Even A Decade Long Recession Will Be Okay

by David Ning · 10 comments

recession is okay

It’s hard to ignore the similarities of our current crisis with Japan’s financial crisis which began in 1990.  Boom of the housing market and excess lending feeding off each other leading to a housing bubble.  Once popped, stock market prices were dragged lower and what’s left was banks with unmanageable debts from a lack of lending standards.  Then the economy went with it and what followed was 10 years of no growth in Japan’s economy.

I remember last year when my friend from Japan who told me that his house is finally worth what it was when he bought it 20 years ago.  It sure is scary to think about the possibility of this happening in the United States.

Then I thought about my friend, who were actually retiring last year.  In 1990 (when the crisis happened), he was a mid level manager working hard in the corporate world.  When the crisis hit and headlines of doomsday were appearing everywhere, I’m sure he was worried much like we are right now.  Unfortunately for him (and many other people), the unthinkable (at the time) and the worst situation happened, causing Japan’s growth to grind to a halt.  Having lived through one of the worst economic eras of Japan’s history and 18 years later, my friend retired as the President in one of Toshiba’s medical division.  He has two daughters and lives comfortably in a beautiful part of Japan.

He came out of his national crisis great and here are a few reasons why:

He Didn’t Throw Up the White Towel
Many people gave up during that time and none of them came out better than my friend.  While he lost money on paper like everybody else, he stuck by his strong work ethics and came out of the crisis financially much stronger than he went in.

He Didn’t Sell His House and Stocks
Unlike many of his friends, he did not sell his house nor his stocks.  As he worked hard and accumulated more money, he put his money into more investments like saving accounts and stocks.  While these alone didn’t make him rich, it certainly didn’t make him poor either.

He Didn’t Panic and Be Unproductive
I keep saying this and I will say it again.  I see so many people these days spending time worrying about their finances and not being productive.  Stop worrying because business is as usual.  Stay positive and work hard because good times will come again.

While it’s difficult for anyone to predict the future, we can take comfort in knowing that people still prosper in bad times.  Don’t give up, don’t panic and stop worrying.  That’s what my friend did.

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{ read the comments below or add one }

  • karla (threadbndr) says:

    My mom, who was a teenager/college student during the Great Depression has a “survived it once, will survive it again” attitude. Like your friends, staying the course left her parents and her much better off financially.

    My Grandfather actually lost his farm, but my Grandmother had used her dowry money to buy land and a rental property for cash, so they moved and prospered. I grew up in that house.

  • marci says:

    As the old saying goes, “When the going gets tough, the tough get going.”

    Hang in there, and keep on a-truckin’.

  • carlota says:

    Your post enlighten me. I can let my hubby to buy the stocks now. Thanks.

  • Karina Harris says:

    The current economic crisis in the US is certainly sparking a lot of controversy and people are beginning to feel very lost when they can no longer lean on their employers or big business to help them through the tough times. With the amount of people being laid off and fired from their jobs not many people know that home-based businesses thrive in this type of financial crisis. It saves gas money, airfare, and also eliminates the tension when thinking about if and/or when you may be laid off from your 9 to 5 job.

  • Joe says:

    Great post David.

    I’m just grateful that I’m in my mid 30’s and have the opportunity to take part in this once in a lifetime equity sale.

  • Vik Dulat says:

    I agree with Fatherlyours. It is a good time to buy stocks right now. Sooner or later the stock market will be back. I guess time will tell as to when it will come back.

  • Shadox says:

    The most important thing to worry about (financially) is your monthly cash flow. As long as you have a job and are making more money every month than you are spending, you are in OK shape. Focus on keeping your job and not making any stupid / rash decisions.

  • Fatherlyours says:

    Yeah, you are right. A friend of mine even told me that buying stocks at this time is even a wiser decision.

  • Joy Ball says:

    Wow, you make me calm again. I’m very worried right now but like what you said, not to panic. You’re right we should work hard instead of worrying so much. Thanks for your great article. You are very positive person.

  • Donny Gamble says:

    I don’t believe that the recession will last for an entire decade because the emerging markets will recover from this crisis a little bit after the United States and this should take about 3 to 4 years.

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