“Weather the Storm”

By Mark Folgmann

Everybody is trying to predict when this economy will turn. Has real estate hit bottom? When will the bear market turn back into the roaring bull and what about jobs? Sure the real estate agents tell you it’s over and the brokers want you to believe we have hit bottom but the reality is “nobody knows”. I’m not a pessimist but even I can see this thing could go on for some time. When you really study world history not American history you will find that an economy can hit the skids for a very long time. Just because it hasn’t happen recently (last 100 years) doesn’t mean it can’t.

With my clients I have to prepare for the worst case scenario even if it never happens. What if we have another 9/11 before we see recovery? Many of my clients are already retired and can’t afford to loose another 10-20 years due to the economy. Have you ever thought about what it might be like if it took the country 8 more years to recover and Michigan 15 years? What would you do different? Would you save a little more while your family was still employed? What about reducing your debt by 50% over the next 2-3 years or maybe build up additional cash reserves? Should your 401k be allocated different and what about finally paying attention to investment cost? Can we really afford to pay 2-3% on our investments when we are only earning 2-5%? With over 90% of our country still working we still have plenty of time to shore up the ship and these minor changes can have a huge impact on our financial lives.

Hopefully we don’t see another decade of trouble ahead but if we do, you will be much better prepared. Today is the end of this years Cherry Festival and my wife and I have spent most of the week downtown either serving beer or enjoying the festival and can’t help but notice that many of the downtown stores close early during the festival or don’t open at all. This I don’t get, can’t we keep our town open till 9 or 10 pm for one week each year while hundreds of thousands of people come to spend money. We heard countless comments about stores being closed and would encourage everyone to stay open because the overall shopping experience is a big part of the festival. Even with Michigan tough economy it appears we have had another successful Cherry Festival, great job Traverse City.