What should you do if you are running out of time and money?
This is the question we get from readers over 50…over 60…and sometimes over 70.
We baby boomers were famously ‘na…na…na…live for today.’ Now, it’s tomorrow. And many of us — often through no fault of our own – are having trouble making ends meet.
At the Diary, we write about the world of money. About economic policy and how it affects you.
But what if, in your world of money, you are running short? What should you do to get more?
Check under the seat cushions? Rob a bank?
We’ll come back to this question in a few moments. First, let’s take a look at the big picture…
The yellow machines go silent
It appears that the world economy is headed for recession.
An economy makes and takes. Whatever you make — whether it is an apartment building or a plastic toy — you have to begin by taking dirt out of the ground.
You need to dig a hole before you can put up a building…or even make a parking lot. And you need to scrape up raw materials — copper, iron, oil, etc. — before you can make anything at all.
This requires machines. Yellow machines. When economic activity goes down…so do sales of these machines.
Yellow machines move dirt. They are used in construction, mining, and every sort of resource industry. We’re talking about backhoes…tractors…forklifts…excavators…bulldozers…and loaders.
Ominously, demand for these machines — along with the stuff they move — is collapsing.
Two of the biggest suppliers are Caterpillar in the US and JCB in Britain. Both report catastrophic drops in sales.
Caterpillar says its sales have fallen three years in a row. And it expects a fall of another 5% next year. This marks the first time in its 90-year history that sales have fallen four years straight.
The Illinois-based company — which gets 60% of its revenues by selling machines outside the US — says it has had to lay off 31,000 people so far…with more job losses to come.
JCB says that it, too, is suffering a devastating fall in sales. Commenting on falls in demand of 70% in Russia, 47% in China, and 36% in Brazil, JCB’s CEO, Graeme Macdonald, said:
‘Market conditions in the construction equipment sector have been difficult for some time, but they have worsened quite rapidly in recent weeks.’
The yellow machines are at the beginning of the process, not the end.
You have to move dirt before you put up a factory. Or build a house. So, when the wheels stop turning on the yellow machines, it won’t be long before it shows up in falling GDP figures.
What really matters
Now, back to the question on the table: you are 70. You have no money. What do you do?
Sell your body for medical experiments? Invent a new app?
Sophisticated trading systems and expensive investment programs are not a good idea if you fall into this category.
They are for people who have money already. If you have money, want more, and enjoy the thrill and challenge of financial adventure, they can be highly lucrative.
But what if you don’t have money already?
We don’t know anything more than anyone else on the subject. We don’t have any secrets. But after thinking about it, we have some ideas.
This is not advice. This is just what we would do if we were in that situation…
First, we would go back to philosophy — Democritus, Epicurus, Zeno, Seneca, Marcus Aurelius, and Lucretius (not to mention Jesus of Nazareth!).
They argued — albeit in different ways — that what matters in life has little to do with wealth or status. What matters (at least according to Plato’s description) is courage, wisdom, justice, and temperance.
We would add beauty and dignity. And a good wine. And a good cook. But nowhere on the list is a Rolex or a house in Malibu.
The nice thing about Plato’s list…as well as the whole Epicurean/Stoic/ascetic creed…is that it doesn’t cost much!
As many philosophers and religious teachers have said, wealth may get in the way of the things that matter. It may distract you and reduce your real happiness.
You may be better off without it…
A better philosophy
We are not ducking the question. We are just putting it in context.
If you want more money, you first have to understand what you want it for…and how it might affect your life.
Our goal is not to come to terms with financial misery. Nor is it to submit to poverty — even happily. Instead, we want to master poverty…to live better.
As Nietzsche put it, we aim to ‘set to dancing with arms and legs.’ And for that we need context.
Tomorrow — a simpler, better philosophy…and how to use it to get more money!
For The Daily Reckoning, Australia