the riddle of steel

German Hero

“He is strong! If I die, I have to go before him, and he will ask me, ‘What is the riddle of steel?’ If I don’t know it, he will cast me out of Valhalla and laugh at me.” … “That’s Crom, strong on his mountain.” ~Conan the Barbarian

Over the last couple of months we’ve all learned that some of the advice that we’ve been handed over the years will not be easy to swallow. Learning to live within your means and invest in index funds and network to maintain your job are all nice, friendly pieces of advice when the economy and the market are headed in a never-ending positive direction.  The same was true during the real estate boom – “invest in real estate” was such basic, incontrovertible advice that it seemed almost crazy to ignore it.

Now for my generation (Gen X) and the rest of the country it’s time to learn the riddle of steel. I’m not apocalyptic, but as I’ve mentioned before it’s awfully easy to advise people to invest in the market when it’s returning 10% per year, or to invest in real estate when it’s wildly appreciating, or even to be aggressive in your career when the job market is hot.  Nerves of steel will be required now.  When the job market is tight and the investment possibilities are limited, it will take some fortitude to stick with the wealth-building philosophy.  I made a pledge to reach a wealth goal last year, and recently I’ve doubted I’m going to make it.  But I’ve decided that the current economic environment offers even MORE opportunities than the rosier markets of the past few years.  When times are bad, individuals with focus and discipline are going to win the day.

I’ve been badly distracted by the presidential election in the US. I’ve mentioned it before – I’m a presidential politics junkie and I spend most of my free internet-reading time reading about minor political moves by the candidates, when my decision’s been made for months (although I’m not terribly happy with my choice).  I am looking forward to the conclusion of the race simply because it will allow me to shake my addiction to political news and return my full focus to the question of building wealth for the benefit not just of myself but for my family, friends, community and clients/customers.  I know that times are hard but I’ve realized that times like this are the times when people with real skills – not just paper degrees and flimsy networking connections – can move forward, and the more I think about it the more excited I get.  The market will be tough, the business environment will be challenging, and even daily life will be harder – but these are the challenges that will allow us to measure the best versions of ourselves.

photo credit: giopuo

11 comments

  • I agree, being discipline is probably the best advice over any other money saving plan. Are you close to achieving your goal? If so, when does it end and what are some of your future goals?

    Craig
    http://www.budgetpulse.com

    • Craig, my goal (from the link in the article) was to have $2 million in net assets in 2017. I have been brutally pushed back from my timeline in the last couple of months. I set $2M because the expected level of income off of that level of assets was enough to cover most of my (very high northeastern US) cost of living, meaning I could quit work and generate “extra” income solely through writing.

      I'm not giving up on that goal, but the last few months have made achieving that much, much, much harder.

  • yeah, we need nerves of steel. I've never had a problem being in dicey stock markets, yet must admit feeling unnerved by an increasing number of “pundits” who say the investment advice we've all bee spoon-fed for years could be wrong, terribly wrong. I actually read one example showing how you'd have been better off putting $12,000 under a mattress for the last 5 or 10 y ears than if you've invested in what they're calling “the lost decade,” due to sucky returns.

    i'm surprised to you say you're not thrilled with your candidate choice. I see this election as very polarizing. It's hard for me to imagine feeling uninspired by the choices. for me, the choice is obvious.

    • Fern, that's what kills me – of course, hindsight is 20/20, but I would've been much better off keeping my money in my “low return” savings account than investing it in S&P 500 index funds like the financial genius Warren Buffet proposes…

      I'll be honest here in the comments about the candidates: I was a McCain supporter in 2000 and really loved the guy for years. I have been sickened by his campaign and I am – beyond a shadow of a doubt – voting for Obama. I am voting for Obama based on only two things, though – I think he'll help American “PR” in the world, and I think he's less likely to start another war. I'm not convinced his economic policies are anywhere NEAR as transformational as we need, and I think we need a politician to step up and tell us harsh truths now: taxes must go up, spending must go down, companies must fail and massive military withdrawals around the world are no longer optional – we cannot afford troops in Germany, Korea, etc. I'm not sure Obama – with his promise to “govern from the middle” – is the guy to deliver on the harsh changes we need. But I'll pull the lever for him and hope for the best….knowing that the alternative is a nightmare of avoidance, war, and religious intolerance.

  • Yes… the question is exactly HOW to move forward. Discipline is certainly key and with current stock market valuations I think that over time the stock market will generate good returns. The market is pretty much pricing apocalypse, and personally I don't see the four horsemen on the horizon.

    My personal strategy has been to invest a fixed amount in the market on the 15th of each month, come hell or high waters. I have followed this approach since the trouble started in July 2007. So far, that strategy hasn't worked so well… but I am hopeful that in the long run, this is a solid approach that will take us where we need to go.

  • The thing about a savings account having been better in the last 5-10 years than the stockmarket is only important if you're cashing out now. Otherwise the question is do you think it will be worth more or less in the future than it was when you bought it? Or what it's worth now? If less, cut your losses, if more, ride it out.

  • Nabloid.com

    I agree, we need to live within our means! That piece of advice shouldn't just apply to people, but also to the government and to the Presidential Candidates. Watch the documentary I.O.U.S.A., they just released a 30 minute version of the award winning documentary that talks about the US government finances and consequences that are coming in the future… It's really good. http://www.nabloid.com/iousa-30-minute-version/

    BTW, Obama already won the second he showed his face, and he will spend spend spend, like all politicians do. Change has to be clearly defined, and it isn't. The election is just a popularity competition, nothing more. People act like he is here to save them… ridiculous. People should wake up and realize, even Obama has stinky poop.

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