Look around, a fundamental shift is taking place. People everywhere are re-thinking their lifestyle. Some by choice and some by fire. Foreclosure, bankruptcy, unemployment – these words scream change for those involved. I think a mindset which lies beyond overarching consumption is taking hold. Millions of families are realizing that it is not the stuff that makes you happy, it is having a purpose, stability, love and time. This shift is painful but I hope it is one that will make our country as a whole more viable and prosperous in the decades to come. Here is an analogy of our current situation.
Imagine that each of our personal financial situations is represented by a boat that we drive. Some boats are big, some are fast, some are small, some are slow, some people are so bad off they don’t even have a boat and are just treading water to stay alive. Now imagine that all of these boats are floating down a wide river. The river represents the economy.
Every once in awhile, water levels begin to rise and all the boats begin to move more quickly. After plodding along for so many years people start to get excited in the fast and deep water. During this time people begin to get a taste for better boats and either trade up to a bigger, faster model or if they can’t afford a new boat, they do everything they can to quickly make their current boat look good. Everyone starts to fill their boats with gadgets of all kinds and they justify all of the changes by thinking about their change in luck. Many boaters start making plans based upon the water always being high and flowing easily. Everything goes well and they have fun keeping up with their neighbors.
After a time, the water recedes and the boats slow down to normal level. As the water level decreases many boats who only know how to navigate the edges of the river begin to hit a few rocks. But since they love their boat and all that is in it, they adjust and make it work. Not quite as much fun, but life is certainly better than it was before. Right?
That is until the river begins to dry up. The strong current which is left in the middle of the valley can only hold a small percentage of boats, most of the boats begin to navigate the shallow water, many boats begin to hit rocks. Some of the boats are new boats and were built only for speed in deep water. These boats start breaking up almost immediately. Other boats are more resilient and throw an anchor and wait for higher water. No fun at all. Many people end up worse off than before the flood.
A fairly simple analogy, but I think there are a few lessons that everyone can stand to learn from it:
- Don’t make plans for the future based upon the high water lasting forever.
- Build a boat for strength and stability, not for speed and flash.
- The more the water recedes, the easier it is to realize that the stuff in the boat doesn’t matter.
- The water will rise again. (and don’t forget it will fall again)