How to protect your money

Markets opened down again this morning, meaning that the few soaring spikes of last week were only some bargain hunters and speculators spicing up the market.

 

Although your stay at home firm will still be doing as good or as bad as it was before, the underlying fact is: your firm is part of a sick economy.

 

What is the economical disease all about?

 

It’s an economy:

based on consumer-goods
 
paid with borrowed money.

 

The latter is the easiest to explain: if you are borrowing on an interest rate between 1% and 5%, most likely you will make more money than what you borrowed, interest included.

 

But when you have let’s say:

 

• a student loan at 16% and still looking for a job or
   
• credit card loans at above 17% only paying the minimum payback needed

 

You are creating debt without having anything to replace it. Sooner or later somebody will want his money back, and you will be bankrupt.

 

That’s sad both for you as for your lender, because he suddenly no longer has the money he believed he had. Once this ball starts rolling in an economy without much state intervention like US, the ball will sooner or later hit the big companies.

 

But you say: I am a small stay at home owner, what is my part in this?

 

All you have to look at is the way you borrow and how you are using your borrowed money to create income. Is it "healthy" or is it "sick":

 

• sick because you rely on customers who are almost bankrupt
   
• sick because you need to pay too much interest
   
• sick because you don’t succeed in adding extra value to the money you borrowed

 

What is wrong with the consumption society

 

Any stay at home job earner knows that every extra sale means more money. So what’s wrong with consumption you might ask?

 

Nothing is wrong with consumption, but things get bad when I produce 100 hamburgers, sell 50 at a profit and throw away the rest because I didn’t have enough customers.

 

This works fine in your backyard, but on a global scale: you are using up way too much resources, spilling them by throwing them away, where on the other side of the globe people are in need of these resources but can’t get their hands on them.

 

These people will get desperate and sooner or later start a war: because if you can’t buy it, you can always conquer it. That’s what our history shows over and over again.

 

So as long as firms don’t take the global limited resources into account, your stay at home job exists in a very unstable landscape on the long run.

 

Up to you to take your chances, but in the current world recession we live in today, there isn’t much more room left to neglect the others and blindly trust the consumption society.