The Board Has Turned Against Us

I recently wrote about a talk I heard from Jamie Dimon in which he said he isn’t overly concerned with our domestic economy. 

In just a few short weeks, my personal opinion on that has shifted. 

I fear that things are going to get very bumpy, very shortly. 

For the past few years, the majority of Americans (individually and at the corporate level) have been in the offensive mode. We have had a “spend money to make money” mentality, but as we stare down a well-anticipated recession, the overall strategy is shifting from offense to defense. People are hording what they have, which means less is flowing through our economy, which makes things more difficult for everyone. It’s like we have all been playing chess, and right now we are doing our best to get out of the corner so we aren’t taken down next. And the board is against us. 

It may seem like a frightening time, but the reality is that this forewarning is incredibly useful. I urge everyone to hope for the best but plan for the worst, both personally and economically. If you haven’t already, take some real time to think through your worst case scenario. What will happen if you lose your livelihood? Fall ill? Encounter an unexpected challenge? What moves can you make today to soften those blows? If you start taking steps now, you will be in an advantageous position when Murphy’s Law comes into effect. 

This is the same advice I offer to people looking to start their own business. It is important to spend some mental space considering your worst case scenario. Too many people espouse the power of thinking positively. Lately there has been a trend of encouraging people to have “delusional confidence” - if you believe you will succeed, you are more likely to succeed. This advice frustrates me. Confidence is good, but preparation is better. Delusional confidence can end in Apple, but it can also end in Theranos. Preparation in the form of planning for the worst even when things are at their best is what gets you through the rough times with minimal damage.

So take some time today to think about what you would need in order to survive a recession. What is the least amount of money you can sustain yourself on? Where would that come from if you lose your livelihood? What is your backup plan? What is the backup plan to the backup plan? If you can get all of these things in place now when things are relatively stable, you are less likely to panic if and when the worst occurs. 

I am always looking eight steps ahead, and I urge you do to the same.