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Rotten Economy Survival Skills

The Heroic Investing ShowWhile we don’t have major financial institutions failing left and right, like back in 2008, the only people who would say the economy is cooking along pretty good are probably the ones with unfettered access to happy drugs. This is not a good economy. Not by a long shot. It’s not even an average economy. This one is truly rotten. You know we’re in bad shape when the president brags about how the unemployment rate improved to 9.4%. Since curling into a fetal position and waiting for the worst to pass is not an option, let’s review what Nobel Prize-winning economist, Gary Becker, has to say about surviving in a rotten financial times.

Education still matters.
Becker did his seminal writing back in the 1950’s but believes his research that education matters is just as true today, if not more so, than it was back then. People with only high school diplomas can still expect much lower rates of pay and longer periods of unemployment. Becker says a liberal arts education is still the way to go also, which means a degree focusing on broad principles rather than specific skills. His thinking is that today’s job market is one in which flexibility is critical, and those with a solid educational foundation can create the specifics on their own.

Mid-career malaise.
For those in their 30’s, 40’s, and 50’s – now is not the time to sit back and coast. One of Heroic Investing’s founding principles is to “Always Be Learning,” an idea which Becker strongly supports. With the ingratiation of the personal computer and Internet into our lifestyle, there is literally no reason to not pursue self-improvement throughout your life. Education is no longer solely for the young. Becker refers to this as an investment in human capital.

Becker also supports transforming the Social Security system into something that more resembles a 401k plan, where you can save and invest your money tax free, then choose when you want to retire. The longer you wait, the more money you’ll have. Until the government catches up with this way of thinking, though, open a private IRA and max out the contributions early and often.

But ultimately this preeminent economist’s argument/recommendation always comes back to education as the best way to survive financially no matter what the economy at large is doing.

The Heroic Investing Team

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Flickr / Murray State

 

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