A federal election means we're being bombarded with claims about the economy from all sides. Perspective is healthy: if you're saving and have a solid financial roadmap, fears about the overall health of the economy shouldn't have little if any effect on your goals.
Photo by isak55 (Shutterstock).
Our friend Trent at the Simple Dollar calls this fear the "Economy Bogeyman", and warns against paying too much attention to it.
Just like the bogeyman when we were children, the economic bogeyman of the moment isn't real.
A person who works hard, spends significantly less than he or she earns, and invests the rest in both a diversity of investments — stocks, cash, real estate — along with investments in their life — education, skills, a home, a strong social network, debt freedom — has everything they need to protect themselves from virtually any economic bogeyman.
If you're doing all of these things, and you still aren't protected from a downturn, then nobody else will be spared either. Trent likens it to worrying about an asteroid strike; there's a chance it could happen, but there's nothing you can really do about it. Every downturn will bring about fearmongers hoping to capitalise and lead you to bad investments and financial decisions, but staying the course is almost always the better choice. Check out the source link for some more insight.
The Economic Bogeyman [The Simple Dollar]