Coping With Financial Catastrophe

In case you're among the .001% of the population who might not have noticed (who knows? perhaps you've been in a coma for the past six months), the world's financial institutions are in meltdown. Commentators the world over are using the term 'unprecedented' to describe what's happening. That means, of course, that there are no precedents to guide you and me in our attempts to figure out what our options might be. Do you shift what money you have left around to stop the erosion, or do you sit tight and do nothing with the conviction that eventually things will turn around and improve? Do you act, and lock in your current condition, turning a paper financial hemorrhage into a cash loss, or do you do nothing and risk your remaining assets in a world market that seems to be spinning out of control?

For anyone who's a Douglas Adams fan, I want to share with you the very best advice possible: as it says in big letters on the front of the Hitchhiker's Guide to the Galaxy, "Don't Panic!" (and, of course, while you're at it, always know where your towel is). The sage advice you've been offered in regard to panicking — don't — can very easily be forgotten, especially when you're a guy going through the midlife transition. Since your inner world tends already to be in turmoil, a global financial crisis is sure to throw fuel on the fire. When your life is in turmoil and you feel like you're hanging by a thread, there's nothing quite like a suffering a direct hit to both your career and your financial future to send you over the edge.

The collapse of the financial markets represents only one extreme example of the catastrophic events that could (and often do) occur during midlife. What do you do? How do you recover? What's the best plan? If you're asking me to provide you with an effective, safe and secure remedy to your woes, you're asking the wrong guy. Everybody suffers — including me — when the catastrophe effects the global economy. I have to make exactly the same kinds of decisions that you're faced with right now. Furthermore, I'm neither an economist nor a financial adviser and, as I mentioned earlier, this situation is unprecedented. What I can offer you are suggestions regarding the mentality you need to adopt toward the crises that you're bound to be facing during midlife.

First, let me remind you about catastrophe theory. I've been using the term 'catastrophe' liberally because it has a particular meaning apart from the connotations of 'disaster' and 'tragedy'. Technically speaking, a 'catastrophe' doesn't need to be something horrible. 'Catastrophe' refers to a watershed point or a point of no return, beyond which events are governed by a certain inevitability. People often call it 'the straw that broke the camel's back.' It's the one too many that collapses the house of cards, or the drop of water that causes the container to overflow. The financial markets have reached their 'tipping point,' and now you have little choice but to ride the catastrophic results back down to their point of equilibrium . . . unfortunately, there's no telling where that point may be.

You need to understand that, whenever catastrophe hits, you necessarily go into reactive mode. The almost irresistible need to do something proves to be a far greater threat than the catastrophe itself. Chances are very good that a knee-jerk decision in reaction to events outside your control will prove to be a poor choice. I'll offer you three suggestions about how to react to a crisis: 1) do only whatever's immediately necessary to preserve the life and limb of yourself and others; 2) stop, breathe, think, gather information, consult experts, assess your risks, plan; 3) only act if and when a) you have contingency plans already in place or b) your proposed course of action carries both a reasonable level of risk and a reasonable chance of success. Keep in mind that reactive decisions have a very strong tendency to make a crisis situation worse. Doing nothing very often proves to be the best course of action.

Most people experience an overloading of crisis experiences (and, consequently, a lot of reactive decision-making) during midlife. The reasons behind this become clearer once you stop and think about what's going on in your life. On the inside, you're experiencing a highly emotionally-charged period of reevaluation. It often happens that all of your assumptions and presuppositions come under scrutiny at some time or other during midlife. As a result, your long-standing decision-making processes have come to a grinding halt. New values are intruding into old habits. It takes more time and energy than ever before in your life to make an authentic decision.

Meanwhile, on the outside, your life is in full-gear and highly committed. You face critical challenges (and choices) having to do with your relationships, your family, your social involvements, your career, your finances, your health, and so on, seemingly forever. In point of fact, you're 'at the top of your game.' Also, the stresses and concerns that face you are both broad and deep and carry with them some very serious consequences for your future. At midlife, more than at any other time before or after, your responsibilities are maxed out, your resources stretched to the breaking point.

This is no time to be handed a catastrophe, yet, because of where you are in the course of your lifetime, this is exactly when catastrophes are most likely to occur. This time in your life most requires good contingency planning — exactly the skills that younger men are most reticent to develop. You need to have an emergency evacuation plan, and you need, if possible, to conduct personal 'fire drills,' so you won't have to react blindly when the unthinkable does happen. You don't have to produce a catastrophic response plan for every possible eventuality: that would be both silly and impractical. But, you do have to have in place such plans for your critical relationships, your financial security, and your health.

Obviously, you can't put a response plan into place once the catastrophe has occurred. Yet, remember what I've said many times before: pain is simply the universe trying to get your attention. There's a lesson to be learned from every crisis; midlife mastery consists in responding to these crises by doing the possible, learning your lesson (the first time), then moving on with the resources that remain. Since you're reading this, I can only assume that you're concerned with your future. That, in itself, proves that you're on the right track. If the Second World War — and the incredible suffering of millions of innocent people — has anything at all to teach us, it's that where there's life, there's hope. So long as there's breath in your body, no matter how damaging the catastrophe, you can always do better tomorrow.