9.30.2008

Big Friendly Letters

As a junior high schooler, I lugged the huge Hitchhiker's Guide to the Galaxy 5-books-in-one Edition around in my backpack, loving the silly stories and humor of Douglas Adams. It's one of the few books I can re-read over and over. During some of the first weeks of college, new friends in the dorm (who are still friends to this day!) sat around during downtime and read the book out loud to each other, seeing who could get through a whole chapter reading without cracking up themselves. It was a blast. Now, many more people know the (approximate) story from the movie made a few years ago.

The story revolves around a Brit names Arthur Dent, who gets saved from an exploding earth by his friend Ford Prefect, who turns out to be an alien. Ford is a writer for the definitive guide to everything in the universe, called the Hitchhiker's Guide to the Galaxy. The first thing we learn about this electronic, all encompassing Guide, is that the cover is emblazoned with "big, friendly letters" that read DON'T PANIC.

Good advice. Take all this financial hubbub, for instance. Quite a few people seem to be panicking. Am I? Not at all. But I have a mortgage! And a 401K! And what if I need a car loan?! Or Ladybug steam cleaners?! Or a vacation to Hawaii?! Shouldn't we ALL be panicking??!

Short answer: 
No.

Longer answer:
I'm not panicking. Here's why:
  • Yes, banks are failing, but, I don't have more than $100,000 sitting in an account somewhere, I know my money's safe. It's all thanks to that little sticker on the door of the local bank branch. "FDIC Insured." If anything DID happen to my bank, my money is safe, and I can still get to it. We're seeing this in practice- and, even if your bank fails, there's no reason to run and hide your life savings under your mattress. It's insured, and in safer in the bank than it is in your hands, in case of theft or house fire.
  • Yes, the credit market is tightening, but I've structured my lifestyle in such a way that I don't rely on  credit. I don't use my credit card. I don't plan on taking out a car loan. When looking at a big purchase, I save up before hand rather than ask "How much will this cost me every month?"
  • Yes, prices are going up, but we live below our means, so temporary fluctuations in food and gas prices won't break the budget, and significant increases will put us behind in saving for goals but won't force us to rely on credit.
  • Yes, the markets are in turmoil and I have a 401K, but I'm young. I'm investing for the long haul. My investment balance is decreasing now, but I'm also getting the opportunity to buy low, which will pay off in an eventual recovery. 
So, I Don't Panic. 


- link via God's Politics

4 comments:

Kacie said...

My thoughts EXACTLY.

I don't see how panicking does any good, anyway.

We'll just keep on doing what we're doing: Spending only when needed, saving what we can, and paying off debt.

No biggie.

For the sake of everyone though, I hope things start to improve soon.

brighthaven said...

Sounds like someone's been listening to Dave...

Anonymous said...

God's ecomomics operate differently than the world's. The world's economics are a mess right now but you are in good shape and will be fine!

Marie said...

Very sound advice. Panic kills.

Some smart people "bought low" today, IBM and all the blue chip stocks. Wish I'd had some investment money! I'd buy a few foreclosures, too!

"Crashes" like this are the best opportunity to pick up bargains.

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