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How much has the current economic crisis affected people globally?

In this current economic downturn that has affected the working class globally, what will be the common phrases you hear from family, friends, neighbors, and newspapers?

“Honey, I lost my job” next “Our company had laid off a few hundred workers” next “We have financial problems, how are we going to pay our daily bills” next “XXX company is laying off hundreds of workers to cut costs.”

The International Labor Organization predicted that around 20 million people will lose their jobs in the course of this fearsome economic crisis.

Everyone has to put on the austerity belt to offset daily expenses and reduce unnecessary expenses.

Battling a deepening recession, some parents are even reducing or abandoning childcare services, keeping their children at home in the care of their grandparents.

Many people are having to rebalance their work and personal lives as gas and food prices have become prohibitive and the average cost of child care exceeds rent and mortgage payments, even for those earning wages. Even after a sharp drop in gasoline prices.

It’s not that low-wage earners are feeling the pinch, but it’s also hitting those people who thought they were safe from this troubled economy for a while.

Governments around the world must find a solution to unemployment, and the rate is rising dramatically.

People need to work, they cannot be without a job, and the days are gone when you can choose the types of occupation according to your interest, and it is a situation of taking any available job for the sake of life.

LESSONS FROM THE FINANCIAL CRISIS

What is everyone’s mind now?

Most people may be worried about the terrible financial crisis, job, financial situation or their wealth.

Is that all you have to do? “NO” let’s focus on the current economic crisis and start learning from the impact and being brave to face the worst and improve our survival tactics.

Casual first, here’s a fresh perspective for those who are worried about their money.
“Wealth is not how much money you have. Wealth is what you have left when you lose all your money”, quoted by Roger Hamilton.

Now what do you have left, when all your money is gone?

You may have forgotten about your personal wealth that you have accumulated over the years, those skills that you learn, the knowledge absorbed from society, the network of associates, and finally, the character that has matured in difficult periods.

Stop, stop, stop, all worries, instead focus on building and expanding a quality business network with your knowledge and skills. For those working-class people, look for more part-time jobs available in your community.

One should also stop worrying about reputation, but focus and hone our character, because you have zero influence on your reputation.

It is what people think of you, and that you have a total influence on your own character and mentality.

GOOD THOUGHTS AND BAD INVESTORS

Most Financial Management courses educate their students on the positive correlation between risk and return at the beginner stage.

The higher the risk of an investment with the higher return of the gain and vice versa, of course.
Institutional and private investors who critically purchased high-risk, high-return structured finance instruments ignored this fundamental principle.

Most of the reshuffling and reselling of subprime mortgage risks will not eliminate the ultimate risk of credit default which is based on the creditworthiness of the ultimate borrower and not the issuing banks.

However, many financial institutions and private investors continue to buy these high-risk, high-yield instruments or bonds and should we follow them blindly?

Well, the answer is to ask questions of financial backers;

Why does this instrument offer such a high return, when it is promoted as a low risk investment?

What will be the risk?

We need to be transparent about this risk before even thinking about investing in these so-called safe investments.

Overconfidence is one of the most common traps that people can fall into and you need to be aware of all the knowledge gaps and perception blind spots.

This kind of situation is dangerous as we don’t know what we are supposed to know about financial backers.

In fact, most financial institutions actually knew what risks they were taking on their books and the same with eager high-yield investors who had risks in their portfolio.

Pay attention to what you don’t really know about any trading situation before making the investment, as the Aldous Huxley quote is correct; “Facts do not cease to exist just because they are ignored.”

Amplifies the Effects of Risk Ignorance By Groupthink 2006, some economists and lawmakers warned that the US housing market was in deep trouble as soon as US interest rates started to rise again.

This warning was ignored, as these critics were often ridiculed, silenced, and forced to adhere to the prevailing mindset of the uncritical dominant majority.

Although clear warning signs of an impending real estate crisis in the US have been voiced for more than two years, most investors either failed to notice or simply ignored the facts.

So, finally, what causes the financial crisis?

It is mostly herd thinking coupled with overconfidence, ignorance, selfishness and greed with a short term focus on exciting growth, personal gain, compensation and neglect of long term sustainable growth and profitability.

The greedy mind of many investors with their thoughts; “I want to make more and more profit now” as such thinking is value exploitation at its worst. It is the antithesis of creating value as a responsible investor or business thinker.

As revealed by world population statistics, which have reached 6.8 billion people living on this earth at the latest and are estimated to increase to 9 billion by the year 2050.

The conclusion of the current economic crisis is human error, not a natural disaster; It is the ignorance, greed and selfishness of the human being that Lord Buddha defines as poison embedded in the mind of the human being.

As Albert Einstein said “We cannot solve our problems with the same thinking that we used when we created them.”

As times get tougher with the economy and recession positions, our fellow humans will eradicate bad thoughts, wake up, it’s time for a new creative renaissance.

The motto will be; “Reactivate our economy to reduce the suffering and agony of the recession”