Think a Stock Market Crash doesn’t Affect You? Think Again!

Posted by MoneyThinker in Current Events, investing | 0 comments

Around the world, nervous eyes are watching the stock market, waiting to see what happens. Investors, politicians, stock market professionals, everyone is watching carefully as futures dip up and down drastically every single day. I bet that there are some of you sitting there saying “So what? I have nothing invested in the stock market.” Well, guess what friend. It affects you too! I don’t have anything in the stock market right now, and it’s going to affect me! Bummer, right? Here are 5 ways that a stock market collapse would affect you.

1. Starting a small business. Really? Yes, if your aspiration is to start a small business, you better do it before the stock market dips any further. Most people start small businesses off of their own savings, which, in a poor stock market, are a lot less due to the cost of living being higher and interest accrued being lower. It also is a scary place to be when starting a business; there’s not as much money being put into small businesses, so your start-up may be more of a struggle then you’re bargaining for.
2. Buying a house or car. I warned of this in my blog last week in my entry about buying vs. renting a home. I’m staying a renter because it’s going to become much more difficult for anyone to get a loan, even though the interest rates are the lowest that they have been. Banks just don’t want to give that money to just anyone; they want to make sure that they’ll get that money back promptly.
3. Education. Yes, even educational loans will be more difficult to get. You may insist that you’ve been saving for your child’s education for years. While this is true, the interest rates are lower… meaning that you’re earning less money on that account. Education on the whole is going to be harder to pay for.
4. Selling a House or Car. Because of the fact that it’s going to be harder to buy a house or car, it’s also going to prove more difficult to sell those items as well. You won’t be able to sell your home to just anyone. Buyers have to pass a more scrupulous credit check than ever before, and the process will just get longer while banks become more hesitant. So, you may find that buyer, but not be able to sell your house for up to a year afterwards. Yuck.
5. Employment and unemployment. With the cost of living going up, your benefits will most definitely go down, especially if you’re fresh on the job hunt. They won’t cut much if you’re already employed, but they may a bit. Unemployment is going to be harder to get, and those extensions that you’ve been enjoying? They may be no more as the government struggles to help the economy get back on its feet.

Sadly, the stock market does not care if you have all of your money invested in it or none at all. It affects every area of life, no discrimination for any reason. If the market crashes, the whole world is going to feel the effects of it. Until tomorrow, spend smart, save smart!