One bright day in late autumn a family of Ants were bustling about in the warm sunshine, drying out the grain they had stored up during the summer, when a starving Grasshopper, his fiddle under his arm, came up and humbly begged for a bite to eat.
“What!” cried the Ants in surprise, “haven’t you stored anything away for the winter? What in the world were you doing all last summer?”
“I didn’t have time to store up any food,” whined the Grasshopper; “I was so busy making music that before I knew it the summer was gone.”
Aesops Fable “Ant and the Grasshopper”
We are all living in an economic time when the Ant and the Grasshopper may soon become our reality. If we take a look at the major indexes in the US we see constant growth over a long period of time but history tells us markets have up and down cycles. The best thing you can do is understand that cycles are real and prepare yourself to still do well in spite of any cycle change.
Here is some advice that you can use for your personal finances and your business, if not life may not flow as smoothly for you in the next 18 – 36 months.
Individuals: • Create a “safety net” savings account (3 months of your living expense or more) • Cut back on unnecessary expenses at least until you get that safety net built • Pay off debts – set up a free CreditKarma account to help you get a full picture of your debt • Enhance your current skills or develop a skill that can help you make more money in the future
Businesses: • Improve your cash flow as much as possible because when markets go down the businesses with cash flow grow and make more money than ever • Consider utilizing contract services to reduce your overall cost and administrative burden • Get your team and your customers refocused on how your business adds value because your customers will continue to pay you even in a down market when they feel like your business adds value to their business • Develop a data driven culture, those who know data often see changes and opportunity before others do; practical data analytics tools will be your best business investment so don’t wait.