The world economy is not getting any better. In fact, it is going to get a lot worse in the next few years ahead. However, most people are still in the dark. To them, as long as they receive their paycheck at the end of the month, then the economy is good. To them, their monthly paycheck is their monthly security. Without knowing the fundamental shifts in the economy, this way of think is a risk to themselves and their families.
What about you? Are you planning ahead, or do you still have your head in the clouds? Do you have your Plan B?
2 Different Approaches
In any situation, there are 2 different approaches that you can employ – the Reactive approach or the Proactive approach. In this article, I want to share my personal thoughts on these 2 approaches and how they can affect all areas of your life, especially your financial life as I am very much a finance person.
Most people do not know the difference between the 2 approaches. But to me, they can mean failure or success in everything that I do.
So, what is the diff?
The Reactive Approach
Sadly, most people are reactive in nature. They wait for things to happen first before they start thinking about their next step. For example, they would wait for recession or retrenchment to hit them in their face first, then they would start looking for another job or another source of income.
In most cases, they are just too late in looking for a supplementary income source in a hurry when economy is down, and when everyone is looking for jobs or income at the same time.
They are always “surprised” by events that they chose to ignore earlier. As such, their lives are always that of topsy and turvy. Unstable and chaotic.
The Rise of the Robots
We all know that retrenchment is on the rise and will continue to increase. We all know that robots, machine learning, and Artificial Intelligence (AI) are replacing mundane jobs all over the world.
Take for example, disruptions in the retail sector are causing many brick and mortar retail shops to go bust. Retail shop vacancies in shopping malls are on the increase and they remain vacant for longer periods of time now than ever before.
If you are in the retail industry, what do you think of your career prospects? How about the longevity of your monthly paycheck?
On the other hand, many working-class people who are not in the retail industry do not see this as a sign of what will come next. They do not see this happening to them. To them, they tell themselves, “this is the problem of the retail industry. I am not in the same industry. So, not my problem.”, or “What happens to them will not happen to me.” This way of thoughts is all flawed.
We are all connected
Our economy is so connected that we are not able to clearly differentiate ourselves anymore. Take for example, when the trade war between USA and China started, exporting countries go under water in their exports almost immediately.
Like they say, “when USA sneezes, Asia would be having a cold.” This is how connected we are as a global economy. Certainly, event like this will impact every aspect of business including all supply chain and the jobs market etc.
This is also the reason why we cannot adopt the reactive approach way of thinking anymore. It is a big risk to us and our future. We need to engage ourselves in the proactive way of thinking (a.k.a Scenario Thinking). We must think ahead before things happen right before you. Like I always say, “you must think ahead to get ahead.”
The Proactive Approach
To be proactive means to constantly ask yourself the “what if” question. This is one of the questions I constantly ask myself.
“What if this happens”, “What if that happens”, “How will that impact my future, my job, my family, and my business.”
Proactive people think things before they happen. They want to be in a certain control of their future. They refuse to let circumstances determine their destiny. They create their own destiny. They are always prepared for the future no matter what comes.
They look at the far horizon and start questioning themselves, “What are the opportunities ahead?”, “What are the threats?”, “How to capitalize on those opportunities and avoid those threats?” etc. Questions like these make them grow bigger and bigger in any economic situation without a doubt.
However, many reactive thinking friends of mine tell me this way of living is paranoia. And to a certain extent, I agree with them. However, I would rather be living a bit more paranoid than to be dead like them when events caught up with them.
Andrew Grove, CEO of Intel once said, “Only the paranoid will survive.” Just with this statement and mindset when he took over as CEO of Intel, has made Intel the world’s number 1 chip maker. What say you?
I hope this blog article of mine will lead you to think if you have been a Reactive thinker or a Proactive thinker. There is nothing wrong with Reactive thinking per se. However, between the 2, trust me, Proactive thinkers are more prosperous in all areas of their life especially their financial life.
Thank you for reading my blog article.
CEO & Founder, ALGOINSIGHTS PTE LTD