ARE WE HEADED FOR A DEPRESSION?

I know most people do not give a hoot about the stock market but with the market dropping so drastically it makes me sit back and wonder. How much further will it drop? Are we headed for another depression? I see the news that tells me that people are losing their jobs, people are losing their houses and bankruptcies abound. How will all this affect me? If more and more people lose their jobs, will my husband lose his usually secure government job?

My husband and I have always lived in a financially conservative way. Our decisions were always based on many "what ifs". What if one or both of us lost our jobs? What if the economy goes bad? What if one of us got sick?

Before we had kids, we bought our house using only my husband's salary making sure the payment was only based on what he earned. We bought a simple house with 5 acres. Then I worked for the next six years and we pretty much put my salary towards paying extra on our house. When we were done paying for it, we didn't start living high on the hog. We knew that when we had kids I wanted to stay home so we didn't want to depend on my income.

When it came to deciding where to put our 401K money we decided to put it in the most conservative funds, government securities. We figured this was our retirement and we didn't want to risk it in the stock market even though that would mean that we would get less interest.

We've learned to keep our decisions mostly to ourselves because over the years plenty of people have tried to tell us what to do. Much of this advice was started with the words "you must". We were told that paying off your house early was a bad idea because then you wouldn't have any mortgage interest to itemize on your taxes. We were told that we should spread out our 401K money in a bunch of different funds. We were told that we could afford to spend much more on our house. Many times we were called cheap....well, because we are cheap! AND proud of it!

Right now as I wonder whether we are going to have another depression, I feel pretty good about my decisions. My youngest daughter asked "are you worried mom?" I could honestly say "no"." The only thing I have to do is pay the taxes on my house and I will have a place to stay. I've never succumb to the temptation to be materialistic. I am a person who can use the same old things until they are truly worn out. No, I am not really worried. However, I do wonder what will happen with other people.

Recently my husband was talking to a colleague at work about retirement. My husband told this man his plan and told him of his philosophy of being careful to only invest in government securities and not the stock market. My husband was not trying to convince this man to change his ways but apparently his ideas must have sounded pretty good. Without telling my husband the man went and changed his 401K to have it invested in government securities. Right after he did this, the stock market began to drop. He came to my husband and said "you've already saved me $10,000!" This man is getting closer to retirement and it makes me feel good that he won't have his savings demolished.

I think that maybe our country is due for a readjustment. We've become spoiled. It would be painful but maybe people need to learn to go without. I just hope that means that people would go without a computer and cable TV. I would not want to see people go without food. I would not want to see people be homeless. It would make me very sad to see people hurting in this way. Even though we've all gotten soft, I think that the people of this country are strong enough to weather this storm.