For years, I had heard that in Chinese, the word for crisis is the same as the word for opportunity. Recently I learned that the more popular story is that the Chinese word for crisis consists of two characters: one meaning danger, and one meaning opportunity. Both stories are interesting, but neither is true. While there’s some disagreement, there is little evidence to suggest that the word for crisis was derived in such a way.
But etymology aside, a crisis and an opportunity really aren’t that different, are they? Each is a critical point at which events will turn for the better or for the worse. A mishandled opportunity become a crisis, and a well-managed crisis becomes an opportunity. The most important factor is not the challenge itself, but how you handle it.
Everyone knows that the U.S. is in the middle of a huge financial meltdown. But the events are what they are, and worrying about things won’t change them. So you can either address the situation as a crisis or as an opportunity.
To treat it as a crisis, you should live in fear. Even though the banks are FDIC-insured, you can go withdraw all your cash in case there’s a run on the banks. To protect yourself against the collapsing dollar, you can convert most of your cash to gold and keep it in your basement. With the cash you have left, you can buy food and supplies to keep you alive when the world collapses. Of course, having all this gold and food and such will make you a target, so you’ll need to arm yourself appropriately.
On the other hand, to treat it as an opportunity, you’ll need to be bold and courageous enough to make the situation work in your favor. The downside of this path is that it’s a lot harder to figure out what to do. After all, panicking is easy. But taking constructive action when everyone is losing their head, that takes guts and vision.
Here are some ways of turning an apparent crisis into an opportunity:
1. Take advantage of unfounded pessimism
Because of all the news of bank failures and rampant speculation, bank stocks have been a wild ride lately, and some of them have been undervalued by overreacting investors. This has created some great opportunities for those with the appropriate knowledge, risk tolerance, and yes, luck.
On September 29th, Wachovia stock went as low as $0.01. The next day, it reached $3.70. Market timing is notoriously difficult, and personally I don’t recommend it. However, for someone who was brave enough to invest in a high-risk stock and lucky enough to time it perfectly, it was possible to turn $10,000 into $3.7 million in one day.
2. Take advantage of low competition
I’ve seen a lot of people saying that because of the economy, they’ve decided not to start the business they were planning on, or to put their business on hold and resume it when things turn around, or to slash their prices because no customers have any money.
While this makes sense at some level, I think most people are overreacting. And when everyone decides it’s not a good time to do something, that reduces your competition tremendously. Now might not be a great time for certain types of businesses, but the low competition makes it a wonderful time for other types of businesses.
3. Use this time to reassess your life plan
When bad things are happening, it sometimes makes you stop and think about where your life is going. While you can do this at any time, we tend to be stuck on autopilot until we encounter obstacles on the course we’re on. Unusual times can give you a much-needed wakeup call.
During this time, some people have decided that they’re in the wrong career, or they want to be self-employed, or they want to move to a different part of the country, or they want to get married, or they want to have a kid, or any number of things. Take a minute to ask yourself if your life is still moving in the direction you want.
Every critical juncture has the potential to become either a crisis or an opportunity. What will you make of this one?
Hunter Nuttall wants you to stop sucking and live a life of abundance. Visit his site to learn how to improve your life and your income.
“Success happens not by chance, but because you were given a chance and took advantage of it.” – Kevin Geary
We can reframe the current crisis into opportunity and many millionaires are created after the bear market due to lesser competition and cheaper materials.
Cheers
Vincent
Personal Development Blogger
These are challenging time and with that comes many opportunities. Opportunities are only as good as you make them. I’ve been advising clients for months to continue to regularly invest. Think of it as boxing day, you buy the big screen TV on boxing day, not the week after.
Since we’ve just finished this whole election thing (and everyone’s already sick of it
), let me mention…
All remarkable presidents became remarkable during and… I would venture to say in some regard… because of times of crisis. In a way, we’re forced to polarize to our strengths when times get difficult.
As a wise man once put it:
“The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.” -Martin Luther King, Jr.
While I certainly believe that crisis and opportunity are companions, I also believe that an individual should be highly aware of their true objectives in seeking the given “opportunities.”
For example, if an investor seeks “over-sized” gains as a result of “over-sized” declines, it is important for the investor to honestly question if their intention is based upon greed or if it is based upon a sound strategy that already existed before the crisis/opportunity presented itself.
Bringing the thoughts in the post full-circle, the ancient chinese, especially taoists, also believe in a balance of passivity and activity, with an emphasis on passivity…
“Nature never hurries — yet everything is accomplished.” ~ Lau Tzu
This financial crisis can be a good pain, like working out at the gym. Sometimes you need to stress the economies monetary muscles in order to make everyone stronger. People are now beginning to realize how import it is to save, budget, and become more financially responsible. Those who learned these lessons early on, will stand to gain a lot.
Great article. I say it is a time of opportunity along with some set strategies and a plan. If you have accomplished such things as personal happiness and empowerment you are well on your way.
Investing, in stocks or time or anything in any human arena, is best when your predictions of others are going to be more accurate.
To buy shares is to put money on what you think people will do next, after all, and people are arguably at their most predictable now.
nice article
“What does not destroy me, makes me stronger” ~ Friedrich Wilhelm Nietzsche (1844-1900).
The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty – Winston Churchill.
In the middle of every difficulty lies opportunity – Albert Einstein