Categorized | Domaining Tips

Understanding the World’s Current Financial Situation

Posted on 25 October 2013 by Andrei

As a domainer, I can’t stress this enough: it’s in your best interest to understand the world we’re living in so that you can position yourself accordingly.

Most countries made huge mistakes, they spent money they didn’t have on things they didn’t need. Countries, citizens, almost everyone wanted to live beyond his/her means.

The problem is this: you as a person can choose to live beyond your means by borrowing money. Everything is great initially, you buy everything you wanted but at a certain point, the money runs out and of course, you have to pay the lender back with interest.

No problem, you take out another loan and use your home as collateral.

That way, you have enough money to pay your current commitments and to keep living beyond your means.

Eventually, that money runs out as well and you have to keep paying back both loans, with interest of course.

… this can’t go on forever and the more you kick the can down the road, the harder it will be to recover.

There’s nothing wrong with wanting a loan, nothing at all.

But if you go overboard and let things degenerate, then as of a certain point, there’s no way out.

Imagine that you’re driving in your car at a speed of 200 kilometers per hour and are heading towards a huge brick wall that’s only 800 meters away.

The ideal situation would have been not driving at such a high speed in the first place.

But ok, whatever, if you reduce the speed while you’re still 800 meters away from the wall, nothing bad will happen. The breaking distance is only about 400 meters at a speed of 200 km/h, so you’ll be able to stop in time and avoid the collision.

If you start reducing the speed when you’re only 600 meters away, no problem, still enough distance.

If you start reducing the speed when you’re only 400 meters away, something might go wrong and you’re no longer playing it safe since the breaking distance is 400 meters. You might be able to stop *just* in time but then again, you might not. If not, then the speed won’t be huge at the moment of impact, so you’ll probably only do some minor damage to your car. Not a fun situation at all but still, nothing disastrous.

If you start reducing the speed when you’re only 200 meters away, you probably won’t be able to avoid the impact and even more so, the speed at impact will be greater than in the previous situation. So instead of only causing minor damage, you’ll cause more damage to your car. But still, you probably won’t be hurt all that much, maybe a few minor bruises.

If you start reducing the speed when you’re only 150 meters away, you’ll end up being more seriously hurt, maybe something like a broken rib/arm/leg. So you won’t be able to avoid hospitalization.

If you start reducing the speed when you’re only 100 meters away, you might end up so seriously injured that you’ll die.

If you start reducing the speed when you’re only 50 meters away, the chances of survival will be slim.

If you start reducing the speed when you’re only 10 meters away, there’s nothing you can do to avoid death.

The world economy is the car that’s moving towards a huge brick wall at 200 km/h. We could have made the right choices years ago and stopped while there was still a reasonably large distance between the car and the brick wall.

Now it’s too late for that, we’re already too close and it’s very likely that even if we do the right things now, we’ll be injured.

But we can still survive *if* we stop kicking the can down the road and start reducing the speed asap.

If you understand this example and correlate it with the world’s current financial situation, you’ll be in a good position to figure out what to do next.

2 Comments For This Post

  1. Kroc Says:

    Great advice! It’s an important factor we often overlook or choose to ignore. Educate yourselves today and be prepared for tomorrow. Thank you!

  2. Kassey Says:

    The world has not changed at all, when it comes to weakness of human being. Written some 3000 years ago, Proverbs 22:7 say: the borrower is slave to the lender.

 
 
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