or not you can afford that vacation to Croatia next year? Everything you care about is affected by politics. And yet, you delude yourself into believing that it doesn’t matter. When you choose to stay ignorant and apathetic, the only thing that doesn’t matter is you and your concerns.
5. GETTING A PINK SLIP ISN’T A REFLECTION OF YOUR WORTH
There are a lot of factors involved, most of which have nothing to do with your work. You could be the one getting the sack due to any old reason like:
Your department is being downsized or eliminated.
New technology has made your field of expertise less relevant.
You earn a little more than others doing the same work as you.
Your boss doesn’t like you.
If you do get fired from your job, try not to weigh yourself down with feelings of unworthiness. Learn what you can from it (there is usually a lesson or two), dust yourself off and make your move.
6. DON’T SPEND MORE THAN YOU EARN
An ever-increasing number of businesses want us to buy their wares. They hire advertisers and influencers to sell us the idea that life is somehow incomplete or at the very least, a tad paler without the latest threads, cellphone or car. However, at the end of the day, money is numbers.
In a literal sense, there isn’t much difference between someone who makes 30,000 bucks a month and another who earns a lakh if both end up saving only 5,000 every month. Or worse, if they're both in debt. If it happens once in a blue moon and due to unforeseeable circumstances, it’s understandable. But if expenses that exceed your income is your standard operating procedure, then you’re tempting fate.
7. CAREFUL WHAT YOU TAKE ON DEBT FOR
Speaking of debt, you might say that sometimes one needs to live beyond one’s means. In truth, yes. Except that it pays to remember that a loan is about borrowing from the future. In which case, it is best that whatever you'll be paying for in the future also be of use to you in the coming years. Please be warned, over-sized blazers in fuchsia do not fall into that category!
I must confess that I’m terribly averse to taking out loans but I do concede that they are necessary at times. All of us aren't sitting on a nest egg to buy a home or invest in a business venture. However, before you sign on the dotted line, I suggest you ask yourself whether you’ll be building an asset whose value is likely to appreciate like the price of gold or depreciate like a car or an air conditioner. For instance, if it’s a home you’re buying, let it be one you can move into with an EMI that isn’t more than double your monthly rent. There’s a reason why it’s called a starter home. It doesn’t have to be the castle of your dreams!
8. YOUR JOB ISN’T YOUR LIFE
While we're talking about homes, how about you spend some time there? Have a life beyond your work. I’m sorry to be the one to break it to you but if you work in the private sector, you never know when you could be handed the pink slip. I've known a fair number of folks who acted like their organisation would crumble to dust if they took more than a week off work. If only they had. They would know that things went on just fine without them. Sometimes, even better!
Let’s get real. When you leave or are escorted out, there isn’t a job or boss in the world who wouldn’t replace you before you can even exit the building. So, make sure that work isn’t your sole contribution to the world. Spend time with people you like and doing things you enjoy. It makes for a happier and healthier you. It’s the kind of investment that never fails to pay dividends.
Also, when you go through tough times (whether due to work or otherwise) it helps to have friends and family that you haven’t ignored while chasing the hustle train.
9. DON'T EXPECT HELP FROM POLITICAL LEADERS
Believing that a politician will fight for what is due to you even if you take your foot off the pedal is fantasy. Even the cool ones, like Barack Obama, who claimed to stand for the average person and pretended to need crowd-funding, will disappoint. Don’t expect them to do you any favours.
When push comes to shove, they’ll stand by the guys who helped pave the way to the office they hold. Just in case, you thought you were part of the ‘guys’ because you voted for them or argue with random strangers on social media in support of their policies, let me tell you a secret. You aren’t. The guys who bankrolled their campaigns and the ones who are in the position to do so again are the ‘guys’ they’ll stand by. And you’ll be left holding a banner proclaiming, ‘Yes, we can’. Don’t fall for their poll promises. Keep up the pressure and vote for action, not dramatics.
10. DIVERSIFY YOUR INVESTMENTS
Don’t park all your earthly belongings in one basket. Split them up into high risk, high return and low risk, low return based on your requirements. Distribute your investments over different sectors – real estate, mutual funds, stock markets if you like, gold bonds, fixed deposits, etc. Make common sense investments in different baskets. And if something sounds too good to be true, it’s usually a scam or worse, a pyramid scheme!
11. MANAGE YOUR EXPECTATIONS
I’m usually an optimist but not to such a degree so as to ignore what stares me in the face. And so, I would recommend not trusting individuals or institutions to do the right thing if doing the wrong thing brings them a lot more money or power, with little or no risk of retribution. Barring a few noble and notable exceptions, that’s just human nature.
12. HOPE SPRINGS ETERNAL
Yes, I know the title said 11 lessons. But Life surprises us and I thought, so should this post. The greatest lesson I learnt from the Recession is to not give up hope and wake up to all the wonderful stuff in my life that I may have ignored and wasn’t grateful for. And to remember that disappointments aren’t always dead-ends. Often, they’re a fork in the road that forces us to make a choice. The path we choose can make all the difference.
Very well written articles both part one & two.