You lose some… you lose some

Imagine a man who moves into your neighborhood and he lives on $10,000 per day. Every single day this guy goes out and spends $10,000. He is living the high life and we all envy him. How wonderful to be like that. Everyday it’s new cars, trips all over the world with big groups of friends, huge fancy parties… we all want that life. Now imagine that you take a look just one level deeper behind the scenes. You discover that this man had one million dollars when he moved into the neighborhood and he has no income whatsoever. You do a little analysis and you realize something that no one else realizes. This man is soon going to run out of money and everything will change. His $1,000,000 will run out in exactly 100 days at the rate he is spending.

There are 2 courses of action this man can take. He could realize that he will run out of money in 100 days and cut back on his spending. He could take steps to ensure his future and preserve his wealth. Or he could just continue spending $10,000 per day.

If he continues to spend $10,000 per day he will run out of money on a particular instant. On day 100 he will be spending $10,000 and everything will appear wonderful when he goes to bed that night. When he wakes up the next morning he will have nothing and his good life will be over. A gradual loss of wealth and resources does not cause a corresponding decline in the rate of spending. A self correction can only be the result of an analysis and a conscious effort. The correction requires self control and a willingness to “do without” today in order to preserve the future.

America is analogous to the man spending $10,000 per day. Our situation is even worse because we have blown all of our resources and built up excessive debt. When the time comes that our access to resources runs out it will be sudden and dramatic. It is probably too late to prevent it but that is a mute point anyway. Perhaps we could change it by forcing our government to stop taxing us to death and stop wasting resources, but that is not going to happen. All you can do now as an individual is try to prepare yourself as best you can for the inevitable.

We like to fool ourselves into thinking that it won’t, or at least may not, happen. We tell ourselves that the government and its’ finances are too complicated for us to understand… the experts in government are aware and keeping things in check… or it’s different when you’re talking about an entire nation or a government. But tangible reality always takes over as the controlling factor. When the resources are gone they will be gone. From where and from whom will you get the products and services that are required to support a decent life style?

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