Do you know the causes of financial crisis?
Uncovering the causes of financial crisis might be a ongoing search, simply because I know there are many reasons that can impact what happens within a financial system. I am not an economist nevertheless I have my own views, as I’m sure you do as well. That being said, inside today’s article let us disregard what the governing bodies are saying and get real.
I know that the authorities, along with major businesses such as the banks and institutions, have their spin about the real causes of the financial crisis, rather than wanting to get into the truth of the problem.
I ‘m not convinced this is going to win me any friends but hey, you simply live once and today seems like an appropriate day to voice my view. Furthermore I might possibly get a number of thoughts out there which might help you when the next financial crisis takes place. It is my understanding that it is going to take place once again, simply because nothing has actually changed, and unless things do, we are going to keep going down in a constant spiral.
So let’s look at, in my personal opinion, is most likely the significant cause of the financial crisis.
To start I want to ask you some questions, they are simple ones and it will be easy to respond to them:
Do you have a credit card?
Have you ever gone in excess of your limit?
Have you ever purchased something you know you can’t afford?
Do you own your own home or do you have a loan?
Perhaps you have drawn down on your house loan to get something that was really not essential?
When you look through your house do you have more than one television or fridge?
How many computers to you have at home?
What number of unwanted mobiles will be in your draws or cupboards?
How do you pay for your holidays? With your savings or maybe your “line of credit”?
I’m sure you get the hint.
We purchase things we don’t need and continue getting ourselves into debt to have the things we are “advised” we need. Financial debt is really a cavern of hopelessness. We’re instructed it is necessary to get ahead (mind you this is the lie) and experts claim, when we do not possess a credit card exactly how are we going to get a favourable credit record for that home loan from the bank?
What a laugh!!! The banks and credit organizations are a few of the most effective marketers on the planet. They’re betting that many people have an insatiable hunger to own up to date possessions, let alone the best. The institutions understand that people detest the thought of being left out and another person owning something which they do not own, and God forbid if a person has an item the other person does not possess. Most people place stress on themselves to go out there and acquire it the “best and lastest” to keep up with the Joneses. What a lie!!!
It is our greed that will keep us desiring more and keeps us in personal debt and it can be the debt which often places unnecessary stress upon us, puts strain on out our relationships and, stops us from becoming everything we were designed to become.
You see whenever we have financial debt we make judgements of , what we can or no longer can do, and where we can or can’t go, simply because we have been limited by means of a contract to repay back a loan. When we do not pay up we could easily lose everything we have worked so to hard to pay-off and own.
So just what is it that causes a financial crisis?
Well it is pretty simple in my mind.
1. It starts with believing the lie that we must possess more.
2.Many of us begin looking for ways to have things we presume we need.
3.Rather than spending less or even building a small business which multiplies our cash flow we tend to do the comfortable thing and utilize our charge card or even get a loan.
4.Burden gets placed on the economy because people today are spending excessively (money that is not theirs since they borrowed it from the bank or financial institution).
5.The federal government with their knowledge says that “people are spending too much”, and because so many actually the government needs to slow them down by putting interest rates up on loans.
6.Rates of interest get higher, we tend to stop buying.
7.Companies that thought the bubble would not burst carry on in to debt themselves in order to feed the insatiable drive of the country/globe for their business.
8.When people avoid shopping, businesses simply cannot afford to pay their workers.
9.Employees end up getting laid off.
10.Any time too many individuals get laid off simultaneously finance institutions can’t carry the consumer debt and they also fail.
11.Consumers start getting worried that they’ll lose almost all their money and so many people move their funds out of the financial institution.
12.The bank just can’t allow individuals from pulling out their funds and people panic.
13.This brings about additional worry.
14.Individuals revolt.
15.Government authorities execute a bail out.
16.Authorities go deep into debt as well.
17.Governing bodies go under when they grasp they cannot pay off their own debts.
18.Countries turn out to be owned by organizations and not the people.
I realize this may be a pretty melancholy take on things, nonetheless it is fact, well truth in my eyes anyway.
It would be good to be in a position to blame someone else for a financial crisis yet in the long run we have to take responsibility with regard to the things we purchase along with the personal debt many of us put ourselves in.
You see it is our greed that starts everything and it really is the consumer debt that continues the cause of financial crisis.
In the event that you would like to seize control again for you and your family, may I suggest you do what many of the largest names in business are working on right now.
These are just my personal beliefs, I am not a certified adviser.
1.Get out of debt. Don’t have any kind of personal financial debt.
2.Start reducing your smallest debt for starters after which, start compounding your repayments.
3.Don’t combine your debt (this is certainly my personal view therefore you should seek qualified guidance). Make extra payments on your smallest debt first simply and pay the minimum on the other debts. After this smallest debt is paid back, then use the money you had been using to pay it off and put it off the next smallest personal debt. Continue on with all of your debts. This will begin to compound and you should notice the money you owe starting to minimise quickly.
4.As soon as that you’re out of debt, cut up your charge cards and get a visa/mastercard debit card.
5.Maintain a financial buffer. ie. don’t spend everything you earn.
6.Begin saving finances and get an Emergency fund.
7.Do not get back into debt.
8.Use cash, even using Eftpos can be tempting and be hard to track.
9.Discover ways to budget more wisely, from food shopping to petrol savings.
These are my personal ideas on what causes a financial crisis and exactly what, in my opinion, you can do to help reduce the outcome of the next financial crisis on you and your family.
In my mind I do not believe that there’s any such thing as good debt. Debt is Debt, it’s a lie to have you bound up financially.
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